remote patient monitoring for disease management: 10 observations about the state-of-the-market

Remote Patient Monitoring for Disease Management: 10 Observations About

the State-of-the-MarketPresented at

NMHCC Disease Management Congress Chicago, Illinois September

2002

Better Health Technologies, LLCVince Kuraitis JD, MBA Harry Leider MD, MBA

www.bhtinfo.com (208) 395-1197

http://www.nmhcc.org/DMC/page.cfm

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Top 10 ObservationsRemote Patient Monitoring (RPM)

1) The market is extremely fragmented. RPM comes in many sizes, shapes, flavors.

2) The value proposition of RPM is compelling!3) Show Me the Evidence! The strength and specificity of the RPM value

proposition is unproven.4) Customers are adopting RPM applications.5) Cost savings (NOT quality improvement) is driving current RPM

adoption.6) Valuation of RPM companies is unclear (market cap/sales)7) RPM has multiple drivers AND multiple barriers.8) Weak links in the RPM value chain9) The immediate RPM market is being driven by niche applications (as

opposed to integrated, enterprise-wide adoption).10) Watch for RPM’s synergy with other promising health care

information technology killer applications.


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BACKGROUND


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The Big Picture: Health Care in 2002Relative Cost & Quality

OptimalQuality

RelativeCost &Quality

OptimalCost

?

Source: Northeast Consulting Resouces

xYouAre Here

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Shifting DM Metrics:Creating Value for Patients and Shareholders

OptimalQuality

RelativeCost &Quality

OptimalCost

?

Source: Northeast Consulting Resouces;Better Health Technologies, LLC

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ROI

Outcomes

High Variation in Chronic Care

Source: Rand Health, Taking the Pulse of Health Care in America, 1999http://www.rand.org/publications/RB/RB4524/

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Ch. 4 – Taking the First Steps

“common chronic conditions should serve as a starting point for the restructuring of health care delivery”*

*IOM Report, Crossing The Quality Chasm, 3/01


http://www.nap.edu/books/0309072808/html/

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Restructure Health Care Around Priority Conditions

• AHRQ should identify 15-25 priority conditions (mostly chronic conditions) Cancer

Diabetes Emphysema High cholesterol HIV/AIDS Hypertension Ischemic heart disease Stroke

• Purchasers, health care organizations, and professional groups should develop strategies and implement action plans to substantially improve quality for priority conditions over the next 5 years

Arthritis Asthma Gall bladder disease Stomach ulcers Back problems Alzheimer's disease and other dementiasDepression and anxiety disorders



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Strategic ContextPersonalized Medicine

• Remote patient monitoring (RPM)• Contact center (mail, email, call center, in-

person…..)• Appropriate treatment settings (home,

ambulatory……)• Customer Relationship Management (CRM)

software• Customized pharmaceuticals• Genomic profiling and therapies


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1) The market is extremely fragmented. RPM comes in many sizes, shapes, flavors.



RPM CompaniesA&D MedicalADTActive CorporationAdvanced BodymetricsApplied Digital SolutionsAeroTel Medical SystemsAgilentAlereAMD TelemedicineAmerican Medical AlertAmerican TeleCareAvidcareBiotrokikBodyMediaCambridge HeartCameron HealthCardioComCardioNetCyber-CareCyberNetData CriticalDigital AngelDMCareElite CareGeneral Electric

HealthCare VisionHealtheTechHealthFrontierHealthHero NetworkHeart AlertHomMedIGEN InternationaliMetrikusInterComponentWareIntelliServicesInterCureiSenseKivaloLife NavigatorLifeLine SystemsLifeConnectLifeLinkLifemastersLifestreamM-BiotechMedipatternMedisana USAMedisignalMedtronicMicronics

NexanPanasonicPersonal Electronic DevicesPolarQRS DiagnosticRemote Medical CorporationRoadside Telematics CorpSensatexSensitronSiemensSpacelabs MedicalSportBrainStayhealthyTelemed.comTelemedicine GroupTelemedicine Solutions in HealthcareTherasenseTransMedExTransMedExVISICUVitalComVivoMetricsWelch AllynWellness Monitoring, Inc.World Wide Video



MEDICAL MONITORING

MEDICALDEVICES

TELEMED

DISEASE/CONDITION

MGMTFITNESS/

WELLNESS

SENSORS

SMARTHOUSES

ETC.

REMOTEREMOTEPATIENTPATIENT

MONITORINGMONITORING



Medical MonitoringMedical Monitoring



MedicalMedical DevicesDevices



TelemedicineTelemedicine


http://www.americantelecare.com/atiprogram03a1010.html


Disease ManagementDisease Management



Fitness/WellnessFitness/Wellness


http://www.polarwatch.com/%09%09%09%09%09%09%09%09cat3_1.htm%09%09%09%09%09%09%09


SensorsSensors


http://www.vivometrics.com/


Smart HousesSmart Houses


http://www.adt.com/index.cfm


2) The value proposition of RPM is compelling!



3) Show Me the Evidence! The strength and specificity of the RPM value proposition is unproven.



The Evidence

• Conclusions-to-date– RPM and clinical improvement: positive, inconclusive– RPM and cost effectiveness: almost non-existent evidence

• AHRQ Evidence Report*: “The evidence for the efficacy of telemedicine technology is less clear. The

problem is not that studies have strong evidence against efficacy, but rather that their methodologies preclude definitive statements. Many of them have small sample sizes that preclude statistical power, and the settings of others may not be equivalent to clinical settings. Still others focus on patient populations that might be less likely than others to benefit from improved health services, such as people who have complex chronic diseases.”

• Other studies with similar conclusions*Source: http://www.ahrq.gov/clinic/telemedsum.htm



4) Customers are adopting RPM applications.



5) Cost savings (NOT quality improvement) is driving current RPM adoption.


3 Definitions of Chronic Disease Market Size

(Drawn to scale)

$500 MDMSCs

$700 B Chronic Care Patients$20 –$100 BOpportunity*

* Projections by BCG and First Union


“Inside the Box”

DMSCs (Business Model)• Prevent unnecessary

hospitalizations and ER visits• Save $$ short term for payor• Quality w/o ROI only “sells” for a

few diseases• 4 to 6 top diseases• Done “to” the patient• Care coordinator = 3rd party• Local/regional focus• Outsource vs. build

DM (Care Delivery Model)• Optimize patient health status & clinical

outcomes• Save $$ long term for payor or patient• Health care consumerism/ patient

empowerment• 100+ conditions/diseases• Done “by” the patient• Care coordinator = patient or doctor

• Not geographically bound• Assembly from components viable

“Outside the Box”



4 Different Chronic Disease Customer Segments Emerging

MCOsEmployers

Patients/CaregiversProviders


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Varying Value Propositions for Chronic Care

Who cares most about ________?MCOs Employers Patients/

CaregiversProviders

Short-termMedical Costs

Health/Quality of Life Clinical Quality Peace of Mind/Monitoring Productivity Convenience/Time Savings New Revenue Source

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CaregiversProviders



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CaregiversProviders



http://www.stressless.com/index.cfm?CFID=44076&CFTOKEN=2946407

http://www.patientkeeper.com/default.asp


6) Valuation of RPM companies is unclear (market cap/sales)


Valuation of Health Care Sectors Differs Dramatically


7) RPM has multiple drivers ANDmultiple barriers.


Trends Fueling RPM

1. Health care consumerism2. Medical error reduction/quality improvement initiatives3. Connectivity infrastructure: transaction processing lays the

foundation for e-care4. DM “assembly” model gaining prevalence (vs. making or buying)5. IT – data warehousing, data mining6. Clinical work flow automation software 7. ASPs: particularly suited for health care8. HIPAA = standardized data9. eHR: employers connecting with employees10. Physicians accept the Internet, particularly for clinical applications11. HMOsRUs.com: Defined contribution/eHealth Insurance12. Medicare reform

http://www.varian.com/index.html


Barriers to RPM

• Reimbursement• HIPAA: Privacy/confidentiality issues• Physician resistance• Technology maturity

– Infrastructure– Bandwidth– Standards– Friendly user interfaces


http://www.varian.com/index.html


8) Weak links in the RPM value chain:

ReimbursementMobility (wireless)Point-of-care access



9) The immediate RPM market is being driven by niche applications (as opposed to integrated, enterprise-wide adoption).



Mobile Computing Apps

• Charge capture and coding• Prescription writing• Clinical documentation• Lab order entry/results reporting• Decision support• Alert messaging and communications



10) Watch for RPM’s synergy with other promising health care information technology killer applications.



Scanning the Horizon – Possible Killer Apps

• Medical information sites for physicians • Wireless reference, ordering and coding systems • EMR (Electronic Medical Records) • Voice recognition • Physician patient email • Telehealth in the patient's home • Expert systems for decision-support



SUMMARY & IMPLICATIONS



• RPM – early, promising• Value propositions

– Initially cost savings– Multiple others

• Need for industry collaboration– Evidence of RPM effectiveness– Improving reimbursement– Rapid development of synergistic, complementary apps



END



Better Health Technologies

• Strategy, business models, partnerships• Disease/care management and e-health • Consulting/Business Development

• E-Care Management News– Complimentary e-newsletter– 3,000+ subscribers in 27 countries worldwide– www.bhtinfo.com/pastissues.htm




Recent BHT Clients• Pre-IPO Companies

– Life Navigator (remote monitoring connectivity and health intermediary services)– DiabetesManager.com (Internet diabetes DM)– CogniMed (highest cost/risk patient management software)– Caresoft (consumer focused DM)– Benchmark Oncology (oncology DM)– SOS Wireless (cellular phone technology)– Click4Care (Internet DM)

• Established organizations– Medtronic -- Neurological DM (medical devices/chronic disease solutions) -- Cardiac Rhythm Patient Management– Disease Management Association of America (trade association)– PCS Health Systems (PBM)– Varian Medical Systems (oncology equipment & systems)– VRI (behavioral health care management services)– Washoe Health System (integrated delivery system)– S2 Systems (medical transaction processing software)– CorpHealth (MBHO)– Physician IPA– Centocor (biopharma)


remote patient monitoring for disease management: 10 observations about the state-of-the-market

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