This workshop addressed emerging clinical and business models, focusing on digital homes and smart phones. The first speaker, Stan Kachnowski launched into HU oriented trends. Since I was trying to remember what I was going to say, I really don't remember Stan's presentation - the audience did stay awake right after lunch, so it must have been compelling.
Innovation in health care seems to be more difficult that it is in other industries. There are good reasons for this - like the fragmented "cottage industry" nature of health care, the many different stakeholders, and the Byzantine reimbursement and regulatory frameworks. Any new venture requires a strategic view rendered by someone who can put all the pieces together, and identify barriers or detractors to a particular innovation. Only a proper assessment of the health care environment will result in a course of action that eliminates or avoids the problems and leverages the strengths of the business plan. Given these challenges, and the entry of numerous startups and non-medical companies entering the HU market, I presented a framework for evaluating the potential success of innovation in health care. You can read more about the framework here. If you attended Healthcare Unbound, you can download the presentation from the HU website here. If you'd like to know more, drop me a line.
Yacov Geva, CEO of Card Guard, was next. He reviewed their product portfolio. The sensors shown all communicate with back end servers via smart phones. His barriers to adoption included lack of reimbursement, lack of government support, massive consumer marketing costs, providers not keen on ordering or recommending remote monitoring solutions, and unproven business models. Also noted was that patients don't want to pay for remote monitoring. He also mentioned the key potential benefits of remote monitoring - sort of like the golden fleece, glowing attractively just out of reach.
Stephen Intille was up next. He started asking the rhetorical questions, who likes to pay for a new roof, electricity, car insurance, and Stephen's condo's dead steam boiler? No takers. Stephen summarized Mike Barrett's Prospect theory and Don Jones' desired properties of HU applications. Stephen's point is solutions must provide a positive experience - from installation through use. Smart sensors can monitor, help prevent and provide compensation (like help with a mild cognitive impairment). The sweet spot is where these three capabilities intersect. He identified the point of decision as the best time to provide positive reinforcement. Stephen provided some great examples of product concepts that actually provides the just in time positive reinforcement that was his theme.
Mike Barrett broke up the presentations and we broke into discussion. The first question was, "Who will represent the largest buyer of HU solutions in four years?" One limit of smart phones is that they are a poor platform for wireless apps - too many tasks, like starting the app and accessing the internet, have to be manually initiated. Brad Sokol drew parallels between HU solutions and the evolution of the RFID industry - these solutions started vertical and went horizontal.
Darrin Jones, Sr Bus Dev Manager in Intel's Digital Health Group, articulated why Intel decided to enter the HU market space. Darrin spends a lot of time in Europe because he sees different things in the market about "aging in place" and HU solutions. Perhaps because Europe has socialized medicine, they don't have the luxury of putting off decisions about the coming boomer tsunami. He noted GE's recent deals buying 186 nursing homes and $110 million debt financing for long term care providers. (Leveraging opportunities in health care, without mucking up their current medical device business will be a challenge.)
The advent of retail clinics (typically manned by nurse practitioners) will be disruptive in health care. Sample companies include RediClinic, Take Care Health Systems, and MinuteClinic. Consumers who chose not to pay for health care, or have a high deductible health plan, they will vote with their feet and use these retail clinics. Payers will eventually turn to retail clinics for some patient encounters due to the lower cost. Cognitive trending companies include GleeCo and Posit Science - these Darrin's advise is to avoid any business plan based on anticipated reimbursement - VCs aren't funding these kind of businesses.
Lydia Lundberg, owner of Elite Care, talked about the route from independent living to institutional care. Elite Care has developed a HU solution to help people age in place, that also transfers to their own independent living facility. She described their solutions and the business model implications for referrals and community relations with providers. One of her key points was that "data doesn't scale" - you only have some much time to look at so much data. Using knowledge modeling and discovery software, they are building abstracted business models. This will enable Elite Care to move from a reactive mode in caring for their residents, to becoming proactive and anticipatory of patient needs.
Brad Sokol of FastTrack Technologies, talked about building ROIs for HU solutions. Using models from other industries, he laid out how to create compelling return on investment analysis value propositions. He also suggested a number of nascent HU solutions like meal delivery and operational software for remote monitoring service providers. Brad also presented Near Field Communications technology combined with cell phones as an enabling technology for HU solutions (more here). He ended his presentation describing what he called a natural birth adoption curve: users born in 1975, will adopt in 2015 and the market will be saturated in 2040. The big money will be made between 2015 and 2040.
Bill kicked off another Q&A session with his usual panache. He painted a rosey scenario where governments are broke and can't pay more for HU solutions, and payors are facing catastrophic loss in risk management with aging baby boomers. He posits that the sole long term market will be based on consumer self-pay and self-insured employers. A Canadian researcher suggested that people's sense of entitlement won't let them self-pay for health care. It was noted that socialized medicine in a number of countries is running out of money and moving to self-pay. Another audience member suggested we not count out payors, who he thinks will manage risk and survive.
The discussion then transitioned to Elite Care and the social and emotional dynamics between residents, family, and staff that are the consequence of the technology they use and how the manage their business. After a question about sensor costs (they're falling rapidly) the conversation transitioned to the importance of how the resulting sensor data is used - much like the lifestyle DNA that Astro Teller talked about yesterday. In general, the more sensors you can layer on analysis algorithms, the better the data. Installation is a major cost component, and how the sensors are installed is critical to the sucess of the installation. Stephen's suggestion was to take what Elite Care's already doing and make it fun - like putting sensors in family members homes and using them to mediate free communications (like Skype) that does not exist now.
Mike brought us back to the backend intelligence. One to one mapping of sensors to behaviors is easy, but detecting more sophisticated behaviors like eating. Stephen posited that by getting enough sensors in enough homes, researchers expect to discover new biomarkers that will impact health. IBM has a product called Home Director that is not far from what we're talking about.
UPDATE: If you're returning to this post, you might notice that I provides some additional background about my presentation on Innovation in Healthcare.
Pictured right is a view from the presenter's table.