7. Business Models In Ehealth2
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Business Models in eHealth Dr Justin M Whatling Chief Clinical Officer, BT Health Director of Strategy, Global Healthcare Visiting Professor UCL, Centre for Health Informatics and Multiprofessional Education
Agenda • The changing healthcare environment • Current business models and challenges • Where we could get to
Current healthcare models are not fit for purpose • Reimbursement based business model for biomedical model of healthcare is not fit for purpose • Sustainability of the healthcare system has become critically dependent on the success of prevention models • NHS does not have the money or the experience at driving this, and we collectively need to quickly go through the discovery, innovation and deployment processes for the future healthcare delivery business models • Maintaining health and productivity is crucial to longterm economic stability
Supply – Demand mismatch • Victim of our own success
• Increasing consumer expectation • Increasing cost of health innovations • Demand of an ageing chronically ill population
• Health ICT has a critical role to play
• Lack of healthcare professionals • Constrained budgets
Role of Health ICT • Health ICT is key as it can transform the economics of interactions in the web of services and providers • ICT’s inherent flexibility can catalyse the service innovations required to sustain an increasingly complex web of care – But it is difficult to predict technology and service configuration sets that are likely to succeed and – Current technologies and modes of operation limit reuse and adaptability of solutions • Progress has been further limited by risk averse behaviour – Whole system business models for prevention and Long Term Condition programmes are most likely to be sustainable, but require high up-front investment – consequently ‘Pilotitis’ is endemic – The consumer healthcare industry is emergent, fragmented, investment-driven – no strong lead customer to provide the impetus for adoption – Health 2.0 market activity has weak business models
Approach to date Social care Market
Payer/ Provider Market
Consumer Health Market
like the healthcare system we have built health ICT around the needs of organisations and staff
Redressing ownership of health and wellbeing Consumer influence Gyms Wellness services Behavioural programmes Employer services
‘Fitness notes’ Personalised budgets
Social services
Telecare Health services
Telemedicine Healthcare Institution influence
• Consumer power and extent of choice is increasing but high industry fragmentation is resulting in disconnected engagement
Where Healthcare needs to get to… Drivers Drivers Public PublicHealth Health Prevention Prevention Payer/ Provider Market
Consumer Health Market
Social Care Market
Wellbeing Wellbeing Consumer Consumer expectation expectation Consumer Consumer responsibility responsibility Empowerment Empowerment Focus Focuson on outcomes outcomes
convergence of health and wellness markets
Something starting to happen…
Payer/ Provider Market
Consumer Health Market
• Co-creation of content • Secure email collaboration • Service advertising • Patient monitoring • Medication compliance • Shared decision making • Semantic fingerprinting • Effects of computers on consultations • Second opinion services • Reimbursement of new consultation methods
• Means testing • Personal budgets • Private sector / SME provision • 3rd sector engagement
Social Care Market • Shared care assessment • Pooled budgets • Joint commissioning
• Outcomes management • Telecare • Behaviour change programmes
convergence of health and wellness markets will drive new business models
Currency of healthcare must change • Evidence based management Outcomes management • Activity reimbursement Outcomes based purchasing • Disease centric Patient centric • Care episode based Care cycle based • Care pathways Integrated care pathways • Data Information Knowledge centricity • This transformational change will fundamentally change the business models operating in healthcare and in health ICT
Current business models and challenges
Business/ Service delivery models • Four players – – – –
Patients/ customers Healthcare payers Healthcare providers ICT suppliers
• Four key flow relationships: – – – –
Care services IT product/ services Funds Evidence of delivery
Adapted from Empirica materials
Business/ Service Delivery Models
Suppliers participate in service delivery but invisibe for customers
vic ser
suppliers e
(health, social) care service
customers
payers
Providers and payers join: Managed Care
suppliers
e vi c ser
customers
providers evi
pre miu m
(health, social) care service
Suppliers and providers join
pro du ct/ ser v ic e pay me nt
reim
(health, social) care service
customers
ce den sem bur
suppliers
pre m
ent
evi
ium
payers
Customers pay out of pocket
pro du ct/s erv ice pay me nt
providers
customers
providers ce den
ent sem r u b reim
suppliers
(health, social) care service
providers
payment pre m
evidence ium
payers
Adapted from Empirica materials
Business/ Service Delivery Models • Integration of ICT services into existing delivery channels – Healthcare organisations view ICT services as a logical extension of their portfolio – Cash flow follows well established paths – No disruption of present delivery structures Suppliers participate in service delivery but invisibe for customers customers
suppliers
e vic ser
pro du ct/ ser v ic e pay me nt
(health, social) care service
providers evi
pre miu m
payers
ce den
reim
sem bur
ent
Adapted from Empirica materials
Business/ Service Delivery Models • Combining medical service provision and IT support – ICT services are not delivered in the context of conventional healthcare structures – established healthcare providers view such offerings as a threat
Suppliers and providers join
customers
suppliers
(health, social) care service
pre m
providers evi
ium
payers
ce den
ent sem r u b reim
Adapted from Empirica materials
Business/ Service Delivery Models • Managed Care approach – Legal constraints and opposition by health care providers – Disease management concepts (public sickness funds) are now widely discussed – Has become an interesting option
Providers and payers join: Managed Care
suppliers
e vi c ser
customers
(health, social) care service
pre m
pro du ct/s erv ice pay me nt
providers
ium
payers
Adapted from Empirica materials
Business/ Service Delivery Models • Private market approach - direct payment by patients – Rare exception in countries with developed national health systems – But private out-of-pocket payments are expected to increase
Customers pay out of pocket
customers
suppliers
(health, social) care service
providers
payment evidence
Adapted from Empirica materials
Challenge areas • Personal health records – Foundational – Patients more interested in utility services that PHRs • US Regional Health Information Organisations – Many failures, some successes – No business model for sharing information • Health 2.0 initiatives – Standalone VC-backed startups – dot com but in healthcare • Telecare – Who pays is not necessarily who benefits • Care Management/ Self-care in CDM – Pilotitis • Consumer health knowledge services
Lack of sustainable business models for CDM
Case Management
Disease Management
Supported Self Care
Very High Risk
Healthcare market focus
Lack of sustainable business models
High Risk
Consumer pay
Low Risk
Prevention
NHS pay
consumer health market focus
Regression to the mean
Business model trade offs • Report on telehealth workshop published, eHealth Europe, 29 December 2008 • There is a lack of appropriate business models: – Buying or leasing hardware offers a more flexible local service and may be the best option for long-term monitoring, but has a high initial cost, need for replacement and staff training – Buying services has a low initial cost, may include staff and offers better back-up, but has a high recurring cost, less flexible local service and an incentive to terminate
• Is there a hybrid model?
Changing global economic outlook affect on IT spending in healthcare worldwide through to 2010 • The current outlook for global economic growth in 2009 has been lowered to 2.8% • The most-recent published 2008 IMS IT spending forecast worldwide (July 2008) contains a CAGR of 5.3% for healthcare from 2007 through 2012. This growth rate is no longer feasible for businessplanning purposes for 2009 and 2010. • Early indications for worldwide healthcare provider IT spending growth in 2009 and 2010 show growth to be between 3.6% and 4.1%, and 3.3 and 4.4%, respectively.
Gartner, Nov 08
Recommendations for Health ICT suppliers • Build sales and marketing material demonstrating predictability of costs and outcomes • Forestall launching new initiatives or products that do not have quick "time to value“ • Target the "hidden IT buying centers" in healthcare • Eschew "knee jerk" cost reduction outsourcing initiatives • Retain healthcare talent despite short-term pressures to trim staff • Rebuild ROI and time-to-value-related marketing material • Propose global delivery options to established clients Gartner, Nov 08
More recently… • Have you heard about the upturn?, Smart Healthcare, 28 October 2009 • Kable predicts that spending on ICT in healthcare will increase by a third in the next five years. It reckons that the market will expand by about 8% by the next financial year, despite the recession and criticism from the Conservatives. Victor Almeida comments that large sums of money will continue to be spent on the NPfIT until its benefits have been fully realised. • HAVE YOU HEARD ABOUT THE UPTURN? SMART HEALTHCARE (ONLINE) - 28/10/2009 • THE ONLY HEALTHY FUTURE - SMART HEALTHCARE (ONLINE) - 28/10/2009
Refocusing on technologies that enable cost reductions need to refocus on cost decreasing technologies
outcome USA
This is not the focus of research establishments, who will compound this problem if they do not refocus on translational research that addresses this looming crisis
cost
Literature on return on investment • Information technologies are so intermingled with people and processes that the identification of specific IT benefit remains questionable (Meyer R, 2008) • eHealth Impact study demonstrated average of 4 year net benefit and 5 year cumulative net benefit, EPR 7-8 years (eHealth Impact, 2006) • Widespread implementation of health IT has been limited by a lack of generalisable knowledge about what types of health IT and implementation methods will improve care and manage costs for specific health organisations (US Agency for Healthcare Research and Quality, 2006)
Future EC work •
Business Models for eHealth Tender (15/05/2008) – The study will analyse successful business models for innovative eHealth applications, focusing on financing, longer term sustainability, incentives of all the stakeholders and on the role of procurers. – Particular attention should be given to ICT applications for chronic diseases management, with reference to the research carried out in this field that the European Commission has funded (FP6, FP7).
•
The study will focus on business models for eHealth. The specific goals of the study are: – To review the state of the art evaluation methodologies and approaches focusing on efficiency, sustainability and economic benefits of eHealth systems; – To consider the current demand for eHealth systems and tools in the four defined market areas with a view to evaluating the existing and potential eHealth market size; – To identify eHealth business models within the four market areas outlined above that represent best practices in a range of Member States, analyse and present the findings. – To describe a vision of sustainable eHealth systems for each of the four market areas. This will include proposed business models presuming that some seed funding was available to roll out a service on a wide scale.
Where we could get to
Service Fragmentation, to •
•
•
• •
Increasing complexity and unpredictability of service configuration Complex ecosystem with extensive relationships between organisations and services Organisations increasingly purchasing services from each other Core health capabilities changes little Current limited reuse and adaptability
Service Provider B Service Provider A
Application B Application A
Service Provider E
Service Provider D
Service Provider C Application D
Application C
Service Orchestration • Reuse • Adaptability • Faster time to market • Lower total cost of ownership
Service Provider B Service Provider A
Application A
Service Provider E
Identity Management
Data Warehouse
Payments & billings
ePHR
Semantic Broker
EHR
ePrescribing Service
Decision Support
Service Provider C Application D
Application B
Service Provider D
Application C
An Example: UK Consumer health market • • • • •
NHS Direct NHS Choices Healthspace NHS 'Life Check' – Health MoT New trends and initiatives – – – –
‘Fitness notes’? Pharmacy engagement Healthcare at Home Health Tourism
• But: – – – – –
Fragmented, little reuse Limited innovation Silo care settings NHS brand in healthcare Partial ecosystem…
• Consumers want: – – – – – – –
Utility Access services Trusted information Communication Convenience Personalisation Fun and interactive
Oyster NHS BMJ BT Tesco Google Virgin
Consumer health market existed for some time
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Explosion through new & better channels
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Opportunity to improve the consumer health experience by creating an integrated ecosystem wrapper …
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Ecosystem
SAGA Community
Age Concern Community
Virgin Health Community NHS services Consumer services
Discount voucher SESAME: SEnsing for Sport And Managed Exercise
NHS consumer obesity information Weight mgmt. consumer information
London 2012 Patient health record access
Publicity & Media Campaigns
Data synch
Behaviour change Link to NHS care record Patient progress GP
Consumer purchase weight mgmt service
Patient referral to service
QMAS for QoF QoF to be 'crucial‘ in obesity plans Reimbursement
Network effect • the value of a network increases exponentially with the number of users (nodes) on the network • Some products only have standalone value – bread, icecream • Some products provide value as stand-alones and also exhibit a network effect, e.g. PC
Hard to predict what business models could be used by players in the mixed ecosystem, but they could be any of these: Brokerage
Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-toconsumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables.
Advertising
The vendor provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages. The advertising model works best when the volume of viewer traffic is large or highly specialized
Infomediary
Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
Merchant
Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction
Manufacturer (Direct)
The manufacturer or "direct model", is predicated on the power of distribution channels to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel (Dell).
Affiliate
The affiliate model provides purchase opportunities wherever people may be gathering (physically or virtually). It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partners. It is a pay-for-performance model -- if an affiliate does not generate sales, it represents no cost to the merchant.
Community
The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services.
Subscription Model
Users are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium" (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined.
Utility
The utility or "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates.
© British Telecommunications plc Issue 11, 190308, Commercial – In Confidence This content has been adapted from an article by Michael Rappa on Business 38 Models on the Web. http://digitalenterprise.org/models/models.html
Transactional business models
New business models evolving •
Information Arbitrage –
•
Infomediary –
–
•
Information arbitrages are instances where the spread between the cost of accessing a piece of information and your ability to resell it is sufficient to be able to make a profit maximizes the value of the information by being helpful to the customer in locating products and services that are most relevant to the customer based on who they are and what their preferences are businesses that can advise consumers about their complicated treatment and provider options
Metamediary services –
Metamediaries are companies with robust Internet sites that furnish customers with multiproduct, multivendor and multiservice marketspace in return for commissions on sales
Not just confined to the consumer health market • Philips sell PACS on a pay per image stored basis in N America and Europe • Emergis sell pharmacy solutions in Canada on a fee for transaction basis • Infermed can sell global decision support service on a pay per patient per year basis • US Chronic Disease Management services on a fee per patient per month basis, or even a fee per population per month basis • US Payers 100% reimbursing for remote monitoring services
Open Health Tools Conceptual Architecture Health Information Network Interoperability Services
Infrastructure Services R
Provider Registry
R
Security Management
R
Patient Resolution
R
R
R
Privacy Management
Public Health Information Services
Patient Information Services
HL7 V3
Healthcare Information Exchange
Terminology
Electronic Health Record (EHR)
Outbreak Management R
R
Service Registry
Community Management
Document Processing
De-Identified Patient Data Warehouse
Personal Health Record (PHR)
Public Health Reporting
Healthcare Service Bus (HSB) R
Public Health Services
POINT OF SERVICE
HSB Access Node
Public Health Provider
HSB Support Services
Pharmacy System
Pharmacist
Interoperability Services
Radiology Center PACS/RIS
Lab System (LIS)
Radiologist
Representative HIN Services
Hospital, LTC, CCC, EPR
Lab Clinician
Physician Office EMR
Physician/ Provider
Representative Commercial Services
EHR Viewer
Physician/ Provider
Open HealthIT
Core Initiative
Physician/ Provider
R Open HealthIT
Reference Implementation
Developing new business models • What is required is an environment where participants can explore why they should participate in the ecosystem by playing around in a virtual environment with simulated services and business models • They could potentially simulate the physiological, psychological and sociological impact of future health ICT services in environments like Second Health (http://secondhealth.wordpress.com/) • Assess the whole system economic impact through collaborative modelling environments which don't exist yet, but are likely to be brought into being by a £5m initiative funded by the TSB • Work on a smaller scale to achieve an economic modelling environment has been initiated by the East of England SHA, or by the Whole Systems Partnership (http://www.thewholesystem.co.uk/). This is a space to be watched.
For example…
• Subscription charges (£5/month) (red) • Transaction charges (5p / trans) (blue)
Thank You [email protected]
Agenda • The changing healthcare environment • Current business models and challenges • Where we could get to
Current healthcare models are not fit for purpose • Reimbursement based business model for biomedical model of healthcare is not fit for purpose • Sustainability of the healthcare system has become critically dependent on the success of prevention models • NHS does not have the money or the experience at driving this, and we collectively need to quickly go through the discovery, innovation and deployment processes for the future healthcare delivery business models • Maintaining health and productivity is crucial to longterm economic stability
Supply – Demand mismatch • Victim of our own success
• Increasing consumer expectation • Increasing cost of health innovations • Demand of an ageing chronically ill population
• Health ICT has a critical role to play
• Lack of healthcare professionals • Constrained budgets
Role of Health ICT • Health ICT is key as it can transform the economics of interactions in the web of services and providers • ICT’s inherent flexibility can catalyse the service innovations required to sustain an increasingly complex web of care – But it is difficult to predict technology and service configuration sets that are likely to succeed and – Current technologies and modes of operation limit reuse and adaptability of solutions • Progress has been further limited by risk averse behaviour – Whole system business models for prevention and Long Term Condition programmes are most likely to be sustainable, but require high up-front investment – consequently ‘Pilotitis’ is endemic – The consumer healthcare industry is emergent, fragmented, investment-driven – no strong lead customer to provide the impetus for adoption – Health 2.0 market activity has weak business models
Approach to date Social care Market
Payer/ Provider Market
Consumer Health Market
like the healthcare system we have built health ICT around the needs of organisations and staff
Redressing ownership of health and wellbeing Consumer influence Gyms Wellness services Behavioural programmes Employer services
‘Fitness notes’ Personalised budgets
Social services
Telecare Health services
Telemedicine Healthcare Institution influence
• Consumer power and extent of choice is increasing but high industry fragmentation is resulting in disconnected engagement
Where Healthcare needs to get to… Drivers Drivers Public PublicHealth Health Prevention Prevention Payer/ Provider Market
Consumer Health Market
Social Care Market
Wellbeing Wellbeing Consumer Consumer expectation expectation Consumer Consumer responsibility responsibility Empowerment Empowerment Focus Focuson on outcomes outcomes
convergence of health and wellness markets
Something starting to happen…
Payer/ Provider Market
Consumer Health Market
• Co-creation of content • Secure email collaboration • Service advertising • Patient monitoring • Medication compliance • Shared decision making • Semantic fingerprinting • Effects of computers on consultations • Second opinion services • Reimbursement of new consultation methods
• Means testing • Personal budgets • Private sector / SME provision • 3rd sector engagement
Social Care Market • Shared care assessment • Pooled budgets • Joint commissioning
• Outcomes management • Telecare • Behaviour change programmes
convergence of health and wellness markets will drive new business models
Currency of healthcare must change • Evidence based management Outcomes management • Activity reimbursement Outcomes based purchasing • Disease centric Patient centric • Care episode based Care cycle based • Care pathways Integrated care pathways • Data Information Knowledge centricity • This transformational change will fundamentally change the business models operating in healthcare and in health ICT
Current business models and challenges
Business/ Service delivery models • Four players – – – –
Patients/ customers Healthcare payers Healthcare providers ICT suppliers
• Four key flow relationships: – – – –
Care services IT product/ services Funds Evidence of delivery
Adapted from Empirica materials
Business/ Service Delivery Models
Suppliers participate in service delivery but invisibe for customers
vic ser
suppliers e
(health, social) care service
customers
payers
Providers and payers join: Managed Care
suppliers
e vi c ser
customers
providers evi
pre miu m
(health, social) care service
Suppliers and providers join
pro du ct/ ser v ic e pay me nt
reim
(health, social) care service
customers
ce den sem bur
suppliers
pre m
ent
evi
ium
payers
Customers pay out of pocket
pro du ct/s erv ice pay me nt
providers
customers
providers ce den
ent sem r u b reim
suppliers
(health, social) care service
providers
payment pre m
evidence ium
payers
Adapted from Empirica materials
Business/ Service Delivery Models • Integration of ICT services into existing delivery channels – Healthcare organisations view ICT services as a logical extension of their portfolio – Cash flow follows well established paths – No disruption of present delivery structures Suppliers participate in service delivery but invisibe for customers customers
suppliers
e vic ser
pro du ct/ ser v ic e pay me nt
(health, social) care service
providers evi
pre miu m
payers
ce den
reim
sem bur
ent
Adapted from Empirica materials
Business/ Service Delivery Models • Combining medical service provision and IT support – ICT services are not delivered in the context of conventional healthcare structures – established healthcare providers view such offerings as a threat
Suppliers and providers join
customers
suppliers
(health, social) care service
pre m
providers evi
ium
payers
ce den
ent sem r u b reim
Adapted from Empirica materials
Business/ Service Delivery Models • Managed Care approach – Legal constraints and opposition by health care providers – Disease management concepts (public sickness funds) are now widely discussed – Has become an interesting option
Providers and payers join: Managed Care
suppliers
e vi c ser
customers
(health, social) care service
pre m
pro du ct/s erv ice pay me nt
providers
ium
payers
Adapted from Empirica materials
Business/ Service Delivery Models • Private market approach - direct payment by patients – Rare exception in countries with developed national health systems – But private out-of-pocket payments are expected to increase
Customers pay out of pocket
customers
suppliers
(health, social) care service
providers
payment evidence
Adapted from Empirica materials
Challenge areas • Personal health records – Foundational – Patients more interested in utility services that PHRs • US Regional Health Information Organisations – Many failures, some successes – No business model for sharing information • Health 2.0 initiatives – Standalone VC-backed startups – dot com but in healthcare • Telecare – Who pays is not necessarily who benefits • Care Management/ Self-care in CDM – Pilotitis • Consumer health knowledge services
Lack of sustainable business models for CDM
Case Management
Disease Management
Supported Self Care
Very High Risk
Healthcare market focus
Lack of sustainable business models
High Risk
Consumer pay
Low Risk
Prevention
NHS pay
consumer health market focus
Regression to the mean
Business model trade offs • Report on telehealth workshop published, eHealth Europe, 29 December 2008 • There is a lack of appropriate business models: – Buying or leasing hardware offers a more flexible local service and may be the best option for long-term monitoring, but has a high initial cost, need for replacement and staff training – Buying services has a low initial cost, may include staff and offers better back-up, but has a high recurring cost, less flexible local service and an incentive to terminate
• Is there a hybrid model?
Changing global economic outlook affect on IT spending in healthcare worldwide through to 2010 • The current outlook for global economic growth in 2009 has been lowered to 2.8% • The most-recent published 2008 IMS IT spending forecast worldwide (July 2008) contains a CAGR of 5.3% for healthcare from 2007 through 2012. This growth rate is no longer feasible for businessplanning purposes for 2009 and 2010. • Early indications for worldwide healthcare provider IT spending growth in 2009 and 2010 show growth to be between 3.6% and 4.1%, and 3.3 and 4.4%, respectively.
Gartner, Nov 08
Recommendations for Health ICT suppliers • Build sales and marketing material demonstrating predictability of costs and outcomes • Forestall launching new initiatives or products that do not have quick "time to value“ • Target the "hidden IT buying centers" in healthcare • Eschew "knee jerk" cost reduction outsourcing initiatives • Retain healthcare talent despite short-term pressures to trim staff • Rebuild ROI and time-to-value-related marketing material • Propose global delivery options to established clients Gartner, Nov 08
More recently… • Have you heard about the upturn?, Smart Healthcare, 28 October 2009 • Kable predicts that spending on ICT in healthcare will increase by a third in the next five years. It reckons that the market will expand by about 8% by the next financial year, despite the recession and criticism from the Conservatives. Victor Almeida comments that large sums of money will continue to be spent on the NPfIT until its benefits have been fully realised. • HAVE YOU HEARD ABOUT THE UPTURN? SMART HEALTHCARE (ONLINE) - 28/10/2009 • THE ONLY HEALTHY FUTURE - SMART HEALTHCARE (ONLINE) - 28/10/2009
Refocusing on technologies that enable cost reductions need to refocus on cost decreasing technologies
outcome USA
This is not the focus of research establishments, who will compound this problem if they do not refocus on translational research that addresses this looming crisis
cost
Literature on return on investment • Information technologies are so intermingled with people and processes that the identification of specific IT benefit remains questionable (Meyer R, 2008) • eHealth Impact study demonstrated average of 4 year net benefit and 5 year cumulative net benefit, EPR 7-8 years (eHealth Impact, 2006) • Widespread implementation of health IT has been limited by a lack of generalisable knowledge about what types of health IT and implementation methods will improve care and manage costs for specific health organisations (US Agency for Healthcare Research and Quality, 2006)
Future EC work •
Business Models for eHealth Tender (15/05/2008) – The study will analyse successful business models for innovative eHealth applications, focusing on financing, longer term sustainability, incentives of all the stakeholders and on the role of procurers. – Particular attention should be given to ICT applications for chronic diseases management, with reference to the research carried out in this field that the European Commission has funded (FP6, FP7).
•
The study will focus on business models for eHealth. The specific goals of the study are: – To review the state of the art evaluation methodologies and approaches focusing on efficiency, sustainability and economic benefits of eHealth systems; – To consider the current demand for eHealth systems and tools in the four defined market areas with a view to evaluating the existing and potential eHealth market size; – To identify eHealth business models within the four market areas outlined above that represent best practices in a range of Member States, analyse and present the findings. – To describe a vision of sustainable eHealth systems for each of the four market areas. This will include proposed business models presuming that some seed funding was available to roll out a service on a wide scale.
Where we could get to
Service Fragmentation, to •
•
•
• •
Increasing complexity and unpredictability of service configuration Complex ecosystem with extensive relationships between organisations and services Organisations increasingly purchasing services from each other Core health capabilities changes little Current limited reuse and adaptability
Service Provider B Service Provider A
Application B Application A
Service Provider E
Service Provider D
Service Provider C Application D
Application C
Service Orchestration • Reuse • Adaptability • Faster time to market • Lower total cost of ownership
Service Provider B Service Provider A
Application A
Service Provider E
Identity Management
Data Warehouse
Payments & billings
ePHR
Semantic Broker
EHR
ePrescribing Service
Decision Support
Service Provider C Application D
Application B
Service Provider D
Application C
An Example: UK Consumer health market • • • • •
NHS Direct NHS Choices Healthspace NHS 'Life Check' – Health MoT New trends and initiatives – – – –
‘Fitness notes’? Pharmacy engagement Healthcare at Home Health Tourism
• But: – – – – –
Fragmented, little reuse Limited innovation Silo care settings NHS brand in healthcare Partial ecosystem…
• Consumers want: – – – – – – –
Utility Access services Trusted information Communication Convenience Personalisation Fun and interactive
Oyster NHS BMJ BT Tesco Google Virgin
Consumer health market existed for some time
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Explosion through new & better channels
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Opportunity to improve the consumer health experience by creating an integrated ecosystem wrapper …
Health & Beauty Health Information
Diets / Nutrition
Consumer Support Groups Complementary Therapy
Self Monitoring
Ecosystem
SAGA Community
Age Concern Community
Virgin Health Community NHS services Consumer services
Discount voucher SESAME: SEnsing for Sport And Managed Exercise
NHS consumer obesity information Weight mgmt. consumer information
London 2012 Patient health record access
Publicity & Media Campaigns
Data synch
Behaviour change Link to NHS care record Patient progress GP
Consumer purchase weight mgmt service
Patient referral to service
QMAS for QoF QoF to be 'crucial‘ in obesity plans Reimbursement
Network effect • the value of a network increases exponentially with the number of users (nodes) on the network • Some products only have standalone value – bread, icecream • Some products provide value as stand-alones and also exhibit a network effect, e.g. PC
Hard to predict what business models could be used by players in the mixed ecosystem, but they could be any of these: Brokerage
Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-toconsumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables.
Advertising
The vendor provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages. The advertising model works best when the volume of viewer traffic is large or highly specialized
Infomediary
Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
Merchant
Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction
Manufacturer (Direct)
The manufacturer or "direct model", is predicated on the power of distribution channels to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel (Dell).
Affiliate
The affiliate model provides purchase opportunities wherever people may be gathering (physically or virtually). It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partners. It is a pay-for-performance model -- if an affiliate does not generate sales, it represents no cost to the merchant.
Community
The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services.
Subscription Model
Users are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium" (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined.
Utility
The utility or "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates.
© British Telecommunications plc Issue 11, 190308, Commercial – In Confidence This content has been adapted from an article by Michael Rappa on Business 38 Models on the Web. http://digitalenterprise.org/models/models.html
Transactional business models
New business models evolving •
Information Arbitrage –
•
Infomediary –
–
•
Information arbitrages are instances where the spread between the cost of accessing a piece of information and your ability to resell it is sufficient to be able to make a profit maximizes the value of the information by being helpful to the customer in locating products and services that are most relevant to the customer based on who they are and what their preferences are businesses that can advise consumers about their complicated treatment and provider options
Metamediary services –
Metamediaries are companies with robust Internet sites that furnish customers with multiproduct, multivendor and multiservice marketspace in return for commissions on sales
Not just confined to the consumer health market • Philips sell PACS on a pay per image stored basis in N America and Europe • Emergis sell pharmacy solutions in Canada on a fee for transaction basis • Infermed can sell global decision support service on a pay per patient per year basis • US Chronic Disease Management services on a fee per patient per month basis, or even a fee per population per month basis • US Payers 100% reimbursing for remote monitoring services
Open Health Tools Conceptual Architecture Health Information Network Interoperability Services
Infrastructure Services R
Provider Registry
R
Security Management
R
Patient Resolution
R
R
R
Privacy Management
Public Health Information Services
Patient Information Services
HL7 V3
Healthcare Information Exchange
Terminology
Electronic Health Record (EHR)
Outbreak Management R
R
Service Registry
Community Management
Document Processing
De-Identified Patient Data Warehouse
Personal Health Record (PHR)
Public Health Reporting
Healthcare Service Bus (HSB) R
Public Health Services
POINT OF SERVICE
HSB Access Node
Public Health Provider
HSB Support Services
Pharmacy System
Pharmacist
Interoperability Services
Radiology Center PACS/RIS
Lab System (LIS)
Radiologist
Representative HIN Services
Hospital, LTC, CCC, EPR
Lab Clinician
Physician Office EMR
Physician/ Provider
Representative Commercial Services
EHR Viewer
Physician/ Provider
Open HealthIT
Core Initiative
Physician/ Provider
R Open HealthIT
Reference Implementation
Developing new business models • What is required is an environment where participants can explore why they should participate in the ecosystem by playing around in a virtual environment with simulated services and business models • They could potentially simulate the physiological, psychological and sociological impact of future health ICT services in environments like Second Health (http://secondhealth.wordpress.com/) • Assess the whole system economic impact through collaborative modelling environments which don't exist yet, but are likely to be brought into being by a £5m initiative funded by the TSB • Work on a smaller scale to achieve an economic modelling environment has been initiated by the East of England SHA, or by the Whole Systems Partnership (http://www.thewholesystem.co.uk/). This is a space to be watched.
For example…
• Subscription charges (£5/month) (red) • Transaction charges (5p / trans) (blue)
Thank You [email protected]
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