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Business Models for eHealth: - World of Health IT Conference

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<strong>Business</strong> <strong>Models</strong> <strong>for</strong><br />

<strong>e<strong>Health</strong></strong>:<br />

Results from an EU Project<br />

Lorenzo Valeri (RAND Europe)<br />

Patrick Jansen (Capgemini Consulting)<br />

Daan Giesen (Capgemini Consulting)


Overview <strong>of</strong> the presentation<br />

• <strong>e<strong>Health</strong></strong>: understanding business models <strong>for</strong><br />

going beyond financial issues<br />

• Sizing the <strong>e<strong>Health</strong></strong> market<br />

• Applying business models approaches to<br />

<strong>e<strong>Health</strong></strong><br />

• Concluding remarks


e-healthcare business models: going<br />

beyond financial issues<br />

- Evolution <strong>of</strong> healthcare delivery-<br />

Socio-Economic<br />

Trends<br />

<strong>Health</strong> Specific Trends<br />

Aging Funding complexities<br />

Chronic Diseases Patients Mobility<br />

Un-healthy behaviour Standardisation<br />

<strong>Health</strong>y and<br />

independent lifestyle<br />

- Affecting Trends-<br />

Cultural differences<br />

- Challenges <strong>for</strong> <strong>Business</strong> Modelling <strong>for</strong> <strong>e<strong>Health</strong></strong><br />

• Financial sustainability<br />

• <strong>e<strong>Health</strong></strong> systems <strong>for</strong> efficiency and<br />

effectiveness <strong>of</strong> pre-existing<br />

services<br />

• Financial (and operational)<br />

sustainability also via change<br />

management<br />

• Extended timings <strong>for</strong> the <strong>e<strong>Health</strong></strong><br />

system development


EU 27+2 – Total <strong>e<strong>Health</strong></strong> market 2008<br />

& 2012


EU 27+2 – <strong>e<strong>Health</strong></strong> growth rates per<br />

segment 2008-2012


<strong>Business</strong> models: Identifying the<br />

interactions<br />

Resources<br />

Offer<br />

PROF<strong>IT</strong><br />

Financial Per<strong>for</strong>mance<br />

Customer<br />

<strong>e<strong>Health</strong></strong><br />

Value<br />

Proposition<br />

Interactions<br />

Change<br />

management<br />

Data collection


Mapping <strong>e<strong>Health</strong></strong> <strong>Business</strong> <strong>Models</strong><br />

KEY<br />

PARTNERS<br />

What can partners do<br />

to leverage your<br />

business model (better,<br />

at lower cost)?<br />

COST<br />

STRUCTURE<br />

KEY<br />

ACTIV<strong>IT</strong>IES<br />

What key activities do<br />

you need to per<strong>for</strong>m<br />

and how easily can you<br />

do this?<br />

KEY<br />

RESOURCES<br />

What key resources<br />

does your business<br />

model require?<br />

What is the cost structure <strong>of</strong> your business<br />

model and is this in line with the core<br />

values <strong>of</strong> the business model?<br />

VALUE<br />

PROPOS<strong>IT</strong>ION<br />

Which <strong>of</strong> you clients’<br />

problems do you solve<br />

and which needs are<br />

satisfied?<br />

REVENUE<br />

STREAMS<br />

RELATION PATIENT /<br />

USER /<br />

What kind <strong>of</strong> relations<br />

does your<br />

patient/user/doctor<br />

expect and which kind<br />

do you maintain?<br />

CHANNELS<br />

Through which means<br />

do your clients want to<br />

be reached and which<br />

means do you utilize?<br />

DOCTOR<br />

SEGMENTS<br />

What are your<br />

patients’, users’,<br />

doctors’ needs,<br />

problems, desires, and<br />

ambitions?<br />

What value are your clients willing to pay<br />

<strong>for</strong> and what is the preferred payment<br />

mechanism?


Centro Unico di Prenotazione-<br />

Umbria<br />

Environment<br />

Main drivers to change<br />

<strong>Business</strong> Model<br />

Solution<br />

Key Success Factors<br />

<strong>Business</strong> Model<br />

• Booking/cancellation/rescheduling and payment by patient <strong>of</strong> specialised visit or tests also via<br />

pharmacies<br />

• Integration with Umbria’s local radiology in<strong>for</strong>mation system, laboratory in<strong>for</strong>mation system and<br />

hospital in<strong>for</strong>mation system<br />

• Direct link with Italy’s Ministry <strong>of</strong> Economic and Finance<br />

• Multichannel access <strong>for</strong> patients to book/cancell/rescheduling <strong>of</strong> specialised test or visit<br />

• Facilitation <strong>for</strong> rural areas<br />

• Efficiency in the collection <strong>of</strong> payments <strong>for</strong> test (tickets)<br />

• Financial incentives <strong>for</strong> the involvement <strong>of</strong> private pharmacies<br />

• Client/Server solution via regional Intranet solution managed by Umbria’s in-house <strong>IT</strong> company<br />

Webred<br />

• Actors involved: 2 Regional Hospitals (Perugia/Terni), 4 local health authorities (Citta di Castello,<br />

Perugia, Terni, Foligno) and 266 pharmacies (144 in rural areas, 122 in urban areas) and 487<br />

specialist doctor or approved laboratories<br />

• Potential users: over ca. 880.000 citizens, <strong>of</strong> which 140.000 <strong>for</strong>eigners (650.000 in the Province <strong>of</strong><br />

Perugia and 230.000 in the Province <strong>of</strong> Terni)<br />

• Direct involvement <strong>of</strong> all actors in the development <strong>of</strong> the system<br />

• Financial incentives <strong>for</strong> private pharmacies to link-up to the system<br />

• Centralised <strong>IT</strong> infrastructure<br />

• <strong>IT</strong>IL-aligned approach with <strong>IT</strong> support call centre (especially <strong>for</strong> private pharmacies) and <strong>for</strong> specific<br />

operational issues (e.g. suspension <strong>of</strong> booking by a single laboratory/diagnostic centre due to long waiting<br />

lists)


CUP: Changing the <strong>Business</strong> Model<br />

CUP without pharmacies CUP with pharmacies<br />

Outpatient<br />

Radiology<br />

Departments<br />

2 Regional<br />

Hospitals<br />

Outpatient<br />

Laboratories<br />

4 Local<br />

<strong>Health</strong><br />

Authorities<br />

Hospital<br />

Radiology/Laboratory<br />

2 Regional<br />

Hospitals<br />

Outpatient<br />

Radiology<br />

Departments<br />

4 Local<br />

<strong>Health</strong><br />

Authorities<br />

Outpatient<br />

Laboratories<br />

Web-Red <strong>IT</strong> infrastructure Web-Red <strong>IT</strong> infrastructure<br />

2<br />

4<br />

1<br />

3<br />

A144 Rural<br />

Pharmacies<br />

Citizen/Patient Citizen/Patient<br />

1: Request <strong>of</strong> test/specialist by patient/citizens<br />

2: Automatic check on availability and assign date/time <strong>for</strong> visit<br />

3: Response back on availability/available time<br />

4: Booking/rescheduling complete-Payment <strong>for</strong> visit by patients<br />

3<br />

2<br />

4<br />

1<br />

Hospital<br />

Radiology/Laboratories<br />

A122 Urban<br />

Pharmacies<br />

A15 GPs


CUP: Changing the Value Proposition<br />

KEY<br />

PARTNERS<br />

Hospital wards<br />

Diagnostic Tests<br />

144 Rural Pharmacies<br />

122 Urban Pharmacies<br />

15 GPS<br />

Web (TBD)<br />

KEY<br />

ACTIV<strong>IT</strong>IES<br />

6 locations <strong>for</strong><br />

booking/payment/reschedule<br />

/cancellation <strong>of</strong><br />

lab.test/specialised visit/ 281<br />

locations<br />

KEY<br />

RESOURCES<br />

Diagnostic centres<br />

Hospital/Local <strong>Health</strong><br />

Authorities<br />

Patients<br />

Pharmacies<br />

COST<br />

STRUCTURE<br />

Personnel<br />

Direct cost (printing, etc…)<br />

Education & Training <strong>for</strong> pharmacies<br />

<strong>IT</strong> Call centre<br />

<strong>IT</strong> system integration<br />

<strong>IT</strong> support <strong>for</strong> pharmacies<br />

VALUE<br />

PROPOS<strong>IT</strong>ION<br />

High quality service<br />

Efficiency and<br />

effectiveness<br />

Multiple access points<br />

especially <strong>for</strong> rural<br />

areas<br />

Customer<br />

retention/additional<br />

revenues <strong>for</strong><br />

pharmacies<br />

Management <strong>of</strong> the<br />

results <strong>of</strong> health<br />

awareness campaigns.<br />

REVENUE<br />

STREAMS<br />

CLIENT<br />

RELATION<br />

Distant relation<br />

Closer to needs <strong>of</strong><br />

patients<br />

CHANNELS<br />

Hospital structures<br />

Local <strong>Health</strong>care<br />

authorities<br />

Pharmacies<br />

GPs<br />

Doctors<br />

GPs<br />

Patients<br />

Pharmacies<br />

Pharmacies:<br />

2 EURO per booking<br />

Better cash flow <strong>for</strong> pharmacies<br />

PATIENT /<br />

USER /<br />

DOCTOR<br />

SEGMENTS


Tactus: Serving Alcoholics online<br />

Environment<br />

Main drivers to change<br />

<strong>Business</strong> Model<br />

Solution<br />

Key Success Factors<br />

<strong>Business</strong> Model<br />

• Tactus delivers care and treatment to addicts with alcohol, drugs, medicine, gambling, and eating<br />

problems<br />

• Especially alcoholic abuse has a stigma: people are ashamed; it is a taboo<br />

• Tactus per<strong>for</strong>ms 5,500 units <strong>of</strong> care per year and the 2007 result was €1,605,000 (budget <strong>of</strong> €57<br />

mio)<br />

• 10% <strong>of</strong> all Alcoholics ever got help<br />

• Research pointed out that preventive actions should indicate better results<br />

• The behavioral change side <strong>of</strong> the treatment needs to be easily accessible<br />

• Structured asynchronous Internet treatment program (Tactive) with a focus on cognitive<br />

behavioral therapy through one-to-one counseling <strong>of</strong> a pr<strong>of</strong>essional assistant:<br />

• Two-sided treatment (diagnostics & behavioral change)<br />

• In<strong>for</strong>mative website<br />

• Forum <strong>for</strong> online contact with fellow-sufferers<br />

• Internet-based treatment (on a secured plat<strong>for</strong>m)<br />

• Aftercare chat module<br />

• Three executing organisations: Tactus, Mondriaan, and Symphora Group<br />

• Research that underpins the benefits <strong>of</strong> the service, and gives opportunities to adjust<br />

• Personal counseling relation between pr<strong>of</strong>essional assistant and alcoholic is key<br />

• Price from M&ICT <strong>of</strong> €650K<br />

• No transportation needed, freedom in time and place


Tactive: Changing the <strong>Business</strong> Model<br />

Alcoholic treatment be<strong>for</strong>e Alcoholic treatment after<br />

Local, regional,<br />

national<br />

government<br />

Knowledge<br />

Quality & Control; Subsidy<br />

Tactus<br />

Orders & Leads; Money<br />

Feedback<br />

Provide treatment &<br />

care to clients<br />

<strong>Health</strong>care<br />

Insurer<br />

Treatment<br />

Pr<strong>of</strong>essional<br />

Assistants<br />

Internet-based<br />

treatment<br />

Local, regional,<br />

national<br />

government<br />

Forum<br />

Tactive<br />

(Alchoholdebaas.nl)<br />

Tactus<br />

Pr<strong>of</strong>essional<br />

Assistants<br />

In<strong>for</strong>mative<br />

website<br />

Aftercare chat<br />

module<br />

<strong>Health</strong>care<br />

Insurer<br />

Source: Interview Hans Keizer, Tactive / Tactive Documentation


Tactive: Changing the Value Proposition<br />

KEY<br />

PARTNERS<br />

Local, regional and<br />

national government<br />

Tactus<br />

TheFactor.e<br />

<strong>Health</strong> insurer<br />

Mondriaan<br />

Symphora Group<br />

COST<br />

STRUCTURE<br />

KEY<br />

ACTIV<strong>IT</strong>IES<br />

Give care & treatment<br />

Supervise assistants<br />

Provide addict care<br />

Develop internet-based<br />

plat<strong>for</strong>m<br />

KEY<br />

RESOURCES<br />

680 Pr<strong>of</strong>. assistants<br />

20-25 Pr<strong>of</strong>. assistants<br />

Knowledge on diagnostics<br />

& behavioral change<br />

<strong>IT</strong> knowledge<br />

Personnel – Pr<strong>of</strong>essional assistants<br />

Education & Training<br />

Coaching on digital treatment<br />

<strong>IT</strong> application: development and<br />

maintenance<br />

VALUE<br />

PROPOS<strong>IT</strong>ION<br />

Tactive online treatments<br />

E.g. Alcoholdebaas.nl<br />

Provide in<strong>for</strong>mation,<br />

fellow-sufferer contact,<br />

treatment and aftercare<br />

assistance<br />

Roll-out to other areas:<br />

�Gambling<br />

�Drugs<br />

�Eating<br />

�Medicine<br />

REVENUE<br />

STREAMS<br />

RELATION PATIENT /<br />

USER /<br />

DOCTOR<br />

Need-oriented relationship<br />

Personal & Anonymous<br />

Patient has the control over<br />

his/her own treatment<br />

CHANNELS<br />

Front-end <strong>IT</strong> system<br />

Pr<strong>of</strong>essional assistants<br />

<strong>Health</strong> insurer<br />

SEGMENTS<br />

People with addicts<br />

Desired knowledge and<br />

experience around<br />

addictions<br />

Other target groups:<br />

�Anonymous patients<br />

�Policyholders<br />

�Companies<br />

�Self-payers<br />

Roll-out to other<br />

countries<br />

Client fee: fixed fee + fee per hour <strong>for</strong><br />

delivered treatment/care<br />

Franchise fee<br />

Resell <strong>of</strong> application to other countries<br />

Source: Interview Hans Keizer, Tactive / Tactive Documentation


Conclusions<br />

• Mapping business model<br />

• Long term commitment <strong>of</strong> senior management<br />

• Not about new service but about news ways <strong>of</strong> delivering a specific<br />

healthcare care specific service<br />

• Financial commitment<br />

• Stable financial support throughout project life line<br />

• Final support <strong>for</strong> supporting staff commitment<br />

• Patient’s needs<br />

• Patients viewed as “clients” or “customers”<br />

• <strong>Health</strong>care services aimed at providing more efficient services<br />

• Open standards<br />

• Explicit use <strong>of</strong> technical open standards to foster integration and followup<br />

extension <strong>of</strong> functionalities<br />

• Evaluation<br />

• Senior management commitment to a-priori and ex-post evaluation <strong>of</strong> the<br />

effects <strong>of</strong> <strong>IT</strong>-enhanced healthcare service


For more in<strong>for</strong>mation<br />

Pr<strong>of</strong>. Jo Chataway<br />

Director<br />

RAND Europe<br />

Westbrook Centre<br />

Milton Road<br />

CB4 1YG Cambridge<br />

Tel:00441223353329<br />

Email: chataway@rand.org

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