PatientPoint Healthcare IT
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1 Business Model Data-mining Service For Office-based Private Practice Physicians Using Electronic Health Records (EHRs) This document presents a business model regarding providing data-mining service for office-based private practice physicians using electronic health records (EHRs). It is prepared using the components (i.e., customer segment, value proposition, channel, customer relations, key resources, activities, key partners, cost structures, and revenue streams) needed to develop and utilize an effective business model. Prepared By Eighteen Ventures PO Box 5035 Portland, Maine Page 1
2 TABLE OF CONTENTS Company Background Information 3 Proposed Service Offering 4 Customer Segment 5 Value Proposition 6 Channels 6 Customer Relationships 7 Key Resources 7 Key Partners 8 Cost Structure 9 Revenue Streams 9 Implementation Process 10 PatientPoint Healthcare IT Business Model Diagram 11 Page 2
3 Company Background Information Company Description PatientPoint Healthcare IT is a software development firm. In particular, the company specializes in helping office-based physician practices incorporate and cost-effectively utilize electronic health records (EHRs) data. Company Background The company was started to provide electronic health records (EHR) deployment services to office-based physician practices. Through this experience, the company s leadership discovered an opportunity to assist physicians, using of data-mining techniques, on how to better utilize their data produced from electronic health records. Electronic Health Record Data-mining Service Using its propriety software, Info-Health Documents, PatientPoint Health IT will assist physician practices with examining and analyzing patient data contained in electronic health records (EHRs). The service benefits include helping providers (1) determine more precise treatment plans for patients, (2) track payments from private and government insurers, (3) meet meaningful use requirements to earn federal government incentive payments and (4) improve overall practice management. Target Buyers PatientPoint Health IT offers its data-mining service to office-based, non-hospital owned, primary care physician practice, with one or five physicians, using a basic EHR system that captures patient history and demographics, patient problem lists, physician clinical notes, comprehensive lists of patients medications and allergies, computerized orders for prescriptions and laboratory and imaging results. Leadership and Management Team A group of seasoned professionals possessing a combined 40 years in the healthcare IT industry leads the company. In particular, Robert Dibble, the firm s President & Chief Executive Officer, has been directly involved in the healthcare IT arena for fifteen years; while the vice-president for operations has twenty years of direct industry experience and the director of marketing and business development has six-teen years of direct industry experience. Page 3
4 Proposed Service Offering Using its propriety software, Info-Health Documents, PatientPoint Health IT proposed service is designed to help physician practices examine and analyze patient data contained in electronic health records (EHRs). The data-mining EHR service benefits include helping physicians (1) determine more precise treatment plans for patients, (2) track payments from private and government insurers, (3) meet HITECH Act meaningful use requirements to earn federal government incentive payments and (4) improve overall practice management. Electronic Health Record (EHR) An Electronic Health Record (EHR) is a digital collection of patient health information compiled at one or more meetings in any care delivery setting. A patient's record typically includes patient demographics, progress notes, problems, medications, vital signs, past medical history, immunizations, laboratory data and radiology reports. EHRs can electronically move information securely between doctors, hospitals and other health care providers when it is needed for a patient s care. Market Driver With the passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act, healthcare organizations and physicians are encouraged to incorporate digital technology as a part of their healthcare delivery system. HITECH, in particular, contains specific financial incentives designed to accelerate the adoption of electronic health record (EHR) systems among providers. Under the Act, the Medicare and Medicaid EHR Incentive Programs provide EHR incentive payments to eligible professionals (EPs), i.e., physicians, and eligible hospitals as they adopt, implement, upgrade, or demonstrate meaningful use of certified electronic health record (EHR) technology. Page 4
5 Market Research The US Bureau of Labor Statistics indicates that are approximately 230,187 physician practices in the United States. Among these physician practices, 52.8% consist of only one office-based physician. Physician group practices with 2-5 physicians make up 37.1% of physician offices in the United States. In 2013, 78% of office-based physicians used any type of electronic health record (EHR) system, up from 18% in 2001; In 2013, 69% of office-based physicians reported that they intended to participate (i.e., they planned to apply or already had applied) in meaningful use incentives. Smaller practices are the driving force in EHR usage. In January 2013, 42.3% of one-physician practices and 53.7% of two-physician practices had reported using EHRs. Those numbers grew by 11% in just one year, with solo offices coming in at 53.7% and two-physician groups climbing to 64.9% for Customer Segment The company offers its data-mining service to office-based, non-hospital owned, primary care physician practice, with one or four physicians, using a basic EHR system that captures patient history and demographics, patient problem lists, physician clinical notes, comprehensive lists of patients medications and allergies, computerized orders for prescriptions and laboratory and imaging results. Target Client Profile Type of Business: Size of Operation: Medical Specialty Ownership Type: Primary Physician Practice 1 5 Physicians Family Medicine, Internal Medicine, Pediatrics & Obstetrics Independently Owned Owner s Age Range: Estimated Annual Revenues: Years in Business: Geographical Area(s): $250K - $5 million 2-12 years Maine To Florida, United States Page 5
6 Value Proposition The company s data-mining EHR service helps physician practices improve patient care, reduce operational costs and produce profits. Moreover, the service helps physician practices meet the eligibility for government funding through HITECH Act and earn incentive payments. Channels In order to educate, inform, and communicate with potential customers, the company utilizes a variety of promotional activities. The activities include: Promotional Activities Direct Mail Guest Speaking Public Relations Advertisement Networking Events Conference Exhibits Approach Educating and informing Physicians the benefits of using data-mining for EHRs. Sharing knowledge and expertise on the use of data-mining EHRs. Issuing Media Releases regarding new client signings, service developments and industry awards. Placing ads in targeted Physician and Healthcare Information Technology (HIT) trade publications. Attending and developing contacts at industry conferences. Hosting a booth and providing information at industry conferences. Page 6
7 Customer Relationships Since the company s management and staff learned how to establish positive and lasting relationships with past clients, they will use this knowledge to do the same with future customers. The company s service performance includes: Working with the client to identify its proper service level needs. Communicating with the client at each of service implementation phases. Explaining and illustrating the data-mining service process. Following-up with the clients to make sure the service met their satisfaction. Key Resources The company identified three things needed to provide the service. They are: An experienced, talented and knowledgeable professional staff. Established contacts and relationships with individuals, groups and companies that actively participate in the healthcare industry. An established, dependable reputation for providing similar services for the company s targeted clients. Since the company s management team and professional staff have provided EHR deployment services to physician practices, the company possesses all of the required key resources. Page 7
8 Key Partners State Medical Associations/Societies The company expects to partner with, when possible, state medical associations/societies located from Maine to Florida. Specifically, the company hopes to offer hosting free online workshops that present information regarding the benefits of using data-mining their electronic health records. Targeted state medical associations/societies include: Medical Society of the State of New York, New Hampshire Medical Society, Maine Medical Association, Maryland State Medical Society, Connecticut State Medical Society, Vermont Medical Society, Medical Society of New Jersey, Medical Society of Virginia, Pennsylvania Medical Society, Pennsylvania Medical Society, Massachusetts Medical Society, The North Carolina Medical Society, Medical Society of Delaware, Florida Medical Association, Medical Association of Georgia, and South Carolina Medical Association Large Electronic Health Record Vendors The company also anticipates partnering with leading large EHR vendors to provide the data-mining services to their existing clients matching our client profile. In partnering with the large EHR, the company will offer the vendors a percentage of the revenue earned from the service performance. The targeted large vendors include: Epic, IBM, Allscripts, MedeAnalytics, McKesson, Truven Health Analytics, Optum, Oracle, Cerner, ihealth Analytics, Verisk Health, Amazing Charts, Aprima (imedica), CareRevolution, Centricity, eclinicalworks, e-mds, EpicCare Ambulatory, MEDENT, Medinformatix, MediNotes, MPM Suite, NextGen HER, PowerChart/PowerWorks, Practice Partner, Praxis, Sage Intergy and SOAPware. Page 8
9 Cost Structure The company s operating expenses include salaries with benefits, office space, taxes, office equipment, information technology services, travel, promotions, office utilities, and professional services. Revenue Sources The company offers its service as a fee-for service. Clients are able to select from three service modules based on their practice size. The modules range from $2,500 to $4,000. Service Modules Physician Practice Size Service Price Basic Module 1 to 2 Physicians $2,500 Intermediate Module 3 to 5 Physicians $3,000 Grand Module 5 to 7 Physicians $4,000 Page 9
10 Implementation Process To measure whether or not the stated assumptions are correct, the implementation process includes the following steps: 1) Identify and meet with potential clients to learn/understand their opinions, interests and knowledge of the proposed service. 2) Identify and meet with representatives from the targeted state medical associations/societies to discuss their interest and requirements to partner with their organizations. 3) Identify and meet with representatives from targeted large EHR venders to discuss their interest and requirements to partner with their companies. 4) Build a minimum viable product (prototype) that will be utilized and tested by a group of Early Adopters, e.g. potential clients seeking a need for the proposed product. 5) Collect and analyze the feedback from the four implemented steps and use the information to improve the product and correct the stated assumptions in each section of the business model Page 10
11 Key Partners PatientPoint Healthcare IT PatientPoint Healthcare IT Business Model Diagram Key Resources Customer Segment(s) (1) The company expects to partner with, when possible, state medical associations/societies located from Maine to Florida. (2) The company also anticipates partnering with leading large EHR vendors to provide the data-mining services to their existing clients matching our client profile. Customer Relationships The company intends to: Work with the client to identify its proper service level needs. Communicate with the client at each of service implementation phases Explain and illustrate the data-mining service process. Follow-up with the clients The company identified three things needed to provide the service. They are: An experienced, talented and knowledgeable professional staff. Established contacts and relationships with individuals, groups and companies that actively participate in the healthcare industry. An established, dependable reputation for providing similar services for the company s targeted clients. Office-based physician practices: non-hospital owned, primary care physician practice, with one or four physicians, using a basic EHR system that captures patient history and demographics, patient problem lists, physician clinical notes, comprehensive lists of patients medications and allergies, computerized orders for prescriptions and laboratory and imaging results. Value Proposition The company s data-mining EHR service helps physician practices improve patient care, reduce operational costs and produce profits. Moreover, the service helps physician practices meet the eligibility for government funding through HITECH Act and earn incentive payments. Cost Structure Revenue Stream The company s operating expenses include salaries with benefits, office space, taxes, office equipment, information technology services, travel, promotions, office utilities, and professional services. The company offers its service as a fee-for service. Clients are able to select from three service modules based on their practice size. The modules range from $2,500 to $4,000 per month. Page 1
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