Improving Healthcare through Technology

Improving Healthcarethrough Technology

Paul Smit

Philips Medical Systems � Analyst Day

June 9, 2004

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Agenda

� The burden of Disease

� Impact of Medical Technology

� The Care Cycle

� Personal Healthcare

� Molecular Medicine

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Healthcare Expenditures will grow from ~8% of worldwide GDP to ~10% in 2010

Healthcare is the world�s largestservice sector

49%

28%

8%

2%

13%

North America

Western Europe

Japan

China/Hong Kong

Rest of the World

Worldwide Healthcare Expenditure:US$3,300 bln in 2002

North America makes up 49% of the worldwide spent

Source: Medistat

0%

2%

4%

6%

8%

10%

1950 2000 2010

Source: WHO

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Healthcare spending today isconcentrated in a few markets

Source: Medistat

USA, Japan, Germany, France and Italy:70% of the World�s Healthcare spendings

70%

30%

Top 5 countries

Other countries

2002

Healthcare spendings

$ bln $ Per capita % of GDP 1990 - 2003 CAGR

USA 1,533 5,375 14.7% 5%

Japan 248 1,960 6.2% 6%

Germany 238 2,899 10.7% 5%

France 140 2,284 9.7% 5%

Italy 120 2,096 8.2% 5%

As a nation�s GDP increases, Healthcare spendings will rise

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Source: NIH, 2004

0 100 200 300 400 500 600 700

Injuries, Drug & Alcohol Abuse, other

Blood

Skin

Respiratory

Infectious, Parasitic

Genitourinary

Endocrine, Nutritional

Musculoskeletal

Lung

Digestive System

Cancer

Brain/Nervous System

Cardiovascular

Direct cost

Indirect cost

Indirect Costs include Morbidity costs (cost of lost productivity due to illness) and Mortality costs(cost of lost productivity due to premature death)

368

193

192

132

111

85

76

70

54

37

12

304

626

Heart & Brain disease and Cancer arethe most expensive diseases�.Break Down of Healthcare Costs by Disease Area (USA)

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HeartDisease

Cancer Stroke ChronicLung

Disease

Accidents

Diabetesmellitus

InfluenzaPneumonia

Alzheimer

Nephritis

Septicaemia

Other

Death Causes in the US

�and the most deadly

29.5%

23%

6.9%5.1%

3.9%2.9% 2.8%

2.0% 1.6%

26.0%

1.3%

0%

5%

10%

15%

20%

25%

30%

35% Cardio andVasculardiseases

Cardio andVasculardiseases

Cardio and Vascular Diseases and Oncology responsible for ~60% of US DeathsSource: CDC, National Vital Statistics, 2001

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Agenda



� The Care Cycle



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Medical Technology has greatlyimproved Healthcare �.

Source: NCHS

Heart DiseaseHeart Disease

Cancer

Cancer

US Life Expectancy at Birth

1950-2000

65

70

75

80

1950 1960 1970 1980 1990 2000

Around 70% of the survival improvement in heart attackmortality is a result of changes in technology.� Cutler & McClellan, 2001

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�.while accounting for just 7% ofHealthcare costs

� In heart disease, every $ in technology brings $ 6 in

economic value Cutler & McClellan, 2001

Break Down of Healthcare Costs by Spending Category (USA)

* Largely physician salaries and cost of hospitalization

62%13%

9%

7% 4%2% 3%

Primary Care Services*

Prescription Drugs

Nursing Home & Home Healthcare

Medical Equipment & Devices

Government Public Health Activities

IT in Healthcare

Research

10Medical Systems Sources: Russ Coile, Futurescan 2003, SG-2

� with big potential to transform Healthcare

Imagingearlier diagnosis saves lives and reduces costs

Minimally invasive surgeryreducing patient trauma and costs

Healthcare IT Right Information at the right time

enables better treatment and lower costs

Molecular MedicinePreventing disease from happening

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Agenda



� The Care Cycle



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Information &Decision support

Operating roomMonitoringImaging


IntensiveCare unitMonitoring


Step downfacility

Monitoring

Step downfacility

Monitoring

HomeMonitoring

HomeMonitoring

Pre-Hospital/Ambulance

Monitoring


Monitoring

DiagnosticsImaging

DiagnosticsImaging

Follow Up

Diagnostics

Patient Monitoring

Treatment

Diagnosist

Follow-up

The Care Cycle

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Patient Monitoring: Monitoring vitallife-signs of Patients in real time

Informed patient management

E.g. Neonatal Event Review automatically detects

neonatal intensive care events and captures

real-time wave snippetsIntelliVue Patient

Monitor

OB TraceVue CIS

IntelliVue Information Center

Chart interpretation Uses rules-based algorithm to interpret complex fetal heart rate and alert clinicians to changes in fetal condition

Clinical review applications and analysis tools

Detailed retrospective analysis of patient condition,

including full disclosure of 96 hours of data

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Major contribution to drive Hospital costdown through shorter Length-of-Stay

� Portal technology:Information at the Point of Care

� Open systems integration

� Training and workflow efficiencies

Philips:

� Top ratings in service and support

� History of innovation

#1

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HOMEHOME



Operating roomMonitoringImaging Intensive

Care unitMonitoring


Step downfacility

Monitoring

Step downfacility

Monitoring

HomeMonitoring

HomeMonitoring


Monitoring


Monitoring

RadiologyImaging

RadiologyImaging

Treatment

Follow Up

Diagnostics

Diagnostic Imaging

The Care Cycle

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�Imaging is key to lower Healthcarecosts and improved patient outcome�McKinsey, 2004

Imaging is about:

� Better diagnosis for better treatment

� Earlier detection to catch disease early

� Minimally invasive surgery to avoid traumaand shorten procedure time

Continued advances in Imaging modalities

will transform medicine during this decade��SG-2, 2004

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MRI: Breakthrough inWhole Body Imaging

� Trauma scanning

� Cancer diagnosis:Screening for Metastases

� Scan Time < 5 min

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HOMEHOME




Care unitMonitoring


Step downfacility

Monitoring

Step downfacility

Monitoring

HomeMonitoring

HomeMonitoring


Monitoring


Monitoring

RadiologyImaging

RadiologyImaging

Treatment

Follow Up

Diagnostics

Interventional Imaging

The Care Cycle

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Imaging innovations allow for MinimallyInvasive Surgery� Minimally invasive surgery�

� avoids trauma

� saves costs

�.and 3D guidancel

#1

Very detailed 2 D�.

Digital 2D Imaging

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�.Continuous innovation to treat Aneurysms

System which will

� analyse

� Compute

� and simulate

an aneurysm�..

� And the treatment path

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� Angiography

� Stent placement

� Electrophysiology ablation

� Pacemaker implant

� Image guided surgery (i.e., spinal)

� Image guided neurosurgery

� Radiation Therapy

� Brachytherapy (in-body radiation therapy)

� Cryosurgery

Main areas for minimal invasivetreatments

CardiovascularCardiovascular

OrthopedicsOrthopedics

OncologyOncology

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Agenda



� The Care Cycle



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HOMEHOME




Care unitMonitoring


Step downfacility

Monitoring

Step downfacility

Monitoring

HomeMonitoring

HomeMonitoring


Monitoring


Monitoring

RadiologyImaging

RadiologyImaging

Treatment

Follow Up

Diagnostics

Home Monitoring

The Care Cycle

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Home Monitoring and PersonalHealthcare

� Burden of Chronic disease isincreasing

� Main cause of death for 50%of people worldwide

� In the USA, 50% of all people willhave a chronic condition in 2020,consuming 80% of the healthcarespending*

� How can be we apply technologyto manage chronic disease better?

*(RAND corporation)

Costs of Chronicdisease, USA

0

500

1000

1500

2000

1990 2000 2020

$ bln

Direct Medical Costs

lost productivity

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Philips Personal Healthcare Solutions

Monitoring and Early Detection

Devices

Biochemical

Wearable Sensors

Communication Platform

-Temp is 72-Stove is on-Lois in bedroom

Lois tookmedicationat 10:15.

Personal message fromphysician reassuring Lois of her

condition

No panic activation.

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�.secure and personalized

�remotely connects patients to their care community

�Enables the development of new care models

Unique Personal Healthcare Platform

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Agenda



� The Care Cycle



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High growth for test, monitoring and imaging equipment for 2007- 2020+

High growth for test, monitoring and imaging equipment for 2007- 2020+

Heart disease and cancerbecome manageable through screening and early treatment

Heart disease and cancerbecome manageable through screening and early treatment

Treatment

Follow Up

Diagnostics

The Care Cycle in Molecular Medicine

Breakthrough in molecular agents

2008 - 2020

Breakthrough in molecular agents

2008 - 2020

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Molecular Medicine

The Future

Your own biochemistry becomes

the basis for treatment

Imaging will screen people who have

known genetical or life-style risks

whether a disease is developing

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CEL>POINT: Detecting Cancer�.

Images courtesy: Cell>point, Houston TX

Thryroid Cancer

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�Theseus: Selecting the best Cancer Treatment

Pre Chemotherapy

Apomate48h postchemoRx

Apomate

Courtesy Prof. Pierre Rigo, Univ. Liege

Post Chemotherapy

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Next stop:Detecting vulnerable Plaque �

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Conclusions

� Increased adoption of Medical Technology willreduce cost and increase quality of care

� Continued advances in Imaging will transformmedicine during this decade

� Philips is well positioned to deliver the benefits

Improving Healthcare through Technology

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