Healthcare business models are particularly challenging to distinguish between customers, buyers, and the users. Many claim we are moving away from our business as usual “fee for service” to value based reimbursement. What does this mean for digital health, biotech and device entrepreneurs and what is the timing for this change? Who pays for any solutions in healthcare? Where can you be successful?
This session will start with a discussion of healthcare customers: insurance companies, hospitals, doctors, patients, and consumers. We will focus on the unique challenges that each present. What defines winning for each player? And what does each player need to do to win.
We will propose various approaches to help your business models succeed by drawing on our own healthcare startup and corporate experiences
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Follow the money healthcare business models - seattle startup week
1. Follow the Money in Healthcare: Business Models
1
Geoffrey Baker
Managing Director Michael Uradnik
CEO
www.cascadebh.comwww.venadvisory.com
2. 2
• Follow the money
• Healthcare Value Chain – Who, What, Where, and How?
• Opportunities – Changes & Shifts in healthcare
• Finding the Right Business Models
• Where to Play and Not Play - Entrepreneurial opportunities
• Healthcare Business Model Case Study
• Discussion
Session Introduction
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health 2
3. 33
Just Follow the Money
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
4. Healthcare Value Chain
4
Source: The World Financial Review (9-2012), “The Business of Healthcare Innovation: Convergence in the Marketplace.”
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
5. Disruption
& Change
Lacking Open Standards
Data Integration, Interoperability, Connectivity
Aging
Population
Substandard
Healthcare Value, Safety
& Waste
Need for Patient
Centered Care
Unaffordable,
Uncoordinated,
Inaccessible Care
5 A’s
Government
Intervention &
Compliance
Need for Transparency
Precision
Medicine
Drivers of ChangeDrivers of Change
52015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
7. 7
Crowded Digital Health Marketplace
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
8. page 8
Where Are You In Your Business Model Journey?
Source: Bill Aulet, MIT Entrpreneurship
Center, “Disciplined Entrepreneurship: 24
Steps to a Successful Startup” 2013
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
9. 9
• Profit Model: How you make money.
• Network: How you connect with others
to create value.
• Structure: The organization and
alignment of talent, resource and assets.
• Process: Developing and implementing
unique or superior methods.
• Product Performance:
the development of
distinguishing
features and
functionality.
• Product System: the
creation of
complementary
products and
services.
• Service: supporting and amplifying
the value of your offerings.
• Channel: The way in which your
offerings is brought to customers.
• Brand: The representation of your
offerings and business.
• Customer Engagement: Fostering
compelling interactions.
Why is your Business Model Innovative?
Source: Perkin [2014]; Kelley, L. et al. 2013.
Profit
Model
Network Structure Process Product
Performance
Product
System
Service Channel Brand Customer
Engagement
C O N F I G U R A T I O N O F F E R I N G E X P E R I E N C E
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
10. Finding the Right Business Models in Healthcare
Source: Ash Maurya (Running Lean) 2012 adaptation of Business Model Generation (2009) Canvanizer.com
Leanstack.com
Start with Lean Business Canvas Model
11. Orbits
11
(1) Center for Medicare and Medicaid Services, Office of the Actuary, April 2010.
(2) CPT code 99490 - chronic condition management $42.60
(3) Steve Blank “The Startup Owner’s Manual”
$635 BN (1)
Chronic Care Conditions
$17BN (2)
CPT 99490
Served Available
Market Target
Market
Total Addressable
Market (TAM)
(100% market share) (3)
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
12. 12
What Value Does Your Business Model Create for Customers?
12
Metrics Improved
Solution
Value
Growth
Efficiency
LeversValue levers
Customers
New Markets
New & optimized
products & services
Channels
Consumption &
Pricing models
Lower Cost
Process Improvement
Capability
Maturity
Velocity
Quality
Outcomes
General Industry
Healthcare
• Triple Aim
• Better Experience
• Better Access
• Less Disparity
• Better Outcomes
• Lower Cost
• Reduced waste
• Patient Safety
• Care Coordination
• Payment for value
+
Customers
New Markets
New & optimized
products &
services
Channels
Consumption &
Pricing models
Process
Improvement
Lower Cost
Capability
Maturity
Velocity
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
13. 13
What is your Business Model Evidence?
#’s are Illustrative Only
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
14. 14
Live Case Study – MVP lean validation
interview with customer
14
2015, Seattle Start-up Week. Venture Advisory Services, Cascade Behavioral Health
15. PROBLEM
1. Caseworkers must manage
hundreds of patients, but can
only reach 10% on any day.
There’s not enough
resources.
2. Crisis helpline nurses have no
automated intake to expedite
calls or triage.
3. Patient satisfaction and
patient outcomes survey
results are delayed and
expensive to collect.
Mental Health Virtual Intelligent Assistant
SOLUTION
1. Supports care health risk assessments, coordination, self-care between
visits, treatment compliance. Notifies nurses and caregivers of progress
results interactions.
2. Outreach prompts patient adherence to advice, medications and
modifies behaviors.
3. Reduce anxiety and information burden on patient to comprehend
complex information with multiple choices. Support patient decision-
making for treatments.
UNIQUE VALUE PROPOSITION
1. Regularly prompt patients to self-report status and progress on therapy
sessions. Therapists have far more information about patients between visits.
2. VIA guides patients in conversation through difficult choices for treatments.
3. VIA interpretation, explanation and alert routing of wearable sensor results.
4. VIA natural conversation call with a patient regarding their satisfaction with
recent service experience.
CUSTOMER
SEGMENTS
1. Health Coaching,
Behavioral
coaching
2. Clinics/Hospitals
3. Call Centers, Nurse
Helpline Intake
COMPETITION
Virtual Care Assistants (Nuance – Nina,
VirtOz, CDI, Gamgee/22 Otters, Get Abby,
Next IT – Alme, IBM Watson, Great Call,
Welltok/IBM). Horizontals.
Mental Health (Ginger IO, Lifegraph,
empower interactive, breakthrough,
Intellicare, Big White Wall, Talkspace,
Optimism)
Patient Satisfaction (Press Gainey)
REVENUE STREAMS
Transaction based,
Cognition- as-a-Service
(API); i.e., $0.004 per
request, Query volume
pricing, mo. subscription
cost for licensing technology
Therapy digital visits at
$40/20 min session
CHANNELS (Licensing Technology)
Medicaid MCOs (Molina, Centene, United Behavorial Health,
Lantern Health),
Telemedicine HIT (MD Live/Breakthrough, Carena, Teladoc, GE-
Intel CareInnovations),
HIT Companies (EMRs, CDI), Urgent Care (QAlliance),
Wearables (biometric, Samsung, ANT, apple),
Care Coordination Outreach (Emmi Solutions, + 100 more)
MARKET SIZE
$3N Market (2020)
(Nuance ~1BN in
HC), 30% CAGR
TIME TO MARKET
11X Mos, High
velocity
