Wardell, Future of Digital Health, Leerink Research 2014-10

October 27, 2014

Reason for report:

PROPRIETARY INSIGHTS

Steven Wardell(617) [email protected]

DIGITAL HEALTHFuture of Digital Health

• Bottom Line: We are initiating coverage of the Digital Health sector. Thesame digital revolution that re-ordered the media sector has now arrived atthe healthcare sector, creating winners and losers. We believe healthcareis entering the same digital productivity curve as the technology sector.We have identified 6 important Digital Health investment themes andthe many social, industry, policy, and technological drivers behind them.We initiate coverage of CSLT, EVDY, IMPR, WAGE, and WBMD atOutperform, with a Market Perform rating on VEEV. Investment in theDigital Health sector has grown meaningfully over the past two years. Butat the same time, while the S&P 500 Healthcare Index returned about23% over the last 12 months and the NASDAQ Biotechnology Indexreturned over 36%, the Leerink Digital Health EW39 Index has returnedonly about 1%. Channel checks within our MEDACorp network point toincreased physician adoption of digital content, while cost-shifting fromemployers to employees increases consumer demand for online mediaand Consumer Directed Benefits management.

• Healthcare is undergoing a digital transformation, and we highlightsix key themes powering investment opportunities in the emergingDigital Health Sector: Consumer Empowerment, Automation,Connected Health, Population Health, Big Data, and Healthcare IT.We define Digital Health as the convergence of the healthcare system withdigital technology. We see a vast opportunity for Digital Health in the nearterm, as consumers take charge of their healthcare, technological shockspresent opportunities for IT improvement, healthcare reform (the ACA)challenges the status quo, aging Baby Boomers and the hyper-connectedMillennials demand increased involvement in their own care, and risinghealthcare costs shift to consumers. We have already seen growinginterest in the sector, with private and public investments totaling $2.3bin 1H14, up from $2b in 2013 and $1.4b in 2012, and 7 IPOs this year.However, the Leerink Digital Health EW39 Index of 39 public pure-playDigital Health stocks had a return of only 1% over the past 12 months,while the S&P 500 Healthcare returned ~23% and the NASDAQ Biotechindex returned over 36% – suggesting to us there is room for valuationupside in the Digital Health sector, with compelling societal, technological,sector, and policy drivers fueling this growth.

• Now is different: the post-2010 healthcare industry is poised foradoption of new technologies to enhance productivity, controlspending, and improve outcomes. Despite technological improvementspropelling US business productivity and collaboration through enhancedIT systems in the late 20th and early 21st centuries, healthcare laggedwell behind. The Affordable Care Act of 2010 opened up the healthcaresystem to adoption of technological improvements due to a convergenceof factors - namely, an estimated ~10m newly insured individualsentering the system in 2014, and a shift from volume- to value-basedpayment, placing importance on outcomes and cost management. On themanufacturing side, increasingly stringent FDA regulation and legislation

S&P 500 Health Care Index: 775.27

Companies Highlighted:CSLT, EVDY, IMPR, VEEV, WAGE, WBMD

Please refer to Pages 102 - 104 for Analyst Certification and important disclosures. Price charts and disclosures specific tocovered companies and statements of valuation and risk are available athttps://leerink2.bluematrix.com/bluematrix/Disclosure2 or by contacting Leerink Partners Editorial Department, OneFederal Street, 37th Floor, Boston, MA 02110.

https://leerink2.bluematrix.com/bluematrix/Disclosure2

DIGITAL HEALTH October 27, 2014

requiring tracking of physician compensation is creating a need for datamanagement and process automation in the pharmaceutical industry.

• Our MEDACorp survey of 50 physicians across the U.S. pointsto growing demand for digital content, which in turn presentsan opportunity for content providers to profit from increasedpharmaceutical advertising. While older generations of physiciansmay prove “sticky” to old habits, we found that, overall, physicians areincreasing their use of web and mobile (online) sources, single sign-onsystems (SSOs), and HIPAA-compliant texting in their daily practice. Thisincreasing interest in online sources presents the biggest opportunityfor WBMD and EVDY, which stand to benefit from increased advertisingspend as physician demand increases and pharma ad spend continues togrow.

• We initiate coverage of 6 companies, with Outperform ratings onCSLT, EVDY, IMPR, WAGE, and WBMD and a Market Perform ratingon VEEV. Our coverage companies range in primary function from OnlineHealth Media (WBMD, EVDY) to Consumer Digital Tools (CSLT, WAGE)and Healthcare Automation (VEEV, IMPR).

• In online media, we see a $5b market growing at 10% per year,with physicians increasingly transitioning to digital platforms aswell. Pharmaceutical advertising spend increased 17% in 2013, and weforecast this trend continuing with spend growing at 12% over the nextfew years. We see WBMD as best positioned to take advantage of trendsshifting consumption by both patients and physicians to online, followed byEVDY, an up-and-comer in mobile.

• As benefit costs are shifted from employers to employees,consumers are empowered to take control of their healthcare tominimize spend while maximizing quality of care. We see 2015 asa big year for employer risk shifting, with WAGE and CSLT poised tocapitalize on increased demand for transparency and management ofHigh Deductible Health Plans and Consumer Directed Benefit accounts.

• Healthcare has lagged in purchasing and adopting automationtechnologies, but we see opportunity for providers andmanufacturers to invest in IT. In automation, VEEV and IMPR standto benefit from trends toward IT upgrades that take advantage of cloudsystems and mobile technology.

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TABLE OF CONTENTS

CHAPTER 1: OVERVIEW OF THE DIGITAL HEALTH SECTOR, ITS DRIVERS, AND COMPANIES ........................................... 4

DIGITAL HEALTH INVESTMENT THEMES ....................................................................................................................... 4

PERFORMANCE OF PUBLIC PURE-PLAYS IN DIGITAL HEALTH ...................................................................................... 5

SECTOR LANDSCAPE ..................................................................................................................................................... 7

SUB-SECTOR LIFECYCLES............................................................................................................................................... 9

DISCUSSION OF DRIVERS BEHIND OUR 6 INVESTMENT THEMES................................................................................. 9

KEY COMPONENTS OF THE AFFORDABLE CARE ACT (ACA) FOR HEALTHCARE TECHNOLOGY INVESTORS ............... 16

MEDACORP SURVEY REVEALS CHANGE IN PHYSICIAN BEHAVIOR ............................................................................. 19

CHAPTER 2: INITIATING COVERAGE ON 6 DIGITAL HEALTH STOCKS ............................................................................. 35

FOCUS ON ONLINE HEALTH MEDIA (WBMD, EVDY) .................................................................................................. 38

FOCUS ON CONSUMER DIGITAL TOOLS FOR HEALTHCARE (WAGE, CSLT) ................................................................ 47

FOCUS ON HEALTHCARE AUTOMATION (IMPR, VEEV) .............................................................................................. 50

ACKNOWLEDGEMENTS: ................................................................................................................................................. 56

APPENDIX A: DIGITAL HEALTH DEFINITIONS ................................................................................................................. 57

APPENDIX B: THE LEERINK DIGITAL HEALTH EW39 INDEX AND LEERINK RATINGS ...................................................... 59

APPENDIX C: THE LEERINK DIGITAL HEALTH LANDSCAPE (TABULAR FORMAT) …………………………………………………………61

APPENDIX D: MEDACORP SURVEY …………………………………………………………………………………………………………………………..79

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CHAPTER 1: OVERVIEW OF THE DIGITAL HEALTH SECTOR, ITS DRIVERS,

AND COMPANIES

Healthcare, the largest sector of the US economy, is going through arguably its greatest transformation. Led by the

digital revolution that has “blown to bits” other sectors -- like the media sector over the past two decades -- powerful

external forces are now restructuring the healthcare sector, creating winners and losers.

We studied the societal, technological, sector, and policy drivers affecting the healthcare system, and discerned six

themes that are powering investment opportunities in digital healthcare today. Below we provide a discussion of the

six Digital Health Investment Themes and the Drivers behind them.

DIGITAL HEALTH INVESTMENT THEMES

1. Consumer Empowerment. Consumers are taking control of healthcare spending, and market participants like

payers and providers must follow them or become irrelevant.

2. Automation. Technologists are digitizing the components of healthcare and automating workflows, creating

new opportunities for the adaptive, and de-valuing old skills and legacy systems.

3. Connected Health. Patients are tearing down the walls of the healthcare system, demanding to receive care

and information when and where they need it.

4. Population Health. Providers are beginning to manage the wellness of a population proactively, instead of

reactively treating the sick.

5. Big Data. Data scientists are optimizing care with next-generation analytics applied to a growing mountain of

healthcare data.

6. Healthcare IT. IT systems are now at the center of providers’ plans to improve care outcomes, cut costs, and

get paid.

We define Digital Health as the convergence of the healthcare system with digital technology, a convergence that

enables the six Digital Health Investment Themes. Once digital technology pervades the healthcare system, the

convergence term “Digital Health” will fade into “healthcare.” Several terms have evolved over time to describe the

digitally-powered changes revolutionizing healthcare: Health 2.0, digital medicine, connected health, and e-health

among others; see Appendix A for a discussion of these terms.

In the 2010s, Digital Health has rapidly become a large public and private investment sector in the US. Market

research firm Rock Health found that there was $1.4b of investment in Digital Health in 2012, $2.0b in 2013, and

$2.3b in just the first half of 2014.

In addition to many private companies, a number of public companies are strongly affected by the Digital Health

Investment Themes. In the table below, we summarize the investment themes in Digital Health, the pure-play stocks

whose value is being driven by those themes, and the major public companies that are also affected by these

investment themes.

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#

Investment Theme

Drivers

Public Pure Plays

Public Majors

1 Consumer Empowerment

Consumers take charge

Payers shifting costs onto consumers

Healthcare Reform – drives health insurance exchanges

Demographics – shift to web and mobile

Technology shock – pharma shift to targeted therapeutics

Benefitfocus, Care.com, Castlight, eHealth, Everyday Health, HealthEquity, Health Insurance Innovations, WageWorks, WebMD

ADP, Bank of America, CVS, Towers Watson, Yahoo, InteractiveCorp

2 Automation Technology shock – Moore’s Law

Healthcare Reform – IT at the center

Pharma cost cutting and restructuring

HealthStream, Imprivata, Intuitive Surgical, Mazor Robotics, Medidata, MTBC, Nuance, Omnicell, Veeva

Quintiles, PDI, Inc., iRobot

3 Connected Health

Technology shock – Moore’s Law


BioTelemetry, DexCom, Insulet (OmniPod), LifeWatch, SHL Telemedicine, Spok, Tandem Diabetes, Vocera

Alere, Apple, Boston Scientific, Google, Intel, Medtronic, Philips, Qualcomm, St. Jude, Stryker, Verizon

4 Population Health

Healthcare Reform – change to fee for value


Healthways, Streamline Health, Weight Watchers

J&J, Lilly, Merck, Novartis, Pfizer, Cognizant

5 Big Data Technology shock – Moore’s Law

Healthcare Reform – IT at the center

Advisory Board, IMS Health Aetna, IBM, Premier Inc., UnitedHealth, Verisk, Samsung, Apple, Google, Philips, Salesforce.com

6 Healthcare IT Healthcare Reform – IT at the center

Accretive Health, Allscripts, athenahealth, Cerner, CPSI, Craneware, HMS Holdings, MedAssets, Merge Healthcare, Quality Systems

ADP, AdvancedMD, GE, McKesson, Oracle, Quest

Source: Leerink Research

PERFORMANCE OF PUBLIC PURE-PLAYS IN DIGITAL HEALTH

We combined the 39 public pure-play stocks of the Digital Health sector at equal weight (“EW”) into a composite

index, and compared their performance to the S&P 500 Healthcare Index and the NASDAQ Biotechnology Index.

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The resulting chart of the Leerink Digital Health EW39 Index (below) shows that over the last 12 months, while the

S&P 500 Healthcare Index returned about 23% and the NASDAQ Biotechnology Index returned over 36%, the Digital

Health EW39 Index had returns of only about 1%. Digital Health stocks were strongly negatively-affected by the 2014

Spring Growth Stock Correction, as was the NASDAQ Biotechnology Index. In the wake of that correction, Digital

Health stocks have picked back up – however, not as much as the NASDAQ Biotechnology Index. This lag suggests

that, at the present time and with continued lift from societal and technological megatrends, we believe the stocks in

our Digital Health Index have room to rise, and new buyers can buy below historical highs.

Source: Latest twelve month performance per FactSet 10/23/14 close. The Leerink Digital Health EW39 Index is comprised of 39 pure-play Digital

Health stocks with equal weighting. IPOs added during the year are treated in the Digital Health Index through rebalancing (includes Benefitfocus,

Care.com, Castlight, Everyday Health, HealthEquity, Imprivata, IMS Health, MTBC, Tandem Diabetes, and Veeva).

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The Leerink Digital Health EW39 Index is comprised of 39 stocks that we believe trade as pure-plays benefiting from the investment themes of Digital Health. A list and description of these stocks is attached to this document as Appendix B.

The stocks in the Leerink Digital Health EW39 Index are volatile. Some recent standout results of stocks in the index include:

Company Ticker Return LTM*

DexCom DXCM 46.30

Intuitive Surgical ISRG 29.48

LifeWatch LIFE-CH 29.08

HealthEquity HQY* 17.44 Since IPO on 7/31/14

Omnicell OMCL 14.85

Vocera VCRA (51.52)

Streamline Health STRM (51.57)

Care.com CRCM* (66.17) Since IPO on 1/24/14

Castlight CSLT* (71.78) Since IPO on 3/14/14

Note: Stock price returns as of 10/23/14 close per FactSet for last 12 months except where IPO was less than 12 months ago.

We believe that this high potential for gain and loss indicates that judicious research and stock selection are

warranted as this new sector evolves.

SECTOR LANDSCAPE

The Digital Health landscape is rapidly evolving. We are currently tracking developments at over 250 Digital Health

companies. Many startups are formed each year. Some private companies are growing rapidly and raising

substantial venture and growth equity rounds. There have been 10 Digital Health IPOs in the last 12 months. M&A

activity is hot, and leading Digital Health companies and major technology companies are seeking to become

consolidators, such as GE, Intel, WageWorks, Medtronic, Weight Watchers, WebMD, Everyday Health, Google,

Facebook, Care.com, and others. In the figure below we have created a sector landscape that places companies

within their primary Digital Health product categories and into six investment themes, recognizing that this simplifies

the sector’s overlaps.

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The Leerink Digital Health Sector Landscape

Source: Leerink Research. The Leerink Digital Health Landscape is also presented in tabular format in Appendix C.

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SUB-SECTOR LIFECYCLES

Digital Health is a convergence term to describe the converging sectors of healthcare and digital technology. Existing

sectors are colliding and new sectors are being birthed. Different sub-sectors of the Digital Health convergence

sector are in different stages of development, and many are in early stages of development. The figure below shows

the stages of the lifecycle that industries typically go through. We also interpret where on the lifecycle the different

sub-sectors of Digital Health are located. This interpretation may be helpful in understanding what to expect of a

company and a sub-sector. Early in the lifecycle, companies may have low or negative profitability, as they still have

start-up costs and may not have reached economies of scale. Late in the growth stage, there is typically a shake-out

characterized by M&A and exit.

Stages in the Digital Health Sector Lifecycle.

Source: Leerink Research.

DISCUSSION OF DRIVERS BEHIND OUR 6 INVESTMENT THEMES

A. Consumers take charge. The 2010s are the Era of the Consumer in healthcare. Whereas 20 years ago, a

healthcare business organizing around the patient-as-buyer in healthcare would not have been successful, today the

consumer market in healthcare is growing rapidly, and even traditional payer and provider organizations are learning

how to sell to consumers and how to adapt to their needs.

As healthcare spending in the US rises at a rate greater than inflation, healthcare payers such as employers are

continuing to shift healthcare risk, cost, and power onto consumers through less generous benefit designs. These 9


benefit design changes include covering fewer employees, increasing deductibles in health plans, increasing co-pays

and co-insurance portions, and, ultimately, reducing and capping the amount of the health insurance benefit premium

that employers will pay. In this way, employers are moving from what has traditionally been a defined-benefit type of

employee benefit toward a defined-contribution benefit, following the path of employee retirement benefits in the late

20th century.

As payers shift healthcare costs onto consumers, they also shift responsibilities and decision-making onto the

consumers. Consumers can now direct healthcare spending as never before, and they are also spending more out-

of-pocket dollars on healthcare than ever before. We have identified 5 growing categories of consumer-empowered

spending in healthcare.

Categories of consumer-empowered healthcare spending:

1. Health plan selection. Consumers have a growing number of health plan options to choose from. Whereas

in the past, a participant in a health benefit might have been able to choose between an HMO and a PPO

from the same carrier, today benefit sponsors may provide to participants several in-house options from

multiple carriers. In addition, still more health plan options are available from private and public exchanges.

Growing consumer choice in health-plan options drives health plans to focus on the consumer as the

customer, instead of the benefit sponsor (such as the employer) as the customer. Carriers must therefore

design plan benefits and costs around the consumer in order to be competitive. All health insurance carriers

are designing plan options to compete in this environment. In addition, employee benefit consulting

companies like Towers Watson (TW) are setting up private insurance exchanges, such as Towers Watson’s

OneExchange, to assist their employer-clients in this transition, while offering multiple plan options to the

employee-participant.

2. Pre-deductible spending. Increasingly, benefit sponsors are shifting healthcare costs onto consumers by

sponsoring low premium / high-deductible health plans (HDHP), including IRS-qualified high-deductible health

plans that are paired with tax-advantaged spending accounts (such as Health Savings Accounts and Flexible

Spending Accounts) that allow employees to spend pre-tax earnings on healthcare. In 2014, the deductible of

a typical single employee in an HDHP was between $1,250 and $6,350 for the year. Consumers control this

healthcare spending (instead of employers) and it hits their wallets on a dollar-for-dollar basis, instead of

being subsidized by their employer. Healthcare providers and vendors who wish to earn the business of

these consumers must sell directly to the consumers. Consumer-directed benefit vendors such as

WageWorks (WAGE) and HealthEquity (HQY) are strongly affected by the shift to high-deductible health

plans. As employers shift health costs onto employees through these high-deductible health plans paired with

tax-advantaged spending accounts, the employers need to set up more consumer-directed benefit accounts

and process more funds through the accounts. Health-transparency data vendors like Castlight (CSLT) also

benefit from this cost shifting by employers, as employers pair the cost-shifting with consumer digital tools that

empower employees to optimize their care decisions.

3. Post-deductible spending. The effect of consumer control of pre-deductible spending in the healthcare

marketplace is multiplied because the spending patterns that consumers develop during the pre-deductible

phase of their health spending (such as using a health-transparency tool to choose one vendor over another

on account of its cost effectiveness) are typically carried over into the post-deductible spending covered by

the health benefit. Potentially all of a consumer’s healthcare spending can be set and directed by the

consumer on the basis of the decisions they made when they were directly spending their own money during

the pre-deductible phase.

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4. Consumer-influenced spending. Traditionally, the healthcare marketplace de-emphasized the consumer

because the physician/provider was the decision-maker and the health plan was the payer. Another way that

this traditional structure is now changing is that consumers are gaining additional influence even in areas of

healthcare where that traditional structure still exists. Increasingly, consumers arrive in the doctor’s office with

their own sources of information and opinions about their needs, and treat the physician as a gate-keeper to

the healthcare system rather than as the authoritative decision-maker. Patients may learn about new

pharmaceuticals through pharma direct-to-consumer “ask your doctor” ads for prescription drugs when

seeking information on websites such as Everyday Health (EVDY) and WebMD (WBMD), and go to their

physician requesting the drug (or procedure or device).

5. Direct consumer spending. Consumers are also increasingly willing to spend their post-tax consumer

dollars on healthcare products. A diabetic consumer may receive paper testing strips at no cost through her

health benefit, but may purchase a continuous blood glucose monitor on her own -- with her consumer dollars

-- for the benefits that it offers. A patient with chronic pain may self-manage with OTC drugs bought out of

pocket for the benefits of increased control and convenience and the potential for cost savings. Millions of

Americans have bought activity trackers from companies such as FitBit, Jawbone, and Misfit, or turned on

their smartphone’s activity-tracking settings, using the data from these devices to track their fitness, diet, and

sleep, or to help them self-manage their chronic conditions. Increasingly, health-conscious Americans are

willing to spend their own consumer dollars on health products, and vendors are responding with a wide

variety of consumer-oriented options. Websites such as WebMD (WBMD) and Everyday Health (EVDY) are

popular media channels that health brands turn to for an audience.

Beyond the structural changes described above, a secular social and demographic trend is changing healthcare. The

current generations driving the US economy, from Boomers to Millennials, are taking charge of their healthcare as

prior generations never did. Current generations are likely to question authority, whereas prior generations deferred

to authority. Current generations are likely to develop their own expertise, and they find the tools to accomplish this

readily available, whereas prior generations primarily sought out experts to hand their case over to. Current

generations proactively demand to be involved in their own healthcare, whereas prior generations wanted institutions

to be responsible.

B. Technology shocks. Belatedly, technology is one of the primary drivers of the digital revolution in healthcare.

Over the past 30 years, whereas high-tech sectors of the economy seemed to ride a “digital productivity curve”(driven

by Moore’s Law) of dramatic increases in cost-effectiveness, other sectors of the economy -- especially healthcare,

government, and education -- seemed stuck with slow improvements in productivity, or even negative productivity

trends (sometimes called Eroom’s Law, or Moore’s Law spelled backwards).

However, the last few years have seen breakthroughs in the application of digital technology to healthcare. The

digital revolution that has restructured other industries is finally shaking up healthcare. Health records that used to be

trapped on paper in manila folders in physician practices, or on film at hospitals, are now commonly born digital and

readily shared with members of the care team wherever they are and whenever they need access.

Healthcare products that were once unimaginable, that seemed too expensive for common use, and that were

necessarily controlled by specialty physicians, are now becoming accessible to all. If a component of a healthcare

product can be digitized, then it can follow the same curve of rapid productivity improvement as the rest of the digital

economy.

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Technology forces driving improvement in Digital Health include the following:

1.) Moore’s Law. The original Moore’s Law, which applied to the cost effectiveness of microprocessors, is now

joined by a cloud-computing variation of Moore’s Law. Both are now delivering technology shocks to the US

healthcare sector. The cost-effectiveness of cloud computing is growing, both on an absolute basis to users

and also in comparison to traditional enterprise-software infrastructure costs, as economies of scale play out

around cloud storage, transport, processing, and maintenance costs. Cloud-based companies in healthcare

like Benefitfocus (BNFT), Castlight Health (CSLT), athenahealth (ATHN), CareCloud, WageWorks (WAGE),

Veeva (VEEV), Medidata (MDSO), HealthEquity (HQY), and others are riding this curve, as do automation

companies like Omnicell (OMCL), Intuitive Surgical (ISRG, maker of the Da Vinci surgical robotics system),

and Imprivata (IMPR, which automates sign-on and authentication management across complex hospital

systems).

2.) Smartphones. The innovation curve of Digital Health is also being driven by the cost-effectiveness curve of

the smartphones in our pockets, as mass-market demand for these devices drives ever-lower per-unit costs

and ever more pervasive infrastructure support for components like video cameras, cellular radios, GPS

receivers, mobile processors, and body sensors. Companies propelled by these technology shocks include

companies with important mobile apps like WebMD (WBMD) and Everyday Health (EVDY) in the online

health publishing sub-sector; consumer digital tools companies like WageWorks (WAGE) and Castlight

(CSLT); and population health management companies like MDRevolution. In addition, activity tracker

companies like FitBit and Jawbone benefit, as do wearable medical device companies like DexCom (DXCM)

and Insulet (PODD), both of which make advanced diabetes medical devices.

3.) Targeted Therapeutics. A third technology shock to hit the healthcare system is the progress of drug

development from primary-care blockbuster drugs -- such as ibuprofen-class drugs for pain relief and statin

drugs for high cholesterol -- to targeted therapeutics, which have the potential to stop the progression of major

diseases that have hitherto eluded successful treatment. Building on advances in the study of disease and in

the capabilities to manipulate biology, targeted therapeutics allow us to more effectively treat Crohn’s disease,

infertility, hepatitis C, cancer, growth-hormone deficiency, and other conditions. Over the past 10 years,

pharmaceutical companies have seen their primary-care blockbuster drugs go off-patent, as part of the

ongoing Patent Cliff, which peaked in the early 2010s. Pharma companies have adapted strategically by

shifting drug development to targeted therapeutics and restructuring the way that they sell and market the

drugs.

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Note: AP – Approved Product

Whereas in the past, pharma companies targeted the mass consumer and the primary care physician with

their sales and marketing efforts, today pharma companies are targeting patients with specific conditions,

such as diabetes and Hepatitis C, and the specialist physicians who care for them. Instead of targeting with a

large force of sales professionals aimed at big groups of physicians and mass media ads aimed at every

consumer, pharma companies are now building much smaller and more specialized sales forces, and

advertising to patients and physicians on a much more specialized basis. Online publishers like WebMD

(WBMD) and Everyday Health (EVDY) allow pharma companies to target messages to specific physicians

and specific patient communities, something that traditional publishers can’t do as well. And cloud-based

client-relationship management (CRM) systems -- like Veeva (VEEV) -- enable pharma companies to

automate sales processes better than before. Pharma companies can cut the size of their sales forces, while

integrating the sales reps more effectively into the pharma company’s workflows, and manage this new team

more cost-effectively.

4.) Agile Startups. Another kind of technology shock has played out before America’s eyes in Silicon Valley

over the past decade and with accelerating speed since 2008. It’s the combination of the following: the

emergence of an agile startup culture centered around a falling cost of IT infrastructure and product

development, the utilization of agile-software-development-management techniques leading to rapid

innovation, plus a spirit of rapid experimentation among startup talent and capital. The result has been an

unparalleled cycle of innovation in the B2C and B2B markets. This cycle of innovation is now extending to

healthcare, as evidenced by the large and fast growing pool of investment in Digital Health companies that

has been tracked by Rock Health. This technology shock ensures that some of America’s most talented

entrepreneurs will be ready to serve up innovative technology solutions to the healthcare sector as Healthcare

Reform is opening the sector up to the forces of change for the first time in two generations.

C. Healthcare Reform. The Affordable Care Act of 2010 and related reforms represent the biggest change to

the US healthcare system in the post-WWII era and one of the largest business opportunities of the 2010s. Prior to

WWII, few Americans had health insurance and most health insurance policies covered only hospital expenses. 13


However, during WWII the War Labor Board ruled that the ongoing wage freeze didn’t apply to fringe benefits, and

employers responded by using health benefits to compete for workers during a time of labor shortages. This change

kicked off the modern American healthcare payment system – with employers providing health insurance as a tax-

advantaged fringe benefit. Government reinforced this system both as a conventional employer and also as the

insurer of the old (Medicare) and the poor (Medicaid).

Many of the modern healthcare system’s much-observed ailments have been attributed over time to its fundamental

fee-for-service payment structure. Healthcare’s expensive procedures and suspected overutilization of care is

attributed to the system’s bias to pay for procedures but not to pay for quality, or thinking about options, or prevention,

or waiting to take action, or maintaining wellness. The system’s lack of a true marketplace is attributed to

misalignment of incentives among the user (the patient), the decision maker (the provider / physician), and the payer

(the insurance carrier). Due to the healthcare system’s decentralized nature, it has proven difficult to improve any one

part without reforming all of the healthcare system (and the healthcare payment system too). And payment reform

ultimately required changes in healthcare policy and law that the political system couldn’t deliver until recently.

Under the traditional healthcare system, the misalignment among payers, providers, and patients often punished

innovation:

Prospective innovators found that they had to bear all the cost of innovation, while the benefits were spread

diffusely among other participants, without enough of the benefits accruing to the innovator to justify the cost.

Thus physicians rejected electronic medical records at their practices because they would have to bear the

cost of the system in time and money -- with not enough benefit accruing to their practice, they felt, to justify

the cost.

Innovations that required different sector participants to adopt their innovation withered because of lack of

agreement on priorities among participants.

Vendors would find their innovative product rejected by otherwise-receptive physicians because the

innovators needed to get assurance of reimbursement from payers first before physicians would prescribe or

use the innovative products.

Clinicians weren’t allowed to use basic productivity technology in the practice of medicine because it didn’t

meet HIPAA standards. And lack of critical mass in electronic clinical systems caused sector participants to

default to paper and physical mediums of collaboration, denying the collaborative benefits of electronic

systems to the participants who adopted them early.

Payers refused to reimburse an innovative product because the costs were too high to cover the innovation

for members who could be changing carriers within a couple of years anyway.

Wellness products were rejected by the healthcare system because of a traditional agreement to reimburse

for sick care but not for population health.

Providers who innovated to develop higher-quality procedures found the system didn’t reward high-quality

care and didn’t punish low-quality care.

Patients over-consumed expensive care because they didn’t have to pay the bills.

The consequences of the healthcare system’s misalignments could fill many pages and have contributed to America’s

having the highest per-capita healthcare expenses in the world with sometimes less-than-the-best outcomes. The

result of these problems in the US healthcare system was that throughout the late 20th and early 21

st centuries, while

US businesses were pioneering world-class productivity, collaboration, and automation systems in offices and

factories, healthcare’s payers and providers seemed stuck in a darkly-humorous parallel universe of old and kludgey

technology, including telephone answering services, color-coded manila folders, large film negatives, paper clips,

monochrome computer screens, multiple computer key-function codes from 1980s DOS manuals, handwritten phone

messages on pink sheets of paper, and deliveries of critical workflow documents through the postal system. Our 21st

century brain surgeons are still wearing beepers and reading faxes. 14


The healthcare reforms of the 2010s have opened up the healthcare system -- the largest single component of the US

economy -- to the adoption of the same wave of productivity, collaboration, and automation systems as the rest of the

economy. Like a third-world country in the 1990s that could skip over the building of a copper-line telephone network

in favor of going straight to the latest mobile phone system, the US healthcare sector now has the opportunity to adopt

the latest cloud-based systems while skipping over the prior generation of enterprise systems built by pioneers in the

business sector. The US healthcare sector can now jet straight to Malibu without having to trek for weeks in

Conestoga wagons through a technological Death Valley.

15


KEY COMPONENTS OF THE AFFORDABLE CARE ACT (ACA) FOR HEALTHCARE

TECHNOLOGY INVESTORS

Individual Insurance Mandate

By some estimates, the individual insurance mandate will add 14 million people to the ranks of the insured in 2014, and ultimately as many as 30m people, growing significantly the population of people who receive conventional reimbursed healthcare under the current system.

Accountable Care Organizations (ACOs)

Perhaps the ACA’s largest single reform, the creation of the ACO framework, changes the nature of healthcare spending from fee-for-service to fee-for-value, unlocking the potential of modern workplace technology to improve the cost-effectiveness of the healthcare workplace. We believe that ACOs will behave very differently from traditional healthcare provider organizations and will have a large appetite for cost-effective innovations. They will be major buyers of healthcare automation technologies and will also purchase population-health management solutions to help reduce the cost of caring for their populations.

Public Exchanges

The public health insurance exchanges facilitate the buying of health insurance by consumers from health plans. The public exchanges make it easier for the uninsured to take advantage of government subsidies and to obtain the right health insurance. Over time the exchanges will also make it easier for employers to outsource their employee benefit functions by directing employees to public and private exchanges.

Cadillac Tax The ACA includes provisions to begin taxing so-called Cadillac Health Benefits, health plans with very generous health benefits, starting in 2018. We believe that the start of the Cadillac Tax will serve as a catalyst for employers to shift additional risk and cost of health benefits onto employees through less generous health benefits. This catalyst will increase the use of high-deductible health plans and associated tax-advantaged spending accounts, and will benefit consumer-directed benefit companies such as WageWorks (WAGE) and Health Equity (HQY). Less generous benefits will also spur employers’ provision to employees of health data transparency products such as Castlight (CSLT).

Sunshine Act (and sequelae)

A part of the ACA, the Sunshine Act mandates that pharmaceutical companies document and report all compensation of physicians. The Sunshine Act is part of a larger trend of restricting the ability of pharmaceutical companies and other manufacturers to influence physicians. The Sunshine Act has forced a software upgrade on the part of pharmaceutical companies that detail to physicians, benefiting salesforce automation and CRM companies such as Veeva (VEEV). By limiting the ways that pharmaceutical companies can reach physicians, the Sunshine Act and its sequelae (such as provider organization restrictions on affiliated physicians’ ability to receive compensation from industry) will benefit companies that own unaffected channels to physicians, such as online healthcare publishing companies like WebMD (WBMD) and Everyday Health (EVDY).

Source: Leerink Research.

In addition to the ACA, there are other parts of Healthcare Reform that are changing the healthcare system and

placing healthcare IT at the center of how payers and providers work and get paid. Under HIPAA (the Health

Insurance Portability and Accountability Act of 1996) all covered entities, such as hospitals, must adopt by 2015 the

new ICD-10, a diagnosis and procedure coding system that is substantially more detailed than the prior standard,

ICD-9, and that requires updating enterprise software and workflows in order to successfully comply with it.

16


Also, under the American Recovery and Reinvestment Act of 2009 (ARRA) and its included HITECH Act, healthcare

providers can receive financial rewards for the Meaningful Use of Electronic Health Records. Currently, providers

must meet additional use requirements under Stage 2 of Meaningful Use in the 2014-15 timeframe in order to

continue to receive these rewards. Provider organizations that decline to participate in the Meaningful Use program

initially forgo its financial rewards, and later are subject to reimbursement penalties from CMS for not satisfying its

billing requirements.

The combination of these policies has triggered multiple waves of healthcare IT software upgrades and put healthcare

IT in 2014 at the center of how healthcare payers and providers improve care, cut costs, and get paid. Instead of

necessarily defaulting to the lowest common technological standard of paper documentation and communication,

healthcare participants can now train and organize around advanced electronic systems. A critical mass of

participants in healthcare online has been reached, and participants can now count on doing their work digitally.

Laggard provider organizations must also make deferred investments in IT systems in order to stay current and

interoperate with their peers and payers. The emergence of IT at the center of healthcare is benefiting automation

companies like Imprivata (IMPR), which automates the sign-on and authentication process for healthcare providers

across multiple healthcare IT systems, and Omnicell (OMCL), which automates the hospital pharmacy.

D. Demographics. Major demographic trends are boosting demand for digital solutions to healthcare

challenges. At the older end of the demographic spectrum, Boomers are retiring in vast numbers and becoming major

consumers of healthcare services, triggering a number of changes. Healthcare has long been viewed as a labor-

intensive service sector that has resisted automation. But as the Boomers enter retirement at a time of

unprecedentedly high healthcare spending and a growing gap in the adequate supply of healthcare providers,

Boomers are increasingly demanding healthcare and eldercare services. In addition, unlike prior generations who

saw themselves as recipients of care from institutions and authorities, Boomers are taking charge of their care

through their own spending and demanding that their care be customized to them. In order for their care to be

convenient, personalized and affordable, there’s an increased need for automation.

Earlier along the demographic spectrum are the Millennials, a generation that was “born digital” and that turns first to

internet-connected mobile devices for information, connection, work, and play. Businesses that want to serve

Millennials will need to figure out how to serve them on their mobile devices.

In between the Boomers and the Millennials, the rest of America is responding to the technological shocks of the past

30 years by changing how they spend their time and how they want to receive care. They are consuming information

from online sources such as the web and mobile apps. And they too are changing how they want to interact with their

healthcare vendors and providers, switching from offline activities, such as calling a doctor’s office, to online activities,

such as finding a provider and booking a visit through a mobile app.

These demographic changes are boosting healthcare benefit vendors that engage with their members through web

and mobile: vendors such as WageWorks (WAGE), Health Equity (HQY), and Castlight (CSLT). The trend to online

activities also benefits healthcare publishers with a strong web and mobile presence such as WebMD (WBMD) and

Everyday Health (EVDY), and population health vendors with mobile apps such as Weight Watchers (WTW) and

Healthways (HWAY). This web and mobile trend also helps medical device companies that are building brands in the

hearts of consumers, such as DexCom (DXCM) and Insulet (PODD).

We believe that the convergence of positive technology shocks powered by Moore’s Law with demographic shifts

such as retiring boomers and provider shortages, plus the world’s highest healthcare costs, is spawning an

unprecedented wave of automation in healthcare. Increasingly we’re receiving our healthcare in new ways – such as

at home, through connected devices, and with the assistance of automation.

17


E. Healthcare costs. US healthcare costs are the highest in the world. They have been growing faster than the

general rate of inflation for decades. They are regularly cited by policy makers as a major factor inhibiting US global

competitiveness, by company CEOs and CFOs as a major challenge to profitability, and by consumers as a major

budget concern. High healthcare costs are a major driver of cost-shifting by employers, which boosts the growth of

High-Deductible Health Plans and Consumer-Directed Benefit accounts, which, in turn, drives growth for consumer-

directed benefit companies like WageWorks (WAGE) and HealthEquity (HQY). Soaring healthcare costs and the

need to restrain them also benefit health-transparency tools companies that help consumers optimize care decisions,

such as Castlight Health (CSLT). High healthcare costs were a major driver behind the introduction of Accountable

Care Organizations (ACOs) in the Affordable Care Act. ACOs, in turn, introduced a fee-for-value calculation into the

healthcare system, which was formerly overwhelmingly fee-for-service based. The introduction of fee-for-value into

healthcare will benefit population health companies like Healthways (HWAY) and Weight Watchers (WTW), and

automation companies like Imprivata (IMPR) and Omnicell (OMCL).

Source: Health Affairs as cited in Vox.com 9/4/2014

18


MEDACORP SURVEY REVEALS CHANGE IN PHYSICIAN BEHAVIOR

Digital Health Survey Points to Increase in Online Content Demand

Our recent survey of 50 board-certified physicians reveals fundamental changes in physician behavior in terms of how

new digital technology is used in their everyday practice. The focus of this survey was centered on digital content

distribution, advertisements, and the single sign-on (SSO) system. Among our Digital Health coverage universe, the

companies that will be most impacted by content and advertisement decisions and trends are WebMD (WBMD) and

Everyday Health (EVDY). Data from the survey suggest that within the next ~3-5 years, there will be significant growth

in demand for digital content, especially for the mobile health segment. Advertisers will see opportunities as a result.

And the increasing interest in and adoption of single sign-on will benefit Imprivata (IMPR).

Usefulness of SSO Is Above Average, According to Results

Demand by physicians for single sign-on products will most directly impact Imprivata (IMPR). The general sentiment

of our surveyed physicians is that SSO’s usefulness is above average, and time saved can be up to an hour per shift,

but mostly hovers around 10-15 minutes per day. The market opportunity for Imprivata is presently narrow due to the

SSO product category’s low visibility and limited exposure among physicians. However, there could be significant

market upside to Imprivata given the growing interest in the product category combined with barriers to entry to new

competition, due to the need to integrate with many other software systems in order to sell a viable product.

Demographics: Survey Respondents Skew to a Younger Group

Among MEDACorp’s 50 surveyed physicians, the majority work in private practice, followed by academic medical

centers, community hospitals, and Veterans Administration facilities. By comparing our survey sample with the survey

results from the Center for Studying Health System Change (below), we believe that academic medical centers could

be over-represented in the MEDACorp survey. In terms of experience, almost all MEDACorp respondents have been

practicing for at least 5 years, and all use online or mobile apps at least one hour a week. The average number of

years in practice is ~17, with the lowest being 3 years and highest being 40. The distribution of our MEDACorp survey

leans towards the younger side of the spectrum, however, and therefore could show a skew toward use of technology,

especially mobile technology. In our survey, 62% of respondents have <20 years’ experience, in contrast with ~50% in

the chart from the Journal of Medical Regulation also cited below. MEDACorp respondents were mostly located in the

Northeast, Florida, the Illinois/Chicago area, and the California coast, with a scattering throughout the Midwest.

19


Source: MEDACorp Survey: Digital Health, August 2014 Source: MEDACorp Survey: Digital Health, August 2014

Source: A Census of Actively Licensed Physicians in the United States, 2010, Journal of Medical Regulation

1

11 11

9

13

5

0

2

4

6

8

10

12

14

0-5 6-10 11-15 16-20 21-25 25+

Resp

on

den

ts

Years in Practice

Years in Practice (n=50)

Academic medical

center, 26%

Community hospital,

10%

VA, 2%

Private practice,

62%

Primary Practice Setting (n=50)

1.9%

22.7%

24.7% 24.4%

14.8%

7.6%

3.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Less than 30Years

30-39 40-49 50-59 60-69 70+ Unknown

Age

Age of Physicians in the US (2010)

20


Source: Center for Studying Health System Change: 2008 Health Tracking Physician Survey

Geographic Distribution of Physicians in MEDACorp Digital Health Survey

Symbols represent responding physicians

Source: Google Maps, MEDACorp Survey: Digital Health, August 2014

21


Use of Online and Mobile Slated to Continue Growing

Less than ten years ago, a smartphone in everyone’s pocket was not yet a reality, even accessing the internet

was still a struggle for some. In 2014, not having a smartphone has become uncommon, and not having

internet access is rare. For many of us, a very large part of our lives is spent on our mobile phones or in front

of computer screens, and for physicians, it is no different. We asked our respondents how many hours per

week they spent using online and mobile resources three years ago, today, and what they expect in another

three years. There is a clear trend of increased use of online and mobile resources. The statistical summary

for this question is in the tables below. We found that the CAGR of usage was approximately 20% during the

past three years. In the next three years, physicians expect slower growth, at around 11% CAGR. If we

remove the two outliers -- one physician who almost never uses online/mobile, and another who is heavily

dependent (~40 hours a week currently) -- the results largely remain the same as without the removal of

outliers, with a clear upwards trend in hours spent. We attribute the slowdown in growth rate to the time

constraint of the physicians’ schedules. This suggests an asymptotic growth pattern, with the time spent

quickly approaching the physicians’ upper limit. Based on this growth in physician use of digital sources, we

see a strong future outlook for Digital Health content providers.

Hours Spent per Week Using Online/Mobile Resources: All Data (n=50)

Mean Median Sum CAGR*

3 years ago (August 2011) 4.3 3 217 -

Currently (August 2014) 7.4 6 368 19%

3 years from now (August 2017) 10 8 499 11%

Hours Spent per Week Using Online/Mobile Resources: Without Outliers (n=48)


3 years ago (August 2011) 3.9 3 187 -


3 years from now (August 2017) 9.3 8 446 11%

Note: CAGR is calculated from August 2011, giving 3-year and 6-year annual growth rate estimates

Source: MEDACorp Survey: Digital Health, August 2014

NEJM and Conferences Dominate Offline Knowledge Sources

Traditionally, the most trusted print journals in medicine are the New England Journal of Medicine and the Journal of

the American Medical Association. The overall responses from our physicians are in line with the known trust placed

in these two publications. We posed an open-ended question to the physicians worded as such: “What are your top

three preferred offline sources for new medical information?” Our aim with this question is twofold: 1) we believe that

the top three choices that come to mind do not necessarily have different qualities in the physicians’ opinions, which

means three answers more accurately captures information on what sources are most widely used; and 2) for the

most used sources, we wanted to know why they are so heavily utilized among physicians. Medical Conferences and

NEJM heavily dominate, at 19% and 14% respectively overall, and at 34% and 27% respectively, as the physicians’

first choice. For NEJM, many respondents mention that they use it due to “trust” and because it is “up to date,” while

for conferences, the physicians preferred them for “CME,” “in person meetings,” and “new research.”

22


If we do take into consideration differences between the top three choices, the importance of medical conferences

stands out. We also notice that JAMA was almost never picked as a first choice, but was picked as a second choice

more than any other source. JAMA was described in much the same manner as NEJM, which leads us to believe that

it is generally trusted as a journal, but is not the de facto top source. Despite some heavy contrast of preferences

among age groups, the staple journals are used almost universally, which leads us to conclude that despite the shift

towards digital content, print media will yet hold a place for physicians to obtain new information.

Note: Other Journals include: The Lancet, JCEM, Internal Medicine Journal, etc. Other includes non-journal publications.


Number of Mentions

Top Offline Sources Offline source 1 Offline source 2 Offline source 3

Annals of Internal Medicine 4 2 2

JAMA 1 9 3

NEJM 13 7 2

Conferences 16 4 9


Offline Sources Breakdown by Experience Shows Contrasting Preferences

By breaking down the top sources of offline information, a few interesting trends emerge. The group with the most

diverse use of sources is the group with 11-15 years of experience. The two groups with the lowest source diversity

are the oldest doctors: 21-25 and 25+ years in practice. Between the older and younger physicians, the most glaring

difference is the “Conferences” category. Age and/or experience are likely factors that can explain the unwillingness to

travel in the oldest physicians. Here we see heavy trust placed in traditional journals: over 50% of the responses for

the 25+ group were in NEJM, JAMA, or Annals of Internal Medicine, while for the next oldest cohort (16-20), the

responses only tallied 30%. With this data, it is fair to conclude that the older generation are somewhat stuck in their

ways, which is problematic when Digital Health content providers try to penetrate this market segment. This will be

explored further when we discuss the survey results for online use.

Conferences, 19%

NEJM, 14%

JAMA, 9%

Annals of Internal

Medicine, 5% Textbooks, 4% JASN, 3% Colleagues,

3%

Mayo Clinic Journal, 2%

Cleveland Clinic Journal,

2%

Other Journals,

29%

Other, 10%

Offline Sources Overall

23


Switching over to the relatively inexperienced doctors (6-10 years in practice), we also notice a narrower range of

sources versus the middle groups (11-15 and 16-20). The likely explanation here is a shift of younger doctors to

online sources, while they only prefer the most known of print media for offline sources, namely the NEJM. The

NEJM is as important to younger physicians as it is for older physicians; however, from oldest to youngest, the Annals

of Internal Medicine vanished from 19% to 0%, and JAMA steadily shrank from 13% to 6%.

Note: Categories with no responses in age groups not included


Offline Sources By Experience Years of Experience

Source 0-5 6-10 11-15 16-20 21-25 25+

Conferences 7 4 5 13

NEJM 5 4 5 5 3

JAMA 1 2 3 2 3 2

Annals of Internal Medicine

2 1 2 3

Textbooks 3 2 1

Jnl Am Soc Nephrology 2 1

1

Colleagues 2 1 1

Mayo Clinic Journal 1 1 1

Cleveland Clinic Journal 2 0 1

Other Journals 10 10 9 10 4

Other offline sources 2 2 2 2 5 2


6% 6% 7% 13% 13%

30% 31% 33% 26% 25%

6% 6%

3% 4%

6%

6%

3% 4% 6%

3%

3%

9% 6%

4%

6%

4%

5%

19% 6%

9%

7%

8%

13% 15%

13%

19%

13%

19% 21%

13% 19%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0-5 6-10 11-15 16-20 21-25 25+

Offline Sources by Experience (3 per Physician, n=50, 3n=150)

Conferences

NEJM

JAMA

Annals of Internal Medicine

Textbooks

JASN

Colleagues

Mayo Clinic Journal

Cleveland Clinic Journal

Other Journals

Other

No

t sig

nif

ican

t, o

nly

on

e r

esp

on

den

t

24


Online Sources Fragmented, but Dominated by Handful of Brands

For the online sources question of the survey, we posed a similar question: “What are your top three preferred online

sources for new medical information?” Again, we believe that the top three results are not significantly different in

terms of quality, but only ranked in a particular order based on doctors’ varying taste. Results for online sources were

highly mixed, with a much wider range of responses. This is not surprising considering the ease of publishing and

reaching audiences online. There are two clearly dominant brands: UpToDate and WebMD (including Medscape),

each consisting of over 20% of the total responses; with UpToDate being an overwhelming 44% of respondents’ first

choices, and WebMD (WBMD) a close second at 34%. Emedicine, which was 3% of the responses, was acquired by

WBMD in 2007. Incorporating Emedicine into the WebMD tally as a whole, we see WebMD as a clear market leader

in the online side of the business (23%). UptoDate and Medscape/WBMD dominate physicians’ first two choice slots,

while the third choice slot is mostly Epocrates and PubMed.

Note: Other includes: Yahoo Search, NEJM/JAMA Digital, CDC.gov, etc.


Top Websites Website 1 Website 2 Website 3

UptoDate 18 10 3

Medscape 12 8 2

Epocrates 2 2 5

PubMed 2 1 8

WebMD 2 3 4


One of the most notable findings of our survey of offline versus online content preferences of physicians is the

discontinuity of brand choices between offline and online. Incumbent brands from the offline segment such as NEJM

and JAMA had every possible advantage in winning the preference of physicians as the physicians spend more and

more time online. However, our survey shows that those brands did not successfully transfer their leadership position

online. This suggests that there is an important discontinuity between offerings in those areas. This further indicates

UpToDate, 20%

WebMD, 6%

Medscape, 15%

Medpage Today, 1%

PubMed, 7% Epocrates, 6%

Sermo, 5%

QuantiaMD, 3%

Wikipedia, 3%

Google, 3%

Emedicine, 3%

MDLinx, 2%

Doximity, 1%

Other, 25%

Online Overall Choice

25


that online-based challengers in the health information sector may have advantages competing in that sector that the

incumbent (offline) health information vendors can’t easily duplicate.

Medscape vs. MedPage Today Favors Medscape (WBMD)

In terms of our coverage universe, WebMD (WBMD) and its web property Medscape are much more recognized and

used than Everyday Health (EVDY) and Everyday Health’s web property MedPage Today. Medscape’s competitor,

MedPage Today, received only two mentions in the survey, totaling just 1% of the responses. In our view, these

current numbers are not a major concern for EVDY as long as EVDY is able to sustain growth in consumer views.

Everyday Health’s core business is in the consumer segment, which means any forays into the physician space can

be only incrementally positive. WBMD’s advantage here is significant: Medscape was founded in 1995; MedPage

Today was founded nine years later in 2004, quite a while after Medscape had already gained large viewership.

Online Sources Breakdown by Age / Experience

Conducting a similar analysis to our offline analysis, we notice that the story is again centered on the oldest

physicians. The 25+ years-of-experience group uses WBMD products the most out of any other group, at 26% of

responses (the sum of results for the WebMD website and the Medscape website, which is owned by WebMD). In

addition, UpToDate is completely missing from the 25+ years-of-experience group’s responses, even though it

dominates every other age group and the survey as a whole. Of the five doctors in the 25+ category, four listed

Medscape or WebMD as their first or second choice.


26


Online Sources by Experience Years of Experience

Source 0-5 6-10 11-15 16-20 21-25 25+

UpToDate 7 9 8 7

WebMD 3

2 2 2

Medscape 5 5 4 6 2

MedPage Today

1 1

PubMed 3 4 1 3

Epocrates 3

5 1

Sermo 1 4

1 2

QuantiaMD 1 3

1

Wikipedia 1 1 1 1

Google

2 1 1

Emedicine 1 1 1 1

MDLinx

1 1 1

Doximity 1

Other 3 7 4 7 13 4


Focus on Mobile: Epocrates and WebMD’s Medscape are Winners in Mobile Digital Health

For the mobile segment, athenahealth’s recently acquired Epocrates and Medscape’s mobile version dominate the

market, at 25% and 14% of our responses. Wolters Kluwer’s UpToDate comes next with 8% and Everyday Health’s

MedPage Today is at 1%. Some physicians mentioned that software provided by their EHR vendor is a top choice,

while others chose to put “none” for one of their choices. Since mobile digital health is relatively new, it is not

surprising that some doctors only use one or two apps or apps that are conveniently provided by their EHR vendor.

Interestingly, “none” is predominantly found to be a response in the relatively young 6-10 years-of-experience group,

and in the 25+ years-of-experience group. Most in the younger group cited some of the following reasons for using

apps: “Check drug doses,” “Drug info at point of care,” and “Medical calculations.” With older physicians some cited

the same reasons, but others were clearly indifferent towards apps: “It is there” and “Easy to use.”

Convenience and communication are key for mobile, unlike online and print media. Of course, there are still some

degrees of trust required. However, we did not observe as many physicians listing “trust” or “best” for mobile. Another

topic that arose was the community aspect of mobile digital health. One physician mentioned that “social media is

fun,” while others spoke of “networking,” “exchanging ideas,” and “3 minute videos I can look at any time.” For many

doctors, questions of how to treat a difficult case can be answered quickly and on the go with mobile content. The

days of researching topics in a medical library are disappearing. Today, with mobile digital health, solutions or ideas

can be found and shared at any time, in almost any place.

27



Mobile Apps Mobile app 1 Mobile app 2 Mobile app 3

Epocrates 24 10 3

Medscape 10 7 4

UpToDate 4 4 4

Sermo 2 5 5

QuantiaMD 2 4 6


No Significant Growth in Usage of Specific Applications Expected

We asked physicians which of the top web and mobile sources they use now versus what they expect to use in three

years. UpToDate, AMA-Assn.org, and Doximity showed very slight increases in expected use; however, other sources

either were expected to be used less or just about the same. Although it is important to try to anticipate which

direction physicians’ tastes or trust will move in, there does not seem to be an indication of any major market share

movements upcoming. It is worth mentioning, though, that the use of Everyday Health’s MedPage Today is not

expected to increase or decrease, while use of WebMD’s Medscape is expected to decline. The data may be

illustrative of a trend, but we cannot come to any concrete conclusions based on this data alone.

28


Expectation of Web and Mobile Source Usage in Three Years

Currently (August

2014) In 3 years (August

2017)

Medscape 74% 68%

MedPage Today 22% 22%

Epocrates 76% 76%

Quantia 40% 32%

Sermo 48% 46%

UpToDate 72% 74%

AMA-Assn.org 4% 6%

Doximity 16% 18%

Others: Cleveland Clinic (2x); Quantia (1x); Epic (1x); The Heart.org (1x); annals.org (1x)

10% 8%


Quality of Select Mobile / Online Apps Drives Usage

Quality is paramount for doctors in deciding which apps to use for mobile and online. We surveyed our physicians

about the quality of a number of mobile apps and online resources, using a scale of 1-5, where 1 is worst and 5 is

best. Physicians only responded if they have used a listed product. A summary of the results is below. Not

surprisingly, the top three spots are taken by UpToDate, Epocrates, and Medscape, corroborating their other

preference choices. These three are the only ones with an average score above 3.5; all other products polled,

including MedPage Today, did not break 3. The overall average quality score is 3.19, which, technically speaking,

puts all surveyed products below average in quality except the top three. Also representative of higher quality is the

higher number of responses for the top three. The top three all had over 45 physicians respond and rate the apps.


29


Ad Preferences

We asked the respondents which medium they preferred for advertisements to reach them. Our questions asked for

the top three most preferred types of ads and one least favorite, for both offline and online (web and mobile). For the

most part, the physicians were indifferent between offline and online, with 62% answering “no preference.” There was

a slight leaning towards offline media at 22% vs. 16% for online. When asked about specific types of marketing

materials, traditional direct mail turned out to be the least preferred, making only 28% of physician’s top three

preferred list, and 24% of physicians’ least preferred type of ad. For the other offline ad categories, physicians as a

whole seemed more or less indifferent, with each category appearing on 50% or more of respondents’ top three list.

For online and mobile advertisements, the one category that stands out is the sponsored education material. While

appearing only in 42% of the top three lists, this category has the distinction of not being named as any physician’s

least preferred ad source.

Offline Ad Preferences

For offline print ads, physicians most often described their preference as related to the ease of reading or ignoring.

One physician specifically mentioned the fact that there is no need to click through as with the online ads. Overall, it

seems print ads are liked for their information when relevant, and for their unobtrusiveness when not relevant.

Ironically, this helps explain both the like and dislike for direct mail; many highlighted that they can easily discard

these ads. One physician’s reason for preferring print and mail ads are “[can] ignore them” and “[can go] to recycle

bin.” In terms of sponsored events and pharma rep visits, physicians highlighted that interactions are the most

important part. For sponsored events, education and interaction are the most chosen descriptors. For pharma rep

visits, similar language is used: “I like the personal contact,” “can ask questions in real time,” “quick, up to date info on

new meds,” etc. We see this as evidence that physicians really like custom tailored information when they need it,

while retaining the freedom to ignore information they do not find relevant.


30


Type of Ad Top 3 Preferred Types of Ads.

Least Preferred Type of Ad

Online

Display ads on web pages (such as banner ads) 20% 16%

Search engine ads (paid ads mixed in search engine results) 22% 14%

Sponsored educational material 42% 0%

Display ads in mobile apps 12% 24%

Direct email advertising 16% 10%

Offline

Display ads in medical journals (print edition) 50% 2%

Sponsored events (such as CME events that have sponsors) 56% 4%

Visits from pharmaceutical representatives 54% 6%

Direct mail (postal variety) 28% 24%


The Importance of Sponsored Educational Material

Sponsored educational material is by far the most preferred category of online advertisement among polled

physicians. This category is important to note because none of the other online categories reached more than 25% of

the top three list.


Single Sign-On Survey

In addition to sources of medical information, we also surveyed physicians’ use of Digital Health products in the form

of single sign-on (SSO) systems. As hospitals increase the amount of data and systems in place, care providers have

found it increasingly difficult and time-consuming to log into different workstations and systems. Our survey asked

physicians their experiences with SSO systems like that offered by Imprivata. The response data showed that more 31


than half the respondents have not used an SSO. In addition, 69% of those at an academic medical center have used

an SSO before, while only 40% of those at a community hospital have done so, and 32% at a private practice. We feel

this is a good representation of the general market because many small community hospitals and private practices do

not have the scale to meaningfully leverage an SSO system. When we asked the physicians specifically about

Imprivata’s OneSign product, only 3 physicians, or 6%, said they have used this product. Overall, most respondents

that have used single password commented positively on their experience, citing higher efficiency and ease of use.

Detractors’ main issues include sluggishness in starting up or the program’s not working all the time.

When we asked the doctors how much time SSO systems saved them per day, the majority responded with “15

minutes,” at 31.8% of responses. At the lower end of the spectrum, 27% responded with 5 minutes or less. At the

higher end, 9% said about 30 minutes, and another 9% said 50 minutes or more. We estimate that this averages out

to be about 16 to 17 minutes per physician per day, which over the course of a week adds up to more than one extra

hour of downtime per physician that can instead be allocated towards patient care.

Have you used any Single Sign-On (SSO) System?

Yes 44%

No 56%

Have you used Imprivata’s Single Sign-On Product?

Yes 6%

No 94%



32


Single Sign-On Breakdown

Among all respondents, the average score of usefulness was a 3.46 on a scale of 1 to 5, with 1 being least useful and

5 being most useful. The average score among those that have used an SSO system was 3.73, while the average

among those who have not was 3.25. Along those same lines, if we look at the individual breakdown of responses,

there is a skew towards the high end of usefulness, especially for those who have used SSO. The only outlier for this

group gave a rating of 1, citing as his reason that he uses only 1-2 programs normally, which significantly diminishes

the value of having an SSO system in place. His rationale for not viewing SSO as particularly useful is in line with our

view that smaller practices with fewer applications do not have the scale for such a system to be financially beneficial.

Overall, more than half of physicians rated SSOs above average (a 4 or 5 rating), while only 26% rated SSOs below

average (a 1 or 2 rating).

Average usefulness scores by practice setting also trended strongly in line with our view. The average score given by

academic medical center physicians who have used SSO was 3.56, above our sample average of 3.46. Physicians

from private practices and community hospitals who have used SSO gave above-average scores of 3.90 and 3.50,

respectively. For many of the private practices and community hospital physicians, exposure was an issue, and those

who had not used SSO in these settings found SSO less useful than our sample average. Some of the comments

among these doctors include “never used before” or “I don’t know about that.” The results here suggest that it will be

much easier to sell SSOs to larger healthcare providers, not only due to the matter of scalability, but also as a matter

of user opinion. Since SSOs benefit larger institutions more significantly and visibly, decision-makers will most likely

not be as difficult to persuade at these locations versus at smaller private practices, where more effort and time will be

needed to sell a new product. In addition, our survey revealed that academic physicians who have not used an SSO

may have a slightly more positive opinion of SSO than those who have used SSOs in the past, pointing to potential

demand. But doctors in community hospitals and private practices have the opposite reaction: non-users have a lower

opinion, indicating less demand and/or a need to educate the marketplace.


33


HIPAA-Compliant Text Messaging an Important Tool

In our survey, we posed a similar question regarding the HIPAA-Compliant messaging systems. This is another

aspect of Imprivata’s product offerings (Cortex). From our results, the overall physician sentiment toward the product

category of secure, HIPAA-compliant text messaging is positive in terms of usefulness, with an overall score of 3.78. If

the responses are broken down by practice setting, physicians from academic medical centers are again the ones

most positive, giving an average score of 4 out of 5. Private practice and community hospital physician responses

were more mixed, giving average ratings of 3.74 and 3.60 respectively, once again below the overall average.

Negative comments were more prevalent from private practice physicians, many of whom question the necessity of

text messaging. In contrast, community hospital and academic medical center physicians gave no directly negative

comments; most of the lower scores in these two practice settings were from non-users who were simply indifferent.

In general, positive comments centered around ease of use, legal considerations, and the security of communications.

In conclusion, once again, academic medical centers look to be the easier and better targets for future opportunities.

Source: MEDACorp Survey: Digital Health 2014

Imprivata’s Opportunities and Risks

As mentioned earlier, our surveyed physicians have had limited exposure to Imprivata (IMPR). With this limited data, it

is hard to draw concrete conclusion regarding OneSign specifically. With that said, three physicians were generally

positive. The responses were as follows: “I like it,” “helpful and [easy to] use,” and “good system.” In addition, our

survey found that doctors on average are willing to use SSO systems for about 66% of their hospital visits, a sign that

this technology is gaining traction. Given the overall positive opinion of most physicians about SSO and the happy

experiences of previous OneSign users, Imprivata has a good opportunity in the coming years for growth. In terms of

Imprivata’s Cortex, we see there are opportunities to convince doctors to adopt HIPAA-compliant text messaging

systems. The general sentiment is positive, as many physicians already believe in the importance of such system.

3.60

3.74

4.00

Veterans Administration facility

Community hospital

Private practice

Academic medical center

HIPAA-Compliant Texting Usefulness by Practice Setting (n=50)

Low High Usefulness

Not Significant, Only One Respondent

34


CHAPTER 2: INITIATING COVERAGE ON 6 DIGITAL HEALTH STOCKS

We are initiating coverage on 6 companies in 3 Digital Health sub-sectors that have strong exposure to the Digital

Health investment themes.

WebMD (WBMD) and Everyday Health (EVDY) are leading companies in the Online Health Media sub-sector.

Castlight (CSLT) and WageWorks (WAGE) are leading companies in Consumer Digital Tools in healthcare.

Veeva (VEEV) and Imprivata (IMPR) and leading companies in Healthcare Automation.

An overview follows of the Online Health Media, Consumer Digital Tools in healthcare, and Healthcare Automation

sub-sectors. Online health media are on the “pull” side – consumers are pulling in content through digital tools such

as websites and mobile apps. Employer-provisioned consumer digital tools such as Consumer Directed Benefit

accounts and Health Transparency Tools are on the “push” side: employers are pushing these tools at employees

along with increased responsibility for healthcare costs (discussed more in the next sections).

For a number of these companies, our research has uncovered latent market imbalances that in our opinion are not

yet reflected in the stock price, indicating that the stock is mispriced and creating opportunities for investors. We have

also identified future catalysts that we think will resolve the imbalance and make the stock’s value more obvious to the

stock market.

The Digital Health sector is full of rapid change and lacks the clarity of more mature areas of the stock market, making

it an ideal area for equity research to uncover value.

35


Summary of Coverage Insights S

ub

-

Secto

r

Stock Leerink Rating

Recent Close

(a)

% Beat / (Miss)

(b)

% ∆ Latest Guid.

(c)

Stock Last 90D Key Drivers Future Stock Catalysts

Stock Controversies Leerink's View

Onlin

e H

ealth M

edia

WebMD (WBMD)

Outperform (OP), Price Target $60

$38.71 0% 1% (23%) • Demographics - shift to web and mobile • Technology shock - pharma shift to specialty drugs

• Pharma brands re-index ad spending to online channels

• Future growth rate of pharma spend on online channels (6% v. 12% growth)

Pharma online ad spend growth rate increases to 12%

Everyday Health (EVDY)


12.11 2% 1% (28%) • Demographics - shift to web and mobile • Technology shock - pharma shift to specialty drugs

• Pharma brands re-index ad spending to online channels

• Future growth rate of pharma spend on online channels (6% v. 12%)

Pharma online ad spend growth rate increases to 12%

Consum

er

Dig

ital T

ools

Castlight Health (CSLT)


11.23 11% 6% (23%) • Employer risk and cost shifting • Consumer empowerment

• Employer major shift to CDHP-only at start of 2015 • Wal-Mart contract expires end of 2015

• High multiple • Future employer willingness to pay ($1 v. $7 PPPM) • ROI (adoption, price opportunities)

• Await future data about price points, sales volumes, and renewals end of '15 • Will be a challenge to get employers to pay more than $4 PPPM

WageWorks (WAGE)


51.52 (0%) 10% 21% • Employer risk and cost shifting • Consumer empowerment

• Employer major shift to CDHP-only at start of 2015 • Cadillac Tax 2018 • Impact of end of Use It or Lose It in 2015 benefits season

• Impact of public and private exchanges on new accounts • Rate of employer cost shifting (drives new CDB accounts)

• Growth of health premiums and growth of exchange memberships in 2015 will drive Consumer Directed Benefit account growth and revenue

Healthcare

Auto

matio

n

Veeva (VEEV)

Market Perform (MP), Price Target $29

27.99 9% 8% 18% • Pharma restructuring of sales • Pharma shift to distributed business model

• Company press releases and earnings releases show Vault traction through sales to pharma

• Running out of TAM - $1b or $5b? • Traction in move into R&D budget

• Size of TAM an important area of future research

Imprivata (IMPR)


12.90 5% NA NA • Healthcare reform – IT at the center • Meaningful Use, HIPAA

• Lockup expires 12/22/14 • MU1 and MU2 deadlines 2013-20

• Single sign-on now a need-to-have?

• Single sign-on now become need-to-have for CIO

Note: Source: Leerink Research and FactSet as of 10/23/14 close; NM - not meaningful; NA - not available; TAM - total addressable market

(a) Recent close as of 10/23/14.

(b) % Beat / (Miss) is revenue beat / miss of latest quarter actual versus Street consensus.

(c) % ∆ Latest Guid. is change in latest management revenue guidance for year compared with prior guidance.

36


Comparable Companies Valuation

Hist. % Street % EBIT

Latest Mkt 5-Yr Avg LT EPS Margin

($ in MM per share) Ticker Rating Close Cap. '14E '15E '16E '14E '15E '16E '14E '15E '16E NTM P/E Growth '13A

HEALTHCARE CLOUD AND EMERGING GROWTH COMPANIES

athenahealth ATHN OP 116.04$ 4,420$ NM 89.3x 70.3x 6.0x 4.9x 3.9x 32.4x 26.8x 21.4x 70.0x 20% 12%

Benefitfocus BNFT - 25.97 662 NM NM NM 4.6 3.6 2.8 NM NM NM NM 20% (26%)

Castlight Health CSLT OP 11.23 1,007 NM NM NM 19.7 10.6 6.3 NM NM NM NM NA NM

HealthStream HSTM - 29.26 807 83.6 71.4 59.7 4.1 3.4 3.1 24.5 20.7 17.4 56.6 19% 12%

Imprivata IMPR OP 12.90 306 NM NM 57.3 2.4 1.9 1.6 NM NM 25.6 NM 25% (8%)

Streamline Health STRM - 3.86 71 NM NM NM 2.7 2.3 2.1 33.8 14.4 8.2 NM 29% (20%)

Medidata Solutions MDSO - 42.52 2,297 56.3 43.2 32.8 6.2 5.1 4.2 26.3 20.0 15.0 33.0 21% 9%

Veeva Systems VEEV MP 27.99 3,634 87.2 72.5 58.1 10.9 8.7 7.0 44.0 35.9 27.9 NM 32% 24%

WageWorks WAGE OP 51.52 1,813 56.2 44.9 35.1 5.6 4.4 3.6 20.9 16.0 12.7 44.8 15% 20%

Median - - - 1,007 70.0 71.4 57.7 5.6 4.4 3.6 29.3 20.3 17.4 50.7 21% 10%

ONLINE ADVERTISING

AOL AOL - 41.86$ 3,293$ 20.6x 16.5x 14.4x 1.3x 1.2x 1.1x 6.7x 6.1x 5.5x 17.5x 13% 8%

Demand Media DMD - 7.22 133 NM 149.5 18.5 0.4 0.5 0.5 2.0 2.3 2.1 23.5 NM (5%)

Everyday Health EVDY OP 12.11 368 26.9 14.6 9.4 1.9 1.6 1.4 10.6 7.9 5.8 25.4 43% (2%)

Facebook FB - 80.04 208,108 49.1 38.9 28.9 15.8 11.8 8.8 24.0 18.0 13.8 43.3 36% 48%

Google GOOG - 543.98 367,682 21.0 17.8 15.0 5.9 5.0 4.2 11.9 10.0 8.4 19.1 16% 37%

LinkedIn LNKD - 202.62 24,904 107.2 73.9 51.4 10.4 7.8 6.0 40.3 28.4 20.7 NM 38% 3%

WebMD WBMD OP 38.71 1,515 42.1 29.0 24.7 2.9 2.6 2.3 10.9 8.8 7.9 38.9 13% 11%

Yahoo! YHOO - 42.60 42,370 27.4 37.7 34.4 9.3 9.1 9.0 31.3 31.1 30.8 21.0 (0%) 21%

Yelp YELP - 57.17 4,121 476.4 139.0 62.1 10.0 7.0 5.2 53.6 30.9 19.4 NM 64% (4%)

Median - - - - 34.7 37.7 24.7 5.9 5.0 4.2 11.9 10.0 8.4 23.5 26% 8%

INDICES

S&P 500 SP50 - 1,951 - 16.7x - - - - - - - - 13.3 - 15.5

S&P 600 Healthcare (sm cap) SP568 - 1,329 - 37.4 - - - - - - - - 19.6 - 8.2

S&P 500 Healthcare (lg cap) SP565 - 744 - 21.4 - - - - - - - - 13.2 - 13.8

NASDAQ Biotechnology 63109R10 - 2,966 - 54.8 - - - - - - - - 22.8 - 26.4

Sources: FactSet market data and consensus estimates as of close on 10/23/14; Leerink estimates for CSLT, IMPR, VEEV, WAGE, EVDY, WBMD

Fiscal years calendarized where applicable; EBITDA and EPS are non-GAAP where available

NM - not meaningful; Enterprise Value based on a market cap that includes basic shares outstanding only.

P/E (a) EV / Revenue EV / EBITDA

37


FOCUS ON ONLINE HEALTH MEDIA (WBMD, EVDY)

Consumers have a growing desire to take control of their healthcare, and increasingly they have the information, the

budget, and the tools to do so. Online health media stand on the “pull” side of consumer empowerment tools:

consumers want healthcare information to inform their healthcare decision-making and are pulling in the content

through digital tools such as websites and mobile apps. Employer-provisioned consumer digital tools such as

Consumer Directed Benefit accounts and Health Transparency Tools are on the “push” side of consumer

empowerment tools: employers and payers are pushing consumers to use the tools as they withdraw their guarantee

of unlimited “free” healthcare; those tools will be discussed in the next section, while we focus here on the former,

health media tools and companies.

In this report, we will use the term “online” to mean the combination of web and mobile.

Everyday Health and WebMD Are Leading Online Health Media Companies

Online health media companies, such as WebMD and Everyday Health, are primarily supported by advertising and

sponsorship spending by pharma and healthcare companies, and secondarily by the spending of consumer packaged

goods (CPG) brands from CPG companies like Procter & Gamble. The market for online consumer healthcare ad

spending today is about $5b and growing at over 10% per year, according to eMarketer.

Online Ad Spending by US Healthcare, Pharma, and Consumer Packaged Goods (CPG) Companies ($b)

Growing ~10% Annually

Source: eMarketer, March 2014

The above figure depicts online ad spending by US healthcare, pharma, and consumer packaged goods (CPG)

companies from 2011 to 2017E. The healthcare and pharma segment of this advertising spend is expected to grow

from $1.4b in 2014 to $2.0b in 2017 at a CAGR of 12%. The CPG segment is expected to grow from $4.0b in 2014 to

$5.3b in 2017 at a CAGR of 10%.

1.0 1.1 1.3 1.4 1.6 1.8 2.0

2.5 3.5 3.5 4.0 4.5 4.9 5.3

$3.5

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$7.3

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CPG

Healthcare &Pharma

$

38


Pharma Industry Revenue Growth Is Back on Track…

After suffering several negative shocks that squeezed marketing budgets from 2007 through the early 2010s, the pharma

industry is back on track with strong New Molecular Entities (NME) launches over the next four years and resulting pharma

industry health.

US Biopharma New Molecular Entities Launches 2010-2017E Shows Recovery

Source: IMS Institute for Healthcare Informatics, November 2013

…and Pharma Ad Spending Is Rebounding

We believe that a robust pipeline of biopharma NMEs will translate into strong ad spending in the consumer and

physician online health media markets. Pharma and healthcare online ad spending rebounded in 2013 by 17%,

according to eMarketer, after experiencing a setback in 2011-2012 as a result of turmoil surrounding the pharma

Patent Cliff.

Healthcare Marketers Will Follow Consumers Online

Consumers continue a secular behavior shift from spending their time offline to being online (web and mobile

sources). However, brand managers who advertise have often continued to spend in traditional offline media

channels even as consumers spend less time in those channels, creating a structural imbalance in the market. The

result is an “underindexing” by brand managers with respect to online channels. Eventually, however, we believe that

advertisers will have to follow consumers online and close the underindexing gap.

24

3032

35

0

5

10

15

20

25

30

35

40

2010 2011 2012 Avg. '13E-17E

39


Time Spent in Media vs. Advertising Spending (US 2013) Demonstrates a Need to Shift to Online

Source: eMarketer and Interactive Advertising Bureau as cited by Kleiner Perkins Internet Trends Report 5/28/14

The above figure depicts the percent of time spent by consumers in offline media (such as print, radio, and TV) and

the time spent in online media (such as internet and mobile) versus the percent of all advertising spending that they

receive in the US. Internet and mobile are underindexed in ad spend by advertisers by 19 percentage points:

advertising spend has not yet indexed and caught up with consumer time online, but we expect that the trend in ad

spending will continue to shift in the online direction.

For reasons discussed below, we believe that pharma brand managers tend to lag other brand managers, and that

they underindex spending to online channels by the same percent as other brand managers or more. We expect

future internet and mobile ad levels to grow as pharma, healthcare, CPG, and other advertisers increase their

allocations to those categories. The growth rate of online health media companies has suffered in the past due to this

underindexing issue, but we believe that online health media companies will benefit over the next few years from a

“catch up” period for online advertising, as the underlying imbalance is resolved.

Savvy Pharma Buyers Want Access to Mobile and Multiple Screens

Consumers are spending a growing amount of their time on mobile devices (as distinct from traditional websites). In

the crowded online health media marketspace, this represents a discontinuity in usage – publishers who succeeded

on the traditional web may not successfully migrate to mobile devices, creating market openings for new entrants.

WebMD and Everyday Health have entered the mobile market successfully with mobile apps and, in our view, are well

positioned to maintain their existing online position in mobile. But these are still the early days in the mobile health

marketspace and it is too soon to declare winners.

The Landscape for Online Healthcare Marketing Is Still Evolving

There are several complex factors at play in online advertising and sponsorship for pharmaceutical companies. While

we believe that the outlook for increased pharma online advertising and sponsorship is positive and will grow at 12%

for the next few years, based on market research that we have seen and confirmed with industry leaders who see

5%

12%

38%

25%

20%19%

10%

45%

22%

4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Print Radio TV Internet Mobile

Time Spent

Ad Spend

40


pharma spend having picked up recently, overall there are both positive and negative contributing factors. These

factors are summarized as follows:

Biopharma portfolios today have a heavier mix of targeted therapeutics and a lighter mix of primary-care

blockbuster drugs due to patent expirations. We believe that online channels are frequently better suited to

reaching specialty patient populations. For example, a pharma brand that wants to reach diabetes patients

would find an online diabetes patient community more effective than most offline channels, such as

magazines.

Online ads can be more targeted and interactive, in a way that television and print media can’t -- which

advertisers view as a positive. Another benefit of online ads is that their effectiveness can be measured more

easily than can print advertisements’. Increasingly, brand managers prefer online ads because their

effectiveness can be proven, whereas it is harder to measure and prove the effectiveness of offline ads.

The pharma industry does, however, face regulatory and legal restrictions and challenges with all of its promotions.

For this reason, pharma brand managers tend to react conservatively to marketing innovations like web and mobile ad

opportunities. This conservatism likely explains some of the underindexing problem that we highlighted above. Any

clarification or relaxation of FDA regulations on pharma online advertising and sponsorships would be a positive

catalyst for the stock of online health media, but is not expected near term.

ONLINE HEALTH INFORMATION

Consumers Are Becoming Increasingly Reliant on Online Health Information…

Consumers are increasingly turning to the internet, including websites and mobile apps, for engaging content and

answers to questions about their health. In 2012, 59% of US adults searched for health information online. These

individuals are using the internet as way to identify symptoms before meeting with a physician. A Pew Research

study from 2012 found that only 41% of these online diagnosers had their condition confirmed by a clinician. Based

on this data, we think the mounting use of online health platforms, such as WebMD’s Consumer Network Websites,

by “online diagnosers” can be viewed as a positive to payers, by preventing costly and unnecessary trips to primary

care physicians.

Internet Health Information Search Habits of US Adults

Source: Pew Research, January 2013

41


The Consumer Online Health Information Marketspace Is Becoming More Competitive

The online consumer healthcare information marketplace is large, growing, and competitive. While WebMD and

Everyday Health compete with each other and other media companies such as MayoClinic.org and Health.com, they

also compete against mass media and search engines. Consumers’ interest in searching for health content has led

many online search engines, such as AOL.com and Yahoo.com, to launch their own health channels. America’s

obsession with social media platforms, such as Facebook and Twitter, has led some health information content

providers to gravitate toward providing their content through these sites.

Relative Size of Everyday Health, WebMD, and Competitors in the Online Consumer Health Information

Market Over Time (unique visitors in millions) Shows WebMD Continuing to Lead

Source: Compete.com estimates, May 2014

This above figure depicts the relative size of competitors in the online consumer health information market over time,

as measured by unique visitors. Based on this data from Compete.com, WebMD and Everyday Health are two of the

leading consumer health information websites among the comparators we looked at.

The Emergence of Consumer-Empowered Healthcare (CEHC)

Consumers are increasingly directing spending in healthcare. The combination of high-deductible, low-premium

health plans, tax-advantaged health spending accounts, health plan choice offered by employers, consumer digital

tools, and a growing willingness of consumers to spend their own money on their healthcare is creating a powerful

new consumer-directed healthcare market. The combination of these consumer empowerment trends represents

growing market power in the hands of the healthcare consumer. Healthcare participants -- such as manufacturers,

payers, and providers that want to reach the healthcare consumer -- will have to do so through channels in the health

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42


information marketspace, and we believe WebMD is well positioned to benefit from the growing market power of

healthcare consumers.

Physicians Embracing Digital Platforms for Decision Support

Like consumers, physicians are increasingly turning online, to website and mobile sources of content, for their

professional information. Among the reasons that physicians go online, learning from healthcare professional (HCP)

content sites, such as WebMD’s Medscape and Everyday Health’s MedPage Today, is the most common. Healthcare

professional information sites reach 81% of US physicians who go online. Those physicians visited HCP sites 14.6

times during the quarter. And the average visit lasted about 5 minutes.

Percent Reach of Health Categories among Physicians 1Q2012

Health Category % Reach of Physicians Online

Average Visit per Physician

Average Minutes per Physician

HCP content (a) 81% 14.6 5.1

General health content 72% 6.5 2.9

Association 61% 4.8 6.9

Government 51% 4.7 6.3

Health social media 50% 9.7 8.0

Pharma support 47% 8.6 10.2

Pharmaceuticals 44% 3.3 3.6

Health & wellness 39% 4.9 5.1

Insurance 34% 7.0 8.9

Physician locator 33% 2.7 2.3

Medical journal 30% 3.5 4.8

Clinic 25% 7.4 9.4

Pharmacy services 18% 8.0 10.1

EMRs 4% 18.4 18.0

Source: comScore / Symphony press release, December 2012

(a) HCP – Healthcare provider

Physicians are trending toward online information sources for numerous reasons. Physicians prefer online

information thanks to its ease-of-use and immediacy. Also, Healthcare Reform and the ACA have pushed physicians

toward online information sources to ensure that decisions are complying with guidelines about treatment. Moreover,

the adoption of Electronic Health Records (EHRs) has led physicians to spend more of their workday in front of

computer screens, where online health information is easily accessible. Finally, the Physician Payments Sunshine

Act of 2010 reduced the amount of time that physicians spend with pharmaceutical company representatives. This

has, in turn, given physicians more time in their day, but has also left them with unanswered questions about

pharmaceuticals. To answer these questions, physicians are turning to online information sources, such as WebMD’s

Medscape platform.

Our MEDACorp survey confirms this trend (see below). We asked our respondents for their online and mobile habits

three years ago, today, and what they expect in another three years. There is a clear trend of increased use in online

and mobile. We found that the CAGR of usage was approximately 20% during the past three years. In the next three

years, physicians expect slower growth, at around 11% CAGR. We attribute the slowdown in growth rate to the time

constraint of the physicians’ schedules. This suggests an asymptotic growth pattern, with the time spent quickly

43


approaching the physicians’ upper limit. Despite the slowdown in growth, the importance of the online/mobile

marketplace is undeniable, and we see a strong future outlook for digital health content providers.

All Data (n=50):


3 years ago (August 2011) 4.3 3 217 -


3 years from now (August 2017) 10 8 499 11%


Without Outliers (n=48):


3 years ago (August 2011) 3.9 3 187 -


3 years from now (August 2017) 9.3 8 446 11%

Note: CAGR is calculated from August 2011, giving 3-year and 6-year annual growth rate estimates


Medscape (WebMD) Is the Leading Source of Online Information Among Physicians and Healthcare

Professionals

Medscape is the brand name of WebMD’s Public Portal targeted at physicians and healthcare professionals. WebMD

counts 625,000 active US physician users of Medscape in 2013, a substantial majority of all the physicians in the US.

The online physician health information marketspace is competitive and crowded. Medscape is the clear leader in the

market at over 2.5m unique visitors per month. Leading competitors include UpToDate.com, JAMANetwork.com (the

website for The Journal of the American Medical Association), NEJM.org (the website for The New England Journal of

Medicine), AMA-ASSN.org (the website for the American Medical Association), Doximity.com, and Sermo.com.

Medscape.com had over 2.5m unique visitors in April 2014, substantially more than its leading for-profit and non-profit

competitors.

44


Unique Visitors to Leading Websites in the Physician Health Information Market (in MM)

Source: Compete.com estimates, May 2014

In addition to reaching 625,000 US physicians, Medscape reaches more than 1.3 million physicians outside the US.

Medscape’s importance is corroborated by our MEDACorp survey. In a highly fragmented market, WBMD/Medscape

holds the leading market share of 21% among respondents.

Cutting the Cords: Professionals Are Embracing Mobile Platforms

The Epocrates 2013 Mobile Trend Report published by athenahealth (ATHN, OP) examined the use of the three

major digital platforms: computers, smartphones, and tablets. The survey found that tablet use among healthcare

providers (MDs, physician assistants, and nurse practitioners) increased from 34% in 2012 to 53% in 2013. Also,

smartphone and tablet use accounted for 40% of the time spent on digital devices at work. We expect that adoption

of mobile devices by healthcare professionals will only continue to grow. Driving the use of connected devices will be

the falling cost of tablet computers and the improving capabilities of mobile applications.

WebMD Has Captured Physicians Seeking Mobile Solutions

We believe that WebMD is well-positioned to capitalize on the use of mobile tools in clinical settings. Medscape

mobile app is one of the most downloaded apps for US physicians according to a survey of 1,400 doctors by

American EHR Partners in 2013. The Medscape app’s decision-support tools and drug/disease references help

physicians to reduce time and unnecessary steps in clinical settings.

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4

Medscape.com

UpToDate.com

JAMANetwork.com

NEJM.org

AMA-ASSN.org

Doximity.com

Sermo.com

45


POPULATION HEALTH MANAGEMENT

The Spread of Accountable Care Organizations (ACOs) Is Expected to Drive More Demand for Population

Health Management (PHM) Services

Since January 2010, the number of lives covered by ACOs has grown to 18 million. While ACOs offer many changes

compared to the traditional healthcare fee-for-service model, one of the most notable components of the ACO model

is the Shared Savings Program. This program is designed to reward ACO member institutions that reduce healthcare

costs, while meeting certain performance standards.

Number of US Lives Managed by ACOs

Source: Leavitt Partners, June 2014

With this shift toward a focus on value-based care, provider organizations are now being incentivized to engage and

manage the health of the populations they cover. As a result, the need for the PHM tools has grown along with the

spread of ACOs. Population Health Management tools allow payers and provider organizations to provide care,

including preventive care, wellness, and disease management tools to specific populations in a way that optimizes

overall health and reduces systemic cost. We believe that the ongoing growth in the number of covered lives

managed by ACOs and a need for cost containment from all payers will drive demand for PHM services such as

WebMD’s.

Private Portal/PHM Tools Will Supplement Core Business

WebMD’s Private Portal business accounted for 16% of company revenue in FY2013, and WebMD is pursuing new

agreements with payers to supply the Population Health Management (PHM) tools contained in its private portal line

46


of business to consumers. In January 2014, WebMD launched its WebMD Health Services platform, a private portal

product, for the Blue Cross Blue Shield Federal Employee Program (FEP). This program provides five million FEP

members with access to the consumer empowerment tools. Features of the platform include a personal health record

application, health coaching services, and around-the-clock access to nurses. The FEP plan is the largest contract

WebMD has secured for its WebMD Health Services platform. While we consider WebMD to be a leading provider of

private portal services and that this line of business has the potential to contribute to WebMD’s growth, it is not a

primary driver of growth for the business. In WebMD’s Annual Shareholder Meeting in October, the company

announced that it did not expect to close any more private portal deals in 2014.

FOCUS ON CONSUMER DIGITAL TOOLS FOR HEALTHCARE (WAGE, CSLT)

Consumers are increasingly being given the power of the purse in healthcare and the tools to optimize their spending.

Employer-provisioned healthcare tools such as Consumer Directed Benefit accounts, as provided by WageWorks

(WAGE) and HealthEquity (HQY), and healthcare transparency tools, as provided by Castlight (CSLT), are typically

“pushed” on consumers by payers such as employers. Payers are withdrawing their formerly generous healthcare

benefits and handing the responsibility, cost, power, and risk of healthcare spending to employees. To sweeten a

sour deal, employers are providing their employees with the tools to help employees manage their healthcare

spending well, and pressing them to adopt the tools.

A structural imbalance is building up in the Consumer Digital Tools market (consumer-directed benefit accounts and health

transparency tools): employers are shifting risk on to consumers at a fast rate, but consumers have not yet responded by

adopting Consumer Digital Tools as rapidly as employers are shifting risk. We believe that as consumers take on more of

the risk and cost of their healthcare, consumers will eventually catch up to the full use of Consumer Digital Tools, benefiting

Consumer Digital Tools companies like WageWorks and Castlight.

We further believe that the coming 2015 benefits year will be a big year: at first for employer risk shifting, and for the

provision of Consumer Digital Tools such as those offered by WageWorks and Castlight, and then later for the increased

use of the tools by consumers, driving higher-than-expected growth for Consumer Digital Tools companies.

In June 2014, the National Business Group on Health, a leading industry association of large employers, conducted a

survey of its large employer members on their health benefit design plans for the 2015 benefit year. They found that large

employers plan a major change in benefit design in 2015 that will cause major shifting of health benefit costs onto

employees. They found that, in 2015, 32% of their respondents plan to shift to offering their employees Consumer-Directed

Health Plans (CDHPs) only. A Consumer-Directed Health Plan is a high-deductible health plan paired with a tax-

advantaged Health Savings Account (HSA). Removing other health plans and offering Consumer-Directed Health Plans

only is known as the “Full Replacement” option because it replaces other HMO and PPO plan options with CDHP only.

We believe that this shift will take place and is reflective of similar shifts in other health benefit designs among large and

small employers nationwide in 2015.

47


Shift to CDHPs-Only Should Drive Purchase of Consumer Digital Tools in Healthcare

Source: National Business Group on Health Survey, August 2014.

We believe that the shift -- from 2014 to 2015 – by employers to the Full Replacement option (from 22% of large employers

surveyed to 32%, an increase of 10 percentage points and 45% growth) represents the dropping of the first shoe of a major

risk shifting by employers in 2015. The second shoe to drop will be an increase in employers provisioning Consumer Digital

Tools to employees and an increase in revenue at Consumer Digital Tools companies in 2015.

Transparency tools like those offered by Castlight are contributing to, and benefiting from, a virtuous cycle in the US

healthcare market: the cycle of consumer empowerment.

As recently as 20 years ago, information products that empowered consumers to control their healthcare and that

benefited from increased control by consumers over their healthcare, would not have received as much of a tailwind

as they do today. At that time, consumers were not expected to manage their own care or to know much about

healthcare. Products that empowered consumers were too unwieldy to use and conflicted with the prerogatives of

providers and payers. Healthcare products that relied on consumer choice could not expect a large market.

Today, however, a growing number of consumers are willing and able to take control of their healthcare decisions.

They are empowering themselves with modern digital technologies, and they are having responsibility shifted to them

by payers. Increasingly, they are spending their own dollars and making decisions differently. For the first time in the

modern age and in growing parts of the healthcare sector, the consumer, decision maker, and payer are becoming

one, with the potential finally to align incentives and end conflicts that have made the healthcare sector inefficient and

famously “broken.”

The consumer market for healthcare transparency information is new because it could not have existed in its present

form at earlier times in history, just as the market for mobile apps could not have existed before the rise of the modern

smartphone. Castlight’s consumer-facing health data transparency product relies on a cloud-based back-end running

48


big-data analytics and a user-friendly front-end delivering a complete data solution to users. In addition, Castlight’s

product would sit unused were it not for today’s increasingly empowered consumer, ready for more authority,

possessing more control over healthcare dollars, and feeling the burden of costs more acutely than ever before. As

more employers demand cost sharing from employees and more employees take charge of their healthcare,

companies like Castlight can expect growth from both empowering consumer choice and from being sought and used

by consumers.

The Consumer Empowered Healthcare (CEHC) market is the marketplace where consumers spend their own out-of-

pocket dollars, or healthcare benefit dollars that they influence and control, on healthcare goods and services. To win

these dollars, companies must offer new products and market them differently: companies must market them to

consumers directly instead of only to providers and institutional payers. In the CEHC market, consumers are the

payers as well as the end-users.

Castlight sells into a growing market of self-insured employers who are both shifting costs on to consumers and

empowering consumers to optimize their healthcare. And in turn, Castlight’s product further empowers consumers

with the ability to take charge of their care.

Tax Advantages of Consumer-Directed Benefits

Healthcare observers have long noticed a tax discrepancy in payment for healthcare. In cases where employers pay

for employee healthcare through a benefit, the cost of healthcare is counted as a business expense of the employer

and is not taxed under federal and state income tax. However, when workers are independent and purchase health

insurance or pay for healthcare, they use post-tax dollars, making healthcare more expensive when it is not provided

by employers as a benefit. Consumer-Directed Benefit (CDB) accounts allow employers to shift healthcare costs on

to employee-consumers while retaining the tax-advantaged nature of the employee’s healthcare spending so long as

it passes through a tax-qualified CDB account (such as a Health Savings Account, a Flexible Spending Account, or

Health Reimbursement Account). Thus consumers are given control of pre-tax dollars to spend on healthcare and

other expenses (such as dependent care and commuting expenses) without having to recognize those funds as

taxable income.

Consumer Directed Benefit accounts are attractive to employers because they allow employers to shift healthcare

costs onto employees while preserving a sizeable tax benefit for the employees. In addition, CDBs address one of

the fundamental inefficiencies in the US healthcare market: the misalignment between payers and consumers of

healthcare.

Historically, the healthcare marketplace has contained important misalignments among participants that have led to

inefficiencies and driven up the cost of healthcare. The central misalignment is that in healthcare, the payer, user,

and decision-maker are different parties with different interests. In most healthcare situations in the US, the payer is a

health plan sponsor (such as an insurer or self-insured employer), the decision-maker is a physician, and the user is

the patient. Patients may perceive healthcare as a “free” consumption good from which they derive an important

benefit, while payers may perceive healthcare as an expense that they are unhappily forced to deal with and from

which they derive no direct benefit.

Analogously, if employers provided a benefit of ham sandwiches for free at breakfast, lunch, and dinner, then

employees would eat more food than they otherwise would, and a lot more ham sandwiches than other selections;

and caterers would look to employers for future business. Employees would find a very different marketplace for food

49


and behave differently if they made their own choices about food with their own money, and caterers would focus

more of their time on serving the consumers directly.

In healthcare, once consumers are paying more directly for their healthcare, they become the payer and user (and

sometimes also the decision-maker) because costs have been shifted onto them by their employer, and they have a

CDB account of tax-advantaged funds from which to pay for their healthcare. The misalignments are resolved into

better alignment, and the consumer will make different decisions about what choices to make and how much

healthcare to consume.

FOCUS ON HEALTHCARE AUTOMATION (IMPR, VEEV)

Since at least the 1980s, the Fortune 500 have in general made a bet that they can boost the productivity of their

workforce through technology, including provisioning employees with computer workstations and mobile devices,

productivity software, workgroup and collaboration solutions, and systems that automate the enterprise’s core

workflows, such as processes around manufacturing, sales, marketing, customer service, finance, design, resource

planning, and more.

The healthcare sector in general, including hospital systems and pharmaceutical companies that are members of the

Fortune 500, has been a laggard in purchasing and adopting these automation technologies. The reasons are varied,

but the low demand for automation has often been rooted in factors such as how provider organizations are paid, the

need for costly customization, and the heavy regulations placed on companies serving the healthcare sector. In turn,

this lagging demand has led in the past to a vicious cycle of a limited supply of innovation and automation

technologies. Companies that have been leading suppliers of innovative technology and automation to the Fortune

500 for decades have often skipped supplying those technologies in customized form to the healthcare sector. The

healthcare sector’s homegrown technology companies, in turn, have not kept pace with the productivity innovations in

the Fortune 500.

In the last few years, major healthcare organizations, including health systems and pharmaceutical companies, have

begun to change their behavior and adopt productivity and automation technologies more rapidly, with trends like the

growth of the ACO payment model and the success of industry cloud business models in healthcare. And there are

signs that this trend will continue to grow.

Automation technology has continued to evolve, including technologies that are more attractive than ever before and

that can be readily applied to the healthcare sector, and technologies that have been fully adapted to the healthcare

sector’s needs. Analogously, in the 1990s, many less-developed countries that had underinvested in expensive

wireline telephony technologies suddenly awoke to the potential to set up wireless telephony technologies that were

not only more cost effective than traditional wireline telephony but also much more useful in allowing people to remain

connected through mobile phones at all times. Likewise automation technologies in the larger business world, such

as cloud-based workflow automation systems, have progressed and become much more useful today than in the

past, and healthcare companies have more reason than ever to adopt the technologies.

Vendor companies that provide cutting-edge automation technologies in healthcare should benefit from these trends.

In particular, we will look at sector factors affecting two such companies: Imprivata (IMPR) is automating the

workflows around clinician sign-on to hospital information systems (which helps hospitals achieve the goals of

Healthcare Reform) and the authentication management of clinicians (which helps hospitals maintain strict privacy

50


procedure around patient data). And Veeva (VEEV), which is supporting workflows in pharmaceutical and life-science

companies through next-generation cloud-based workflow automation that better serves today’s global, decentralized,

heavily-regulated pharmaceutical company in areas such as customer relationship management and content

management.

Changing Demand for Automation at Provider Organizations

Traditionally, provider organizations have been laggards to adopting automation technologies in part because of the

way that they have been paid. Under the post-WWII fee-for-service healthcare payment system, healthcare systems

were rewarded strongly for capturing more demand for healthcare (especially in the form of medical procedures), but

weakly or not at all for customer service, quality, and efficiency. As a result, provider organizations often

underinvested in automation technology.

The Affordable Care Act of 2010 introduced a new model for how providers get paid: the Accountable Care

Organization (ACO) seeks to make provider organizations accountable for the outcomes for the care that they provide

through a modified capitation payment model. Under this new model, generation of new procedures is not rewarded

but efficiency in providing care is highly rewarded, with the potential for every dollar saved through technology (like

automation systems) going straight to the bottom line. Whereas in the past, provider organizations used to grow by

generating new demand for healthcare services and hiring skilled healthcare employees to provide the care, ACOs

are incentivized to forestall demand for expensive healthcare services and automate as much of the care delivery

process as they can.

In addition, the American Recovery and Reinvestment Act of 2009 and its associated HITECH Act put information

technology at the center of healthcare, including offering CMS payment rewards for provider organizations that moved

their workflows online, such as incentivizing electronic medical records and prescription processing online through

ePrescribing. The US Department of Health and Human Services is now incentivizing providers to make Meaningful

Use of electronic medical records by means of increased Medicare reimbursements in the early years of the program

and through penalties in Medicare reimbursement in the later years of the program for laggards and non-adopters.

The result has been a large upgrade of hospital and ambulatory information systems, as provider organizations

purchase and implement the required capabilities and encourage physicians to adopt and use the systems, so as to

attest to Meaningful Use of the electronic medical records.

51


Participation of Provider Organizations in Meaningful Use Program

Source: Health Affairs Blog, October 2013.

Imprivata automates the workflows of clinicians in a hospital setting. As clinicians find that they must log into and use

information systems in order to make meaningful use of EMRs and to get their work done, a need has arisen to

automate the sign-on process in order to save clinicians’ time. Imprivata has built a market-leading Single Sign-On

(SSO) solution.

In addition, as IT is now at the center of more and more health system processes, health systems need to manage

access to those systems ever more carefully, including managing the authentication of the users of systems.

Otherwise they risk fines under HIPAA and loss of credibility with patients and partners in the event of breaches.

Health systems often feel the need to employ strong authentication systems such as 2-factor authentication (more

than just a password and often also a token such as an identity card). Health systems also need the ability to close

down an authorized account should the clinician walk away from the workstation without closing down the account.

However, on top of this, more and more clinicians need to use IT resources intensively as part of their job, and the

hospital system wants to make access to these systems by authorized people more convenient, not less convenient.

A solution to automate authentication in a clinical environment is needed, and Imprivata has stepped in with just such

an automation solution, its OneSign SSO product.

52


Changing Demand for Automation in Life Sciences

Life-sciences manufacturers, including pharmaceutical companies, have traditionally spent generously on office

productivity technology such as laptops, cell phones, office productivity software, and sales automation technologies

for their large direct sales forces, and content management systems that manage the millions of regulated documents

that they must generate, access, and store for compliance in R&D, regulatory submission and approval, and sales

and marketing activities. However, pharmaceutical companies were often viewed as technological laggards, partly

due to a highly regulated environment where technological innovation was not encouraged, and partly due to their

longtime success as profitable companies with patent-protected products and relatively high profit margins, that didn’t

feel the need to innovate in their office technologies to be competitive in the marketplace.

Traditionally, pharma companies grew by developing new mass-market blockbusters and building out beneath them a

full-sized salesforce, and they sought to meet aggressive market share targets by boosting the number of direct sales

representative feet on the ground nationwide.

Starting in the late 2000s, though, a trifecta of megatrends has led to the traditional pharma sales and marketing

model becoming unsustainable and its replacement with a leaner model demanding fewer sales reps and more

effective workflow support through IT. These megatrends have included

1) The Patent Cliff (the loss of patent protection for many of big pharma’s core primary-care drugs),

2) the changing market for drug purchases, which has led to disappointing launches for pharma’s new drugs, as

managed care organizations have gained increased purchasing power, demanded proof of value from pharma

companies, and more aggressively utilized tiering, and

3) Increasing shareholder activism and demand for leaner pharma operations to boost returns on invested capital.

Source: ZS Associates Analysis, Pink Sheet, Leerink Estimates

53


Since the early 2010s, the pharmaceutical industry has built up a new portfolio of more targeted on-patent therapies

and is not returning to the old pharma sales model. Pharma’s new portfolio of targeted therapeutics serves niche

patient populations and specialist physicians. Pharmaceutical companies have adapted by retaining fewer sales

representatives and seeking to drive productivity through sales automation.

Benefits of Cloud-Based Workflow Automation

Cloud-based workflow automation systems, such as Salesforce.com and Veeva, offer a number of benefits both to the

enterprise IT department and to the user -- benefits that have been widely remarked upon and that have led to the

growing market share of cloud-based systems among enterprises in the business world. We believe that cloud-based

workflow automation will lead to similar successes in the healthcare sector. Veeva offers cloud-based Customer

Relationship Management (CRM) and content management workflow automation systems for the life-science sector

and is one of a very few true life-science industry-specialized multi-tenant true-cloud-architecture vendors.

To the enterprise IT department, a multi-tenant cloud system offers a number of benefits, including shifting the

maintenance of enterprise server and network infrastructure from the enterprise to the cloud vendor, and the ending of

the upgrade cycle, where an enterprise IT department was responsible for purchasing and implementing software

upgrades across its enterprise system. For the user, cloud-based systems offer a number of benefits such as keeping

systems and data fully up to date without the need for synchronization, better response times for high-processing-

workload functions and searches, and a more convenient and capable collaboration environment online with

colleagues.

Automating Workflows with the iPad

The introduction of the iPad in 2010 had an important effect on field-based enterprise sales forces worldwide, now

able to carry an always-on, always-connected, always-up-to-date and convenient tablet to automate field-based

processes and help them to sell in the precious few moments that they have to connect with their prospects (in the

case of pharma reps, with the physicians in their territory). Pharmaceutical companies must track the activities of their

sales reps for sales productivity reasons and also for regulatory reasons. Typically a pharma rep visiting a physician’s

office needs to obtain a physician signature to validate that the representative met the physician, and if the pharma

rep leaves behind drug samples, the pharma rep must obtain a signature from a physician or qualified professional as

a receipt. In the past, pharma reps obtained these signatures on paper and then sent the paper back to headquarters

for processing. However, with the introduction of the iPad, signatures could be obtained quickly in the course of the

visit, and the transmitting of the data back to headquarters and the collecting and processing of it there could be

automated as well.

Veeva has gained rapid market share in the pharma commercial market for CRMs due in part to the ability of its iPad

to relieve these pain points for pharma sales forces.

Pharma Organizations Are Decentralizing and Their IT Must Follow

From World War II through the 2000s, global pharmaceutical organizations followed a modernist corporation model:

they sought to solve difficult R&D and sales problems by hiring many of the world’s most talented professionals and

building large R&D campuses and large national sales forces to achieve a competitive advantage. The modernist

54


corporate model offered the ability to increase profits by growing an organization to a large scale through successfully

commanding and controlling resources.

In more recent years, new models of corporate growth, innovation, and efficiency have evolved, and pharma

companies have adapted to them. Today, a pharmaceutical company may outsource early-stage R&D globally to

biotech companies, outsource clinical trial work to contract research organizations, outsource marketing to marketing

agencies, and outsource sales to contract sales organizations. At the same time, pharma companies have become

truly global, moving development anywhere in the world and selling everywhere in the world.

Organizational processes, such as drug development, that were once so difficult that only the world’s leading

companies -- hiring and training in-house the world’s leading talent and headquartered in the world’s most advanced

cities -- could be successful at them, have now evolved. Pharma companies have found that they can achieve more

cost-effective results by outsourcing the processes to specialized organizations with greater economies of scale or to

lower-cost parts of the world.

As pharma organizations are decentralizing, we believe that they will have a growing need to move their workflows

from client-server enterprise software systems (an older generation of software that built to the needs of centralized,

modernist enterprises), to cloud-based workflow-automation systems that can easily span many enterprises and allow

for more seamless collaboration among employees across multiple organizations. And these changing and

increasing needs will benefit companies like Veeva that are building the cloud infrastructure for the life-science

industry.

55


Acknowledgements:

Alice Avanian, CFA, Carmen Augustine, Cristina Diaz-Dickson, and Mingkai Lin of Leerink Partners Equity Research

and Rick Sullivan, intern, contributed to this report. Their contribution is greatly appreciated.

Note: MEDACorp performed this survey on behalf of a Leerink Partners analyst. The analyst in conjunction with MEDACorp

developed the questions contained in the survey.

56


APPENDIX A: DIGITAL HEALTH DEFINITIONS

Digital Health (Leerink definition): Digital Health is a convergence term used to describe the coming together of

formerly separate sectors such as the healthcare system, connected devices, and big data analytics that is enabled

by digital technology and the digitization of healthcare information. There are 6 investment themes in Digital Health,

including

Consumer Empowerment. Consumers are taking control of healthcare spending, and market participants like

payers and providers must follow them or become irrelevant.

Automation. Technologists are digitizing the components of healthcare and automating workflows, creating new

opportunities for the adaptive, and de-valuing old skills and legacy systems.

Connected Health. Patients are tearing down the walls of the healthcare system, demanding to receive care and

information when and where they need it.

Population Health. Providers are beginning to manage the wellness of a population proactively, instead of

reactively treating the sick.

Big Data. Data scientists are optimizing care with next-generation analytics applied to a growing mountain of

healthcare data.

Healthcare IT. IT systems are now at the center of providers’ plans to improve care outcomes, cut costs, and get

paid.

Digital Health is a useful term to describe a convergence phenomenon that is not well understood. However, as a

convergence term, Digital Health is also a transitional term whose use will ultimately fade away as its elements

become normalized and accepted. Ultimately, “Digital health care practices” will become just “healthcare practices.”

Digital Health companies (Rock Health definition): Health companies that build and sell technologies (or

technologies paired with services). Excludes companies that are selling a service only.

Digital Health (Paul Sonnier definition): Digital Health is the convergence of the digital and genetics revolutions with

health and healthcare with the goal of reducing inefficiencies in healthcare delivery, improving access, reducing costs,

increasing quality, and making medicine more personalized and precise.

e-Health (Wikipedia): Healthcare practice supported by electronic processes and communication. Interchangeable

terms also include health informatics, healthcare practice using the internet, and mHealth.

Health 2.0 (Health 2.0 Conference definition, from Wikipedia): The use in health care of new cloud, SaaS, mobile and

device technologies that are

Adaptable technologies that easily allow others tools and applications to link and integrate with them, primarily

through use of accessible application programming interfaces (APIs),

Focused on the user experience, incorporating the principles of user-centered design. and

Data-driven, in that they both create data and present data to the user in order to help improve decision-making.

Digital Medicine (Eric Topol definition): Digital technologies, social networking, mobile connectivity and bandwidth,

increasing computing power and the data universe converging with wireless sensors, genomics, imaging, and health

information systems to creatively destroy medicine as we know it.

Connected Health (Joe Kvedar definition): Connected health is a model for healthcare delivery that uses technology

to provide healthcare remotely. Connected health aims to maximize healthcare resources and provide increased,

57


flexible opportunities for consumers to engage with clinicians and better self-manage their care. It uses technology –

often leveraging readily available consumer technologies – to deliver patient care outside of the hospital or doctor's

office. Connected health encompasses programs in telehealth, remote care (such as home care), and disease and

lifestyle management, often leverages existing technologies such as connected devices using existing cellular

networks, and is associated with efforts to improve chronic care.

Sources: Leerink Research, Wikipedia, author websites.

58


APPENDIX B: THE LEERINK DIGITAL HEALTH EW39 INDEX AND LEERINK

RATINGS

The Leerink Digital Health EW39 Index is an equal-weighted (“EW”) collection of 39 public stocks that Leerink

Research deems to be Digital Health Pure-Play stocks. We believe that they trade primarily on the Drivers behind the

6 Digital Health Themes.

Company Name Ticker

Leerink Rating Description

1 Accretive Health ACHI NR Provides healthcare services

2 Advisory Board Co. ABCO NR Provides research and analysis to the healthcare industry

3 Allscripts Healthcare Solutions, Inc.

MDRX OP Provides software for healthcare providers

4 athenahealth, Inc. ATHN OP Provides internet-based business services for physician practices

5 Benefitfocus, Inc. BNFT NR Provides software development services to the healthcare industry

6 BioTelemetry, Inc. BEAT NR Operates as a wireless medical technology company, focusing on the delivery of health information

7 Care.com, Inc. CRCM NR Provides online services for families

8 Castlight Health, Inc.

CSLT OP Provides healthcare information technology solutions

9 Cerner Corporation CERN OP Provides healthcare information-technology solutions, healthcare devices, and related services

10 Computer Programs and Systems, Inc.

CPSI MP Provides information-management services to the healthcare industry

11 Craneware CRW-GB NR Engages in the development, licensing, and ongoing support of computer software for the healthcare industry

12 DexCom, Inc. DXCM MP Manufactures and markets medical devices and glucose monitoring systems

13 eHealth, Inc. EHTH NR Provides health insurance services

14 Everyday Health, Inc.

EVDY OP Provides online health solutions to consumers and healthcare professionals

15 HealthEquity, Inc. HQY NR Provides health insurance brokerage services

16 HealthStream, Inc. HSTM NR Provides online continuing education and training solutions.

17 Healthways, Inc. HWAY NR Provides specialized, comprehensive solutions to help people improve physical, emotional, and social well-being

18 Health Insurance Innovations

HIIQ NR Provides health insurance marketing and administration

19 Imprivata, Inc. IMPR OP Provides authentication and access management technology solutions

20 IMS Health Holdings, Inc.

IMS OP Operates as a global information and technology services company

21 Insulet Corporation PODD OP Manufactures, develops, and markets insulin infusion systems

22 Intuitive Surgical ISRG MP Designs, manufactures and markets robotic technologies

23 LifeWatch AG LIFE-CH NR Specializes in advanced telemedicine systems

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24 MedAssets, Inc. MDAS OP Provides technology-based products and services

25 Medical Transcription Billing Corp.

MTBC NR Provides medical billing and transcription services

26 Medidata Solutions, Inc.

MDSO NR Provides software clinical technology solutions

27 Merge Healthcare Incorporated

MRGE NR Develops medical imaging, information-management software

28 Nuance Communications, Inc.

NUAN NR Provides voice and language solutions for businesses and consumers

29 Omnicell, Inc. OMCL NR Provides automated solutions for hospital medication and supply management

30 Quality Systems, Inc.

QSII MP Develops computerized information processing systems

31 SHL Telemedicine Ltd

SHLTN-CH

NR Specializes in the developing and marketing of advanced personal telemedicine solutions

32 Spok Holdings, Inc. SPOK NR Provides wireless messaging, mobile voice and data, and unified communications solutions

33 Streamline Health Solutions, Inc.

STRM NR Provides healthcare information technologies and services to healthcare organizations

34 Tandem Diabetes Care, Inc.

TNDM NR Develops and manufactures medical devices for the treatment of diabetes

35 Veeva Systems, Inc.

VEEV MP Provides industry-specific, cloud-based software solutions for the life-sciences industry

36 Vocera Communications, Inc.

VCRA MP Provides wireless communication services

37 WageWorks, Inc. WAGE OP Provides pre-tax benefits to employers and employees

38 WebMD Health Corp.

WBMD OP Provides health information services

39 Weight Watchers International, Inc.

WTW NR Provides weight management services

Source: Leerink Research and FactSet.

Note: OP – Outperform; MP – Market Perform; UP – Underperform; NR – not rated.

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Company Ticker Category Company Description

23andMe - Big Data Analytics 23andMe, Inc. is a personal genetics company that provides genetic information through

DNA analysis technologies and web-based interactive tools. Its Peronsal Genome Service

enables individuals to gain insights into their ancestry and inherited traits.

ABILITY Network Healthcare Automation - Provider Healthcare information technology company that enables physicians and hospitals to

connect securely via the internet to Medicare, other payors, and each other in order to help

process claims and exchange clinical information. It provides a broad suite of innovative

workflow tools to help manage the administrative complexities of healthcare. The firm

offers its products and services to hospitals, healthcare agencies, hospices, skilled nursing

facilities, and other healthcare providers.

About.Com - Consumer Empowerment - Online Media Provides internet news, information, entertainment services and web sites grouped into

channels such as arts, hobbies, shopping and sports.

Access Mediquip - Population Health The company works with thousands of payers, manufacturers and providers to manage the

acquisition, financing, delivery and reimbursement of implantable medical devices such as

orthopedic and spinal implants.

Accolade Population Health Engages in the provision of professional health assistant services. Accolade Personal

Health Assistants are able to engage individuals as they navigate the world of healthcare

and health benefits, and address the emotional, financial, social, and logistical

considerations that surround each stage of decision-making.

Accretive Health ACHI Healthcare IT Healthcare company, which also provides services that help healthcare providers generate

sustainable improvements in their operating margins and healthcare quality while also

enhancing patient, physician and staff satisfaction across its three offerings: Revenue

Cycle Management, Quality and Total Cost of Care, and Physician Advisory Services.

Act.MD

Population Health

Builds web and mobile applications to transform how patients, their families, and all their

medical providers work together to deliver life-saving care.

Activate Networks Big Data Analytics Applies unique, highly validated, and fully functional technology to map, analyze and

activate social networks across a broad range of constituencies: consumers, patients,

health plan members, physicians, hospitals, etc. The technology can work with nearly any

type of data that allows connections among individuals, groups, or institutions. Maps

networks, whether existing or created, using and integrating single or multiple data sources:

Adreima - Healthcare IT Based on the belief that maximum reimbursement can best be achieved through full

integration of the technical, clinical, and legal aspects of claims management, the company

has developed a family of services to help hospitals convert receivables to cash. These

services include Receivables Management, Post Payment Review, Denials Management,

Eligibility Services and Clinical Auditing.

Advanced Practice

Strategies (APS)

Healthcare Automation - Provider Provides medical risk management services. The firm offers services to medical

professionals, legal teams, and risk management organizations. It provides e-learning

solutions for providers and payers seeking to increase patient safety and better manage

liability exposure in high-risk areas. The company also provides litigation support services

to providers, leveraging its medical illustration expertise to develop visual strategies that

educate the jury in complex medical and technical matters.

AdvancedMD ADP Consumer Empowerment - Benefits

Healthcare IT

Provides business outsourcing solutions. The company operates through three business

segments: Employer Services, Professional Employer Organization Services and Dealer

Services.

Advisory Board ABCO Big Data Analytics Global research, consulting and technology company. Provides research & analysis,

business intelligence & software tools and management & advisory services to the health

care and education industries.

Aethon - Healthcare Automation - Provider Global research, consulting and technology company. Provides research & analysis,

business intelligence & software tools and management & advisory services to the health

care and education industries.

Aetna AET Consumer Empowerment - Benefits

Big Data Analytics

Operates as health care benefits providing company. Offers traditional, voluntary and

consumer-directed health insurance products and related services, including medical,

pharmacy, dental, behavioral health, group life and disability plans, medical management

capabilities, medicaid health care management services and health information exchange

technology services. The company operates thrrough three segments: Health Care, Group

Insurance and Large Case Pensions segment.

Airstrip Technologies - Connected Health - General Airstrip Technologies, Inc. provides mobile medical software applications. It offers a

complete, vendor and data source-agnostic enterprise-wide clinical mobility solution, which

enables clinicians to improve the health of individuals and populations and with deep clinical

expertise and strong roots in mobile technology and data integration, the firm is

empowering leading health systems globally as the industry continues to evolve at a rapid

pace.

Akili Interactive Labs - Population Health Develops therapeutic mobile video games. It is pioneering a new approach to cognitive

health, by combining cutting-edge neuroscience with high-quality immersive gaming.

Aledade - Healthcare IT Helps Primary Care Physicians to form inexpensive Accountable Care Organizations.

Offers primary care doctors complete package of resources, services and technology

needed to establish the ACO with no upfront costs.

APPENDIX C: LEERINK DIGITAL HEALTH LANDSCAPE (TABULAR FORMAT)

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Alere ALR Connected Health - Reimbursed

Population Health

Develops, manufactures and markets consumer and professional medical diagnostic

products. Also offers broad array of health information solutions that increase access to

critical health data, provide clinical decision support and facilitate more comprehensive

performance reporting and analysis.

AllScripts MDRX Healthcare IT Provides clinical, financial, connectivity and information solutions and related professional

services to hospitals, physicians and post-acute organizations, such as nursing homes.

Company segments: software delivery, services delivery, client support, pathway solutions

and information technology outsourcing.

AmazingCharts - Healthcare IT AmazingCharts.com LLC is engaged in the development of electronic health records

management software solutions. The firm's solution areas encompass appointment

scheduling, document management, instant messaging, optional integrated billing,

templates, and data charting and reporting. It also offers credit card processing, financial

planning, information technology support, and systems maintenance services.

American Well - Connected Health - Reimbursed American Well Corp. provides on-line healthcare services. The firm uses web

communications and digital telephony that offers services to the home setting. The

company was founded in 2006 by Ido Schoenberg and Roy Schoenberg and is

headquartered in Boston, MA

Analyte Health - Healthcare Automation - Provider Analyte Health, Inc. provides online healthcare services and specializes on sexual health.

The company’s online clinic enables users to chat live with an Analyte nurse, select a panel

of tests, and get an authorization from an Analyte physician.

Aon Hewitt - Consumer Empowerment - General Provides management consulting services, specializing in human resource consulting and

compensation or benefits planning. Actuarial consulting. Terms are on a fee basis.

Apple AAPL Connected Health - General

Big Data Analytics

Designs, manufactures, and markets mobile communication and media devices, personal

computers, portable digital music players, and sells a variety of related software, services,

peripherals, networking solutions, and third-party digital content and applications.

Aprima - Healthcare IT Aprima Medical Software, Inc. develops innovative electronic health record, practice

management and revenue cycle management solutions for medical practices.

Arcadia Solutions Big Data Analytics Engages in the provision of healthcare consulting services. The firm specializes in the

development of healthcare management and payment processing platforms, with focus on

the enhancement of the health information technology and healthcare transformation

sector. Its service areas encompass accountable care solutions, strategy and business

consulting, electronic health records management, data analytics and reporting,

infrastructure, information security, and managed services.

athenahealth ATHN Healthcare IT Provides internet based business services for physician practices

Aver Informatics Big Data Analytics Builds easy-to-use data management tools designed to improve operational efficiencies

throughout the healthcare industry, resulting in increased revenue for payers and providers,

and improved quality outcomes for patients.

Aviacode - Healthcare IT The firm's cloud-delivered coding applications, ProCoder and ProAuditor, enable

professional medical coders and coding auditors to create consistent, reliable and

predictable coding results and document reviews. Its proprietary technology and workflow

improves the accuracy and efficiency of medical coding, which is the process of translating

clinical documentation into diagnosis and procedure codes, which is at the heart of

healthcare revenue cycle. These improvements impact hospitals and physician groups

profoundly through improved efficiency, increased revenue and strengthened cash flow.

Awarepoint - Healthcare Automation - Provider Awarepoint Corp. delivers cloud-based real-time location systems. It enables predictive

workflows to better manage assets, patients, and personnel across the enterprise, the

aware 360°Suite allows administrators and care providers to advance the quality,

efficiency, experience, and economics of care. The firm also delivers non-intrusive, rapid-

time-to-impact implementations that go-live in 30-60 days, with room- and bay-level

accuracy and guaranteed interaction detection.

BenefitFocus BNFT Consumer Empowerment - Benefits Provides cloud-based benefits software solutions for consumers, employers, insurance

carriers and brokers delivered under a software-as-a-service (Saas) model. Operates two

segments: Employer and Carrier.

BENU - Consumer Empowerment - Benefits BENU, Inc. provides integrated health benefit solutions. It offers products that include

SyncHR, a cloud based platform that combines human resources, benefits and payroll;

ClearBenefits, a cloud based benefits administration software; ClearCOBRA, a unified

platform for managing eligibility, enrollment and administration and; SuiteSpot, a private

healthcare exchange built for brokers to deliver a better healthcare solution to their clients.

The firm's clients include large and mid-sized employers.

Best Doctors - Connected Health - Reimbursed Best Doctors, Inc. engages in the provision of medical consultation services and insurance

programs. Its services include InterConsultation medical reviews, Ask the Expert advisory

services, Find a Best Doctor physician search assistance, and Explore My Options

treatment decision support.

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BioTelemetry BEAT Connected Health - Reimbursed Operates as a wireless medical technology company, which focuses on the delivery of

health information. Provides cardiac monitoring services, original equipment manufacturing

with primary focus on cardiac monitoring devices and centralized cardiac core laboratory

services. Three segments: Patient Services, Product and Research Services.

BodyMedia Connected Health - General Develops, markets and sells body monitoring products and applications. It offers wearable

body monitors that record and transmit physiological data utilized in observing health and

wellness conditions particularly weight management.

Boston Scientific BSX Connected Health - Reimbursed Developes, manufactures and markets medical devices that are used in a broad range of

interventional medical specialties. The company's products and technologies are used to

diagnose or treat a wide range of medical conditions.

Brightree - Healthcare IT Brightree LLC is a holding company engaged in the development and provision of business

management software solutions to clients in the healthcare industry. It offers tools and

program suites for billing, document management, inventory, integrated ePuchasing, and

business analytics.

Bswift - Healthcare Automation - Payer Provides home health care services (100%). Terms are contractual basis. Sells to

commercial concerns.

Care.com CRCM Consumer Empowerment - General Operates as an online care destination, which enables people to connect to family care

services.

CareCloud - Healthcare IT CareCloud Corp. provides cloud-based practice management, electronic health record and

medical billing software and services. The company's products are connecting physicians

to their patients and each other through a fully integrated digital healthcare ecosystem that

can be accessed on any browser or device. It serves the healthcare industry and

physicians.

CareCore Big Data Analytics Provides diagnostic imaging management services. Its solutions include cardiology,

oncology, sleep benefits management, radiation therapy, and pain management solutions.

Casenet Population Health Provides innovative care management software solutions and services. Its solutions are

case management disease management, utilization management, home and community

services and transportation. It centers on the individual receiving care and the discipline of

team-based care management.

Castlight CSLT Consumer Empowerment - Health Transparency Provides healthcare information technology solutions. Cloud applications allow customers

to conquer the complexity of the existing health care system by providing personalized,

actionable information to their employees, implementing technology-enabled benefit

designs and integrating disparate systems and applications.

Cegedim CGM-FRHealthcare Automation - Pharma Engaged in collecting, processing, and distributing data and services related to medical

information. Provides services, technological tools, software, information flow and data

management services. Offers services to the healthcare industries, life sciences

companies, healthcare professionals and insurance companies.

Ceridian - Consumer Empowerment - Benefits Provides computer processing, human resources and workforce management support

services. Specializes in payroll processing & tax services, employee benefits

administration, corporate wellness & employee assistance, employee retention, and

recruitment services.

Cerner CERN Healthcare IT Designs, develops, markets, installs, hosts and supports health care information

technology, health care devices, hardware and content solutions for health care

organizations and consumers. It also provides a wide range of value-added services,

including implementation and training, remote hosting, operational management services,

revenue cycle services, support and maintenance, health care data analysis, clinical

process optimization, transaction processing, employer health centers, employee wellness

programs and third party administrator services for employer-based health plans.

Change Healthcare

Corp.

- Consumer Empowerment - Health Transparency Change Healthcare Corp. is a holding company, which is engaged in the provision of

healthcare cost transparency solutions for customers to purchase healthcare services. It

offers an engagement platform solution that provides healthcare cost and data, and a

channel for consumers to make decisions for themselves and their families on pharmacy,

medical, and dental purchases.

ClearCost - Consumer Empowerment - Health Transparency Offers an online solution that allows patients to compare medical services and prescription

drugs in order to make informed decisions and me smarter shoppers for health care.

Cogent HMG - Healthcare Automation - Provider Cogent HMG, Inc. provides healthcare services and operates hospitals. It offers hospitalist

solutions that include physician staffing, practice management, case management,

program management, quality improvement, standardized care, recruiting, training and

mentoring, communication and reporting, and marketing services. The company also offers

intensivist solutions for critically ill medical and surgical patients being treated at hospitals'

intensive care units.

Cogito Health - Population Health Cogito Dialog helps people interact better on the phone by giving them real-time

visualization of how they and the customer sound as they are speaking. Cogito Dialog

facilitates the detection of physical and behavioral health problems.

Computer Programs

and Systems

CPSI Healthcare IT Operates as a healthcare technology company that designs, develops, markets, installs

and supports computerized information technology systems to meet the unique demands of

small and midsize hospitals.

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Connance - Healthcare IT Connance, Inc. provides healthcare services. It products include Conn Connance

Outsourcing, Connance Self-Pay, Connance Charity and Connance denials. It is an

opportunity to get more from their revenue cycle. Every day Connance solutions help

hospitals, physician groups and third-party revenue cycle partners lower costs and increase

productivity. Connance revenue cycle productivity solutions combine predictive analytics

and insights from hundreds of clinical settings with a user-driven technology platform to

improve denial processes, raise performance of outsourced operations and transform self-

pay and charity activities.

Connecture - Consumer Empowerment - Benefits Connecture Inc. provides web-based sales and service automation solutions to the health

insurance industry. It has automated elements of the insurance sales and service process.

It offers an end-to-end business process transaction platform consisting of focused

modular applications that fully integrate with existing systems.

CoPatient Consumer Empowerment - Digital Tools: Benefits Advocates find errors on your medical bills and appeal insurance denials. Our years of

medical billing experience, combined with the condition-and procedure-specific expertise of

our dedicated team of advocates, are consumers’ secret weapon against ever-increasing

out-of-pocket medical expenses.

Craneware CRW-GBHealthcare IT Engages in the development, licensing and ongoing support of computer software for the

healthcare industry. The company's software-as-a-service solutions help hospitals and

other healthcare providers more effectively price, charge, code and retain earned revenue

for patient care services and supplies.

CUE.ME - Connected Health - General Provides device that analyzes samples of saliva, blood or nostril swabs to test levels of

vitamin D, inflammation, influenza, testosterone and fertility. Also provides smartphone app

that includes interactive charts as well as food and activity logging to help track health

trends.

Curaspan Healthcare Automation - Provider Builds secure patient-transition networks for hospitals, post-acute providers and suppliers

to optimize patient care.

Curoverse - Big Data Analytics Curoverse, Inc. develops an open-source platform to manage big genomic data. It focuses

on increasing productivity and lowering costs for storing, organizing, analyzing and sharing

the multitudes of new data created by next generation sequencing. Its open-source

software technology designed to enable genomics researchers to make discoveries faster

and for their findings to be used in patient care.

CVS CVS Consumer Empowerment - General Integrated pharmacy health care provider. Operates three business segments: Pharmacy

Services, Retail Pharmacy and Corporate.

Decision Resources

Group

- Big Data Analytics Decision Resources Group is a research firm located in Waltham, Massachusetts. The firm

is a subsidiary of Piramal Healthcare Ltd. They provide market research publications,

advisory and consulting services for pharmaceutical companies, managed care

organizations and medical device manufacturers. Decision Resources Group's research

focuses exclusively on the healthcare sector. They follow the following therapeutic areas:

cancer, cardiovascular, central nervous system, infectious disease, immune/inflammatory,

metabolic disorders, pain management, respiratory disorders, genitourinary,

gastrointestinal and other high-interest diseases.

Demand Media DMD Consumer Empowerment - Online Media Diversified digital content & media and domain name services company. Its business is

focused on an Internet-based model for the professional creation of content, and is

comprised of two service offerings, Content & Media and Registrar.

Dexcom DXCM Connected Health - Reimbursed Medical device manufacturing company focused on the design, development and

commercialization of continuous glucose monitoring systems for ambulatory use by people

with diabetes and for use by healthcare providers in the hospital for the treatment of both

diabetic and non-diabetic patients.

Dovetail Health Population Health Provides enterprise-class solutions that support the process of banking payments.

Doximity - Consumer Empowerment - Physician Community Doximity, Inc. operates an online professional physician network with the United States

physicians as members. The company provides a HIPAA-secure communication platform

for doctors to connect and collaborate with their peers online and with smartphone

applications for iPhone and Android devices. It enables physicians to connect with

physicians to collaborate on patient treatment or identify the appropriate expert for patient

referrals.

DrFirst - Healthcare IT Offers software solutions and services that provide real-time access to patient data,

improve communication and collaboration at the point of care and across the patient's circle

of caregivers, and enhance the doctor's clinical view of the patient to help drive better

health outcomes.

eClinicalWorks - Healthcare IT eClinicalWorks LLC is engaged in the provision of electronic health records and practice

management services.

eHealth Technologies EHTH Consumer Empowerment - General Offers Internet-based health insurance agency services for individuals, families and small

businesses. Also offers online sponsorships and advertising and technology licensing. The

company's ecommerce platform enables individuals, families and small businesses to

research, analyze, compare and purchase health insurance products.

Eliza Corp. - Population Health Eliza Corp. provides health engagement management, blending technology,

communication solutions, and data analytics. Its services include interaction design,

analytics/consulting, and social media.

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EMC Corp. EMC Big Data Analytics Information technology company, which develops, delivers and supports a range of

information infrastructure and virtual infrastructure technologies, solutions and services. It

enables businesses and service providers to transform their operations and deliver

information technology as a service. The company conducts its business through three

broad categories: EMC Information Infrastructure, Pivotal and VMware Virtual

Infrastructure.

Emdeon - Healthcare IT Provides revenue and payment cycle management and clinical information exchange

solutions connecting payers, providers and patients. Its product and service offerings

integrate and automate business and administrative functions of payer and provider

customers.

eMDs - Healthcare IT e-MDs, Inc. develops healthcare software solutions. It is engaged in providing clinical &

financial information management software for physician practices and groups. The

company offers applications for electronic medical charts & records, billing, scheduling,

practice management and document management.

Envision EVHC Healthcare IT Offers an array of healthcare-related services to consumers, hospitals, healthcare systems,

health plans and local, state and national government entities. Provices and manages

community-based medical transportation services.

Epic - Healthcare IT Epic Systems Corp. develops healthcare information systems. It offers inpatient clinical,

electronic medical record, portable clinical information, core specialty support, operating

room management, ICU/acute care support, and inpatient pharmacy services. The

company also provides implementation, process engineering, training, optimization,

architecture, and content services.

Epson - Connected Health - General Developes, manufactures and sells information equipment as well as device and precision

products.

eVariant Big Data Analytics Operates as an software-as-a-service company serving the healthcare provider market. It

combines digital marketing solutions, big data and analytics into a unified platform and this

allows healthcare organizations to identify opportunities, measure marketing campaigns

against reportable ROI and improve patient, physician and employer engagement.

Everyday Health EVDY Consumer Empowerment - Online Media Provides digital health and wellness solutions. It also provides consumers, healthcare

professionals and brands with content and advertising-based services across a broad

portfolio of websites that span the health spectrum.

Evolent Health - Population Health Evolent Health, Inc. provides transformation solutions to health systems. It covers the full

spectrum of health system needs as they develop their value-based care strategies. The

firm is integrated platform for population and health plan management to health systems.

Evolent integrates the technology, tools and team needed to advance value-based care

delivery and innovative payment models.

Explorys - Population Health Explorys, Inc. provides a cloud-computing platform specialized for the healthcare industry.

It allows healthcare systems to aggregate, analyze, manage, and research data online. Its

data platform collects and standardizes electronic healthcare data from disparate source

systems, patients, diagnoses, lab tests, medications, devices, and outcomes.

FitBit - Connected Health - General Fitbit, Inc. is engaged in the development of wearable device which tracks data of an

individual's health. It offersproducts which can track a person's activities, such as calories

burned, sleep quality, steps, and distance. The data collected allows an individual to

monitor their progress towards their own personal goals.

Flatiron Health - Big Data Analytics Flatiron Health, Inc. is a health care technology company. Its OncologyCloud platform

allows cancer centers, physicians and life science companies to gain unprecedented and

actionable insights from clinical, practice management and billing data. The firm's software

platform accelerates personalized medicine and research by applying advanced analytics

to electronic patient care data documented by physicians. The company also offers

OncoAnalytics, a platform that provides actionable business intelligence around population

stats, reimbursement, treatment patterns, resource utilization, and other key performance

indicators for cancer care providers.

Gaffey Healthcare - Healthcare IT GAFFEY Healthcare is a holding company, which engages in the practice management

and medical billing solutions. It offers end to end revenue cycle solutions from Patient

Access/Eligibility through Billing and Claims Management, Collections - all the way to

Payment Verification and Integrity. All the components of its software are tied together

through its workflow and business Intelligence platform HTSG AlphaCollector.

Garmin GRMN Connected Health - General Provides navigation, communication, and information devices and application that are

enabled by global positioning system technology. The company operates through the five

segments: Automotive and Mobile, Aviation, Marine, Outdoor and Fitness.

GEHealthcare - Healthcare IT Develops and manufactures products for the generation, transmission, distribution, control

and utilization of electricity; manufactures aircraft engines and medical equipment

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GetWellNetwork - Consumer Empowerment - General GetWellNetwork, Inc. provides patient care solutions. It is a provider of interactive patient

care solutions serving hospitals and health care organizations throughout the United

States. The firm has developed an innovative care model with patient engagement as a

core strategy for performance improvement. GetWellNetwork’s interactive patient care

(IPC) combines the tools, process and people to activate patients in their care, transform

clinical practice and advance key performance measures.

Ginger I/O - Big Data Analytics Provides iPhone and Android apps that collect health information from individuals and

shares data with healthcare providers.

GNS Healthcare Big Data Analytics Engages in the provision of analytics solutions for the healthcare industry. Its technology

extracts the knowledge embedded in the vast amounts of patient data being generated by

electronic health records, insurance claims, clinical trials, and other sources. It offers

custom analytics to solve specific problems for health care companies and

biopharmaceutical firms, and are rapidly developing new products that will answer

questions and provide guidance to insurers, hospitals and drug makers.

Google GOOG Connected Health - General

Big Data Analytics

Focuses on search, advertising, operating systems, platforms, enterprise and hardware

products.

Grand Rounds - Connected Health - Reimbursed Grand Rounds Outcomes Management online platform focuses on the most complicated

and expensive conditions in order to deliver the best possible outcome for employees at the

lowest possible cost. The platform facilitates specialist office visits and expert opinions

through "virtual clinic" as well as real-time physician-to-physician consultation for patients

facing life-threatening/complex conditions while in the hospital.

Greenway GWYT Healthcare IT Engages in developing and exploiting green energy technologies.

hCentive - Healthcare Automation - Payer hCentive's WebInsure Exchange Manager allows insurers to rack and manage

applications, plans and members with an easy-to-use interface. Insurers will be able to

manage queues and members, track applications and correspondance and showcase

health plans on different State Exchanges.

Health Catalyst - Big Data Analytics Health Catalyst LLC engages in the development of healthcare data warehousing and

process improvement solutions for healthcare organizations and health systems. Its

software application and processes manages operational, financial, clinical, and research

data of hospitals and healthcare facilitis. The firm's product, Late-Binding Data Warehouse

is an architectural model for analytics in healthcare, which avoids the pitfalls of early binding

architectures.

Health Insurance

Innovations

HIIQ Consumer Empowerment - General Provides affordable, web-based individual health insurance plans and ancillary proucts. It is

engaged in the sale of 12-month short-term medical (STM) insurance plans as an

alternative to traditional individual major medical (IMM) plans.

Healthcare BlueBook - Consumer Empowerment - Health Transparency Helps consumers save on healthcare expenses while helping Fair Price providers attract

cost-conscious consumers. Once consumers what healthcare services should cost, they

can find providers that offer the best value.

HealthcareSource Healthcare Automation - Provider Develops talent management software for the healthcare industry. The HealthcareSource

Quality Talent SuiteSM helps healthcare organizations acquire, develop and retain the best

workforce possible in order to improve the patient and resident experience. The firm's cloud-

based talent management solutions include applicant tracking, behavioral assessments,

reference checking, employee performance, compensation, competency and learning

management, and eLearning courseware.

HealthEdge - Consumer Empowerment - Benefits HealthEdge Software, Inc. designs and provides software applications for healthcare

payors. It provides modern, disruptive technology that delivers for the first time, a suite of

products that enables healthcare payors to leverage new business models, improve

outcomes, drastically reduce administrative costs and connect everyone in the healthcare

delivery cycle. The firm’s next-generation enterprise product suite, HealthRules is built on

modern, patented technology and is delivered to customers via the HealthEdge Cloud or on-

site deployment.

HealthEquity HQY Consumer Empowerment - Benefits Offers a full range of solutions for managing health care accounts (health savings

accounts, health reimbursement arrangements, and flexible spending accounts) for health

plans, insurance companies, and third-party administrators. Its platform provides an

ecosystem where consumers can access their tax-advantaged healthcare savings,

compare treatment options and pricing, evaluate and pay healthcare bills, receive

personalized benefit and clinical information, earn wellness incentives, and make educated

investment choices to grow their tax-advantaged healthcare savings.

HealthFleet - Population Health Cloud computing company dedicated to the design and delivery of healthcare applications,

services and facilitating technologies. Solution is open platform, specifically crafted to

bridge the technology gap between healthcare payers, providers and patiens to lessen the

collective burden of chronic care.

HealthGrades - Consumer Empowerment - Online Media Cloud computing company dedicated to the design and delivery of healthcare applications,

services and facilitating technologies. Solution is open platform, specifically crafted to

bridge the technology gap between healthcare payers, providers and patiens to lessen the

collective burden of chronic care.

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Healthland - Healthcare IT The company makes its business to understand the rural healthcare environment, including

the unique needs, barriers, and financial considerations these hospitals face. With this

awareness, they develop highly functional, cost effective information systems while

providing superior customer service and support. As they further advance their capabilities,

they continue to help their customers deliver high-quality care to their patients and

communities.

Healthline Networks Consumer Empowerment - Online Media &

Community

Provides internet-based intelligent health search, advertising and content services which

enabling providers and everyday people to make more confident, informed healthcare

decisions. The company's proprietary health taxonomy platform powers a suite of

marketing, health search, data-mining and content solutions for global enterprises and

advertisers.

HealthSparq - Consumer Empowerment - Health Transparency HealthSparq™ develops healthcare transparency software solutions for health plans and

employers to offer to their members and employees. HealthSparq's integrated healthcare

transparency solutions for information sharing and decision-making work by leveraging

claims-based treatment timelines, costs and treatment data linked together with consumer

reviews and community discussions. The result turns patients into informed healthcare

shoppers, allowing them to seek out better care, make smarter choices and save money.

HealthStream HSTM Healthcare Automation - Provider Provides Internet-based learning and research solutions for healthcare organizations all

designed to assess and develop the people that deliver patient care which, in turn, supports

the improvement of business and clinical outcomes. It primarily provides services to

healthcare organizations and other members within the healthcare industry.

Healthways HWAY Population Health Provides specialized, comprehensive solutions to help people improve physical, emotional

and social well-being, reducing both direct healthcare costs and associated costs from the

loss of employee productivity.

HealthWyse Healthcare IT Delivered through a hosted data center with end-to-end managed services, its software is

designed to address the everyday challenges. HealthWyse focuses specifically in software

for home health, hospice and private duty, which allows delivering a progressive yet refined

solution that is proven to help agencies succeed.

HMS Holding Corp HMSY Healthcare IT Provides revenue enhancement and recovery services. It provides cost tontainment

services to government and private healthcare payers and sponsors.

Human Care

Systems

Population Health

Provides unique, personalized patient experiences using proven behavioral interveitions.

Offers complete patient family and support solutions to initiate and manage complex

diseases, conditions and therapies. Designs multi-channel patient experiences using

phone, web, mobile and printed materials to engage patients and families.

Humedica, Inc. - Big Data Analytics Humedica, Inc. offers software-as-a-services (SaaS) business solutions to the health care

industry. It aims to address the specific needs of inpatient and outpatient health care

providers, pharmaceutical and biotechnology firms, medical device manufacturers,

government agencies, and financial services firms.

Iatric Systems Healthcare IT Engages in the development of software applications, interfaces, and reporting solutions for

healthcare information systems. Its roducts and services focus on data, systems, and

process integration.

IBM IBM Big Data Analytics Information technology company, which provides integrated solutions that leverage

information technology and knowledge of business processes.

IC Sciences - Population Health Provides smartphone apps that connect to a wide range of blood pressure, prostate and

cardiac monitoring devices and allow for manual data entry to collect health information

from individuals and shares data with healthcare providers. Apps also include interactive

charts as well as medication logging and a personalized Dashboard to manage user health

on any computer.

IHM Services

Company

EMC Big Data Analytics Provides solutions that transform healthcare data into actionable information. It offers SaaS-

based analytics software that allows hospitals and healthcare providers to utilize business

intelligence to improve the quality of patient care and better enable them to compete in the

changing world of health reform. The company's solutions include meaningful use, quality

alert, infection alert and automated indicator extraction systems.

ikaSystems Healthcare Automation - Payer Engages in the development of enterprise-level cloud computing technologies to support

healthcare payers' commercial, Medicare and Medicaid lines of business. Its flagship

product, ikaEnterprise, automates all key processes in the payer business cycle, from

marketing and sales through claims administration and customer service to care and

quality management and business intelligence, all on a single integrated platform.

Imprivata IMPR Healthcare Automation - Provider Provides authentication and access management technology solutions for the healthcare

industry. Its solutions save clinicians time to focus on patient care, increase their

productivity and satisfaction, and help healthcare organizations comply with privacy and

security regulations.

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IMS Health IMS Big Data Analytics Operates as a global information and technology services company. Provides clients in the

healthcare industry with comprehensive solutions to measure and improve their

performance. The company standardizes, organizes, structures and integrates this data by

applying its sophisticated analytics and leveraging its global technology infrastructure to

help its clients run their organizations more efficiently and make better decisions.

InCrowd - Healthcare Automation - Pharma InCrowd, Inc. provides a real-time research platform for the life sciences industry. Its

crowdsourcing platform provides results within minutes to marketing professionals who

need fast answers to critical questions.

Inside Tracker - Consumer Empowerment - General Segterra, Inc. engages in the development and marketing of a health and fitness analytics

platform. It offers InsideTracker, which tracks and analyzes key biochemical and

physiological markers and applies sophisticated algorithms and scientific databases to

determine personalized optimal zones for each marker. The InsideTracker system offers

science-driven nutrition and lifestyle interventions. The service is geared towards

triathletes, marathoners and other endurance athletes, as well as those just interested in

better nutrition and maintaining a healthy weight.

Insulet PODD Connected Health - Reimbursed Engages in the development, manufacture and marketing of an insulin infusion system for

people with insulin-dependent diabetes.

Intel INTC Connected Health - General Designs, manufactures and sells computer components and related products. Also

engages in the designing and manufacturing of computing and communication

components. Also develops platforms, which it defines as integrated suites of digital

computing technologies designed and configured to work together to provide an optimized

user computer solution.

InTouch Health - Connected Health - General InTouch Technologies, Inc. develops and markets remote presence telemedicine solutions.

It provides telemedicine solutions for high-acuity applications where doctors are required to

take immediate clinical action. The InTouch Telemedicine System is the industry's only fully

integrated end-to-end solution encompassing clinical data management, medical imaging,

24/7 technical support, clinical consulting services and the SureConnect cloud-based

infrastructure. By removing time and distance barriers, this System effectively enables

physicians to perform real-time consults with hospital patients through a host of purpose-

built telemedicine devices.

IntraLign - Big Data Analytics Intralign Health, Inc. provides specialty healthcare services to hospitals and health

systems. Its orthopedic solutions provide data-driven efficiency tools, care-centered design

processes and clinical support services to healthcare providers, enabling them to better

control both the economics and quality of major joint replacements. Its services include

Intra-Operative Support, Intelligent CareDesign, and Advanced Analytics.

Intuitive Surgical ISRG Healthcare Automation - Provider Develops, manufactures and markets da Vinci Surgical Systems and related instruments &

accessories for minimally invasive surgery. Also develops and manufactures robotic

technologies designed to improve clinical outcomes and help patients return more quickly

to active and productive lives.

Iora Health - Population Health Iora Health, Inc. engages in the provision of healthcare services. It has completely

redesigned primary care to help patients better manage their health and navigate the health

care system. Every patient gets personal physician as well as a personal health coach who

stays in close contact during and between office visits, both of whom are available by

email, text, or video in addition to in-person visits. In addition, it provides educational

offerings, including group visits, to help patients stay on track with their health goals.

iRobot IRBT Healthcare Automation - Provider Engages in the business of designing and building robots. Develops proprietary technology

incorporating advanced concepts in navigation, mobility, manipulation and artificial

intelligence to build robots.

Jawbone - Connected Health - General AliphCom is a holding company engaged in the development and manufacture of human-

centered wearable technology and audio devices. Its products include wireless speakers,

speakerphones, Bluetooth headsets, and noise-eliminating technologies. The firm operates

through the following brands: jawbone, NoiseAssassin, and JAMBOX.

Kareo - Healthcare IT Kareo, Inc. offers medical office software and services. It provides small medical practices

an intuitive way to deliver care and engage patients through native iPad and iPhone

applications or with a web browser. The firm offers electronic health record (EHR), practice

management and billing services.

Keas - Population Health Keas, Inc. provides health care related services. It also provides online care plans for

individuals. The firm's care plans are designed to help people on health and wellness

issues. It promotes healthy behavior and teamwork with an interactive application platform

that delivers relevant, personalized content to hundreds of thousands of employees.

Knome Big Data Analytics Provides whole genome sequencing and analysis services to biomedical researchers and

motivated families seeking to understand the genetic underpinnings of human disease. It

offers tools and solutions that help researchers, drug developers, and clinicians determine

the genetic basis of human disease and drug response.

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Kyruus - Big Data Analytics Kyruus, Inc. provides physician network optimization software solutions. Its big data

solutions helps hospitals and health systems optimize their patient access, referral

management, and care coordination operations. The company serves hospitals, health

systems and accountable care organizations.

Landmark Health Healthcare Automation - Payer Assists health plans in delivery and management of their physical medicine benefits.

Management programs rely in data analytics to profile practice patterns of providers to

identify those whose resource utilization deviates materially from their peers on a risk-

adjusted basis. Works with providers to encourage patient-centered treatment regiments

that focus on functional restoration.

Liazon Healthcare Automation - Payer Engages in the provision of web-based employee benefit solutions. It operates Bright

Choices Exchange, an online benefits store that helps employers manage their resources

on their benefits costs by setting predictable budgets while guiding employees purchase

coverage of health, dental, vision, life, and disability benefits.

LifeWatch LIFE-CHConnected Health - Reimbursed Engages in the provision of medical solutions around ambulatory cardiac telemetry

services. It specializes in advanced telehealth systems and wireless remote patient

monitoring services. I

Linkwell Health Population Health Develops health and wellness engagement platforms. It designs and implements

couponing and nutritional incentive programs for individuals with chronic health conditions.

The firm provides promotional offers, including coupons and rebates from advertisers to

health plans, wellness organizations, and benefits managers for distributing them to their

members.

Lively - Connected Health - General Lively device connects to smartphones and offers medication reminders as well as food

and drink monitoring and step counting. The device also includes an emergency request for

urgent medical attention. Lively also provides an online Dashboard that displays daily

activity and allows users to share data with other users or healthcare providers.

Lumeris - Population Health Provides information technology, guidance and operational services

Lumos Labs, Inc.

(Lumosity)

- Consumer Empowerment - General Lumos Labs is a cognitive neuroscience research and development company that builds

software tools for improving brain health and performance. Lumosity is the first general

brain fitness program from Lumos Labs. It specializes in creating innovative applications of

the latest developments in brain science in order to help people lead better lives. Since its

formation in the spring of 2005, Lumos Labs has been consistently focused on researching

and developing the most effective cognitive training applications.

Mango Health - Population Health Provides HIPAA-compliant enterprise platform that is integrated with leaders in healthcare

to bring adherence solutions to market.

Maxwell Health Consumer Empowerment - Digital Tools: Benefits Operates a human resources platform that manages benefits and promotes employee

health. It offers census management and payroll services. The company combines

software as a service platform and a concierge service to simplify benefits, reduce

insurance costs and improve employee health.

McKesson MCK Healthcare IT Health services and information technology company, which provides medicines,

pharmaceutical and care management products.

MD Revolution - Population Health RevUp digital health platform focuses on the real drivers of chronic disease to reduce

healthcare consts and deliver real, measurable improvements in health and wellbeing.

RevUp combines personal health and genetic information with data aggregated from a

variety of monitoring devices and logging tools into one dashboard.

MDLive - Connected Health - Reimbursed MDLIVE, Inc. operates as telehealth provider of online and on-demand healthcare delivery

services and software that benefit patients, hospitals, employers, payers, physician practice

groups and accountable care organizations. The company's cloud-based Virtual Medical

Office software platform makes it possible for patients, medical professionals and plan

administrators to collaborate seamlessly and securely via voice, video, email and mobile

devices. Payers and providers can also utilize the HIPAA-compliant system to collect and

share clinical data from patient medical records, lab results and in-home biometric devices

for real-time risk assessments, wellness advice, diagnosis and treatment.

MedAptus Connected Health - General Operates as a healthcare information technology company which provides revenue cycle

solutions to medical group practices and integrated delivery systems. It offers professional

charge capture a flexible, scalable solution in use at single-specialty groups, multi-specialty

clinics, academic centers and IDNs; technical charge capture eases and standardizes

facility billing by automating the charge creation process across an outpatient care team;

and infusion services charge capture which streamline and improve infusion coding by

compliant capture.

MedAssets MDAS Healthcare IT Financial and performance improvement company, which provides technology based

products and services to hospitals with operational problems.

MedAssist Healthcare IT Provides revenue management services. The company delivers a series of services that

help free healthcare organizations to focus on patient care. Its operations are supported by

regional offices, national infrastructure, technology, financial and advisory resources.

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MedeAnalytics - Big Data Analytics MedeAnalytics, Inc. provides software-as-a-service based healthcare performance

management solutions to hospitals, physician practices and payers. Its analytics platform

delivers intelligence that helps healthcare organizations detect its greatest areas of risk and

identify opportunities to improve its financial health. MedeAnalytics empowers providers

and payers to collaborate and use data to strengthen its operations and improve the quality

of care.

MedHOK Healthcare Automation - Payer Operates as a healthcare software company. It offers an integrated care management,

quality and compliance platform that leverages the cloud to enable physicians, payors, third

party administrators, pharmacy benefit managers and other entities to manage and

measure care against national quality standards for optimal outcomes. The firm also

provides adjustment improvement, data validation, complaint tracking and pharmacy

management services.

MEDHOST - Healthcare IT Provides market-leading enterprise, departmental and healthcare engagement solutions.

offers ED Pass, a registration kiosk that allows patients to check into the emergency

department (ED) and identify their complaint, speeding registration and screening for

potential high-risk patients.

Medical Information

Technology

(MEDITECH)

- Healthcare IT Develops, manufactures, licenses and supports computer software products for the

hospital market. Its product 6.0, is a platform that provides a comprehensive and integrated

EHR designed to help organization increase patient safety, streamline processes, and

improve communication across departments and care teams.

Medical Transcription

Billing Corporation

MTBC Healthcare Automation - Provider Operates as a healthcare information technology company that offers proprietary electronic

health records and patient management solutions, together with related business services,

to healthcare providers. The company's integrated services are designed to help

customers increase revenues, streamline workflows and make better business and clinical

decisions, while reducing administrative burdens and operating costs. Its services include

full-scale revenue cycle management, electronic health records, and other technology-

driven practice management services to private and hospital-employed healthcare

providers.

Medidata MDSO Healthcare Automation - Pharma Provides cloud-based solutions for life sciences that enhance the efficiency of customer's

clinical development processes from concept to conclusion, optimizing their research and

development investments. Its solutions allow its customers to increase the value of their

development programs by more efficiently and effectively designing, planning, and

managing key aspects of the clinical trial process, including study and protocol design, trial

planning and budgeting, site negotiation, clinical portal, trial management, randomization

and trial supply management, clinical data capture and management, safety events

capture, medical coding, clinical business analytics, and data flow and interoperability

among multiple trial applications.

MedImpact - Healthcare IT MedImpact Healthcare Systems, Inc. provides pharmacy benefit management services. Its

services include prescription pricing calculations, clinical validation assessments,

processing, clinical support, and network management. Its clients include employer groups,

healthcare organizations, medical groups, and utilization review firms.

Medivo - Big Data Analytics Medivo, Inc. provides virtual healthcare services. It helps customers manage their health

and make visits with doctor more productive by providing simple apps for symptom

tracking, easy-to-understand explanations of their lab results and personalized health

information.

MEDSEEK - Healthcare Automation - Provider MEDSEEK, Inc. provides project, web and content management services for the

healthcare industry. It offers MEDSEEK Influence platform that integrates Web, mHealth,

predictive analytics, and precision marketing technologies to help hospitals differentiate

from their competitors by engaging prospects and patients before and after a physical

encounter.

Medtronic MDT Connected Health - Reimbursed Medical technology company, which provides innovative products and therapies for use by

medical professionals to meet the health care needs of their patients. Its primary products

include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders,

spinal conditions and musculoskeletal trauma, urological and digestive disorders, diabetes,

and ear, nose, and throat conditions.

Mercer - Consumer Empowerment - General Mercer is a global consulting company that helps clients around the world advance the

health, wealth and performance of their people. Mercer provices a comprehensive array of

health and benefit solutions - access to local market experts as well as national resources

that advise on regulatory compliance and innovative benefit strategies.

Merge Healthcare MRGE Healthcare IT Provider of clinical systems and innovations that seek to transform healthcare. The

company is an enterprise image provider dedicated to healthcare information technology

solutions. It develops solutions that automate healthcare data and diagnostic workflow to

enable a better electronic record of the patient experience, and to enhance product

development for health IT, device and pharmaceutical companies.

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MicroMD - Healthcare IT MicroMD brand of practice solutions encompasses simple yet powerful electronic medical

records and practice management software that help facilitate the delivery of superior

patient care; automate incentive and quality reporting activities; and streamline operations

for busy providers. Full-featured, time-tested and budget-friendly, the MicroMD ONC-ATCB

certified, award-winning software helps small practices, large medical groups, community

health centers and billing services accelerate progress towards a paperless environment

and health information exchange with minimal disruption and stress. High client retention

rates attest to its market-leading presence and client-centric focus.

MindBody - Healthcare Automation - Provider MINDBODY, Inc. provides web-based business management software solutions. It offers

an online software that provides access to the business from any computer, tablet, or

smart phone; MINDBODY Processing, an integrated merchant account that enables to

organize and streamline businesses; mobile applications; hardware; and ID and gift cards.

It serves fitness, yoga, Pilates, salons, spas, and martial arts businesses.

Misfit - Connected Health - General Misfit Wearables Corp. manufactures and invents wearable computing products. Its

product shine, an elegant personal activity tracker that you can instantly sync with

customers smart phone just by placing the device on the screen. The firm is making

products and services in the consumer health and fitness space to inspire people be

develop healthy habits.

Modernizing Medicine - Healthcare IT Modernizing Medicine Inc. provides powerful electronic medical record systems to

accommodate the specific needs of specialty practices. It offer cloud-based EMR systems

for the following specialties Dermatology, Ophthalmology, Plastic Surgery, Cosmetic

Surgery, Orthopedics and Otolaryngology.

naviHealth Population Health Provides data-driven clinical decision-support solutions to the post-acute healthcare

markets. It delivers post-acute care so that patients experience better outcomes at lower

costs, while more efficiently utilizing the resources of payers, health systems and providers.

The firm's products include Post-Acute Compass and Advantage Navigator. It also

provides educational opportunities for nurses and healthcare professionals.

NaviNet - Big Data Analytics At NaviNet, they are constantly working to find new and innovative ways to streamline

interaction among health-industry participants; be it providers, plans, patients or partners.

Utilizing NaviNet's multi payer Web site, providers have access to real-time patient

information such as eligibility, benefits and claims status, and clinical history from its

nation's leading plans and partners.

Netsmart - Healthcare IT Established, leading supplier of on demand and enterprise-wide software solutions to health

and human services providers and payers nationwide.

NextGen - Healthcare IT NextGen delivers the highest quality systems and services so that the company's clients

can maximize the extraordinary opportunities ahead. And they work consistently to grow

NextGen product lines, expand the company's educational resources, and maintain the

latest certification awards available. Whether they are from a hospital, health system or

private practice, they invite to use NextGen website as a resource.

Nuance

Communications

NUAN Health Automation - Provider Provides voice and language solutions for businesses and consumers around the world. Its

solutions are used in healthcare, mobile, consumer, enterprise customer service and

imaging markets. The company products are based on proprietary voice and language

platform. It operates under four segments: Healthcare, Mobile & Consumer, Enterprise and

Imaging.

Omada Health Population Health Provides diabetes and obesity prevention programs through online. It combines behavioral

science, human-centered design and new technology to transform disease prevention,

while building from established clinical precedent. The firm focuses on offering programs

for the prevention of type 2 diabetes.

Omnicell OMCL Health Automation - Provider Provides automation and business information solutions. The company's automation,

analytics and medication adherence solutions are designed to enable healthcare facilities to

acquire, manage, dispense and administer medications and medical surgical supplies.

OneHealth - Population Health OneRecovery is a safe, anonymous and caring online community dedicated to helping

people in recovery from addiction, as well providing support to their families and loved

ones. Uniquely built by people in recovery for people in recovery, OneRecovery offers a

supportive space for members to share stories, work on their recovery programs and

mutually support one another as they recover from alcoholism, drug addiction and eating

disorders.

Oracle ORCL Healthcare Automation - Pharma

Healthcare IT

Provides enterprise software and computer hardware products and services. The company

is organized into three businesses: Software, Hardware Systems and Services.

Oscar - Consumer Empowerment - General Oscar Health Insurance Co. provides health insurance services. It is a new kind of health

insurance company that is using technology to make insurance simple, intuitive and human.

The firm is a group of technology and healthcare dreamers who looked at the current state

of the U.S. healthcare system, got frustrated by the horrible consumer experience, and

decided to do something big about it.

Par8o Consumer Empowerment - Physician Community Combines process improvement, workflow, and technology to minimize costs and improve

patient care. Three segments include People, Process, & Platform.

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Passport Health - Population Health Passport Health, Inc. provides travel medical services. The company provides travel health

information and immunizations for international travelers, major corporations, universities,

missionaries and volunteers and other international organizations.

PatientKeeper - Healthcare IT PatientKeeper, Inc. provides healthcare applications for physicians. Its clinical solutions

include Computerized Physician Order Entry (CPOE), Mobile CPOE, Medication

Reconciliation, NoteWriter, Mobile Clinical Results, Physician Portal, ePrescription, Sign-

Out, eSignature and Provider Directory. The firm’s financial solutions include PatientKeeper

Charge Capture, PatientKeeper Analytics and PatientKeeper PQRS.

PatientPing - Population Health Offers bridges between providers to share basic information on common patients in real-

time. PatientPing integrates with any EMR and also offers web and mobile applications.

PatientSafe Solutions Healthcare Automation - Provider Provides wireless workflow optimization and patient safety solutions. The company is

committed to the transformation of care delivery through the convergence of consumer

mobile technologies and enterprise clinical systems.

They believe that by reshaping care providers' technology experience with intuitive, mobile-

enabled workflows, they can build on existing EHR infrastructure to drive measurable

results across patient safety, clinical quality, and care team effectiveness.

PatientsLikeMe - Consumer Empowerment - General PatientsLikeMe, Inc. operates online health communities for patients. It enables patients to

share data with other patients, caregivers, physicians, researchers, and pharmaceutical

and medical device companies. The company offers data and information on patients,

treatments, symptoms, and research.

PayFlex - Consumer Empowerment - Benefits PayFlex Systems USA, Inc. provides employee benefits administration products and

services, such as flexible spending and health savings accounts, health reimbursement

arrangements, dependent care account, transit and parking programs.

PDII PDII Healthcare Automation - Pharma Provides outsourced commercial services to established and emerging pharmaceutical,

biotechnology and healthcare companies in the U. S. It also provides other promotional

services including clinical educator services, digital communications, teledetailing and with

the formation of its new business unit, Interpace BioPharma which provides

pharmaceutical, biotechnology, medical device and diagnostics clients with full-service

product commercialization solutions.

Pebble - Connected Health - General Pebble smartwatch accomodates a variety of apps including Runkeeper, which allows

users to track their runs and other fitness activities.

Philips PHIA-NLConnected Health - General

Big Data Analytics

Technology company that is engaged in the healthcare, lighting, and consumer well-being

markets. It operates through the following segments: Healthcare, Consumer Lifestyle,

Lighting, and Innovation, Group and Services.

Phreesia - Healthcare Automation - Provider Phreesia, Inc. provides patient check-in solutions for medical practices. It replaces the

traditional clip board with a tablet computer or PhreesiaPad with a built in credit card swipe

feature. The firm also provides patients to use the PhreesiaPad to enter clinical and

financial information.

PHT - Healthcare Automation - Pharma PHT Corp. is engaged in the development of software applications. It offers

biopharmaceutical clients comprehensive services for acquiring, managing and analyzing

data collected directly from patients through all phases of clinical development.

Phytel - Population Health Phytel, Inc. provides population health management software solutions. Its products include

Phytel Atmosphere, Phytel Outreach, Phytel Insight, Phytel Coordinate, Phytel Engage,

Phytel Transition, Phytel Remind and Phytel PQRS. The firm services include automate

care management, qualify for medical home, reduce readmissions, improve patient

compliance, report quality measures and increase patient engagement.

PillPack Consumer Empowerment - Digital Tools: Benefits Simplifies the process of managing medications through a combination of convenient

packaging, modern technology and personalized service.

PointClickCare - Healthcare Automation - Provider Wescom Solutions, Inc. is a holding company that provides electronic health records and

business office software for the long-term care industry. It helps multi-facility providers

manage the complete lifecycle of resident care. The firm's Electronic Health Record (EHR)

platform streamlines clinical, billing, and administration processes. Its services encompass

technology implementation, training, and support.

Practice Fusion, Inc. - Healthcare IT Practice Fusion, Inc. provides web-based electronic medical record systems. Its features

include e-Prescribing, medical charting, scheduling, referral letters, lab integrations, patient

management, patient health record, electronic medical record (EMR) integration and

application programming interface (API), mobile EMR and support.

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Precyse Solutions - Healthcare Automation - Provider Precyse Solutions LLC is engaged in the provision of health information management (HIM)

services and technologies. Its business activities encompass HIM strategic sourcing, HIM

interim management and consulting, coding, Oncology data management, clinical

documentation improvement, audit and compliance, education, and transcription. The firm

also develops software solutions for coding and clinical documentation.

Predilytics - Big Data Analytics Predilytics, Inc. is a holding company, which engages in the provision of healthcare

predictive analytics product and services. It applies its patented analytic tools to transform

healthcare “big data”, and to point the way for at-risk healthcare organizations to optimize

and precisely target their care delivery resources, to increase revenue, and to control

costs. It serves the payers, providers, and care management organizations.

Premier PINC Big Data Analytics The company operates through two segments: Supply Chain Services and Performance

Services. The Supply Chain Services segment provides healthcare supply chain

management services to a broad range of healthcare providers in the United States. The

Performance Services segment provides informatics and advisory services to healthcare

providers in the United States.

Press Ganey - Healthcare IT Press Ganey Associates, Inc. develops and provides health care performance

improvement solutions. The company offers software suites for hospitals, medical

practices, outpatient settings, home-care, and clinics. The company’s products include

clinical performance suite, operational and partnership performance suites, satisfaction

performance suite, and marketing performance suite.

Privia Health Population Health Operates as a physician-based wellness and care management company, which provides

membership programs in the United States. It partners with doctors to keep people healthy,

prevent disease, and better manage care in-between office visits, and develops a network

of membership-based medical practices. The firm allows patients to book same and next-

day appointments, refill their prescriptions, track their health progress, and collaborate with

their doctors and health teams through private email messaging. It enables doctors to gain

access to web-based technology and a wellness team, which serves as a virtual extension

of the doctor's office, and helps patients to follow-up, implement, and adhere to their

physician's wellness and care recommendations.

Propeller Health - Connected Health - Reimbursed The Propeller sensor and mobile application allows users to better understand and manage

asthma and COPD through remote monitoring and management, tracking medication use

and reducing unnacessary costs associated with hospitalizations and office visits. .

Proteus Digital Health - Connected Health - Reimbursed Proteus Digital Health Inc. develops medicine products and therapeutic devices. It

develops digital health products that collect and aggregate various behavioral, physiologic,

and therapeutic metrics, such as medication adherence, heart rate, sleep patterns, physical

activity, and stress levels into personal management tools delivered to the mobile devices

of consumers.

QPID Health Big Data Analytics Provides health record acceleration software and intelligence solutions. It develops clinical

insights software for use by hospitals and medical groups. The firm's QPID solution uses

natural language processing and proprietary tools to substantially improve how clinical and

administrative users can have access to information stored in electronic health records and

other back end repositories.

QSI QSII Healthcare IT Develops and markets computer-based practice management, electronic health records

and revenue cycle management applications along with connectivity products and services.

It serves medical and dental group practices as well as rural and community hospitals. The

company operates through four reportable segments: QSI Dental, NextGen, Hospital

Solutions and RCM Services.

Qualcomm QCOM Connected Health - General Develops, designs, manufactures and markets digital telecommunications products and

services. It also supplies integrated circuits and system software based on code division

multiple access, orthogonal frequency division multiple access and other technologies for

use in voice and data communications, networking, application processing, multimedia and

global positioning system products to device and infrastructure manufacturers. The

company sells equipment, software and services to transportation and other companies to

wirelessly connect their assets and workforce.

QuantiaMD - Consumer Empowerment - Physician Community Quantia, Inc. is a holding company, which engages in the development of interactive

communication networks and provides integrated end-to-end security. It offers a physician

relationship management services. It enables communication between physicians,

clinicians, and major healthcare organizations. Its web-based and mobile platform uses a

blend of social media, game mechanics, and engagement science to help clients

organizations such as health systems and life sciences companies collaborate with

physicians to reduce costs, save time, and improve quality of care.

Quest Diagnostics DGX Healthcare IT Engaged in providing diagnostic testing, information and services that help patients,

physicians and others to make better healthcare decisions. It offers patients and physicians

the broadest access to diagnostic laboratory services through the company's nationwide

network of laboratories and patient service centers.

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Quintiles Q Healthcare Automation - Pharma Provides biopharmaceutical development services and commercial outsourcing services.

The company operates through two business segments: Product Development and

Integrated Healthcare Services. The Product Development segment provides services and

expertise that allow biopharmaceutical companies to outsource the clinical development

process from first in man trials to post-launch monitoring. Its comprehensive service

provides the support and functional expertise necessary at each stage of development, as

well as the systems and analytical capabilities to help its customers improve product

development efficiency and effectiveness.

Recondo Technology - Healthcare IT Recondo Technology, Inc. develops and distributes software and cloud computing solutions

to the healthcare industry. It offers solutions that include Auth-DP, EligibilityPlus,

SurePayHealth, ClaimStatusPlus, Recondo Electronic Claims Management, Trilogi

Revenue Recovery, Denial Reporting, Financial Assistance and ZPay eCashering. The firm

connects providers, payers, and patients using cloud computing solutions throughout the

healthcare revenue cycle.

RedBrick Health - Population Health RedBrick Health Corp. provides health technology services that help employers

reinvigorate their health and wellness programs. It operates as a health technology

company. The company's platform includes personalized programs, social networking

tools, and rewards that link individual financing to healthy behaviors. It serves large self-

insured employers and strategic distribution partners.

Reflexion Health Population Health Develops software for healthcare services. Its flagship product is Rehab Measurement

Tool, which aims to transform rehabilitation medicine by providing engaging, low-cost

software tools to improve physical therapy.

RemitDATA - Big Data Analytics RemitDATA, Inc. sells web-based services to assist health care providers with

reimbursement and productivity. The company provides user-specific logins and passwords

so that all access is controlled and tracked for auditing purposes. It was founded in 2000

and is headquartered in Memphis, TN.

Rise Health Population Health Provides healthcare services. It provides primary care solutions to help physician practices

and other health care organizations. The company focuses on fundamental change in

primary care delivery, the keystone of an efficient and effective healthcare system. It offers

consulting, practive management, analytics/decision support, ACO development, PCMH

enablement and technology development solutions.

RxAnte - Population Health RxAnte, Inc. provides health care services. It offers a new and innovative approach for

driving medication adherence by helping organizations target, manage, and evaluate their

adherence support initiatives. The company's patent-pending predictive analytics and

decision support solutions turn ordinary claims data into actionable insights and

management recommendations that help health care organizations deliver the right

intervention to the right patient at the right time.

Sage SGE-GBHealthcare IT Supplies business management solutions. It provides business software, services and

support to small and medium sized businesses. Its software and services includes

accounting, enterprise resource planning and payroll software through to payment

processing, customer relationship management and industry-specific solutions.

Salesforce.Com CRM Big Data Analytics Provides enterprise cloud computing applications. It provides a comprehensive customer

and collaboration relationship management service to businesses of all sizes and industries

and also provides a technology platform for customers and developers to build and run

applications. The company has designed and developed its applications to be easy-to-use

and intuitive solutions that can be deployed rapidly, customized easily and integrated with

other software applications.

Samsung - Big Data Analytics Engages in the manufacturing and selling of electronics and computer peripherals. The

company operates its business through following business divisions: Consumer

Electronics, Information Technology & Mobile Communications and Device Solutions. The

Consumer Electronics business division provides cable television, monitor, printer, air-

conditioners, refrigerators, washing machines, and medical devices. The Information

Technology & Mobile Communications business division offers handheld products,

communication systems, computers, and digital cameras. The Device Solutions business

division comprises of memory, system large scale integrated circuit and light emitting

diode.

Santa Rosa - Healthcare IT Santa Rosa Consulting is a National provider of information technology and management

consulting services to the healthcare industry. Primary service offerings include Advisory &

Consulting, Services, Vendor Implementation & Integration Services, MEDITECH Services

and Staffing & Recruiting Services.

SAS - Big Data Analytics SAS Institute, Inc. engages in the provision of business analytics software and services. It

offers solutions in the areas of business analytics, business intelligence, customer

intelligence, financial intelligence, foundation tools, fraud and security intelligence, high-

performance analytics, human capital intelligence, information management, information

technology, and CIO enablement.

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SBR Health Connected Health - General Provides a simple, secure communications platform that links physicians, patients and

specialists across hospitals, clinics, homes and geographically isolated areas. Originally

developed to meet the stringent requirements of the United States military, their software

application is secure and HIPAA compliant. Furthermore, their fully customizable platform is

designed to smoothly integrate with existing workflow to make it easy and efficient for

anyone to use.

SCIO Health

Analytics

Big Data Analytics Engages in the provision of healthcare analytics services. It specializes in care and risk

management, payment integrity, consumer ans employer, and network and provider

concerns. It caters to the large health plans, pharmacy benefit managers, and care

management organizations.

SeeChange Health - Consumer Empowerment - General SeeChange Health LLC provides healthcare software and payment solutions. It offers a

consumer engagement and health incentive platform to employers, health plans and

administrators. The firm provides provide the information, tools, and technology to help

while companies take control of health expenses.

Sermo - Consumer Empowerment - Physician Community Sermo, Inc. operates as an online physician community. It helps physicians to collect

medical data from its web-based platform which helps them to discover emerging trends

and provides new insights into medications, devices, and treatments.

Shareable Ink Healthcare IT Enterprise cloud computing firm that transforms point-of-care clinical documentation to

structured data and analytics.

ShareCare - Consumer Empowerment - Online Media Sharecare, Inc. provides healthcare information services. It is a health and wellness social

media platform that connects people with top ranking experts ranging from doctors and

specialists to hospitals, healthcare companies and health-conscious consumers. The site's

unique Q&A format is its collective wisdom, providing health-seeking consumers with

answers reflecting multiple expert perspectives greatly simplifying the search for quality

information.

SHL SHLTN-CHConnected Health - Reimbursed Specializes in the developing and marketing advanced personal telemedicine solutions,

which focuses on cardiovascular and related diseases. It operates its business in three

geographical segments: Europe, Israel and the United States.

Siemens SIE-DE Healthcare IT Engages in the electrical engineering and electronics business. It operates through the

following segments: Energy, Healthcare, Industry, Infrastructure and Cities, Equity

Investments, and Siemens Financial Services (SFS).

Silverlink Healthcare Automation - Payer Provides engagement management solutions for healthcare organizations. It offers end-to-

end managed solutions for managed care, pharmacy, medicare, and medicaid and

population health. The firm's solutions deliver better control, coordination and effectiveness

in member communications to promote healthy and loyal behaviors.

Sony 6758-JP Connected Health - General Engages in the development, design, manufacture, and sale of electronic equipment,

instruments, devices, game consoles, and software for consumers, professionals, and

industrial markets. Its operations are carried out through the following segments:

Consumer Products and Service; Professional, Device and Solutions; Pictures; Music;

Financial Services; and Other.

Spok SPOK Connected Health - General Provides wireless messaging, mobile voice and data, and unified communications solutions

to the healthcare, government, and enterprise sectors. The company operates through two

segments, Wireless and Software.

St. Jude Medical STJ Connected Health - Reimbursed Develops, manufactures and distributes cardiovascular medical devices for the global

cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas and

neurostimulation medical devices for the management of chronic pain. It operates through

two operating divisions: Cardiovascular and Ablation Technologies and Implantable

Electronic Systems Division.

Stanson Health Healthcare Automation - Provider Provides solutions to reduce low-value and unnecessary care leveraging real-time alerts

and relevant analytics to guide and influence physician's decisions.

Streamline STRM Population Health Provider of SaaS-based healthcare information technology solutions for healthcare

providers. The company's comprehensive suite of solutions includes: enterprise content

management, business analytics, integrated workflow systems, clinical documentation

improvement, and computer assisted coding.

Stryker SYK Connected Health - Reimbursed Medical technology company. The company offers a diverse array of innovative medical

technologies, including reconstructive, medical and surgical, and neurotechnology and

spine products. Its products include implants used in joint replacement and trauma

surgeries; surgical equipment and surgical navigation systems; endoscopic and

communications systems; patient handling and emergency medical equipment;

neurosurgical, neurovascular and spinal devices; as well as other medical device products

used in a variety of medical specialties. The company operates its business through the

following segments: Reconstructive, MedSurg, and Neurotechnology & Spine.

Tandem - Connected Health - Reimbursed Medical device company, which designs, develops and commercializes products for people

with insulin-dependent diabetes. It manufactures and sells the t:slim Insulin Pump and

slimmest & smallest durable insulin pump; t:connect; and glucose monitoring, infusion sets

and accessories.

75




Teladoc - Connected Health - Reimbursed TelaDoc, Inc. provides telephone medical consultation services. The firm is not licensed to

practice medicine and must contract with one or more professional associations and/or

licensed physicians to provide telephone and online video consult to members. Its doctors

in national network are U.S. board-certified family practitioners, PCPs, pediatricians and

internists who use electronic health records to diagnose, treat, and write prescriptions,

when necessary and quality process meets National Committee for Quality Assurance

(NCQA) standards.

TelCare Connected Health - General Telcare's first product is the Telcare BGM, a cellular-enabled blood glucose meter for the

Americans and addressable patients worldwide who have diabetes that instantly transmits

glucose values to a care-management server and provides instant feedback and coaching

to patients with diabetes. In addition to directly reducing cost of care by improving

outcomes and preventing complications, Telcare creates an ecosystem of care that

provides caregivers and disease managers with previously-unavailable actionable clinical

data.

Towers Watson TW Consumer Empowerment - General Global professional services company, which helps organizations to improve performance

through people, risk and financial management. The company offers various solutions in

four business segments, Benefits, Risk and Financial Services, Talent and Rewards and

Exchange Solutions.

TriZetto - Population Health Positioned to drive the convergence of core benefit administration, care management and

constituent engagement. It provides information technology solutions that enable payers

and other constituents in the healthcare supply chain to improve the coordination of benefits

and care for healthcare consumers. The company provides core administration solutions,

care and network management solutions, and a constituent Web solutions. Comprehensive

solutions for Medicare Advantage and managed Medicaid plans also are available, along

with hosting, business and professional services.

Truven Health

Analytics

- Consumer Empowerment - Health Transparency Truven Health Analytics, Inc. engages in the provision of unbiased information, analytic

tools, benchmarks, and services to the healthcare industry. Its health brands include

Micromedex 2.0, CareNotes System, Red Book Online, Formulary Advisor, PDR Electronic

Library, and NeoFax and Pediatrics. The firm's clients consist of constituents in the U.S.

healthcare system, including federal government agencies, state government agencies,

employers and health plans, hospitals, clinicians, and life sciences companies.

T-System Healthcare IT Leader in emergency department clinical, business and IT solutions. Offers point of care

tools to streamline processes.

Valence Health - Population Health Valence Health delivers patient-centered, data-driven solutions so providers can achieve

optimal reward for quality care. Its patient-focused, data-driven solutions have created

competitive advantage for clients since 1996, and it is uniquely qualified to meet the current

and future challenges for health care providers. Valence Health works to create patient-

centered solutions that complement workflows, and empower physicians and staff to use

data and information to improve outcomes.

Validic - Big Data Analytics Motivation Science, Inc. engages in the development of a health technology platform. It

offers Validic, a mobile health technology platform used for accessing data from mobile

health devices, wearables, in-home devices, and patient healthcare applications. The firm

serves wellness companies, healthcare providers, pharmaceutical, and health plan

companies.

Veeva VEEV Healthcare Automation - Pharma Provides industry-specific, cloud-based software solutions for the life sciences industry. Its

solutions enable pharmaceutical and other life sciences companies to realize the benefits of

modern cloud-based architectures and mobile applications for their most critical business

functions, without compromising industry-specific functionality or regulatory compliance.

Verisk VRSK Big Data Analytics Operates as a holding company, which provides information about risk to professionals in

insurance, healthcare, financial, government, supply chain, and risk management. The

company offers risk assessment services and decision analytics for professionals in many

fields, including: property and casualty insurance, financial services, healthcare,

government and human resources. The company operates in two segments: Decision

Analytics and Risk Assessment.

Verizon VZ Connected Health - General Operates as a holding company, which provides broadband and other wireless and wireline

communications services to consumer, business, and government and wholesale

customers. It also provides converged communications, information and entertainment

services over America's most advanced fiber-optic network, and delivers integrated

business solutions to customers. The company operates its business through two

segments: Verizon Wireless and Wireline.

Virgin Pulse

Population Health

Provides solutions to help employers support employees across all aspects of their lives,

make healthy, long-lasting behavior changes and set the foundation for engagement

initiatives.

Vitals - Consumer Empowerment - Health Transparency

Consumer Empowerment - Online Media

MDx Medical, Inc. provides online doctor evaluation and comparison services. It enables

consumers to search for doctors, hospitals, and clinic information.

76




Vivify Health - Population Health Vivify Health, Inc. provides a cloud based platform that manages patients in a post-acute

setting. It offers population health, accountable care, preventable readmissions and

disease management solutions. The company's product collects clinical data from each

patient's monitoring devices and integrates it back into the hospital's EMR, prompting early

intervention and the potential to reduce unnecessary readmissions and healthcare costs.

Vocera

Communications

VCRA Connected Health - General Provides secure, integrated, intelligent communication solutions, focused on empowering

mobile workers in healthcare, hospitality, energy, and other mission-critical mobile work

environments, in the U.S. and internationally. Through its communication and care

experience solutions, the company helps its healthcare customers improve patient safety

and satisfaction, and increase hospital efficiency and productivity.

Voxiva Health - Population Health Voxiva, Inc. provides interactive mobile health services. It communicates and interacts with

people to help them live healthier lives. The firm's services combine various technologies

SMS text messaging, interactive voice, email, mobile apps, devices, and the web to

support prevention and wellness, disease management, adherence, and more.

WageWorks WAGE Consumer Empowerment - Benefits Provider of Consumer-Directed Benefits in the United States. WageWorks administers and

operates a broad array of CDBs, including pre-tax spending accounts, such as health and

dependent care Flexible Spending Accounts, as well as Commuter Benefit Services,

including transit and parking programs, Health Savings Accounts HSAs, Health

Reimbursement Arrangements, and other employee benefits. The company delivers

employee spending account benefit programs through highly scalable benefits as a service,

delivery model that employer clients and their employee participants may access through a

standard web browser on any Internet-enabled device, including computers, smart phones

and other mobile devices, such as tablet computers.

WebMD WBMD Consumer Empowerment - Online Media

Population Health

Provides health information services to consumers, physicians and other healthcare

professionals, employers and health plans through its public and private online portals and

health-focused publications. Its online healthcare information, decision-support applications

and communications services enable consumers to obtain detailed information on a

particular disease or condition, to locate physicians, to store individual healthcare

information, to assess their personal health status, to receive periodic e-newsletters and

alerts on topics of individual interest, and to participate in online communities with peers

and experts.

WeightWatchers - Population Health Provides weight management services, operating globally through a network of company-

owned and franchise operations. It operates through two segments: Weight Watchers

International and WeightWatchers.com. Through WeightWatchers.com, it offers Internet

subscription weight management products to consumers and maintains an interactive

presence on the Internet for the Weight Watchers brand. The company provides two

Internet subscription offerings: Weight Watchers Online and Weight Watchers eTools.

Wellbe - Population Health Offers a Population Health solution designed to manage high-cost, high-volume, specialty

acute care episodes through a cloud-based platform that combines vital tools for patient

engagement and coordination across the care continuum backed by patient-generated data

analytics to manage the performance of value-based reimbursement programs.

WellDoc - Population Health WellDoc, Inc. is a holding company, which engages in the provision of chronic disease

management support services. It is a healthcare company that uses technology to improve

disease management outcomes and reduce health care costs. Its DiabetesManager

provides a system for patients and health care providers to coordinate diabetes care,

propel self-management, and achieve long-term adherence.

Welltok - Population Health Welltok, Inc. provides consumer engagement and behavior modification solution for health

plans. It offers personalized personal health itinerary including tailored articles, videos and

condition management programs. The firm also engages with coaches and health experts

for trusted advices.

WiserCare

Population Health

Operates as a healthcare information technology company that offers a web-based

decision support system for patients and doctors. Its patent pending decision support

solution has been designed by physicians and health services experts to help patients, and

their physicians, make smarter, faster and more effective medicinal decisions. The firm's

system enhances the decisions patients make with their doctors at the point of care,

improving healthcare quality and patient satisfaction, while saving provider time and

improving informed consent.

Withings - Connected Health - General Withings SAS designs, develops, and industrializes connected objects. The company's

products include smart body analyzer WS-50, wireless scale WS-30, blood pressure

monitors, smart baby monitors, and baby companion and health mate applications. It offers

internet connected WiFi body scale products that automatically record the users' weight, fat

mass, and BMI, which the users can view from their computers or smart phones. The firm

also provides blood pressure monitoring and baby monitoring applications for iPhones,

iPads, or iPods.

77




Yahoo YHOO Consumer Empowerment - Online Media Global technology company, which delivers personalized, including search, content, and

communications tools on the web and on mobile devices. The copamy provides a variety of

products and services, many of them personalized, including search, content, and

communications tools-all daily habits for hundreds of millions of users, on the Web and on

mobile devices. The majority product offerings are available in more than 45 languages and

in 60 countries, regions and territories.

ZeOmega Population Health Provides software solutions for integrated care management. It offers population health

management platform for payers, providers, and value-based care organizations. The firm

offers Jiva, an integrated care management software that transforms traditional episodic-

based care management into proactive and collaborative population healthcare

management through electronic health record enabled care plans, point-of-care tools,

decision support, and user-configurable workflows for care management.

Zephyr Health - Big Data Analytics Zephyr Health, Inc. is a holding company, which engages in the provision of data

information for health companies. It transforms data via research, integration, modeling,

analytics, and visualization within its cloud-based Zephyr Platform. Its data information

focuses mainly for sales and marketing, medical affairs, managed care, and clinical

development.

Zipnosis - Connected Health - General Offers a mobile solution to help diagnose and treat a variety of conditions.

Zirmed - Healthcare IT ZirMed, Inc. provides web based revenue cycle management solutions for the healthcare

business. Its solutions include eligibility verification, credit/debit card processing, check

processing, claims management, reimbursement management, electronic remittance

advice, patient statements, and patient e-commerce solutions.

ZocDoc - Consumer Empowerment - General ZocDoc, Inc. provides online services for patients to find and schedule doctor

appointments. It offers a free service that helps patients find a local doctor who accepts

their insurance, see real-time availability, and instantly book an appointment online via

ZocDoc.com or the free ZocDoc App for iPhone or Android. The firm also offers ZocDoc

Check-In, that allows patients to fill out their paperwork online in advance of their

appointment, and a Spanish-language version called ZocDoc en Español is also available.

Zynx Health Healthcare Automation - Provider Designs and develops support software for health care organizations. It offers Internet-

based software for disease management, clinical quality improvement, emergency

department diagnosis, treatment support, pain management, and medical facility safety.

Sources: FactSet; Company Websites; Leerink Research

78


APPENDIX D: MEDACORP DIGITAL HEALTH SURVEY

Respondent Distribution

Geographic Distribution

Source: Google Maps

Specialty Board certified physicians

Trend Digital Health

Number of Respondents 50 physicians

Respondent Distribution United States

Survey Date August 2014

Responses represent an average of the aggregate responses (n=50) unless otherwise noted. Inclusion Criteria Screener 1: Are you a board-certified physician?

100.0% Yes, specify specialty: See Appendix

0.0% No

Screener 2: How many years have you been in practice?

Mean Median

Number of years in practice 17.4 16

Screener 3: Do you use online sources and/or mobile applications for professional medical information (“online” in this context

means either website or mobile app)?

Yes No

Website 100.0% 0.0%

Mobile apps 100.0% 0.0%

Screener 4: What best describes your primary practice setting?

26.0% Academic medical center

62.0% Private practice

10.0% Community hospital

2.0% Veterans’ Administration facility

0.0% Other

Screener 5: Do you have admitting privileges to an academic or large community hospital??

100.0% Yes

0.0% No

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Use of Online Healthcare Information

1. How much of your time do you spend per week with online (either website or mobile app) sources of professional healthcare information (e.g., Medscape) at the following time points? Online is defined as the combination of time spent on the web and time spent on mobile apps.

*Please answer in increments of hours per week

Mean Median Sum

3 years ago (August 2011) 4.3 3 217

Currently (August 2014) 7.4 6 368

3 years from now (August 2017) 10.0 8 499

2. What are your top three preferred offline (i.e., not computerized) sources for new medical information (e.g., JAMA, medical

conference)? Please specify the reason you use each offline source (e.g., CME).

See Appendix for a summary of responses. 3. What are your top six preferred online sources for new medical information (three websites, three mobile apps) and please

specify the reason you use each online source (e.g., drug reference, referral management)? See Appendix for a summary of responses.

4. Which online sources (website and mobile app) do you use regularly? Which ones do you expect to use in the future? Check all that apply.

Currently (August 2014) In 3 years (August 2017)

Medscape 74.0% 68.0%

MedPage Today 22.0% 22.0%

Epocrates 76.0% 76.0%

Quantia 40.0% 32.0%

Sermo 48.0% 46.0%

UpToDate 72.0% 74.0%

AMA-Assn.org 4.0% 6.0%

Doximity 16.0% 18.0%

Other(s): Cleveland Clinic (2x); Quantia (1x); Epic (1x); The Heart.org (1x); annals.org (1x)

10.0% 8.0%

Please specify reason(s) for use.

See Appendix for a summary of responses.

5. On a scale of 1 to 5, (1 = low quality, 5 = high quality) rate the quality of each product.

3.8 (n=47) Medscape

2.8 (n=32) MedPage Today

3.9 (n=46) Epocrates

2.9 (n=40) Quantia

2.9 (n=43) Sermo

4.4 (n=47) UpToDate

2.2 (n=35) AMA-Assn.org

2.0 (n=41) Doximity

3.3 (n=3) Other(s); Medcalc (1x); The Heart.org (1x); Google (1x)

Please comment.

80



6. Of your overall time online, what percent is currently web-based and what percent is mobile-based? How do you expect this to change three years from now?

Currently (August 2014) 3 years from now (August 2017)

Website 66.1% 52.5%

Mobile app 33.9% 47.5%

Why? See Appendix for a summary of responses.

7. Do you prefer physician-directed advertisement online (website or mobile app) or offline (traditional media, e.g., print) context?

16.0% Online, why? See Appendix

22.0% Offline, why? See Appendix

62.0% No preference

Which are your preferred types of ads? Select top three.

20.0% Online: display ads on web pages (such as banner ads)

22.0% Online: search engine ads (paid ads mixed in search engine results)

42.0% Online: sponsored educational material

12.0% Online: display ads in mobile apps

16.0% Online: direct email advertising

50.0% Offline: display ads in medical journals (print edition)

56.0% Offline: sponsored events (such as CME events that have sponsors)

54.0% Offline: visits from pharmaceutical representatives

28.0% Offline: direct mail (postal variety)

Specify why. See Appendix for a summary of responses. Which is your least preferred?

16.0% Online: display ads on web pages (such as banner ads)

14.0% Online: search engine ads (paid ads mixed in search engine results)

0.0% Online: sponsored educational material

24.0% Online: display ads in mobile apps

10.0% Online: direct email advertising

2.0% Offline: display ads in medical journals (print edition)

4.0% Offline: sponsored events (such as CME events that have sponsors)

6.0% Offline: visits from pharmaceutical representatives

24.0% Offline: direct mail (postal variety)

Imprivata’s Single Sign-On (SSO)

Single sign-on is when a clinician can go to any terminal or computer in a hospital network and log into the terminal using the same badge, thumbprint, or other product so that a user-name and password is not entered each time the provider wants to access the mainframe.

8. Have you used any Single Sign-On (SSO) system?

44.0% Yes

56.0% No

81


If you have used Single Sign-On, please estimate how much time it saves you per day?

13.6% Less than 5 minutes

13.6% 5 minutes

18.2% 10 minutes 31.8% 15 minutes

4.5% 20 minutes 0.0% 25 minutes 9.1% 30 minutes 0.0% 40 minutes 9.1% 50 minutes or more

9. On a scale of 1 to 5, (1 = not useful, 5 = very useful), how important is Enterprise Single Sign-On (SSO) to the usability of

hospital IT system?

3.5 Usefulness of SSO to usability of hospital IT

Please comment.


10. On a scale of 1 to 5 (1 = not important, 5 = very important), how important is secure, HIPAA-compliant text messaging (SMS)

to you?

3.8 Level of importance of secure, HIPAA-compliant text messaging (SMS)

Please comment.


11. Assuming Enterprise Single Sign-On is available, what percent of visits to the hospital would you use it?

65.9% Percent of hospital visits I would use SSO

12. Are you more or less likely to refer patients to a facility that has Single Sign-On vs. a facility that does not have it?

14.0% More likely to refer patients to a facility with SSO

2.0% Less likely to refer patients to a facility with SSO

84.0% No difference

Please comment. See Appendix for a summary of responses.

13. Have you used Imprivata’s Single Sign-On Product?

6.0% Yes

94.0% No

What do you think of Imprivata’s Single Sign-On product?


In what other way(s) do you think that a hospital’s purchasing of a Single Sign-On solution for its physicians will benefit the hospital?


82


Appendix: Summary of responses. Question 1: Are you a board-certified physician? Specify specialty.

1 Pain

2 Internal medicine, nephrology

3 Gastroenterology, transplant hepatology

4 Radiology

5 Infectious diseases

6 Internal medicine and nephrology

7 Nephrology

8 Endocrinology

9 Allergy

10 Rheumatology

11 Nephrology

12 Infectious disease

13 Internal medicine


15 Internal medicine and pediatrics


17 Internal medicine, pulmonology, critical care medicine


19 Emergency medicine

20 Nephrology, internal medicine

21 Pulmonary, critical care, sleep

22 Infectious diseases

23 Endocrinology, internal medicine

24 Neurology

25 Internal medicine and pediatrics

26 Critical care


28 Endocrinology




32 Rheumatology

33 Rheumatology


35 Dermatology

36 Internal medicine and gastroenterology


38 Rheumatology

39 Medical oncology

40 Oncology


42 Anesthesiology/Internal medicine

43 Hematology and oncology

44 Nephrology




48 Dermatology

49 Cardiology


83


Question 2: What are your top three preferred offline (i.e., not computerized) sources for new medical information (e.g., JAMA,

medical conference). Please specify the reason you use each offline source (e.g., CME)? Offline Source #1

1 Pain news Easy

2 NEJM To keep myself updated

3 Schiffs textbook of Hepatology Comprehensive

4 NEJM Trust

5 NEJM Best

6 Medical conference Hear expert opinion firsthand

7 Print AJKD Receive printed journals, pass to fellows to read

8 Medical conference Interactive, travel

9 Conferences CME

10 Rheumatology news Up to date rheum info

11 Conference Live

12 Clinical Infectious Diseases (CID) Med ref

13 Cleveland Clinic Journal of Medicine CME

14 NEJM Reputation

15 Annals of Internal Medicine Availability, trust

16 Annals of internal medicine Subscription

17 Society and national meetings CME

18 NEJM New important information provided

19 Emergency medicine conferences Teach me state of the art stuff

20 NEJM Current studies

21 Medical conference Most up to day, efficient

22 NEJM Journal

23 JCEM Good journal

24 NEJM Most important papers

25 Harriet Lane Peds reference

26 Chest journal Reviews

27 NEJM Help in my practice

28 NEJM Latest studies

29 Conference Latest & upcoming info

30 American family physician CME

31 JAMA Respected

32 Medical conferences Networking

33 Medical conference Networking, CME

34 National conferences-ACP yearly conference

Authoritative

35 CME --

36 Medical conference Interaction

37 New England Journal of medicine Current research

38 ACR Good articles

39 Symposia Education

40 Journals Subscribe

41 CME Informative

42 Anesthesia and Analgesia Primary specialty

43 Ash Most recent research

44 Journal of American society of Nephrology

Mobility, CME

45 Annals of Internal Medicine Credible source linked to the ACP

46 Annals of Internal Medicine Consistent

47 NEJM Gold standard

48 JAAD Reliable info

49 NEJM All encompassing

50 Cleveland Clinic Journal of Medicine Oriented to teaching me

84


Offline Source #2

1 JAMA Well known

2 JASN To keep myself updated

3 AASLD annual meeting Up to date information, CME

4 JAMA Trust

5 JAMA Best

6 textbooks Background in physiology

7 Print JASN --

8 Hard copy journals Mobile and easy to review

9 Colleagues --

10 The rheumatologist Up to date rheum info

11 advisory boards Live

12 NEJM Med ref

13 JAMA Up to date clinical info

14 Family med journal Brief

15 JAMA Reputation

16 Mayo clinic proceedings Relevant info

17 Journals Easy to read

18 American family physicians Review articles relevant to my field

19 Colleagues So we are all "on the same page"

20 JASN Current studies/reviews

21 journals, Peer reviewed

22 Sanford guide Antibiotic doses/recs.

23 Endo practice Good journal

24 AAN Conference Neuro knowledge

25 Pharmacopia Meds, ease of use

26 NEJM New studies

27 Mayo clinics Help in my practice

28 Endocrine Today Great review

29 Talks Exchange of ideas

30 JAMA News

31 NEJM Respected

32 A+R Gold standard

33 NEJM Keeping up

34 Journals-JAMA, NEJM Relevant and peer reviewed so more definitive source

35 JAMA journal --

36 medical journals Convenience

37 Annals of Internal Medicine Current research

38 NEJM Well balanced

39 JCO Updates

40 conferences --

41 Epocrates Informative

42 ASRA/Regional Anesthesia and Pain Medicine

Primary specialty

43 Blood Most pertinent journal

44 Kidney international Mobility, CME

45 New England Journal of Medicine Credible for source my entire career

46 lancet Interesting

47 Annals of Internal Medicine Society

48 Skin and Allergy News Latest info

49 JAMA Very up to date

50 Mayo Clinic Journal Oriented to teaching me

85


Offline Source #3

1 Pain physician Easy access

2 medical conference To keep myself updated

3 EASL ILC Up to date information, CME

4 AJR Trust

5 CID Best

6 colleagues Trusts associates with significant experience

7 Print Kidney International --

8 Textbooks Mobile

9 Journals --

10 NEJM Up to date medical articles

11 Pharma dinners Live

12 JID Med ref

13 ACP Journal Clinical studies relevant to my specialty

14 internal medicine Journal New data

15 Audio Reviews in Pediatrics CME

16 medical economics Keep up with changes

17 Reference books --

18 Cleveland clinic Succinct relevant articles to my field

19 Annals emergency Medicine "The" eminent EM journal

20 JAMA Current studies

21 Text books Standard of care

22 Medical conferences In person meetings

23 CCF journal Good journal

24 ASA Conference Stroke knowledge

25 procedure for primary care Procedures, ease of use

26 SCCM Conference CME

27 Clinics of internal medicine A deep review

28 JCE&M Informative

29 Presentations Insights into thought leaders

30 Medical Economics Articles

31 Journal Watch Respected

32 Nature Science news

33 AIUM journal Sono updates

34 Local CME conferences Topics relevant, known speakers I work with

35 Cutis --

36 CME Interaction

37 medical conferences/CME Research and new practice guidelines

38 JAMA Ok articles

39 dinner programs Discussion, meet with speakers and colleagues

40 podcasts --

41 Medscape Informative

42 Anesthesiology Primary specialty

43 Journal of Clinical Oncology --

44 Division conferences CME

45 JAMA I'm an AMA member and find it to have good articles

46 NEJM Experimental

47 Lancet Well respected

48 Dermatology News Latest info

49 circulation Cover whole field with best rep

50 Annals of Internal Medicine New information

86


Question 3: What are your top six preferred online sources for new medical information (three websites, three mobile apps) and

please specify the reason you use each online source (e.g., drug reference, referral management)? Website #1

1 Pain source Free

2 UpToDate Frequent use to reference

3 Hepatology Specialty specific

4 WebMD Trust

5 Medscape Best

6 UpToDate Consistent info from authors I trust

7 PubMed Cite papers to fellows

8 Medscape Diverse, reliable

9 UpToDate Learn certain topics

10 UpToDate General clinical info

11 UpToDate Good

12 UpToDate Good source

13 Sermo Info sharing with colleagues

14 UpToDate Good resource

15 MD consult Availability

16 Medscape Medical education

17 UpToDate Easy access to medical info

18 UpToDate Online review of important medical topics

19 Sermo Fun

20 UpToDate Great treatment recs/guidelines

21 Up to date Easy to ready , state of art

22 Up to date General overview

23 Medscape Good resource

24 UpToDate --

25 UpToDate Patient education and health info

26 Medscape Information

27 MD consult Full text

28 UpToDate Get any answer

29 Medscape Latest info

30 Yahoo.com General health news

31 UpToDate Thorough

32 Medscape Current

33 MedPage Today CME

34 Up to Date Relevant, easy to navigate, use it like textbook

35 Medscape Current concise

36 Drug reference Convenience

37 Medscape Good information source

38 Web md Patient info

39 Drugjs.com Treatment information and side effects

40 PubMed Literature search


42 Up to Date Comprehensive and up to date

43 Spo rates Drug index

44 Journal websites e.g. JASN, kidney int Medical education, up to date, research

45 Annals.org Broad array of medical information

46 Sermo Informative

47 Epocrates Easy

48 JAAD Same as above, online

49 Med scape Up to date, accurate

50 eMedicine/Medscape Updated reviews of disease

87


Website #2

1 Anesthesia news Free

2 WebMD Ease of use

3 Liver transplantation Specialty specific

4 Epic rates Trust

5 eMedicine Best

6 Micromedex Drug reference

7 Medscape --

8 UpToDate Comprehensive

9 Medscape Learn certain topics

10 www.rheumatology.org ACR rheumatology info

11 Medscspe Good

12 QuantiaMD Comprehensive

13 UpToDate Updated new medical information

14 JAMA New data

15 Up to date Trust

16 Quantia Points

17 Medscape Medical community info

18 eMedicine Good summary of disease topics

19 Up to Date The best

20 Medscape Great reviews

21 NEJM Articles

22 Google Better than pub med

23 Google Good start point

24 Wikipedia --

25 Summit medical Patient education

26 UpToDate Information

27 Up to date Good review


29 Mdlinx Latest articles

30 Google.com Search specific topics

31 CDC Has what I need

32 Medpage Current

33 Epocrates Rx info

34 Medscape I get emails on latest news and can quickly read plus get CME

35 Dermscape Topical

36 Pub med Medical information

37 Up to date --

38 Medscape CME

39 Sermo Surveys, physician discussion boards

40 NCCN Cancer treatment recommendations

41 UpToDate Informative

42 The answer page CME

43 UpToDate Clinical info

44 UpToDate CME, most up to date

45 Acponline.org Good source for moc credit(s)

46 Google Quick

47 WebMD Google

48 WebMD Easy to navigate

49 Merck Especially for meds

50 Wikipedia Patient education because the language and diagrams are clear

88


Website #3

1 Pain news Free

2 PubMed Reference material

3 Clinical liver disease Specialty specific

4 Sermo Trust

5 Wiki Best

6 WebMD General reference

7 CDC.gov Infection trends for immunocompromised patients

8 Epocrates Practical , diverse

9 PubMed Search literature

10 NEJM website Recent clinical articles

11 Epocrates Good

12 Doximity --

13 Quantia Paid surveys or reward points

14 Family med Review

15 PubMed Lit searches

16 Sermo Surveys

17 QuantiaMD Concise presentations

18 Sermo Informal means of finding out information about a topic

19 Medscape Lots of info

20 PubMed Most recent articles

21 PubMed Article

22 PubMed For specific articles

23 Wikipedia Good start point

24 PubMed --

25 CDC.gov Up to date id issues and travel

26 eMedicine Information

27 Web md Help to explain

28 WebMD Informative

29 Drugs.com Drug details

30 Uptodate.com Reference

31 Ada Has what I need

32 UpToDate Gold standard

33 UpToDate Clinical information

34 IM news Up to the minute news in medical world

35 WebMD Current

36 Hipocrates Convenience

37 Epocrates --

38 ABIM Board issue

39 Medscape Updates

40 ASCO Bulletins


42 Med-Linx Broad subject matter

43 NCCN guidelines Guidelines

44 PubMed CME, research

45 Ama-assn.org Good for health policy information

47 Sermo Referrals

48 QuantiaMD Reliable

49 Med-Linx Well specialized

50 New England Journal of Medicine Summaries of articles to keep me current; subscription is too expensive

89


Mobile Application #1

1 Pain journal Easy

2 Epocrates Check drug doses, adverse effects, drug interactions

3 Epocrates Drug info

4 Epocrates Trust

5 Medscape Best

6 Epocrates Drug reference

7 Medscape

8 Epocrates Effective

9 QuantiaMD Cases, CME

10 Epocrates Drug info at point of care

11 Medscape Good

12 Epocrates

13 Epocrates Easy to navigate med info

14 Epocrates Dose of meds

15 Epocrates Experience with site, ease of use

16 Medscape CME

17 UpToDate Quick access to medical guidelines

18 Epocrates Look up drug information

19 Epocrates Complete

20 Epocrates Best drug dosing

21 Epocrates Drug reference

22 Medscape Easy to use

23 Sermo Good resource

24 MedCalc Formulas

25 UpToDate mobile Patient education and health info

26 UpToDate Information

27 Medscape Free

28 Epocrates Drug information


30 UpToDate Reference

31 QuantiaMD Interesting

32 Epocrates Current

33 Epocrates Rx info

34 Epocrates Comprehensive drug info

35 WebMD Topical

36 Drug reference Convenience

37 Washington manual Good help for complex hospital cases

38 Medscape Easy

39 Epocrates Information

40 PubMed --


42 Medscape Interesting and topical information

43 Spo rates Drug information

44 Medscape CME

45 ASCVD risk estimator Need to calculate need for lipid medication

46 Sermo Easy

47 Epocrates Easy to use

48 Epocrates Reliable

49 Med-Linx Best specialty

50 Medscape Detailed drug information

90



1 APS journal Free

2 Qx calculate Medical calculations

3 Doximity Networking

4 WebMD Trust

5 Sermo Best

6 MedCalc Medical calculator

7 Epocrates Med check, formulas

8 Medscape Effective , helpful

9 Sermo Cases

10 UpToDate app General clinical info

11 Epocrates Good

12 Medscape --

13 MedCalc Calculation/formulas to use medically

14 Family med Review

15 MedCalc Ease of use

16 QuantiaMD Quizzes

17 Epocrates Quick access to drug reference

18 Medscape Concise review of topics

19 QuantiaMD Easy to use

20 MedCalc Good formulas

21 Up to day Fast reviewed

22 Epocrates Easy to use

23 QuantiaMD Good resource

24 Epocrates Meds

25 Epocrates Bugs and drugs


27 Epocrates Help my practice

28 Sermo Informative

29 Medscape Latest details

30 Yahoo General health news

31 Doximity Reference

32 Med-Linx Current

33 Up to date CME and practice updates

34 QuantiaMD Love the short presentations-well done by top notch physicians

35 JAMA.com Topical

36 Epic systems Referrals

37 CDC Travel info

38 Impact rxi ICD look up

39 Drugs Information

40 Medscape --

41 Up-to-date Informative

42 Anesthesia Challenging questions

43 Medscape --

44 Epocrates Research, CME

45 Focus-AF calculator Good estimator of stroke risk

46 Epocrates It is there

47 Sermo Other docs

48 Medscape Easy to navigate

49 Sermo Broad coverage

50 GFR calculator To help me decide if drug dose needs modification

91



1 Pain practical Free

2 Sanford guide Chose appropriate antibiotic

3 Sermo Networking, surveys

4 PDR Trust

6 Sermo In touch with medical community

8 Sermo Social, fun

9 Epocrates Drug interaction

10 MKSAP 16 app Boards review

11 UpToDate Good

12 QuantiaMD --

13 UpToDate Relevant updated medical info

14 Calculator Very handy

15 Omnio Variety of resources within app

16 Chads vasc Calculate risk

17 Medscape Medical info

18 QuantiaMD 3 minutes videos i can look at anytime

19 NEJM Easy

20 Neph calc Good lab reference

21 Medscape Information

22 Med page today Quick bullets or vignettes

24 General websites Misc.

25 Prognocis EMR EMR

26 Lexicomp Drug info

27 Doximity Help my practice

28 Quantia Interesting topics

29 Sermo Exchange ideas

30 Google --

31 Epocrates Reference

32 UpToDate Gold standard

33 NYU library Journal search

34 Sermo Interesting forums/topics

35 Medscape.com Current

36 Epocrates Rapid information

37 Up to date Easily available source of medical info

38 Dragon Dictation

40 JCO --


42 The medical letter Interesting content

43 Quantia --

44 PubMed mobile Research

45 ACP smart medicine Excellent for evidence based advice and recommendations

48 QuantiaMD Reliable

49 QuantiaMD Good all around

50 Epic To read what is happening to my hospitalized patients

Question 4: Which online sources (website and mobile app) do you use regularly? Please specify reason for use.

Medscape Medpage Today Epocrates Quantia

1 -- -- Free Free

2 -- -- Drug interaction, adverse effects, doses

--

3 Medical info -- Drug info Surveys

4 Trust Trust Trust Trust

5 Best -- -- --

6 -- Reference --

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Medscape Medpage Today Epocrates Quantia

7 Available, complete -- Formulas, med check, familiarity

--

8 Effective, helpful Effective Diverse and helpful Interactive

9 Info -- -- CME

10 -- -- Drug info -- 11 Good -- Good -- 12 Thorough -- Thorough -- 13 -- -- -- Reward points

14 -- -- Dose -- 15 Information push -- Ease of use -- 16 CME -- -- Points

17 Medical news -- Easy to use drug reference Concise Presentations

18 Relevant review topics -- Look up drug information 3 min videos

19 If not able to access up to date

-- -- Get rewards

20 Good reviews Most recent news Current med dosing -- 21 Information -- Drug reference -- 22 On my phone On my phone On my phone On my phone

23 Use reg Use reg

24 Misc. Misc. Meds -- 25 -- -- Mobile, bugs and drugs -- 26 Information -- Drug info -- 27 Easy to use -- Easy to use -- 28 Informative Interesting Drug information Interesting topics

29 Latest info on diseases Drug info -- 31 -- -- Reference Interesting

33 Clinical information CME, news Rx info --

34 Searches topics which are relevant

-- Source for drug info which is comprehensive

Great short presentations. Love this site

35 Topical -- -- --

36 Good source -- Great for med info Good learning experience

37 Good info source -- -- -- 38 Both now and future -- Both now and future -- 39 Education and updates -- Updates -- 40 Only occasional -- -- --

42 Interesting and useful information

-- -- --

43 -- -- Drug info -- 44 CME Research, CME, medmath -- 46 -- -- Easy -- 47 -- -- Easy -- 48 Reliable data Reliable data Reliable data

49 Always present and up to date

Always present and up to date

-- Interesting perspectives

50 Informative, free -- -- Informative new bits; opportunity to test myself

Sermo UpToDate AMA-Assn.org Doximity Other

2 -- Read subject in detail -- -- -- 3 Surveys -- -- Networking -- 4 Trust Trust -- Trust -- 5 Good -- -- -- --

6 To keep in touch with medical community

Reference -- To keep in touch with medical community

--

8 Social , fun Good review source -- -- --

93


Sermo UpToDate AMA-Assn.org Doximity Other

9 -- Info -- -- -- 10 -- Clinical info -- -- -- 11 -- Good -- -- -- 12 -- Thorough -- Thorough -- 13 Paid surveys -- -- -- 14 -- Good resource -- -- -- 15 -- Comprehensive -- Social networking -- 16 -- Knowledge -- -- -- 17 -- Medical Guidelines -- -- --

18 Discussions of topics relevant to my field in informal manner

Go to source for researching any topic

-- -- --

19 Enjoyable Best -- -- -- 20 -- Best treatment recs -- -- -- 21 Topics Up to date information -- -- -- 22 On my phone Computer reference -- -- -- 23 Use regularly -- -- -- -- 24 -- Data driven mgmt. -- -- --

25 -- Both, patient and health info

-- Listing only --

26 -- Info and CME -- -- -- 27 -- EASY TO USE -- Easy to use -- 28 Interesting topics Get all info -- -- -- 29 Community Details on diseases -- -- -- 30 -- Reference -- -- -- 31 -- Best reference I know -- -- -- 32 -- As above -- -- --

33 -- Clinical management updates

-- -- --

34

Forums for discussion and interesting problems from other docs

Authoritative online text easy to search

-- -- Use epic for access to patient records

35 Current -- -- -- --

36 Good learning experience

New info -- -- --

38 -- Both current and future

-- -- --

39 Surveys, physician discussions

-- -- -- --

42 Interesting dialogue Comprehensive -- -- -- 43 Surveys for $ Unusual clinical cases -- -- -- 44 -- CME -- -- -- 45 -- Depth of information Great health policy -- -- 46 Easy -- -- -- -- 48 Reliable data -- -- -- --

49 Broad coverage including social issues

-- -- -- --

50 I ventilate my contrarian feelings here

-- -- -- Most informative learning experience; relevant to needs

94


Question 5: On a scale of 1 to 5, (1 = low quality, 5 = high quality) rate the quality of each product. Please comment.

1 If it's free. It's great.

3 Nice survey

6 I generally use UpToDate because the authors are well known to me and the recommendations and tiles are brief and useful.

10 Epocrates and UpToDate most useful on a day-to-day basis

14 UpToDate seem the best to me

18 Too much advertising

19 Sermo is my favorite, where I spend the most time.

20 UpToDate remains the gold standard as it provides very useful diagnostic and most importantly treatment recs.

22 Each option serves a different purpose, some are more entertaining than educational

23 Use user friendly websites

24 UpToDate is best

27 Help a lot in my practice

28 Up to date the most important

32 Up to date has the most information

33 Not enough time for everything-not interested in Sermo chat rooms.

34 The best sites are easy to navigate and relevant information I need to practice and are authoritative with nationally recognized experts

37 The available web sites and aps are helpful, but have too much pharma input

38 No comment

39 I find some of the sites easier to use than others. Some don't seem to work technically

42 I view the above sites/apps as necessary to keep up with medical developments especially those outside my primary specialty.

44 UpToDate is my best web reference. I use Epocrates a lot for patient related info. Medscape videos are great

45 UpToDate is the best. It has everything i need

46 Do not use these consistently

48 They are all reliable and up to date sites

49 Like the most current

50 UpToDate is the best but costs too much; Medscape/eMedicine is an effective substitute. Sermo is recreational and not clinically useful. Epocrates is OK and could take the place of Medscape, almost

Question 6: Of your overall time online what percent is currently web-based and what percent is mobile-based? How do you

expect this to change three years from now? Why?

1 Easier

2 Easy to use mobile apps

3 Better apps

4 Easier to use

5 Easier

6 I primarily use UpToDate and it is a reference that my institution has made available through the intranet, which is inconvenient to access via a mobile device

7 Availability of employer sponsored portable devices, right now using personal devices and feel uncomfortable pulling out personal devices in front of students/residents/fellows/colleagues/patients

8 I find myself leaning and relying more on mobile sources as they are more practical and time efficient

9 Easier to access mobile apps

10 I expect more sites to be easily accessible on phones or tablets over time.

11 Need web

13 Mobile devices are becoming more functional and handy

14 Web is more handy

15 As browsers become faster, I will need to have fewer app's downloaded on my phone

16 Easier to view on computer screen

17 Easier access with mobile device.

18 Capabilities of mobile applications will improve

19 I'm not much for Mobile apps

20 Better phones and better apps will make the phone the preferred source.

95


21 Use more mobile platform

22 Phones are always with us

23 Use mobile as more apps become avail

24 Usually near a computer

25 Better and more feasible apps

26 Will probably be the same

27 Portability

28 Apps getting easier and better

29 I will use more mobile for the ease of use and better devices

30 No comment

31 I don't use these references that often. I suspect my mobile use will increase, but can't know.

32 Screen size

33 May go to tablet, or bigger smart phone

34 As mobile becomes better it is more convenient than being at desk top and I can access it anywhere and on go

35 Ease of usage

36 Away from computers

37 I'm in my office more than ever

38 Better smart phones and faster Wi-Fi

39 Using mobile apps uses too much battery life and can be more difficult to use than on a desktop or laptop

40 Computer at desk

41 More time for mobile

42 More online resource, increased ease of use, more and cheaper bandwidth

43 Don't expect more mobs use than currently

44 Mobile apps easier to use, more mobility

45 Once internet speeds become faster, I think I'll have more time using apps

46 That is how it is

47 Easy to use

48 Easier to read on a computer

49 More ease in using mobile

50 I use mobile on the fly, seeing patients; I use the web when seated at one of my work computers or at home

Question 7: Do you prefer physician-directed advertisement online (website or mobile app) or offline (traditional media, e.g., print)

context? Why?

5 Online Easy

7 Online Its more green

8 Online Easier to review and go through

10 Offline See below

11 Offline Live

15 Offline Less work disruption

18 Offline Popups online are intruding

19 Online Less pushy

20 Online Less trash

21 Online Up to date info

22 Offline Annoying on line

24 Offline Read it at leisure

27 Online Easier to carry on

33 Offline Easier to discard, ignore

34 Offline Then I can take whatever time and go through materials slowly-usually if I am looking on other websites I am in a rush and want to look for specific info to help a patient

40 Offline I can ignore it

44 Offline I get too may e-mails. Can select offline ads

49 Offline Don't want to be interrupted when doing specific task and time limited

96


Question 7: Which are your preferred types of ads? Select top three. Please specify why.

Online

Display ads on web pages (such as banner ads)

Search engine ads (paid ads mixed in search engine results)

Sponsored educational material

Display ads in mobile apps

Direct email advertising

1 -- -- Free -- Free

2 -- -- -- Nuisance value Nuisance value

3 -- Least intrusive -- Least intrusive --

4 -- -- -- Where I spend most time

--

5 Easy Easy Easy -- -- 7 Quick glance Quick glance Quick glance -- --

8 -- -- I like the educational value

Easy

10 Can review ads while looking at a relevant web page

-- -- -- --

12 -- -- Good -- Interest

13 -- -- Provide education or learning experience

--

14 -- -- Teaching --

15 -- -- Educational value --

16 -- -- -- Can read when i want

18 I can choose to click or not click

Option to click and search

Ads less obvious -- --

19 -- Easy to access Teach me more -- -- 20 Easy to view Does not interfere -- -- -- 22 Can ignore -- -- -- --

25 Saves paper time and ease of use

-- Saves paper, ease of use

Saves paper time and ease of use

--

26 -- -- Can use anytime -- -- 27 -- Easy to erase -- Easy to erase -- 29 -- -- Educational -- -- 30 -- -- Like it -- Can delete it easily

33 -- Can ignore -- -- -- 34 -- -- -- -- -- 35 -- -- Specific for specialty -- -- 36 -- -- More comprehensive -- -- 37 -- -- -- -- Easy to read

38 -- Can pick and choose Educational value -- -- 41 Informative -- Informative -- -- 42 Visibility -- My choice -- --

48 -- -- -- -- Doesn't clutter websites

50 -- Gives me choice Seminars and focused discussions are useful

-- --

97


Offline

Display ads in medical journals (print edition)

Sponsored events (such as CME events that have sponsors)

Visits from pharmaceutical representatives

Direct mail (postal variety)

1 -- -- Free --

2 -- Opportunity to interact with those of interest

-- --

3 -- Least intrusive -- -- 4 -- More education -- --

6 Won't click through like online ads

-- Like getting detailed information

Like getting detailed information

8 Easy to review -- -- --

9 Interaction I like interaction At my leisure

10 Can review at my leisure if I want

-- Can ask Qs directly in real time

--

11 -- Live Live Live

13 -- CME credit can be obtained Personalized -- 14 -- Live encounter Sample --

15 Can review at my leisure; no high-pressure tactics

Educational value -- --

16 Easy to see Credits -- -- 19 -- -- -- I can throw it out.

20 Easy to view and quickly read

-- Quick, up to date info on new meds

--

21 Can speed past I can control time spent Like interaction -- 22 -- -- Can schedule Can toss

23 Most useful info Most useful info Most useful info --

24 Habit Specific to me Relationship Often specific to me

26 -- Can use anytime Can discuss --

27 -- -- Interaction --

28 Less distracting Less distracting Expect it

29 They are there if needed -- One can ask questions

30 -- Like it Like it

32 Read only relevant CME -- Can discard at will

33 Can ignore -- Lunch is pleasant

34 I can access it more conveniently

-- They bring samples I can go over it when I want to

35 -- Educational -- Topical for specialty

36 Convenience Interaction -- --

37 Interesting -- I like the personal contact --

38 Easy to follow -- -- --

39

They can be interesting and present a drug in a unique way that lets me decide which ones I want to concentrate on but can easily skip others

To satisfy CME requirements

Ability to speak to a representative from the company

--

40 Ignore them At least I can learn something

-- Goes to recycle bin immediately

41 Informative -- -- --

42 -- -- -- Old school

43 -- Preferred -- Gets to our patients

44 Easy to read Focused -- Can select and tear up that I don’t want

45 Easy to see/read Nice to be able to interact with the "teacher"

By far the best; other forms are largely a waste of space; I don't pay attention to them

--

98


Display ads in medical journals (print edition)

Sponsored events (such as CME events that have sponsors)

Visits from pharmaceutical representatives

Direct mail (postal variety)

46 -- Fun to get out of house Can discuss in detail I can throw it out

47 Like to read Listening Samples -- 48 Easier to read -- Add value to new products --

49 Read at leisure Learn most Depends on competency of rep

--

50 -- -- Good way to learn about new drugs

--

Question 9: On a scale of 1 to 5, (1 = not useful, 5 = very useful), how important is Enterprise Single Sign-On (SSO) to the

usability of hospital IT system? Please comment.

1 Free and easy

2 Security, ease of use

3 Not familiar

4 Never used before

6 Nearly useless as I generally use only 1-2 applications in any one setting

7 OMG, I can't deal with having to log into everything I need

8 I like the practicality and less time involved

9 Good option

10 Sometimes slow to initially boot up.

12 Not preferred

13 Not very familiar with it

14 No encounter

15 My experience is that it has been very helpful.

16 Easy to track

17 It doesn't always work. Little time saved.

18 When you have to log on 10x/day, every minute helps

19 Too much risk of identity theft.

20 Would be a huge time saver and make computer usage easier and faster

21 More efficient

22 Save time and energy remembering different passwords

23 Easier than repeated passwords

24 Not crucial

25 Helpful, still hard to track passwords

27 Easy to use

28 Make it easier and less time consuming

29 Mainly it is single system and saves time

30 No comment

31 I'm tired of entering my password.

32 Time saver

33 It's more efficient

34 It makes it easier and quicker-not absolutely critical though a nice feature

36 Efficiency

38 Much less headache

39 I haven't used this so I am not sure how useful it would be

40 Don't know it

41 Very useful

42 Allows access to necessary information wherever you are

43 Saves headache if not time

44 Don’t know if our system uses Enterprise SSO

45 I don't think it saves much time; often I find it doesn't work

49 Save a lot of time

50 Unfortunately not available

99


Question 10: On a scale of 1 to 5 (1 = not important, 5 = very important), how important is secure, HIPAA-compliant text

messaging (SMS) to you? Please comment.

1 Not that important

2 Security, ease of use

3 Use all the time

4 Good communication system

5 Easy

6 SMS could be a great tool for communication and interaction

7 Litigation risk is reduced

8 Highly important due to the legal implications

9 Protect patient information

10 I text all the time, and HIPAA compliant texting would better allow me to interact more freely with colleagues regarding patient care.

13 Protection of privacy is important to my patients

14 I prefer no more texting

15 Would serve as good means to health-team communication

16 Very important for privacy

17 Texting is more used as a means of communication in healthcare.

18 I send very few messages via this route

19 Have to use it all the time.

20 Occasionally comes in handy but don't have much of a need

21 Some importance, like being able to message

22 Safety issue for patients

23 Don't use

24 Don't worry about this

25 Would use it, except it ties me too close to patient care 24/7

26 Could be very helpful for communication

27 Secure enough

28 Is it really necessary?

29 Any Personal medical info has to be HIPAA

30 No comment

31 I don't use text messaging so it's not important to me.

32 Legal issue

33 Nice for patient care

34 Not really using text as much because of HIPAA issues-depends on the setting-but now using encrypted email for communication re patients

36 Confidentiality

37 Vital to be compliant

38 I think it should be used

39 It helps to keep everything compliant

40 Don't use

42 Never used

43 Do not think this a problem

44 Extremely important

45 I hate HIPAA; it just slows me down and interferes with my practice

46 HIPAA is just a gimmick

47 Required

48 Keep up to date

49 Obvious

50 It is the future

100


Question 12: Are you more or less likely to refer patients to a facility that has Single Sign-On vs. a facility that does not have it?

Please comment.

1 Doesn't matter

2 Clinical care is more important to me

3 Not familiar

4 Convenience

5 Easy

6 This is invisible to the patient and to patient care

7 Feel that more resources are available in facilities that recognized the use and implement SSO

8 When it comes to patient referral, quality of care would be my main interest

10 I only work at a facility with SSO now.

14 Less headache

15 More concerned with quality of care and patient satisfaction

18 It is a user friendly application, not something that would convince me to utilize a hospital

19 Identity theft.

20 I will use the best hospital regardless of SSO

21 This would not change where I send patients

22 Not enough of an option at this point to really comment

23 No difference

24 Not a factor in referrals

25 Very helpful

27 Avoid errors in hand writing

28 Not that big a deal

29 It is safer

31 I work in one facility.

33 I only admit/refer to 1 hospital almost exclusively which is a major academic center

34 Nice feature but it is not the critical issue which decides where I go

36 Referral depends on the physician

38 That is not a high priority thing

39 I really don't know how useful this is going to be

44 Referral not depend on SSO but physician expertise

45 Referral is based on the quality of the service, not the sign-on mode

48 I'm not familiar with this service

49 Depends on quality of institution

50 Clinical appropriateness overrides convenience

Question 13: What do you think of Imprivata’s Single Sign-On product?

15 I like it

25 Helpful and ease of use

27 Good system

Question 13: In what other way(s) do you think that a hospital’s purchasing of a Single Sign-On solution for its physicians will

benefit the hospital?

25 Time saving for sure

27 Fewer errors

101



Disclosures AppendixAnalyst CertificationI, Steven Wardell, certify that the views expressed in this report accurately reflect my views and that no part of mycompensation was, is, or will be directly related to the specific recommendation or views contained in this report.

102


Distribution of Ratings/Investment Banking Services (IB) as of 09/30/14IB Serv./Past 12

Mos.Rating Count Percent Count PercentBUY [OP] 138 69.30 51 37.00HOLD [MP] 61 30.70 2 3.30SELL [UP] 0 0.00 0 0.00

Explanation of RatingsOutperform (Buy): We expect this stock to outperform its benchmark over the next 12 months.Market Perform (Hold/Neutral): We expect this stock to perform in line with its benchmark over the next 12months.Underperform (Sell): We expect this stock to underperform its benchmark over the next 12 months.The degreeof outperformance or underperformance required to warrant an Outperform or an Underperform rating shouldbe commensurate with the risk profile of the company.For the purposes of these definitions the relevant benchmark will be the S&P 600® Health Care Index forissuers with a market capitalization of less than $2 billion and the S&P 500® Health Care Index for issuers witha market capitalization over $2 billion.

103


Important DisclosuresThis information (including, but not limited to, prices, quotes and statistics) has been obtained from sourcesthat we believe reliable, but we do not represent that it is accurate or complete and it should not be reliedupon as such. All information is subject to change without notice. This is provided for information purposesonly and should not be regarded as an offer to sell or as a solicitation of an offer to buy any product to whichthis information relates. The Firm, its officers, directors, employees, proprietary accounts and affiliates mayhave a position, long or short, in the securities referred to in this report, and/or other related securities, andfrom time to time may increase or decrease the position or express a view that is contrary to that containedin this report. The Firm's salespeople, traders and other professionals may provide oral or written marketcommentary or trading strategies that are contrary to opinions expressed in this report. The Firm's proprietaryaccounts may make investment decisions that are inconsistent with the opinions expressed in this report.The past performance of securities does not guarantee or predict future performance. Transaction strategiesdescribed herein may not be suitable for all investors. Additional information is available upon request bycontacting the Editorial Department at One Federal Street, 37th Floor, Boston, MA 02110.

Like all Firm employees, analysts receive compensation that is impacted by, among other factors, overall firmprofitability, which includes revenues from, among other business units, Institutional Equities, and InvestmentBanking. Analysts, however, are not compensated for a specific investment banking services transaction.MEDACorp is a network of healthcare professionals, attorneys, physicians, key opinion leaders and otherspecialists accessed by Leerink and it provides information used by its analysts in preparing research.

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