COMPANY CONFIDENTIAL
US HEALTH IT TRANSFORMATION
US Healthcare Digital Transformation
David Feygin, Ph.D., MBA
VP of Health IT Integration and Strategic Innovation, BD
COMPANY CONFIDENTIALRapid change driven by converging policy, clinical, demographic and technology trends
• Coverage Expansion • Population Health
• Value-Based Payments • Personalized Treatments
• Provider Consolidation
• Aging Population • Patient Consumerism
• Provider Shortages • Healthcare IT & Informatics
• Care Setting Shift
RAPIDLY CHANGING HEALTHCARE
ENVIRONMENT
Patient-centric, evidence-driven,
technology-enabled, cost-effective,
location-optimized, high-quality
HEALTHCARE
Provider-centric, experimental,paper-based,
wasteful, hospital-bound,
inconsistent SICKCARE
FROM: TO:PARADIGM SHIFT
COMPANY CONFIDENTIALReform and Data Are Creating New Opportunities to Improve Lives
Shifting profit pools and creating vast new economically viable opportunities
Hospitals Highly Connected(HIMSS Stage 4+)
>55%>55%50 ‐70%50 ‐70%Hospital Revenue from Value Based
Reimbursement by 202O
Available, Connected DataValue Based Reimbursement
COMPANY CONFIDENTIALAs Incentives Align, Informatics Becomes Key to Addressing Major Needs
Viable OpportunitiesFrom To
Pay for service & provider incentives to maximize revenue
Focus on what’s broken or inefficient (adherence, errors,ineffective treatments, overuse)
Pay for performance and efficiency
Individual components and products
total solutions, portfolios of products and services
Risk sharing service models, startups create key components
Solutions for patients and providers
Solutions for patients, providers and payers
Data aggregation and analytics (big‐data), Population Health Management Solutions
Cost reduction and Incremental Innovation
Disruptive, innovations that solves health‐system level problems New skills, Bigger Problems
Theoretically Equivalent “Non‐Inferior” Products
Proven Superior Products (Clinically Proven)
Proven Superior Products (Clinically Proven)
Pure focus on clinical outcomes Focus on clinical and economicoutcomes
Drive healthcare delivery efficiency and optimize processes
Physician preference and custom Data driven, analytically proven, and standardized
Automation, analytics (CDSS), big data
Operating Rooms & Hospitals as primary Revenue Drivers
Operating Rooms & Hospitals as primary Cost Drivers
Technologies that keep patients out of the hospital and OR
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COMPANY CONFIDENTIAL
New “breed” of innovative Value Based Care (VBC) solutions leverage information technology to improve access, reduce cost, increase efficiency and manage risk
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Care Coordination
Connected Medical Devices
Healthcare Consumer Engagement
Analytics and Big Data
Population Health
Management Wearables
and Biosensing
Personalized Medicine
Telemedicine EHR and Clinical
Workflow
Digital Diagnostics
Home and Retail Care
Converging biomolecular medicine with technology services and bioinformatics to empower physicians, patients and payers
RECENT FUNDING: $375M
Offers software, services and access to clinical services to anyone who wants to
offer a complete telehealth service
RECENT FUNDING: $130M
Provides partners with a continuous care program, including care coordination, risk
management, and IT enablement
RECENT FUNDING: $125M
COMPANY CONFIDENTIAL
Dave’s (Not So Insightful) Digital Health Predictions1. Internet of Medical Things/Medical Industrial Internet will fundamentally improve patient
care and reduce costs
2. Connecting well‐care, prevention and sick‐care will align with reimbursement incentives and consumer interest – but behavior change and fundamental differences in well‐care/sick‐care industry dynamics will slow change
3. Big Data will revolutionize healthcare, but generating and leveraging “the right”, real‐time data will drive more immediate value
4. Enhanced access to care (Tele‐Medicine), healthcare process and delivery automation (Kiosks) and the democratization of healthcare knowledge (digitized care paths) will drive care delivery toward lower costs professionals and patients themselves
5. The comprehensively digitized and individualized patient (wearable tech, genomics, etc.) will enable personalized/customized medicine at “mass‐produced” cost.
6. Care coordination across care teams (patient, family, retail, nurse, physician,), care sites (home, retail, acute) and along the continuum of care (wellness to monitoring) driven by connectivity and digital care plans, will identify tremendous opportunities for improved carewhich will be gradually addressed by broad‐based “solutions”
7. Healthcare best‐practices and clinical guidelines will be more defined by looking backward at robust historical data than looking forward at prospective clinical trials. Watson, Explorys, etc. will identify broad opportunities for healthcare efficiency improvement.
Updated January 2014
BD Overview
• Enabling safer, simpler and more effective parenteral drug delivery
• Improving clinical outcomes through new, accurate and faster diagnostics;
• Providing tools and technologies to the research community that facilitate basic science, drug discovery and cell therapy;
• Enhancing disease management in diabetes, women’s health and cancer, and infection control.
• Improving clinical, laboratory and research practices in emerging markets
Strategy and Focus Areas
Drive revenue growth through investment in innovation
BD’s Strategy is to Apply Technology and Clinical Knowledgeto Make Healthcare More Effective, Efficient and Safe.
The Five Areas of Focus Are:
BD’s Strategy is to Apply Technology and Clinical Knowledgeto Make Healthcare More Effective, Efficient and Safe.
The Five Areas of Focus Are:
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BD SafetyGlide™Injection Needle BD Nexiva™ Closed IV
Catheter System
BD PosiFlush™Heparin-filled Flush Syringe
BD Soluvia™ Prefillable Microinjection System
Enabling safer, simpler and more effective parenteral drug delivery
BD Emerald™ Syringe
BD Sterifill Advance™ Plastic Prefillable Syringe
Insert BD Simplist here
BD Simplist™ line of ready-to-administer prefilled injectables
Improving clinical outcomes through new, accurate and faster diagnostics
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BD Viper™ System with XTR Technology
BD MAX™ SystemBD FocalPoint ™ GS
Imaging System
BD Kiestra™ Total Lab Automation
BD Veritor™ System
BD BACTEC™ FX
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Providing tools and technologies to the research community that facilitate basic science, drug discovery and cell therapy
BD FACSVerse™ Analyzer
BD™ LSR II
BD FACSCanto II™ Flow Cytometer
BD Accuri® C6 Flow Cytometer
BD FACSCount™ SystemBD LSR Fortessa™ Cell Analyzer
Research Technologies Clinical Technologies
BD FACS Jazz™
BD FACSCalibur™
BD FACS™ Lyse Wash Assistant
Enhancing disease management in diabetes, women’s health and cancer, and infection control
12BD Viper™ System
with XTR Technology BD BACTEC™ FX
Women’s Health and Cancer Infection Control and Patient Safety
BD PosiFlush™Heparin-filledFlush Syringe
BD SurePath™PAP Collection System
Diabetes Care
BD Ultra-Fine™ Nano 4mm Pen Needles with PentaPoint™ Comfort
BD AutoShield™ Pen Needle
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NantHealth5/21/2015
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BD TO ACQUIRE CAREFUSION FOR $12.2 BILLION
Combination of Complementary Portfolios Creates Global Leader in Medication Management and Patient Safety Solutions
Accelerates BD’s Strategy to Improve Quality of Care and Reduce Healthcare Costs; Enhances Emerging Market Growth Opportunities
Generates Significant Value for Shareholders; Accretive to Cash EPS on a Double-Digit Percentage Basis in the First Full Year
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COMPANY CONFIDENTIAL
The Combined Product Portfolios Would Enable an End-to-End Medication Management Solution from Pharmacy to Patient
Coronado Portfolio
BD Portfolio
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What’s Next …
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“Link Diagnosis and Care Delivery to Solve Health System Problems and Improve the Lives of Individual Patients”
“Link Diagnosis and Care Delivery to Solve Health System Problems and Improve the Lives of Individual Patients”
BD’s Medical Internet of Things!BD’s Medical Internet of Things!
Personalized Health System Level Solutions
(Reduce Cost & Improve Outcomes)
Personalized Health System Level Solutions
(Reduce Cost & Improve Outcomes)
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Entrepreneurship
(Medical Robotics Startup)
ProductsProducts
David Feygin, VP Health IT Integration & Strategic Innovation (Former VP Corporate Strategic Innovation)
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Deep Technical &Medical Understanding
(Ph.D. in Medical Robotics)
ScienceScience Slides!Slides!
Commercial Strategy & Innovation
(MBA & Business Strategy)
I am driven to create new understanding, new products and new enterprises that dramatically improve people’s livesCommon Thread:
Mission: To provide a clear path for outside‐the‐home‐court innovation that supports our corporate growth strategy and corporate mission of helping all people live healthy lives. Our first area of focus (Part 1) is ensuring a clear path for OTHC innovation that lead to solutions beyond our core.
Mission: To provide a clear path for outside‐the‐home‐court innovation that supports our corporate growth strategy and corporate mission of helping all people live healthy lives. Our first area of focus (Part 1) is ensuring a clear path for OTHC innovation that lead to solutions beyond our core.
Unfortunately, BD Has Not Been Able to Capture Such High Value Opportunities Outside Our Core…but Change is Coming!
Comprehensive Examination
• Leading Growth and Innovation Course• Growth Leader Panel• GM Accelerator Innovation Diagnostic• Innovation Profile
Consistent Diagnosis
Significant Gaps
•Bias toward home court when competing w/innovations• Insufficient, dedicated resources for synthesis•No innovation process or funnel (ideas have no pathway)•No accountability for innovation•Risk averse & inwardly focused behaviors
Clear PrescriptionBD Innovation Work
System
• Search, Synthesis, Select & Execution•BU, Regional & Corporate Systems• Innovation clearinghouse enables oversight and like vs. like comparisons
•Dedicated corporate group accountable for innovation system and search/synthesis of white space opportunities
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Purpose of our BD Innovation System
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Outside the Home Court
Home Court
The BD Innovation System:
• Provides a clear path for outside‐the‐home‐court innovation that leads to solutions beyond our core
• Enables us to search for opportunities, synthesize ideas into innovation, select innovations for greatest impact, and execute innovation
Why do we need an Innovation System?
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• Today, the healthcare industry is changing in fundamental ways
Upgrades to BD’s core products not sufficient to completely achieve our desired growth aspirations
Need outside‐the‐home‐court innovation as well
• Established structures, behaviors, and processes acting like “prevailing winds” against efforts to seek and pursue outside‐the‐home‐court innovation
Need different structures, behaviors, and processes to support outside‐the‐home‐court innovation
Outside the Home Court
Home Court
What is the BD Innovation System?
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• New Accountable Structures, new Behaviors and Culture, such as Constructive Challenge, and a new rigorous yet dynamic, multi‐stage Innovation Process
• The Step 5 Coalition is our leadership change network that will build critical awareness and make connections across BD
• Implementation is already well underway
Accountable Structures, Customer Centricity, Innovation Process, Cultural Change and “Network Based” Change Enable OTHC Innovation
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Red Teams
Negative Experts
Functional Challenge
Rules of Challenge
Robust Innovation Process & Portfolio
BDX Innovation Council Strategic Innovation Groups
Established OSMT
ConstructiveChallenge
AccountableStructures
Leadership ChangeNetwork
BDT “Innovation Center”
6 BU Innovation systems
Execution LeadsShared Value
EuropeInnovation
BD TechHR/Talent
SynthesisLeads
AsiaInnovation
Policy/Regulatory& Medical
R&D & Science
Bus‐Dev/Corp‐DevFinance
IP andLegal
BU StrategicMarketingHEOR
CSIG, Strategic Innovation Leads
Emerging Regional Innovation Systems
Step5
Coalition
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Innovation System – Idea JourneyManages the entire BD Innovation Portfolio
BDXInnovation Council
BU/Regional Innovation Council
Strategic InnovationLeader
BDT
Corporate Strategic Innovation Group
Medical
Strategic Marketing
HEOR
R&D
Regulatory
Transitional or Adjacent Spaces Outside Business and Regional Efforts or Cross‐Business Initiatives
Idea2
Idea1
X‐Functional Support & Challenge
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Outside‐the‐home‐court innovations move through the Stages of the Innovation Process:
0 Direction for Innovation ‐ Explore spaces and trends in order to uncover unmet needs of select current and potential customers, and connect our innovation efforts to benefits and outcomes they desire and deem essential.
1 Needs & Problems –What is the problem you are trying to address? What is the scale of the problem?2 Business Opportunities – Is the need clearly identified? Could the hypothesized solution achieve significant differentiation for BD?3 Characterized Space & Opportunities –What do we know about this space? Who are the competitors? What does the
environment and landscape look like? What opportunities exist and how could BD capitalize on those opportunities?4 Actionable Strategy – How does BD win? How do we capture and maintain sustainable competitive advantage?5 Incubate & Execution – How do we nurture and support this new solution? Where in BD does it fit? How do we ensure a smooth
transition into our existing infrastructure?
Stages of Innovation
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Innovation System – Idea Synthesis
Market AnalyticsMarket sizing, segmentation, pricing, trending, primary,
secondary market research Market creation strategies
Portfolio approach , sustainable differentiation, stakeholder Analysis, EcoSystem Analysis
Business Development
Relationship management, diligence, negotiating & deal structuring, external partner management
Global Sensing/Sourcing
Angel Networks, VC connections, Investor conferences, regional sensing/sourcing
External Associations to Understand Problems
KOL relationships, Research Centers, Universities
Macro‐economic, Policy, Market, Clinical Trends
Macro Trend Analysis
Health Economics Assessment Including Market Development
Identify large cost areas … cost‐benefit, comparative effectiveness …. market development studis/trials
Policy/Regulatory Changes
Alignment of incentives, regulatory paths, reimbursement, establishment of regulatory barriers to entry, policy influence, etc.
Concept Development
Consolidated business plans, Evaluation of novel concepts
X‐Functional Innovation Synthesis
Corporate Strategic Innovation Group (CSIG)
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Responsibilities• Shares responsibility for innovation performance with BD Innovation Council
• Engages on selection of innovations• Implements support and challenge systems
• Manages innovation funnel
Cross Business & Outside the CoreSearch & Synthesis
Center Of Excellence for Innovation
Ownership of BD Innovation System
• Support Business Unit implementation of Innovation IIG to synthesize or execute a >$250M top‐line innovation
• Coordinate global Search & Synthesis
• Track innovation performance metrics
• Drive Search, Synthesize, Select excellence
• Work with Business Unit Innovation Systems (Cells, Councils, etc.) to implement and coordinate best‐practices
• Develop white space and cross business opportunities
• Ensure constant flow of innovation opportunities that enable long term growth by moving the company into new growth markets
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Backup
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BD Locations
Industrialized Markets
Emerging Markets
Latin America - 1952
• ~5,200 Associates
• 8 Countries, 5 Plants
U.S.A. - 1897
• ~12,000 Associates
• 29 Plants
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Canada - 1951
• ~550 Associates
• 1 Plant
Asia Pacific - 1971
• ~4,600 Associates
• 16 Countries, 5 Plants
India - 1995
• ~550 Associates
China - 1994
• ~2,200 Associates
Europe - 1952
• ~6,000 Associates
• 21 Countries, 10 Plants
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Japan - 1971
• ~600 Associates
• 1 Plant
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EMA - 1994
•~ 250 Associates
• 10 Countries
*note: last updated April 2013
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BD Foundation: Our Purpose and Values
“Helping all people live healthy lives”
We treat each other with respect
We do what is right
We always seek to improve
We accept personal responsibility
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The “Three Greats”
Great performance for customers and shareholders
Great contributions to society
Great place to work
FY 2013 Revenues: $8.054B
BD Biosciences$1.1B
BD Medical$4.3B
BD Diagnostics$2.7B
By Segment: By Geography:
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BD Medical
Focuses on providing innovative solutions to reduce the spread of infection, enhance diabetes treatment and advance drug delivery.
Customers Served• Hospitals and clinics• Physicians’ office practices• Consumers and retail pharmacies• Governmental and nonprofit public health agencies• Pharmaceutical companies• Healthcare workers
Products• Needles and syringes• Intravenous catheters• Safety-engineered and auto-disable devices• Prefillable drug delivery systems• Prefilled IV flush syringes• Insulin syringes and pen needles• Regional anesthesia needles and trays• Sharps disposal containers• Closed-system drug transfer devices• BD Simplist™ line of ready-to-administer prefilled injectables• Medication workflow solutions
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BD Diagnostics
Focuses on improving quality, increasing productivity and ensuring flexibility to help laboratories guide medical decisions.
Customers Served• Hospitals, laboratories and clinics• Reference laboratories• Blood banks• Healthcare workers• Public health agencies• Physicians’ office practices• Industrial and food microbiology laboratories
Products• Integrated systems for specimen collection• Safety-engineered blood collection products and systems• Automated blood culturing systems• Molecular testing systems for infectious diseases and women’s health• Microorganism identification and drug susceptibility systems• Liquid-based cytology systems for cervical cancer screening• Rapid diagnostic assays• Plated media• Microbiology laboratory automation
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BD Biosciences
Focuses on continually advancing the science and applications associated with cellular analysis.
Customers Served• Research and clinical laboratories• Academic and government institutions• Pharmaceutical and biotechnology companies• Hospitals and reference laboratories• Blood banks
Products• Fluorescence-activated cell sorters and analyzers• Monoclonal antibodies and kits for cell analysis• Reagent systems for life science research• Cell imaging systems• Cell culture media and supplements for
biopharmaceutical manufacturing
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FY2013 Shared Value Outreach
• Pursue our purpose through long-standing relationships with non-governmental organizations.
• Corporate grants, product donations,
volunteer service initiatives and disaster relief
programs
• Donate time, technical expertise and resources
• Contributions: ~$11 million – Product donations: $5.1 million (fair market value)– Cash support: >$5.9 million, including $940,000
in matching gifts
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FY2013 Shared Value Outreach
Associate engagement programs:
– International volunteer opportunities:• BD Volunteer Service Trip Program
• BD/PEPFAR Lab Strengthening and Safe Blood Collection Programs
– Henry P. Becton Volunteer Impact Awards Program
– Paid-time off for Volunteer Community Service hours (U.S.)
– U.S. Matching Gifts Program: $940,000 to match associate giving
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FY2013 – Top Corporate Contributions*
1. AmeriCares*
2. Catholic Medical Mission Board*
3. Heart to Heart*
4. Project HOPE*
5. Direct Relief International*
6. National Cancer Coalition*
7. U.S. Fund for UNICEF
8. Joint Commission’s Center for
Transforming Healthcare
9. GHESKIO TB Hospital, Haiti
10.Accordia Global Health
Foundation
Awards and Recognitions: Highlights
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