Dr Oren Fuerst Digital Health Business Models Presentation June 30

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Digital Health Series - Business Models Event June 30 2014, Herzeliyya

(Microsoft Ventures Academy) Dr. Oren Fuerst

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Digital Health Series - Business Models Event June 30 2014, Herzeliyya

Dr. Oren Fuerst

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Agenda:!A Framework!

The Broad Landscape !Illustration of an Industry impact- players in the Pharma!

Illustration of an Industry-Clinical Trial Recruitment!Illustration of a segment play- Diabetes Care!

Examples of Approaches- Employer/Employee!Illustrations of Scale!

Use Case: Dario!Group Discussion: Dario!

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8 Factor Business Model: In Search of an Unfair Advantage

Economies of Scale! Intellectual Property!

Strategic Alliances!

Network/virality effect!

Technology/Operations!

Business Model!

(c) 2000-2014 Fuerst and Melumad!

Management/HR!

Market/Environment! Revenue/Pricing!

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Digital Health Series - Business Models Highlights

Impact of Digital Health

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The global healthcare industry has seen a transformation over the last decade, which has been driven by advances in biopharmaceuticals, medical technology and surgical procedures.

Over the next decade, we will see even more dramatic changes, resulting from factors such as advances in genetic, cell and tissue techniques; interventional medical technologies; neuro-engineering; intelligent prosthetics; and improved imaging technologies. We are in the middle of a paradigm shift. Digital Health applications in integrated healthcare offerings and information and communication technologies, which can tap into the full potential of big data analytics, will transform the way we think about healthcare.

For the conducted survey1, we have defined the term ‘Digital Health’ as follows:

n ‘Digital Health’ represents the convergence of digital technologies (especially information and communication technologies and data analytics) with elements and decision making structures of the traditional care value chain. The

overall objective is to improve the wellbeing of patients, and/or to reduce costs of services.2

Numerous terms such as ‘eHealth’, ‘mHealth’ or ‘telemedicine’ are frequently used synonyms of Digital Health to describe concepts of healthcare practice that use or involve information and communication technology. Thus, they are some of the phrases used that refer to Digital Health (Figure 1).

In fact, mHealth is the building block that enables Digital Health solutions to enfold their full potential by using mobile communication technologies and concepts. Mobile technologies can potentially act as a catalyst to increase the impact of digital offerings, when they are applied as an enabler within integrated healthcare offerings. The resulting digital offerings can change the logic of existing market mechanisms and reduce costs3.

�� 5IF�EFçOJUJPO�JT�CBTFE�PO�"SUIVS�%��-JUUMFnT�VOEFSTUBOEJOH�PG�%JHJUBM�)FBMUI�and refers to the prevailing academic and business thinking, including: Frank (2000); Topol (2012; 2013); Mellodge and Vendetti, (2011)

3 Basset et al., (2012)

Emergence of digital technologies and genetics into the traditional value chain

� Smart pill bottles provide reminders & records of medicine intake

� Video monitoring for special needs � Vital signs collection and remote

reporting

� Online health self-education � Online patient-doctor consultation � Online monitoring daily routines

� Sensor technologies

� Genetics

� Mobile technologies acting as a catalyst to connect and integrate the chain of care

Source: Mitchell, J. & Associates (1999) The cost effectiveness of telemedicine enhanced by embracing e-health. Pawar et al. (2012) A framework for the comparison of mobile patient monitoring systems. m-healthTalk.com (2013) m-health – What does it mean and what’s included. Fasano, P. (2013) Transfor-ming Health Care – The financial Impact of Technology. Sonnier, P. (2012) Definition of Digital Health. Pagliari et al. (2005) What Is eHealth. Arthur D. Little

Figure 1. Digital Health harbors a variety of concepts and related applications – mobile technologies act as a catalyst

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Adapt to Changes- Example from Pharma

Impact of Digital Health

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2. Shift in customer base

The traditional business model of the Pharmaceutical industry

is expected to change as the importance of patients and

consumers will increase. Payers are seen to become the leading

stakeholder. Wholesalers are likely to have a decreasingly

important role, whereas the roles of other stakeholders, such as

providers and pharmacists, have been estimated not to change

(Figure 8).

3. New competencies and partnerships

Successful execution of Digital Health strategies requires new

competencies. All survey participants consider partnerships

an essential part of successful design, implementation

and operation of Digital Health solutions. There is demand

for technological know-how, development of customer-

specific solutions and provision of modular solutions. Also,

Pharmaceutical companies consider market and customer

knowledge as highly relevant (Figure 9 overleaf).

Respondents also indicated which partners they consider mostly

relevant to succeed in the Digital Health environment. Payers,

healthcare providers, software companies and component and

medical device companies are considered the most important

partners for the Pharmaceutical industry (Figure 10 overleaf).

Figure 8. How important are the different stakeholders in the traditional and the future Digital Health business model?

Source: Joint Arthur D. Little, KIT survey; Bassett et al. (2012) From Science 2.0 to Pharma 3.0; Srai, J.S., Alinaghian, L.S. (2010) Mapping Emerging Value Chains in Pharmaceutical Industry

N=16

Traditional business model

Importance

1 2 3 4

Primary HCP

Secondary HCP

Patients

Consumer

Wholesalers

Retailers

Pharmacies

Payers

ICT provider

digital-Health business model

Importance

1 2 3 4

Primary HCP

Secondary HCP

Patients

Consumer

Wholesalers

Retailers

Pharmacies

Payers

ICT provider

Traditional business model Digital-Health business model

1 = not important at all, 2 = slightly important, 3 = important, 4 = very important

Importance of stakeholders

Example: Clinical Trials Recruitment!

Example: Clinical Trials Recruitment!

Addressed by: Direct Recruitment !

Medication Monitoring as a Driver for Patients!

Indirectly: Rich Patient Profiles !

•  CV!

Online Drugstores Players = Offline Drugstores (they really took over the “new”

world).....!http://myappmag.com/online-pharmacies-drugstores/!

But Online Fulfillment DOES NOT EQUATE Offline Drugstore or PBM

Ordering, Handling and delivery!

http://euromonitor.typepad.com/.a/6a01310f54565d970c017ee5af105a970d-pi!

Example for All You Need for Diabetic Care!



Example Reimbursement of Supplies !


Remote Personal Team !

Employers Solutions Example!

Employers Solutions Example!

Scalable Human Touch Example !

Scalable Human Touch !

Programs where nutrition is Key as (Preventive) Medicine !

Dario Use Case and Group Discussion!

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Business Model!

(c) 2000 Fuerst and Melumad!

Management/HR!




LabStyle Innovations Corp. (OTCQB:DRIO)!

Thriving with Diabetes In the mHealth Era !

Medical Companies Have!Spent Millions To Improve This Pack!

www.mydario.com

Patients Still Have to Manage Their Own Condition Most of the Time !

4 hours

8,756 Hours

alone!

www.mydario.com

with care giver !

To Manage Diabetes Effectively You Need a Combination of:!

Tools! Motivation!Information!

www.mydario.com

Simple to use, Smart Meter™ Plugs into smartphone Pocket-sized all-in-one

Knowledge is empowering Personal pattern recognition & all information you need

You’re not alone Peer & Professional support

Value to Patients!

Smart Meter

Knowledge

Support

www.mydario.com

Tools!

Motivation!

Information!

Value to Payers!

= =

Better testing!& compliance!

Savings!Better care !& prevention!

www.mydario.com

Value to Supporters !

Easier monitoring & remote support

Parents & children

www.mydario.com

Adults & older parents Caregivers & PWDs

A Growing Market !

$12b

$27b (Up 170%)

2013! 2022!www.mydario.com

The Only Personalized Smart Meter

www.mydario.com

� Compact � Tiny blood sample � Highly accurate � All-in-one device � Automatically log & monitor � Actionable alerts � A1C estimates

B2C!Digital Marketing!

App Users!

Via Distributors!

B2B !Sales Force!

Healthcare Professionals!

Dario Direct!

www.mydario.com

Multiple Potential Revenue Streams!

•  Out of pocket & reimbursement •  Disposable Strips (razorblade model)

•  Healthcare professionals - licenses •  Payer risk-management & cost reduction

•  Clinical studies, trial recruitment •  Partnerships

Software Platform

Device & Disposables

Data Monetization

www.mydario.com

8 Factors Business Model!

Network/virality effect

www.mydario.com

Market Environment

Strategic Alliances

Economic of scale

Management / HR

IP

Revenue Pricing

Technology / Operations

Business Model

8 Factors Business Model!

Network/virality effect

www.mydario.com

Market Environment

Strategic Alliances

Economic of scale

Management / HR

IP

Revenue Pricing

Technology / Operations

Business Model

Family, Care Givers $12B Market

Demand + Lack of innovation

IP Portfolio

Initial Stage SW DNA Develop Medical Device

3 Streams – Test Strips

Complicated + OEM

Discussion Points!

Traditional distributer Vs direct sales

www.mydario.com

With whom to partner?!

Data collection for valuable segmentation

Thank You.!

Thriving with Diabetes, Together!

Thriving with Diabetes In the Health Era

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Business Model!

(c) 2000 Fuerst and Melumad!

Management/HR!


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