Healthcare Innovations Paddy Padmanabhan paddy@damoconsulting.net IIT Bay Area | June 9, 2018

Healthcare challenges and trends driving innovation Disruptive technologies IOT & wearables Healthcare reforms Cybersecurity challenges High cost of treatment Focus on VBC “Advances in connected devices, including sensors, wearables and implantables that enable consumers and clinicians to pro-actively track and manage health, anywhere, anytime, and from any device.” ─ KPMG “Health reform isn’t over, it’s just more complicated.” ─ PWC “The financial and reputational cost of a breach affecting patient health can far exceed the lost revenue from business disruption.” ─ PWC “Treating people with chronic diseases accounts for 86% of our nation's healthcare costs.” ─ CDC “The historically predominant fee- for-service business models are being replaced by risk-sharing models based on integrated, team- based care.” ─ Accenture “The convergence of blockchain with emerging technologies such as AI, ML, mHealth and IoMT provide new opportunities to explore digital health economies by 2025.” ─ Frost & Sullivan 2 @paddypadmanabha

Technology vendor landscape* The custodians The enablers We have the data and the workflow We built it, you can rent it Technology vendors The innovators The arbitrageurs As a startup looking to fill a need, you have to understand the technology vendor landscape. I categorize the vendors as the custodians, enablers, arbitrageurs, and innovators. I defined these categories in my book The Big Unlock, and in the following slides I will talk about each of them in some detail. Remember that these are not necessarily your competitors. They could be your partners, or even customers. We have a whole new way of doing it We can do it for you (and for less) *From The Big Unlock: Harnessing data and growing digital health businesses in a value-based care era 3 @paddypadmanabha

Innovation in healthcare 4 @paddypadmanabha

Innovation focus areas and examples Big Themes Top Healthcare Innovation - 2018 Smart glasses Smart clothing Artificial intelligence Direct-to-consumer (DCT) genetic testing Acuity-adaptable care delivery models Confirm Rx Distraction-based virtual reality (VR) for pediatrics NeuroAD Therapy System Neonatal MRI system Micro Hospitals Blockchain Artificial Intelligence Smart sensors Virtual reality Chatbots CRISPR Artificial Intelligence 3D printing Remote monitoring Population Health “Growth in the AI health market is expected to reach $6.6 billion by 2021” ─ Accenture Source: Advisory Board, ECRI Institute, PWC, Damo Research 5 @paddypadmanabha

Market partnerships that are driving innovation Humana, MultiPlan, Optum, Quest Diagnostics and UnitedHealthcare partner to launch a blockchain driven pilot program to improve data quality and reduce administrative costs burden related to provider directories (by using the encrypted system of data exchange that relies on a distributed ledger). JPM, Amazon, and Berkshire form joint venture to focus on using big data, virtual technology, better customer engagement and more consumer choice to address critical healthcare problems and issues. 2nd April, 2018 5th April, 2018 6 @paddypadmanabha

Where is all the money going ? So – that’s a quick snapshot of the industry and the opportunity landscape. Now, consider that the healthcare IT industry has been getting around 5 billion on average every year for the past few years. Where all this money going? This quarterly report by Rock Health gives us an idea. You can map the investment categories listed here to my previous slide where I talked about stakeholder imperatives. Disease monitoring, health and wellness information, telehealth are all big categories. You can see some of the companies that have really scaled up nicely – Amwell is a great example. Companies like Teladoc are growing so fast they can’t keep pace, even though they are losing money. On average, $5.2 billion was invested in the U.S. Health IT market in each of the last 5 years. ─ Healthcare Growth Partners, Jan 2018 7 @paddypadmanabha

Innovation funds: how providers are supporting innovation UPMC enterprises corpus: $120M annually (a part of the UPMC R&D budget - less than 1% of UPMC revenue). Partners Healthcare fund: $171.1 million to develop new technologies in the laboratories of Partners HealthCare system. Mayo Clinic venture innovation fund: 4% of Mayo Clinic Ventures net licensing income with a focus on early stage and concept technologies. 3rd March, 2018 8th January, 2018 2015 Intermountain innovation fund: $35 million fund (launched in 2015 and managed by Healthbox, a partner for innovation and entrepreneurship in healthcare). Optum venture fund: $250 million (launched in November 2017 to invest healthcare data and insights companies. 29h Nov, 2017 8 @paddypadmanabha

https://www.cio.com/blog/healthcare-technology-trends/ https://www.damoconsulting.net/book-the-big-unlock/