How Top Vendors Are Empowering Their Clients Shift To Outcome Oriented Healthcare – Insights from TBR’s 4Q12 Healthcare IT Services Benchmark

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TECHNOLOGY BUSINESS RESEARCH, INC.

Empowering clients for outcome oriented healthcare: Insights from TBR’s 4Q12 Healthcare IT Services Vendor Benchmark

Technology Business Research Quarterly Webinar Series

May 9, 2013

TBR

2 TBR Quarterly Webinar Series | 5.3.13 | www.tbri.com | ©2013 Technology Business Research Inc.

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Webinar Presenters

Joseph WalentLead Analyst, Healthcare IT ServicesProfessional Services [email protected] @JDWalent

mailto:[email protected]

TBR


TBR’s Healthcare IT Services reports deliver unique insight and value through in-depth analysis in a concise, consumable format

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Webinar Overview

Clients are gaining advantages and are better understanding revenue opportunities through our reports and their personal relationships with TBR

• The Healthcare IT Services Practice continually covers 18 vendors in our IT Services Vendor Benchmark.

• Of those vendors, 12 are covered directly with quarterly and semiannual reports.

• In addition, we publish five “healthcare IT services” company reports, focusing the Healthcare IT service businesses of Accenture, CSC, Dell Services, HP Services and IBM Global Services.o TBR reports are unique due to their deep, holistic analysis of

leading vendor businesses.o Financial modeling and TBR insights help customers build a

better understanding of vendor business models.o TBR reports and webinars are designed to be responsive to

client timelines, to be clear and concise, and to provide insights across multiple layers of an organization.

o TBR’s strategic assessment provides an impartial reality check on how vendors are performing in regard to their strategic objectives and the overall market.

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Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Key Trends

Healthcare IT Services Vendor Trends for 4Q12

Mobility: Balancing access to data while ensuring patient privacy and Protected Healthcare Information is a priority.

Regulatory: Clarity around the future of the healthcare reform provides a clear course for Healthcare IT Services customers.

Interoperability: Global shift in healthcare to outcome-oriented delivery demands solutions to ensure coordination of care.

The healthcare industry continues to operate in an environment of rapid change and expanding demands

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The healthcare industry continues to operate in a environment of rapid change and expanding demands

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Driving to greater ease and expediency in healthcare information exchange gained critical mass in 4Q12.

• McKesson, Cerner, AllScripts, RelayHealth, Greenway and Athenahealth announced the formation of CommonWell Health Alliance for the development and integration of standardized solutions.

• As an inclusive organization, the partnership will create guidelines to increase healthcare data liquidity, while preserving privacy and ensuring security.

As healthcare industry vendors pursue interoperability and a move to collaborative competition, C&SI expertise is being delivered through the development and maintenance of comprehensive HITS solutions.

Healthcare IT Services Vendor Trends for 4Q12 — Interoperability

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Interoperability

Healthcare IT Services vendors with established Consulting and Systems Integration practices will register increased demand in 2013

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India-centric vendors’ leveraging of low-cost labor, positions them for continued growth and profitability as interoperability gains traction, while healthcare pure plays will maintain solid profitability with focused C&SI service delivery


Top performers in 4Q12 balanced expansion with efficient operations in the fast-growing HITS marketplace

Accenture

Cerner

CGI

Cognizant

CSC General DynamicsHarris

HCLIBM GS

McKessonHP Services

Allscripts

Infosys

Dell Services

CPSI

NextGen

Xerox ServicesSAIC

Deloitte

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

-20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Ope

ratin

g M

argi

n TT

M

Healthcare IT Services Revenue TTM Growth YTY

4Q12 HITS TTM Operating Margin and Revenue Growth

LEGEND: SIZE OF BUBBLE = HEALTHCARE IT SERVICES REVENUESOURCE: TBR ESTIMATES AND COMPANY DATA

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20.7% Avg. Healthcare IT Vendor TTM Growth YTY 11.8% Average Healthcare IT Vendor TTM Operating Margin

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The effort to develop Accountable Care Organizations will necessitate a drive to create healthcare information liquidity


Health Record Systems

Interoperability

Vendor Opportunity: A comprehensive shift toward interoperability creates opportunity for Healthcare IT Services vendors with established C&SI capabilities, as coordination of care to deliver improved outcomes becomes central in the global healthcare market.

Healthcare IT Services Vendor Trends for 4Q12 — Interoperability

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Cerner, a founding member of CommonWell, will gain valuable insight into EHR integration with its engagement with the NBA


NBA teams represent mobile

workforce

Cloud-based EHR platform is at the center

Transferability will find direct

application for traditional markets

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The increased saturation of smartphones and hand-held devices accelerates the drive to mobile access.

The shift to a consumer-based healthcare model across both developed and emerging economies is driving the transition to personalized healthcare services, providing access at the patient's convenience, anywhere and at any time.

Healthcare IT Services Vendor Trends for 4Q12 — Mobility

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Mobility

Mobile devices are becoming a central component in the delivery and management of patient and population health

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Mobile device management, wireless network security, mobile application development and testing, and remote healthcare data gathering solutions will form the core of healthcare mobility opportunities

SOURCE: TBR


The shift in focus to patient-centered healthcare will spur the transition to mobile solutions for providers, payers and life sciences

Vend

or In

vest

men

t Ac

tivity

/Cus

tom

er D

eman

d

Current Market Scenario

Future Market Scenario

Low

High

Customer DemandVendor Investment

HITS Mobility Inflection Point

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HITS Vendors are in varying degrees of mobile solution maturity, with general IT solution providers and traditional government IT vendors leading the way

SOURCE: TBR


The drive to mobile solutions throughout the healthcare industry mandates all players to increase investment in mobile solutions

Low High

Low

High

Portf

olio

Cap

abili

ties

Mobility Brand Perception

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Regulatory: Clarity around the future of the healthcare reform in U.S. provided a clear course for Healthcare IT Services customers.



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Healthcare IT Services vendors providing solutions that aid providers and payers in the commercial and government markets, will realize improved revenue growth in 2013. • Government IT service vendors are moving rapidly into the

healthcare space. • Consulting engagements for vendors with regulatory audit

capabilities will increase.

Healthcare IT Services Vendor Trends for 4Q12 — Regulatory

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Regulatory

The conclusion of the 2012 election cycle in 4Q12 resulted in the message that the Obama initiated healthcare reform in the U.S. will prevail

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Healthcare IT Services Quarterly Benchmark Highlights and Outlook: Regulatory

Implementation of the ACA requirements for Health Insurance Exchanges created additional opportunities for HITS engagements

Exchange

Developme

nt

• Vendor Engagement: CGI contracted with six states, Hawaii, Vermont, Colorado, Massachusetts, California and Kentucky to build and implement HIX platforms.

Call Center Operations

• Vendor engagement: General Dynamics’ Vangent was awarded a $28.2 million one-year deal to build and operate call centers for the purchase of mandated healthcare insurance.

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The healthcare industry continues to operate in an environment of rapid change and expanding demands

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Healthcare IT Services Research

Current Topics 1Q13 Report Key Themes

• HITS Vendor Reports:o IBM Global Services o HP Services o CSCo Accenture o Dell Services

• Vendor Reportso CGIo HCLTo Cognizanto General Dynamicso Infosyso Xerox Serviceso SAIC

• Vendor Benchmarks• Benchmark Webinar

• Evaluate HITS vendors’ mobility solutions to bring clients in compliance with Meaningful Use 2 regulatory requirements.

• Are vendors leveraging and/or forging alliances, investing in acquisitions or organically expanding mobility services portfolios?

• Analyze leading vendors’ strategies for development and deployment of solutions addressing this expanding demand area.

• Review the variety of strategies vendors are pursuing to bring solutions to market.

• Assess investment strategies to grow healthcare-specific big data/analytics portfolios: R&D investments, alliances and/or acquisitions.

• Are vendors packaging vertical-agnostic platforms with healthcare domain expertise, creating healthcare-specific analytics solutions or consulting for partner platforms?

Expanding Role of

Mobility in Healthcare IT Solutions

Clinical Predictive Analytics

Storage and Big

Data Analytics

Healthcare IT Services Quarterly Benchmark Highlights and Outlook: 1Q13 Key Topics

The expansion of healthcare data and its availability are creating additional opportunities for Healthcare IT services vendors

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Questions?

PSBQ 4Q12 Research Highlights and 2013 Outlook

TBR


For further information, please contact:

Lindy Hanson James McIlroyDirector, Professional Services Practice Vice President, [email protected] [email protected]

Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannel

Joseph WalentLead Analyst, Healthcare IT ServicesProfessional Services [email protected] @JDWalent




TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

About TBR

Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

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