SlideShare a Scribd company logo

The Future Health Ecosystem Today

Dave Chase, profile picture
Dave Chase

The document discusses the future of the healthcare ecosystem, emphasizing the need for patient-centric care, wellness, and prevention. It highlights the significant challenges faced, including healthcare spending inefficiencies and aging populations, while proposing solutions such as personalized medicine and technology-enabled services. Key drivers of health outcomes and a shift towards value-based care are also explored, suggesting that major changes in policy and market dynamics are essential for improvement.

Healthcare
1 of 94
Downloaded 1,105 times
1
2
3
4
Most read
5
6
7
8
9
10
11
Most read
12
13
14
15
Most read
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
The Future Health Ecosystem Today @chasedave
1 | @chasedave > The Future Health Ecosystem Today > Current Problems > Clinical Care > Patient-Centric Care > Wellness & Prevention > Credits & Contact Information CONTENTS
2 | @chasedave THE FUTURE HEALTH ECOSYSTEM TODAY
3 | @chasedave THE FUTURE HEALTH ECOSYSTEM WILL FOCUS ON THE TRUE DRIVERS OF OUTCOMES Source: RWJF/UWPHI.3 GENETICS DIET & EXERCISE TOBACCO USE ALCOHOL & DRUG USE SLEEP SEXUAL ACTIVITY ACCESS TO CARE QUALITY OF CARE EDUCATION EMPLOYMENT INCOME FAMILY/ SOCIAL SUPPORT COMMUNITY SAFETY AIR QUALITY WATER QUALITY HOUSING TRANSIT
4 | @chasedave Vector 2: Evidence-Based Decisions Vector 3: B2C Health Improvement Programs Vector 1: Next Generation Primary Care SleepTracking/ Testing: Wearables/Hardware Personalized Medicine/Genomics Health Information Care Navigation Disease Management Peer Networks Health Coaching Decision-MakingTools Care Access Remote Patient Monitoring Patient Engagement Wellness Programs GENETICS DIET & EXERCISE TOBACCOUSE ALCOHOL& DRUG USE SLEEP SEXUALACTIVITY Family Support and Self-Help Patient Groups Source: RWJF/UWPHI.
5 | @chasedave Vector 5: Analytics and Clinical Decision Support Vector 2: Next Generation Primary Care Vector 3: Value-Based Care Vector 4: Operational Efficiency Vector 1: Disease-Specific Care Pathways Transparency Virtual Medicine Remote Patient Monitoring Retail Clinics, DPC Care Coordination Patient EngagementBig Data Personalized Medicine Medication Management Nanotechnology House Calls Practice Management, EMRs, Pharmacy Management ACCESSTO CARE QUALITYOF CARE Tech-EnabledServices Knowledge Sharing Source: RWJF/UWPHI.
6 | @chasedave Advance Directives Programs/Services Next Gen Benefits Social Services Access/Management Vector 1: Equilibrating Healthcare Expense Vector 2: Community-Based Health Initiatives Vector 3: Aging & End-of- Life Programs House Calls Hospice Programs Virtual Medicine Incentive ProgramsWellness Programs EDUCATION EMPLOYMENT INCOME FAMILY/SOCIAL SUPPORT COMMUNITY SAFETY Early ID and Prevention Programs Source: RWJF/UWPHI.
7 | @chasedave GPS-EnabledSensorsVector 1: Targeted Monitoring and Rapid Response Vector 2: Community- Based Health Initiatives Food,Housing and Transportation Access Next Generation Public Transport Environmental Response Mechanisms Continuous Monitoring (wi-fi,bluetooth,etc.) Vector 3: Affordable Living and Access AIR QUALITY WATER QUALITY HOUSING TRANSIT Built Environment Design Broadband Connectivity Source: RWJF/UWPHI.
8 | @chasedave Personalized Medicine Continuous Monitoring of Clinical and Non-Clinical Data Better Understanding of How Patient Behaviors Affect Outcomes Episodic to Real-Time, Micro-Targeted Care Predictive and Actionable Analytics Access to Care Proactive Medicine > Reactive Medicine Care Coordination Enhanced Cell Identification and Tracking THE PREVIOUSLY UNFATHOMABLE WILL BECOME A REALITY
CURRENT PROBLEMS
10 | @chasedave A STARK IMBALANCE WITH DRAMATIC REPERCUSSIONS Source: RWJF/UWPHI; Bipartisan Policy Center. 4% Health Behaviors 8% Other 88% Medical Services 10% Physical Environment 20% Clinical Care 30% Health Behaviors 40% Social & Economic Factors What Drives Outcomes? Where Do We Spend Money? Unhealthy Workforce CollateralDamage Chronic Disease Obesity Wasted Spending Overtreatment
11 | @chasedave THE SWANS ARE IN THE WATER, BUT WHAT COLOR ARE THEY? CadillacTax A consumer movement is triggered Aging-in-place Medicare pricing expands to self-insured Medicare allowed to negotiate with pharma Tax-exempt health systems lose status State AG’s pursue physician non-competes The bursting of the hospital bond bubble Like the newspaper/publishing industry at the internet’s inception, the healthcare industry is on the verge of its transistor moment. Which of today’s healthcare incumbents will fail to survive?
12 | @chasedave HEALTHCARE’S COLLATERAL DAMAGE IS SIGNIFICANT > State budgets for healthcare coverage vs other priorities Mental Health PublicHealth Education Human Services Infrastructure & Housing Law& PublicSafety LocalAid $0 B $3 B $6 B $9 B $12B $15B -22% -31% -12% -11% -14% -13% -51% FY01 FY14 GIC, MassHealth & other coverage + $5.4b + 37% −$3.6b − 17% Source: Massachusetts Budget and Policy Center; figures all adjusted for GDP growth. % change
13 | @chasedave AN UNHEALTHY WORKFORCE BURDENS EMPLOYERS AND ECONOMY SMOKING + $5,800 Additional annual costs per employee with various lifestyle risks > Lost Revenue $1,900-$2,250 per employee per year > Lost Employee Time 45,000,000 avoidable sick days per year > Lost Output $576 billion is lost by the U.S. economy due to workforce illness Poor employee health leads to... And adds costs to employers budgets DIABETES + $4,413 OBESITY + $4,237 HIGH BLOOD PRESSURE + $1,077 Source: Berman et al., tobaccocontrol.bmj.com; NBCH, Februrary 2012; Van Nuys et al., American Journal of Health Promotion, May/June 2014; Kowlessar et al., JOEM, May 2011.
14 | @chasedave OUR POPULATION IS AGING AND SICKER THAN EVER 50+ 65-74 > The U.S. population aged 50+ is expected to grow to 132mm... 2010 109mm 2030 132mm 2030 39mm …and the number aged 65-74 will nearly double 2010 22mm $0.75 of every $1 spent > Chronic disease is an epidemic that is expected to worsen... ...and account for the vast majority of healthcare expenditures 2010 2030 TOTAL(MM) 149mm 171mm PROPORTION 48% 49%
15 | @chasedave THIS GENERATION’S TOBACCO: SUGAR AND A SEDENTARY LIFESTYLE > For every additional serving above the USDA’s recommended 12 tsp sugar per day, a child is 60% more likely to become obese. 4x # of TVs in homes has QUADRUPLED 2x # of foodservice establishments has DOUBLED 2x 3x Soda consumption has DOUBLED in girls, and TRIPLED in boys Obesity in children aged 6-11 1980 6.5% 2008 19.6% 2010 1in 3 children are overweight or obese 1+hrs 7.5 hrs DAILY SCREEN TIME 1.5hrs 4.5hrs for children ages 8-10 (2009) Soft drink consumption has spiked 1978 2002 16.9 oz/day 26.8 oz/day 12tsp sugar 22tsp HFCS Source: CDC; Whitehouse.gov.
16 | @chasedave $210bn Unnecessary Services $190bn Administrative Costs $130bn Inefficient Delivery of Care $55bn Prevention Failures $105bn Inflated Prices $75bn Fraud U.S. HEALTHCARE WASTE = NETHERLANDS GDP $765bn in wasted spending Source: Institute of Medicine (2009 data); The World Bank (2009 data)
17 | @chasedave AND TOTAL HEALTHCARE SPENDING IS SEVERELY DISPROPORTIONATE  5% of patients  50% of dollars Source: U.S. Agency for Healthcare Research and Quality.
18 | @chasedave Angiogram CT scan, head Cost perhospital day Appendectomy Hip replacement Coronary artery bypass LOWER COST PROCEDURES HIGHER COST HIGHEST COST $30 $800 $1000 $1350 $68,000 $100 HIGHER PRICES = HIGHER SPENDING Argentina, Canada, Chile, India France, Germany, Spain, Switzerland United States Source: International Federation of Health Plans. Graphic: Wilson Andrews - The Washington Post. Published March 2, 2012.
19 | @chasedave HIGHER SPENDING ≠ BETTER HEALTH OUTCOMES Rank Country 1 France 2 Switzerland 3 Denmark 4 Netherlands 5 Australia 6 Canada 7 Germany 8 Norway 9 UK 10 U.S.A 11 New Zealand Rank Country 1 UK 2 New Zealand 3 Switzerland 4 Canada 5 Norway 6 Australia 7 Netherlands 8 France 9 Denmark 10 U.S.A 11 Germany Diabetes Extremity Amputation(1=best) Asthma Mortality (1=best) 2.5x Asthma 6.7x Diabetes 3.0x Congestive Heart Failure > U.S. chronic disease hospital admissions compared to peer countries Source: OECD Health Care Quality Indicators Data 2009, data from 2007, compared to Canada; OECD Health Data 2011, The Commonwealth Fund
20 | @chasedave 22 Knee Replacements 1st Tonsillectomy 1st MRI Exams 2rd CT Exams 3rd VOLUME INCENTIVE = OVERTREATMENT AND SPECIALTY-RICH CARE 87.5% of U.S. physicians are specialists 61.3% OECD average > HAIs: Longer stays, more provider volume 5 98,987 People die annually in the U.S. from HAIs, more than breast cancer and prostate cancer COMBINED Averagehospital stay (days) 28k Prostate Cancer 41k Breast Cancer 99k HAIs > USA winning the race for most procedures Source: GE, JESS3; OECD Health Data 2012.
21 | @chasedave “Physician burnout climbs 10% in 3 years, hits 55%” - MEDSCAPE LAYERING BUREAUCRACY ON TOP OF FLAWED SYSTEM, PLACING STRAIN ON ALREADY DISGRUNTLED PHYSICIAN WORKFORCE Source: Medscape’s 2014 Physician Compensation Report; 2014 Survey of America’s Physicians. Do not feel fairly compensated50% Would not choose medicine as their career today42% Plan to accelerate retirement39%Plan to limit access to their practices 44% Anticipate ICD-10 will cause severe problems in their practice 50% Physicians transitioning to cash-only (2011-2013) 100%
CLINICAL CARE
23 | @chasedave 1. Government intervention = catalyst 2. Employers shifting risk and insurers responding to regulation and a new marketplace for covered lives 3. Providers must respond to shifting reimbursement, cost sharing, and volume reallocation > And are beginning to do so in a number of ways 4. The era of open information in healthcare is underway > But there is still a long way to go to begin realizing the value of population health 5. Keeping patients out of the hospital, and on the internet > But an uncertain regulatory landscape is stifling growth CLINICAL CARE OVERVIEW
24 | @chasedave GOVERNMENT INTERVENTION = CATALYST 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 Mar: PPACA > HITECH Act: a bonanza for incumbent EHR vendors Feb: HITECH Act Jan: ACO Medicare incentives Oct: CMS payments for VBP Jan: MLR, Stage 1 of Meaningful Use (MU) Oct: Open enrollment begins Jan: Individual Mandate Medicaid expansion Dec: Stage 2 of MU King v. Burwell Medicare Access and CHIP Reauthorization Act Stage 3 of MU Jan: CadillacTax > ACA driving shift from volume to value > Cadillac Tax: a bonanza for health innovators GOALS > Access> Standardization> Affordability
25 | @chasedave EMPLOYERS SHIFTING RISK OR SELF-FUNDING Percent of Covered Workers Enrolled in a $1,000+ Deductible Plan (Single Coverage by Employer Size) Percentage of Covered Workers in Self-Funded Plans > ACA Benefits Standards Avoidable Through Self-funding 2009 2013 2000 2014 49% 61% Source: Kaiser Family Foundation and Health Research & Educations Trust, “Employer Health Benefits 2013 Annual Survey,” August 2013; Gabel JR et al., “Small Employer Perspectives On the Affordable Care Act’t Premiums, SHOP Exchanges, and Self-Insurance,” Health Affairs; The Advisory Board Company. 40% 13% 58% 28% Essential health benefits 1 Modified community rating 2 Guaranteedissue and renewability 3 MLR Requirements 4
26 | @chasedave 95% TRADITIONAL INSURERS ARE ADMINISTRATIVELY INEFFICIENT, HAVE CAPPED MARGINS, AND ARE IN A NEW BATTLEGROUND FOR CUSTOMERS MLR Requirement Limiting Margins Portion of PremiumDollars Mandated for Medical Care Growth in U.S. Healthcare Workforce (1990-2012) Portion of growth in doctors Portion of growth in administrative staff 1 DOCTOR 5 NURSES 10 ADMINS Source: Bureau of Labor Statistics,NCHS, Himmelstein/Woolhandler analysis of CPS; The Advisory Board Company. +75% New Market Issuers Offering Qualified Health Plans On Exchanges Federally-Facilitated Marketplace (36 states) State-BasedMarketplace (8 states reporting) 191 2014 248 2015 61 2014 67 2015 80% Individual and Small-Group Markets Large Group Market 85% 5%
27 | @chasedave Prominent Employers Using Private Exchanges 172 > Private exchange operators as of October 2014 PRIVATE EXCHANGE ENROLLMENT IS FORECASTED TO TAKE OFF 3 9 19 30 40 2014 2015 2016 2017 2018 Potential Growth Path for Private Exchange Enrollment (mm lives) Source: Accenture, “Are You Ready? Private Health Insurance Exchanges are Looming,”; privatehealthexchange.com; The Advisory Board Company. > Low-wage employers most active to date > Skilled industries in the wings ACTIVE EMPLOYEES (MEDICAREADVANTAGE, MEDIGAPPLANS) RETIREES
28 | @chasedave REIMBURSEMENT CUTS DEMAND A CHANGE IN OPERATIONS AND STRATEGY BY PROVIDERS > Medicare FFS payment cuts and move to alternative reimbursement will be significant Source: CMS; The Advisory Board Company $260bn Hospital payment rate cuts (2013-2022) $415bn Total FFS rate cuts (2013-2022) 50% Medicare alternative payment target (2018)
29 | @chasedave VOLUMES SHIFTING OUTPATIENT, AND THE GOVERNMENT WILL TAKE CONTROL OF THE INPATIENT SETTING 42% 58% 19% 15%33% 25% 6% 2% 2012 2022 Average Inpatient Case Mix by Volume N=785 hospitals MEDICARE MEDICAID COMMERCIAL SELF-PAY Source: “Report to the Congress: Medicare Payment Policy,” MedPAC, March 2014; The Advisory Board Company. -20 -10 0 10 20 30 40 Neurosurgery Orthopedics Vascular Services Cardiac Services All Payer Volume Growth Projections (2013-2018) INPATIENT OUTPATIENT -11% 11% 16% 15% 17% -3% 5% 14%
30 | @chasedave RISK-SHARING AND THE INCORPORATION OF OPERATIONAL EXPERTISE ARE THE FUTURE Risk-Based Revenue Breakdown (% of providers), N=116 71% 21% 5% 3% 13% 39% 38% 10% 0% 20% 40% 60% 80% Under 25% 25-50% 50-75% Over 75% TODAY IN 3 YEARS 20% 25%25% 30% 40% 30% 30% 30% 25% 70% 45% 20% 10% FY 2013 FY 2014 FY 2015 FY 2016 EFFICIENCY OUTCOMESOF CARE PATIENT EXPERIENCE CLINICALPROCESS Medicare VBP Program Domain Weights OTHER MANDATORY RISK PROGRAMS HAI Penalties Readmission Penalties Source: 2013 Care Transformation Survey, The Advisory Board Company; CMS. 65% of the Medicare VBP program will depend on quality metrics by 2016
31 | @chasedave ACO GROWTH HAS RESULTED IN WIDENING REACH, BUT MANY ARE STRUGGLING TO REDUCE SPENDING MSSP Cohort First-year spending reduction Growth of Accountable Care Organizations (ACOs) 32 146 253 253109 164 205 235 0 200 400 600 1Q12 3Q12 1Q13 3Q13 Medicare Non-Medicare Source: Leavitt Partners; The Advisory Board Company. 67% Portion of U.S. population in a primary care area with an ACO Portion of U.S. population treated by an ACO17% Earned Shared Savings 25% Reduced Spending But Did Not Earn Shared Savings 22% Did Not Reduce Spending 53%
32 | @chasedave High out-of-pocket costs... COST SHARING BY PAYERS AND PATIENTS BRINGS WITH IT REPERCUSSIONS AND NEW OPPORTUNITY FOR PROVIDERS > As a result, providers are turning to technologies that can improve referrals, marketing efforts and operational efficiencies, as well as reduce administrative burden. Source: The Advisory Board Company; Aon Hewitt; “Medical Debt Among People With Health Insurance,” Kaiser Family Foundation; Bankrate.com; National Survey of Employer-Sponsored Health Plans 2014, Mercer. …discourage utilization Large medical bills... …means more bad debt Can’t meet the higher rangeof out-of-pocket health cost limits 63% Don’t have savings to cover a $1,000 ER visit 62% Americans strugglingwith medical debt are insured 70% Patients becoming price-sensitive... …and more likely to shop Forgoing care when sick or injured because of cost15% Patientsreport using homeremedies instead of seeking medicalattention 33% Large employers now offer a price transparency tool77% Average U.S.Employee will pay: $2,487 out of pocket/yr $6,600 $13,200 Under ACA,2015 out-of-pocket cost ceilings: Worker’s share of costs 52% over last 5 years
33 | @chasedave PAYERS CLAIMS COSTS/FINANCE UTILIZATION EMR PROCEDURES OUTCOMES PRESCRIPTIONS SUPPLYCHAIN • Coordinated care • Improved outcomes • Interoperability • Population health • Lowercosts • Disease prevention • Adherence SATISFACTION THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY TRIALRESULTSAND EFFICACY SALESAND DRUGHISTORY • R&D productivity • Trial improvement • Improving efficacy• Careaccess • Price transparency • Convenienceandcost • Good health EXERCISEDATA PURCHASES BEHAVIORS,SOCIAL DATA PROVIDERS GOALS PATIENTS DATAGOALS PHARMA DATAGOALSDATAGOALS CLAIMS COSTS • Payment innovation • Data acquisition • Provider-performance transparency • Lowering costs • Reducingclaimspaid • Winningshare • Wellness & prevention
34 | @chasedave TRADITIONAL PAYERS ARE RESPONDING IN NUMEROUS WAYS Source: The Advisory Board Company. Trends ✚ Omni-Channel Understanding and Delivery Model for Reaching Out to and Engaging with Consumers ✚ Relationships and Partnerships with Providers That Support Value- Based ReimbursementModels ✚ Private Cloud Solutions to Better Manage Data Collection, Aggregation, and Analytical Efforts ✚ Data Management and Warehousing Technology Partnerships Health Matters Consolidation $38 billion July 2015 $1.25bn cost savings $6.8 billion July 2015 $52 billion June 2015 $2bn cost savings $14 billion March 2015
35 | @chasedave SHIFT FROM VOLUME TO VALUE IS UNDERWAY, BUT A LONG WAY TO GO ...but many providers still don’t have financial “skin in the game” 47% of value-oriented payments exclude financial risk Commercial health plans have dramatically shifted how they pay physicians and hospitals... % of commercial health plan payments that are value-based 2013 2014 11% 40% % of patients attributed to a provider with a payment reform contract 2013 2014 2% 15% 10% of payments to specialists are value-oriented 24% of payments to primary care physicians are value-oriented Source: The Scorecard of Payment Reform 2014, Catalyst for Payment Reform; plans responding represent 65% of commercially-insured lives in the U.S.
36 | @chasedave WHILE HOSPITALS FOCUS ON M&A, INNOVATORS ARE INNOVATING Hospital M&A Activity has accelerated Partnerships and Affiliations on the rise Heart & Vascular Center Markey CancerCenter 0 20 40 60 80 100 120 2009 2010 2011 2012 2013 2014 1Q 2015 An incredibly fragmented U.S. hospital system 4,500 acute care hospitals 2,000 hospital companies ...means a perceived opportunity to control costs and coordinate care Source: Pricewaterhouse Coopers.
37 | @chasedave PATIENT REGISTRATION CARE COORDINATION INSURANCE ELIGIBILITYVERIFICATION CODING SCHEDULING PATIENT STATEMENTS ANALYTICS RCM E-PRESCRIBING ACCOUNT ALERTS REFERRALMANAGEMENT DENIALMANAGEMENT PROVIDERS ARE BEGINNING TO EMBRACE TECHNOLOGY TO STREAMLINE WORKFLOWS
38 | @chasedave EHR INCUMBENTS USING TRADITIONAL STRATEGIES TO PROTECT MARKET POSITION FragmentedPlayers 23% 9% 2014 CONCERNS 1 DATA BLOCKING 2 DATA SILOS 3 VENDOR LOCK-IN 4 POOR INFORMATION EXCHANGE Source: MedScape EHR Report 2014. 10 YEARS AGO 2014 CONCERNS
39 | @chasedave VENDORS THAT RESPOND TO POPULATION HEALTH-FOCUSED CUSTOMER NEEDS WILL WIN Identification of various sub- populations with different needs Tools that enable collaboration across providers, patients and payers Tools that aggregate community level data Ability to gather and incorporate continuous data on total populations Solutions that analyze clinical, claims, and socioeconomic data > Identifying, collecting, and utilizing actionable information will be critical 1 2 3 4 5
40 | @chasedave BUT THERE IS STILL A LONG WAY TO GO TO BEGIN REALIZING THE VALUE OF POPULATION HEALTH of payers and providers think a national publicHIE is at least 10 years away 92% PHYSICIANS 81% HOSPITALS 94% INSURERS/PAYERS remain meaningfully unconnected in regards to intelligentinteroperability POPULATION HEALTH REQUIRES CHANGES IN THEBUSINESS MODEL OF CURRENT VENDORS Open APIs and PaaS for developers HIE Application Ecosystem Rapidly Extended Functional Capabilities > Firms with a wide offering of population health tools, revenue cycle management services, patient portals, dashboards, and analytics will emerge as the next wave of health IT leaders In effort to coordinatecare, private exchanges will outpace public efforts Cerner wins DoD contract with interoperability capabilities and partnerships Epic launches CareEverywhere Source: Healthcare IT News; HIMSS Analytics. 82% REALITY TAKEAWAY/RESPONSE REALITY TAKEAWAY/RESPONSE
41 | @chasedave VIRTUAL MEDICINE HOLDS PROMISE 74% Source: CDC; Truven Analytics; Center for Connected Health Policy, as of September 2014; Teladoc. 71% of employer-sponsored ER visits not necessary 417 mm (33%) could be treated through telehealth 1.25bn Ambulatory care visits per year in US Employees are open to virtual care Currently offer telehealth services Plan to offer telehealth in coming year 54% of 18-29 Year Olds 49% earn > $71,000 53% work > 35 Hours And Employers Are Responding 48%
42 | @chasedave KEEPING PATIENTS OUT OF THE HOSPITAL IS THE NEW GOAL “I think my job ultimately is to close every one of our hospitals...If it were my wife or my mom or my kids, I never want them in the hospital.” -- DavidFeinberg, CEO Geisinger Health System Source: HIMSS Analytics; Allied Market Research; Berg Insight. REMOTE PATIENT MONITORING 2014 26% of providers utilized some form of RPM 4m Units 2020 >20m UnitsBlood pressure monitor market share 71% Mount Sinai accountable care program (Sep 2010 – May 2012) resulted in: • Paramedics trained for and completing home visits for high-riskpatients • 911 callers offered options besides ER • Nurse health line for non-emergency situations RE-THINKING OPERATIONS Admissions 43% ER Visits 54%
43 | @chasedave BUT AN UNCERTAIN REGULATORY LANDSCAPE REMAINS Mental Health Office Visits Smoking Cessation Substance Abuse Wellness Visit Prolonged Outpatient Rural Eligible Facilities Source: CMS; Center for Connected Health Policy. FEDERAL LEVEL Current Medicare Coverage SERVICES LOCATION TelehealthEnhancement Act of 2013 Medicare TeleHealth Parity Actof 2015? Medicare HealthParityAct of 2014 STATE LEVEL State Medicaid programs that reimburse for: Live Video Store-and-forward Remote Patient Monitoring 47 9 1629 States with telehealth parity laws 8 States with proposed parity law 47 States that require physician to be licensed in state of patient 13 States with cross-border telemedicine license
44 | @chasedave BUT THIS HASN’T SLOWED THE BATTLE TO BUILD A NETWORK Business Model Delivery Method Freemium B2C B2B2C Video/Phone Kiosks Text Store-and-forward
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
46 | @chasedave PAYER MANAGEMENT/BENEFITS MANAGEMENT CLINICAL CARE INNOVATORS MOBILITY, VIRTUAL MEDICINE, AND REMOTE PATIENT MONITORING CARE COORDINATION / NEW ENTRANTS
47 | @chasedave CLINICAL CARE INNOVATORS DATA ANALYTICS AND POPULATION HEALTH PRACTICE MANAGEMENT/RCM/PRODUCTIVITY TOOLS AND POC MANAGEMENT/EHR
48 | @chasedave $63mm $50mm $16mm $70mm $58mm $40mm 2013 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER 2014 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER 2015 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER $40mm$85mm $29mm $400mm $100mm $89mm $78mm $54mm $45mm $36mm $30mm $30mm $131mm $125mm $100mm $41mm $25mm $21mm $24mm $15mm $81mm $50mm $32mm $24mm $21mm $110mm $82mm $71mm $101mm $41mm $19mm NOTABLE RECENT FINANCINGS $395mm $120mm $70mm $55mm $54mm $25mm $500mm $178mm $100mm PRIVATE PLACEMENTS
49 | @chasedave IPOs $131mm $261mm $1.3bn BENEFITS WORKFLOWS ANALYTICS SEPT. 2013 OCT. 2013 APRIL 2014 $75mm $127mm $53mm $600mm WORKFLOWS BENEFITS BENEFITS ANALYTICS JUNE 2014 JULY 2014 DEC. 2014 FEB. 2015 $223mm $196mm $100mm $157mm WORKFLOWS ANALYTICS WORKFLOWS TELEHEALTH MAY 2015 JUNE 2015 JUNE 2015 JUNE 2015 NOTABLE RECENT FINANCINGS
50 | @chasedave PATIENT-CENTRIC CARE
51 | @chasedave 1. Patients become educated price-seekers > Entrepreneurs are empowering them 2. Decentralized medicine and physician extenders 3. On-demand is making its way to healthcare 4. Healthcare is the next extension of our online lives 5. Patient = center of future health ecosystem > Stakeholders must respond to this new normal or perish PATIENT-CENTRIC CARE OVERVIEW
52 | @chasedave > The number of Americans with an HSA Account is expected to skyrocket PATIENTS ARE BEING FORCED TO TAKE CONTROL OF THE HEALTHCARE THEY RECEIVE $1.7bn $15.5bn 2006 2012 17mm 50mm 2014 2020 HSA enrollment in large employer plans 2006 4% 2007 5% 2008 8% 2009 8% 2010 13% 2011 17% 2012 19% 2013 20% 2014 20% > HDHP/SO Enrollment for Employer-Sponsored Plans 74% > National HSA assets have grown over 9x from 2006-2012 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2014.
53 | @chasedave AND SELF SELECTING INTO HIGH DEDUCTIBLE AND LEAN HEALTH PLANS Annual Deductibles of Individual Plans Selected on eHealth (October 2013-March 2014) Metal Tiers of Plans Chosen on public exchanges (All Enrollees; October 2013-March 2014) <$500 13% $500-$999 3% $1,000- $1,999 11% $2,000- $2,999 5% $6,000+ 38% Silver 64% Gold 9% Platinum 5% Catastrophic 2% Bronze 20% Source: Breakaway Policy Strategies, “Eight Million and Counting: A Deeper Look at Premiums, Cost Sharing and Benefit Design in the New Health Insurance Marketplaces,” May 2014; eHealth, “Health Insurance Price Index Report for Open Enrollment and Q1 2014,” May 2014; HHS Summary Report, May 2014; The Advisory Board Company. $3,000-$5,999 30%
54 | @chasedave A NEW KIND OF PATIENT IS IN THE WAITING ROOM > Millennials are beginning to utilize the healthcare system more regularly, with significant consequences for industry stakeholders 0% 25% 50% 75% 100% 1995 1Q 2015 Post-Millennials Millennials Gen Xers Boomers Silents Greatest 31% SILENTS 2% GREATEST 49% BOOMERS 18% GEN XERS 34% MILLENNIALS 1% POST-MILLENIALS 34% GEN XERS 29% BOOMERS 2% SILENTS Source: Pew Research Center.
55 | @chasedave > Various tools are being created with the goal of improving care navigation and transparency, and empowering and educating the patient-consumer ENTREPRENEURS ARE RESPONDING How exactly does my insurance work? How much should I be paying? How do I know who the best doctor is? My doctor’s hours don’t match my hours. Can someone explain my condition to me in normal words?Does my doctor think about me after I leave the office?
56 | @chasedave 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 TOOLS AIMED AT FIXING PRICE FAILURES ARE EMPOWERING PATIENT-CONSUMERS Tulsa, OK $0.6mm 51% Seattle, WA $1.1mm 46% Rockford, IL $1.0mm 50% Savings($K) Total $ Savings Average % Savings Source: The Zero Card. Representative of procedures completed in 2012-2014; Tusla (n=134), Seattle (n=301), Rockford (n=170).
57 | @chasedave TOTAL– Big 6 Sites, Market Share 901 50% 457 24% 140 8% 103 6% 80 4% 30 2% 1,711 93% Health System Affiliations 47 6 4 46 2 3 108 DECENTRALIZED MEDICINE AND PHYSICIAN EXTENDERS ARE THE NEW NORM > The retail clinic market is highly concentrated and dominated by house-hold names 18% of PCP visits could be handled at retail clinics. > 10 million visits per year by Americans at retail clinics represents only 2% of all primary care encounters. Annual ED Visits Non-Urgent ED visitsshifted to other care sites 132mm 47mm Annual PCP Visits VisitsEligible for NP-Led Care 573mm 103mm Source: CDC/NCHS,“National Ambulatory Medical Care Survey, National Hospital Ambulatory Medical Care Survey.” 2009-2010; The Value Proposition of Retail Clinics, April 2015, RWJF; The Advisory Board Company.
58 | @chasedave AND A NEW PRIMARY CARE MODEL IS IN THE MAKING > Concierge/DPC practices have grown dramatically since 2005 and offer numerous distinct advantages Source: Wall Street Journal; Forbes; Oliver Wyman. 48% ER VISITS 2005 2015 146 5,500 ✚ Number of concierge practices is up 3,700% 80 / 100 COMMONDIAGNOSES COVERED Why use the equivalent of auto insurance for an oil change? NET PROMOTER SCORES 93 NPS 51 NPS 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 0.0 0.5 1.0 1.5 2.0 2.5 Patients TransactionVolume($mm) Monthly Transaction Volume ($) Patients 41% HOSPITALIZATIONS 25% OUTPATIENT UTILIZATION
59 | @chasedave While some practices are working with insurers on bundled products for the individual market, in the near future, a national health insurer will team with a national player in primary care, such as Walgreen’s, to offer DPC at scale to consumers via a gym-like monthly membership fee, taking DPC from a niche offering to a new model consumers begin to understand. TRADITIONAL INSURERS ARE BEGINNING TO EMBRACE DPC, AND OTHERS ARE DRIVING CHANGE United Food and Commercial Workers Union UnitedHERE, Atlantic City Freelancer’s Union, Brooklyn Culinary Workers Union, Las Vegas 2012 2013 2014 2015 UNIONS COMPANIES Source: The Advisory Board Company.
60 | @chasedave ON-DEMAND IS MAKING ITS WAY TO HEALTHCARE Heal Pager Medicast Retrace Health FOUNDED 2014 2014 2013 2013 2014 FEE/SERVICE $99 On sitedoctor in 1 hour $200 for urgentcare $75-100 for wellness NA $50: NP videoconsult $200: in-person $150 REGION Los Angeles San Francisco NYC San Francisco NA Minneapolis Atlanta TARGET CUSTOMER Adults& Kids Adults& Kids HealthSystems Adults & Kids Pediatric Care
61 | @chasedave FINANCES DOCUMENTS ACTIVITY SOCIAL= CONSUMERS ARE BRINGING THEIR LIVES TO THE INTERNET AT A RAPID PACE
62 | @chasedave AND HEALTHCARE IS NEXT mHealth apps are set to become a regular part of care 86% of clinicians believe mHealth apps will be important for patient health management over next 5 years 90%Use mobile devices to engage patients app-enabled patient portals telehealth services text communications remotepatient monitoring 73% 62% 57% 49% 7in 10 U.S. adults track at least one health indicator Source: Pew Self-Tracking, June 2013; Pew Internet & American Life, January 2014; 2013 Accenture Consumer Electronics Products and Services Usage Report; MedData Group, April 2014; HIMSS 2015 Mobile Technology Survey. And the means of tracking are remarkably primitive 49% IN HEAD 34% PAPER 8% MEDICAL DEVICE 7% APP 5% SPREADSHEET 1% ONLINE TOOL
63 | @chasedave THE PATIENT WILL BE AT THE CENTER OF THE FUTURE HEALTHCARE SYSTEM FUTURE FOCI: Primary Physician Consulting Physician LabInsurance Pharmacy Non-ClinicalActivity Family Hospital Post-Acuteand Home Care Ancillary Sites Personalized treatment 1 Controls method and venue of care delivery 2 Shops for quality and cost 3
64 | @chasedave CARE EPISODE REIMBURSEMENT Traditional Foci 1. Diagnostics 2. Technology 3. Drugs 4. Beds 5. Procedures PROVIDERS ARE ALTERING THEIR GOALS TO REFLECT THIS NEW FOCUS LONG-TERM HEALTH MANAGEMENT Patient-Centricity Source: The Advisory Board Company. 1. Multi-provider patient portal/tools 2. Medical information is made relevant 3. Patient-generated data is sought out 4. Portable and on the patient’s terms 5. Collaborative care process with shared decision making tools
65 | @chasedave INDUSTRY STAKEHOLDERS MUST EMBRACE PATIENT ENGAGEMENT Those with Significant Investments in Patient Engagement and Relationship Management Solutions Patient relationship management and engagement work And industry players are responding LESS ACTIVATED MORE ACTIVATED 30-Day Readmissions Medical Errors Poor Communication Health Consequence 28% 13%36% 19% 49% 13% Greater Patient Engagement = Improved Outcomes Source: AARP survey of patients over 50 with 2 or more chronic conditions.
66 | @chasedave PAYERS WERE FIRST TO DO SO WITH MIXED RESULTS Health Matters GOLDWALKERCOLORFALL
67 | @chasedave And providers have much to learn from their efforts > Vendors providing frictionless and secure integration with consumer health data, leading to actionable clinical data will win with providers 4 EHR integration is a must; seek interoperability opportunities 1 Analytics are as important as data collection and warehousing 5 Build partnerships with payers to provide health and wellness incentives for patients 2 User must be empowered via actionable clinical insights 6 Easy identification of high-risk patients 3 The simpler the better
68 | @chasedave CareMore: A PROVIDER EMBRACING A PATIENT-CENTRIC MODEL 1 Early intervention is central to their model. Longitudinal records (8-10 sources) and predictive modeling allow for early intervention to prevent acute episodes. 2 “A high percentage of physician services can be delivered by non-physicians.” 3 A patient can go from being in the easy chair to ICU in 12 hours so they must rapidly intervene. speedy delivery within minutes can save. 4 Capitation is freedom, not risk. Education is what the patient needs, and longitudinal. Key Takeaways from CareMore Business and Care Management Model > Age- and health-adjusted payment for its full patient panel > Patient-first business design required total rethink of patient relationship,health model, and care team > Physician hospitalists include treatment of patients outside hospital > Each chronic condition has its own holistic treatment plan > Information is rapidly processed and forwardedto all members of care team A Medicare healthcare companybasedin Southern Californiaprovidingcare to an exclusively Medicare Advantage population Acquired by Wellpoint in 2011 for $800 million Source: Oliver Wyman.
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
70 | @chasedave PATIENT-CENTRIC CARE INNOVATORS HEALTH INFORMATION, TRANSPARENCY, AND PLAN INFORMATION PATIENT RELATIONSHIP MANAGEMENT AND ENGAGEMENT/REMOTE PATIENT MONITORING
71 | @chasedave PATIENT-CENTRIC CARE INNOVATORS CONSUMER-FRONTING PAYER PRODUCTS THAT HELP MANAGE BENEFITS AND PAYMENT CARE ACCESS/RETAIL CLINICS/DIRECT PRIMARY CARE/HOUSE CALLS/CARE ANYWHERE
72 | @chasedave NOTABLE RECENT FINANCINGS PRIVATE PLACEMENTS 2013 ENGAGEMENT INFORMATION CARE ACCESS $10mm $8mm $68mm $40mm $24mm $15mm $6mm $15mm $10mm $14mm $14mm 2014 ENGAGEMENT INFORMATION CARE ACCESS $82mm $26mm $110mm $17mm $11mm $81mm $50mm $32mm $25mm $15mm $27mm $24mm $21mm 2015 ENGAGEMENT INFORMATION CARE ACCESS $500mm $20mm $178mm $130mm $20mm $63mm $50mm $28mm $35mm $13mm $13mm $20mm $16mm $15mm $16mm s
73 | @chasedave $91mm $178mm $100mm CARE ACCESS INFORMATION INFORMATION JAN. 2014 MARCH 2014 MARCH 2014 NOTABLE RECENT FINANCINGS IPOs
74 | @chasedave WELLNESS & PREVENTION
75 | @chasedave 1. The era of open information in healthcare is underway 2. Wearables show promise, but not perfected 3. The life science industry’s “transistor moment” has the potential to revolutionize medicine 4. Large pharma can’t resist for long 5. America’s growing culture of wellness is beginning to penetrate the workplace, but are the results real? 6. The race to build a healthcare data platform is on WELLNESS & PREVENTION OVERVIEW
76 | @chasedave PAYERS CLAIMS COSTS/FINANCE UTILIZATION EMR PROCEDURES OUTCOMES PRESCRIPTIONS SUPPLYCHAIN • Coordinated care • Improved outcomes • Interoperability • Population health • Lowercosts • Disease prevention • Adherence SATISFACTION THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY TRIALRESULTSAND EFFICACY SALESAND DRUGHISTORY • R&D productivity • Trial improvement • Improving efficacy• Careaccess • Price transparency • Convenienceandcost • Good health EXERCISEDATA PURCHASES BEHAVIORS,SOCIAL DATA PROVIDERS GOALS PATIENTS DATAGOALS PHARMA DATAGOALSDATAGOALS CLAIMS COSTS • Payment innovation • Data acquisition • Provider-performance transparency • Lowering costs • Reducingclaimspaid • Winningshare • Wellness & prevention
77 | @chasedave WEARABLES SHOW PROMISE 65% WEIGHT 61% BLOOD SUGAR 57% BLOOD PRESSURE 54% EXERCISE 36% NUTRITION 36% PAIN 35% SLEEP 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E EXPENSE PRIVACY LOOK COMFORT HEALTHRISK Leading barriers to purchase cited by U.S. consumers Source: IMS Research, MeMD, ABI Research, Deloitte, Rackspace; TNS Global, October 2013. > 88% of physicians want patients to monitor health parameters at home. Their top priorities include: While wearable technology in healthcare is expected to triple in size by 2019, there are major consumer impediments to purchase. > Fitness and medical wearables were 60% of the wearables market in 2013 10% 13% 13% 31% 54% $2.0bn $2.7bn 100m units $5.8bn
78 | @chasedave > Declining rate of sustained activity tracker use over ownership BUT COULD BE A FAD AND ARE TARGETING THE WRONG POPULATION 0% 25% 50% 75% 100% 0 3 6 9 12 15 18 21 24 RateofSustained Utilization Time (months) Daily engagement falls below 50% within 18 months of purchase 0% 10% 20% 30% 18-24 25-34 35-44 45-54 55-64 65+ % of activity tracker owners % of U.S. population Americans own a wearable1 in 5 1 in 10 Wear it daily > Activity tracker ownership age demographic Ages 25-34 Goal: Fitness Optimization Ages 55-64 Goal: Overall health improvement and longevity Source: Endeavour Partners, September 2013; PwC.
79 | @chasedave 86% wearables would make users vulnerable to security breaches 82% feared wearables would invade their privacy 72% wearables would hurt our ability to relate to each other CONSUMER AND DOCTOR SENTIMENT ON WEARABLES IS MIXED 46% employer should fund wearable technology for employees 72% would use a smartwatch if employer paid 63% would use a fitness band if employer paid > “Doctors would love to be excited about wearables — they’re gadget guys at heart — but their day-to- day is spent battling 30 year old fax machines to get your last lab report.” - Jeff Tangney, CEO of Doximity Source: PricewaterhouseCoopers. > “We can't make the leap that just because the data from these low-risk devices is coming in digitally doesn't mean that it's accurate.” - Dr. Michael Blum, UCSF
80 | @chasedave Rapidly declining cost of sequencing the human genome THE LIFE SCIENCE INDUSTRY’S “TRANSISTOR MOMENT” Allows previously unthinkable questions to be answered What is my unique physiology? What can I metabolize? What drugs would not interact well for me? What is the best dosage for me? What is unique about my cancer? What is my pre-disposition to disease? Source: PricewaterhouseCoopers. 2009 $100k 2015 $1k
81 | @chasedave HAS THE POTENTIAL TO REVOLUTIONIZE MEDICINE TRADITIONAL MEDICINE One size does not fit all PERSONALIZED MEDICINE: The application of genomics, pharmacogenomics, and proteomics for improved efficacy HIGH FAILURE RATES LOW FAILURE Source: Brian Spear, Margo Heath-Chiozzi, Jeffrey Hugg, “Clinical Trends in Molecular Medicine”. BIOMARKER DIAGNOSTICS (Blood, DNA, Tissue) THERAPY SSRIS 38% ASTHMA 40% DIABETES 43% ARTHRITIS 50% ALZHEIMER’S 70% CANCER 75% TARGETED THERAPY
82 | @chasedave LARGE PHARMA CAN’T RESIST FOR LONG 3 Include diagnostics in development, trial design, and treatment Payers are beginning to recognize the real and increasing cost of administering ineffective drugs and treating side effects, and pharma must respond or face a frustrating future of declining sales and profits 1 Forge alliances with diagnostic companies 2 Communicate safety and efficacy advantages of targeted therapies BLOCKBUSTER TARGETED Mass Phenotype TargetedGenotypeMarkets Disease State Disease Life CycleFocus 1 Drug – 1 Disease State Numerous StatesTreatments/Drugs Scale KnowledgeEconomics Large Runs Small RunsManufacturing Few, Large Multiple, SmallSales Force Few ManyProduct Portfolio BUSINESS MODEL TRANSITION Source: The Changing Face of R&D in the Future Pharmaceutical Landscape, Deloitte.
83 | @chasedave 0 2,000 4,000 6,000 8,000 10,000 1996 2000 2004 2008 2012 2013 AMERICA’S GROWING CULTURE OF WELLNESS OrganicFarms 20022012 7,323 17,281 266% Organic market sales growth (2002-2011), totaling $31.5 billion in 2011 # of farmers markets per USDA 78% of families buy organic THE TASTES OF A NEW GENERATION... When asked if they will increase or decrease their spending in 50 different categories over the next 12 months, the proportion of millennials answered: 1 FRESH FRUITS AND VEGETABLES ⬆37% And the organic movement is showing rapid growth 3x growthin farmers markets 2 ORGANIC FOOD ⬆25% 3 NATURAL PRODUCTS ⬆23% Source: Boston Consulting Group 2013 Global Consumer Sentiment Survey of U.S. Millennials’ Saving and Spending Intentions; USDA; Organic Trade Association.
84 | @chasedave WELLNESS IS BEGINNING TO PENETRATE THE WORKPLACE WHAT THEY OFFER BIOMETRIC TESTING HEALTH RISK ASSESSMENT SUBSIDIZED GYM MEMBERSHIPS FREE FLU SHOTS WEIGHT LOSS GROUPS SMOKING CESSATION PROGRAMS LIFESTYLE COACHING 24-HOUR NURSE LINE HEALTH FAIRS PHYSICAL ACTIVITY PROGRAMS Source: Fidelity Investments and National Business Group on Health. And spending more per employee on wellness incentives 201520142010 $430 $595 $693 of U.S. employers with >50 employees offer wellness programs 50%
85 | @chasedave BUT ARE THE RESULTS REAL? PEPSICO > Employee engagement is questionable 24% actually participate in employer wellness programs ...to whoever shows wellness works. -Al Lewis & Vik Khanna InsuranceThoughtLeadership.com Source: RAND Group; HBR.org; Gallup. > For every $1 spent on wellness, these studies showed healthcare savings of: J&J DISEASEMANAGEMENT LIFESTYLEMANAGEMENT TOTAL MILANI/LAVIE $2.71 $3.80 $0.50 $1.50 $6.00 12% strongly agreethey have higher overall well-being because of employer > Prompting the “Wellness Prize” $1 MILLION
86 | @chasedave THE RACE TO BUILD A HEALTHCARE DATA PLATFORM IS ON ACQUISITIONSINVESTMENTSPLATFORMSPARTNERSHIPS INNOVATORS 34 Total Healthcare Investments
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
88 | @chasedave PHYSICAL FITNESS DIET & NUTRITION VITAL SIGN MONITORING & WEARABLE TECH WELLNESS & PREVENTION PROGRAMS WELLNESS & PREVENTION INNOVATORS
89 | @chasedave SOCIAL ENGAGEMENT, NETWORKS, COACHING MEDICATION MANAGEMENT AND ADHERENCE GENOMICS/PRECISION MEDICINE BEHAVIORAL AND EMOTIONAL HEALTH WELLNESS & PREVENTION INNOVATORS
90 | @chasedave 2013 PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS $40mm $30mm $239mm $43mm $63mm $21mm $12mm $35mm $30mm $19mm $18mm 2014 PRECISION/GENOMICS BEHAVIORIALHEALTH WEARABLES WELLNESS $480mm $120mm $40mm $147mm $204mm $29mm $70mm $62mm $32mm $23mm $19mm$60mm $58mm 2015 PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS $200mm $100mm $50mm $300mm $92mm $58mm $100mm $79mm $35mm $48mm $30mm $30mm$55mm $50mm $19mm $23mm NOTABLE RECENT FINANCINGS PRIVATE PLACEMENTS
91 | @chasedave $102mm $732mm GENOMICS WEARABLES FEB. 2015 JUNE 2015 NOTABLE RECENT FINANCINGS IPOs
CREDITS & CONTACT INFORMATION
93 | @chasedave P R O F E S SI O N AL P R I O R E X P . E D U C A T I O N Kevin Cable ManagingDirector kcable@cascadiacapital.com (206) 696 - 7922 • BoardMember(e.g.,InnovateWashington,TechnologyAlliance, WashingtonSoftwareAlliance) • CEO,NumeraSoftware • VP Corp.Dev., MolecularSimulations BS,Cell& MolecularBiology,Universityof Washington Dave Chase Senior Advisor @chasedave www.healthfundr.com/u/dave-chase • Managing Partner, Healthfundr • AdvisoryBoard, OliverWymanHealthInnovationCenter • Co-Author,2014HealthcareBook of the Year • ContributingWriter,TechCrunch,Forbes • SVP,WebMD • CEO,Co-Founder,Avado BA,Business & Mathematics,Universityof Washington ExecutiveEducation,NorthwesternUniversity Kurt Sheline Senior Associate ksheline@cascadiacapital.com (206)436 - 2542 • PathwayCapital • LighterCapital • MerrillLynch MBA,UC Berkeley BA,ClaremontMcKenna College Kate Nimmo Analyst knimmo@cascadiacapital.com (206)436 - 2510 • TuckBusiness BridgeProgram BA,DartmouthCollege CASCADIA CAPITAL HEALTHCARE & DIGITAL HEALTH TEAM TEAMWIDE EXPERIENCE • Originated / executed over $1 billion of M&A and financingtransactionsin the healthcare sector • Entrepreneurs/Co-founders with exits • Regular dialog with key industry players regarding“live” transactions • Unprecedented financialsponsor relationships

More Related Content

PPTX
Teladoc Case Study
Andrew Marsha Mulia
 
PPTX
Digital Transformation of Indian Healthcare Sector.pptx
New Delhi Institute of Management
 
PDF
Healthcare Sector Analysis PowerPoint Presentation Slides
SlideTeam
 
PPTX
Future Trends in Healthcare
Farhad Zargari
 
PDF
Digital transformation in healthcare: What you need to know
RashmiHC5
 
PPTX
Emerging Trends in Healthcare Innovation
Gokul Alex
 
PPTX
2023 Healthcare Trends: What Leaders Need to Know about the Latest Emerging M...
Health Catalyst
 
PDF
The future of healthcare 2019
Future Agenda
 
Teladoc Case Study
Andrew Marsha Mulia
 
Digital Transformation of Indian Healthcare Sector.pptx
New Delhi Institute of Management
 
Healthcare Sector Analysis PowerPoint Presentation Slides
SlideTeam
 
Future Trends in Healthcare
Farhad Zargari
 
Digital transformation in healthcare: What you need to know
RashmiHC5
 
Emerging Trends in Healthcare Innovation
Gokul Alex
 
2023 Healthcare Trends: What Leaders Need to Know about the Latest Emerging M...
Health Catalyst
 
The future of healthcare 2019
Future Agenda
 

What's hot (20)

PPT
Hospital as a system
Nc Das
 
PPTX
Recent trends in healthcare technology
Anil Pethe
 
PPTX
Organization management of medical records department part-1
T.Keshavarao
 
PPTX
NABH
Vijay Raj Yanamala
 
PPTX
m Health
lokesh213
 
DOCX
SUMMER REPORT
Asim Haque
 
PPTX
Outpatient Department (OPD)
Zulfiquer Ahmed Amin
 
PPTX
Pharmacy services
rangaraju123
 
PPTX
Mhealth - mobile health
Tushar Swami
 
PDF
Hospital information system[1]
Prasit Chanarat
 
PDF
OPERATIONAL MANAGEMENT IN HOSPITALS
k Sravan
 
PPT
Clinical pharmacy
Sitaram Khadka
 
PDF
Hospital committees
DrSiddharthSingh5
 
PPTX
Healthcare industry ppt
Ankit Agarwal
 
PPT
e-health
Monief Eid,Prince2,Prosci, Lean Six Sigma &ITIL
 
DOC
Organizational Structure Of A Hospital[1]
jawadorak
 
PPTX
ROLE OF IT IN HOSPITALS
GAURAV PRAKASH
 
PPTX
E pharmacy
Abhi Keralli
 
PPTX
BENEFITS AND CHALLENGES TO THE ADOPTION OF ELECTRONIC MEDICAL RECORDS
UsmanYakubuMaaruf
 
PDF
Technology for Healthcare and Mankind
Atifa Aqueel
 
Hospital as a system
Nc Das
 
Recent trends in healthcare technology
Anil Pethe
 
Organization management of medical records department part-1
T.Keshavarao
 
NABH
Vijay Raj Yanamala
 
m Health
lokesh213
 
SUMMER REPORT
Asim Haque
 
Outpatient Department (OPD)
Zulfiquer Ahmed Amin
 
Pharmacy services
rangaraju123
 
Mhealth - mobile health
Tushar Swami
 
Hospital information system[1]
Prasit Chanarat
 
OPERATIONAL MANAGEMENT IN HOSPITALS
k Sravan
 
Clinical pharmacy
Sitaram Khadka
 
Hospital committees
DrSiddharthSingh5
 
Healthcare industry ppt
Ankit Agarwal
 
e-health
Monief Eid,Prince2,Prosci, Lean Six Sigma &ITIL
 
Organizational Structure Of A Hospital[1]
jawadorak
 
ROLE OF IT IN HOSPITALS
GAURAV PRAKASH
 
E pharmacy
Abhi Keralli
 
BENEFITS AND CHALLENGES TO THE ADOPTION OF ELECTRONIC MEDICAL RECORDS
UsmanYakubuMaaruf
 
Technology for Healthcare and Mankind
Atifa Aqueel
 
Ad

Similar to The Future Health Ecosystem Today (20)

PPTX
Harbin Clinic Presentation | Part 1
Michael Burcham
 
PPT
Reasons Why You Need An Experienced Account Manager
gingin4
 
PPT
Megatrends in the healthcare industry
Ignacio Riesgo
 
PPTX
Angel Capital Association keynote - April 2017
Dave Chase
 
PDF
HealthPanel Concept pitchdeck
smworth
 
PDF
141009 dhc check up bill james
Steven Rubis
 
PPT
Future of Health
Sher i Kashmir Institute of Medical Sciences, Srinagar (India)
 
PPTX
Future of Health
Sher i Kashmir Institute of Medical Sciences, Srinagar (India)
 
PDF
Digital Hospitals: The Future of Acute Care
sambiswal
 
PPTX
Healthcare trends and opportunities
Founding Fuel
 
PPTX
Consumer Centric Healthcare
Leo Barella
 
PDF
2017 global health care sector outlook by Deloitte
Nelson Loh
 
PPTX
The changing landscape of health care in the US -- drivers and outcomes
Gregory Travis
 
PDF
Future of healthcare 15 october 2019
Future Agenda
 
PPTX
Summary of Top Ten Health Industry Issues
Patricia (Patty) O'Brien
 
PDF
Healthcare's Digital Future
mirkka länsisalo
 
PDF
How do we see the healthcare's digital future and its impact on our lives?
Jane Vita
 
PDF
SVB Digital Health Report 2016
Silicon Valley Bank
 
PDF
SVB digital health-report-2016
Galen Growth
 
PPTX
Healthcare
Ashish Sharma
 
Harbin Clinic Presentation | Part 1
Michael Burcham
 
Reasons Why You Need An Experienced Account Manager
gingin4
 
Megatrends in the healthcare industry
Ignacio Riesgo
 
Angel Capital Association keynote - April 2017
Dave Chase
 
HealthPanel Concept pitchdeck
smworth
 
141009 dhc check up bill james
Steven Rubis
 
Future of Health
Sher i Kashmir Institute of Medical Sciences, Srinagar (India)
 
Future of Health
Sher i Kashmir Institute of Medical Sciences, Srinagar (India)
 
Digital Hospitals: The Future of Acute Care
sambiswal
 
Healthcare trends and opportunities
Founding Fuel
 
Consumer Centric Healthcare
Leo Barella
 
2017 global health care sector outlook by Deloitte
Nelson Loh
 
The changing landscape of health care in the US -- drivers and outcomes
Gregory Travis
 
Future of healthcare 15 october 2019
Future Agenda
 
Summary of Top Ten Health Industry Issues
Patricia (Patty) O'Brien
 
Healthcare's Digital Future
mirkka länsisalo
 
How do we see the healthcare's digital future and its impact on our lives?
Jane Vita
 
SVB Digital Health Report 2016
Silicon Valley Bank
 
SVB digital health-report-2016
Galen Growth
 
Healthcare
Ashish Sharma
 
Ad

More from Dave Chase (20)

PPTX
The Future We Choose - Reestablising Health Sovereignty
Dave Chase
 
PPTX
The Future We Choose - Health Rosetta
Dave Chase
 
PDF
Local 5 steps to transforming health plans
Dave Chase
 
PPTX
Health Care Status Quo Results Gallery
Dave Chase
 
PPTX
Health Care Status Quo Results Gallery
Dave Chase
 
PPTX
Scott Haas USI Alternative Reimbursement Case Study Dropping Medical Spend ov...
Dave Chase
 
PPTX
Generic price spread between PBM and GoodRx
Dave Chase
 
PDF
Case study - Surgery Partners
Dave Chase
 
PPTX
HR Digest interview on opioids in the workplace
Dave Chase
 
PPTX
If this was a pill, it would be the blockbuster drug of the century
Dave Chase
 
PDF
Emergency department physical therapy
Dave Chase
 
PDF
Opioid Crisis Wake-up Call summary
Dave Chase
 
PDF
Effect of three decades of screening mammography on breast cancer incidence
Dave Chase
 
PDF
Overdiagnosis in cancer
Dave Chase
 
PDF
Book cover direction
Dave Chase
 
PPTX
Broker & Consultant Disclosure Standards for Health & Welfare Plans
Dave Chase
 
PPTX
Hint Summit 2017 Health Rosetta Institute Ecosystem overview - Dave Chase a...
Dave Chase
 
PPTX
Health Rosetta Institute Ecosystem Overview
Dave Chase
 
PPTX
Health 3.0 Pyramid
Dave Chase
 
PPTX
Health Rosetta Case Study - City of Kirkland, Washington
Dave Chase
 
The Future We Choose - Reestablising Health Sovereignty
Dave Chase
 
The Future We Choose - Health Rosetta
Dave Chase
 
Local 5 steps to transforming health plans
Dave Chase
 
Health Care Status Quo Results Gallery
Dave Chase
 
Health Care Status Quo Results Gallery
Dave Chase
 
Scott Haas USI Alternative Reimbursement Case Study Dropping Medical Spend ov...
Dave Chase
 
Generic price spread between PBM and GoodRx
Dave Chase
 
Case study - Surgery Partners
Dave Chase
 
HR Digest interview on opioids in the workplace
Dave Chase
 
If this was a pill, it would be the blockbuster drug of the century
Dave Chase
 
Emergency department physical therapy
Dave Chase
 
Opioid Crisis Wake-up Call summary
Dave Chase
 
Effect of three decades of screening mammography on breast cancer incidence
Dave Chase
 
Overdiagnosis in cancer
Dave Chase
 
Book cover direction
Dave Chase
 
Broker & Consultant Disclosure Standards for Health & Welfare Plans
Dave Chase
 
Hint Summit 2017 Health Rosetta Institute Ecosystem overview - Dave Chase a...
Dave Chase
 
Health Rosetta Institute Ecosystem Overview
Dave Chase
 
Health 3.0 Pyramid
Dave Chase
 
Health Rosetta Case Study - City of Kirkland, Washington
Dave Chase
 

Recently uploaded (20)

PPT
KULIAH UG WANITA Prof Endang 121110 (1).ppt
eddieSaputra4
 
PPTX
PEDIATRIC OSCE, MBBS, by Dr. Sangit Chhantyal(IOM)..pptx
SangeetChhantyal
 
PDF
Myers’ Psychology for AP, 1st Edition David G. Myers Test Bank.pdf
solutionsmanual3
 
PDF
Dermatology diseases Index August 2025.pdf
Hany salah Soliman
 
PDF
MINERAL & VITAMIN CHARTS fggfdtujhfd.pdf
vaishnavikumarimugha
 
PDF
Dr. Jasvant Modi - Passionate About Philanthropy
Dr. Jasvant Modi
 
PPT
Adrenergic drugs (sympathomimetics ).ppt
AdugnaWari
 
PDF
CHAPTER 9 MEETING SAFETY NEEDS FOR OLDER ADULTS.pdf
ANNIELOURRIECASABUEN1
 
PPT
Microscope is an instrument that makes an enlarged image of a small object, t...
LuckyMittal13
 
PPTX
NUTRITIONAL PROBLEMS, CHANGES NEEDED TO PREVENT MALNUTRITION
rpragatheeswari
 
PPTX
ABG advance Arterial Blood Gases Analysis
Shiv Bais
 
PPTX
PE and Health 7 Quarter 3 Lesson 1 Day 3,4 and 5.pptx
AnnaMae39
 
PPTX
Rheumatic heart diseases with Type 2 Diabetes Mellitus
drsharmasekhar54321
 
PPTX
Importance of Immediate Response (1).pptx
aryethscandelaria
 
PDF
MECE & SCQA FRAMEWORKS, - Adding Innovation & Influencing Hospital & Super-Sp...
Vipin Srivastava
 
PPTX
Galactosemia pathophysiology, clinical features, investigation and treatment ...
ssuser7f57ff
 
PDF
A Brief Introduction About Malke Heiman
Malke Heiman
 
PDF
Khaled Sary- Trailblazers of Transformation Middle East's 5 Most Inspiring Le...
insightscare
 
PPTX
Trichuris trichiura infection
banisterbribi
 
PDF
NUTRITION THROUGHOUT THE LIFE CYCLE CHILDHOOD -AGEING
LoverTeddy
 
KULIAH UG WANITA Prof Endang 121110 (1).ppt
eddieSaputra4
 
PEDIATRIC OSCE, MBBS, by Dr. Sangit Chhantyal(IOM)..pptx
SangeetChhantyal
 
Myers’ Psychology for AP, 1st Edition David G. Myers Test Bank.pdf
solutionsmanual3
 
Dermatology diseases Index August 2025.pdf
Hany salah Soliman
 
MINERAL & VITAMIN CHARTS fggfdtujhfd.pdf
vaishnavikumarimugha
 
Dr. Jasvant Modi - Passionate About Philanthropy
Dr. Jasvant Modi
 
Adrenergic drugs (sympathomimetics ).ppt
AdugnaWari
 
CHAPTER 9 MEETING SAFETY NEEDS FOR OLDER ADULTS.pdf
ANNIELOURRIECASABUEN1
 
Microscope is an instrument that makes an enlarged image of a small object, t...
LuckyMittal13
 
NUTRITIONAL PROBLEMS, CHANGES NEEDED TO PREVENT MALNUTRITION
rpragatheeswari
 
ABG advance Arterial Blood Gases Analysis
Shiv Bais
 
PE and Health 7 Quarter 3 Lesson 1 Day 3,4 and 5.pptx
AnnaMae39
 
Rheumatic heart diseases with Type 2 Diabetes Mellitus
drsharmasekhar54321
 
Importance of Immediate Response (1).pptx
aryethscandelaria
 
MECE & SCQA FRAMEWORKS, - Adding Innovation & Influencing Hospital & Super-Sp...
Vipin Srivastava
 
Galactosemia pathophysiology, clinical features, investigation and treatment ...
ssuser7f57ff
 
A Brief Introduction About Malke Heiman
Malke Heiman
 
Khaled Sary- Trailblazers of Transformation Middle East's 5 Most Inspiring Le...
insightscare
 
Trichuris trichiura infection
banisterbribi
 
NUTRITION THROUGHOUT THE LIFE CYCLE CHILDHOOD -AGEING
LoverTeddy
 

The Future Health Ecosystem Today

  • 1. The Future Health Ecosystem Today @chasedave
  • 2. 1 | @chasedave > The Future Health Ecosystem Today > Current Problems > Clinical Care > Patient-Centric Care > Wellness & Prevention > Credits & Contact Information CONTENTS
  • 3. 2 | @chasedave THE FUTURE HEALTH ECOSYSTEM TODAY
  • 4. 3 | @chasedave THE FUTURE HEALTH ECOSYSTEM WILL FOCUS ON THE TRUE DRIVERS OF OUTCOMES Source: RWJF/UWPHI.3 GENETICS DIET & EXERCISE TOBACCO USE ALCOHOL & DRUG USE SLEEP SEXUAL ACTIVITY ACCESS TO CARE QUALITY OF CARE EDUCATION EMPLOYMENT INCOME FAMILY/ SOCIAL SUPPORT COMMUNITY SAFETY AIR QUALITY WATER QUALITY HOUSING TRANSIT
  • 5. 4 | @chasedave Vector 2: Evidence-Based Decisions Vector 3: B2C Health Improvement Programs Vector 1: Next Generation Primary Care SleepTracking/ Testing: Wearables/Hardware Personalized Medicine/Genomics Health Information Care Navigation Disease Management Peer Networks Health Coaching Decision-MakingTools Care Access Remote Patient Monitoring Patient Engagement Wellness Programs GENETICS DIET & EXERCISE TOBACCOUSE ALCOHOL& DRUG USE SLEEP SEXUALACTIVITY Family Support and Self-Help Patient Groups Source: RWJF/UWPHI.
  • 6. 5 | @chasedave Vector 5: Analytics and Clinical Decision Support Vector 2: Next Generation Primary Care Vector 3: Value-Based Care Vector 4: Operational Efficiency Vector 1: Disease-Specific Care Pathways Transparency Virtual Medicine Remote Patient Monitoring Retail Clinics, DPC Care Coordination Patient EngagementBig Data Personalized Medicine Medication Management Nanotechnology House Calls Practice Management, EMRs, Pharmacy Management ACCESSTO CARE QUALITYOF CARE Tech-EnabledServices Knowledge Sharing Source: RWJF/UWPHI.
  • 7. 6 | @chasedave Advance Directives Programs/Services Next Gen Benefits Social Services Access/Management Vector 1: Equilibrating Healthcare Expense Vector 2: Community-Based Health Initiatives Vector 3: Aging & End-of- Life Programs House Calls Hospice Programs Virtual Medicine Incentive ProgramsWellness Programs EDUCATION EMPLOYMENT INCOME FAMILY/SOCIAL SUPPORT COMMUNITY SAFETY Early ID and Prevention Programs Source: RWJF/UWPHI.
  • 8. 7 | @chasedave GPS-EnabledSensorsVector 1: Targeted Monitoring and Rapid Response Vector 2: Community- Based Health Initiatives Food,Housing and Transportation Access Next Generation Public Transport Environmental Response Mechanisms Continuous Monitoring (wi-fi,bluetooth,etc.) Vector 3: Affordable Living and Access AIR QUALITY WATER QUALITY HOUSING TRANSIT Built Environment Design Broadband Connectivity Source: RWJF/UWPHI.
  • 9. 8 | @chasedave Personalized Medicine Continuous Monitoring of Clinical and Non-Clinical Data Better Understanding of How Patient Behaviors Affect Outcomes Episodic to Real-Time, Micro-Targeted Care Predictive and Actionable Analytics Access to Care Proactive Medicine > Reactive Medicine Care Coordination Enhanced Cell Identification and Tracking THE PREVIOUSLY UNFATHOMABLE WILL BECOME A REALITY
  • 11. 10 | @chasedave A STARK IMBALANCE WITH DRAMATIC REPERCUSSIONS Source: RWJF/UWPHI; Bipartisan Policy Center. 4% Health Behaviors 8% Other 88% Medical Services 10% Physical Environment 20% Clinical Care 30% Health Behaviors 40% Social & Economic Factors What Drives Outcomes? Where Do We Spend Money? Unhealthy Workforce CollateralDamage Chronic Disease Obesity Wasted Spending Overtreatment
  • 12. 11 | @chasedave THE SWANS ARE IN THE WATER, BUT WHAT COLOR ARE THEY? CadillacTax A consumer movement is triggered Aging-in-place Medicare pricing expands to self-insured Medicare allowed to negotiate with pharma Tax-exempt health systems lose status State AG’s pursue physician non-competes The bursting of the hospital bond bubble Like the newspaper/publishing industry at the internet’s inception, the healthcare industry is on the verge of its transistor moment. Which of today’s healthcare incumbents will fail to survive?
  • 13. 12 | @chasedave HEALTHCARE’S COLLATERAL DAMAGE IS SIGNIFICANT > State budgets for healthcare coverage vs other priorities Mental Health PublicHealth Education Human Services Infrastructure & Housing Law& PublicSafety LocalAid $0 B $3 B $6 B $9 B $12B $15B -22% -31% -12% -11% -14% -13% -51% FY01 FY14 GIC, MassHealth & other coverage + $5.4b + 37% −$3.6b − 17% Source: Massachusetts Budget and Policy Center; figures all adjusted for GDP growth. % change
  • 14. 13 | @chasedave AN UNHEALTHY WORKFORCE BURDENS EMPLOYERS AND ECONOMY SMOKING + $5,800 Additional annual costs per employee with various lifestyle risks > Lost Revenue $1,900-$2,250 per employee per year > Lost Employee Time 45,000,000 avoidable sick days per year > Lost Output $576 billion is lost by the U.S. economy due to workforce illness Poor employee health leads to... And adds costs to employers budgets DIABETES + $4,413 OBESITY + $4,237 HIGH BLOOD PRESSURE + $1,077 Source: Berman et al., tobaccocontrol.bmj.com; NBCH, Februrary 2012; Van Nuys et al., American Journal of Health Promotion, May/June 2014; Kowlessar et al., JOEM, May 2011.
  • 15. 14 | @chasedave OUR POPULATION IS AGING AND SICKER THAN EVER 50+ 65-74 > The U.S. population aged 50+ is expected to grow to 132mm... 2010 109mm 2030 132mm 2030 39mm …and the number aged 65-74 will nearly double 2010 22mm $0.75 of every $1 spent > Chronic disease is an epidemic that is expected to worsen... ...and account for the vast majority of healthcare expenditures 2010 2030 TOTAL(MM) 149mm 171mm PROPORTION 48% 49%
  • 16. 15 | @chasedave THIS GENERATION’S TOBACCO: SUGAR AND A SEDENTARY LIFESTYLE > For every additional serving above the USDA’s recommended 12 tsp sugar per day, a child is 60% more likely to become obese. 4x # of TVs in homes has QUADRUPLED 2x # of foodservice establishments has DOUBLED 2x 3x Soda consumption has DOUBLED in girls, and TRIPLED in boys Obesity in children aged 6-11 1980 6.5% 2008 19.6% 2010 1in 3 children are overweight or obese 1+hrs 7.5 hrs DAILY SCREEN TIME 1.5hrs 4.5hrs for children ages 8-10 (2009) Soft drink consumption has spiked 1978 2002 16.9 oz/day 26.8 oz/day 12tsp sugar 22tsp HFCS Source: CDC; Whitehouse.gov.
  • 17. 16 | @chasedave $210bn Unnecessary Services $190bn Administrative Costs $130bn Inefficient Delivery of Care $55bn Prevention Failures $105bn Inflated Prices $75bn Fraud U.S. HEALTHCARE WASTE = NETHERLANDS GDP $765bn in wasted spending Source: Institute of Medicine (2009 data); The World Bank (2009 data)
  • 18. 17 | @chasedave AND TOTAL HEALTHCARE SPENDING IS SEVERELY DISPROPORTIONATE  5% of patients  50% of dollars Source: U.S. Agency for Healthcare Research and Quality.
  • 19. 18 | @chasedave Angiogram CT scan, head Cost perhospital day Appendectomy Hip replacement Coronary artery bypass LOWER COST PROCEDURES HIGHER COST HIGHEST COST $30 $800 $1000 $1350 $68,000 $100 HIGHER PRICES = HIGHER SPENDING Argentina, Canada, Chile, India France, Germany, Spain, Switzerland United States Source: International Federation of Health Plans. Graphic: Wilson Andrews - The Washington Post. Published March 2, 2012.
  • 20. 19 | @chasedave HIGHER SPENDING ≠ BETTER HEALTH OUTCOMES Rank Country 1 France 2 Switzerland 3 Denmark 4 Netherlands 5 Australia 6 Canada 7 Germany 8 Norway 9 UK 10 U.S.A 11 New Zealand Rank Country 1 UK 2 New Zealand 3 Switzerland 4 Canada 5 Norway 6 Australia 7 Netherlands 8 France 9 Denmark 10 U.S.A 11 Germany Diabetes Extremity Amputation(1=best) Asthma Mortality (1=best) 2.5x Asthma 6.7x Diabetes 3.0x Congestive Heart Failure > U.S. chronic disease hospital admissions compared to peer countries Source: OECD Health Care Quality Indicators Data 2009, data from 2007, compared to Canada; OECD Health Data 2011, The Commonwealth Fund
  • 21. 20 | @chasedave 22 Knee Replacements 1st Tonsillectomy 1st MRI Exams 2rd CT Exams 3rd VOLUME INCENTIVE = OVERTREATMENT AND SPECIALTY-RICH CARE 87.5% of U.S. physicians are specialists 61.3% OECD average > HAIs: Longer stays, more provider volume 5 98,987 People die annually in the U.S. from HAIs, more than breast cancer and prostate cancer COMBINED Averagehospital stay (days) 28k Prostate Cancer 41k Breast Cancer 99k HAIs > USA winning the race for most procedures Source: GE, JESS3; OECD Health Data 2012.
  • 22. 21 | @chasedave “Physician burnout climbs 10% in 3 years, hits 55%” - MEDSCAPE LAYERING BUREAUCRACY ON TOP OF FLAWED SYSTEM, PLACING STRAIN ON ALREADY DISGRUNTLED PHYSICIAN WORKFORCE Source: Medscape’s 2014 Physician Compensation Report; 2014 Survey of America’s Physicians. Do not feel fairly compensated50% Would not choose medicine as their career today42% Plan to accelerate retirement39%Plan to limit access to their practices 44% Anticipate ICD-10 will cause severe problems in their practice 50% Physicians transitioning to cash-only (2011-2013) 100%
  • 24. 23 | @chasedave 1. Government intervention = catalyst 2. Employers shifting risk and insurers responding to regulation and a new marketplace for covered lives 3. Providers must respond to shifting reimbursement, cost sharing, and volume reallocation > And are beginning to do so in a number of ways 4. The era of open information in healthcare is underway > But there is still a long way to go to begin realizing the value of population health 5. Keeping patients out of the hospital, and on the internet > But an uncertain regulatory landscape is stifling growth CLINICAL CARE OVERVIEW
  • 25. 24 | @chasedave GOVERNMENT INTERVENTION = CATALYST 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 Mar: PPACA > HITECH Act: a bonanza for incumbent EHR vendors Feb: HITECH Act Jan: ACO Medicare incentives Oct: CMS payments for VBP Jan: MLR, Stage 1 of Meaningful Use (MU) Oct: Open enrollment begins Jan: Individual Mandate Medicaid expansion Dec: Stage 2 of MU King v. Burwell Medicare Access and CHIP Reauthorization Act Stage 3 of MU Jan: CadillacTax > ACA driving shift from volume to value > Cadillac Tax: a bonanza for health innovators GOALS > Access> Standardization> Affordability
  • 26. 25 | @chasedave EMPLOYERS SHIFTING RISK OR SELF-FUNDING Percent of Covered Workers Enrolled in a $1,000+ Deductible Plan (Single Coverage by Employer Size) Percentage of Covered Workers in Self-Funded Plans > ACA Benefits Standards Avoidable Through Self-funding 2009 2013 2000 2014 49% 61% Source: Kaiser Family Foundation and Health Research & Educations Trust, “Employer Health Benefits 2013 Annual Survey,” August 2013; Gabel JR et al., “Small Employer Perspectives On the Affordable Care Act’t Premiums, SHOP Exchanges, and Self-Insurance,” Health Affairs; The Advisory Board Company. 40% 13% 58% 28% Essential health benefits 1 Modified community rating 2 Guaranteedissue and renewability 3 MLR Requirements 4
  • 27. 26 | @chasedave 95% TRADITIONAL INSURERS ARE ADMINISTRATIVELY INEFFICIENT, HAVE CAPPED MARGINS, AND ARE IN A NEW BATTLEGROUND FOR CUSTOMERS MLR Requirement Limiting Margins Portion of PremiumDollars Mandated for Medical Care Growth in U.S. Healthcare Workforce (1990-2012) Portion of growth in doctors Portion of growth in administrative staff 1 DOCTOR 5 NURSES 10 ADMINS Source: Bureau of Labor Statistics,NCHS, Himmelstein/Woolhandler analysis of CPS; The Advisory Board Company. +75% New Market Issuers Offering Qualified Health Plans On Exchanges Federally-Facilitated Marketplace (36 states) State-BasedMarketplace (8 states reporting) 191 2014 248 2015 61 2014 67 2015 80% Individual and Small-Group Markets Large Group Market 85% 5%
  • 28. 27 | @chasedave Prominent Employers Using Private Exchanges 172 > Private exchange operators as of October 2014 PRIVATE EXCHANGE ENROLLMENT IS FORECASTED TO TAKE OFF 3 9 19 30 40 2014 2015 2016 2017 2018 Potential Growth Path for Private Exchange Enrollment (mm lives) Source: Accenture, “Are You Ready? Private Health Insurance Exchanges are Looming,”; privatehealthexchange.com; The Advisory Board Company. > Low-wage employers most active to date > Skilled industries in the wings ACTIVE EMPLOYEES (MEDICAREADVANTAGE, MEDIGAPPLANS) RETIREES
  • 29. 28 | @chasedave REIMBURSEMENT CUTS DEMAND A CHANGE IN OPERATIONS AND STRATEGY BY PROVIDERS > Medicare FFS payment cuts and move to alternative reimbursement will be significant Source: CMS; The Advisory Board Company $260bn Hospital payment rate cuts (2013-2022) $415bn Total FFS rate cuts (2013-2022) 50% Medicare alternative payment target (2018)
  • 30. 29 | @chasedave VOLUMES SHIFTING OUTPATIENT, AND THE GOVERNMENT WILL TAKE CONTROL OF THE INPATIENT SETTING 42% 58% 19% 15%33% 25% 6% 2% 2012 2022 Average Inpatient Case Mix by Volume N=785 hospitals MEDICARE MEDICAID COMMERCIAL SELF-PAY Source: “Report to the Congress: Medicare Payment Policy,” MedPAC, March 2014; The Advisory Board Company. -20 -10 0 10 20 30 40 Neurosurgery Orthopedics Vascular Services Cardiac Services All Payer Volume Growth Projections (2013-2018) INPATIENT OUTPATIENT -11% 11% 16% 15% 17% -3% 5% 14%
  • 31. 30 | @chasedave RISK-SHARING AND THE INCORPORATION OF OPERATIONAL EXPERTISE ARE THE FUTURE Risk-Based Revenue Breakdown (% of providers), N=116 71% 21% 5% 3% 13% 39% 38% 10% 0% 20% 40% 60% 80% Under 25% 25-50% 50-75% Over 75% TODAY IN 3 YEARS 20% 25%25% 30% 40% 30% 30% 30% 25% 70% 45% 20% 10% FY 2013 FY 2014 FY 2015 FY 2016 EFFICIENCY OUTCOMESOF CARE PATIENT EXPERIENCE CLINICALPROCESS Medicare VBP Program Domain Weights OTHER MANDATORY RISK PROGRAMS HAI Penalties Readmission Penalties Source: 2013 Care Transformation Survey, The Advisory Board Company; CMS. 65% of the Medicare VBP program will depend on quality metrics by 2016
  • 32. 31 | @chasedave ACO GROWTH HAS RESULTED IN WIDENING REACH, BUT MANY ARE STRUGGLING TO REDUCE SPENDING MSSP Cohort First-year spending reduction Growth of Accountable Care Organizations (ACOs) 32 146 253 253109 164 205 235 0 200 400 600 1Q12 3Q12 1Q13 3Q13 Medicare Non-Medicare Source: Leavitt Partners; The Advisory Board Company. 67% Portion of U.S. population in a primary care area with an ACO Portion of U.S. population treated by an ACO17% Earned Shared Savings 25% Reduced Spending But Did Not Earn Shared Savings 22% Did Not Reduce Spending 53%
  • 33. 32 | @chasedave High out-of-pocket costs... COST SHARING BY PAYERS AND PATIENTS BRINGS WITH IT REPERCUSSIONS AND NEW OPPORTUNITY FOR PROVIDERS > As a result, providers are turning to technologies that can improve referrals, marketing efforts and operational efficiencies, as well as reduce administrative burden. Source: The Advisory Board Company; Aon Hewitt; “Medical Debt Among People With Health Insurance,” Kaiser Family Foundation; Bankrate.com; National Survey of Employer-Sponsored Health Plans 2014, Mercer. …discourage utilization Large medical bills... …means more bad debt Can’t meet the higher rangeof out-of-pocket health cost limits 63% Don’t have savings to cover a $1,000 ER visit 62% Americans strugglingwith medical debt are insured 70% Patients becoming price-sensitive... …and more likely to shop Forgoing care when sick or injured because of cost15% Patientsreport using homeremedies instead of seeking medicalattention 33% Large employers now offer a price transparency tool77% Average U.S.Employee will pay: $2,487 out of pocket/yr $6,600 $13,200 Under ACA,2015 out-of-pocket cost ceilings: Worker’s share of costs 52% over last 5 years
  • 34. 33 | @chasedave PAYERS CLAIMS COSTS/FINANCE UTILIZATION EMR PROCEDURES OUTCOMES PRESCRIPTIONS SUPPLYCHAIN • Coordinated care • Improved outcomes • Interoperability • Population health • Lowercosts • Disease prevention • Adherence SATISFACTION THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY TRIALRESULTSAND EFFICACY SALESAND DRUGHISTORY • R&D productivity • Trial improvement • Improving efficacy• Careaccess • Price transparency • Convenienceandcost • Good health EXERCISEDATA PURCHASES BEHAVIORS,SOCIAL DATA PROVIDERS GOALS PATIENTS DATAGOALS PHARMA DATAGOALSDATAGOALS CLAIMS COSTS • Payment innovation • Data acquisition • Provider-performance transparency • Lowering costs • Reducingclaimspaid • Winningshare • Wellness & prevention
  • 35. 34 | @chasedave TRADITIONAL PAYERS ARE RESPONDING IN NUMEROUS WAYS Source: The Advisory Board Company. Trends ✚ Omni-Channel Understanding and Delivery Model for Reaching Out to and Engaging with Consumers ✚ Relationships and Partnerships with Providers That Support Value- Based ReimbursementModels ✚ Private Cloud Solutions to Better Manage Data Collection, Aggregation, and Analytical Efforts ✚ Data Management and Warehousing Technology Partnerships Health Matters Consolidation $38 billion July 2015 $1.25bn cost savings $6.8 billion July 2015 $52 billion June 2015 $2bn cost savings $14 billion March 2015
  • 36. 35 | @chasedave SHIFT FROM VOLUME TO VALUE IS UNDERWAY, BUT A LONG WAY TO GO ...but many providers still don’t have financial “skin in the game” 47% of value-oriented payments exclude financial risk Commercial health plans have dramatically shifted how they pay physicians and hospitals... % of commercial health plan payments that are value-based 2013 2014 11% 40% % of patients attributed to a provider with a payment reform contract 2013 2014 2% 15% 10% of payments to specialists are value-oriented 24% of payments to primary care physicians are value-oriented Source: The Scorecard of Payment Reform 2014, Catalyst for Payment Reform; plans responding represent 65% of commercially-insured lives in the U.S.
  • 37. 36 | @chasedave WHILE HOSPITALS FOCUS ON M&A, INNOVATORS ARE INNOVATING Hospital M&A Activity has accelerated Partnerships and Affiliations on the rise Heart & Vascular Center Markey CancerCenter 0 20 40 60 80 100 120 2009 2010 2011 2012 2013 2014 1Q 2015 An incredibly fragmented U.S. hospital system 4,500 acute care hospitals 2,000 hospital companies ...means a perceived opportunity to control costs and coordinate care Source: Pricewaterhouse Coopers.
  • 38. 37 | @chasedave PATIENT REGISTRATION CARE COORDINATION INSURANCE ELIGIBILITYVERIFICATION CODING SCHEDULING PATIENT STATEMENTS ANALYTICS RCM E-PRESCRIBING ACCOUNT ALERTS REFERRALMANAGEMENT DENIALMANAGEMENT PROVIDERS ARE BEGINNING TO EMBRACE TECHNOLOGY TO STREAMLINE WORKFLOWS
  • 39. 38 | @chasedave EHR INCUMBENTS USING TRADITIONAL STRATEGIES TO PROTECT MARKET POSITION FragmentedPlayers 23% 9% 2014 CONCERNS 1 DATA BLOCKING 2 DATA SILOS 3 VENDOR LOCK-IN 4 POOR INFORMATION EXCHANGE Source: MedScape EHR Report 2014. 10 YEARS AGO 2014 CONCERNS
  • 40. 39 | @chasedave VENDORS THAT RESPOND TO POPULATION HEALTH-FOCUSED CUSTOMER NEEDS WILL WIN Identification of various sub- populations with different needs Tools that enable collaboration across providers, patients and payers Tools that aggregate community level data Ability to gather and incorporate continuous data on total populations Solutions that analyze clinical, claims, and socioeconomic data > Identifying, collecting, and utilizing actionable information will be critical 1 2 3 4 5
  • 41. 40 | @chasedave BUT THERE IS STILL A LONG WAY TO GO TO BEGIN REALIZING THE VALUE OF POPULATION HEALTH of payers and providers think a national publicHIE is at least 10 years away 92% PHYSICIANS 81% HOSPITALS 94% INSURERS/PAYERS remain meaningfully unconnected in regards to intelligentinteroperability POPULATION HEALTH REQUIRES CHANGES IN THEBUSINESS MODEL OF CURRENT VENDORS Open APIs and PaaS for developers HIE Application Ecosystem Rapidly Extended Functional Capabilities > Firms with a wide offering of population health tools, revenue cycle management services, patient portals, dashboards, and analytics will emerge as the next wave of health IT leaders In effort to coordinatecare, private exchanges will outpace public efforts Cerner wins DoD contract with interoperability capabilities and partnerships Epic launches CareEverywhere Source: Healthcare IT News; HIMSS Analytics. 82% REALITY TAKEAWAY/RESPONSE REALITY TAKEAWAY/RESPONSE
  • 42. 41 | @chasedave VIRTUAL MEDICINE HOLDS PROMISE 74% Source: CDC; Truven Analytics; Center for Connected Health Policy, as of September 2014; Teladoc. 71% of employer-sponsored ER visits not necessary 417 mm (33%) could be treated through telehealth 1.25bn Ambulatory care visits per year in US Employees are open to virtual care Currently offer telehealth services Plan to offer telehealth in coming year 54% of 18-29 Year Olds 49% earn > $71,000 53% work > 35 Hours And Employers Are Responding 48%
  • 43. 42 | @chasedave KEEPING PATIENTS OUT OF THE HOSPITAL IS THE NEW GOAL “I think my job ultimately is to close every one of our hospitals...If it were my wife or my mom or my kids, I never want them in the hospital.” -- DavidFeinberg, CEO Geisinger Health System Source: HIMSS Analytics; Allied Market Research; Berg Insight. REMOTE PATIENT MONITORING 2014 26% of providers utilized some form of RPM 4m Units 2020 >20m UnitsBlood pressure monitor market share 71% Mount Sinai accountable care program (Sep 2010 – May 2012) resulted in: • Paramedics trained for and completing home visits for high-riskpatients • 911 callers offered options besides ER • Nurse health line for non-emergency situations RE-THINKING OPERATIONS Admissions 43% ER Visits 54%
  • 44. 43 | @chasedave BUT AN UNCERTAIN REGULATORY LANDSCAPE REMAINS Mental Health Office Visits Smoking Cessation Substance Abuse Wellness Visit Prolonged Outpatient Rural Eligible Facilities Source: CMS; Center for Connected Health Policy. FEDERAL LEVEL Current Medicare Coverage SERVICES LOCATION TelehealthEnhancement Act of 2013 Medicare TeleHealth Parity Actof 2015? Medicare HealthParityAct of 2014 STATE LEVEL State Medicaid programs that reimburse for: Live Video Store-and-forward Remote Patient Monitoring 47 9 1629 States with telehealth parity laws 8 States with proposed parity law 47 States that require physician to be licensed in state of patient 13 States with cross-border telemedicine license
  • 45. 44 | @chasedave BUT THIS HASN’T SLOWED THE BATTLE TO BUILD A NETWORK Business Model Delivery Method Freemium B2C B2B2C Video/Phone Kiosks Text Store-and-forward
  • 46. C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
  • 47. 46 | @chasedave PAYER MANAGEMENT/BENEFITS MANAGEMENT CLINICAL CARE INNOVATORS MOBILITY, VIRTUAL MEDICINE, AND REMOTE PATIENT MONITORING CARE COORDINATION / NEW ENTRANTS
  • 48. 47 | @chasedave CLINICAL CARE INNOVATORS DATA ANALYTICS AND POPULATION HEALTH PRACTICE MANAGEMENT/RCM/PRODUCTIVITY TOOLS AND POC MANAGEMENT/EHR
  • 49. 48 | @chasedave $63mm $50mm $16mm $70mm $58mm $40mm 2013 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER 2014 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER 2015 WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER $40mm$85mm $29mm $400mm $100mm $89mm $78mm $54mm $45mm $36mm $30mm $30mm $131mm $125mm $100mm $41mm $25mm $21mm $24mm $15mm $81mm $50mm $32mm $24mm $21mm $110mm $82mm $71mm $101mm $41mm $19mm NOTABLE RECENT FINANCINGS $395mm $120mm $70mm $55mm $54mm $25mm $500mm $178mm $100mm PRIVATE PLACEMENTS
  • 50. 49 | @chasedave IPOs $131mm $261mm $1.3bn BENEFITS WORKFLOWS ANALYTICS SEPT. 2013 OCT. 2013 APRIL 2014 $75mm $127mm $53mm $600mm WORKFLOWS BENEFITS BENEFITS ANALYTICS JUNE 2014 JULY 2014 DEC. 2014 FEB. 2015 $223mm $196mm $100mm $157mm WORKFLOWS ANALYTICS WORKFLOWS TELEHEALTH MAY 2015 JUNE 2015 JUNE 2015 JUNE 2015 NOTABLE RECENT FINANCINGS
  • 52. 51 | @chasedave 1. Patients become educated price-seekers > Entrepreneurs are empowering them 2. Decentralized medicine and physician extenders 3. On-demand is making its way to healthcare 4. Healthcare is the next extension of our online lives 5. Patient = center of future health ecosystem > Stakeholders must respond to this new normal or perish PATIENT-CENTRIC CARE OVERVIEW
  • 53. 52 | @chasedave > The number of Americans with an HSA Account is expected to skyrocket PATIENTS ARE BEING FORCED TO TAKE CONTROL OF THE HEALTHCARE THEY RECEIVE $1.7bn $15.5bn 2006 2012 17mm 50mm 2014 2020 HSA enrollment in large employer plans 2006 4% 2007 5% 2008 8% 2009 8% 2010 13% 2011 17% 2012 19% 2013 20% 2014 20% > HDHP/SO Enrollment for Employer-Sponsored Plans 74% > National HSA assets have grown over 9x from 2006-2012 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2014.
  • 54. 53 | @chasedave AND SELF SELECTING INTO HIGH DEDUCTIBLE AND LEAN HEALTH PLANS Annual Deductibles of Individual Plans Selected on eHealth (October 2013-March 2014) Metal Tiers of Plans Chosen on public exchanges (All Enrollees; October 2013-March 2014) <$500 13% $500-$999 3% $1,000- $1,999 11% $2,000- $2,999 5% $6,000+ 38% Silver 64% Gold 9% Platinum 5% Catastrophic 2% Bronze 20% Source: Breakaway Policy Strategies, “Eight Million and Counting: A Deeper Look at Premiums, Cost Sharing and Benefit Design in the New Health Insurance Marketplaces,” May 2014; eHealth, “Health Insurance Price Index Report for Open Enrollment and Q1 2014,” May 2014; HHS Summary Report, May 2014; The Advisory Board Company. $3,000-$5,999 30%
  • 55. 54 | @chasedave A NEW KIND OF PATIENT IS IN THE WAITING ROOM > Millennials are beginning to utilize the healthcare system more regularly, with significant consequences for industry stakeholders 0% 25% 50% 75% 100% 1995 1Q 2015 Post-Millennials Millennials Gen Xers Boomers Silents Greatest 31% SILENTS 2% GREATEST 49% BOOMERS 18% GEN XERS 34% MILLENNIALS 1% POST-MILLENIALS 34% GEN XERS 29% BOOMERS 2% SILENTS Source: Pew Research Center.
  • 56. 55 | @chasedave > Various tools are being created with the goal of improving care navigation and transparency, and empowering and educating the patient-consumer ENTREPRENEURS ARE RESPONDING How exactly does my insurance work? How much should I be paying? How do I know who the best doctor is? My doctor’s hours don’t match my hours. Can someone explain my condition to me in normal words?Does my doctor think about me after I leave the office?
  • 57. 56 | @chasedave 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 TOOLS AIMED AT FIXING PRICE FAILURES ARE EMPOWERING PATIENT-CONSUMERS Tulsa, OK $0.6mm 51% Seattle, WA $1.1mm 46% Rockford, IL $1.0mm 50% Savings($K) Total $ Savings Average % Savings Source: The Zero Card. Representative of procedures completed in 2012-2014; Tusla (n=134), Seattle (n=301), Rockford (n=170).
  • 58. 57 | @chasedave TOTAL– Big 6 Sites, Market Share 901 50% 457 24% 140 8% 103 6% 80 4% 30 2% 1,711 93% Health System Affiliations 47 6 4 46 2 3 108 DECENTRALIZED MEDICINE AND PHYSICIAN EXTENDERS ARE THE NEW NORM > The retail clinic market is highly concentrated and dominated by house-hold names 18% of PCP visits could be handled at retail clinics. > 10 million visits per year by Americans at retail clinics represents only 2% of all primary care encounters. Annual ED Visits Non-Urgent ED visitsshifted to other care sites 132mm 47mm Annual PCP Visits VisitsEligible for NP-Led Care 573mm 103mm Source: CDC/NCHS,“National Ambulatory Medical Care Survey, National Hospital Ambulatory Medical Care Survey.” 2009-2010; The Value Proposition of Retail Clinics, April 2015, RWJF; The Advisory Board Company.
  • 59. 58 | @chasedave AND A NEW PRIMARY CARE MODEL IS IN THE MAKING > Concierge/DPC practices have grown dramatically since 2005 and offer numerous distinct advantages Source: Wall Street Journal; Forbes; Oliver Wyman. 48% ER VISITS 2005 2015 146 5,500 ✚ Number of concierge practices is up 3,700% 80 / 100 COMMONDIAGNOSES COVERED Why use the equivalent of auto insurance for an oil change? NET PROMOTER SCORES 93 NPS 51 NPS 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 0.0 0.5 1.0 1.5 2.0 2.5 Patients TransactionVolume($mm) Monthly Transaction Volume ($) Patients 41% HOSPITALIZATIONS 25% OUTPATIENT UTILIZATION
  • 60. 59 | @chasedave While some practices are working with insurers on bundled products for the individual market, in the near future, a national health insurer will team with a national player in primary care, such as Walgreen’s, to offer DPC at scale to consumers via a gym-like monthly membership fee, taking DPC from a niche offering to a new model consumers begin to understand. TRADITIONAL INSURERS ARE BEGINNING TO EMBRACE DPC, AND OTHERS ARE DRIVING CHANGE United Food and Commercial Workers Union UnitedHERE, Atlantic City Freelancer’s Union, Brooklyn Culinary Workers Union, Las Vegas 2012 2013 2014 2015 UNIONS COMPANIES Source: The Advisory Board Company.
  • 61. 60 | @chasedave ON-DEMAND IS MAKING ITS WAY TO HEALTHCARE Heal Pager Medicast Retrace Health FOUNDED 2014 2014 2013 2013 2014 FEE/SERVICE $99 On sitedoctor in 1 hour $200 for urgentcare $75-100 for wellness NA $50: NP videoconsult $200: in-person $150 REGION Los Angeles San Francisco NYC San Francisco NA Minneapolis Atlanta TARGET CUSTOMER Adults& Kids Adults& Kids HealthSystems Adults & Kids Pediatric Care
  • 62. 61 | @chasedave FINANCES DOCUMENTS ACTIVITY SOCIAL= CONSUMERS ARE BRINGING THEIR LIVES TO THE INTERNET AT A RAPID PACE
  • 63. 62 | @chasedave AND HEALTHCARE IS NEXT mHealth apps are set to become a regular part of care 86% of clinicians believe mHealth apps will be important for patient health management over next 5 years 90%Use mobile devices to engage patients app-enabled patient portals telehealth services text communications remotepatient monitoring 73% 62% 57% 49% 7in 10 U.S. adults track at least one health indicator Source: Pew Self-Tracking, June 2013; Pew Internet & American Life, January 2014; 2013 Accenture Consumer Electronics Products and Services Usage Report; MedData Group, April 2014; HIMSS 2015 Mobile Technology Survey. And the means of tracking are remarkably primitive 49% IN HEAD 34% PAPER 8% MEDICAL DEVICE 7% APP 5% SPREADSHEET 1% ONLINE TOOL
  • 64. 63 | @chasedave THE PATIENT WILL BE AT THE CENTER OF THE FUTURE HEALTHCARE SYSTEM FUTURE FOCI: Primary Physician Consulting Physician LabInsurance Pharmacy Non-ClinicalActivity Family Hospital Post-Acuteand Home Care Ancillary Sites Personalized treatment 1 Controls method and venue of care delivery 2 Shops for quality and cost 3
  • 65. 64 | @chasedave CARE EPISODE REIMBURSEMENT Traditional Foci 1. Diagnostics 2. Technology 3. Drugs 4. Beds 5. Procedures PROVIDERS ARE ALTERING THEIR GOALS TO REFLECT THIS NEW FOCUS LONG-TERM HEALTH MANAGEMENT Patient-Centricity Source: The Advisory Board Company. 1. Multi-provider patient portal/tools 2. Medical information is made relevant 3. Patient-generated data is sought out 4. Portable and on the patient’s terms 5. Collaborative care process with shared decision making tools
  • 66. 65 | @chasedave INDUSTRY STAKEHOLDERS MUST EMBRACE PATIENT ENGAGEMENT Those with Significant Investments in Patient Engagement and Relationship Management Solutions Patient relationship management and engagement work And industry players are responding LESS ACTIVATED MORE ACTIVATED 30-Day Readmissions Medical Errors Poor Communication Health Consequence 28% 13%36% 19% 49% 13% Greater Patient Engagement = Improved Outcomes Source: AARP survey of patients over 50 with 2 or more chronic conditions.
  • 67. 66 | @chasedave PAYERS WERE FIRST TO DO SO WITH MIXED RESULTS Health Matters GOLDWALKERCOLORFALL
  • 68. 67 | @chasedave And providers have much to learn from their efforts > Vendors providing frictionless and secure integration with consumer health data, leading to actionable clinical data will win with providers 4 EHR integration is a must; seek interoperability opportunities 1 Analytics are as important as data collection and warehousing 5 Build partnerships with payers to provide health and wellness incentives for patients 2 User must be empowered via actionable clinical insights 6 Easy identification of high-risk patients 3 The simpler the better
  • 69. 68 | @chasedave CareMore: A PROVIDER EMBRACING A PATIENT-CENTRIC MODEL 1 Early intervention is central to their model. Longitudinal records (8-10 sources) and predictive modeling allow for early intervention to prevent acute episodes. 2 “A high percentage of physician services can be delivered by non-physicians.” 3 A patient can go from being in the easy chair to ICU in 12 hours so they must rapidly intervene. speedy delivery within minutes can save. 4 Capitation is freedom, not risk. Education is what the patient needs, and longitudinal. Key Takeaways from CareMore Business and Care Management Model > Age- and health-adjusted payment for its full patient panel > Patient-first business design required total rethink of patient relationship,health model, and care team > Physician hospitalists include treatment of patients outside hospital > Each chronic condition has its own holistic treatment plan > Information is rapidly processed and forwardedto all members of care team A Medicare healthcare companybasedin Southern Californiaprovidingcare to an exclusively Medicare Advantage population Acquired by Wellpoint in 2011 for $800 million Source: Oliver Wyman.
  • 70. C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
  • 71. 70 | @chasedave PATIENT-CENTRIC CARE INNOVATORS HEALTH INFORMATION, TRANSPARENCY, AND PLAN INFORMATION PATIENT RELATIONSHIP MANAGEMENT AND ENGAGEMENT/REMOTE PATIENT MONITORING
  • 72. 71 | @chasedave PATIENT-CENTRIC CARE INNOVATORS CONSUMER-FRONTING PAYER PRODUCTS THAT HELP MANAGE BENEFITS AND PAYMENT CARE ACCESS/RETAIL CLINICS/DIRECT PRIMARY CARE/HOUSE CALLS/CARE ANYWHERE
  • 73. 72 | @chasedave NOTABLE RECENT FINANCINGS PRIVATE PLACEMENTS 2013 ENGAGEMENT INFORMATION CARE ACCESS $10mm $8mm $68mm $40mm $24mm $15mm $6mm $15mm $10mm $14mm $14mm 2014 ENGAGEMENT INFORMATION CARE ACCESS $82mm $26mm $110mm $17mm $11mm $81mm $50mm $32mm $25mm $15mm $27mm $24mm $21mm 2015 ENGAGEMENT INFORMATION CARE ACCESS $500mm $20mm $178mm $130mm $20mm $63mm $50mm $28mm $35mm $13mm $13mm $20mm $16mm $15mm $16mm s
  • 74. 73 | @chasedave $91mm $178mm $100mm CARE ACCESS INFORMATION INFORMATION JAN. 2014 MARCH 2014 MARCH 2014 NOTABLE RECENT FINANCINGS IPOs
  • 75. 74 | @chasedave WELLNESS & PREVENTION
  • 76. 75 | @chasedave 1. The era of open information in healthcare is underway 2. Wearables show promise, but not perfected 3. The life science industry’s “transistor moment” has the potential to revolutionize medicine 4. Large pharma can’t resist for long 5. America’s growing culture of wellness is beginning to penetrate the workplace, but are the results real? 6. The race to build a healthcare data platform is on WELLNESS & PREVENTION OVERVIEW
  • 77. 76 | @chasedave PAYERS CLAIMS COSTS/FINANCE UTILIZATION EMR PROCEDURES OUTCOMES PRESCRIPTIONS SUPPLYCHAIN • Coordinated care • Improved outcomes • Interoperability • Population health • Lowercosts • Disease prevention • Adherence SATISFACTION THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY TRIALRESULTSAND EFFICACY SALESAND DRUGHISTORY • R&D productivity • Trial improvement • Improving efficacy• Careaccess • Price transparency • Convenienceandcost • Good health EXERCISEDATA PURCHASES BEHAVIORS,SOCIAL DATA PROVIDERS GOALS PATIENTS DATAGOALS PHARMA DATAGOALSDATAGOALS CLAIMS COSTS • Payment innovation • Data acquisition • Provider-performance transparency • Lowering costs • Reducingclaimspaid • Winningshare • Wellness & prevention
  • 78. 77 | @chasedave WEARABLES SHOW PROMISE 65% WEIGHT 61% BLOOD SUGAR 57% BLOOD PRESSURE 54% EXERCISE 36% NUTRITION 36% PAIN 35% SLEEP 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E EXPENSE PRIVACY LOOK COMFORT HEALTHRISK Leading barriers to purchase cited by U.S. consumers Source: IMS Research, MeMD, ABI Research, Deloitte, Rackspace; TNS Global, October 2013. > 88% of physicians want patients to monitor health parameters at home. Their top priorities include: While wearable technology in healthcare is expected to triple in size by 2019, there are major consumer impediments to purchase. > Fitness and medical wearables were 60% of the wearables market in 2013 10% 13% 13% 31% 54% $2.0bn $2.7bn 100m units $5.8bn
  • 79. 78 | @chasedave > Declining rate of sustained activity tracker use over ownership BUT COULD BE A FAD AND ARE TARGETING THE WRONG POPULATION 0% 25% 50% 75% 100% 0 3 6 9 12 15 18 21 24 RateofSustained Utilization Time (months) Daily engagement falls below 50% within 18 months of purchase 0% 10% 20% 30% 18-24 25-34 35-44 45-54 55-64 65+ % of activity tracker owners % of U.S. population Americans own a wearable1 in 5 1 in 10 Wear it daily > Activity tracker ownership age demographic Ages 25-34 Goal: Fitness Optimization Ages 55-64 Goal: Overall health improvement and longevity Source: Endeavour Partners, September 2013; PwC.
  • 80. 79 | @chasedave 86% wearables would make users vulnerable to security breaches 82% feared wearables would invade their privacy 72% wearables would hurt our ability to relate to each other CONSUMER AND DOCTOR SENTIMENT ON WEARABLES IS MIXED 46% employer should fund wearable technology for employees 72% would use a smartwatch if employer paid 63% would use a fitness band if employer paid > “Doctors would love to be excited about wearables — they’re gadget guys at heart — but their day-to- day is spent battling 30 year old fax machines to get your last lab report.” - Jeff Tangney, CEO of Doximity Source: PricewaterhouseCoopers. > “We can't make the leap that just because the data from these low-risk devices is coming in digitally doesn't mean that it's accurate.” - Dr. Michael Blum, UCSF
  • 81. 80 | @chasedave Rapidly declining cost of sequencing the human genome THE LIFE SCIENCE INDUSTRY’S “TRANSISTOR MOMENT” Allows previously unthinkable questions to be answered What is my unique physiology? What can I metabolize? What drugs would not interact well for me? What is the best dosage for me? What is unique about my cancer? What is my pre-disposition to disease? Source: PricewaterhouseCoopers. 2009 $100k 2015 $1k
  • 82. 81 | @chasedave HAS THE POTENTIAL TO REVOLUTIONIZE MEDICINE TRADITIONAL MEDICINE One size does not fit all PERSONALIZED MEDICINE: The application of genomics, pharmacogenomics, and proteomics for improved efficacy HIGH FAILURE RATES LOW FAILURE Source: Brian Spear, Margo Heath-Chiozzi, Jeffrey Hugg, “Clinical Trends in Molecular Medicine”. BIOMARKER DIAGNOSTICS (Blood, DNA, Tissue) THERAPY SSRIS 38% ASTHMA 40% DIABETES 43% ARTHRITIS 50% ALZHEIMER’S 70% CANCER 75% TARGETED THERAPY
  • 83. 82 | @chasedave LARGE PHARMA CAN’T RESIST FOR LONG 3 Include diagnostics in development, trial design, and treatment Payers are beginning to recognize the real and increasing cost of administering ineffective drugs and treating side effects, and pharma must respond or face a frustrating future of declining sales and profits 1 Forge alliances with diagnostic companies 2 Communicate safety and efficacy advantages of targeted therapies BLOCKBUSTER TARGETED Mass Phenotype TargetedGenotypeMarkets Disease State Disease Life CycleFocus 1 Drug – 1 Disease State Numerous StatesTreatments/Drugs Scale KnowledgeEconomics Large Runs Small RunsManufacturing Few, Large Multiple, SmallSales Force Few ManyProduct Portfolio BUSINESS MODEL TRANSITION Source: The Changing Face of R&D in the Future Pharmaceutical Landscape, Deloitte.
  • 84. 83 | @chasedave 0 2,000 4,000 6,000 8,000 10,000 1996 2000 2004 2008 2012 2013 AMERICA’S GROWING CULTURE OF WELLNESS OrganicFarms 20022012 7,323 17,281 266% Organic market sales growth (2002-2011), totaling $31.5 billion in 2011 # of farmers markets per USDA 78% of families buy organic THE TASTES OF A NEW GENERATION... When asked if they will increase or decrease their spending in 50 different categories over the next 12 months, the proportion of millennials answered: 1 FRESH FRUITS AND VEGETABLES ⬆37% And the organic movement is showing rapid growth 3x growthin farmers markets 2 ORGANIC FOOD ⬆25% 3 NATURAL PRODUCTS ⬆23% Source: Boston Consulting Group 2013 Global Consumer Sentiment Survey of U.S. Millennials’ Saving and Spending Intentions; USDA; Organic Trade Association.
  • 85. 84 | @chasedave WELLNESS IS BEGINNING TO PENETRATE THE WORKPLACE WHAT THEY OFFER BIOMETRIC TESTING HEALTH RISK ASSESSMENT SUBSIDIZED GYM MEMBERSHIPS FREE FLU SHOTS WEIGHT LOSS GROUPS SMOKING CESSATION PROGRAMS LIFESTYLE COACHING 24-HOUR NURSE LINE HEALTH FAIRS PHYSICAL ACTIVITY PROGRAMS Source: Fidelity Investments and National Business Group on Health. And spending more per employee on wellness incentives 201520142010 $430 $595 $693 of U.S. employers with >50 employees offer wellness programs 50%
  • 86. 85 | @chasedave BUT ARE THE RESULTS REAL? PEPSICO > Employee engagement is questionable 24% actually participate in employer wellness programs ...to whoever shows wellness works. -Al Lewis & Vik Khanna InsuranceThoughtLeadership.com Source: RAND Group; HBR.org; Gallup. > For every $1 spent on wellness, these studies showed healthcare savings of: J&J DISEASEMANAGEMENT LIFESTYLEMANAGEMENT TOTAL MILANI/LAVIE $2.71 $3.80 $0.50 $1.50 $6.00 12% strongly agreethey have higher overall well-being because of employer > Prompting the “Wellness Prize” $1 MILLION
  • 87. 86 | @chasedave THE RACE TO BUILD A HEALTHCARE DATA PLATFORM IS ON ACQUISITIONSINVESTMENTSPLATFORMSPARTNERSHIPS INNOVATORS 34 Total Healthcare Investments
  • 88. C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
  • 89. 88 | @chasedave PHYSICAL FITNESS DIET & NUTRITION VITAL SIGN MONITORING & WEARABLE TECH WELLNESS & PREVENTION PROGRAMS WELLNESS & PREVENTION INNOVATORS
  • 90. 89 | @chasedave SOCIAL ENGAGEMENT, NETWORKS, COACHING MEDICATION MANAGEMENT AND ADHERENCE GENOMICS/PRECISION MEDICINE BEHAVIORAL AND EMOTIONAL HEALTH WELLNESS & PREVENTION INNOVATORS
  • 91. 90 | @chasedave 2013 PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS $40mm $30mm $239mm $43mm $63mm $21mm $12mm $35mm $30mm $19mm $18mm 2014 PRECISION/GENOMICS BEHAVIORIALHEALTH WEARABLES WELLNESS $480mm $120mm $40mm $147mm $204mm $29mm $70mm $62mm $32mm $23mm $19mm$60mm $58mm 2015 PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS $200mm $100mm $50mm $300mm $92mm $58mm $100mm $79mm $35mm $48mm $30mm $30mm$55mm $50mm $19mm $23mm NOTABLE RECENT FINANCINGS PRIVATE PLACEMENTS
  • 92. 91 | @chasedave $102mm $732mm GENOMICS WEARABLES FEB. 2015 JUNE 2015 NOTABLE RECENT FINANCINGS IPOs
  • 94. 93 | @chasedave P R O F E S SI O N AL P R I O R E X P . E D U C A T I O N Kevin Cable ManagingDirector kcable@cascadiacapital.com (206) 696 - 7922 • BoardMember(e.g.,InnovateWashington,TechnologyAlliance, WashingtonSoftwareAlliance) • CEO,NumeraSoftware • VP Corp.Dev., MolecularSimulations BS,Cell& MolecularBiology,Universityof Washington Dave Chase Senior Advisor @chasedave www.healthfundr.com/u/dave-chase • Managing Partner, Healthfundr • AdvisoryBoard, OliverWymanHealthInnovationCenter • Co-Author,2014HealthcareBook of the Year • ContributingWriter,TechCrunch,Forbes • SVP,WebMD • CEO,Co-Founder,Avado BA,Business & Mathematics,Universityof Washington ExecutiveEducation,NorthwesternUniversity Kurt Sheline Senior Associate ksheline@cascadiacapital.com (206)436 - 2542 • PathwayCapital • LighterCapital • MerrillLynch MBA,UC Berkeley BA,ClaremontMcKenna College Kate Nimmo Analyst knimmo@cascadiacapital.com (206)436 - 2510 • TuckBusiness BridgeProgram BA,DartmouthCollege CASCADIA CAPITAL HEALTHCARE & DIGITAL HEALTH TEAM TEAMWIDE EXPERIENCE • Originated / executed over $1 billion of M&A and financingtransactionsin the healthcare sector • Entrepreneurs/Co-founders with exits • Regular dialog with key industry players regarding“live” transactions • Unprecedented financialsponsor relationships

Editor's Notes

  • #9: Propeller Health Aclima Healthify
  • #13: A Black Swan event is thought to be a surprise and without precedent at the moment it occurred. However, after evaluating the surrounding context, it becomes obvious that the event was bound to happen.
  • #26: Enablers: Evolent, Aledade
  • #27: Bloom Health, Lumity
  • #28: Consumerism is hitting insurance, and they are currently in a bad spot Oscar, etc.
  • #30: Host of practice management companies: Aledade, Kareo, Privia Health, Optum, Evolent
  • #32: Practice Management, Care Coordination: Emdeon, CareCloud, Athenahealth, Phreesia, Tonic, Accretive Health
  • #34: 2% utilization on price transparency tools (source: Dave)
  • #35: Demand for data/big data From providers, payers, patients Supply of data, and technical capability to analyze it But data security issues Precision medicine, biopharmaceutical R&D productivity, mobile health, telemedicine
  • #39: Greenway, Cegedim, Wellero, Modernizing Medicine, Allscripts, Kyruus
  • #40: whats next: interoperability, referral management, transcription New markets are developing with or without these incumbents
  • #41: IMS Health, Welltok, MedeAnalytics, Advance Health, Alignment Healthcare, Health Catalyst
  • #43: Teladoc, American Well, HealthTap, Doctor on Demand
  • #44: Direct primary care, house calls, etc: Qliance, Med Zed, Pager, Medicast, Retrace Health, One Medical Group, Avizia
  • #68: https://aishealth.com/archive/nhpw073012-03
  • #69: http://www.fiercehealthcare.com/story/hospitals-embrace-social-media-have-yet-realize-its-full-benefits/2014-12-01?utm_medium=nl&utm_source=internal http://www.fiercehealthit.com/story/himss15-patient-engagement-among-top-priorities-providers/2015-04-14
  • #78: Demand for data/big data From providers, payers, patients Supply of data, and technical capability to analyze it But data security issues Precision medicine, biopharmaceutical R&D productivity, mobile health, telemedicine
  • #79: •  Wearable device penetration is significant: 1/6th of U.S. adults own one. Ownership is highest among ages 25-34 (at 25%) but it remains strong through age 65. The market falls into two segments with different motivation patters: “fitness” which appeals to younger adults, and “wellness” which appeals to older adults. •  Many users make the tracker part of their life. Survey data indicates that about 50% of owners still use their device 12 months after purchase, and the trend appears to level off at about 40% long-term use (see graph above), which you could view as a glass about half-empty, or half-full (3). •  People pay attention to wearables. Research by Dr. Kamal Jethwani found that about 10% of users are “Quantified Selfers” who monitor their data and take motivation from it. Another 20%-30% can change behavior with some encouragement in addition to the data tracker (2). •  There is more early evidence that feedback leads to change in behavior. Dr. Rajani Larocca, a primary care physician at Massachusetts General Hospital, conducted a small study giving trackers to diabetes patients aged 50 to 70. He found that every single person increased activity, and about 50% were still using the tracker six months later (2). (http://www.forbes.com/sites/toddhixon/2014/03/18/wearable-devices-selfies-for-health-nuts/) Sources: Source: NPD Group, as reported in the New York Times. New York Times, http://well.blogs.nytimes.com/2014/03/10/the-monitored-man/?_php=true&_type=blogs&ref=science&_r=0 Endeavor Partners, Inside Wearables, January 2014,www.endeavourpartners.net. E.g., direct primary care, more intensive monitoring post acute-care discharge, tele-medicine, and strong consumer desire to stay in the home.
  • #82: http://fortune.com/2015/07/09/23andme-is-the-startup-worlds-newest-unicorn/ http://www.technologyreview.com/news/537916/rebooting-the-human-genome/ Personalized tracking and genomics data will revolutionize the way diagnoses and treatments operate Combination of genetic profile + environment + personal health history will provide a more robust picture of an individual’s health
  • #84: http://fortune.com/2015/07/09/23andme-is-the-startup-worlds-newest-unicorn/ http://www.technologyreview.com/news/537916/rebooting-the-human-genome/ Personalized tracking and genomics data will revolutionize the way diagnoses and treatments operate Combination of genetic profile + environment + personal health history will provide a more robust picture of an individual’s health Changing business model of big pharma away from blockbuster drug model to more collaborative model focused on outcomes and specialized therapies
  • #85: http://thehill.com/blogs/congress-blog/healthcare/247555-why-the-strongest-science-must-prevail-in-nutrition http://nymag.com/scienceofus/2014/08/gamified-health-apps-work-who-knows.html According to a 2012 W.K. Kellogg Foundation survey, 87% of U.S. consumers agreed that they eat more whole grains and fresh fruits and vegetables now than they did 5 years ago
  • #86: Might want to drop in food-tracking apps (not school specific but could be relevant here) Up to $6 saved for every $1 spent, deliver a clear ROI 52% of workers participating in a wellness program report increased energy and greater productivity at work 35% say that information they learned in a wellness program led them to miss fewer days of work (source: http://www.corporatewellnessmagazine.com/focused/the-future-of-wellness-is-here-managing-chronic-disease-via-interactive-health-and-wellness-education/)
  • #87: Might want to drop in food-tracking apps (not school specific but could be relevant here) Up to $6 saved for every $1 spent, deliver a clear ROI 52% of workers participating in a wellness program report increased energy and greater productivity at work 35% say that information they learned in a wellness program led them to miss fewer days of work (source: http://www.corporatewellnessmagazine.com/focused/the-future-of-wellness-is-here-managing-chronic-disease-via-interactive-health-and-wellness-education/)
  • #88: Google: More than one-third of the money Google Ventures invested in 2014 went to health care and life-sciences companies, up from 9% each of the prior two years. The venture group plans to continue investing in the area, looking to capitalize on an explosion of health data and new ways to analyze it, said Bill Maris, head of Google Ventures Calico Life Sciences, working with Novartis to develop smart contact lens Baseline study into the human body Google wearable Google health, started in 2008, shut down in 2013, which was attempting to integrate with physicians and hospitals Google fit, doesn’t try to do that, and is instead focused on exercise and nutrition Apple (Healthkit) Partnership with Epic, which has 40% of Americans medical information 2/3 of clinicians have iPhones Ipad is dominant tablet for clinicians Samsung SAMI platform, Gear fit wearable IBM Epic and Mayo Clinic collaboration to apply cognitive computing capabilities to EHRs New york genome center The Most Popular Mobile devices currently used by Black Book surveyed physicians and practices:  68% iPhones  59% iPads and Tablets  31 % Smart/Android Phones/Other Source: Black Book Rankings Direct to consumer: diagnostics Consumer companies: have marketing expertise to target consumers that healthcare organizations don’t have Telecom and technology: capitalizing on emerging opportunities to manage vast quantities of genetic and other health data and build IT infrastructure Consumer health platforms being built: Google Fit, Apple Health Kit, Samsung SAMI, will act as cloud repositories for health and biometrics data collected by wearable devices. Apple and Samsung also say they are working with Epic, the dominant EHR company in the U.S.