Epic: Strategy Predictions

The EHR landscape is dominated by a few select vendors. One of those is Epic Systems. There is no shortage of analytical commentary on the strengths and weaknesses of this otherwise secretive organization. This blog will discuss a few potential strategy options for Epic going forward.

• Global expansion: Epic and Cerner are currently in a battle to gain the majority share of the US market. As you can see in the infographic below, Epic is #1 in 22 states and Cerner is #1 in 15 states. A recent survey also found that Epic is poised to gain even more market share due to prominent mind share so there is still a lot of opportunity to be had. As the battle to gain market share in the US is fierce, Epic will also look to move further into other regions to offset the saturating US market. However, a recent deployment at Cambridge University Hospitals in the UK has led to significant financial issues. Epic's premium pricing position has led to the $300m implementation being met with cynicism over the proposal's value for money. If Epic is to penetrate other regions effectively, it will need to find ways to reduce initial cost outlay.

• Solution improvement in interoperability: Despite scoring the highest mark for interoperability among its competitors in a recent Healthcare IT News consumer survey, it remained the lowest scoring element of Epic's scorecard (see below.) This is evidently an industry wide issue that needs to be addressed.

 

• Bolster analytical capabilities with IBM's Watson: Epic has a large foundation of patient data and information. As it continues to gain market share in hosting this information, it will also aim to improve its analytical capabilities to derive real value from this data. Epic's experience with IBM on the DoD bid in working jointly with Mayo Clinic has forged a relationship which will see Epic explore how Watson's cognitive computing capabilities could be applied into Epic's EHR base. 
• Develop mobile health applications: Epic announced in late 2014 that it is building a data center to transition its healthcare IT apps to a cloud-based model due to growing demand. Coupled with this, Epic also announced that it would be working with Apple to develop mobile health applications for Apple HealthKit. Cloud-based health applications connecting healthcare providers and patients to Epic's EHR will improve its standing in the mobility space.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. TechTarget, Infographic: Epic leads Cerner in battle for EHR market, http://searchhealthit.techtarget.com/news/4500250294/Infographic-Epic-leads-Cerner-in-battle-for-EHR-market, 21st Jul 2015
2. EHR Intelligence, Epic Systems Tabbed to Expand Hold of Ambulatory EHR Market, https://ehrintelligence.com/news/epic-systems-tabbed-to-expand-hold-of-ambulatory-ehr-market, 13th Oct 2015
3. Healthcare IT News, Epic EHR adds to UK hospital's financial mess, http://www.healthcareitnews.com/news/epic-ehr-adds-uk-hospital-money-woes, 28th Sep 2015
4. Healthcare IT News, 2015 EHR Satisfaction Survey vendor report card: Epic, http://www.healthcareitnews.com/infographic/2015-ehr-satisfaction-survey-vendor-report-card-epic, 9th Sep 2015

Recent developments at TraceLink

I have recently been looking at the Life Sciences supply chain competitive landscape and in particular, a vendor called TraceLink. TraceLink labels itself as 'the world's largest track and trace network for connecting the Life Sciences supply chain and eliminating counterfeit drugs from the global marketplace'. It has also seen a few interesting developments as of late so here's a top 5 countdown along with my independent analysis, enjoy:

• Targetting the Brazilian market: TraceLink recently formed an alliance with Brazilian based pharma IT services and automation specialist, SPI. The motivation behind this move was to assist life sciences clients in meeting requirements for track-and-trace due in December 2015. Under these new regulations, life sciences organizations are required to have serialized and tracked three batches of product through the supply chain. This will then become mandatory for all pharmaceuticals one year later. TraceLink will benefit from early entry into the market, focusing on this regulation, but will draw attention from competitors eagerly watching how the market situation develops.
• Onboarding industry expertise: In July, TraceLink announced that it had brought three industry experts into its management team: Michael Ventura (Director, Industry Solutions) from GSK, Elizabeth Waldorf (Director, Global Traceability) from AMGEN and Marcel Zutter (Senior Implementation Program Manager, EMEA) from Abbott. Bringing in senior level management with decades worth of expertise at reputable Life Sciences organizations such as these only further validates TraceLink's commitment to the industry and aligns its strategy with market demand. 
• Partnership with the Yankee Alliance: Very recently, TraceLink launched the Yankee Alliance Preferred Partner Program. This enables more than 12,000 Yankee Alliance member pharmacies, clinics, hospitals, care facilities and physician practices to take advantage of reduced rates of its Product Track software in order to comply with the US Drug Supply Chain Security Act (DSCSA.) It makes sense for an organization to adopt the industry standard solution and although interoperable tracking software may not be a priority right now, it may facilitate some trend analysis in the near future to determine best practices for supply chain optimization. 
• Strong Q2 2015 results: Last month, TraceLink announced its Q2 results for 2015 and one of the highlights was that it had added 50 new customers within the quarter, resulting in a 76% increase in quarterly sales bookings and a 128% increase in year-over-year bookings. TraceLink also recorded a 178% year-over-year staff increase in Q2, exhibiting its growth potential. Growth in sales is primarily down to regulatory compliance pressures and although the full list of clients is not publically available, their expansion into Brazil is a definite contributor to these impressive figures.
• Nexus '15: TraceLink will be holding a track-and-trace event later this month to bring together experts and leaders from various disciplines to discuss track-and-trace strategies. Two major themes emerge from this announcement as TraceLink look to delve into how the Internet of Things (IoT) and Mobility will impact regulatory compliance. It will be interesting to see how TraceLink will prepare and react to the evolving regulatory landscape as new workflow processes become standard.

Many thanks for taking the time to read this blog. As always, if you found it useful and/or interesting, please share this on social media and if you have any comments or questions, please feel free to leave them below.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

Accenture: Using terminology as a competitive differentiator

I'd like to reference two articles in this blog post if I may. The first was written by Stuart Lauchlan of Diginomica entitled 'Don't mention the outsourcing, but dig deep into digital at Accenture'. In this article, he credits Accenture with entering the 'digital' market early as it is now reaping the rewards of strong, consistent growth. Lauchlan later goes on to recall how Pierre Nanterme, Accenture CEO, chose to abandon traditional terminology such as 'consulting' and 'outsourcing' as he believed they did not represent Accenture's true capabilities. My initial reaction to this is that it was a clever and easy move to make. Although there has been significant changes in the IT world, does Accenture still outsource? Yes. Does Accenture still consult? Yes. Nothing has changed drastically, yet it has re-branded its marketing strategy to align itself with market demand.

The second article I'd like to refer to was written by Varun Sinha entitled 'How Accenture Has Emerged as a Threat to Infosys, Wipro'. Like the former, this was written following Accenture's quarterly earnings announcement and it goes on to describe how Accenture's growth both signaled a growing market for India-led vendors but also increased competition as Accenture continues to grow faster. It is touched upon briefly in this article but what struck me was the notion of whether Accenture's decision to abandon traditional terminology was a way of differentiating itself from traditional, India-led competitors.

Instinctively, when you hear the word 'outsourcing', it leads you to the thought of reducing operations in one country in favor of a lower cost country. This fundamental thought process was originally a competitive differentiator for India-led organizations but with Accenture's repositioning of terminology, it can now bask in the perceived imagery of higher value services at a premium.

Finally, I looked at relative R&D spend statistics among some of the largest IT services vendors to see whether this repositioning was potentially supported by investment. Although it doesn't go into detail of how R&D was spent, Accenture's R&D spend as a percentage of its annual revenue rose from 2.01% (2012) to 2.50% (2013), a rise of over $150m, before settling back down in 2014. Other vendors had either reduced/maintained R&D spend or increased its percentage as part of a lower annual revenue whereas Accenture saw a rise in both. Although not conclusive, this suggests that Accenture could have invested in digital technologies to support its marketing efforts.

I commend Accenture for the foresight to take this step. The question I'd like to leave you with is this: 'Which era will we be entering next?' Maybe 'virtual services' for example? I'd love to hear what you have to think so please leave your comments below and if you've enjoyed reading this post, feel free to share it on social media.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Diginomica, Don’t mention the outsourcing, but dig deep into digital at Accenture, http://diginomica.com/2015/06/26/dont-mention-the-outsourcing-but-dig-deep-into-digital-at-accenture/#.Va0P7PlViko, 26th Jun 2015
2. NDTV Profit, How Accenture Has Emerged as a Threat to Infosys, Wipro, http://profit.ndtv.com/news/corporates/article-how-accenture-has-emerged-as-a-threat-to-infosys-wipro-775537, 26th Jun 2015

Bridging the Payer-Provider trust gap

Through my research into the Healthcare Payer market, it is apparent that there is a significant trust issue between Payers and Providers. In a market where we're seeing an ever increasing percentage of convergence between the two parties, this mistrust serves as an unwelcome roadblock to innovation and unfortunately the patients are likely to be the ones who suffer.

As we've seen in the recently published PayerView report by Athenahealth and ReviveHealth, although overall benefit reliability is improving, there is still a lot of work to do in regards to streamlining workflows, making processes more efficient and ultimately bridging the trust gap.

In this blog, I'm going to lay out a few recommendations for both Payers and Providers on how to build trust with the other party based on what I've come across during my research. Many of these points apply to both entities but for the purposes of this blog post, we'll look at them separately:

Payers

• Remain agile: As can be seen in the PayerView rankings, the top two performers are small, commercial players. Although there's a general assumption that smaller organisations are more agile, regardless of the size, Payers must be able to quickly react to market shifts including regulatory changes.
• Integrate and coordinate your data: Easier said than done but integrating and coordinating your data will have many benefits as it will streamline workflows, simplify claims processing and make transactions more accurate and efficient. Also, once your data is aggregated, this then enables you to analyze it for future improvements.
• Communicate: Communication is vital with both patients and Providers. Technologies such as portals, patient accessible EHRs, mobile access and secure messaging will engage patients while clinical information sharing, timely pre-authorizations and a reduction of unnecessary procedures will bridge the gap with Providers.

Providers

• Learn from Payers: Payers are well versed in areas such as patient engagement despite Providers having more direct contact. With the rise of technologies like telehealth, remote monitoring, mobile access etc, Providers should look at what Payers are doing to retain and engage patients and if appropriate, learn from them.
• Invest in HIT: Payers are more likely to contract with Providers who deploy software and systems supporting clinical integration and Population Health Management. The associated analytical efforts based on these would help Payers in calculating more accurate insurance premiums as well as having many patient health benefits.
• Discuss financial risk bearing: As the market embraces a value-based reimbursement model, one of the primary reasons Payers do not trust Providers is the unwillingness to accept financial risk. Once again, this is not an easy fix but clear and transparent communication on mutual goals will certainly help this process.

Once again, many thanks for taking the time to read my blog. I hope you found it useful and welcome any feedback you may have. If you enjoyed this post, please feel free to share it on social media with your friends and colleagues.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Athenahealth, PayerView 2015, http://www.athenahealth.com/network-data-insights/payerview
2. Managed Healthcare Executive, Best practices for payers and providers to cooperate in the era of convergence, http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/best-practices-payers-and-providers-cooperate-era-convergence, 23 Dec 2014
3. HealthcareIT News, Engaging patients: 5 things providers can learn from payers, http://www.healthcareitnews.com/blog/engaging-patients-5-things-providers-can-learn-payers, 8 Sep 2014
4. FTI Consulting, Gap Separates Payers and Physicians on Value-Based Arrangements, According to a New Study Released by FTI Consulting, http://www.fticonsulting.co.uk/global2/press-releases/united-states/gap-separates-payers-and-physicians-by-fti-consulting.aspx, 30 Jul 2014

Best of the Best: Analyzing the leaders in Healthcare

Welcome everybody to another Health Care Bear blog post! This month, I've been looking at industry award winners in healthcare in an effort to find the best use cases of technology and identify patterns between them that could be emulated for other healthcare systems.

For the purposes of my research, I have analyzed three of the HIMSS Davies Enterprise Award winners based on their use of IT (primarily EHR implementations.) These are (in no particular order: Children's Health System of Texas (Children's), Texas Health Resources (THR) and the University of Iowa Hospitals & Clinics (UIHC.) To make it a little easier, I am focusing on US based healthcare systems as healthcare structures vary greatly from country to country. These are a few of the key notes from my research:

1. UIHC absolutely dominated against the other two chosen hospitals by achieving not only the most ROI ($103.6m (159%)) of the three but also invested the least to achieve this ($65.30m), which is incredible.
2. Even if UIHC hadn't received Government incentives, it still would have achieved 104% ROI, mainly due to the financial benefits of integrating monitoring devices which reaped $37.16m (36% of total ROI.)
3. Both Children's and THR have a common IS Vendor Selection Strategy in that they are looking to migrate towards a single vendor approach. UIHC however is looking to migrate toward best of suite/cluter throughout its organization. What is interesting is that this approach is also taken by the top 3 most profitable healthcare systems of America*.
4. The same pattern arises as UIHC is the only hospital not stated as having a Health Information Exchange (HIE) / Regional Health Information Organization (RHIO) initiative either planned or in use.
5. The number of IT vendors these hospitals deal with is staggering with 70 listed between the three chosen for this research. Considering two of them are looking to reduce the number of vendors, this could lead to significant vendor landscape consolidation.

That's it for now folks! Many thanks for staying tuned and as always, I'd love to hear your feedback in the comments below and if you liked this post, please spread the word via social media and finally check out my earlier blog posts. Ciao for now!

* Top 3 most profitable healthcare systems of America selected through the ownership of the top 20 most profitable hospitals of America.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. HIMSS Enterprise Davies Award Recipients, http://www.himss.org/resourcelibrary/TopicList.aspx?MetaDataID=2803

Infosys: What went wrong?

Bonjour everybody and welcome to another Health Care Bear blog post. Today we shall be looking at the India-led IT Consulting and Services multinational, Infosys. Infosys has been through a tough few years recently, which has gradually pushed it towards the back of the line when it comes to winning Healthcare business. Granted, its strengths lie more in the manufacturing space but without a doubt, it does recognize the growth potential in Healthcare. So today I am going to be looking at a few areas which have hindered Infosys' Healthcare business. If you have any comments then please feel free to leave them below as I'd love to hear what you think. Let's get started...

Constant reorganization: Although not necessarily directly related to Healthcare, the image at the top of this blog post shows that there has been a lot of top-level reorganization within Infosys over the past few years. Whilst it focuses on restructuring its internal workforce to position itself for future growth, it cannot properly focus on winning new business in Healthcare and will suffer from leadership inconsistency. If these recent changes weren't enough, Infosys recently announced that it will be once again restructuring its business from the 1st April 2015. Despite the potential benefits of this restructure such as enhanced flexibility, its clients may once again suffer. At a time when it is looking to renew core existing contracts, this is very inconvenient timing. Such is the desperation of keeping hold of these clients, the CEO himself is even taking charge of around a dozen top customer projects.

Underdeveloped solution portfolio: In the past year, Infosys launched just two healthcare-centric platforms; Clinical Trial Supply Management and Osteoporosis Solutions. Over the same timeframe, Infosys won only two engagements; a contract renewal with the District of Columbia for health information exchange (HIE) and an ERP deal for implementation services with L.A. Care Health Plan. Such lackluster effort for a vertical which it recognizes has growth potential is disconcerting, especially when you see competitors such as Cognizant and IBM make strides through acquisitions and expanded capabilities in strategic areas such as cloud. It can no longer rely on its previous BPO success and must innovate to just keep up.

Startup acquisition strategy: This seems to be a trend among many India-led IT service providers. They are looking to invest in the "next big thing" in order to bolster their innovation credentials and pull away from the pack. According to the Economic Times, Infosys has a $500m fund to invest in startups pursuing disruptive ideas. Due to Infosys falling behind the pack over the past few years, this is a survival strategy. It's reportedly failed acquisition of TriZetto to fellow India-led competitor Cognizant potentially exhibited an appetite for larger acquisitions but due to its investment in other startups, it looks as though it will stick with partnering in Healthcare. Meanwhile, Cognizant's acquisition of TriZetto is enabling it to pull away from the India-led pack and take a high-value-add approach with further onshore presence. Unless Infosys finds a diamond among the coal or invests in an established player, it may stay in limbo and be forced to rely on its network of partnerships to win business in Healthcare.

That's all for today folks! Many thanks for taking the time to read my blog, it's very much appreciated. If you did enjoy it and found it useful then please share it on social media as it would greatly help.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Business Today, Missing Murthy, 17 Feb 2013, http://businesstoday.intoday.in/story/infosys-woes-profit-revenue-growth/1/191782.html
2. Zacks, Infosys (INFY) to Restructure Business: Time to Buy?, 9 Feb 2015, http://www.zacks.com/stock/news/163721/infosys-infy-to-restructure-business-time-to-buy
3. Times of India, Infosys, Wipro set to enter Rs 12,000 crore renewal ring, 6 March 2015, http://timesofindia.indiatimes.com/tech/tech-news/Infosys-Wipro-set-to-enter-Rs-12000-crore-renewal-ring/articleshow/46476526.cms
4. TBR, Infosys PSBQ 4Q14, 2 Feb 2015
5. Economic Times, Why Wipro, TCS, Infosys are wooing retail, healthcare startups and investing in them for survival, 11 Feb 2015, http://articles.economictimes.indiatimes.com/2015-02-11/news/59043865_1_startups-wipro-ceo-tk-kurien-silicon-valley

Track & Trace / Serialization: Beyond Compliance Benefits

Welcome once again to The Health Care Bear blog! This month I've been looking at the Track & Trace / Serialization market in Life Sciences. The most common and potent driver for adoption of T&T / Serialization is undoubtedly for regulatory compliance purposes. However, this is by no means the only benefit of this solution so today I'd like to take you through the various potential benefits of T&T / Serialization. If there are any I've missed then please feel free to comment below...

• Comply with regulations: OK, let's get this one out of the way! Regulations are constantly evolving all around the world and in Life Sciences, T&T can help comply with those such as the FDA mandate applicable to Manufacturers, Repackagers, Wholesale Distributors and Dispensers stating that product ownership cannot be accepted without transaction history and statements (either paper or electronic.) Unfortunately, as is this case with this one, they are frequently delayed or changed. Despite the compliance benefits of a T&T solution, the volatile nature of these regulations is pushing customers away from deploying this type of solution globally on an enterprise-wide basis. Regional vendors are making the most of this by concentrating on local regulations only whilst larger, global players face the stigma of being considered out of touch.
• Improve visibility: Serialization gives a client the ability for logistics transparency across the supply chain. Not only will this make reporting more accurate and efficient but it will also eliminate potential unseen issues such as theft. This will also enable the client to detect returns that were not originally sold to the customer to avoid fraudulent claims.
• Protect your brand: Once a client is able to identify and highlight illegal activities such as theft, counterfeiting and diversion; they can then take measures to combat this. In Life Sciences, drug quality is extremely important and so assuring that the intended product makes it all the way to the market without tampering will help protect the brand.
• Provide an integration platform: Deploying a solution which knits together other applications into an overall solution will have long term benefits. Especially given the current reluctance to deploy enterprise wide, global solutions; a serialization solution able to bring in outside components will be valuable when/if the regulatory landscapes in other regions settle down a bit.
• Control your inventory: This solution will enable the client to gain better insight into raw materials ordering. Using analytics in conjunction with T&T/Serialization will maximize storage space and streamline process scheduling.
• Improve workflow processes: The less physical handling is involved, the more productive the supply chain will be and so errors will decrease as the human element is minimized. As well as reducing errors, automation will also speed up the supply chain process considerably.
• Speed up the order-to-cash life cycle: Being able to definitively state where the goods have traveled and exactly when it was delivered and to whom will speed up the time it takes to authorize payment.
• Perfect order fulfillment: Serialization will help perfect order fulfillment by identifying incorrect orders and resolving them before delivery to the customer. This will directly impact a vendor's reputation and improve levels of customer satisfaction.
• Aid the returns process: Through reverse logistics, serialization will also help the recall, return and withdrawal processes as well as shrink/loss recovery. During the same process, the vendor will also be able to pinpoint the location and time where the issue occurred.
• Increase mobility: So your products are making their way through their life cycle, what's stopping you from moving with them? Mobile access to a track and trace solution will enable key members of your workforce to follow the product's journey whilst also on the move and if there is an issue, they are able to keep track of what's going on in real time and correct it on the go.

I'm sure I've only scratched the surface with these benefits so if you have any other suggestions of the potential benefits of a Track-and-Trace / Serialization solution, let me know down in the comment section below.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

Healthcare IT Predictions: 2015 and Beyond

Welcome one and all! Thank you for keeping up to date with my blog, it is very much appreciated and I hope you're finding it an interesting read. Today we're going to be talking about predictions in Healthcare IT both in the near term and further into the future.

There's a lot of content out there discussing potential trends and predictions going forward and so I took the time to review a variety of sources and have decided to cover just three trends I believe are the most widely acknowledged and have the potential to have the greatest impact on the Healthcare vertical. As always, I'd love to hear your feedback on the trends I've covered in this blog as well as others you feel are important so leave your comments below.

1) Data-driven digital strategies
Data is at the heart of everything these days. It arrives in droves in various forms from numerous sources and with varying levels of security protecting it, making it a minefield for organizations to manage. A fully encompassing and actionable strategy is essential throughout the data life cycle from storing the data to analyzing it. Not only does Big Data claim to reduce costs of healthcare (by more than $300bn just for the US alone according to McKinsey) [1] but also to improve quality of care by making better decisions based on more accurate data. I personally see data as the foundation for analytics to build upon. Sure, proper data management can streamline operations, cut costs and improve reporting quality but there is a market appetite for analyzing this data to improve decision making and predict what's down the line. Before clients can do so, the data needs to be accurate, secure and managed properly. Analytics based on inaccurate data is not only a waste of time and resources but is also dangerous in a healthcare setting. By no means is this a simple task though. 

IDC is putting heavy emphasis on digital strategies claiming that by 2016, operational inefficiency will become critical at 25% of hospitals, driving them to budget for a data-driven digital strategy [2]. With an increasing focus on performance quality (including measuring and reporting quality), it is vital that the data is accurate, accessible and actionable [3].

Not only will healthcare organizations require the IT know-how to manage this data but they will also need to ensure that all stakeholders such as the lines of business, clinicians, IT vendors and C-level executives are all educated and on the same page as to what roles they will play in this strategy going forward.

2) No excuses for lack of interoperability
Philippe Houssiau, Vice President of Healthcare in the UK for CSC sees that there is no excuse for a lack of interoperability with systems in place across the care continuum and a drive from policy makers [4]. Although we have the technology to solve the interoperability issue, it's by no means a simple task.

The UK's Better Care fund claims that it will save £253m from reduced emergency admissions during 2015-2016. This seems to be widely considered as an unrealistic target, which is made only worse by an expected NHS funding gap of £65bn by 2030. UK healthcare organizations are therefore in the unenviable position of trying to improve the quality of care whilst also having to dramatically cut costs [5] [6].

Regardless of the monetary figure, the operational benefits of making systems interoperable are undeniable. The lack of uptake, the negative feedback and the functional issues of EHRs have primarily been due to lack of interoperability. Not only does this take up valuable time of healthcare practitioners but also encourages the use of quicker workarounds, which subject the organization to unforeseen cyber security threats.

3) Agile, flexible and scalable IT infrastructures
As well as the increasing amount of data, there is also increasing adoption of devices and applications in the healthcare vertical. IDC expects around 70% of healthcare organizations to invest in consumer-facing mobile apps, wearables, remote health monitoring and virtual care by 2018 [1]. As mentioned previously, not only is the amount of data increasing but also the variety of sources too.

Patients are increasingly interacting with healthcare providers virtually and also via mobile devices and applications. What's interesting to note here is that the recent alliance between Apple and IBM is very well placed to take full advantage of this trend as they cover both the consumer side with Apple devices and applications and the enterprise side building on IBM's experience and footprint in the market. But anyway, I digress...

Organizations must prepare themselves for the influx of data by investing in agile, flexible and scalable IT infrastructures to cope with this increase. Naturally, this plays right into the hands of cloud and SaaS providers who are able to scale up and down based on demand. However, the healthcare industry has notoriously been very cautious when adopting the cloud as some CIOs believe that adopting the cloud signifies giving up control and thereby opening the doors to security issues. Although many organizations are still wary of the cloud, which can be seen by the uptake of private cloud in comparison to public, gradually they are starting to become more confident in using it.

I could go on and on but I'll leave it there for now. I'd love to hear what you're seeing in the market, whether you agree or disagree with the trends/predictions mentioned above or any other comments you may have so feel free to comment below.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Tech Republic, Big data will enhance healthcare, but to whose benefit?, Nov 24, 2014, http://www.techrepublic.com/article/big-data-will-enhance-healthcare-but-to-whose-benefit/
2. IDC, FutureScape: Worldwide Healthcare 2015 Predictions, Nov 12, 2014
3. CSC, Why Healthcare Reform Hinges on Data, http://www.csc.com/health_services/publications/91654/116373-why_healthcare_reform_hinges_on_data
4. Ehealth Insider, 15 predictions for 2015, Jan 2, 2015
5. Public Finance, Health Foundation analysis predicts £65bn NHS funding gap, Jan 23, 2015
6. LGC Plus, Unrealistic better care fund targets must be revised, says NHS England, Jan 5, 2015

Wearables and Sensors... For the fit, the ill and frugal

As you may have picked up on by now, I like to criticize a lot. This is not because I'm a particularly negative human being but I believe that businesses need people who question everything so that they can improve their products, strategies and overall confidence about what they are producing. Let's call it "Social Quality Assurance"!

With that being said... Welcome to the first Health Care Bear post of 2015! Hope you all had a wonderful time over the holidays, I assume my present from you got lost in the post right?! Anyway, in keeping with my recent post about Google Glass, I wanted to expand that out into wearables and sensors in the Healthcare market.

This blog post was inspired by an article by Penn Medicine[1] in which they discuss the behavioral aspect to wearables and sensors. It's undeniable that there is a lot of hype and ongoing investment but there is a cultural change that must run in parallel to compliment the adoption of these devices. I've listed a few of my thoughts below as to the pros and cons of this technology so sit back and enjoy...

Pros

• Power to the consumer - Being able to own / be in charge of a piece of technology that will ultimately lead to health benefits and financial incentives is empowering and continues the trend of greater consumer engagement. Patients will start taking on more and more responsibility for their own well being as incentives become more enticing and penalties more severe.
• Technology already in the market - Although older generations may need support to get to grips with the technology currently available, the beauty is that pretty much everything we need is already at our disposal. Phone apps are available to track sleep patterns, exercise and dietary information. The Samsung Galaxy S5 even has a heart rate monitor built in. Consumers have more or less everything they need, the business mechanisms just need to be put in place to make use of these. When it comes to devices actually worn by the subject, these are already relatively cheap with some basic heart monitoring watches available under £10. More advanced wearables are still a little pricey but will very quickly start declining in price.
• Telehealth and the virtual world - We're starting to see some primary care visits being carried out remotely and this is set to increase over the coming years. Whether the consumer side of the conversation is at a PC or via a mobile phone, the data captured by the wearables will more than likely be stored on the same device used to contact the practitioner and therefore made available quite easily. Also, as virtual interaction becomes more routine, alerts may be set up to monitor when someone's heart rate drops significantly for example and then a practitioner or ambulance can be called automatically to assess the situation. The possibilities are endless.

Cons

• The "Big Brother" effect - In my humble opinion, this isn't a critical factor but there are a lot of skeptics and conspiracy theorists out there that already believe we are constantly being watched and monitored and that this encroaches on our freedom. If they are worried about CCTV cameras, recording devices in lampposts and phones being hacked; chances are they won't be running out to the shops to buy an electronic device that is on their person 24/7.
• More data... great! - The Healthcare vertical already has a tonne of data that they still don't know what to do with. Yes, data for a specific patient will be able to be analyzed by a practitioner for the purposes of improving the patient's health but in the grander scale of things, how are Healthcare organizations going to cope with this new influx of data on a larger scale when they're not yet at the stage of being confident enough to capture, manage and analyze the data already available to them?
• #Integration - This is a key theme of 2015. So your wearable tracks your heart rate for example, great, then what? That data needs to be stored, shared with Payers/Providers and ultimately analyzed. With so many devices in the market, the data needs to be standardized and made available to those who need it as well as being presented in a simple way so that relevant actions can be made. Case in point, I used to drive a car with a monitor in the engine which would monitor my speed and distance travelled and relay that back to my insurer. The same needs to happen with wearables as well as collating that with other healthcare institutions to analyze the data on a grander scale. There's a lot of work to be done before this is possible.

A final note about who will use these and why... I like to categorize the general public into three categories when talking about this topic: those that need it (the ill), those that want it (the fit) and those that don't really care (the lazy.) Before I carry on, I'd like to note that obviously not all of these will have the funds to buy these devices but for the purposes of this analysis, let's say everyone is on a level playing field. The ill will adopt these devices in conjunction with Healthcare Providers in an attempt to improve their health, simple. The fit will adopt these devices independently in order to maximize their own daily routines, fine. The third category is where it gets interesting; the average Joe doesn't particularly care what their heart rate is, whether or not they're getting the idyllic amount of sleep or how many steps they've taken in a day. What they do care about is money (let's face it, who doesn't?) and so to include this demographic, organizations may have to offer incentives such as lower insurance premiums or rewards for participation in clinical trials.

I could go on but I'll leave it there for now. If you have any other pros or cons then feel free to leave a comment below.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Penn Medicine, Wearable Tracking Devices Alone Won't Drive Health Behavior Change, According to Penn Researchers, 01/08/2015: http://www.uphs.upenn.edu/news/News_Releases/2015/01/wearables/

Is Salesforce.com a believer in Veeva?

Veeva is a Business Software and Solutions vendor that has grown rapidly in just 7 years to dominate the CRM space in Life Sciences. The rapid rise of this vendor in such a short period of time is inspirational to any budding entrepreneur as it follows some of the foundational rules of business and economics. As I immersed myself in Veeva's story, I started to contemplate how the company would evolve over time and then started to question whether Veeva's relationship with Salesforce.com (SFDC) would stand the test of time.

Given Veeva's roots within SFDC, it was a natural progression for its CRM product to be hosted on the Salesforce1 platform and needless to say, it has been a great success as it expects to top $300m by the end of this year [1]. To this day, Veeva remains SFDC's preferred worldwide partner for the Life Sciences industry. In fact, in March 2014, Veeva announced that it would be extending its global partnership with SFDC through to 2025 [2]. Their partnership agreement includes minimum payment commitments from Veeva, which has been a successful financial model thus far as it benefits both parties although it does not restrict them from competing against each other should an opportunity arise [3].

Not only has Veeva proven its worth but it is also being touted as potentially bringing in a new wave of cloud due to its industry focus:

“Marc Benioff [Salesforce's chief executive] led the first wave of cloud computing, and there have been a series of leaders like him spending plenty of money to grow their businesses. Peter [Gassner, Veeva's CEO] is leading the next wave, which is focused on industries and real customer successes.” - Gordon Ritter, Founder and General Partner of Emergence Capital Partners [4].

Ritter's company, Emergence Capital Partners invested $4m in Veeva in 2007; an investment which is now worth $1.2b, a 300-fold return. Its prediction that the next wave of cloud is going to be focused on industries seems to be ringing true and so global multinationals must adapt to exhibit that they are in touch with industry requirements. This is exemplified by Veeva surpassing a goliath by the name of Oracle in Life Sciences CRM. This trend needs to be given attention across all verticals as this is also a common criticism of other global multinationals across various industries and service areas.

In April 2014, SFDC announced a new industries strategy aimed at 'accelerating the company's growth and transforming the way companies across key industries connect with their customers.' [5] With a similar solution focus to Veeva and a rejuvenated industry specific strategy, it'll likely to be competing with Veeva in the future whether they are still bound by the partnership agreement or not. Although SFDC is receiving payments from Veeva as a part of its partnership agreement, it is likely to see the impressive growth rates and want a bigger piece of the pie, especially if its business starts to expand.

Naturally, the question arises of whether or not SFDC could try to acquire Veeva. SFDC's $4b acquisition spree over the past four years was topped off with its July 2014 acquisition of analytics-based CRM platform provider, RelateIQ. Organizations such as SFDC are looking to invest in digital marketing and other customer experience initiatives and grow inorganically through acquisitions. Previous acquisitions by SFDC have primarily been horizontally focused and so taking on Veeva would potentially start a chain of acquisitions based more on serving specific industries. The question is whether SFDC believes it now has enough clout to compete with an industry-based vendor like Veeva [6] [7].

What are your thoughts on the future of both vendors? Do you think SFDC could potentially acquire Veeva? Do you think Veeva will continue to concentrate on Life Sciences or expand out into other big industries? Leave your comments below.

Best Regards,

Jonathan Cordwell

Research Analyst, Healthcare Strategy

ResearchNetwork, CSC

1. JPMorgan, North America Equity Research
2. Yahoo Finance, Veeva Systems Extends salesforce.com Partnership Into 2025, March 4, 2014: http://finance.yahoo.com/news/veeva-systems-extends-salesforce-com-210600001.html
3. Veeva, Form 8-K: http://veeva.q4cdn.com/32d16ba7-6a25-47d4-a188-a4576fc7ed87.pdf
4. VentureBeat, Gordon Ritter: Veeva Systems is the next Salesforce, October 16, 2013: http://venturebeat.com/2013/10/16/gordon-ritter-veeva-systems-is-the-next-salesforce/
5. Salesforce.com, Salesforce.com Announces New Industries Strategy, April 2, 2014: http://www.salesforce.com/company/news-press/press-releases/2014/04/140402.jsp
6. Market Realist, Must-know: Salesforce.com’s 2Q15 earnings, September 10, 2014: http://marketrealist.com/2014/09/must-know-salesforce-coms-2q15-earnings/
7. Cloud Socius, 4 Billion Dollars Well Spent? Salesforce Top 5 Acquisitions, July 15, 2014: http://www.cloudsocius.com/top-5-salesforce-acquisitions/