Perennial - Care-coordination business for seniors

Perennial CareCare Coordination for the Senior Life StageIn collaboration with the Mayo Clinic Center for Innovation

May 21, 2009

Designing + Leading a Business Carnegie Mellon University Professors Boni, Evenson + Weingart

Melissa Cliver Dave Passavant Christina Payne

Objective

We intend to increase the holistic value delivered by the

healthcare system by designing a disruptive business concept

that delivers new value for all stakeholders with a reduced

and sustainable cost structure.

Our Concept

Our Concept

Perennial Care is a long-term support service for seniors

to navigate the complexity of the health care system and

create partnerships, enabling informed health care decisions.

Why It’s Disruptive

• An affordable, convenient gatekeeper coordination

service directing seniors to customized social and medical

care networks.

• Health care delivery and coordination that is not physician

led and not based on acute episodic health management.

• Integrates both the general practitioner and the specialist

physician as expert consult.

• 77 million baby boomers are aging.

• Medicare costs 27% of total federal budget by 2030

• 70% of health care cost is for chronic care.

• 55% of medicare patients ages 65 - 74 have 3 and 4

chronic conditions simultaneously.

• Another 20% have 5 chronic conditions simultaneously.

Why Seniors?

Seniors

VALUE PROPOSITION

Time and specialty with experts

Monitor medications

GOAL

Manage complex deteriorating life

Maximize quality of life

Care GiversGOAL

Facilitate best possible quality care for aging loved one

Balance senior care with life tasks

VALUE PROPOSITION

Able to formally track observations

Time management and efficiency

Access to quality medical research

PayersGOAL

Maximize profits

Minimize overhead

Fund quality care

VALUE PROPOSITION

Reduced ER visits

Better patient Rx adherence

Lower costs, non-doctor led care

ProvidersGOAL

Deliver quality care

Minimize risk

Minimize administrative overhead

VALUE PROPOSITION

Better summary of patient history

Better patient Rx adherence

Holistic view of patient health

Relationship with GP

• Recognizing there is a shortage in US, integrate

tele-med potentially integrating global support.

• Focus on a holistic view of general care,

allopathic and osteopathic.

• Prevention and specialist referrals (acute).

Perennial Team

Midlevel medical

Basic testing

Monitoring

Drug management

Guide

Life stage planning

Social Resources

Relationships

Manager

Medical records

Insurance

Expert Awareness

Perennial Focus

Services

• Supplement the existing PCP and specialist care model.

• Organize patient’s data and needs.

• Partner for cost efficiency: labs, supplies, payment.

• Research and recommend life stage options.

• Guide patients and caregivers to external innovators

and specialists.

Technology

• EMR/EHR

• Drug interaction software

• Caregiver tracking software

• Telemedicine

• 24/7 support line

Research

Territory Map

Christensen Models

Solution Shops

Provide intuitive, specialized

recommendations of

solutions to

unstructured problems.

Christensen Models

Value-Adding Process

Transforms inputs into

outputs of higher value via

a repeatable process.

Christensen Models

Facilitated Networks

Institutions that operate

systems in which customers

buy and sell, and deliver

and receive things from

other participants.

“Any program for resolving our runaway health-care

costs that does not have a credible plan for changing

the way we care for the chronically ill can’t make more

than a small dent in the total problem.”

Clayton Christensen, The Innovator’s Prescription

• Shortage of PCPs and incentives created by

the 3rd party payer system result in

7-minute visit.

• ER visits per capita are increasing. Many

due to acute occurrence of complex care

and drug mismanagement.

• Caregivers are acting as untrained

coordinators.

• Services are not aggregated for easy access.

Current Trends

Source: NYTimes

Holistic Care

care network

Framework

care network

journey

Frameworkinnovations

care network

journey

providers

Making it happen

Value Proposition Recap

REDUCED ER VISITS

better drug management

alternate high availability option for acute care

better holistic care management

COST STRUCTURE

cost effective labor force

leverage technologies for efficiency

partner with specialized businesses to deliver low cost services

BUSINESS MODEL

focused on care coordination

Go to Market Strategy

INSURANCE

Charge per capita

% of cost savings

MEDICARE

Pursue reimbursement

Care coordination

SENIORS

Membership fee

Cost per visit

Pareto Economics

• 7M of 36M seniors drive

80% of costs.

• A 1% cost reduction for 50%

of the those seniors would

yield $2.8B in savings

• A 10% of savings fee model

would result in $280M

in revenue

29

7

20% of seniors drive 80% of costs

560

140

36M seniors

$700B costs

Customer Funded Model

Profit Function

Total Revenue - Total Cost

Risks

Assumptions

Opportunities

Perennial Care is a long-term support service for seniors

to navigate the complexity of the healthcare system, while

increasing value and lowering costs.

We recommend starting with a pilot project in the Florida or

Arizona Mayo Clinic facilities for validation with seniors.

Thank you.Special thanks to Bill and Maggie.Questions?

May 21, 2009

Designing + Leading a Business Carnegie Mellon University Professors Boni, Evenson + Weingart

Melissa Cliver Dave Passavant Christina Payne