0 Healthcare Convergence and The emergence of “Digital innovation” Ash Shehata Principal KPMG...

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Healthcare Convergence and The emergence of “Digital innovation”

Ash ShehataPrincipalKPMG LLPGlobal Healthcare Center of Excellence

© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG CONFIDENTIAL.

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ASHRAF W. SHEHATA, KPMG LLP Principal Global Healthcare Center of Excellence Principal US Healthcare & Life Sciences Advisory Leadership Team

Professional and Industry Experience

Ash is a highly experienced healthcare professional at the cutting edge of information technology (IT) advances and business strategy in the sector. In a career spanning over 25 years, Ash has worked for some of the world’s leading IT and consulting firms, using technology to drive improvements such as telemedicine, e-commerce, membership systems, customer service, claims analytics and healthcare management.

As Senior Executive Director Healthcare for Americas with Cisco, he was responsible for payers, providers and life sciences accounts including the Mayo Clinic, WellPoint, Cigna, Wellcare, J&J, GSK, Medtronic and Kaiser. He led the development and deployment of telemedicine solutions with key clients and government agencies.

Prior to this, Ash was Vice President Health Solutions for Wellpoint, supporting over 32 million members (one in 10 Americans) in enterprise applications. He also held senior positions with KGT Global Technologies, IBM and Accenture, leading executive teams in the U.S. and around the world through major change programs in hospitals, medical service providers, physician group practices and managed care organizations.

Ash’s breadth of experience is typified by his first two roles: first as owner of his own consulting and medical management business, and then with The University of Cincinnati Medical Center in the U.S., where he managed a $250 million annual budget for several departments including Radiology, Nuclear Medicine, Lab Medicine, Managed Care, Cancer and Pharmacy.

Technical Skills

Over 25 years experience working with notable healthcare and life science companies, developing and executing strategies, leading operational changes, and managing successful business development efforts.

Experienced in leading executive teams in change management in large hospital settings, medical service organizations, physician group practices, and managed care organizations.

Conducted more than 50 executive business strategy sessions, leading companies and boards through the opportunities and risks associated with decisions around technology enablement, selecting new products, managing cost benefit

Other Activities

Presenter and author of articles on topics such as E-business and technology, IT strategy, role of performance management in healthcare organizations, Convergence, Changing role of Life Sciences and ERP implementation.

ASHRAF W. SHEHATA, BA, MHA, MBAPrincipal, Advisory Management Consulting

KPMG LLP312 Walnut StreetCincinnati, OH 45202

Tel [email protected]

Function and SpecializationAsh is a U.S.-based Advisory executivespecializing in healthcare IT, includingmeaningful use achievement, health informationexchanges, longitudinal clinical records, cloudbasedhealthcare IT, and clinical and otherhealthcare business intelligence.

Education, Licenses & Certifications Masters in Hospital & Health Administration, MBA and BS in Psychology, Xavier University Adjunct Faculty


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The changing healthcare landscape

Contents

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Adapting new solutions for new healthcare systems

What is driving healthcare convergence?

The Digital World

Digital examples

Where are you currently positioned?

Q&A

Contents


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Coordinated care (in own home)

Non-integrated care (institutions)

Focus on quality and value

Addiction to “volume”

Wellness, Prevention and Disease Mgmt

Treating episodes of sickness

Horizontal networksVertical networks

Patient Focused(consumerism)

Client Focused

Real Time and Predictive

Retroactive

Today Tomorrow

Transformational Imperatives affecting the Industry


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Convergence is affecting all market participants

The healthcare industry is experiencing accelerated disruption and convergence due to advanced market drivers. Change is inevitable for all entities, but preparation dictates impact and outcomes.

Economic pressure to cut costs

Increase in regulations that require compliance

Increase in patient expectations of services

Massive IT investments underway and exponentially increasing number of solutions to evaluate

Provider change fatigue

Enhanced care coordination required across the continuum

Implications of Convergence


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We Believe There Are Several “Game Changing” Factors That Could Significantly influence Competitive Dynamics in the Industry

Trend/Dynamic

Shift from volume to value based reimbursement

New Economic

Model

New Commercial

Models

Challenge to traditional revenue model

New detailing strategies

Healthcare Reform Aggregate Spend

Regulatory Reform/ Scrutiny

Increased Focus on

Compliance

Requirement to proactively monitor partnerships

Attention on local market practices

Consumer driven healthcare plans

Online access to global supply

Healthcare Consumerism

Patient Driven

Consumer making own health decisions

Consumers purchasing globally

Emerging markets introduce new opportunities and new competitors

“Reverse” Innovation

Disruptive

Players from emerging economics may introduce cheaper products

‘Retail’ healthcare provider models expanding from pharmacy

Disruptive Market

Entrants

New Industry Players

Shifts in primary point of care Technology powering insight/choice

Internet of everything 25 billion connected devices by

2015

Data Volume and Access

Decentralized Information

Increased opportunity for innovation

‘Monetization’ of health data

Key Considerations ImplicationKey Examples


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Data will be the key to unlocking inefficiencies and improving quality?

The inability to collect, share and use data from a variety of sources is a leading reason that the global healthcare system has the highest potential for improvement.


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Adapting new solutions for new healthcare systems

Three crucial strategies to consider in the new healthcare environment:

Understand the customer and what they want

Reshape offerings to provide enhanced product value and broad value based distribution

Anticipate shifting power structures in the wider healthcare system


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What is driving healthcare convergence?

Healthcare convergence is the thesis that all stakeholders in the healthcare ecosystem will increasingly need to work more closely together to achieve one aim: better patient outcomes at lower costs.

Outcomes vs. inputs New healthcare ecosystems are centered on the patient

Source: KPMG International, 2012


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Key healthcare policy trends driving healthcare convergence

Paying for outcomesRecent healthcare reform acts focus on improving patient outcomes while cutting costs

US 2010 Patient Protection and Affordable Care Act (PPACA)

Trend Description Example

Comparative effectiveness

Assess the additional value of a medical device relative to treatment alternatives.

Patient-Centered Outcomes Research Institute (PCORI) in the US

Real world evidence

Emergence of a Big Data that integrates traditional clinical trials data with claims and EHR to measure value and improveAdverse event reporting

Oncology, Auto Immune Disease, Pain Mgmt, Hep C are great examples of RCT and RWE data leveraging observational and retrospective data

Value-based pricing (VBP)

VBP used to increase market share for the first entrant in a new therapeutic category or in response to budgetary pressures.

US Healthplans are reviewing medical effectiveness based on overall clinical episodes and DRG groupings


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Partnership examples

Finding ways to help improve outcomes and patient engagement align the interests of the industry with those of the patient, healthcare professional and provider: a win for all invested parties.

Trend

■ Develop companion diagnostics to improve outcomes

■ Improving Patient Communications

■ IT and Big Data

■ Mobile health

■ Clinical professional services units


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Understand the customer and what they want

Life sciences companies will need to become better at identifying who their new customers are, what they want and how they want it delivered.

Old model: Customer was prescribing physician, the patient the recipient of direct-to-consumer advertising

New model:Customer includes ultimate bill payer, e.g. government, physician group, informed patients

Old model: Customer was influencing physician; patient the recipient of direct-to-consumer advertising


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Anticipate shifting power structures in the wider healthcare system

■ Rising engagement ■ Increased cost-sharing

and decision-making■ New technologies and

access to information ■ New products and

services■ Redefine and

differentiate product offering

Patient Payers

■ Leverage knowledge and databases of patient and disease profiles

■ Position business as part of the solution

■ Prevention and appropriate treatment

■ Improve patient engagement

Healthcare professionals

■ Change old attitudes by demonstrating the industry is an ally, not enemy, nor merely a source of funding

■ Increase investment in education at all levels to train the next generation of healthcare professionals

Opportunities for the life sciences industry to respond to drivers of change in healthcare systems:


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What is the Internet of Everything?

•The Internet of Everything (IoE) is the emerging global network that connects people, processes, data and physical devices to transform structured and unstructured information into real time insight and decision making.

•Physical devices or things are embedded with sensors and actuators are linked through a combination of wired and wireless networks

Vendors have different points of view on the Internet of Everything –

• IBM tends to focus on the data.• Cisco tends to focus on the

network.• Service providers focus on the

connectivity to devices.

We are of the opinion that the common thread in this conversation is information.

Physical devices (Things)

Connectivity(Protocols, Network infrastructure etc)

Structured and unstructured information

Real time insights and alerts

Decision making and business strategy

Applications and Services


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The Future of Connected Healthcare

In fifty years’ time, I believe that we will consider the rise of mobile technology to be one of the greatest medical advances the world has ever seen.

Armed with the newest devices and technologies, patients will enjoy better health outcomes, doctors and medical professionals will be more effective and efficient, costs for payers and governments will be slashed and populations will – for the most part – be more health conscious.

Indeed, by coupling the power of mobile devices with rapidly-maturing technologies such as cloud, health systems around the world are starting to awaken to an entirely new way of delivering health services.

How mobile devices will revolutionize healthcare

Anson Group


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What is the Internet of Everything? Scale of the Internet of Everything

It is predicted that there will be 25 billion devices connected to the Internet by 2015 and 50 billion by 2020.


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Operationalizing the Digital Strategy

Infrastructure

What will all of this mean form a technical infrastructure point of view? How do I ensure security, access and performance of the solution?

Governance

What are the principle processes and the organisational structure required to ensure integrity and the continuous alignment of information to the business needs?

Performance Management Process and Reporting

How can I improve my financial planning and business performance management? What are the KPIs and reporting requirements of my business? How can I best execute my financial consolidation?Integrated Information Management

What is the information content and date model required to support my reporting requirement? Where are the value creation opportunities in standardisation of KPI and master data?

BI Platform

What is the right application to support information delivery, financial consolidation, planning and performance management? How can I succeed in delivering the applications implementation and make the overall solution really deliver value to the business?

Business Alignment

What information is key to delivering our strategy? How will I deploy this in a manner which maximises business performance in a cost-effective manner?

Industry and Regulatory Standards

Industry and Regulatory Standards

How can the organizational model to operationalize IoE align with the overall industry and regulatory standards?


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Care Continuum Coordination Solution Set required elements

No matter what your challenge (i.e. ACOs, PCMHs, CINs etc) developing capabilities to enable Care Continuum Coordination is essential to drive quality and cost improvements for new “outcomes-based” reimbursement models.


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Care Coordination Maturity

The pathway of maturity can include many of the required elements and necessitate progressive and interdependent advancement. Each organization’s model is unique based upon local factors but require addressing the same key elements to be successful.

Develop Operational and Technical Capabilities

Defining the people and roles that are necessary for success

Assessment of the ability to capture meaningful data with the right technologies

Identification of the Patient populations that can generate return on investment in the short term

Introducing standards to operations and technology will enable efficient growth and program scalability

Expand and Grow with Technology Enablement

Deploy game changing technologies to grow data sets and interoperability for data exchange

Improve timeliness of response to mitigate high cost care solutions

Develop how populations are targeted and programs are advanced by expanding Care Continuum Coordination solutions

Optimize to become Market Leading with Intelligence

Leverage technology to drive performance with valuable analytics and quality improvement

Innovate programs and care delivery with support from business intelligence

Achieve results of improved quality, service, care and cost

Identifying Care Needs

Providing Population Health Management

Care Coordination

Measurement & Quality Improvement

Program Management

Transition of Care Management

Gaps in Care Analysis

Remote Monitoring & Management

Readmission Management

Patient Education

Authorization of Care

Comprehensive Utilization Review

Standards & Compliance

Analysis of Utilization

Costing & Savings Analysis Report

Patient Diagnosis

Follow-up Management

Hospital Provider Efficiency

Improved Patient Convenience

evidence-based standards

Core Performance Measures

Patient Experience Measures

Practice Performance Reporting

Reporting Performance Publicity

Expand on Phase 1

Capabilities

Expand Phase 2 and Optimize

Phase 1

Phase 1: Develop

Care Continuum Coordination Maturity*

Infrastructure (IT, HR Governance, Finance, Compliance, Operations)

Phase 2:Expand

Phase 3: Optimize

*Representative sample of elements


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Impact of Technology Enablement

Capture: Data is collected through activities conducted throughout the Care Continuum cycle. Various systems are needed to support the different processes.

Exchange: Information is exchanged to multiple systems that support the Care Continuum. Highly effective Clinical Decision Making and Care Coordination requires timely access to integrated data (claims and clinical) to perform timely interventions and maximize outcomes.

Use: Using analytics, collected data is aggregated to minimize risk and improve workflows. Data can be utilized to improve clinical care and further research initiatives. Targeted ROI can be increased and accelerated by selecting the greatest breadth of relevant data to acquire and by aligning to this core transformational model .

Achieving the healthcare transformation outcomes of Cost Reduction, Increased Quality and Improved Access requires investment in technologies that will effectively enable clinical data Capture, Exchange and Use.

CAPTURE

Clinical data with EMR

EXCHANGE

Clinical data with IE or HIE

USE

Analytics to drive Clinical Intelligence

Examples

Electronic Medical Record (EMR), Patient Portals, Patient Access

and Financial systems

ExamplesInformation Exchanges (IE),

Health Information Exchanges (HIE ) and Electronic Master

Patient Index (EMPI)

Examples

Analytic engines, presentation layers, rules libraries


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Common Technology and Data Exchange Challenges for CIE

Challenge Description

Flexibility Many EMR Systems

Imperfect Standards

Variance among implementation of standards

Monitoring Volume of data exchange will overwhelm ability to manually track success/failure/issues.

Future State HIE Interaction

State HIEs are using different platforms and approaches.

Poor Data Quality

Poor data quality results in extra work for analytics team.

High Level Summary of relevant CIE and PCMH Technologies and Limitations

EMREMREMR EMR

CCD

CCD

CCD

data

data

data

data

HIE1 HIE2 HIE3

data

data

data

data


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High Level Conceptual CIE Technology Architecture

External Sources

HIEs, CMS, etc.

External EMRs, CCDs

Etc.QualityRegistries

Ancillarysystems

HIMRegistration

(MPI)Enterprise

EMRs

Quality andCompliance

Analytics

Second Line Clinical Staff

Rapid Response

Front LinePrimary Providers

Patient ThroughputAnalytics

073.5

Quantity083.1

Growth114.4

Finance

Quantitative & Qualitative Measurements Across the

Enterprise

BALANCED SCORECARD BEST PRACTICES AND EVIDENCE BASED BENCHMARKS

DAILY USER INTERACTION AND COLLABORATION

Data published to the Analytics Platform will come from the CDW or the legacy application (s) depending on timing of CDW refresh

Clinical DataWarehouse

ETL & Integration

RevenueCycle

Analytics

Case Management

Analytics

Intelligence Layer

External Data Sources

HISPLATFORM NEUTRAL

BPM BPM

The conceptual model below shows how BPM was used in conjunction with the EHR and multiple data sources to create a solution to improve care planning and delivery for high risk pregnancies

http://solutions.3m.com/wps/portal/3M/en_WW/Worldwide/WW/






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KPMG/Cynergy created an mobile front end application for an EHR system used by an innovative healthcare delivery system for Medicare-eligible patients. This system is recognized as an industry leader in medical risk management, highly effective disease management and chronic care programs, and healthcare delivery services.

Development and Implementation of Mobile Front Ends for EHRs will continue to evolve


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Architecture for a telehealth system for 800 locations

Development of Architecture, Operating Model and Business Case for National Provider Network looking for scale


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Health & Wellness Care

Injury & Disease Prevention

At-Risk Medical Surveillance

Life Style & Behavioral Choices

Health & Fitness Incentives

Motivate, Measure, Monitor, Advise and Coach

mHealth and Tele-Health

Episodic Sick Care

Inpatient – Acute Hospital Care

Outpatient – Chronic Condition Care Management & Home Care

Diagnose, Treat, Monitor & Advise

Telemedicine, Tele-Home Care, Tele-Health & mHealth Network

Post Acute – Social Care

Assisted Living/SNF

Terminal Hospice Care

Independent Living with support

Support and Palliate

Tele-Health & TeleCare

$ $$$$$$ $$$$

The consumer forms the epicenter of the healthcare value chain for population health

Episodic sick care drives the highest near-term cost, and surveillance & care coordination of the “at risk” well population represents the greatest opportunity for long-term cost avoidance

NEW High Value Health and Healthcare Target PopulationsConsumers Lifecycle Continuum

http://www.clipartguide.com/_pages/0511-0908-1218-0721.html


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Amazon.com Drives Sales Through Integrated Customer Experience … Is there a future for something like this in healthcare?

“We make money when people use our devices, not when they buy our devices.”

Kindle provides a medium to deliver Amazon’s online content

■ Strategic move in both customer acquisition and retention

■ “People read four times as much as they did before they bought the Kindle”

The new Mayday feature is a single-click, hardware-support solution that lets users work with a remote tech

■ Virtual equivalent of having an IT support person in your living room

■ Allows for customer insight and rapid product development

■ Competitive advantage over Apple

Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.


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Enhancing the product through a digital experience

Sources: Nike; Fitbit; Swipesense.

When done well: Competitive

advantage Customer stickiness Creation of new

revenue streams

Connected wearable devices

“Track how much, how often and how intensely you move.”

Share activity with friends, compare your stats and set up competitions

Personalized Capture Devices

“Dedicated to helping you reach your fitness goals.”

Includes ability to record food and liquid intake

Monitoring Devices

example :SwipeSense

“Hospital-acquired infections cause 90,000 deaths/year.”

Combination had sanitizer/tracking device wirelessly tracks usage information


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Advancing the Internet of Everything of Healthcare

1. mHealth will need to advance from pilot to sustainable program to provide a reliable delivery model for healthcare.

2. Applications will need to mature beyond simply replicating web services to personalized and real time relevant data.

3. Economic model for devices, sensors, consumer mobile devices and infrastructure will need to get more cost effective in order to accommodate the growth model. Unit costs need to dramatically reduce as volumes increase.

4. Cloud and technology providers will need to work with healthcare and life sciences organizations to define specific offerings for healthcare.

5. Involving patients, healthcare providers and payers to develop process, workflows and to innovate the delivery models.

6. The opportunity for the IoE to be a disruptive technology for healthcare is so large that we have to be clear about the business value, process quality and outcomes associated with the early solutions.

7. Patients and consumers will need to warm up to the idea that devices can be an integral part of their life in healthcare. Industry and technology leaders need to demonstrate this confidence through privacy and security measures for consumers and patients.

7 things that need to happen… for the Digital Environment to expand dramatically in Healthcare

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Service offerings are subject to legal and regulatory restrictions. Some of the services included herein may not be available to KPMG's financial statement audit or other attest service clients.

Ashraf ShehataPrincipal, Healthcare & Life SciencesKPMG [email protected]

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