1. A modern industrial revolution:
Connected Health as a driver of improved
outcomes and economic growth
George MacGinnis
8th May 2013

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Diabetes: Most NHS costs wasteful,
says Diabetic Medicine
The majority of NHS spending on diabetes is avoidable, says a
report in the journal Diabetic Medicine. It suggests that 80% of
the NHS's £9.8bn annual UK diabetes bill goes on the cost of
treating complications
BBC 25 April 2012

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Many people experience unwanted or avoidable care encounters
• High costs and poor accessibility may mean putting off seeking care when
early intervention would be better
• Many chronic patients are poorly served by care in hospitals – yet for many
that is where they end up
• Systems often reward activity regardless of the overall outcomes
Infectious diseases
1900-1950
Episodic care
1950-2000
Personalised care
2000-
Health needs are evolving yet services have been slow to catch up

5. © PA Knowledge Limited 2012. Page 5
Telehealth: Catholic Health Initiatives
Please find me a
physician more
prepared to move
with the times”
Quote from an 85 year old patient whose
rheumatology physician refused to do a
teleConsult with her at Thayer County
Critical Access Hospital, Nebraska
requiring her to make the 2.5 hrs.
journey into St Elizabeth’s Medical
Center in Lincoln, Nebraska

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PA sees 3 key themes emerging that are critical for this change:
• Creating and deploying
stratified medicine
• Challenging established
structures through
commercial model innovation
• Including greater patient
insight
• Changing reimbursement to
reward population health
Delivery of more effective
patient outcomes based
on the integration of new
technologies, business
models and partnerships
Patient Centric Healthcare
• Removing cost and improved
access to new models of
healthcare delivery.
• Patients becoming active
partners in care management
• Accessing new data and
information
• Developing eHR, medical
devices, virtual health and
wider technical infrastructure
Effective use of
connected technologies
is enabling a shift from
curative/reactive
healthcare to prevention
and health management
Intelligent Health
Delivering health reforms
to create healthier
communities and
maintain universal access
Healthcare Reforms
• Keeping universal access
affordable
• Re-organising health
services around people’s
needs and expectations
• Securing healthier
communities

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Attention focuses on coordinated care to improve quality and outcomes
The Patient
A Patient Centric perspective provides the driver for growth in the
connected health market
Acute care
provided in more
specialised
hospitals
Where possible,
care moves
closer to the
patient
Improved self care and prevention
to stem rising demand

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‘Paying for cures’ means understanding the impact of each
intervention on the individual level
Improving outcomes involves:
• Better targeting through personalised
medicine and care packages
• Maximising efficacy by understanding
adherence and effect for each patient
• Ensuring best clinical practice is applied
Information drives performance and opens the
way for innovative new approaches

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Intelligent health introduces a new dynamic in fielding solutions
New paradigms challenge the traditional
drug / medical device innovation model:
• Technology innovation outpaces ability
to gather traditional forms of evidence
• Economics governed by service
implementation rather than product
design
• Impact and risk is harder to assess in
‘preventative’ care
Contrasting environments are reflected in
two very different regulatory regimes
which now have to work together
Patient Centric
Safety First
Demonstrate efficacy
‘at least, do no harm’
Market Centric
Maximize consumer value
Foster competition
‘Just enough’

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Developing new Connected Health markets

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The pace of innovation is moderated by the complexity involved
There is a significant drive for innovation:
• Services that improve the efficiency of existing
provision have an immediate case
• Services that change the location of existing
provision involve changing professional working
practices, requiring investment in facilities and training.
• Services that look to change the process of
healthcare to achieve improved outcomes are likely to
be disruptive to existing reimbursement, organizational
and professional structures - and require significant
reforms

12. © PA Knowledge Limited 2012. Page 12
Reform is driving providers along a staged move to new models
Maximizing efficiency
of current operations
Managing key
business risks
Optimising population
health outcomes
• Improving referral
rates
• Maximising clinical
throughput
• Reducing length of
stay
• Reducing re-admissions
• Improving adherence
• Patient-centric care
package
• Evidence based
pathways
• Payment for
outcomes
• Accountable care
The challenge is developing
capability ahead of the reforms
* HAI = Healthcare Acquired Infections

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Exploiting the dynamics of different markets
There are opportunities to build business arising from:
• Focusing on unregulated markets such as wellness
• Identifying where the user is the payer and is able to pay
• Looking at sectors that don’t need the same burden of proof
• Targeting areas with strong clinical leadership
• Building volume through consumerisation of medical offerings
This challenges conventional paradigms for the spread of innovation –
with the potential for reverse innovation spreading from emerging

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Regional differences exist, creating opportunities for new offerings
Regional differences in need, reimbursement, regulation and infrastructure offer
opportunities to incubate a business while waiting for reforms elsewhere
US: Highly regulated.
Hospitals have significant
power. Policy is moving
towards entitlement reform
and providers looking to get
ready for the future while
maintaining revenues.
Gulf: Emerging market for health
infrastructure/ regulation. Mix of
social provision & powerful
consumer base including non-
nationals. Growing markets in
medical tourism.
India: Relatively few regulatory
restrictions: Strong growth of mobile
technologies. High appetite for
innovation. Powerful consumer
base developing while also having
pressing issues of access to basic
care.
Africa: Focus mainly on basic
health needs: infectious diseases,
childbirth and nutrition. Poor
access to care, much of which is
donor funded. Little regulation
and significant supply chain
issues.
EU: Highly regulated. Public
policy led health with
significant variations. Some
countries with a significant
eHealth infrastructure.

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Competitors or collaborators:
New entrants challenge current notions of the market
Healthcare reform is attracting the attention of global players as connected
health drives convergence between industries within healthcare:
• Pharma – looking to find a new ‘value add’
• Mobile – opening up the last untapped enterprise market with capabilities in
meeting consumer demand
• Insurance – looking to move to new business models.
• Media/Entertainment – bringing the customer revolution to healthcare
• Utilities – moving to offer services enabled by smart metering
Who will be the winners and losers in the battle for a consumer health brand?

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Closing thoughts
Changes in healthcare are challenging established concepts of who the
customer is and what they see as a value proposition:
• Governments and payers are seeking to reward positive outcomes, shifting
risk onto healthcare providers and their suppliers
• The customer is changing and bringing more complex buying behaviours
• Solutions, rather than products, will be the key to defining value propositions
• Collaborations involving innovative commercial models will become an
engine for growth
• Early growth markets in connected health may not be the traditional
innovators
• The UK and Ireland have a unique position as early adopters whose
experience is shaping thinking globally

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Questions

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