1. Retail Healthcare: Where Does Telemedicine Fit? EMTN Site Facilitator Retreat August 14 th, 2015

2. Health Care, Education and Research Backdrop Change is structural –Concepts as basic as the patient / consumer value chain are being disrupted –Patient mix change – older, sicker, poorer is the direction / Commercial  Government External events accelerating the pace of change –Health plan mergers –The information and capital raising of Evolent, VillageMD, Privia “Disruption” that has characterized other sectors has arrived in healthcare, driven by the themes of retail, value and technology Emergence of whole new universe of companies highlights the direction we are heading, new categories of healthcare are being created New categories such as “value-based care” will be challenging to navigate, but are creating large untapped addressable markets Strategic Partnership will be a growing necessity – competitive landscape of the future will be characterized by diversified healthcare services companies, more vertical integration, a new level of scale, technology as a differentiator, different strengths defining competitors in the same category - From Ravi Sachdev, Premier PACT 2015

3. Health Care, Education and Research

4. Healthcare is Digital https://www.youtube.com/watch?v=bidBKtN2mMg

5. Health Care, Education and Research

6. Disruption defined… 20% of all medical spending is for 1% of the population (those who have chronic issues) 1 This year, it is projected that there will be 6.8% increase in overall spending 1 Increase in patients – 10/2013 – 12/2014, 13.6 million newly insured patients, Medicaid expansion – more growth 1 44% of current full time physicians who plan to cut back hours, patients, services offered, or who plan to their practices leave for a non-clinical role 1 By 2025, the Association of American Medical Colleges predicts a shortage of 130,600 physicians in the U.S 1 1 Forbes 2015

7. Health Care, Education and Research Disruption continued… Cancer treatment demand is expected to increase by 42% over the next decade which will create a shortage of 1,500 oncologists (IBM, 2015) Medical information will double every 73 days by the year 2020 (IBM, 2015) “I am not your patient, you are my doctor.” Disruption is a reality – pace of change will accelerate.

8. Health Care, Education and Research

9. Retail Healthcare Convenience, Access – Meeting consumer’s needs Price Transparency – quality health care at lower prices Takes a variety of forms – retail/urgent care clinics, mobile health, home medical devices, wellness iHealth: BP monitors, Glucometers, Fitness devices wireless scales …Chronic disease management FitBits 16.7 million paid subscribers 2014 (10x growth in 3 years) Mobile Apps (22,330) Patients = Consumers Consumer Analytics = On-Demand Medicine

10. Health Care, Education and Research Retail Clinics Medical services rendered in a retail setting – locations such as Target, CVS, Walgreens, RiteAid, Albertsons First appearance on the market: 2000 (rapid growth until 2007) Care is often given by a PA or NP under the supervision of an MD Prices are set and listed Easy and convenient with patients reporting high satisfaction rates Driven by consumer demand and fills gaps in the market Telemedicine evolution into retail market

11. Health Care, Education and Research Retail insights… 10.5 million visits annually 58.6% of families used a retail clinic in the last year because of convenience of clinic hours 55.9% access to walk in appointments 48.1% convenience of locations 38.7% lower costs 24.6% no primary care doctor connection The Value Proposition of Retail Clinics RWJ, April 2015

12. Health Care, Education and Research Retail Clinic Users Citing Reasons Other than Convenience for Choosing a Retail Clinic (RWJF, 2015)

13. Health Care, Education and Research Meeting Consumer Need 900% increase of retail clinics from 2006-2014 2,400 end of 2015 (ConvUrgentCare 2015) Walmart - $4 employee, $40 primary care Dr. Nancy Gagliano (CVS MinuteClinic) – aims to operate 1,700 MinuteClinics in a retail setting by 2017, putting 60% of Americans within 10 miles of these clinics Bundling services to include services such as pharmacy, nutrition, lifestyle, and obesity management (can be aligned with incentives from payers) Chronic Disease Management

14. Health Care, Education and Research United Healthcare Embraces the Change https://www.youtube.com/watch?v=v9YiTIYO-2A

15. Health Care, Education and Research Telemedicine Growth… “The number of doctor-patient video consultations will nearly triple from 5.7 million in 2014 to over 16 million in 2015, and will exceed 130 million in 2018.” - Harry Wang, Director, Parks Associates Source: http://www.parksassociates.com/blog/article/chs-2014-pr10

16. Health Care, Education and Research Retail Medicine + Telemedicine = Opportunities Telemedicine collaborations are the logical next step (i.e. virtual care visits at retail clinics, remote monitoring) Support for retail clinic providers, primary care/medical home and staff through telemedicine venues Opportunities for more cost savings and exponential efficiencies Vertical market

17. Health Care, Education and Research Recap Disruption is reality Pace of change will accelerate Must be prepared for non-traditional forms of competition Must augment capabilities to meet the changing demands of the environment Large new addressable markets must be considered by both “new” and “old” competitors Embrace the new entrants, they can strategically augment the business Strategic partnerships will be a growing necessity

18. Questions? Mike Follett, Executive Director Business & Community Development (406) 435-6373 mfollett@billingsclinic.org