Does innovation lead to lower cost?

J. de Groot RvB CbusineZ www.cbusinez.nl Jgbdegroot CbusineZ

Many people state that technology sometime add costs instead of saving it..

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Wouter Bos (last year) Technology sometime add costs instead of saving it

Director care procurement: “eHealth is not cost effective” “we have invested a lot in quit smoking programs, but don’t see the savings”

Pitfalls in technological innovations causes costs increase instead of the expected decline

3

Better specifications… no added value

Technology as add on to existing process

‘Free capacity’ not withdrawn from the system

+ Hospital

Cardiologist

Nurses

“free resource”

Pitfalls in technological innovations causes costs increase instead of the expected decline

4

Better specifications… no added value

Technology as add on to existing process

‘Free capacity’ not withdrawn from the system

+ Hospital

Cardiologist

Nurses

“free resource”

Technology is often used as an add to an existing process rather than facilitate process changes

5

+

In many cases blended care is not a redesign but an extra on the current process

EHealth depression

advice

Check up

Reworked diabetes management process is Using eHealth as an enabler

+

Don’t add on technology! Use it to enable better processes

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+ advice

Check up

No more technology as add on

Use technology as an enabler for processes optimalisation

Health care professionals Learn to use technology as an enabler Learn BPR Dare to question the current process and experiment Don’t add on!

Technology providers Stop pushing technology, start facilitating better processes Dare to question the use of your product Don’t add on

Don’t add on… create better processes

Using BPR instead of add on….. We created a sustainable gamified autism treatment

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Kosten'emodule

%'tijdsbesparing

Psychiater GZ:psycholoog SPH'''''''''''''''''''''Kosten' Opbrengst

Uren tarief Uren Tarief Uren Tarief

Eerste&doorrekening 0 0 0,5 €&87 2 €&214 5,75 €&483 €&784 €&711*&Toevoegen&kosten&emodule&*&Verlagen&SPH&uren 50 0 0,5 €&87 2 €&214 5 €&420 €&771 €&2*&Toevoegen&kosten&emodule&*&Verlagen&SPH&uren& 75 0 0,5 €&87 2 €&214 4,75 €&399 €&775 €&72*&Toevoegen&kosten&emodule&*&Verlagen&SPH&en&GZ7psycholoog&uren& 100 0 0,5 €&87 1,75 €&187 4,5 €&378 €&752 €&21*&Toevoegen&kosten&emodule&*&Verlagen&SPH&en&GZ&uren&&&&&&&&&*&%&tijdsbesparing&toevoegen 50 10 0,5 €&87 1,5 €&161 4,75 €&399 €&697 €&71*&Toevoegen&kosten&emodule&*&Verlagen&SPH&en&GZ&uren&&&&&&&&&*&%&tijdsbesparing&toevoegen 75 10 0,5 €&87 1,5 €&161 4,25 €&357 €&680 €&16*&Toevoegen&kosten&emodule&*&Verlagen&SPH&en&GZ&uren&&&&&&&&&*&%&tijdsbesparing&toevoegen 100 10 0,5 €&87 1,25 €&134 4,25 €&357 €&678 €&18

Current process: They analysed the time saved per care provider by using EHealth

€ 800 per treatment

BPR process: Client goals central Ehealth and group support Professional as coach

€ 400 per treatment

Current process: € 750

Pitfalls in technological innovations causes costs increase instead of the expected decline

8

Better specifications… no added value

Technology as add on to existing process

‘Free capacity’ not withdrawn from the system

+ Hospital

Cardiologist

Nurses

“free resource”

In many cases the costs per unit decreases but …. increases the total costs

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Costs per unit decreases…

&

Total cost increases

Before After technological innovation

Before After technological innovation

Heart failure case

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New process for heart failure using tele monitoring

In 5 hospitals the process for heart failure treatment were redesigned using tele monitoring

50% less hospital admissions 50% less exurcebations 8 patient satisfaction 20% reduction in professional time 25% reduction in fee cardiologist 40% reduction in revenue hospital € 83 mln. potential cost reduction

Great results…

A technology based redesigned process should require less professional time

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Hospital

Cardiologist

Nurses

Implementation of new Heart failure processes would free up resources

A technology based redesigned process should require less professional time

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Hospital

Cardiologist

Nurses

“free resource”

Implementation of new Heart failure process would free up resources

The “free resources” are used to treat new patients and hence the total costs will rise

13

Hospital

Cardiologist

Nurses

“free resource”

Implementation of new Heart failure process would free up resources

If the ‘free resources’ are not withdrawn from the system they tend to find a new function… -  Lower intervention boundaries -  New patient groups -  New treatment If the ‘free resources’ find new treatment (revenue) the total costs for the healthcare system rises!

The challenge of the “free resources” is faced by all innovation projects

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Hospital

Cardiologist

Nurses

“free resource”

vv Blended care

3 Face tot Face + an ehealth

program

Or

F2F + tel support + eHealth

Cost: € 400 - € 500

g Depression treatment in current situation

1st line: 8 consultations

€ 640

2e line: 8-12 consultation

€ 1200

Reductie 50%

+

Same outcome

advice

Check up

Your innovation

Innovative heart failure treament

Blended depression care

Blended diabetes care

Reduction 60%

How to withdraw the ‘free resources’ from the healthcare system?

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Hospital

Cardiologist

Nurses

“free resource”

Hospital Less revenue, more profit Compensation for creative destruction costs Professionals Fixed capacity: compensated for revenue loss Variable capacity: step by step transferred to other areas Overhead: reduced Insurer Lower prices

No financial instrument available…

Let’s finance creative destruction!

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Hospital

Cardiologist

Nurses

“free resource” Health

Insurer

Creative Destruction

Fund

Less revenue, more profit Lower prices (incl. deprecation) Profit protection

Contract

Finances: -  The innovation -  The Creative destruction

cost

Care provider

We will start a creative destruction! fund

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Hospital

Cardiologist

Nurses

“free resource” Health

Insurer

Creative REconstruction

Fund

Less revenue, more profit Lower prices (incl. deprecation) Profit protection

Contract

Finances: -  The innovation -  The Creative

REconstruction cost

Care provider

Imagine … if we together would reconstruct..

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Let creative destruction…. Labs ….. From 400 to.. Saves ?? Derma … Heartfailure.. Diabetes Depression A solution to our

Healthcare cost problem

Hospital

Cardiologist

Nurses

“free resource” Health

Insurer

Creative Destruction

Fund

Less revenu, more profit Lower prices (incl deprecation) Profit protection

Contract

Finances: -  The innovation -  The Creative destruction

cost

Care provider

It doesn’t only take a financial instrument… we need cooperation, vision and a lot of courage too..

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Scaling up innovation

Co operation to jointly tackle big problems instead of power games Vision of how WE want OUR healthcare to be instead of finding arguments to defend your own positions Courage to choose the hard path to find a solution and face our own colleagues Instead of ‘to indulge the hostility’