How the healthcare ecosystem is changing thanks to new tech entrants

1. Healthcare Tomorrow
How the speed of innovation is accelerating and how new companies are
positioning themselves to win

2. About Me
Nikhil Krishnan is a healthcare research analyst, writing about the
intersection of healthcare, life sciences, and software.
He was a senior research analyst at CB Insights, where he built out
the healthcare research team, and had research that was featured in
the Wall Street Journal, Economist, New York Times, and more. He
also authored the weekly CB Insights Digital Health Newsletter,
which grew to 100K+ subscribers.
He is currently on the Strategic Partnerships team at TrialSpark, a
technology company creating a distributed network of clinical trial
sites to run faster and more efficient clinical trials.
Writing: nikhilkrishnan.com
Contact: nkrishnan92@gmail.com

3. 1. Why does this matter today?
2. The big changes in healthcare
a. The changes in infrastructure
b. AI-first companies
c. Patient experience as a business model
3. The impact of these changes
Table of contents

4. Why does this matter today?

5. The business models in
healthcare today are in
jeopardy

6. Drug discovery IRR is decreasing steadily
Endpoints

7. Hospital margins are pressured, especially
in rural areas
Endpoints

8. Governments are changing business models
significantly
“The fight over 'Medicare for All' is only beginning”
-August 30th, 2019
“Trump's War On Middlemen Might Reach Well Beyond
PBM Rebates”
-April 16th, 2019
“CMS clears Louisiana Medicaid 'Netflix model' for hep C drugs
-June 26th, 2019

9. Tech is entering healthcare

10. Infrastructure developments have made it
easier to start a tech company
Open Source + Horizontal
Scaling
Cloud + AWS
Plug-In APIs,
developer
tools, etc.
Both sides of the table

11. Tech companies have advantages over
healthcare companies
Advantages
1. They are liked by customers and have
high user engagement
2. They have strong software and cloud
expertise
3. They don’t need to make money from
their healthcare business
4. They have built-in distribution from
their core business
5. Their organizational structure is
designed for faster decision making

12. Bezos explains, correctly, the traditional corporate
hierarchy: "Let's say a junior executive comes up with a
new idea that they want to try. They have to convince their
boss, their boss's boss, their boss's boss's boss and so
on—any 'no' in that chain can kill the whole idea." That's
why nimble startups so easily slaughter hidebound
dinosaurs: Even if 19 venture capitalists say no, it just
takes a 20th to say yes to get a disruptive idea into
business.
Forbes

13. The big changes in
healthcare today
How new entrants are targeting the weak spots of healthcare incumbents

14. The changes in infrastructure

15. The hardware infrastructure is improving

16. The hardware infrastructure is improving

17. New chips are enabling more computing
intensive processes to happen via the phone

18. More diagnostics + data in patient’s hands
embedded in tools they already have
Apple patent to monitor blood
composition via cameras +
ambient light sensor
Apple patent for non-invasive
glucose monitoring

19. Passive data capture is creating massive,
real-time, structured datasets
HIT Consultant

20. Patient data infrastructure is becoming
cleaner and more patient controlled

21. FHIR + cloud infrastructure enables faster
and more powerful software deployment
How to build a real-world evidence platform using
AWS services

22. FHIR + cloud infrastructure enables faster
and more powerful software deployment
Microsoft Azure Releases Open Source FHIR Server For Health Data

23. The API infrastructure is making it easier
than ever to start a healthcare business
Pharmacy Fulfillment API

24. The API infrastructure is making it easier
than ever to start a healthcare business
Credentialing Verification

25. The API infrastructure is making it easier
than ever to start a healthcare business
Billing, Claims, and Eligibility

26. It’s become easier than ever
to start a tech-enabled
healthcare company with
new tools

27. AI-first companies

28. Being AI-first means
1. Caring about how data that’s captured is
being structured and annotated
2. Creating novel workflows + business models
dependent on AI
3. Taking on risk to be competitive with
existing incumbents

29. Machine learning packages are making it
easier to start an ML company
Packages like Comprehend Medical are making it easier than ever to
deploy machine learning with models trained on health data

31. AI + analytics tools for
patient triaging
More companies are aiming to use AI to
compete with existing healthcare players
AI-assisted algorithmic
drug discovery
AI for
diagnostics/monitoring
AI-based biotech companies
AI-differentiated payers/providers
AI-first medical device/diagnostics companies

32. Playing in someone else’s sandbox has risks
MD Anderson Benches IBM Watson In Setback For
Artificial Intelligence In Medicine
“MD Anderson changed the software it uses for managing electronic
medical records, switching to a system made by Epic Systems of
Madison, Wis. It has blamed this new system for a $405 million drop in
its net income. According to the audit report, the Watson product
doesn’t work with the new Epic system, and must be revamped in
order to be re-tested. The information in the MD-Anderson/Watson
product is also now out of date.”
Forbes

33. Generating your own structured dataset
enables leaves room for expansion
Initial target: Monitoring of Neutrophils,
Lymphocytes, etc. via deep learning
Valuable asset: Pathology image set for
future analysis
Initial target: Atrial Fibrillation detection
Valuable asset: Heart rate data +
outcomes for monitoring other diseases
Initial target: Portable ultrasounds
Valuable asset: Ultrasound image dataset

34. Being AI-native allows for better labor
triaging...

35. ...and create new forms of care that are
more proactive than reactive

36. If you believe AI is a key
differentiator going forward,
these companies are setting
themselves up for the future

37. Patient experience as a
business model

38. Having high engagement rates from patients
makes it possible to
1. Proactively reach out to them
2. Guide them to a mutually beneficial solution
3. Ask follow-up questions and get more data
4. Acquire new customers through word of
mouth marketing

39. High patient engagement + trust means
patients come to you and you can guide them
Oscar

40. Good patient experience allows companies to
ask patients for more data

41. When consumers like you, they’ll engage
outside of the hospitals

42. Patients talk to each other about good
experiences
We find new customers through many
channels. No one channel accounts for
more than one-third of our new
members. What's been most
surprising to us is we get a lot of
references from word-of-mouth. Not
Twitter or Instagram word-of-mouth--
real, one-on-one human interaction.”
- Zachariah Reitano, CEO of Ro
Inc

43. The impact of these changes

44. New business models are becoming more
prevalent
1. Platforms
2. Cash pay and direct-to-consumer
3. Completely at-risk contracting and full-stack
competitors
4. Healthcare as a loss leader for some other
core business

45. 3. Patient brought in if
absolutely necessary
Utilization is going to move from reactive to
proactive care
Today - Reactive Care
Tomorrow - Proactive Care
1. Feel physically sick 2. Go to a physical clinic
3. Capture confirmatory
data via additional testing
1. Anomaly detected -
patient is reached out to
2. Telemedicine + additional
testing ordered virtually

46. Healthcare is coming to patients in the regular
routines vs. requiring standalone routes
Where you shop In things you own With people you trust
Consumers have regular interactions with their electronics, grocery stores,
community centers, etc. Embedding healthcare services into regular interactions
reduces the friction for patients.

47. This also means jobs will change - moving to
different kinds of patient touchpoints
Today: Tons of labor in data collection
+ administrative functions
Tomorrow: More jobs in care
management, with new kinds of roles
Health navigators
Healthcare trained
community members
Telemedicine
triaging

48. Thought experiment:
If you were to rebuild your organization
around its core value proposition, what
would it look like if you wanted to
incorporate these 3 big changes?

49. Thank You
Email: nkrishnan92@gmail.com
Twitter: @nikillinit