Analyzing the HP Sales Approach

This month we've been looking at HP within the Healthcare sector. With so much activity going on at the moment including the company split, the acquisition rumors and of course the $11b DHMSM result looming, it's a very eventful time to be focusing on HP and so in this blog post, we are going to be looking at HP and a few of the characteristics of HP's go-to-market sales approach, enjoy!

• Speak to the CIO whilst partners speak to the business: HP, like CSC, is seen very much as a technology player and it is happy to carry on fulfilling that role. Its in-road into a client is usually via the CIO, which is completely understandable. HP also has a strong partner network with vendors who speak more to the LoBs, such as Deloitte and so will rely on them to deepen the client relationship where necessary.
• Solution-in-a-box: HP typically prefers to craft a solution that can be implemented easily, quickly and cleanly. Once this solution is formulated, it can then work on customizing it and pitching it to different vertical industries.
• Leverage eHealth centers in India: As well as increasing headcount in India as part of its restructuring plan, HP is also leveraging its six eHealth centers in India. This has potential benefits both for the local communities as well as strengthening its value propositions around big data and telehealth for example.
• Concentrate on maintaining and growing existing client base: As its core business continues to dwindle, HP is fighting to at least maintain its existing client base and capitalizing on the loyalty its clients have to EDS after its acquisition.
• Capitalize on the regulatory environment: The ICD-10 deadline gives HP the opportunity to really push the value of its RCM and BPO solution portfolio.

Once again, many thanks for taking the time to read this blog post. If you enjoyed it and would like to see more then please share this on social media.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

Coordination > Consolidation

As we have seen over previous years, there has been widespread consolidation in the healthcare market. Both providers and payers alike have been making acquisitions within their locales. Their goals include improving integration across their organization while reaping other benefits such as expanding revenue streams. Although this may seem a viable option right now, this will present challenges in the near future and so here are a few reasons why coordination might be a better bet than consolidation:

Consolidation

• Fewer options will result in higher cost for the patient: In some areas of the US, there are only one or two insurers. As competition decreases, the market drives towards a virtual monopoly and these payers are able to demand higher prices from consumers. This will drive consumers to seek out alternatives, and with this consumer demand will come new independent entrants into the market delivering a greater quality/value proposition, with whom the larger, consolidated health systems will struggle to compete.
• The rise of telehealth: As payers and providers consolidate, they solely focus on their immediate locale. With the gradual increase in adoption of telehealth, these regional borders will start to fade and patients will be exposed to more future-ready and cheaper alternatives leaving the larger, more expensive networks behind. Although consolidated health systems have the ability to drive scale and invest in telehealth, they are likely to be increasingly subjected to competitors further afield who can offer cheaper telehealth services from remote locations for non-critical care.
• Consolidation doesn't necessarily reap economies of scale: One reason why providers are looking to consolidate is to grow economies of scale. However, a 2012 study by the Robert Wood Johnson Foundation found that the main driver was to simply improve bargaining power with payers and so consolidation did not lead to true integration or enhanced performance.

Coordination

• Remain agile: Formal and informal care coordination enables both payers and providers to leverage their partner networks whilst also remaining agile enough to respond to market shifts, new competition and consumer demand. Larger, consolidated systems will find themselves unable to compete on price in a market where already around 20% of Americans cannot afford health insurance. This is supported by the RWJ Foundation study which found that price increases exceeded 20% when mergers occurred in concentrated markets. 
• Coordinated care encourages a value-based reimbursement model: As mentioned above, although consolidation seems to promote care coordination on the surface, it is usually due to financial reasons and so fails to achieve improved patient care. As the healthcare market progresses from a fee-for-service model to a value-based-care model, providers will be judged on the quality of care they are administering. A true effort to coordinate care will improve the quality of care whereas those purely looking for financial benefit may end up having to play catch-up.
• A multitude of both financial and operational benefits: The benefits of care coordination range from empowering patients, improving the delivery of care and increased efficiency to reduced costs, streamlined workflows, reduced waiting times and improved patient outcomes. Providers who have not consolidated have still been able to reap the benefits of coordinated care and so it makes sense to integrate, coordinate and remain agile.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

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

Dell's Competitive Advantage in Prescriptive Analytics

Hello there and welcome to another blog post by the Health Care Bear! I've recently been looking at Dell's position in the Healthcare industry and one talking point that stood out for me was its strategy and focus on prescriptive analytics. As we all know, IBM is at the forefront of the analytics space with Watson but it looks as though Dell is looking to nibble into that market so I thought I'd write a few words on what I've come across during my research and how Dell has a competitive advantage in this area. As always, I'd love to hear what you have to say so please leave your comments below and share this on social media with your friends and colleagues. Let's begin...

1. Analytics relies on a lot of data: You may be wondering why I included the image at the top as we're not talking about the cloud at the moment. The reason I included this was because of the factoid that Dell manages over 6 billion diagnostic image objects in the cloud, which covers 7% of the US Population (these stats are from 2013 so have likely increased since.) This is a huge competitive differentiator as the larger the data set, the greater the analytical potential. As Dell considers the US Provider market as its largest and most fruitful, it would make sense to focus on this and build up its repository which will simultaneously add potency to its analytical offerings.
2. Growing ability to speak to the business: Traditionally, Dell has struggled to shake off the perception of being purely IT focused and so usually finds itself speaking to the IT department. A vendor is able to culture much stronger and longer client relationships if it can speak to the business value of the solution it is putting forward. Although this is currently one of Dell's weaknesses, it's interesting to note that its partnership with Deloitte could assist in this area as they will be able to capitalize on each others' strengths and this will help Dell take more of a consulting approach, thereby selling into the business. If it can properly articulate the business value of the prescriptive analytics it is selling, this will increase its win:loss ratio.
3. Dell has a solid network of partners: The chart below, although from 2011, shows that Dell is partnering with some of the most influential players in Healthcare at this time. When you also add its more recent partnership with CGI, which focuses on cloud solutions, security solutions and vertical-specific analytics, it's easy to see that it is well positioned to not only capitalize on the amount of data at its disposal but also bring in partners' capabilities to expand the possibilities of what can be done with this data.

That's it for today folks, I sincerely hope you've enjoyed this blog post and look forward to hearing from you!

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Dell, Future Ready Healthcare IT Programs, 2013, http://www.slideshare.net/dellenterprise/futureready-healthcase-it-platforms-get-to-the-cloud
2. Dell, Healthcare ISV Alliance Program, 2011, http://www.slideshare.net/ericvanthoff/dell-healthcare-isv-emea-alliance-program-11601716

The Big Blue Apple: Analyzing the IBM & Apple Alliance

 

Welcome everybody to my latest blog post! Today, I will be looking at the recently formed partnership between IBM and Apple. 

My high level view of this partnership from the start was that it made the world of sense. On one side, you've got a marketing juggernaut with a reputation for innovation and a firm grasp on the consumer market. On the other, you've got arguably the most notable IT vendor in the world with a solid reputation for its work on an enterprise level. Together, their strategy for producing applications for enterprises is perfect and if they can overcome previous personality clashes, they will compliment each other very well indeed.

At the end of last year, IBM and Apple announced that they plan to launch 100 enterprise apps on IBM's 'Mobile First' cloud platform by the end of 2015. So far, 22 apps have been released and healthcare is definitely a key target vertical. Four apps related to healthcare are as follows:

• Hospital RN: Enables nurses to tap into record keeping systems, organization tools and iBeacon technology for streamlined management tasks.
• Hospital Tech: Lets nursing assistants organize and prioritize tasks, freeing up time for patient care.
• Hospital Lead: Helps care managers and charge nurses better manage workloads, staff assignments and patient discharge tasks.
• Home RN: Provides tools to gain greater efficiency in managing caseloads and reporting needs to specialists during home care interaction. [1]

So why are these apps receiving such a warm welcome? They are not aimed at management, they are aimed at those on the front line. Nurses and doctors have been crying out for help for years and will embrace any technology which makes carrying out their jobs easier, quicker, more efficient and less stressful. These apps put more power into the practitioners' hands and with a wider range of operational roles influencing IT purchasing decisions, this is a positive step forward.

What will be interesting to see down the road is how IBM is going to incorporate Watson into these apps. As the apps are managed centrally and used globally, the amount of incoming data will be considerable and given IBM's background and expertise in analytics, it's only a matter of time before they will be able to use this data and incorporate it into other apps or best practice consulting engagements. Currently, as the apps focus on workloads rather than clinical data, analysis would be limited to finding the most efficient way of managing a daily routine. This could be useful for training purposes and for setting goals. 

If any future applications incorporate clinical data then the possibilities will sky rocket as it would enable practitioners from all over the world feed into a central data repository, compare notes in forums and chat rooms and use a critical mass of clinical data to analyze best possible treatments. In fact, it would not surprise me at all if this was the ultimate end game for this partnership, to centralize and collect masses of data from a popular technology vendor such as Apple, apply world class analytics from IBM's Watson and then build up a large global knowledge base which can be utilized and offered to enterprise clients.

That's all for today folks! I'd love to hear what you think about the IBM and Apple alliance so please leave a comment below and if you enjoyed this post, please share it on social media and spread the word.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC

1. Fierce Mobile Healthcare, Apple-IBM mobile health apps: Just what the nurse ordered, 6 April 2015, http://www.fiercemobilehealthcare.com/story/apple-ibm-mobile-health-apps-just-what-nurse-ordered/2015-04-06

A Norwegian, a Dane, a Swede and an Indian walk into a hospital...

Hej, Hallå, Hallo and Namaste! Welcome to a new blog post from the Health Care Bear! After potentially destroying several languages in the first sentence, I'd like to introduce today's topic: The rise of India-led pureplay vendors in the Nordics. Although this can be classed as a cross-industry topic, it has significant relevance to the Healthcare vertical as well so stay with me. 

India-led pure plays have been making inroads into the Nordic private sector over the past few years and so I wanted to write a blog post pointing at a few drivers for their success. Enjoy...

Cost reduction is a top priority in the Nordics: CIO surveys from the likes of Gartner and IDC all highlight the fact that organizations in the Nordics are looking to reduce costs. It is also clear that they are looking to achieve these cost savings through making business processes more efficient. It goes without saying that India-led IT vendors thrive in low cost engagements and so this trend plays to their strengths. Other vendors however can capitalize on other priorities such as a need for agility on a smaller scale due to numerous large scale IT deployments being unsuccessful in the private sector.

Organizations generally indifferent to cloud: Cloud has taken the world by storm. Despite security concerns still present in the market, it is quickly becoming the norm (that rhymes by the way.) I'm sure this is not an isolated case in the Nordics but a lot of organizations are of the opinion that they are being evermore forcefully nudged into deploying cloud solutions. With IT providers looking to capitalize on this global trend as well as smaller niche providers offering only SaaS solutions, it seems to them that they don't really have much choice. Nordic CIOs are indifferent as to which solution to choose as long as it reaps the results they are looking for. Cloud is no longer a differentiator and so if IT infrastructure is disappearing, what's stopping clients from choosing an India-led vendor? Other aspects such as onshore presence, local knowledge and scalability are important but cloud is levelling the playing field.

High percentage of CIOs reporting into CFOs: There is a higher percentage, compared to other regions, of CIOs in the Nordics reporting into CFOs. It may seem as though I'm repeating myself here but this plays well into the hands of India-led vendors as CIOs will take a much more black & white approach to selecting a vendor based on financial viability and efficiency. Public sector CIOs in the Nordics hold substantial IT budgets and so if the likes of Infosys, TCS, Wipro etc are able to break into the Public sector based on their success in the Private sector, they would be able to use this mentality to their advantage and the competitive landscape could drastically change.

That's all for today, I hope you enjoyed this latest blog post. If you did, then please share on social media with your colleagues. Many thanks for your time, look forward to posting again shortly.

Best Regards,

Jonathan Cordwell
Research Analyst, Healthcare Strategy
ResearchNetwork, CSC