The future of PMS in Healthcare IT: Announcing the cooperation with Epic. Stan Smits CEO Medical IT Philips Medical Systems
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1 The future of PMS in Healthcare IT: Announcing the cooperation with Epic Stan Smits CEO Medical IT Philips
2 Agenda Healthcare IT: business rationale Why Epic? Scope of the cooperation agreement Company profile Epic Timeline 2
3 Healthcare IT: business rationale 1. Challenges in Healthcare 2. Healthcare IT a growth market 3. Trends in Healthcare IT 4. Fits the Vequion strategy 3
4 Challenges in Healthcare Cardiology $3,943 Radiology $1,290 Billing Plant Administration Pharmacy $1,433 Food services Lab $3,233 About that Bill Intensive Care $17,664 Operating Room $36, Drives the need for better communication... 4
5 Challenges in Healthcare (cont d) Institute of Medicine: 98,000 US deaths due to avoidable medical mistakes: reduced human errors by decision making tools 5
6 Challenges in Healthcare (cont d) Many US hospitals have fears about future financial viability Thin profit margins (ca <2%>), pressure on reimbursement IT as a tool for better care at lower cost The need to reduce the costs while improving the quality of care Hospitals USA Hospitals in the danger zone 60% Loss making Profitable 40% Total 5,400 hospitals IT is a major driver to decrease cost and to increase quality of care 6
7 IT in Healthcare Market, 2002 IT in Healthcare: Internal IT Outsourced IT Admin / Office Infrastructure Healthcare IT Total: $100 Billion 85 IT in HC EPR HC IT 11 PACS 3 2 Healthcare IT: Best of breed : 1200 companies in the US PACS Integrated systems based on EPR Extremely fragmented 7
8 Healthcare IT - a growth market CAGR 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Med Equip HCIT - US HCIT Eur B$ 14 B$ 3 B$ But with large geographical differences 8
9 Trends in Healthcare IT From department centric to patient centric 9
10 Trends in Healthcare IT (cont d) patients Inpatient Clinicals Hospital Billing Registration/Scheduling/ADT Payor/Managed Care insurers Ambulatory Clinicals Professional Billing referring physicians Current PMS IT focus: Clinical Documentation PACS Excludes: Payroll - HRM General ledger - Finance 10
11 The Vequion strategy Vequion is Philips next generation family of Clinical IT products, solutions and professional services. The Vequion family offers users a customized data management experience that aids confident and faster diagnoses and makes work more gratifying. Vequion is also a commitment. A commitment to eliminate the boundaries that hamper workflow, increase costs and impede quality of care 11
12 Healthcare IT fits the Vequion strategy Philips Clinical IT strategy Customizable so there are no boundaries to how you configure your virtual work environment to meet your needs Fluid so there are no boundaries to the locations from which you can access your information within a secure environment Open and standards-based so there are no boundaries to the equipment you can integrate including legacy systems Future-safe so there are no boundaries to growth 12
13 Vequion current status Current Philips space Intgris Allura Xcelera ABC - A Modalities: Imaging, Monitoring Departmental systems Vequion Enterprise IT One consistent User Interface 13
14 Vequion current status Successfully launched November 2002 The flagship product ViewForum used across Philips : CT, MR, X-ray, PACS Common User Interface highly visible across Philips in products and IT solutions Driving re-use across Philips User Interface Interoperability Remote Service Industry leader in Cardiology, Radiology and Acute Care 14
15 Philips success in PACS Number 1 (ex equo) in customer satisfaction (KLAS) Rapidly gaining market share in US and Europe Scalable from modality to enterprise Proven alliance with Sectra 7+ years 15
16 Ente Ospedaliero Cantonale Ticino, Switserland An organization of 7 hospitals Proves strengths in distributed systems Ca examinations per year Image storage one year online Over 50 clinical and diagnostic workstations Gigabit Wide Area Networking 16
17 Health & Hospital corp. New York City 4 Major hospitals and associated clinics Over exams/year Central archiving Over 100 clinical and diagnostic workstations Over 100 modalities High speed communication Philips stands out in robustness 17
18 Vequion How to extend to Enterprise IT space? Intgris Allura Xcelera ABC - A Modalities: Imaging, Monitoring Departmentals Enterprise IT Vequion Values Customizable Fluid Open and standards-based Future-safe Vequion expand 18
19 Agenda Healthcare IT: business rationale Why Epic? Scope of the cooperation agreement Company profile Epic Timeline 19
20 Why Epic? 1. Best in class Healthcare IT portfolio Enterprise solution 2. Complementary portfolio to Philips: Clinical pathway Customer feedback US News report Leapfrog customer access 20
21 Best in class Healthcare IT portfolio Transition paper patient record to electronic patient record The best portfolio: No 1 in customer vendor ratings, like KLAS Designed for outpatients: fits today's needs Enterprise database architecture: One integrated system across the HC continuum One consistent user interface A proven and complete portfolio: over 100 accounts in US Epic: 20 M patient records in US US: 290 M citizens 21
22 Overall satisfaction with Epic is higher than major competitors KLAS Report HIMSS partner Most respected vendor survey in healthcare Confidential survey of CIO, CFO, IT executives, directors, managers & clinicians 4,000 healthcare facilities 500+ software products 200+ HIT vendors 22
23 Complementary portfolio today PMS strong on subdepartmental and clinical level Radiology Cardiology OR, ER ICU, CCU Departmental: PMS Epic strong on enterprise level EPR Ambulatory Enterprise Scheduling Enterprise: Epic Best of both worlds 23
24 Complementary portfolio Intgris Allura Xcelera ABC - A Modalities: Imaging, Monitoring Departmentals Powered by Epic Enterprise IT Powered by Epic Vequion Full interoperability 24
25 Clinical pathway example: a Cardiology patient At home Patient has pain on chest. His family doctor contacts the hospital At the ER Patient is expected, hospital staff is prepared and patient gets examined In the Cath Lab Patient gets Coronary Angio Graphy (CAG). No coronary problems found In CCU Patient is monitored for 24 hours and send home with medication and new appointment At home Patient can track his life-style changes and has access to his appointment schedule via his personal webportal The data is following the patient. 25
26 Customer quote The partnership between Epic and Philips really brings an opportunity to improve the overall quality in the practice of medicine by delivering information to clinicians when they need it and where they need it. That ability will connect the clinical specialty departments with their colleagues across the institution, said Martin Harris, CIO, Cleveland Clinic Foundation. Cleveland Clinic is # 1 cardiovascular Hospital 26
27 US News & World Report 2003 Philips 55% Siemens 18% GE 7% Other vendors 20% Top 50 Cardiology Institutions using Philips Cardiology IT products 27
28 Extending customer access Customers will get access to superior products through Philips channel: Larger outlet in the US World-wide outlet 28
29 Agenda Healthcare IT: business rationale Why Epic? Scope of the cooperation agreement Company profile Epic Timeline 29
30 Scope of the Strategic alliance 1. Leveraging the world-wide sales and support organization 2. Integration of Epic and Philips portfolio 30
31 World-wide sales and support organization WW dedicated Healthcare IT staff Include enterprise experts Virtual organization Close to market Close to development centers Leveraging the Philips footprint 31
32 Integration of Epic and Philips portfolio Rich interfaces with Philips equipment, providing seamless integration Internationalization Languages, legal and regulatory adaptations Work practices, local market needs Philips Vequion branded enterprise portfolio powered by Epic Departmental offerings covering all relevant patient info extendable to enterprise level Epic will host integration efforts at Epic HQ, Madison, US 32
33 Agenda Healthcare IT: business rationale Why Epic? Scope of the cooperation agreement Company profile Epic Timeline 33
34 Company profile Epic Founded in 1979 Based in Madison, Wisconsin, US 1,100 Employees Privately owned HealthCare IT company Growth approximately 30% per year Website: HealthCare s premium award winning technology vendor 34
35 Agenda Healthcare IT: business rationale Why Epic? Scope of the cooperation agreement Company profile Epic Timeline 35
36 Timeline World-wide announcement November 4 th Partnership introduction for Cardiologists (AHA) and Radiologists (RSNA) in November 2003 Major launch at major US Healthcare IT event (HIMSS) in February 2004 Training and roll-out during
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