DIGITAL HEALTH SOLUTIONS: HEALTH SYSTEM SAVIOR OR DISRUPTOR?

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2 DIGITAL HEALTH SOLUTIONS: HEALTH SYSTEM SAVIOR OR DISRUPTOR? JASON LINEEN VP, STRATEGY AVIA

3 THREE THINGS TO KNOW Pace of Digital is Accelerating Disruptors & Enablers Emerging The Innovation Imperative But, LOTS of signal noise Field of play is shifting from B2B to B2C In response, invest a little & learn a lot 3

4 Source: Peter G. Peterson Foundation ( INDIA $267 4

5 DELIVERING MORE FOR LESS 5

6 ~$26B raised by Health IT / Digital Health companies since 2010 Source: AVIA adaptation of Accenture and Rock Health research; figure includes $6.5B forecasted in CY

7 BUT, HOW TO GET FROM HYPE TO HOPE? 7

8 EMERGING DISTRIBUTION CHANNELS WILL ACCELERATE DIGITAL UPTAKE 8

9 INNOVATION AT SCALE THROUGH COLLABORATION 9

10 THREE THINGS TO KNOW Pace of Digital is Accelerating Disruptors & Enablers Emerging The Innovation Imperative But, LOTS of signal noise Field of play is shifting from B2B to B2C In response, invest a little & learn a lot 10

11 CONSUMERISM IS (FINALLY) COMING TO HEALTHCARE B2B B2C WHOLESALE RETAIL Sources: (1) Kaiser Family Foundation & HRET, Employer Health & Benefits Survey, (2) National Business Group on Health, Large Employers' 2018 Health Care Strategy Survey. (3) Application search on itunes, August (4) Health Care Cost Institute, Issue Brief #11, March % covered workers have a deductible $1, % of large employers offering telemedicine by >1,000 Diabetes Apps in Apple Store 3 43% of total healthcare spend by consumers with employer-sponsored coverage is considered shoppable 4 * Spending by individuals under 65 with employer-sponsored insurance. 11

12 WHITEBOARD FROM AMAZON S OFFICES 12

13 THE POWER OF CONSUMER & SEARCH DATA How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did Target s consumption algorithms can identify changes in purchase patterns and reliably predict when its customers are pregnant and can also estimate the due date within a very small window What Happens When Your Search Engine is First to Know You Have Cancer Research published in the Journal of Oncology Practice demonstrated that a person s Web search history can, in some cases, predict an upcoming diagnosis of pancreatic cancer A wealth of new and potentially useful digital medical information is being created - ranging from Fitbits to smart watches to smartphones and search engines Sources:

14 THE CTA GUIDE TO DISRUPTIVE INNOVATION It takes not only technical prowess, but a compelling business model (and a welcoming regulatory system) to disrupt established industries 14

15 OAK STREET HEALTH RESULTS ACHIEVED (TO DATE) By late 2016, Oak Street served about 22,000 patients with over 80 providers and ~700 employees. A majority of Oak Street s patients are in MA plans or plans for Dual Eligibles with capitated contracts. Average patient age is 73 years old; and % of patients with diabetes was 32% and major depression 21%. 91 Net Promoter Score ( Likelihood to Recommend ) 5-star rating in HEDIS metrics (Top 10 percentile) >40% reduction in hospitalizations for managed care patients We re strong believers in technology but, we think it has to be technology enabling a model, not a model enabling technology. So though Oak Street uses plenty of data, it uses those numbers to support the patient-centric model it already has in place. Sources: Porter, Lee, Alger, Oak Street Health: A New Model of Primary Care, Harvard Business School, 7/7/2017. Griffin Myers, Geoff Price, Mike Pykosz, Caring for Older Adults in a Value-Based Model, NEJM Catalyst, 8/22/2016. Michael Pykosz, Oak Street Health, Co-Founder/CEO 15

16 INNOVATING ON VALUE IN MA MARKETPLACE (ILLUSTRATIVE PATIENT-CENTRIC AND TECH-ENABLED MODELS) Risk-Bearing Providers (Hybrid PCP/Payer Innovators) (yr founded): Aledade (2014), Alignment Health (2013), ChenMed (1980s), ConcertoHealth (2015), Iora Health (2012), Oak Street Health (2013), Privia (2014), VillageMD (2013) and more Insurer-Led: Anthem s CareMore, United s OptumCare and more Dramatically reducing ED visits and hospitalization rates while caring for the most expensive patients (MA & duals) in the world s most expensive health system. 16

17 THREE THINGS TO KNOW Pace of Digital is Accelerating Disruptors & Enablers Emerging The Innovation Imperative But, LOTS of signal noise Field of play is shifting from B2B to B2C In response, invest a little & learn a lot 17

18 ILLUSTRATIVE DIGITAL CONSUMER STRATEGIES Piedmont Now a mobile app for moms and moms-to-be Online scheduling Find a doctor Bill pay Lab results and tests Patient education Asynchronous & synchronous telemed Patient messaging Price checker / out-ofpocket estimate Triage Wayfinding 18

19 THE INNOVATION IMPERATIVE FOR HEALTH SYSTEMS The C-Suite view: +75% of leaders believe the effective use of digital solutions is essential and critical Investing in Innovation: Almost 1/3 of leaders are planning to or have already launched an innovation center in the next 18 months Top 5 innovation priorities: Convenient patient access (including telemedicine) Operational efficiencies Patient-generated data & personalized services Referral management and in-network retention Social community support Survey respondents: 300+ hospital executives (across 48 states) 19

20 BUT, PROGRESS IS SLOW DUE TO COMMON BARRIERS Months From Identifying a Digital Innovation Need to Scaling a Solution Common Innovation Barriers Insufficient funding Insufficient resourcing Competing priorities Resistance to change Ability to align stakeholders Contracting complexity Need Pilot Scale 20

21 DIGITAL INNOVATION ACCELERANTS Five factors that can accelerate innovation 1. Leadership commitment from the top 2. Linking to the organization s strategic priorities 3. Dedicating funding and resources (including flexible budgeting and nimble teams) 4. Starting with the problem to be solved (not bright shinny objects ) 5. Adopting disciplined innovation process with clearly stated success metrics (escaping pilot-itis ) 21

22 A NEW APPROACH TO STRATEGIC PLANNING: FORWARD IN REVERSE START IN THE FUTURE >50% healthcare spending = primary care and ambulatory setting Physician shortage is solved (2x as many virtual visits as physical visits) AI chatbots are routinely conversing with patients about health/wellness, treatment plans, adherence, patient financial services and more Digital therapeutics are a $10b market globally Self driving cars reduce trauma center volumes nationally by 30% 22

23 INSPIRATION 23

24 THREE THINGS TO KNOW Pace of Digital is Accelerating Disruptors & Enablers Emerging The Innovation Imperative But, LOTS of signal noise Field of play is shifting from B2B to B2C In response, invest a little & learn a lot 24

25 THANK YOU

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