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Home Medical Monitoring
(HMM)
Providing connected medical monitoring
equipment to patients in their preferred
care setting
Mark Blatt, M.D.
Randy Swanson
Karl Allen
INTEL CONFIDENTIAL
Team Member’s Bios
Mark Blatt M.D. --- Mark joined Intel one year ago in the Internet Health Division. He is
now working for Internet Business Solutions as a Business Development Manager. Prior to Intel he
was the managing partner of a five-physician group of family practitioners. He practiced family
medicine for 15 years before returning to Yale University to earn his MBA in finance.
Randy Swanson --- Randy is an Eight year veteran at Intel, the last year in Business
Development roles in the New Business Group. He previously served as CPU Financial Controller
and Finance Manager of an advanced manufacturing facility for Intel. Three time winner of the
Finance Achievement Award. Earned both MBA and MSEE from the Univ. of Michigan.
Karl Allen --- Karl has been with Intel fourteen years as a lead architect and technical
manager. Most recently, Karl has led the SW and HW development efforts for two different wireless
handheld platforms: an Internet tablet and a PDA device. Karl has expertise in wireless networking,
PC based peripherals, network architectures, operating system architecture, StrongARM*
architecture and IA HW designs. Karl holds BS in Math Sciences from Oregon State University.
Manufacturing Candidate - Lead manufacturing roles on Intel wireless, PC
peripheral and consumer products. Previous experience in purchasing and production control.
2
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Mission
Bring medical monitoring to patients at home or
in their supported care setting
– Provide support to chronically ill patients through
partnerships with care providers
– Maintain patient in home environment longer
– Flexibility to meet their care requirements and their
communication requirements with caregivers and family
How will we do this?
– By deploying telemedicine monitoring equipment into the
patients home & sending the information back to
providers via a managed net infrastructure.
3
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Home Monitoring Is Inevitable
Legislation
Demand Enabling
Dr to Patient
Home Based Nursing
Prospective Legislation Reimbursement Shortages
Payment Enabling >400k
System Clinic Based ? By 2008
100000+
Enables Reimbursement
Legislation Telemedicine (Dr to Patient)
50000 Nurse Care Elderly and
Enables
Clinic (Nurse to Home) Homebound
Consulting Baby Boomers
10000 (Dr to Dr) Chronic
Disease
1000
Growing
100 Cost Control 8% per Year
1998 1999 2000 2001 2002 2003 2004
HMM is enabled by recent legislation that completely disrupted the
Home Healthcare market
• PPS changed focus from pay per visit to fixed payment
• Demographics drive larger patient load and need for technology
4
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Customers
Home Health Agencies /Visiting Nurses Associations
– 17,000 agencies making 500MM visits per year
– Rapid sales cycle – CEO/CFO decision makers
Pain Points
– Nursing shortages growing worse: costly labor in short supply
– Preserve quality of care under fixed payment system (PPS)
– Onerous documentation requirements penalized by after the fact audits
HMM engaged with both typical and early adopters
– Upcoming deployments and trials are in-budget
– 50% to 75% of all patients benefit from this product
5
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
HMM Impact
Chronic Audit Trail Nurse Readmission
VNA
Disease Justifies In Person Updates Within
Provides Payment
Episode Visits And $70 Cost Audit 30 days
In Home Sent
Dr Orders Max Allowable 5 Patients / Day Trail Penalizes
Assessment
Homecare Payment Hospital
HMM
50%
Of Visits Virtual Visit
$23 Cost
15 Patients/Day
#1 #2 #3
Creates Audit Trail of Doubles Efficiency Increases Quality of
Images And Of Nurses Care and Prevents
Documentation (HMM =50% of Visits) Readmission
At the Point of Care
6
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Satisfaction Studies
Providers
– Low Bandwidth used in Tele-rehabilitation: 80% of providers
satisfied. Journal of Telemed and Telecare, Vol 7, Num 2, Pg 82-89
– Low Bandwidth dermatology exams doctors rated rapport
established 90% of the time. Confident of diagnosis 82%
Archives of Dermatology, 1998:143:471-6
Patients
– After using hometelecare equipment >70% pts felt it could
improve their health and NO pts found the equipment difficult
to use. Telemedicine Journal and e-Health, Vol 7, Num 3, Pg 241-247
– After receiving hometelecare services 93% of pts would do it
again. Telemedicine Journal and e-Health, Vol 6, Num 4 Pg 409-415
7
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Studies Benefits Analysis
Use of Telemedicine reduces ER trips by 50% and
ultimate end stage CHF costs by 25%
Source: Kaiser Permanente, Archives Family Practice Jan 2000
Telemedicine reduces Total Cost of Chronic Illness
Care 66% Source: FL VA ’01
Telemedicine reduces Total Cost of CHF 70%
Source: CT VA ’00
64% of the time a telenursing evaluation could
replace the in person visit Source: Doolittle, McCartney Whitten et al.
J Telemed and e Health Spring 2001
Telehospice inexpensive , effective service
compared with “in person” visits. Source: Doolittle. A cost
measurement study for a home-based Telehospice service JTT 6 193-195
8
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
HMM Early Adopters
Gentiva - >200 sites
Boston VNA
UC Davis Enfield, CT
Eastern
Carolina Univ.
Arizona
HomeCare
Potential customers
Presbyterian estimate over
Hospital Univ Texas 2200 units in
Medical Branch Initial deployments
HMM current engagements
– Customer Sites;
– University Studies
– Alpha input and Beta trial sites
9
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
HMM Architecture Benefits
Provider HMM Mgmt Center Patient System
Minimal IT Support Highly scalable Ease of Use (One Touch)
Real Time A/V Visits 3rd Party Apps Biometric ID
Store & Forward Business Rules Engine Remote Activation
Disease Mgmt Documentation Peripherals Matched to
Valued S/W & Services Backup & Recovery Disease
Creates payment trail Down the Wire Mgmt Wireless ++ in Rev 2
Open platform invites software and services for
both provider and patient
– Plug-n-Play patient unit invites peripherals onto platform
10
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
HMM Offering – 2003 “Any VNA” Est.
Web Center Services and Hardware Per Month
– 57 Home Units at each VNA $4,275
(Est. Unit Cost $2200, 3 Yr Lease at 10% $75/month)
– 2 Nurse Stations $260
(Est. Unit Cost $4000, 3 Yr Lease at 10% $130/month)
– Remote Mgmt and Documentation Mgr $4,275
– Total HMM per Month Cost $8,810
W/ HMM
W/O Telemed Telemed
ROI: Quadruples Customer Margin Margin 5%
Margin 21%
O/H
– $300k investment over 3 years; Benefit of $600k 25% O/H
17%
$2400
– Savings channeled into additional visits or margin Revenue
Per CHF HMM 19%
Episode Nursing
– Revenue about $54k/month at 80% utilization Labor Nursing
70% Labor
– With support costs, HMM is ~19% of revenue 43%
11
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Competitors
Price Lease Web Peripheral Ease A/V
Infrastructure Ports of use
HMM $2,200 $150 YES USB YES YES
HW + SW
Amer. TeleCare $5,000 $140 Proprietary YES YES
NO (POTS-NO SW)
(#1 Player) HW only
CyberCare $5,600 $300 Proprietary Interm YES
Yes (Limited)
HW + SW ediate
Panasonic $15,000 $300-400 Yes (Limited) Serial NO YES
HW + SW
American Med $5,000 n/a No(limited add on Proprietary NO YES
Devices thru sep comp)
HomMed n/a $150 NO (Limited SW) Proprietary YES NO
HW + SW
HealthHero n/a $150 Proprietary YES NO
NO (POTS limited SW)
HW + SW
Videophone (ViTel) $1500 + n/a n/a YES YES
NO (No SW/data) 12
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Competitors
Ease of Use + Home
Open Platform Monitoring
CyberCare
Audio
ATI
Visual AMD Panasonic
HomMed
Store &
Forward Health Hero
Under $2500 - Over Other brands and names
are property of their
$2500 $7500 $7500 respective owners
HMM is the best combination of functionality and price
13
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Competitive Advantage
Infrastructure enables 3rd party apps and value
added software / services to patients and
customers
– SW & HW Ecosystem facilitates standards development
Will leapfrog the competition
– Scalable, turnkey, platform for 3rd party peripherals (HW
ecosystem), path to wireless
First to price point and volume
– Difficult to displace
14
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Available Market
Market Growth Trends
$10,000
300% CAGR
Based on
2001 Growth
$1,000
Revenue in ($MM)
HMM
Assumption
$100
~100%
Actual
1999 - 2001
$10
$1
1999 2000 2001 2002 2003 2004 2005 2006
Source: American Telemedicine Convention June 2001 Participants
– Market estimated to grow from $8.6M to $35.6M in 2001…up 300%
– UTMB Telemedicine Program growing from $100M in 2000 to $350M
in 2001 (includes physician services)
15
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Market Projections – VNA Only
US Homecare Orgs 2001 2002 2003 2004 2005 2006 CAGR
Total Home Health Patients (MM) 22 23 25 27 28 30 7%
Total Home Health Organizations 17,000 17,000 17,000 17,000 17,000 17,000 0%
Home Health Orgs w/Monitoring 225 329 481 702 1,025 1,497 46%
Average Units per Installation 22 36 57 91 147 235 60%
Home Monitoring Units 3,006 6,720 15,738 39,755 92,709 216,964 140%
Home Monitoring ASP 4,382 3,944 3,549 3,194 2,875 2,588 -10%
Home Monitoring Revenue ($MM) $13 $27 $56 $127 $267 $561 116%
HMM Home Health Orgs 51 130 256 404 99%
HMM Units 2,912 8,979 25,623 59,357 173%
HMM Revenue from Home Health Orgs ($MM) $7 $24 $69 $157 178%
FYI HMM Revenue Hospital ($MM) $2 $7 $25 $47 174%
$10 $31 $94 $205 177%
HMM / All Home Health Monitors 19% 23% 28% 27%
HMM / All Home Health Patients 0.1% 0.1% 0.3% 0.7%
Large Potential Market….forecast
<1% penetration to hit revenue goals 16
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Gross Margin Revenue
Business Plan Trends to 60% 60% H/W
40% Software
Homecare Orgs and Hospitals
HMM Summary P&L $K 2001 2002 2003 2004 2005 2006
HW Volume ku - - 3,827 11,724 35,000 77,147
Total Revenue $ - $ - $ 9,604 $ 31,386 $ 94,411 $ 204,527
Hardware $ 8,254 $ 23,955 $ 64,963 $ 128,762
Software $ 1,350 $ 7,431 $ 29,448 $ 75,765
COS $ - $ - $ 3,501 $ 12,348 $ 37,419 $ 82,584
Gross Margin $ - $ - $ 6,103 $ 19,038 $ 56,992 $ 121,943
GM% 64% 61% 60% 60%
Hardware 63% 59% 58% 56%
Software 65% 65% 65% 65%
Operating Expenses:
G&A $ 179 $ 899 $ 506 $ 1,569 $ 4,721 $ 10,226
R&D $ 324 $ 3,242 $ 2,807 $ 3,884 $ 8,497 $ 18,407
Marketing $ 15 $ 1,366 $ 1,729 $ 5,649 $ 16,994 $ 36,815
Operations $ 142 $ 3,317 $ - $ - $ - $ -
Oper. Expenses $ 662 $ 8,874 $ 5,161 $ 11,311 $ 30,464 $ 65,652
Operating Margin $ (662) $ (8,874) $ 941 $ 7,727 $ 26,528 $ 56,291
Operating Margin % 10% 25% 28% 28%
Pretax Income $ (662) $ (8,874) $ 941 $ 7,727 $ 26,528 $ 56,291
Income Taxes $ - $ - $ 411 $ 2,704 $ 9,285 $ 19,702
Net Income (loss) $ (662) $ (8,874) $ 530 $ 5,022 $ 17,243 $ 36,589
Net Margin % 6% 16% 18% 18%
Cumulative cash burn $ (680) $ (9,664) $ (10,180) $ (7,186) $ 4,346 $ 30,957
Op Expenses % Rev:
G&A 5% 5% 5% 5%
R&D 29% 12% 9% 9%
Marketing 18% 18% 18% 18%
ST Op. Expenses 54% 36% 32% 32%
Cash Needed ($10.3M) Net Margin Trends to 18%
17
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Adjacent Markets *Current HMM
Engagement
Employee
Kiosks* Emergency
Home
Room*
Health*
Epidemic
Response*
International
Expatriate Disease
Wellness
Mgmt*
Smart Home
HMM architecture easily extends to new markets
18
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Use of Funds
0-9 months $4.3 million
Alpha product available for human factors research
Beta product ready to submit to FDA for approval
MOU with trial sites converted to definitive agreements
Peripherals suppliers chosen
Hire core engineering team, lead marketer ~6 months
Mfg quotes secured for production
Initial industrial design complete
9-18 months $6.0 MM $10.3 MM cumulative
Beta product received FDA clearance
Trials finished at influencer sites
First product launched with hardware and service component
High end product ready to submit to FDA
Revenue, Profitability and Cash Flow Targets hit
High end product FDA cleared and launched
19
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Summary
$10MM investment forecast to generate
$200MM/year in revenue by ‘06
Homecare organizations need HMM
The potential extended market is huge
Web infrastructure provides competitive
advantage
Right team to get the job done
20
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
backup
21
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Patient Unit Functions
•Focus on Ease of Use Two Connections
(Power and Phone)
Touchscreen Camera
(Context Sensitive (Motion + High Res)
Controls)
One Touch Connect
Biometric ID
(Fingerprint)
USB Ports for
Medical
Peripherals
Hard Drive for
Video Storage
22
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Product Roadmap
Q4 ‘01 Q1 ‘02 Q2 ‘02 Q3 ‘02 Q4 ‘02 Q1 ‘03 Q2 ‘03 Q3 ‘03
Alpha Beta
Telemedicine H/W 1 FDA Qual/Ramp
Revenue
(USB, A/V, Peripherals) Development FCT Test
Refinement
Value Add Services 1
Remote Diagnostics
Vital Signs Monitoring Development Qual/Ramp Revenue
Medication Reminder
Documentation Mgr
FDA Qual/Ramp
Telemedicine H/W 2 Development Revenue
(Wireless, A/V, Periph. 2) FCT Test
Value Add Services 2
EMR Host
Transcription Host Development Qual/Ramp Revenue
Disease Mgmt Web Site
Mail Order Pharmacy
23
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
More Studies
Wound care—in person visits decreased by 30%
over 20 weeks; Augmented by virtual visits; no
change in outcome with wounds healing in 25%
less time. Source: Troy NY VNA June ’01
VA System in Tampa FL; other results from Rural
Telemed healthcare Program
– Decrease wound healing from 4-6 months to 4-6 weeks
– In telepsych programs
• Decrease hospital readmits >90%
• Decrease med use 100%
• Decrease outpatient visits 25%
24
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Market Projections - Hospitals
US Hospitals 2001 2002 2003 2004 2005 2006 CAGR
Total US Hospitals 6,000 6,000 6,000 6,000 6,000 6,000 0%
Hospitals with Home Health 13 20 30 45 68 102 50%
Average Units per Installation 136 203 305 457 686 1000 49%
Home Health Units 1,662 2,304 5,083 13,098 28,379 60,423 128%
Home Health ASP 4,382 3,944 3,549 3,194 2,875 2,588 -10%
Home Health Revenue ($MM) $7 $9 $18 $42 $82 $156 105%
HMM Hospitals 3 8 19 30 115%
HMM Units 915 2745 9378 17789 169%
HMM Revenue ($MM) $2 $7 $25 $47 174%
HMM /Home Health 18% 21% 33% 29%
HMM / All Orgs 0.5% 0.8% 1.1% 1.7%
25
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Cost Estimate Comparisons
Total Cost of Ownership Total Cost of a Sale
– Patients Units $65k – Sales Team $10k
– Nurse Units $ 3k – Installation, training $ 2k
– SW & Service $65k – Warranty $ 2k
– Infrastructure $23k – Cust Support (1st) $ 3k
– Cust Support (2nd) $ 3k
72 units per year $156k per site per year $20k
26
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Risks
Liability
• Mitigation through training, legal boilerplate, etc
• Down the wire diagnostics and fleet mgmt
• Insurance (Quote $2/$1000 revenue)
FDA process
• Both the HW and SW need 510k certification
• 510k is a streamlined approach that leverages off of a similar,
previously approved product – limited 180 days (90 days typical)
• Peripheral suppliers responsible for their own product
Competitors
• Our investigations show none on track for equivalent offering
Time to Market
• Long delays at FDA may allow competition to gain momentum
• Follow on markets may be held up in legislation
27
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
Market Models
Disease model (MM) Number Source
DM 16 ADA
CHF 5 ACC
COPD 20 ALA
Asthma 17 ALA
HTN (known) 35 AHA
Alzhemiers (live at home) 2.8 Alzhemier's Ass
95.8
Adjustment for co-morbidity 71.85
Excl HTN 36.85
Population model (MM)
VNA Visits by VNA of Amer 10 VNA of America
VNA visits by other VNAs 10
Nursing Home 1.5 Eldercare Consulting
Unneeded ER Visits 9.5 Dr C. Bianco
31
Convenience Market
Homebound (needing assistance w/ ADLs) 12.8 Eldercare Consulting
Rural (limited access) 28 est 10% of US pop
40.8
28
Pentium®, Celerontm and Xeontm are trademarks of Intel Corp
Other names and brands are property of their respective owners INTEL CONFIDENTIAL
