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									         Leveraging HIT for
       Medication Management

Community Health Information Exchange
    Medical Office Perspective

               Prepared by:
      Michael Lake, Circle Square, Inc.

        Presented for CalRHIO by:
        David Murphy, SureScripts

              Circle Square Inc. Confidential   1

1. The state of key HIT initiatives today: technology at the point of care
   in the physician practice
2. HIT market segmentation and vendor strategies
3. The drivers for the increased momentum of HIT versus a few years
4. Leveraging advanced HIT (PHR, EHR, eRx) to enable RHIO
   medication management objectives

                              Circle Square Inc. Confidential
   Technology at the point of care

                  Physician Practice
                                                                                      Engaging the Environment
                 Practice              Electronic Medical
               Management                    Record
                                                                                                        Pharmaco    RHIO
                Registration                   Notes                                       Org

                 Scheduling               Charge Capture                                                 Health

                                                                    Exam Room
                                                                                              QIO                   PBM
Front Desk

             Billing / Collections             Labs
                 Accounting                 Prescribing                                                 Pharmacy   Hospital

                     Internal Workflow and Messaging

                  Communications to External Systems

                        Data Storage and Reporting
                            Back Office
                                                                                   Consumers, Patients, Members

                                                           Circle Square Inc. Confidential
HIT Market Segmentation and
     Vendor Strategies

       Circle Square Inc. Confidential   4
Companies providing solutions to physician practices can
be segmented by their business strategies

    Multi-market               Focused                                  Niche     Complement

Hospitals / health plans   Physician practices                           ERx           PHR
     Pharmacies                   EMR                                    PMS         E-visits
 Physician practices          EMR/PMS                                   Bundles   Physician portal

       Examples                 Examples                             Examples        Examples
        Cerner                  NextGen                               DrFirst        CapMed
       McKesson                    PMSI                            AthenaHealth     RelayHealth
        WebMD                 eClinicalWorks                         MedPlus          Verizon

                                      Circle Square Inc. Confidential
         Multi-market strategists are the largest companies with
         the best reach; they are now fast-following into
         physician practice EMR and ERx markets

   Segment                      Characteristics and Dynamics                              Key Companies
                    Leveraging hospital and health systems relationships into            Cerner (Power Chart
                    ambulatory physician practices                                       Office)
  Hospitals and     Automate hospital-owned practices and clinics (EMR)                  GE Healthcare (Logician)
 Health Systems     Support hospital to physician linkage programs with affiliated and   McKesson (Horizon
   Technology       aligned practices (Lab and EMR)                                      Ambulatory)
    Providers       Support health systems engagement with RHIOs                         Siemens (NextGen)
                    Physician’s with EMRs are more likely to support implementation      IDX (Allscripts)
                    of CPOE in the hospital                                              A4 Health (HealthMatics)
                    Historically large PMS companies have been EMR laggards
                                                                                         WebMD (Medical
 Legacy Practice    Protecting large, legacy client bases                                Manager)
  Management        Takeouts by EMR/PMS combinations have created recently               Misys (Medic)
  System (PMS)      more effective clinical systems strategies
    Acquirers                                                                            Cerner (VitalWorks)
                    Little historical customer intimacy, now improving with EMR
                                                                                         IDX (GroupCast)
                    Pursuing multi-market strategies
Pharmacy Services   Automation of retail pharmacy operations                             McKesson
    Providers       Pharmacy claims adjudication                                         NDCHealth
                    Clinical laboratory
 Others with HIT                                                                         Quest (MedPlus)
                    Pharmaceutical manufacturer
     assets                                                                              Caremark (iScribe)

                                              Circle Square Inc. Confidential
         Focused strategists have solid EMR offerings with
         weaker ERx functions than niche players; and
         differentiate by target practice size and architecture

   Segment                          Characteristics and Dynamics                                 Key Companies
                    Leaders are fast-growing, with national distribution, some publicly traded
                    with market caps over $500 million                                            Epic Systems
Larger Practices
                    Comprehensive and sophisticated solutions and services                        NextGen (QSII)
 (20+ clinicians)
                    Large groups and IPAs buying for efficiency and strategic positioning         Allscripts (MDRX)
                    Looking to expand into other markets including smaller practices
                    Also a growing segment (word-of-mouth) although companies with more
Smaller Practices   limited reach and access to capital                                           A4 Health (mid)
 Mid-size (5-20     Many with mature products, developed over years, generally on                 PMSI (mid)
   clinicians)      Microsoft Windows platforms                                                   DOCS (small)
 Smallest (1-4      Sales and services costs create obstacles to growth
   clinicians)                                                                                    e-MDs (small)
                    Spending time with customers, however, increases intimacy
                    Formed to leverage the cost and service aspects of the Internet,
                    particularly for smaller practices
                    Functionality now competitive with more mature products with awards           eClinicalWorks
                    from TEPR, KLAS, TETHIC, ACGroup, F&S
  Web-based         Dynamics center around “just right” sized services balancing efficiency
                    with customer relationship                                                    Bond Medical
                    Can more easily modularize functions, e.g., sell a prescribing-only option    MedPlexus
                    Early stage companies with limited distribution make attractive
                    acquisition or partnering candidates

                                               Circle Square Inc. Confidential
           Niche strategists deliver the best functional solutions,
           but many are struggling with the niche business model

Segment                          Characteristics and Dynamics                                   Key Companies

               Focus on ERx and frequently with minor additional functions, sometimes           DrFirst
               completely unrelated                                                             InstantDx
Electronic     New scripts, renewals, DUR, formulary, RxHub and SureScripts
Prescribing                                                                                     ZixCorp
               Generally early stage with unproven business models and limited reach            Gold Standard
               Acquisition targets by EMR, PMS (below) or new entrant                           Media

               Focus on billing and collections either as software solution or as a service
               priced as a percent of billings
Billing and    Some serve a local area while some are national in scope
                                                                                                Lighthouse Medical
Collections    Web-based solutions are emerging as newest entrants
  (PMS)                                                                                         Local billing
               Most are moving toward clinical systems, with ERx as an early opportunity
               Relationships between billing services and web-based products represents
               a major opportunity in the market

               Focus is on a modular collection of niche products, positioning as “EMR lite”
               Generally targeting larger practices, IPAs and health systems                    HealthVision
               Most modern bundles are web-based platforms that also have appeal as             Axolotl
               RHIO enablers.                                                                   MedPlus
               A variant of this model is likely to emerge to serve smaller practices in pay-   Wellogic
               for-performance programs

                                               Circle Square Inc. Confidential
         Complement strategists use their solutions to add
         value to third party products by (1) attaching to them
         or (2) providing infrastructure to support them

 Segment                    Characteristics and Dynamics                          Key Companies
                Focus on consumer personal health record
                Managed by patients and families, but also can be fed by EMR
  Personal      solutions (medications, lab results, etc.)
Health Record                                                                   WebMD (Health Manager
                Most mature EMR solutions include some form of PHR
                Variants include solutions like consumer medication
                                                                                Various EMR extensions
                administration support
                Focus on extending the physician-patient relationship through
                email services
                Historically weak business model                                Relay Health
                Some health plans are paying for electronic visits              Medem
                In this model patients may request refill authorizations from
                Focus on communicating directly with physicians through         ePocrates
                browser and PDA technologies
  Physician                                                                     WebMD (MedScape)
                Areas of focus are medical content and reference information
 Information                                                                    Skyscape
                Pharmaceutical manufacturers and payers have increasing
                interest in these platforms for e-detailing

                                            Circle Square Inc. Confidential
          Complement strategists use their solutions to add
          value to third party products by (1) attaching to them
          or (2) providing infrastructure to support them

Segment                      Characteristics and Dynamics                                 Key Companies
              Stakeholder owned companies and public companies with different but
              oftentimes complementary goals                                             SureScripts
              Clinical transactions (lab, Rx and referrals) are the focus as growth in   RxHub
              medical claims processing stalls in a mature market                        ProxyMed
              Cross-connections and alliances tend to evolve over time within the        WebMD
              segment                                                                    NDCHealth
              Technical and business standards are key conversations                     MedPlus
              The Internet has a commoditizing influence
              Large companies serving as prime contractors for major healthcare          IBM and HealthLink
              projects                                                                   Accenture and CGEM
Integrators   Global healthcare experience                                               EDS
              Increased consolidation among major players                                CSC
              Increased investment in healthcare projects                                Perot
                                                                                         Initiate (MPI)
              Tools companies are in the center of the evolving RHIO market
                                                                                         Quovadx (Integration
              Providers of structured clinical content play a more important role as     engine)
  Tools       health outcomes are part of pay-for-performance initiatives
                                                                                         First Databank (Content
              Speech-to-text has improved to become a part of many clinical              database)
                                                                                         ScanSoft (Speech-to-text

                                             Circle Square Inc. Confidential
    Technology Adoption Life Cycle segments adopters by
    characteristic buying habits; it also models adoption over time

           Visionaries            Conservatives                                                        Products get stuck at the entrance to the
Enthusiasts                                     Laggards                                               mainstream market
                                                                                                       The early market is willing to put lots of effort
           Large Practice EMR                                                                          into making a product work
                                                                                                       The mainstream market requires a whole
          Small                                                                                        product
   Practice EMR                                                                                         –    Does 100% of the job
                                                                                                        –    Has a compelling value proposition
                                                                                                       Large practice EMR has crossed the chasm
                                      Mainstream Market                                                into the mainstream
                                                                                                       Small practice EMR and ERx are getting
                       Chasm                                                                           prepared for the crossing

     Category               %                                                   Characteristics                                                    Buy For

Enthusiasts                 2.5       Venturesome – Cosmopolite – Dispersed contacts – Tolerance for uncertainty                                  Technology

Visionaries                13.5       Opinion leaders – Integrated into social system – Judicious and successful use                               Product

Pragmatists                34.0       Deliberate – Interconnected with peers – Just ahead of average                                                Market

Conservatives              34.0       Skeptical – Driven by economics and social norms – Low tolerance for uncertainty                            Company

Laggards                   16.0       Traditional – Relatively isolated – Suspicious – Precarious economic situation
Sources: Moore, Crossing the Chasm, Rogers; Diffusion of
Innovations; Gladwell, The Tippling Point                            Circle Square Inc. Confidential

1. Government                                                   4. Maturing whole products
    –   CMS and MMA: ERx standards and                                    –       130,000 physicians plus extenders
        DOQ-IT                                                            –       Large practice tornado
    –   NHIN and RHIOs: community pilots                                  –       Keys to adoption in smaller practices
        and big tech involvement                                                   •   Right equipment
    –   State initiatives and additional                                           •   Integration with PMS, PBM, retail
        proposed federal legislation                                               •   Personalization: e.g., favorites
2. Other payers: health plans, PBMs,                                               •   Medication history
   large employers                                                                 •   Focus on workflow
    –   ERx projects                                            5. Consumer health
    –   Pay for performance projects                                      –       PHR appeal to health plans, hospitals,
    –   Clinical history                                                          pharmacies, consumer orgs, techs,
                                                                                  physician orgs, manufacturers
3. Other healthcare stakeholders                                          –       E-visit technology emerging as PHR
    –   Providers: physician orgs and hospitals                                   extension and integration
         •   EMR standards                                                –       Patient compliance and persistence
         •   Clinical integration and smaller                                     support is core value
             practices model
         •   ED links medication history
    –   Pharmacies
         •   Medication history
         •   MTMS

                                                Circle Square Inc. Confidential
Leveraging ERx, EMR and PHR technologies to enable RHIO
medication management objectives (patient compliance and
persistence programs, medication history, e-Prescribing)

  Physicians rate medication history and patient compliance functions highest among
  reasons to adopt clinical solutions
  All healthcare segments moving toward consumer health and patient compliance and
  persistence (health plans, retailers, leading technology companies)
  Focus on chronic conditions: hypertension, diabetes, CHF, asthma, depression, etc.
  fueled by obesity data
  HIT allows for patient interventions throughout the medication cycle: at initial
  prescription; at first fill and refill; at renewal authorization
  HIT allows for combining ERx, EMR and PHR technologies into a coordinated
  program of patient education and reminders easily integrated into current efforts
  HIT allows for collaboration throughout the community of care between patients and
  care givers: in the practice, at the pharmacy, with the health plan, in the hospital and
  at home
  Future HIT opportunities include the Continuity of Care Record (CCR) which enables
  a dramatic increase in clinical record sharing for outcomes research and care

                                    Circle Square Inc. Confidential
The whole product concept for electronic prescribing
outlines those elements attractive to the mainstream buyer
and will facilitate Medication Management over time

                        Integration with                               True connectivity to
                       existing systems                               community pharmacy
                       (PMS and EMR)                                   enabling renewals

     Support for                                                                        Integrated physician
 implementation and                                                                     practice to pharmacy
      ongoing                                                                                  workflow
                                           Core ERx
                                           New Scripts
Clinical alerting (drug-
                                           & Renewals                                       Training for
        to-drug)                                                                       professionals and staff

                                                                      Connectivity to PBMs
                    Broadband and WiFi                                 for formulary and
                                                                       medication history

                                           Circle Square Inc. Confidential

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