This is a summary of a talk I gave at the Vanderbilt Healthcare Conference 2012 in Nashville. It focused on answering a couple of key questions: * What does innovation in healthcare mean? * Where are the major areas in healthcare where innovation is required? And had a few key takeaways: * Understand health tech buy fallacies * Understand PBU: Payer vs. Benefiter vs. User * Understand why healthcare businesses buy stuff so you can build the right thing

1. What’s next for healthcare
information technology innovation?
Vanderbilt Healthcare Conference 2012
Shahid N. Shah, CEO

2. NETSPECTIVE
Who is Shahid?
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20+ years of software engineering and multisite healthcare system deployment
experience
12+ years of healthcare IT and medical
devices experience (blog at
http://healthcareguy.com)
15+ years of technology management
experience (government, non-profit,
commercial)
10+ years as architect, engineer, and
implementation manager on various EMR
and EHR initiatives (commercial and nonprofit)
www.netspective.com
Author of Chapter 13, “You’re
the CIO of your Own Office”
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What’s this talk about?
Questions answered
Key takeaways
• What does innovation in
healthcare mean?
• Where are the major areas
in healthcare where
innovation is required?
• Understand PBU: Payer vs.
Benefiter vs. User
• Understand why healthcare
businesses buy stuff so you
can build the right thing
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What I mean by “innovation”
Innovation in healthcare is especially hard to define given the wide variety of constituencies
For this presentation, we’ll assume that “innovation” means
either:
a) You have made the job of identifying, diagnosing,
treating, or curing diseases faster, better, or cheaper for
clinicians through the use of information technology (IT)
OR
b) You have made the job of self-diagnosing, self-treating,
or preventing diseases and improving overall wellness of
patients through the use of IT
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What Is the Business of Health Care?
What business are you in? The Emergence of Health as the Business of Health Care
• It's always better to define a business by what
consumers want than by what you can produce or
build
– For example, whereas doctors and hospitals focus on
producing health care, what people really want is health
• In the future, successful doctors, hospitals, and health
systems will shift their activities from delivering health
services within their walls toward a broader range of
approaches that deliver health.
Source: http://www.nejm.org/doi/full/10.1056/NEJMp1206862
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PBU: Payer vs. Benefiter vs. User
If you don’t understand the exact interplay between PBU your product will fail
The person or group that
actually uses the product.
User
The person or group
that benefits most
from the use of the
product.
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Benefiter
Payer
The payer is the
person/entity
that writes the
check for your
product.
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What problem will you be solving?
Focus on jobs that need to be done, not what you want to build
Improve
medical
science?
Improve access
to care?
Reduce costs?
Improve
therapies?
Improve
diagnostics?
Improve drug
design?
Improve drug
delivery?
Create better
payment
models?
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How to identify the best opportunities
From “Jobs to be Done” to the “Five Cs of Opportunity Identification”
Circumstance
• The specific
problems a
customer
cares about
• The way they
assess
solutions
Context
• Find a way to
be with the
customer
when they
encounter a
problem and
• Watch how
they try to
solve it
Compensating
behaviors
Constraints
• Develop an
innovative
means around
a barrier
constraining
consumption
• Determining
whether a job
is important
enough to
consider
targeting
• One clear sign
is a customer
spending
money trying
to solve a
problem
Criteria
• Customers
look at jobs
through
functional,
emotional,
and social
lenses
Source: http://blogs.hbr.org/anthony/2012/10/the_five_cs_of_opportunity_identi.html
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Do you have ideas in payment design?
Payment models going fee for service to outcomes-driven care
The business needs
The technology strategy
• Quality and performance
metrics
• Patient stratification
• Care coordination
• Population management
• Surveys and other directfrom-patient data collection
• Evidence-based surveillance
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Aggregated patient registries
Data warehouse / repository
Rules engines
Expert systems
Reporting tools
Dashboarding engines
Remote monitoring
Social engagement portal for
patient/family
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Can you repurpose or enhance health data?
Try to use existing data to create new diagnostics or therapeutic solutions
Economics
Administrative
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Phenotypics
Behavioral
Biochemical
Genomics
Proteomics
IOT sensors
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Some stuff not to focus on
Incremental innovation is easier, disruptive innovation is probably more useful
• Don’t go for simple incremental innovation if
you can be bold and disruptive
• Don’t look at mHealth, look at mobility in
healthcare
• Don’t look at apps, look at entire systems
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Forget mobile apps, focus on health IOT
• With all the attention being paid to mHealth
there’s been an useless focus on mobile apps
• For the mobile apps, instead focus on
mobility in healthcare through “health
internet of things (IOT)” and self-care
technologies
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Healthcare Industry Fallacies
• Healthcare folks are neither technically challenged nor
simple techno-phobes (they’re busy saving lives)
• Most product decisions are no longer made by clinical
folks alone, CIOs are fully involved
• Complex, full-featured, products are not easier to sell
than simple, stand alone tools that have the capability
of interoperating with other solutions are
• Hospitals will not buy unless one proves value.
• Selling into doctors offices is not easy.
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What makes your products successful
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Easy to explain
Defendable and differentiated
Attractive partnership opportunities
Word of mouth opportunity
Potential for PR
Scaleable staff and systems
Scaleable product — build once, sell many times
Uncomplicated
Focused
Sales model is scaleable and predictable
Own relationship with and information about customers
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Why healthcare businesses buy stuff
Healthcare businesses have complex buying processes – figure out why and what they buy
Increase
revenue
(topline)
Maintain
capabilities
Reduce costs
(bottomline)
Attract new
patients
Increase staff
productivity
Find your
reason
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The Customer Relationship
If you can’t figure out why they buy, see if any of the things below make sense
Customer Gives
You Get
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Money
Time
Energy
Commitment
Referrals
Past experience
Expectations
Knowledge
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You Give
Customer Gets
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Product
Price
Value
Convenience
Selection
Service
Warranty
Brand
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Defining your customer is really hard
Don’t focus on market segmentation, but do try to figure out who your customer is
Target health
sector?
Number of
employees?
Annual sales
volume?
Geography?
Number of
hospital beds?
Number of
patients?
Type of
patients?
The list goes on
and on…be
specific!
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Health technology sector has many ups and downs
Make sure you understand where your product fits in the hypecycle
Source: Gartner; “Hype
Cycle for Healthcare
Provider Applications and
Systems, 2010”
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19. Visit
http://www.netspective.com
http://www.healthcareguy.com
E-mail shahid.shah@netspective.com
Follow @ShahidNShah
Call 202-713-5409
Thank You