Healthcare - Vaxa Inc.

Healthcare

The changes in the global healthcare industry has been decades in the making. Not only driven by changing population demographics and advances in technology but also how care is consumed and delivered. Whichever form care is funded today—private, public, or some combination—each system is being scrutinized as costs have spiraled and there are monumental initiatives in all markets to increase efficiency and the effaciacy of care.

Top factors driving healthcare reform include—increasing and differing consumer demands, regulations, better quality but affordable healthcare, care for all not just the few, and technology and innovation. The issue is these drivers are often in opposition creating tension for the major stakeholders—payers, providers, and product companies.

Today, Healthcare accounts for about 7% or $4 trillion of total global GDP of nearly $60 trillion. Healthcare's value and cost is almost 3x that of banking, making it the world's largest industry and opportunity space.

Our Focus
What Ails Us Healthcare
Client Results

Tab Content One

Vaxa works across the healthcare value chain helping companies to become more competitive in an evolving and changing market. This means creating and aligning products and services to deliver against their three most important targets—better outcomes, better services, and at reasonable costs.

Healthcare Segments

Healthcare Players

Manufacturers

Pharmaceutical & Biotechnology, Devices, Instrumentation, and Technology Providers.

Payors

Employers, Insurers, and Government.

Service Providers

Hospitals, Clinics, and Standalone facilities.

Technology Providers

Hardware, Software, and Service Technology Providers, Distributors and Resellers.

We work with the Healthcare Industry teams of Technology Providers to help them with a range of issues:—from identify and detailing the big healthcare plays, targeting specific parts of the ecosystem, optimizing their capabilities, to forming alliances with software and service providers.

Identifying and detailing the big healthcare plays,
Targeting specific part(s) the ecosystem,
Identifying, analyzing, designing, and forming alliance ecosystems,
Advising on the best Private Equity partners who are aligned with your strategic goals.

Tab Content Two

A major factor that ails the US healthcare system is how hospitals, physicians, and other providers are paid. The fee-for-service is a payment model where services are unbundled and paid for separately in the US healthcare system. It gives an incentive for physicians to over diagnose and treat since payment is dependent on the quantity of care instead of quality of care. The idea of outcomes-based medicine is a generally agreed upon concept by the political parties, healthcare stakeholders, and even consumers.

The US healthcare industry has tried in the last decade or so to create and implement an outcomes-based payment system but has not been successful for reasonas ranging from the complexity of the healthcare system itself, the familarity of the stakeholders with the current fee-for-service, fearing the unknown of further unintended consequences, and the technical hurdles required to change the system.

If there was ever a time for a step-wise change, the time has never been better. The leadership is in place to take bolder initiatives and drive collaboration between public and private payers to transform the system in the next 3 to 5 years. With healthcare consuming about 26% or $4.2 trillion of the US government total spending, such a move can save consumers, employers, and government about $1 trillion over the next decade and improve the health of the nation.

Consider the wide variations of pricing for the same procedures within the same markets. Research from the US Office of Management & Budget and several major insurance companies have found prices from different hospitals within the same geographic market for common procedures—such as pregnancies, hip and knee replacements and respiratory infections—can vary between 50-100% from each other. Why is it some providers can achieve such cost savings while others need to charge higher prices? A key driver is those at the lower end of the pricing curve made strategic decisions to adopt best practices and run their organizations to focus on outcomes instead of maximizing the number of procedures for the same indications.

Payers together with employers, the states and federal government can reap the savings if they can encourage providers to adopt best practice. Payers will also have to rethink their approach in working with providers to make the transition to outcomes based medicine. There following are five stepping stones.

First, for change to take place in meaningful time and have a sense of urgency, both

For a move away from fee-for-service, all key stakeholders in the heathcare system need to be engaged including employers, insurers, and state and federal government in order to cause what is seen as a trying to push a large rock up a steep hil—it will take all the muscle and willpower to get it done.

Replace fee-for-service with outcome-based care.
Focus on heavy-use consumers.
Develop centers of excellence.
Streamline the patient-system interface.

FEE-FOR-SERVICE DRIVES UP COST

The fee-for-service is a payment model where services are unbundled and paid for separately in the US healthcare system. It gives an incentive for physicians to over diagnose and treat since payment is dependent on the quantity of care instead of quality of care.

Inherent in a good data policy is identifying the relevant data sources—not just what is place today but also what other data will be needed to increase performance. For example, there are at least two places where customer constantly interact with a company—the website with emails and chat and call centers. Many customers will tell you what is wrong and often will have suggestions on how to fix a problem. The ability to capture this data, store and organize it, can become a rich source of not only improving how customers experience the company but comoetitive advantage for product and service improvement.

Knowing what to collect, how to store, retrieve and mine is not always as obvious as it sounds. A company needs to understand its business, where it is headed, and what is needed to chart a course—the basics of strategy. But how data fits into that strategy maybe less clear. One way to overcome that speed bump is to look to non-competitive or industries that are outside of your own to see how they tackled the issue. That is, take an outside-in approach as one way to chart the course and minimize mis-steps.

BUILD, BUY, BORROW, OR RENT

Another strategic issue senior executives have to grapple with is the investments construct of technologies to pull data together and the creation of the advanced analytical models and tools. Most companies' core business is not about creating technologies but are mainly users of it. There are numerous external vendors—both established and emerging— that provide the full range of analytical assets from complementary core data, models, and tools that management has to decide the best investment strategy that is advantageous in the long run. That is, what are the make vs. buy vs. partner vs. a combination? How does the change over time?

The investment and deplyment strategies have varied widely in the retail sector. For instance, some retailers have decided to build deep analytical capabilities while others have established long term partnerships with selected vendors. These choices of on-line and traditional brick and mortar companies reflect a dynamic set of strategic, financial, and organization drivers that can only be addressed by top management.

GETTING CLOSER TO THE CLIENT BUSINESS

The medical device industry is one that seem to perennially deliver solutions that are closely matched with doing what is needed to diagnose and treat patients. They do this by creating a deep understanding of their customer needs, wants, and pain points. Sometimes, even understanding their customer's business better than the customers themselves.

Technology companies, particularly those offering big data solutions should look to the medical device and similar industries to see how to convert technology into meaningful usable big data solutions. The issue related to big data is very different to other forms of information technology. Servers, storage, and operating systems can be designed and scaled across a range of application envrionments whereas, data analytics vary tremendously, even when the problem is common, the insights and approaches are vary even customers are within the same industry.

For example, five sectors represent about just under 40% of global GDP—healthcare, public sector, retail, manufacturing, and telecommunications. According to the OECD, healthcare by itself can increase its efficiency by nearly $750B and it is an area where there are major information disconnects between consumers, providers, and payors.

The healthcare systems in the United States and other countries have shown some success in leveraging big data. With rising costs, US providers have implemented a range of pilot programs with good results to date:

The Department of Veterans Affairs in the US has success shown health information technology or HIT in areas such as patient monitoring. The VA has outperformed the private sector by following recommended procedures for patient care, adhering to guidelines, increasing their rates of edvidence-based drug therapies.
The UK's National Institute for Health and Clinical Experience has pioneered the use of large datasets to investigate the clinical and cost effectiveness of new drugs and expensive pre-existing treatments. They issue guidelines on such costs for the NHS and will often negotiate prices and market access conditions for PMP industries.
The Italian Medicines Agency collects and analyzes clinical data on the experience of expensive drugs as part of a national cost effectiveness program. The agency can impose "conditional reimbursement" status on new drugs and can then reevaluate prices and market access conditions relative to its data studies.

The key for big data solutions is understanding the broader goals and how the overall business enviornment must change and then creating a path or series of initiatives that will contribute to a future state. As in the case of healthcare, it about controlling cost, providing easier access, and ensuring the right care is delivered at the right time and place.

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