1. March 9th, 2006 Tomorrow’s Home Environment: Evolving Product Design & Technology Platforms Responding to a New Generation of Home Healthcare Needs & Consumers TIAX LLC 15 Acorn Park Cambridge, MA 02140-2390 www. TIAXLLC.com © 2006 TIAX LLC Presentation to:

2. 1 JE_E3001_03_06_06 There are many forces in place that are driving the shift of healthcare from a clinical (“Professional”) setting to the home (“Consumer”) setting Next Generation Home Healthcare Needs & Consumers Safety and Security Concerns Social Connectedness (“Wired” Home) Wellness Concerns Leisure (Time Poor) Convenience (Attention Poor) Mobile - Wireless Tech Decreasing number of nurses Aging Population Increasing Trend of Earlier Discharge Obesity “disease” Epidemic

3. 2 JE_E3001_03_06_06 The scope of the existing consumer impact is vast and growing: ~ 22.4 million US households (23%) care for a spouse, relative, or other person older than age 50 1. ~ $192 Billion in “free” care is delivered each year - about double the size of the medical device market in 2004. Many caregivers report performing these jobs poorly. ~ 82% of mid-life and older Americans prefer not to move from home if they need help caring for themselves 2 1 1997 National Family Caregiver Survey 2 AARP survey Next Generation Home Healthcare Needs & Consumers

4. 3 JE_E3001_03_06_06 Hypothesis: Success in the home healthcare market will require a blend of two different worlds. Next Generation Home Healthcare Needs & Consumers Professional … Consumer … Devices require training of skilled professionals intuitiveTime and training pressures demand intuitive operation Costs are dictated by reimbursement consumer valueSelf-pay dictates clear consumer value to motivate purchase & use leverageCost drivers require leverage Special purpose devices

5. 4 JE_E3001_03_06_06 Leverage: Cost drivers can be addressed by leveraging existing infrastructure Next Generation Home Healthcare Needs & Consumers Example: Entertainment for kids that encourages aerobic activity Physiological monitoring Encourages aerobic activity Physical rehabilitation

6. 5 JE_E3001_03_06_06 Intuitive Use: Consumers have little tolerance for new products that don’t naturally adapt into an existing life pattern Next Generation Home Healthcare Needs & Consumers Technologies must seamlessly integrate with existing residential infrastructure Entertainment Reliability Convenience Functionality Ease of Use

7. 6 JE_E3001_03_06_06 Consumer Value: To ensure compliance and therefore consumer benefit, integration opportunities should be incorporated into everyday activities Next Generation Home Healthcare Needs & Consumers Monitoring physiologic al behaviorMonitoring physiologic al behavior Providing feedback to the individual and professionalProviding feedback to the individual and professional Impacting the “living environ.”Impacting the “living environ.” Create value while also:

8. 7 JE_E3001_03_06_06 How will a “Professionally” oriented organization evolve to meet the demands of consumers better than “Consumer Product” companies”? Know Consumers & Professionals: Consider the capabilities and limitations of consumers in the context of their homes along with clinical need –Age –Chronic conditions –Training Leverage the existing consumer infrastructure: “Fitting in”,not “Adding on” –Communications –Entertainment –Household systems (Kitchen, bathroom, etc.) Develop an intuitive product: Understand the context of the home environment and the consumer mindset –Create intuitive interfaces to ensure convenience and use/compliance –Understand user expectations to drive technical requirements –Gain consumer insight into the needs for reliability, functionality and usability (ie value vs liability) Next Generation Home Healthcare Needs & Consumers

9. 8 JE_E3001_03_06_06 Next Generation Home Healthcare Needs & Consumers Thank You TIAX LLC 15 Acorn Park Cambridge, MA 02140 John Collins, Ph.D. President 617-498-5854 collins.j@tiaxllc.com