Technology Diffusion & Adoption

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Technology Diffusion & Adoption SG-2, LLC Preliminary

Technology Diffusion % of volume

Technology Diffusion

1.20000

Saturation 1.00000

0.80000

Accelerating diffusion "r" value - rate)

0.60000

"50%" mark

0.40000

Development lag 0.20000

0.00000 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Years

Saturation level: A given technology can impact on a certain percentage of disease prevalence or DRG utilization (the saturation can be set to between “0” and “1”) “Take-off” point: The “take-off” point is defined as the time (year) in which 50% of relevant healthcare facilities are using the technology. Development lag: Technology development and regulatory approval (as appropriate) takes time. For technologies just recently approved, this development lag is “0” Acceleration rate or “r”: Related to how rapidly the technology diffuses (reaches saturation) once it is available. Pharmaceuticals (with low cost and low side-effects) typically have a rapid (or large) acceleration rate, while surgical devices (high expense and extensive training involved) would have a slow (small) acceleration rate.

Noninvasive Angiography example  Utilization forecast of non-invasive (and by corollary, invasive) coronary angiography (CTA and/or MRA based).  In the future, the vast majority of noninvasive angiographies will be screening angiographies.  Screening noninvasive angiographies will outnumber diagnostic noninvasive angiographies by a factor of 10 and both will plateau by around 2009.  Invasive angiographies (even despite an increase in angioplasty volumes) will decrease yet not be completely replaced by noninvasive angiography.

Projected coronary angiography volumes U.S. Population, 2001 - 2010 Total Invasive Angiography Total Noninvasive Angiography (Diagnostic & Screening) Noninvasive (diagnostic) angiography Noninvasive (screening) angiography

14,000,000 12,000,000

8,000,000 6,000,000 4,000,000 2,000,000

Year

20 10

20 09

20 08

20 07

20 06

20 05

20 04

20 03

20 02

0 20 01

Volume

10,000,000

Technology Adoption Technology Adoption 1.20000

1.00000

% of volume

0.80000

Utilization at a rapidly adopting institution #1

0.60000

Utilization at a slowly adopting institution #2 0.40000

∆U1: Difference between utilization at institution #1 relative to local volume adjusted national rate

Current average national utilization rate

0.20000 ∆U2:

0.00000 2001

2002

Current time

2003

2004

2005

2006

Years

2007

2008

2009

2010

Adoption rating %

Adoption Rating

1.20000

Conservative 1.00000

Accelerators

0.80000

0.60000

"50%" mark Early Accelerators

0.40000

0.20000

Initiators 0.00000 2001

2002

2003

2004

2005

2006

2007

2008

2009

Initiators: Utilize technology typically in the first 10% of overall utilization Early Accelerators: Are in the 10% to 50% group of first utilizers. Accelerators: Are in the 50% to 90% group of utilizers. Conservative: Are in the last 10% of utilizers

2010

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