Small Business Development Opportunity: Population Health Management
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1 Small Business Development Opportunity: Population Health Management 1 P a g e
2 TABLE OF CONTENT Sections Pages Population Health Management (PHM) Concept 3 Market Analysis 5 Small Business Development Opportunities 7 Private Investment Activities 8 Business Formation & Growth Process Market Analysis Business Model Business Plan New Technology Development Funding Options Small Business Innovation Research (SBIR) Maine Technology Institute (MTI) 9 10 About HealthTech Maine 14 2 P a g e
3 Population Health Management (PHM) Concept Recognized and regarded as a major shift in the U.S. healthcare delivery process, population health management (PHM) does not have an official definition. Yet, Peter Kinhan, an industry executive with GM Healthcare, provides a clear, solid workable definition: Population health management is an approach to care that focuses on improving the general health of the population by preventing illness in the healthy, keeping chronic sufferers from getting worse, encouraging modifiable lifestyle behavior changes, and directing resources toward the most complex, risky patients with the ultimate goal of preventing utilization. 1 Kinhan explains, PHM involves monitoring of healthcare spending, quality, access, and outcomes, with the goal to improve the health of the entire population, while controlling costs of care. As such, PHM stresses wellness and prevention through disease management, along with cost-effective management of complex cases. Providers employ various strategies to keep populations healthy, mitigating financial risk through preventive services, reducing the need for acute and chronic care, and delivering care in the most appropriate and cost-effective settings. 2 The Institute for Health Technology Transformation identified PHM s goal as to keep a patient population as healthy as possible, minimizing the need for expensive interventions such as emergency department visits, hospitalizations, imaging tests, and procedures. 3 In order to realize PHM s value and accomplish the program s goal, healthcare leaders, executives and providers, utilizing innovative solutions, must develop and implement three main components: (1) Healthcare IT, (2) Care Team and (3) Patient Engagement. The functions of the components are illustrated by diagram A. 1 Population health management: Navigating successfully from volume to value, Peter Kinhan, GE Healthcare 2 Ibid 3 Population Health Management A Roadmap for Provider-Based Automation in a New Era of Healthcare, p. 7. Institute for Technology Transformation. 3 P a g e
4 Diagram A Population Health Management (PHM) Infrastructure Healthcare IT Care Team Patient Engagment Technology Tools: Claim & Clinic Data Electronic Health Records Patient Registries Health Information Exchange Healthcare Analytics Data Warehouse Care Coordination: Physician Nurse Care Coordinator Medical Assistant Social Worker Health Coach Nutritionist Care Management: Wellness Programs Wearables Remote Monitoring Patient Portals Mobile Apps Telehealth 4 P a g e
5 Market Analysis The Population Health Management (PHM) market was valued at $12.8 billion in 2013 and is poised to grow at a CAGR of 26% from 2013 to 2018, to reach $40.6 billion by Primary Industry Participants Industry Market Drivers Hospitals & Health Systems Key variables accelerating population health management growth include: Primary Care Physicians Accountable Care Organizations (ACOs) Care Coordinators Patients Shifting from fee- for- service to value based payment model. Large numbers of chronic condition patients impacting the healthcare system Increasing use of technology to drive down costs and improve health outcomes in patients Projected physician shortage in the U.S. - Largest hospitals have the most Population Health Management technology and the smallest hospitals have the least. 5 - ACOs are spearheading the utilization of PHM. - Care coordinators, who are key players in PHM, work closely with patients through patient engagement activities. 4 Source: Markets and Markets 5 Population Health Management will Be Gigantic Market in 2015, Medical Design Technology, February 2015, by Megan Crouse 5 P a g e
6 Industry Competitive Landscape According to Natalie De Fazio, a director at the consulting firm Stax, The market for PHM support solutions and services is highly fragmented. Players in this space range from industry giants, such as McKesson and Cerner, to smaller businesses offering niche PHM solutions. While a number of vendors offer specialized components, there is currently no single vendor with a complete PHM offering, and the landscape continues to change with new segments constantly emerging. 6 In her February 2015 article, Megan Crouse reported in Medical Design Technology, There is no one vendor dominating this market the most successful, Cerner, has only 11 percent of the market share. That means that there is a lot of opportunity for companies to gain new customers and new footholds. While population health management is an emerging market, it is also a very active market with a number of vendors reporting sales at 10 to 15+ new clients in PHM Major Vendors PHM Startups & Emerging Companies Covisint McKesson Caradigm Valence Health eclinicalworks Medecision Evolent Health Versisk Health Explorys The Advisory Board Company Healthagen XG Health Lumeris Optum Health Catalyst Kryptiq Wellcentive Phytel 6 New Business and Investment Opportunities Emerging from Population Health Management (PHM) November 2014, page 4, Natalie De Fazio. 7 DC MarketScape: U.S. Population Health Management 2014 Vendor Assessment, page 2. 6 P a g e
7 Business Development Opportunities Although the PHM market has welcomed various innovative solutions, below is a select list of technologies that are in demand. Technology Solution Application Projected Market Size Healthcare Analytics Used in care coordination, clinical decision support and operational performance. $18.7 Billion by 2020 Source: MarketsandMarkets Remote Monitoring Used to monitor patients in their homes. $26.3 billion by Source: Berg Insight Patient Engagement Communication and connection tools/methods designed to actively involve patients in the care management process. $13.7 billion by 2019 Source: ReportsnReports Patient Registry Used to collect information about patient populations. $610.8 million by 2019 Source: MarketsandMarkets Care Management Health Information Exchanges Used to assist patients in improving their health conditions/status through activities that reduce the need for medical care. Enables health providers, externally, to electronically exchange patient information/data. $7.3 billion by 2018 Source: MarketsandMarkets $878 million by 2018 Source: MarketsandMarkets 7 P a g e
8 Private Investment Activity Mercom Capital Group reported that the population health management market segment, in 2014, generated $247 million dollars in private investment. In 2013, the market segment brought in a total of $179 million. Rock Health showed that the population health management market segment private investment mark hit $126 million in 2013, while recording $225 million in Notable PHM Companies Acquiring Private Investment Company WellTrackONE Strategic Health Services ZeOmega ACE Health CarePartners Plus Description A population health management company offers an end-to-end solution to physician offices, ACOs, integrated delivery networks, hospitals and other physician networks that help them administer the Medicare Annual Wellness Visit to all their Medicare patients. Provides health management solutions. It offers services in the fields of wellness, preventive health, condition/disease management, and population health management. Provides a powerful population health management platform for payers, providers and value-based care organizations. Our high-value, strategic solution is designed to integrate workflow, analytics, content and communication capabilities. A digital health company which provides patient feedback and engagement software that reliably captures the authentic voice of the patient. A patient engagement technology system that helps people in following steps for better health. The company also provides patient engagement, caregiver management, care coordination, and cost containment solutions for hospitals and physician groups. 8 P a g e
9 Business Formation & Growth Process Successful business formation and growth, within this industry, rely on health technology entrepreneurs effectively producing and implementing three things: a thorough market analysis, a comprehensive business model and a practical business plan. All three documents provide health technology entrepreneurs with key information and data enabling the company to (1) develop a viable technology that meets an identified clinical or commercial need, (2) recognize and responds to the needs of potential buyers and users, (3) capture and utilizes the company s competitive advantages, and (4) articulate a cost-effective business operational strategy that results keeping costs down, generating consistent revenues and earning profits. In addition, the three document help the health technology entrepreneur prepare substantive state (Maine Technology Institute (MTI)) and federal (Small Business Innovation Research (SBIR)) grant proposals leading to acquiring new technology development funding.. Healthcare Marketplace New Health Technology Idea Market Analysis Business Model Business Plan Small Business Funding Sources Small Business Innovation Research (SBIR) Grants Maine Technology Institute (MTI) Grants Clients Competition Revenues Profits Business Growth 9 P a g e
10 Startup or Small Business Growth Funding Options SBIR Program Started at the National Science Foundation in 1982 and now includes eleven other participating federal agencies, SBIR is a small business development program. It encourages and enables health technology entrepreneurs to compete for research and development (R&D) non-dilutive seed funding to create market-driven novel medical technologies or healthcare IT solutions. More importantly, applicants can use the funds to conduct research and development on self-initiated product/technology concepts. The National Institutes of Health (NIH) SBIR program offers small health technology startups with some the best chances to develop innovative healthcare/medical technologies. Small health technology startups, through a competitive proposal submission process, seek two rounds of SBIR R&D funding. The first round, referred to as Phase I, offers $150,000 to $225,000 for proof of concept; while the second round, referred to as Phase II, offers from $1 Million to $1.5 Million to produce a product prototype NIH SBIR s program provides supplemental funds to extend research activities or accelerate product commercialization. NIH s National Cancer Institute (NCI), for example, provides Phase II Bridge Awards. The awards are up to $1million more dollars per year for three years, which can be used for clinical trials or regulatory approval process. Phase II Bridge Awards, offered by a limited number of NIH Institutes and Centers (ICs), enable small health technology firms to move effectively beyond their Phase II grant. NIH SBIR Funded Population Health Management Projects 8 Mobile App for Self -Management of Comorbid Depression and Metabolic Syndrome Depression and metabolic syndrome (MetS) are common chronic conditions that are debilitating to individuals and costly to employers and public and private payors. This project will create MoodJaunt, a mobile app designed to fill a well-known gap8-14 in the population health management market: a lack of engaging and effective self-management programs that address both the emotional and physical wellbeing of adults managing both depression and chronic health conditions. 8 National Institutes of Health (NIH) Small Business Innovation Research (SBIR) Program Database 10 P a g e
11 NIH SBIR Funded Population Health Management Projects 9 Project Name Project Description Develop an interactive web-based program to help caregivers with managing medication administration and medical care of their elderly relatives. Home-based Health Management of COPD Patients Peer Mentor Training to Reduce Hospitalizations for Children with Asthma A Wireless Device to Monitor and Track Fluid Consumption in At-risk Older Adults Develop and evaluate a program to motivate and monitor people with chronic obstructive pulmonary disease (COPD) to complete home exercise as part of pulmonary rehabilitation (PR). Develop a web-based program to train peer mentors to guide parents of children with asthma on methods to reduce Emergency Department (ED) visits and hospitalizations. Develop a device (the Smart Cup) that will improve the health of older adults by managing nutrition using smart health technology. Dashboards for Clinician Monitoring of Patients through a Mobile Sensing Platform Cogito's mobile sensing platform Cogito Companion objectively measures behavioral patterns via mobile phone sensors and uses these patterns as inputs to predictive models, trained against clinical outcomes. The models predict mental states, such as components of depression, distress, and anxiety. 9 National Institutes of Health (NIH) Small Business Innovation Research (SBIR) Program Database 11 P a g e
12 NIH SBIR Funded Population Health Management Projects 10 Project Name A Novel Multi-Parameter Sensor for Heart Failure Remote Monitoring Patient Care Anywhere: Patient Support and Empowerment Across the Care Continuum Project Description Investigate the benefits of a novel, non-invasive multi-parameter sensor with telemetry for monitoring patients with heart failure. The technology can continuously monitor heart rate, heart rate variability, respiratory rate, activity levels, and fluid levels. A patient empowerment solution to promote internal resilience and self-efficacy by creating new partnerships with patients and health care professionals across the care continuum: 1) geographically (home-hospital-community-home) and 2) medically (diagnosis-treatmentsurvivorship-death). Such support will be adaptive to individual's needs and health status based on comprehensive bio psychosocial screening and coordinated across multiple sources in the forms of referrals, education, engagement of community resources, and secure social communication. Remote Assistance for HIV Antiretroviral Adherence Developing a system capable of remotely monitoring, in real-time, the adherence of an HIV patient to Antiretroviral therapy (ART). ART is a medication regimen that once started, needs to be followed for the rest of the patient's life. ART has been successful in improving the quality and expectancy of life of HIV Patients as well as in reducing the likelihood of transmission of the disease 10 National Institutes of Health (NIH) Small Business Innovation Research (SBIR) Program Database 12 P a g e
13 Maine Technology Institute Maine health technology entrepreneurs, e.g. physicians, nurses, researchers, scientists, engineers, inventors and experienced healthcare professionals, are able to acquire Maine Technology Institute (MTI) grants to help with developing an innovative medical technology or healthcare IT solution and grow a small health technology firm. Health technology entrepreneurs, for example, interested in new medical technology development can use either MTI s Phase 0 KickStarter or Seed grants. Phase 0 KickStarter, TechStart and Seed Grants are three funding vehicles that aid Maine health technology startups with developing an innovative technology solution and grow their companies. For instance, the KickStarter grant, worth $5,000, enables health technology startups to use the funding for preparation and submission of a Phase I Small Business Innovation Research (SBIR) proposal. More specifically, the money can be used for hiring grant writers, subject matter experts, other consultants or purchasing market research reports needed to complete the proposal. In terms of funding business development activities, MTI offers TechStart grants. The TechStart grant is designed to help health technology entrepreneurs produce key strategic documents, such as business plans or market analysis, which contribute the growth of their startups. TechStart grants are worth $5,000 dollars. Grants Funding Amount Purpose Phase 0 KickStarter $5,000 Money to prepare and submit a Phase I Small Business Innovation Research (SBIR) proposal TechStart $5,000 Money for business development activities like business plan development. 13 P a g e
14 About HealthTech Maine HealthTech Maine is a private consulting firm providing small business development assistance to Maine's health technology entrepreneurs, such as physicians, nurses, researchers, scientists, inventors, engineers, technologists, and experienced healthcare professionals. In particular, we help health technology entrepreneurs formulate, start and build successful small health technology firms. Our Consulting Services Market Analysis Development: This service is designed to help health technology entrepreneurs and eligible small businesses discover a potential market for a proposed innovative medical technology or unique healthcare IT solution. Moreover, it involves uncovering the competitive nature of the identified potential market, market size and industry conditions associated with the proposed technology concept. Business Model Development: This service is designed to help health technology entrepreneurs build a business case for its startup. The business model is composed of building blocks, such as value proposition, customer segments, customer relationships, key resources, key partners, channels, cost structure, and revenue stream. Each building block plays a role in supporting the company s ability to offer an innovative medical technology that generates revenues and produces profits. Business Plan Development: The business plan is a key strategic document that indicates how the health technology startup costeffectively executes business development functions, e.g. Marketing, Management and Finance, which help grow the company and earn profits. We work with our clients to produce a business plan that helps the company and its medical technology or healthcare IT solution establish a solid position in a designated market. Small Business Innovation Research (SBIR) Proposal Development: We have assembled a successful team of experts to help Maine health technology entrepreneurs acquire federal SBIR funds, from the National Institutes of Health (NIH) and the National Science Foundation (NSF), to produce innovative medical technologies or unique healthcare IT solutions. The service also includes securing a Maine Technology Institute SBIR Phase 0 KickStarter grant that will pay for the preparation of a SBIR Phase I proposal. Contact Person: Mr. Darrell Williams can be reached at: , Darrell@healthtechmaine.com 14 P a g e
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