advance health stanford 2016
TRANSCRIPT
ADVANCE HEALTHExpress your wishes
...in advanceNatalie Stottler, Ami Kumordzie, John Hamilton, Nelly Weiser
A patent-pending medical technology to prevent the $25 billion per year problem of Ventilator-Associated Pneumonia (VAP).
Ami Kumordzie MD/MBA
Natalie StottlerMS/BS
Nelly WeiserBS in STS
113Interviews To Date
33 Pre-pivot80 Post-pivot
Hospitals:1) AMC vs non-AMC2) # of ICU beds (VAP rates are higher in small hospitals and conversion is easier b/c fewer stakeholders, but more devices needed in larger hospitals3) Center for innovation
Patient segments:1) Intubated >12 hrs and in
ICU2) Coming from surgery vs.
medical emergency
Hypothesis: First priority= Medical patients in large hospitals
At hospital, stakeholders are RTs/ICU nurses, ICU physicians, and administrators.
Value proposition:1) Reduced cost through
reduced length of stay, ICU stay, time on mechanical ventilation, and antibiotic usage. (administrators)
2) Greater efficacy in VAP prevention (physicians/RTs)
3) Improvement in view of hospital quality (administrators)
Compared to competition, we allow more flexibility in when to initiate VAP prevention so that physicians can prioritize prevention in patients at highest risk.
Distributor of disposable medical devices and their sales staff
Key opinion leaders in physician communities
Salter Labs is one option.
Initially, need training support for device. Hire RTs who will be knowledgeable about the difficulties in this space (Covidien did this)
Revenue through sale of devices with willingness to pay based on cost savings of lack of VAP.
Hypothesis: Each device is sellable for $10, given an average time on mechanical ventilation of 7 days and replacement every 24 hours.
Future possibility of reimbursement for procedure.
Continuing R&D around device, and further device development
Maintaining manufacturer and distributor relationships
Obtaining regulatory approval in the US and abroad
Patent portfolio
Engineering and medical expertise
Regulatory expert: Alan Donald
Manufacturer: Plastikon
Distributor
Physician KOLs
Insurance companies
Investors
Acquirers
R&D engineering
Manufacturer and Distributor cutHypothesis: We can get each device packaged and sterile from the manufacturer for $1.50 at scale.Hypothesis: We can sell each device to the distributor at a wholesale price of $6.50.
Week 1 BMC for Wickit Medical
Hospitals:1) AMC vs non-AMC2) # of ICU beds (VAP rates are higher in small hospitals and conversion is easier b/c fewer stakeholders, but more devices needed in larger hospitals3) Center for innovation
Patient segments:1) Intubated >12 hrs and in
ICU2) Coming from surgery vs.
medical emergency
Hypothesis: First priority= Medical patients in large hospitals
At hospital, stakeholders are RTs/ICU nurses, ICU physicians, and administrators.
Value proposition:1) Reduced cost through
reduced length of stay, ICU stay, time on mechanical ventilation, and antibiotic usage. (administrators)
2) Greater efficacy in VAP prevention (physicians/RTs)
3) Improvement in view of hospital quality (administrators)
Compared to competition, we allow more flexibility in when to initiate VAP prevention so that physicians can prioritize prevention in patients at highest risk.
Distributor of disposable medical devices and their sales staff
Key opinion leaders in physician communities
Salter Labs is one option.
Initially, need training support for device. Hire RTs who will be knowledgeable about the difficulties in this space (Covidien did this)
Revenue through sale of devices with willingness to pay based on cost savings of lack of VAP.
Hypothesis: Each device is sellable for $10, given an average time on mechanical ventilation of 7 days and replacement every 24 hours.
Future possibility of reimbursement for procedure.
Continuing R&D around device, and further device development
Maintaining manufacturer and distributor relationships
Obtaining regulatory approval in the US and abroad
Patent portfolio
Engineering and medical expertise
Regulatory expert: Alan Donald
Manufacturer: Plastikon
Distributor
Physician KOLs
Insurance companies
Investors
Acquirers
R&D engineering
Manufacturer and Distributor cutHypothesis: We can get each device packaged and sterile from the manufacturer for $1.50 at scale.Hypothesis: We can sell each device to the distributor at a wholesale price of $6.50.
Week 1 BMC for Wickit Medical
KEY HYPOTHESES: → Larger Hospitals are the target customer
→ VAP is a major issue for ICUs
→ The flexibility created by the add-on approach is a crucial value proposition
Week 1: Why the LLP Process is valuable
Let’s look outside Stanford...
Interviews: 12
-VAP is a top priority at Stanford Hospital
-SSD tube is major competition
-The add-on approach allows more flexibility
We Thought… We Did... We Learned…
-Talked with Nurses, Respiratory Therapists, Doctors at Stanford
-Spoke with Stanford RTs who use SSD
-More interviews!
-VAP prevention is a priority BUT it is a protocol heavy task and strict implementation of the VAP bundle has reduced rates
-Yes, SSD is major competition but it is much higher cost than our device
-Add-on approach is a key differentiator from competition
Week 2: Getting outside the Stanford Bubble
Visit to the VA ICUs to ask providers about current prevention methods
Spoke with variety of providers including ED, ICU physicians, RT’s, NP’s, and Nurses
Well, maybe let’s try outside the Bay Area?
We Thought… We Did... We Learned...
Interviews: 11
-VAP is currently a major problem for hospitals outside of Stanford
Healthcare providers in the ICU are seeking improved methods for VAP prevention
Interviewees indicated that VAP is an “important” problem but not “urgent” / top of mind
The VA has previously tried and failed to introduce SSD tubes - VAP bundle is “good enough”
VAP is considered an inevitability of long-term intubation. Complications like VAP speak to larger issues around end-of-life care
Week 3: Danger of Confirmation Bias
When we actually listened to our customers, we learned…
- VAP is NOT an urgent problem here
- Our processes are good enough
- Tracking VAP is hard so real case numbers are hard to come by
- Why don’t you look at the upstream problem?
Give up or Pivot?
Interviews: 10
Week 4: Restart is really, really hard
What we Learned…
We knew there was a need, but now we had to figure out a solution
There’s a reason teams are supposed to come in with a solution.
Trying to do 4 weeks of work at once is hard… but not impossible
So… Do people even want to talk about this?
Interviews: 10
ADVANCE HEALTH
Payers
Patients
Referring PCPs
Caregivers
Integrated telemedicine tool for faster, more thoughtful EOL conversations.
Lower burden (time/emotion) for docs.
Better experience for patients.
Tech enabled.Integrated w/ med records.
Online/web self-referral
PCP referrals.
Per customer / portion of reimbursementPossible subscription, bulk service model
Partner with payers
EMR companies (integration)
Referring PCPs
Integrating into med records.Psych guidance.Recruiting MDs, PAs, NPs
Partnership plan with payers or networks.
Tech platform augmented by sales channel.
RESTART
ADVANCE HEALTH
Payers
Patients
Referring PCPs
Caregivers
Integrated telemedicine tool for faster, more thoughtful EOL conversations.
Lower burden (time/emotion) for docs.
Better experience for patients.
Tech enabled.Integrated w/ med records.
Online/web self-referral
PCP referrals.
Per customer / portion of reimbursementPossible subscription, bulk service model
Partner with payers
EMR companies (integration)
Referring PCPs
Integrating into med records.Psych guidance.Recruiting MDs, PAs, NPs
Partnership plan with payers or networks.
Tech platform augmented by sales channel.
KEY HYPOTHESES:
-Doctors will refer patients to an outside service to discuss advance planning
-Telemedicine platform does not compromise quality of these conversations -Insurance will be the customer
-Patients are willing to talk about this with someone other than their doctor
Week 5: But really, what’s our product?
Team dynamics begin to affect team performanceThe team hasn’t all physically been in the same place since the pivot.Finding a solution to a complex problem we don’t even fully understand.
Let’s test something? Everyone else is testing something...
Interviews: 10
Week 6: Let’s Talk to Patients...
Patients would be uncomfortable discussing end of life wishes with strangers
Insurance Companies would be the customer
Providers would want to have the conversation themselves
Still trying to get our heads around a tough issue...
We Thought… We Did… We Learned...
Interviewed 8 patients at Stanford Hospital, showed them our MVP (brochure)
Interviewed CEO of MyDirectives (competitor)
Interviewed 4 Primary care and Palliative care physicians
Patients were excited about a service that would allow them to express their wishes
Hospitals may be willing to pay for the data integration directly, if not the conversation itself
Providers see this as a way to offload their workload (similar to dietary consultants)
Interviews: 15
Bob is a previously healthy 65 year old
During a routine doctor’s visit Bob is diagnosed with cancer
If anything happens, what matters most to me is dying at home with my family
With No AD or POLST we have to do EVERYTHING
Bob suffers a costly and grueling hospital course..
Families and Providers face tough end of life care decisions
I don’t have time this visit for a goals of care conversation….next time
What would Dad have wanted?
Payers spend Billions covering unwanted hospitalizations and procedures
What are the Impacts of Inadequate Advance Care Planning?
Advance Health connects patients and their families with a trained facilitator of their choosing. The facilitator guides the family in a goals of care conversation.
After meaningful conversation, the facilitator walks the patient through the forms explaining any complex medical terminology and helping the patient to translate her wishes.
Advance Health sends the output of the conversation back to the primary care provider. At the next appointment, the PCP checks in with the patient to ensure her wishes are recorded accurately.
Advance Health periodically reminds users to review their documents and make any necessary updates or changes. These files are shared with the PCP, ensuring all information is up to date.
Our Solution
Week 7: Yes, this is a problem. Can it be a business? We finally understand the
problem! (we think…)
First ACP conversation completed! ...and 5 more signed up
Turning a weakness into a strength (Natalie provides a sensitivity check)
Who will pay for this?
Interviews: 15
Week 8: The US Healthcare System is Complicated.
Follow the money!Payers: there are many with diverse priorities and different timelines.Need to understand the political dynamics (Death panels)
Interviews: 18
Week 8: We may be able to solve a problem for Estate Lawyers
Estate lawyers sound so much easier than dealing with the healthcare system… Let’s look at them!
PATIENTS + FAMILY
ESTATE LAWYER
provides [FREE] referral
ADVANCE
HEALTH
providesACP service
$$$Self-pay
Week 9: The biggest Pain and most to Gain
Lawyers: they said “yes...BUT”
Going the lawyer route means really high CAC with likely low payoff
We’d be a nice to have for them.
So how long do we chase this path down vs. unraveling the messy healthcare system?
We need to go to payers, ACOs!
Interviews: 10
We need to figure this out...
Payers are most concerned about cost savings
Payers have limited levers
We should consider alternate more accessible channels like lawyers, support groups etc.
We should provide a service to outsource ACP
We Thought…
Payers are most concerned about cost savings
Payers have limited levers
We should consider alternate more accessible channels like lawyers, support groups etc.
We should provide a service to outsource ACP
“We want to provide care that is beneficial, wanted, useful and therefore NOT wasteful and ACP is the way to do that.”
Yes, but they are willing to invest in services that promote ACP (as long as there is no direct branding)
Providers MUST be the channel (they are the gateway to the patient and ACO admins)
We should provide a service that enables ACO’s to do this themselves(teach them to fish)
We Thought… We Learned...
Payers- Medicare Advantage
ACOs,Integrated, Single-payer Systems
AARP
End of life Planning Resources
- Financial PlanningEMR companies (integration)
- software development to create online repository of ADs- train personnel to have compassionate ACP conversations- transcription of ACP conversation into written AD- EMR Integrationsocial campaign to normalize
Relationships with Estate Lawyers
Partnership plan with payers or networks.
Trained social workers
Integrated Advance Care Planning
Telemedicine Platform
Customized Advance Care Planning
Get: PCPsKeep: Modify preferences for GOC conversationsGrow: Upsell premium services
Patients: (40s-70s) adults doing estate planning
Providers associated with ACOs
Later...ACOsSingle-Payer Systems
Even Later...Medicare Advantage and Private Insurers (via supplementary plans)
older adults post-crisisadult children who observed parents go through this
Hospital - will pay for data integration
Save PCPs and lawyers time and emotional energy
Quality care for patients & families
Cost Savings for payers
Estate Lawyer referrals > do not need referral fee
PCP Referrals> may not need referral fee
Support GroupsSelf-initiated Online Advertising
Tech platform augmented by sales channel.
Out-of-Pocket from patient
Payer:- Per customer / portion of reimbursement- bundled model for ACP package
Hospital System:Possible subscription, bulk service model
Family/children of sick or elderly patients
Discussion needs to be at home/ with family
Payers- Medicare Advantage
ACOs,Integrated, Single-payer Systems
AARP
End of life Planning Resources
- Financial PlanningEMR companies (integration)
- software development to create online repository of ADs- train personnel to have compassionate ACP conversations- transcription of ACP conversation into written AD- EMR Integrationsocial campaign to normalize
Relationships with Estate Lawyers
Partnership plan with payers or networks.
Trained social workers
Integrated Advance Care Planning
Telemedicine Platform
Customized Advance Care Planning
Get: PCPsKeep: Modify preferences for GOC conversationsGrow: Upsell premium services
Patients: (40s-70s) adults doing estate planning
Providers associated with ACOs
Later...ACOsSingle-Payer Systems
Even Later...Medicare Advantage and Private Insurers (via supplementary plans)
older adults post-crisisadult children who observed parents go through this
Hospital - will pay for data integration
Save PCPs and lawyers time and emotional energy
Quality care for patients & families
Cost Savings for payers
Estate Lawyer referrals > do not need referral fee
PCP Referrals> may not need referral fee
Support GroupsSelf-initiated Online Advertising
Tech platform augmented by sales channel.
Out-of-Pocket from patient
Payer:- Per customer / portion of reimbursement- bundled model for ACP package
Hospital System:Possible subscription, bulk service model
Family/children of sick or elderly patients
Discussion needs to be at home/ with family
KEY LEARNING:
-Doctors will refer → They are the crucial channel
-Patients are willing to talk about this with someone other than their doctor
-Telemedicine platform does not compromise quality of these conversations and allows us to scale -ACOs & Single-Payer Systems = Customer
-Estate Lawyers → Need more Data
Learning from CompetitorsSelf- completion
In-person consultation
Apps Online Consumer Platforms
Non-Profits ADVANCE
HEALTH
❏ TELEMEDICINE❏ CUSTOMER ARCHETYPE❏ LAWYER CHANNEL
Epilogue:
Talking directly with payers!
Takeaway: Payers don’t know how to solve this either but they are actively investing in services, solutions, process change to address it
Seeking new 1-2 teammates to move forward- software developer- experience in health policy,
payer/provider
Seeking advisors- Palliative care physician(s)- Estate Lawyers / Elder care
experts- Social Workers
ADVANCE HEALTH
Epilogue: WickitOriginal team going through LLP process.
Answered some of the questions/inconsistencies.
Pivoted to look at hospitals with lower quality ratings and seeing much more excitement.
Two Teams from One!!!
AcknowledgmentsAllan May
Chuck Sted of HMSA
Charles Packer of Hopkins and Carley
Jeff Epstein, Steve Weinstein, Steve Blank, and TA’s
Stanford and VA Physicians: Dr. Hallenbeck, Harman, Tenover
Classmates - Thank you for the advice and feedback throughout! <3 (esp Anne Merritt, Michal Tal, Nina Ligon for your stories!)
Appendix
Ami, the MVP 2.0
Initial Target Market: Adults over 65 without an AD living with cancer
Note: Cancer pts may be more or less likely to have an AD, but these statistics are not available (http://www.everydayhealth.com/news/most-common-health-concerns-seniors/)
3.97 M
Total Addressable Market: Adults over 65
40.5 M
Serviceable Market: Adults over 65 without an AD
16.2 M
Estimated Revenue (B2B)
Potential to UPSELL additional services (AD or POLST completion)
CPT code 99497 covers a discussion of advance directives with the patient, a family member, or surrogate for up to 30 minutes. An additional 30 minutes of discussion takes the add-on code of 99498
318.9M (US Population)
14.5% over age 6547% Do not have Advance directives (in population over age 40)
25% Willing to try service
x
$160 per hour for ACP consultation
x
Avg of 2 conversations per year
X
x
x
= $ 1.74 Billion annually
Operational● Cost per customer encounter● Rate paid to facilitators● Number of facilitators● Facilitator recruitment and retention costs
Product● User net promoter score● ROI (cost savings per patient)
Marketing● Cost of provider/promoter acquisition● Referral marketing rates (see next page)
Metrics that Matter
Metrics that Matter…Referral Marketing
Cost per provider acquisition * Number of acquired providers
= Total Provider Acquisition Cost
Number of Provider Promoters
Provider Referral Rate
User Visit Rate
User Conversion
Rate
Browse WebsiteCall 1-800 number
Complete ACP servicesurvey to assess Net Promoter Score
log number of service referrals/ month in target demographic
Key Milestones
Product
Launch ACP telemedicine platform (beta, full)Develop database for secure online storage of health records Financial/
Financingcash-positive operations1st financing event (seed round)
Market1st user1st paying customer (self-
pay, payer)1st ACO onboardedPayer partnershipProfessional Association
endorsement> AARP (user)> ACTEC (lawyers)> NHPCO/ AAHPM
(palliative care)
HR1st 10 facilitators recruitedSoftware development hiresEstablishing