ORION HEALTH INVESTOR DAY UNITED STATES
15 SEPTEMBER 2016
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Page 2 • 2016 © Orion Health™ group of companies
Important Notice
This presentation is given on behalf of Orion Health Group Limited
(“OHE”). OHE continues to comply with the NZX Listing Rules.
Information in this presentation:
is for general information purposes only, and is not an offer or
invitation for subscription, purchase, or recommendation of
securities in OHE;
should be read in conjunction with, and is subject to, OHE’s 2016
Annual Report, market releases, and information published on
OHE’s website (www.orionhealth.com);
includes forward-looking statements about OHE and the
environment in which OHE operates, which are subject to
uncertainties and contingencies outside of OHE’s control –
OHE’s actual results or performance may differ materially from
these statements;
may contain information from third parties believed to be reliable,
however, no representations or warranties are made as to the
accuracy or completeness of such information.
All currency amounts are in NZ dollars unless otherwise stated.
OHE results are reported under NZ IFRS. This announcement includes
non-GAAP financial measures which are not prepared in accordance with
NZ IFRS.
the information contained in this presentation should be read in
conjunction with the financial statements and accompanying notes.
due to rounding, the numbers presented throughout this presentation
may not add up precisely to the totals presented. Percentages may not
precisely reflect the presented figures as these are based on unrounded
numbers.
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STRATEGY OVERVIEW
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Page 4 • 2016 © Orion Health™ group of companies
6%10%
23%
34%
45%
<18 18-44 45-64 65-74 75+
Individuals effected by chronic conditions
Healthcare spend increasing1
12
14
16
18
20
22
1999 2003 2007 2011 2015 2019
US healthcare spend as % GDP
Forecast
Global Trend - Regulatory and Funding Frameworks Addressing Excessive Spending
Shift in healthcare is taking place
Chronic conditions cost healthcare most and more elderly have chronic conditions2
$1,081$2,844
$5,074$7,761
$10,414
$14,768
0 1 2 3 4 5+
Number of chronic conditions
Average per capita healthcare spending (US$)
Wastage in healthcare is 30-45% Greatest opportunity in improving outcomes lies in elderly with chronic conditions
There is a shift in healthcare taking place with providers being incentivized to provide value over volume
This is being established through team based community care
1 World Development indicators2 Bloomberg School of Public Health
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Page 5 • 2016 © Orion Health™ group of companies
Old Healthcare Model
Informed and Collaborative Decision Making Assists Effective Treatment
Decisions with
limited information
Not informed
or involved
No Access
No Input
Doctor
Complete
Health Record
Thinking Software
PatientDoctor Patient
Actively ParticipatesFull Spectrum of
Information
Emerging Healthcare Model
Hospital Labs, Radiology, Pharmacy Hospital Labs, Radiology, Pharmacy
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Aggregated data needs to be stored in a central location
60%
from exogenous sources
30%
from genomic sequencing
10%
from health systems
2012
500 Petabytes
2020
25,000 Petabytes
Value Proposition
Many data sources contribute to the health record
Consumerization of healthcare occurring
iPhone Blood
Glucose
Pulse Oximeter
Blood PressureHeart Rate
Armband sensors
for temperature,
skin response,
acceleration &
heat flux
HospitalConsumerGenomic AncillaryGP
Integrated
Care Record
Real-time Analytics
Open API Platform
Who pays for access:
Funders
Payers
Providers
API users
Who uses information:
Care coordinators
Patients
Physicians
Surgeons
Pharmacist
Data explosion
occurringSocial
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Amadeus: Platform for Innovation
Optimize Data for Usage Innovation Ecosystem Privacy & SecurityBuilt for Growth
▸ Fast acquisition
of data
▸ Data normalisation
in real time
▸ Patient centric
information provided
so that it can be used
by care providers
▸ Standard set of APIs
against which
developers can write
their applications
▸ Ability for application to
developers to scale
beyond one deployment
▸ Support & Feedback
Loops
▸ Fast development of
new (custom) data
models with APIs
▸ Fast time to value of
new features
▸ Scalable beyond
today’s traditional data
sets
▸ Only authorised
systems and users can
access information
▸ Ability to segment and
apply privacy critical
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Page 8 • 2016 © Orion Health™ group of companies
Future Proofed Technology
Orion’s software solutions are underpinned by significant R&D investment
made in the world’s leading big data technologies
Previous generation technology limitations
Rigid Limited to analysing static
and structured data
SlowUnable to consume large
amounts of data or
scale-up
LegacyNot built for cloud, mobile
and IoT world
CostlyExpensive licensing costs
from incumbent vendors
FlexibleBuilt for analysing big
data in real-time
ScalableProcess virtually
unlimited patient data
at scale
Built for cloudOpen APIs to support
custom SaaS apps
InteroperableCooperates with vast
third party data
Modern tech stack New tech being used in
broader industries
Legacy and closed tech
stack
Legacy tech used by competing
IT health vendors
Server
Hardware
RDBMS
Model
Orion Health technology platform
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Phase 1 Phase 2 Phase 3 /4 / 5 Phase 3 / 4 /5 Phase 3/ 4 / 5
SummaryEmbed software and
view health record
Introduce clinical
functionality
Complete full suite of
clinicalsIntroduce analytics API platform enabled
Description
Stand up core
solution, load data,
establish feeds from
data sources to
create rich electronic
health record
Expand functionality
of systems. Install
“doing” software for
providers including
inpatient flows,
medications, care
coordination
Expand views and
add cross care
setting flows,
referrals, orders and
patient apps
Expand views &
interfaces, add
analytics functions
Expand views,
interfaces and add
platform as a service
capabilities
Revenue
(per patient)
$$$
$$
$$$
>$$$
A Customer Journey Today
Interchangeable
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Page 11 • 2016 © Orion Health™ group of companies
~90%
~10%
On Prem CloudPrivate Cloud
/
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Opportunity to Assist Existing Customers Move to the Cloud
Customer
Benefits of being in the cloud Value Opportunities
~90%
~10%
On Prem Cloud
On
premise
will shift
to the
cloud
Growth
opportunity
when
moving
patients to
the cloud
Hosting change allows a shift in business model to a
subscription basis with customers
Private Cloud/
1
2
- Significant cost
savings
- Economies of scale
- Lower support costs
- Direct access to data
through our own APIs
- Standardized solution
with rapid deployment
- Ability to apply
machine learning and
analytics
- Connection to complete
patient record with new
data sources
- Easy access to
additional APIs and
cloud services
- Data is accessible and
interoperable
- Scalable environment
- Efficient deployment &
upgrades
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Page 13 • 2016 © Orion Health™ group of companies
Growth Drivers for Orion Health
United
States
• Obamacare and
CMS funding
models
• Canada Health
Infoway strategic
roadmap
• Personalized Healthcare 20/20, supported by £4.2Bn Tech Fund
• Regionalization –NHS Trusts: > 44 Sustainable Transformation Patches
• Care Coordination programs (Devo Mancs)
• €2Bn Program
to fund
regionalization
and Care Co-
ordination
(TSNs, 950
Public hospitals
becoming 135
Regions)
• Interoperability
platforms
• National Health IT
strategy driving
regionalisation
and national EHR
Canada United
Kingdom
France Australia New Zealand
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US BUSINESS UPDATE
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Page 15 • 2016 © Orion Health™ group of companies
United States – Market Context
Affordable
Care Act
(Obama Care)
• Forces providers
& payers to find
savings
• New policies
and incentives
continue
CMS
Reimbursement
model
• Driving to get
physicians on
incentive
programs in a 0
sum program
• Those who
provide quality
will get rewarded
and those below
standard will be
penalized
Payer - Mergers
and Acquisitions
Continue
• As means to
create
economies of
scale, with the
addition of
Providers
becoming
Payers
(Payvidors)
Value based
contracts
gaining traction
• Industry is
forecasting non
fee for service to
make up 75% of
all transaction by
2020
• However, some
providers still
only have
20,000 – 40,000
patients in
outcome based
plans
Competition
landscape
changing
• Solution
convergence
taking place
• ACOs requiring
integrated
solution
Other
market
segments
• Pharmaceuticals,
Bio Tech, Device
Manufactures,
Employers
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Page 16 • 2016 © Orion Health™ group of companies
Key Players
▸ Provider Segment
– Key competitors – Cerner, Epic, IBM, Allscripts DB Motion
– We win in Clinical Integration Networks and lose in closed networks controlled by above
competitors
▸ Payer Segment
– Key Competitors – Accenture/Intersystems, IBM
– We win when provider engagement and clinical integration are key drivers to new value
base models and narrow networks.
– We lose when IBM or Accenture have strong long standing relationshipsFor
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Market segments & Key drivers
Provider
• Shift from fee for service to fee for value requires cross-care setting
coordination
• Medicare payment reform requires electronic clinical quality measure
capture & reporting
• Increase in network affiliations to support independent physicians
• Managing 85c in the dollar
Payer
• Shift from fee for service to fee for value
• Combat competitive threat of disintermediation
(providers turning into payers)
• Decrease costs (e.g. out of network spend)
• Retain and attract new members
• Managing 15c in the dollar
Life Sciences
• Accelerate drug discovery
• Increase revenues through improved med adherence
Public
• Support federal push for health information exchange
• Improve health of citizens
• Reduce cost of care (Medicaid)
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United States – Key Business Focus Areas
Top
Line
Growth
Upgrade existing
customers
New Provider
Customers with
PHM
New Payer
Customers – via
Cognizant
Business
development into
new markets –
Pharma, Devices
Customer
Value
Delivery
Converge to
Amadeus in the
cloud
Improve value
and adoption
Focus on
sustainable
business
models
Margin
Expansion
Refine
Implementation
methodology
and capabilities
Reduce cost of
hosting and
improve
services
Deliver and
Gain
References
Focus on
gaining multiple
references
within each
segment (Payer
and Provider)
Internal
Development
Continue to
build team from
reorganization
in early 2016
Partner
Channels
Cognizant our
distribution
partner for the
payer space
1 2 3 4 5 6
Page 18 • 2016 © Orion Health™ group of companies
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Page 19 • 2016 © Orion Health™ group of companies
Customer Migration to the Cloud
▸ The convergence of our current customer base
to the cloud is expected to take >18 months
▸ We expect that customers will positively
receive the move to the cloud due to
– faster route to new features and product
releases
– standard solution to manage
– lower cost of maintenance
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Cal INDEX | update
▸ Target provider participation uptake has been
slower than initially anticipated but we are now
encouraged by the engagement with potential
participants.
▸ The solution also must be migrated to AWS
Direct and Amadeus, which we aim to
complete early next calendar year.
▸ We are working closely with the newly
engaged BSC Executives, while Cal INDEX
continues to recruit a new CEO.
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US PAYER MARKET
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Page 22 • 2016 © Orion Health™ group of companiesPage 22 • 2016 © Orion Health™ group of companies
Payer Sector Overview
Shift in the way payers think about their solutions with most plans getting
involved with Medicare and Managed Medicaid.
1Q16 Health Enrolment by Segment
N = 265 Million 1Q15 to 1Q16 Segment Percentage Changes
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Page 23 • 2016 © Orion Health™ group of companies
Cognizant & Trizetto Footprint
Govt
50+ Organizations and 30 State and Federal Exchanges
PBM
3 of the 5 Leading US PBMs
Providers52+ Health Systems and 260,000+ Care ProvidersSupporting over 2 Billion transactions per year andover 400PM/EHR Partners
Payers
370+ Payer Organizations
Life Sciences
Nearly all major Global Pharmaceuticals, Medical Devices
and Bio Tech Companies
190 Million Livessupported on Cognizant
software platforms
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Page 24 • 2016 © Orion Health™ group of companies
Orion Center of Excellence Highlights – Practice to Support Tranzform
• Integration Services
• Implementation Services
• Platform Support
• Testing
• Program Management
• Talent pool drawn from Cognizant HIE
COE and external recruits
• Supported by Orion through structured
training to onboard new team members
• Knowledge Repository on Orion
products, implementation processes
and best practices
• Onsite & global teams
• Core-Flex model to address fluctuation
in client’s staffing needs
People
Knowledge
Services
Delivery Model
A dedicated Orion CoE ensures availability of the right expertise for our client’s needs
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Page 25 • 2016 © Orion Health™ group of companies
Cognizant Health Tranzform – Where Does Orion Fit?
Real T
ime S
tream
Captu
re
TranZform™ Analytics
Mic
ro B
atc
h
Streaming
&
Computation
Engine
In Memory
Massively
Parallel
Processing
CareTranZform™
Data Processing Pipeline
Cleansing
SequencingRouting
Mapping
Replay Enriching
TranZform™ Data Engine
TranZformIntegration engine
EMPIsFTPHTTPS TCP/IP
Data
So
urc
es
Network TranZform™ Insights TranZform™ EngageTranZform™
Open API and API Manager
Terminology
Services
Member
Registries
LabsRads
Genomics
EMRsCommunitySystems
Public Health
HIEs
PBMs SocialPayerClaimsBYOHD
Third Party Eco System
EMR Services
Non Member
Data Spaces
Payer
Member
Custom
Clinical
Consumer
Custom
Custom
Patient Matching
CertificationDe-Dup
Conversions
Rules-Audit Notification-Error
Data Transformation & Semantic Standardization
Raw Data
Store
X12
HL7
DICOM NCPDP Device Custom
Connectors
Real Time Stream Capture
Analytics Sandbox
Orion Health
Technology
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Page 26 • 2016 © Orion Health™ group of companies
▸ Tranzform:
– Net new business - new plans & provider owned plans
– Potential upsell into existing Cognizant clients
▸ Centre of excellence deployment in NA and Worldwide
– Live customer with combined services in NA in the near term
– Live customer with combined services in EMEA in the medium term
▸ Significant pipeline growth and movement in stages
Key Goals in the Relationship with CognizantF
or p
erso
nal u
se o
nly
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