Healthcare Analytics: Small Business Development Opportunities

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1 Healthcare Analytics: Small Business Development Opportunities 1 P a g e

2 TABLE OF CONTENT Sections Pages Healthcare Analytics Overview 3 Market Analysis 4 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) 8 9 About HealthTech Maine 15 2 P a g e

3 Healthcare Analytics Overview Healthcare analytics involves application of statistical tools and techniques to healthcare related data in order to study past situations, such as operational performance or clinical outcomes, to improve the quality and efficiency of clinical and business processes. 1 Healthcare analytics applications: Clinical intelligence (CI) software supports activities such as quality improvement, care management, and population health management and Business intelligence (BI) applications address financial and operational aspects of healthcare systems, such as contract negotiations, facility management, measurement of resource utilization, and cost analysis. 2 McKinsey report on the benefit of using analytics in the U.S. healthcare system: if US health care could use big data creatively and effectively to drive efficiency and quality, we estimate that the potential value from data in the sector could be more than $300 billion in value every year, two-thirds of which would be in the form of reducing national health care expenditures by about 8 percent. 3 Healthcare analytics main technology users: Hospitals & Health Systems: Leading users of healthcare analytics. Using data to deliver cost-effective healthcare services that produce quality, successful outcomes for their patients. Accountable Care Originations (ACOs): Using health analytics as significant tool to deliver healthcare services, in a collaborative approach, to defined patient population. Insurers: Improving care and reducing healthcare costs are two primary reasons why payers see the value and use of healthcare analytics. They, specifically, use healthcare analytics to analyze their risk pools and evaluate provider performance. 1 US Healthcare Analytics Market, February 2015, TresVista Financial Services 2 Analytics: The Nervous System of IT-Enabled Healthcare, p.7; Institute for Health Technology Transformation. 3 Big data: The next frontier for innovation, competition, and productivity, May 2011, McKinsey Global Institute 3 P a g e

4 Market Analysis Researcher MarketsandMarkets reports that the healthcare analytics will hit nearly $19 billion by 2020, up from nearly $6 billion in Reasons Why Hospitals Are Using Healthcare Analytics 4 Rising Healthcare Costs Medicare / Mediciad EHR Incentive Accountable Care The Affordable Care Act Pay for Performance With an expectation that hospitals will spend an average of $1.9 million on analytics this year, the organizations plan to dole out money for the following items: - IT infrastructure to optimize data storage - IT systems/solutions to optimize data processing - IT systems/solutions to improve data capture - Enhanced data security - Real-time data analytics applications - Data warehouse/data models Source: CDW Analytics in Healthcare 2015 Leading Healthcare Analytic Industry Vendors Truven Health Analytics Verisk Health McKesson Corporation Cerner Corporation Optum ihealth Analytics SAS Institute Predilytics 4 CDW Analytics in Healthcare P a g e

5 Healthcare Analytics Applications HealthTech Maine Analytical Techniques Descriptive Analytics Predictive Analytics Prescriptive Analytics Application It involves the use of historical data to determine what has taken place, e.g., hospital admission during a defined period of time. It helps to provide an assessment of a particular situation or event. It involves turning data into actionable information by combining real-time and historical data to determine potential future outcomes. More importantly, it helps health providers make more accurate diagnoses that lead to effective patient treatment and lower healthcare costs. It involves using past and recent data, recommending a course of action and indicating probable outcomes. It helps health providers take action that avoid or mitigate negative outcomes. Healthcare Business Intelligence (BI) market is expected to reach roughly $5 billion by 2018 according to research firm MarketsandMarkets. Healthcare Big Data analytics adoption rate increases from 46% in 2013 to 52% in 2015 as health organizations result the benefits of using clinical analytics and business intelligence. The information was provided by HIMSS Analytics. Research and Markets indicated that Clinical Data Analytics was valued at $2.25 Billion 2014 and is expected to reach $12.26 billion by Only 15 % of hospitals use advanced predictive analytics and many of these organizations include non-academic hospitals as reported in a 2015 survey published by the healthcare technology company Jvion. 5 P a g e

6 Big Data Analytics Use In Healthcare Healthcare Payer 5 Clinical Data Analysis Claims Fraud Detection Member Engagement Payer Sentiment Analysis Call Center Analysis Technologies Involved In Healthcare Analytics Electronic Health Records (EHRs) Market Size: $24 billion by 2020 Data Warehouse Market Size: $20 billion by 2020 Patient Portals Market Size: $900 million Using Big Data Analytics in Healthcare Payer Industry, June 11, 2013, Sushil Pramanick. 6 P a g e

7 Private Investment Activity HealthTech Maine Health Rock, the San Francisco, CA-based accelerator, reported that Analytics/Big Data startups and emerging companies acquired nearly $393 million dollars from investors in 2014 compared to receiving $161 million Notable Healthcare Analytics Companies Acquiring Private Investment Ambient Clinical Analytics The creator of a software platform designed for data assimilation, communication and analytics. It is based on decision support tools initially deployed in the intensive care unit (ICU) or emergency department of hospitals. Our software consists of algorithms that mine data from electronic medical records (EMR). It then presents that data to the physicians and nurses so they may facilitate real-time clinical decision making and care delivery. Healthcare Interactive Lumiata Zephyr Health Dedicated to the transformation of the administration and delivery of healthcare to improve health in our communities. We enable our client-partners to effectively leverage their data to identify the health risk and cost drivers of the populations they serve, develop specific programs to engage members and improve outcomes, and provide the administrative tools to deliver, manage, and measure the success of those programs. The company delivers real-time predictive analytics that help hospital networks and insurance carriers provide higher quality care to more patients in less time. To produce accurate insights and predictions related to symptoms, diagnoses, procedures and medications, Lumiata developed the world s first medical graph, which organizes and analyzes hundreds of millions of valuable data points. In healthcare and life sciences, there is a massive amount of fragmented data. Zephyr Health assembles this data that comes from clinical trials, patient demographics, sales, interactions, medical publications and the news to provide life science professionals with a more holistic view of the clinical and treatment landscape. 7 P a g e

8 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 8 P a g e

9 New Technology Development Funding Options SBIR Program HealthTech Maine 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) and the National Science Foundation (NSF) SBIR programs offer 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 research and development (R&D) funding. NIH s SBIR Phase I offers $150,000 to $225,000 dollars, while NSF s SBIR Phase I provides $150,000 dollars. Under the six month Phase I, applicants conduct research to produce a proof of concept or feasibility study. NIH s SBIR Phase II offers $1 Million to $1.5 Million dollars, while NSF s SBIR Phase II awards $750,000 dollars. Award winners, for two years, use the Phase II money to a 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. To help accelerate commercialization of the Phase II project, NSF s offers SBIR Phase IIB matching dollars. Phase II awardees are provided with up to $500,000 from NSF's Phase IIB, if they can secure private investor matching dollars. For instance, if a small health technology firm raised $500K from private investors, then NSF will provide a 50% match, or $250,000, in matching funds. Agency Phase I Funding Amount Phase II Funding Amount National Institutes of Health (NIH) $150, $225,000 $1 Million - $1.5 Million National Science Foundation (NSF) $150,000 $750, P a g e

10 SBIR Funded Healthcare Analytics Project Company: Radial Analytics, Inc. Awarding Agency SBIR Program: National Science Foundation (NSF) System for Patient Risk Stratification through Electronic Health Record Analytics The broader impact/commercial potential of this Small Business Innovation Research (SBIR) Phase I project focuses on using analytics and technology to drive greater efficiency and effectiveness in healthcare. Recent legislative changes are driving all players within the healthcare ecosystem toward greater accountability. This Phase I project specifically includes technologies to automatically assess patient risk and thereby reduce post-discharge readmissions rates. This Phase I project has the potential to support a broad range of customers across both the provider and the payer landscape, by providing cost-effective readmissions control solutions that respond to new legislative pressures. In terms of commercial potential, the Institute of Medicine of the National Academies has estimated that preventable hospital readmissions account for $20 billion/year in wasteful healthcare spending. The addressable market for the proposed Phase I proof-of-concept for patient risk stratification to support readmission control is approximately $100MM. In the future, this research project will serve as a foundation to support broader population health analytics, the addressable market for which exceeds $500MM/year and is growing at a rate of 24% annually. The proposed project aims to develop a data mining system to capture and analyze information from electronic medical records in order to risk-stratify patients after they have been discharged from hospital. Leveraging interoperability standards that are required by federal regulation, the system will seamlessly aggregate data from multiple electronic medical record systems in a vendor-agnostic manner. A custom analytics engine will detect emergent patterns and draw inferences about each patients risk of readmission. If successful, this research will validate the end-to-end concept and suggest the broader applicability of this approach to some of the greatest challenges in population health. 10 P a g e

11 SBIR Funded Healthcare Analytics Project Company: HealthMyne, Inc. Awarding Agency SBIR Program: National Science Foundation (NSF) An Integrated Search, Analytics, and Imaging (SAI) Platform for Clinical Decision Support and Mobile Health This Small Business Innovation Research (SBIR) Phase I Project proposes to develop and deliver to health care enterprises a next generation imaging, analytics, and search solution that meets not only the current needs of multi-enterprise medical image viewing, but satisfies emerging demands related to clinical decision support and mobile health. The project addresses one of the?big Data? problems of medical imaging, i.e. providing access anywhere within the healthcare enterprise to large studies, advanced imaging tools, and image-based analytics across a spectrum of devices from powerful personal computers to mobile devices. The broader impact/commercial potential of this project is to translate novel research using quantitative imaging biomarkers into actual clinical practice. Medical imaging is commonly used for cancer screening, treatment planning, and monitoring but the results that come from purely qualitative interpretations of these images are not always definitive. Recent progress has shown that high-throughput extraction and analysis of advanced quantitative imaging features from medical images (?radiomics?) can be used to increase the accuracy and confidence of cancer screening in certain cases. The goals of this project are to incorporate these analytics into a commercially available system for medical image display and distribution which is necessary for widespread clinical adoption. These advances will enable health care providers to lower costs associated with unnecessary follow up exams as well as to improve patient outcomes through identification of tumors that are more likely to be resistant to treatment and to more efficiently and accurately monitor the response to treatment using medical imaging. 11 P a g e

12 SBIR Funded Healthcare Analytics Project Company: Inflexxion, INC. Awarding Agency SBIR Program: National Institutes of Health (NIH) A Clinical Decision Support Tool for Electronic Health Records Substance abuse treatment is often complicated by a client's family, employment, psychiatric, or legal problems. When these co-existing issues are addressed with evidence-based practices (EBPs), outcomes improve. The expansion of EBPs is especially important regarding Medication-Assisted Treatment (MAT), which is the subject of a number of federal and state treatment initiatives. However, despite extensive efforts to educate clinicians through training, the integration of EBPs into clinical settings continues to lag. EBPs are most likely to be implemented if information is available at the point of service. These challenges strongly suggest the need for a technical solution. This proposal seeks to develop a clinical decision support (CDS) system within electronic health records (EHRs) through a collaboration of two companies that have developed a national standing in substance abuse treatment - Inflexxion (Newton, MA) and FEi (Columbia, MD). Inflexxion and FEi are seeking to develop the Behavioral Health Advisory Module (BHAM). This CDS will plug into Web Infrastructure for Treatment Services (WITS), a web-based EHR supported by FEi. By applying advanced statistical techniques (latent class analysis) and data mining to the extensive WITS dataset, we can assess the relationships between client profiles, delivered services, and outcomes. BHAM can identify which profile best fits a client and provide: (1) tailored, evidence-based practice recommendations, and (2) client engagement strategies (which have been shown to improve outcomes). In Phase I, we completed a model comprised of three profiles of opiate/opioid users; developed an interactive prototype of BHAM; and demonstrated acceptance of the CDS concept by substance abuse experts and clinicians. The concept was also reviewed and supported by CDS and substance abuse expert consultants. The goal of Phase II is to fully develop and test BHAM in substance abuse treatment centers. The field test will examine the primary hypotheses that, relative to the Control condition, counselors in treatment facilities assigned to the BHAM program will provide or offer their clients significantly greater matched evidence-based and wraparound services. 12 P a g e

13 SBIR Funded Healthcare Analytics Project Company: Sai Interactive, INC. Awarding Agency SBIR Program: National Institutes of Health (NIH) PictureRx: Improving Medication Safety in Health Disparity Populations Medication safety is an important concern in hospital Emergency Departments (EDs), which provide approximately 136 million patient visits annually in the US and are a common site of care for health disparity populations. In more than one-third of ED visits, patients are unable to provide an accurate list of their medications. Discrepancies and other errors in the documented medication list affect diagnostic and treatment decisions in the ED, and increase the risk of harmful adverse drug events. Taking an accurate medication history and performing medication reconciliation, though required by regulatory agencies, remains a challenge in this time-pressured environment, and new approaches are needed. PictureRx is an internetbased technology that was developed to improve medication management in vulnerable populations. The project team has successfully completed development and feasibility studies, supported by two Phase I SBIR awards from NIMHD. The current platform allows subscribers to manually maintain structured medication lists and print evidence-based, patient-centered illustrated medication lists in English or Spanish. These were shown in a randomized controlled trial to improve medication understanding. The goals of this Phase II research and development proposal are to expand the capabilities of the PictureRx platform by linking to other electronic health data sources, to test its effectiveness in improving medication reconciliation in Emergency Departments, and to enhance its commercial potential as a technology to improve the care of health disparity populations. In Aim 1, we will develop a process for importing patient prescription data from Surescripts (the nation's largest clinical information network) into the PictureRx platform, where it will be automatically filtered and structured using language processing rules. In Aim 2, we will further develop the current PictureRx user interface to facilitate review, verification, and editing of this information by either the patient or a health care professional. We will also build in a series of prompts to gather a more complete medication history from the patient, which the user will input into the PictureRx platform to augment the medication data that can be obtained through automated means. In Aim 3, we will test the effectiveness of the PictureRx technology in enhancing medication safety in clinical practice, where we expect it will improve the accuracy and efficiency of obtaining a medication history from patients in the ED. Patients will also be provided PictureRx medication instructions upon discharge, which we expect to improve understanding. 13 P a g e

14 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. 14 P a g e

15 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: , [email protected] 15 P a g e