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CONSUMERIZATION45 Minutes
1. Medicare requires Value based (i.e. CJR, spine next).
2. 5% early 2016 to 85% by 2018.
3. Surgeons align with hospital for cost reduction.
4. Middlemen seen as excessive cost.
5. OEM manufacturers have opportunity to step up with low price option, and disrupt market.
VALUE BASED DISRUPTION (BRISK)
1. Hospital is moving to bundle and scrutinizing cost.
2. They align with surgeon and operationalize the Episode.
3. Implant partners that can support the Episode are at the tableand not on the menu.
HOSPITAL GETS INVOLVED (ADOPTION TODAY)
1. Payer has much more transparency on outcomes and costs.
2. Able to negotiate with manufacturer based on value.
3. Steerage to providers that comply.
PAYER GETS INVOLVED (YOUNGER POPULATIONS)
1. Transparency on value and outcomes becomes so readily available that consumer can now make sense of it.
2. They choose best surgeon and implant that they can afford.
3. High deductibles continue to climb and out of pocket expense drives adoption of preference.
4. Highly optimized bundle providers offer choice to extract maximized value from customer.
CONSUMER GETS INVOLVED (2020)
Empl
oyer
Insurance
Governm
entPh
ysici
anHospital
Pharmacy
Risk
TransparencyTech
nolog
yconsumer
costchoice
THE REASON WHY IT IS SO DIFFICULT FOR EXISTING FIRMS TO CAPITALIZE ON DISRUPTIVE INNOVATIONS IS THAT THEIR PROCESSES AND THEIR BUSINESS MODEL THAT MAKE THEM GOOD AT THE EXISTING BUSINESS, ACTUALLY MAKE THEM BAD AT THE ONE COMPETING IN DISRUPTION.
Clay Christensen
DISRUPTION
REMOTE CARE
GOVERNMENT
MENTAL FINANCIALCOMMUNITIES
DEVICE
big data
wearables
IoT
smart home
PATIENTSmobile health
FFS VBPpop health
patient engagement
PHARMA
wellness
EMPLOYERS
PAYERS
GOVERNMENT
PATIENTS
REMOTE CARE
CARE COORDINA
TIONHEALTH
IT
EHRDEVICES
PHARMAHEALTH SYSTEMS
PAYERS
EMPLOYERS
DOCTORS
patient engagement
mobile health
big datapop health
wellness
AGING
CHRONIC DISEASE
NUTRITION FITNESS
claims
CARE COORDINA
TION
HEALTH IT
EHR
DOCTORS
HEALTH SYSTEMS
acute care
community care post acute
Home
e-Visits
conservative options
Health Literacy
clinic visit
diagnostic imaging urgent
care
ambulatory procedure
pre-op evaluation
efficient surgical
intervention
safe recovery
discharge optimization
rehab
recovery at home
outcome data
functional recovery
•Convenient •Trusted •Professional •Accurate
•Convenient •Data Driven •Successful •Personalized
•Quality •Value •Efficiency •Safety
.CARE
CLINICS
THREE PHASE DIGITAL SOLUTION INTERFACE… EXECUTION STRATEGY
surgerystepssurgery done right
outcomes convenience cost
6 MIN WALK TEST = A SIMPLE HABIT$15 TRACKER
AFTER SURGERY
562
BEFORE SURGERY
388
Activity Based Outcomes!Lower DVT risk and…
The most important thing is to remain active, and to love what you are doing.
Activity keeps us young
Running is your passion, keeping you running is ours
SURGEONS PROFESSIONAL
DECISION
HOSPITAL CONTRACTING
MARGIN ON DRG
CREATE & MANUFACTURE
PRODUCT
PAYER COMPENSATES
HOSPITAL
MARKET, PACKAGE & SHIP
SALES, SERVICE & DISTRIBUTION
Direct to Consumer Marketing
Rep Less
Bundled Payments
High Deductibles
50-70% of Implant Cost
Activity Based Costing
Physician Aligned for Cost Reduction
Cost TransparencyPATIENT
Yesterday's Value Chain
TOMORROW'S VALUE CHAIN
CREATE & MAKE
PRODUCT
MARKET, PACKAGE
& SHIP
SALES, SERVICE,
DISTRIBUTE
PROVE VALUE, CONVENER?
Bundled Payments Expand to 85% in 2020.
Competition on Value = outcomes/cost becomes normal
Deductible Financing and Implant Up Sell Based on Evidence
Networks of High Performing Providers
Activity Based Costing Rids Episode of Low Value Support, Such as Implant Reps
Manufacturers that can Take Risk have “Seat at Table”, all others are “on the Menu”
THE PATIENT SHOPS
HOSPITAL ORGANIZES
BUNDLE
SURGEON TEAM LEAD
PAYER PROVIDES CHOICE TO PATIENT
episode support by device companyprovider role
