This briefing was presented at the Military Electronic Healthcare Records Symposium in Washington DC. It answers the following questions: * Is disruptive innovation in military healthcare technology possible? * What does innovation in military healthcare mean? * Where are the major areas in military healthcare where innovation is required?

1. The Barriers to Military Healthcare
Technological Innovation and What We Can
Do to Remove Them
DoD & VA Electronic Health Records Symposium
Washington, DC
Shahid N. Shah, Chairman - OSEHRA Strategic Advisory Board

2. NETSPECTIVE
Who is Shahid?
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Serial healthcare IT entrepreneur, advisor to
numerous startups, blogger, healthcare
technology futurist
Chairman, OSEHRA Strategic Advisory Board
23+ years of software engineering and multi-site
healthcare system deployment experience in
Fortune 50 and Government sectors.
15+ years of healthcare IT and medical devices
experience (blog at http://healthcareguy.com)
15+ years of technology management experience
(government, non-profit, commercial)
10+ years as architect, engineer, and
implementation manager on various EMR and EHR
initiatives (commercial and non-profit)
Author of Chapter 13, “You’re
the CIO of your Own Office”
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3. NETSPECTIVE
What’s this talk about?
Questions answered
Key takeaways
• Is disruptive innovation in
military healthcare
technology possible?
• What does innovation in
military healthcare mean?
• Where are the major areas
in military healthcare where
innovation is required?
• Go narrow, specialize, dive
deep
• Understand PBU: Payer vs.
Benefiter vs. User
• Understand why military
healthcare agencies buy
stuff so you can build the
right thing
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4. NETSPECTIVE
What does “disrupting healthcare” mean?
This is $1 Trillion and the Healthcare
Market is about $3 Trillion
MHS is about $50 billion
~10 million beneficiaries
This is $1 Billion
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5. No, your innovation will not
disrupt military healthcare.
I promise.
The good news
is that doesn’t
have to.
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6. No, your big data or mobile ideas will
not disrupt military healthcare.
But if you can use them to add or extract value
from the existing system, you’ll do just fine.
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7. No, your EHR/PHR or app will not
be used by enough MHS doctors
or patients to disrupt healthcare.
But if you can get even a fraction of them
to use your software, you’ll do just fine.
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8. No, your innovation will not be
easily accepted by permissionsoriented institutions.
Find customers with a problem-solving culture
willing to accept risks and reward failures.
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9. No, your innovation will not be
easily integrated into regulated
device-focused clinical workflows.
Incumbent vendors will not entertain the potential of
new legal liabilities without someone to share it with or
new competition without direct compensation.
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10. NETSPECTIVE
What I mean by “actionable innovation”
You have made the job of
identifying, diagnosing,
treating, or curing
diseases faster, better, or
cheaper for clinicians
through the use of
information technology
(IT) or business models.
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You have made the job of
self-diagnosing, selftreating, or preventing
diseases and improving
overall wellness of
patients through the use
of new incentives,
business models, or IT.
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11. NETSPECTIVE
How innovation in military healthcare is different
As described by Dr. Paul Tibbits at the conference this morning
Health IT
Experience
Single Payer
System
Information
Sharing
“Improve tech and you save money, improve information
sharing and you save lives”
Data
Interoperability
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Strong Program
Management
Significant Systems
Engineering
Capabilities
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12. NETSPECTIVE
Infectious diseases used to kill us…
…but what’s left seem only to be “manageable” not easily “curable”
Top killers in 1900
Pneumonia
and influenza
TB
Diarrhea and
enteritis
Top killers today
Heart disease
Cancer
Chronic lower
respiratory
diseases
Per 100k population, Historical Statistics of the United States, Millennial Edition
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13. NETSPECTIVE
From cures to management…
…young people don’t dye of diseases often now
Death by age group, 1900
Death by age group, Today
http://siteresources.worldbank.org/INTHSD/Resources/topics/Health-Financing/HFRChap1.pdf
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14. NETSPECTIVE
What Is the business of military health care?
What business are you in? The Emergence of Health as the Business of Health Care
• It's always better to define an organization by what
beneficiaries want than by what you can produce or build
– For example, whereas doctors and hospitals focus on
producing health care, what people really want is health
– What makes military health innovation different from
non-military health?
• In the future, successful doctors, hospitals, and health
systems will shift their activities from delivering health
services within their walls toward a broader range of
approaches that deliver health.
Source: http://www.nejm.org/doi/full/10.1056/NEJMp1206862
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15. NETSPECTIVE
PBU: Payer vs. Benefiter vs. User
If you don’t understand the exact interplay between PBU your product will fail
The person or group
that actually uses the
product.
User
The person or
group
that benefits most
from the use of the
product.
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Benefiter
Payer
The payer is the
person/entity
that writes the
check for your
product.
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16. NETSPECTIVE
What kinds of military users are you targeting?
Go narrow and deep not wide and shallow
Prevention
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Education
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Health Promotions
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Healthy Lifestyle Choices
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Health Risk Assessment
26% of Population
4% of Costs
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Obesity Management
Wellness Management
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Assessment – HRA
Stratification
Dietary
Physical Activity
Physician Coordination
Social Network
Behavior Modification
35% of Population
22% of Costs
Management
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Diabetes
COPD
CHF
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Stratification & Enrollment
Disease Management
Care Coordination
MD Pay-for-Performance
Patient Coaching
35% of Population
37% of Costs
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Physicians Office
Hospital
Other sites
Pharmacology
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Catastrophic Case
Management
Utilization Management
Care Coordination
Co-morbidities
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4% of Population
36% of Costs
Source: Amir Jafri, PrescribeWell
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17. NETSPECTIVE
Defining your military PBU participants is really hard
Don’t focus on market segmentation, but do try to figure out who your customer is
Target military
health sector?
Number of staff
or participants?
Annual agency
spend?
Geography?
Number of
hospital beds?
Number of
patients?
Type of
patients?
The list goes on
and on…be
specific!
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18. NETSPECTIVE
How will your customer pay for your innovation?
If you haven’t figured it out for them, customers will not figure it out for themselves
Direct Payment
• Your best option
• Very few truly disruptive
technologies can be
directly paid for by
providers within the USA
• Limited adoption of
‘traditional’ pay for service
reimbursement for next
generation technology
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Direct Reimbursement
Indirect Reimbursement
• Second best option
• Improvements in
technology are outpacing
payer adoption
• Reimbursement will come
but its time consuming and
difficult
• Emerging option
• Payer requirements for
improved quality and
efficiency are creating
indirect incentives to adopt
innovative solutions
• Solutions targeting new
value-based
reimbursement incentives
are highly useful to medical
providers
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19. NETSPECTIVE
Where does your innovation fit?
Target the right market so you understand the regulatory impacts
Be aware of regulations, don’t fear them, use them as
a competitive advantage
Patient
Education
Least Regulation
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Patient
Administration
Diagnostic
Tools
Therapeutic
Tools
Therapies
Most Regulation
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20. NETSPECTIVE
What problem will you be solving?
Focus on jobs that need to be done, not what you want to build
Improve
medical
science?
Improve access
to care?
Reduce costs?
Improve
therapies?
Improve
diagnostics?
Improve drug
design?
Improve drug
delivery?
Create better
payment
models?
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21. Identifying opportunities in military health ecosystem
Data for health or cost reductions

22. When does data matter?
Only when we use it.
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23. When will we use the data?
When we can trust it.
When we can access it.
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24. When will we trust the data?
When it doesn’t “suck”. 
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25. How do we know data doesn’t “suck”?
When it’s “actionable” – or probably
when we can use it to make decisions
based on it (e.g. for jobs to be done,
workflow, etc.).
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26. Unused data never gets better.
Fix broken windows.
Iterate your way to better
data by forcing its use.
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27. NETSPECTIVE
Application focus is biggest mistake
Application-focused IT instead of Data-focused IT is causing business problems.
Silos of information exist across
groups (duplication, little sharing)
Clinical
Apps
Billing
Apps
Lab
Apps
Other
Apps
Healthcare Provider Systems
Patient
Apps
Partner Systems
Poor data integration across
application bases
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28. NETSPECTIVE
NEJM believes doctors are trapped
It is a widely accepted myth that medicine requires
complex, highly specialized information-technology (IT)
systems.
This myth continues to justify soaring IT costs,
burdensome physician workloads, and stagnation in
innovation — while doctors become increasingly bound
to documentation and communication products that are
functionally decades behind those they use in their
“civilian” life.
New England Journal of Medicine “Escaping the EHR Trap - The Future of Health IT”, June 2012
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29. NETSPECTIVE
Real world requirement: Reduce heart failure readmissions
Allocating scarce resources in real-time to reduce heart
failure readmissions: a prospective, controlled study
http://qualitysafety.bmj.com/content/early/2013/07/31/bmjqs-2013-001901.full
“This study provides preliminary evidence that technology
platforms that allow for automated EMR data extraction, case
identification and risk stratification may help potentiate the effect
of known readmission reduction strategies, in particular those that
emphasize intensive and early post-discharge outpatient contact.”
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30. NETSPECTIVE
The Strategy: Modernize Integration
Need to get existing applications to share data through modern integration
techniques including minimal meta data.
Clinical
Apps
NCI
App
Billing
Apps
Lab
Other
Apps
Apps
NEI
App
Healthcare Provider Systems
Patient
Apps
NHLBI
App
Partner Systems
Master Data Management, Entity Resolution, and Data Integration
Improved integration by services
that can communicate between applications
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31. NETSPECTIVE
Common approach, low data interop
Feature X
Feature X
Feature Y
Feature Y
Feature Z
Presentation
Functionality
Data
Presentation
Functionality
Data
Application A
Application B
Copy features and enhance (everything is separate)
Feature X
Feature X
Feature Y
Feature Z
Feature Z
Presentation
Functionality
Data
Application A
Presentation
Functionality
Data
Application B
Connect to directly to existing data, but copy features and enhance
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32. NETSPECTIVE
Sophisticated, better data interop
Feature X
Feature X
Feature Y
Feature Y
APIs
Feature Z
REST
SOAP, RMI
Presentation
Functionality
Data
Presentation
Functionality
Data
Application B
Application A
Create API between applications, integrate data, create new data
Feature X
Feature X
Feature Z
Feature Y
SOA
WOA
Feature Z
Presentation
Functionality
Data
Application A
Presentation
Functionality
Data
Services
Application B
Create common services and have all applications use them
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33. NETSPECTIVE
What users want vs. what they’re offered
Data visualization requires integration and aggregation and then homogenization
What’s being offered to users
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What users really want
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34. NETSPECTIVE
The myth of mobility in healthcare
Sexy but wrong: Device-centric closed systems
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Dull but right: Workflow-centric open solutions
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35. NETSPECTIVE
The myth of med device data interop
Serial
Converter
Device
USB
Converter
DDS
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MQTT
Concentrator
REST
SOAP
AMQP
Local
Network
XMPP
WCTP
Gateway to
EHR
SNMP
SMTP
Cloud EHR
MLLP
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36. NETSPECTIVE
Architecture transition opportunities
Prevalent healthcare industry architectures
Mainframes
Client/Server
EDI
Data-driven
Architecture
(DDA)
DDS
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Web 1.0
HL7
X.12
Event-driven
Architecture
(EDA)
MQTT
SOAP
AMQP
Service-oriented
Architecture
(SOA)
MLLP
Web-oriented
Architecture
(WOA)
XMPP
WCTP
SNMP
REST
Web 2.0 & APIs
SMTP
MLLP
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37. NETSPECTIVE
How to identify the best opportunities
From “Jobs to be Done” to the “Five Cs of Opportunity Identification”
Circumstance
• The specific
problems a
customer
cares about
• The way they
assess
solutions
Context
• Find a way to
be with the
customer
when they
encounter a
problem and
• Watch how
they try to
solve it
Compensating
behaviors
Constraints
• Develop an
innovative
means around
a barrier
constraining
consumption
• Determining
whether a job
is important
enough to
consider
targeting
• One clear sign
is a customer
spending
money trying
to solve a
problem
Criteria
• Customers
look at jobs
through
functional,
emotional,
and social
lenses
Source: http://blogs.hbr.org/anthony/2012/10/the_five_cs_of_opportunity_identi.html
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38. NETSPECTIVE
Do you have ideas in payment design?
Payment models going fee for service to outcomes-driven care
The business needs
The technology strategy
• Quality and performance
metrics
• Patient stratification
• Care coordination
• Population management
• Surveys and other directfrom-patient data collection
• Evidence-based surveillance
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Aggregated patient registries
Data warehouse / repository
Rules engines
Expert systems
Reporting tools
Dashboarding engines
Remote monitoring
Social engagement portal for
patient/family
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39. NETSPECTIVE
Can you repurpose or enhance health data?
Try to use existing data to create new diagnostics or therapeutic solutions
Economics
Administrative
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Phenotypics
Behavioral
Biochemical
Genomics
Proteomics
IOT sensors
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40. NETSPECTIVE
Some stuff not to focus on
Incremental tech innovation is easier, incremental workflow innovation is probably more useful
• Don’t go for simple incremental technology
innovation if you can be bold and incrementally
improve workflow; but make it look like you fit
into the existing ecosystem nicely
• Don’t look at mHealth, look at mobility in
healthcare
• Don’t look at apps, look at entire systems
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41. NETSPECTIVE
Forget mobile apps, focus on health IOT
• With all the attention being paid to mHealth
there’s been an useless focus on mobile apps
• For the mobile apps, instead focus on
mobility in healthcare through “health
internet of things (IOT)” and self-care
technologies
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42. NETSPECTIVE
Healthcare Industry Fallacies
• Healthcare folks are neither technically challenged nor
simple techno-phobes (they’re busy saving lives)
• Most product decisions are no longer made by clinical
folks alone, CIOs are fully involved
• Complex, full-featured, products are not easier to sell
than simple, stand alone tools that have the capability
of interoperating with other solutions are
• Hospitals will not buy unless one proves value.
• Selling into doctors offices is not easy.
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43. NETSPECTIVE
What makes your products successful
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Easy to explain
Defendable and differentiated
Attractive partnership opportunities
Word of mouth opportunity
Potential for PR
Scaleable staff and systems
Scaleable product — build once, sell many times
Uncomplicated
Focused
Sales model is scaleable and predictable
Own relationship with and information about customers
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44. NETSPECTIVE
Why military healthcare organizations buy stuff
Healthcare agencies have complex buying processes – figure out why and what they buy
Increase
revenue
(topline)
Maintain
capabilities
Reduce costs
(bottomline)
Attract new
patients
Increase staff
productivity
Find your
reason
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45. NETSPECTIVE
The Customer Relationship
If you can’t figure out why they buy, see if any of the things below make sense
Customer Gives
You Get
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Money
Time
Energy
Commitment
Referrals
Past experience
Expectations
Knowledge
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You Give
Customer Gets
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Product
Price
Value
Convenience
Selection
Service
Warranty
Brand
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46. NETSPECTIVE
Health technology sector has many ups and downs
Make sure you understand where your product fits in the hypecycle
Source: Gartner; “Hype
Cycle for Healthcare
Provider Applications and
Systems, 2010”
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47. Visit
http://www.netspective.com
http://www.healthcareguy.com
E-mail shahid.shah@netspective.com
Follow @ShahidNShah
Call 202-713-5409
Thank You