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Posts Tagged ‘business model’

If the number of projects focusing on eHealth is any indication, the market must be huge. The recently published brochure “Research and Innovation in the field of ICT for Health and Wellbeing: an overview” lists 97 on-going or recently finished projects funded by the European Commission. By this measure eHealth apps should now be treated as an uncountable.

It has been said too many times that the ageing of the population will put an unmanageable strain on the social and healthcare sectors. It is (almost) public knowledge that only home-care delivery can somehow tackle the coming situation. If you still have any doubts, a recent article in The Economist can, in a nutshell, reassure you about the existence of a growing demand.

In order to respond to the challenge posed by the growing demand, we need to change the way care is delivered. Regarding social care, maybe only some small adjustments will be needed but, for healthcare, a drastic reengineering of the process is necessary.

Assessing the market by simply counting the number of prospective clients is not a valuable marketing approach. We already know that the number of older people living alone at home will increase. The problem is not the number of prospective clients. The problem is twofold: a) how can we reach that population? and b) what business model will bring eHealth into public domain?

The business model has to be ingrained within the care process. Unless distance care can deliver standards similar to face to face care, eHealth will remain the poor relative to traditional healthcare. To attain those standards the redesigning of the care process has to accommodate: a) the idiosyncrasies of the care professionals; b) the legal implications of distance care; and last but not least c) the trust of the care recipient.

Once the care process has been reengineered, then we could focus on designing the business model. For that, the main issue is who pays for what. Because today, most systems link care acts and payment, while home delivery is meant to reduce care acts, switching the burden from the care giver to the care receiver. Again, the alternative funding mode, per-capita payment, is directed to a single organization, while eHealth will switch the burden from healthcare to social-care. So the eHealth business model has to take into account that the healthcare giver is more successful when a) the care receiver does more towards his or her wellbeing, and b) social-care organizations are more active. Summing up, designing a business model that rewards the success of the organization by measuring how it activates other entities (care-recipient and/or social-care) is not easy.

If we successfully solve the business model conundrum, reaching out to our primary customers (care recipients) should be a piece of cake. Anybody will be willing to use a system that reduces the burdensome features of face to face care, e.g. time consumed in transportation and waiting to be seen. Anybody, – and the number of bodies is only increasing -, will grasp the advantages of permanent monitoring, easy access to advice and other advantages that eHealth can deliver. The point is, is eHealth ready to deliver?

Going through a check list of the situation today against the bare needs listed above, the answer is an unqualified NO.

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We are familiar with too many good ideas that never make it to the market and less frequently, brilliant marketing strategies selling a flop. A proper balance between the product and the business plan rarely occurs. That is probably why there are few companies like Zara or HM; only the chosen few can find the Holy Grail. But we all struggle to do our best and come up with the right balance that puts our product or services in the right spot in the market. The belief that that is achievable is what bring us together every time there is a gathering like this one. And the reason for this exposition is because we, the partners of AiB, believe that we are on the right track. First, let me go through briefly how the ideas that my colleagues have already explained can become a sellable thing. To start with, you may have gathered already that AiB has two heads, kind of like a Hydra.  The difference is that this one has only two heads, its breath is not poisonous but sweet, and its blood, instead of being deadly, heals. One of the heads of our friendly beast represents a service. AiB has been designed as a care service with the objective of detecting the risk of falls in the individual being cared for by a care service provider. Corresponding to that view, AiB as a service offers a complete software-hardware package that allows the care provider to screen the population under its care for a set of signs that will prompt the system to raise alarms. If this is the case, care professionals will perform a pre-evaluation of the person to double-check if the user should be included in the risk-prevention programme or if this is a false positive. Once the inclusion is decided upon, a multidisciplinary team will perform a complete check-up of the user and decide upon a personalized care plan for the user to follow. The care plan is a comprehensive set of neurological and physical exercises included in the system library, as well as any other action that the care professional decides, such as pharmacological therapy or dietetic recommendations. The system will request certain information by the user, mainly about environmental conditions, and prompt remedial actions to counter its risks. Once the personalized care plan is designed and introduced in the user terminal, the user will be asked to follow it by means of an agenda, reminders and so forth. Continuous follow-up of his or her performance will be recorded by the system, triggering alarms to the care professionals in case of deviation from the care plan or changes in the vital signs of the user. These events will allow the care professional to modify the personalized care plan accordingly. It will be obvious by now that AiB as a service is directed to socio-health organizations that can take advantage of the system to reduce the rate of falls in the population they cover, with a clear saving in the overall cost of care, which I am not going to go into since we all are aware of the cost of a hip replacement, for instance. The second nice head of our Hydra corresponds to the product that we envisage to earmark for the individual. In a nutshell, AiB as a product is a self-contained package for individual use by those concerned with their health, probably because they have already fallen or have seen their relatives fall. So it is for people who are aware of the personal cost of a fall in terms of days and/or health lost. The AiB product comprises a self-evaluation that will prompt a care plan, although obviously not at the level of the service care plan. The care plan includes a set of remedial actions that can be made in the environment, as well as physical and neurological exercises. A system of alarms will suggest the user refer to a care professional when deterioration in the performance of the user is detected. How does this translate into a business model? We have chosen the Business Model Canvas because it is as good or as bad as any other model but has the advantage of being simple and clear cut. I will concentrate on only two of the boxes of our model. First the customer segment, in the Canvas jargon. As you can see, we are targeting two completely different markets:  the professional care market and the individual, with basically the same body of knowledge.  Again our friendly Hydra comes to mind with two heads but only one body, and guarding against the perils of falls instead of the entrance to the Underworld. Second, the key activities. We have discussed a lot among the partners on how to proceed from here. We have been able to produce a thing, system and product for the prevention of falls, without killing each other.  A thing that is the sum of the efforts of very different organizations, from health care, to users, to ICT companies, to process designers, even an economist (myself). The result cannot be broken into parts so that each one takes its bit and markets it independently. So we arrived to a solution that has been in use for many years: the European Economic Interest Grouping. This legal figure is governed under European Community (EC) Council Regulation 2137/85. It allows us to continue collaborating while preserving the individuality of the members and separating the AiB undertaking from the other business of the partners. The use of the EEIG will allow the AiB partners to go on to the next step of industrializing our output. That will be our way forward. I am sorry I could not attend the event in person, but if you have any questions, feel free to ask either my colleagues present or contact me at the e-mail address shown on the screen. Thank you very much for your attention.

You can also whach the presentation at http://youtu.be/QZtK6AyvfN0

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If demographers are correct, an ageing population is coming and will put mounting pressure on social and health services. The pressure is already here and the response of most governments has been to make it more difficult to access them, reducing the population covered, or to cut the provision of services, reducing the coverage offered, or any combination of both. In other words, look for a quick fix and postpone the problem.

So much talking about structural changes and all our governments are coming out with is cutbacks in the services they provide, without looking at the way they are provided.

Social and health services have to be redesigned. This is so obvious that I am not going to talk about this aspect of the redesigning effort. The only thing that is needed is a political push in that direction. A political push that needs to interiorize that a certain investment has to be made before reaping the benefits.

I will focus on another aspect of the redesigning effort; namely the need to redesign keeping in mind the primary end-user i.e. the patient.

We may have achieved the most efficient work flow, with the possibility of reaching a level of efficacy not known till now, yet despite all our efforts neither that level of efficacy nor the expected efficiency is reached. The problem, I think, lies in the interface between the user and the system. Have we taken care of the lay-out of the system? Have we made it user-friendly not only for the ICT literate but also for those ICT illiterate so that no one feels bored or stressed? Have we considered the cultural differences not only among nations but also within a nation? A carefully designed process needs a carefully designed interface that allows the primary end-user to feel comfortable and at ease when using the service, from the screen in his or her smart-phone to the colour of the walls or the seating arrangement in the care centre. Not reaching that level of integrated design is at the root of so many good ideas gone to waste.

We all have experienced communication problems between process designers and ICT developers, but to that we have to add a third group of professionals, those in charge of making everything look amiable and user-friendly. If we tackle this problem from the beginning, we will have working towards the same objective the expertise of the socio-health professionals, the use of the latest ICT technology providing more efficient care processes, and the end user vision of their real socio-health demands.

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Millions of people use smartphones with a processing capacity that not many years ago was reserved for big mainframes. Not as many millions, but certainly a good number, design apps intended for helping people’s lives; and many of them are e-health related. So, how can the e-health app designer make a mark on those millions of people and differentiate his or her product from the competition?

The designer needs to generate not only the first click, but needs to make that click a habit for the user. Put this way, clearly we have two problems to solve.

Problem one is to induce a lot of people to make that first click that will make our app known to the user. How does a theme become a buzz in the www? We need to create some kind of social movement that makes our app something people talk about, something “cool people” have to know about. You need somebody who can turn an idea into a buzz.

Problem two is to make that first click a habit. A habit is something that becomes part of a person’s life. How do you promote habits into the population? Well, the tobacco industry knows a lot about it and I am not talking about drug addictions, I am talking about the glamour that is still associated with smoking: the Habano cigar in hand transmits something very appealing to a lot of people. We have to be bold in our need to change people’s behavior. So when designing our app we have to imbed into it the addiction factor. Call it serious games or gamification, but to be successful you will need expertise in this area to help you.

Your app efficacy is beyond any doubt; you are the best app designer because you have identified a problem and knew how to solve it. But if you are lacking in social abilities to make a dent in the www, and behavioral change is a concept alien to you, well, I’m sorry to tell you that you will not succeed in the market place.

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“A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced.” We, of course, are sure that the product or service we are offering provides value for our customer but, have we identified clearly who our customer is?
Let´s focus on the issue of identifying our customer since, if we don’t know who the customer is, how can we know what they are expecting?
Maybe we could find some answers in the AAL Joint Programme. In its web we find that “AAL aims to create better conditions of life for older adults.” So, our customers are “older adults”. But, is it really so clear cut?
For instance, «better conditions of life» is a broad aim that can only be achieved through a complex array of interventions. It requires the concerted effort of different stakeholders: what we call “Public Health”.
Public Health is “organized efforts and informed choices of society, organizations, public and private, communities and individuals”. With this in mind, the “older adult” becomes only one of the stakeholders expecting the “promise of value”. There are at least two other stakeholders. “What [should then] make a typical value proposition for AAL markets” has to take into account:
a) Payers (public or private organizations): They tend to be conservative minded. They expect new systems and processes to enhance existing infrastructures. They are looking for improvements in the efficiency of care resources.
b) Caregivers (physicians, social workers, informal caregivers): their main interest is to boost processes, leading to a smoother work-flow. They are aiming to reduce their work burden by increasing the efficacy of the care process.
c) Older adults: they are looking for trustworthy and friendly user processes, allowing for better contact with their surroundings, easy access to their data, timely feedback and guidance and, last but not least, the ability to manage their own lives without unrequested outside interference. In other words they are looking for empowerment.
Probably, due to the fact that attending to all those interests at the same time is not easy, AAL has not delivered as was expected when the European Commission launched the first call seven years ago. But don’t despair; the situation is exactly the same for other R&D programmes: «For many are called, but few are chosen.»
It is not only that these three main stakeholders are looking for different things; the real problem is that their interests diverge.
Although it is centred in mHealth, a study by PWC shows that divergence. According to this study, the main drivers in adopting mHealth for payers are:
Reduction in administrative time for medical personnel, allowing greater time for patients
 Improved quality of care and better health outcomes
 Lower overall costs of care for patients
As for professionals, they would be willing to adopt mHealth if it provides:
 Improved quality of care and better health outcomes
 Easier access to care for existing patients
 Reduction in administrative time for medical personnel, allowing greater time for patients
While end-users are driven by the following characteristics:
 Ability to access healthcare providers more conveniently and effectively
 Ability to reduce own healthcare costs
 Ability to have greater control over own health
One can easily see that the three stakeholders do not coincide in any single driver. But it is probably more telling that “Ability to take control over one’s own health” is not even a concern for payers or professionals, neither in the three main drivers nor in any of the other eight drivers included in the study. And it is precisely this empowerment that should drive most of our efforts for better care processes.
Of course, the objective of satisfying the three stakeholders at the same time is not new. Something very similar was launched by The Institute for Healthcare Improvement in the USA some time ago in “The Triple Aim” . The Triple Aim states that new designs must be developed that simultaneously pursue three dimensions:
 Improving the patient experience of care (including quality and satisfaction);
 Improving the health of populations; and
 Reducing the per capita cost of health care.
We could easily match each of the three aims to each of our three stakeholders: end-user, professional, and payer.
Seen in this light, we can identify a big problem when confronted with the difficulty of achieving that triple aim, or providing value for our three main stakeholders.
In our domain, R&D is driven mainly either by research or by ICT organizations. The presence of end-users leading consortia is anecdotic, as is that of care professionals acting as such. It is true that the EC is putting a lot of emphasis on fostering balanced consortia, but that does not mean that the project achieves that balance. What we see in forums and gatherings is that most consortia are strongly led either by research or by ICT organizations.
Is there an easy answer to this conundrum? Obviously not, we have to assume that people dedicating their lives to devising new processes aimed at improving public health are wise people and that if only a few have found the philosopher’s stone it is due to the difficulty of addressing the three fronts at the same time.
Nevertheless, there are a few rules that we should follow, the first being, who will drive the car of innovation. I strongly suggest that the end user is the one who should be at the steering wheel, if only because during all this years they have been in the back seat. If the trend is for the end user to assume more responsibilities in the care process, what we call the empowerment of the end user, then we have to design the care process according to their wishes and demands, thinking always of “Improving the patient experience of care” as the Triple Aim states. And who better than the end user will know how to improve the experience?
In the case of AAL there is an added problem with our end users. We are talking about “older adults”, so leading the consortia there should be any of the myriad of organizations of older adults.
Consider the typical AAL R&D project. Year One is the design of the proposal and the signing of the contract; Years 2 to 4 the development phase; with the following three years for the completion of the final product or service. In all, seven years for the product to be market-ready. If our end users were in the range 70-75 at the time of inception of the proposal, by the time the product or service is in the market they will be 77-82, probably too old to use what they thought was a great idea seven years previously. No problem, the end result is for people in the 70-75 range, those people who were 63-68 years old at the time of inception; nowadays almost a generation apart when it comes to ICT skills.
So, selecting the end-user leader is not so easy. The right mix of people has to be found, so that the care process and the tools to implement it go hand in hand thinking seven years ahead.
Now, let’s decide who the co-pilot should be. At this point I have to state that I may have a conflict of interest: I am an economist. But putting aside that conflict, I strongly believe that the co-pilot should be the payer. We may not like it and argue that money should not drive all our decisions, but the fact remains that “money makes the world go around” as the famous song from Cabaret tells us. We may be able to put on the market the most desirable item, but if there is not somebody willing to pay for it, we will have another Tucker car; the best but unmarketable.
And that leaves the back seat for, guess who, those who have been in the driver’s seat so far, the research and ICT organizations. They should accept the fact that they are tool makers serving end users with something that payers can afford.
If you are involved in R&D aiming at delivering value to your customer, take into account at least these 3 stakeholders: end user, payer, care giver, in that order. Otherwise, you will be doomed!

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Last year an official at the Ministry of Health from the UK, addressing a conference on business developments in technology for disabled and older people said, “I see more pilots in this gathering than in British Airways”. And yes, he hit the nail on the head. For some reason, most developments financed under the AALJP, or for that matter under any other EU program directed at ameliorating the living conditions of older people, have foundered and have never gotten off the ground.

Why is it that most of those ideas that have been found valuable, not only by their promoters but also by the EU agencies in charge of selecting them, have not made it to the market? Why haven’t they become success stories?

The obvious answer can be found in their faulty business models. Answering the typical questions of “What is the real need?”, “How big is the need?” or “Why should this particular product or service come on the market” do not serve our purpose of achieving a successful business model.

“What is the real need?” and “How big is the need?” focuses obviously on needs, and let me say that one thing is “need” and a very different thing is “demand”. People are ready to pay for their demands, whether these correspond to their needs or not. In the marketplace only products or services that meet a demand will have a chance of success, regardless of the real needs of the population to which the product or service is directed.

“Why should it come to the market?” surreptitiously means that there is already a product or service, and we will look to the market for the possible demand. It is a top-bottom driven question. Our investigation should be bottom-up driven. What we should be doing is to ask first what the market demands are and, only then, investigate how to meet the demand with a product or service.

There is a second problem. Most of us assume that the public purse is going to foot the bill of a product or service directed at the older population. This is based on the belief that we can demonstrate that, for society as a whole, our solution is cost effective. What we really mean is that our product or service will save health care services, social care services, families and individuals huge amounts of money and/or time.

But really, who is going to pay? The health care service, the private health insurer, the municipality in charge of social care, the family, the individual, an NGO, who? Because the truth of the matter is that each of the previous possible payers has an independent budget. Why should, for instance, a health care service foot the entire bill for something that is going to save money for the social care services of a municipality that may even be governed by a different political party?

Out of the previous list of possible payers, there is only one that is going to benefit in full from our product or service: the individual. He or she is the only one paying the bills anyway, through direct payment, indirectly via taxes that finance public services, or by premiums that pay for private insurance care schemes.

There is another group that could benefit from a product or service designed to meet the needs of older and disabled people. It is the vast array of providers that cater for them. We are referring to shops, restaurants, entertainment, transportation, and the like. This group, mostly SMEs, could profit by establishing a special bond with the world’s ageing population.

The point is that, given that individuals are the end users of our services and products, we have to be brave and recognise that they will have to pay for it directly or indirectly. If, on top of that, a broad base of providers can benefit from the result of our investigation, we will have the support of other actors interested in paying for their use. Put together the interest and demands of those two big target groups and you will have a success story. That will be the moment to address a simple question “How much would you pay for this?” Needs and cost for the end users and providers, kept in balance, should be at the core of our development strategy and of our business model.

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Is there such a thing as a developed business model for delivering mHealth or are we stuck with pilot projects financed by well meaning public funds? I am afraid that, as Bill Gates stated in the mHealth conference recently held in Washington (DC), it is more the second than the first and that we are lacking concrete evidence on how mHealth works with big numbers.

My feeling is that the reason for such an state of things lays in the fact that most research into the field has being carried out by the mobile telecom sector and not as part of an strategic drive to make health care more efficient. In a more mundane wording, we have put the cart before the horse.

Probably a more long term and efficient approach would be to start by redesigning the way health care is delivered. By this I mean integrating preventive health care into the more traditional health care of responding to acute problems or urgent needs.

In my opinion, it is in preventive health care where mHealth could prove more useful. This feeling rests in the fact that, in most cases, an individual is a lot more active (*) when he/she belongs to the population group where prevention is important and should be targeted, than when the person has moved into a chronic situation or is suffering an acute health event.

Focusing on preventive health care we will have a big enough population to allow the development of a proper business model to support the functioning of a mHealth based preventive system. Note that I am talking about a business model for preventive health care using mHealth, and not a business model for mHealth.

(*) in this context I am using “active” to mean someone  more aware of his/her surroundings; ITC user literate; open to new ideas; etc.

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