Panel 1: What are the Unmet Needs of the Providers? Panel 2: How Will Payment and Insurance Changes Affect Healthcare Delivery? Panel 3: Early Business Partners for Young HealthTech Companies Panel 4: How is Mobile Health Changing Aging at Home?

1. What are the Unmet Needs of the Providers?
BRAD PERKINS (Vanguard Health  $6B system acquired by Tenet)
Tenet overwhelmed with change process underfoot
Wholesale  retail business
Volume based fee for service  value based care
“Enormously dependent on entrepreneurs to help with the transition”
“All physicians in each of the 15-20 large specialty lines are in non-sustainable practice models.
Services will not be able to be delivered at a competitive cost structure without radical redesign. If entrepreneurs can ride the wave of the transition from volume to value there’s a
great deal of upside.”
MOLLY COYE (UCLA)
May well be only 20-30 systems that survive, Stanford among them
Magnifying glass on performance: overpriced with variable quality and satisfaction (to put it politely)
What is earned is used to fund the research
Real opportunity is in bundled pmts and popn health: bumper cars phenomenon (patients get tossed
from specialist to specialist)
1. Make the process smoother and more coordinated – money here and many companies here
2. eReferral – have a system with template, asynchronous emails from PCP to
specialist/subspecialist to remove the need to refer. This allows PCP’s to handle more. Mayo
has done 10k of these. LA County has done 80% of referrals this way. Delight customer and
providers.
AMIR DAN RUBIN (Stanford Hospitals & Clinics)
1700 hospitals and physicians, ACO and Medicare Advantage arrangements… no longer sees itself as a
tertiary care center
80% of mergers won’t add value (already saw that with the first iteration of healthcare reform)
JOHN MATTISON (Kaiser)
Intense collaboration opportunity
Docs are facing:
1. Massive accelerating change
2. Data stream
3. Behavioral economics (not taught in medical school)
Need visualization tools to support:
1. Provider/patient discussions
2. Personal/patient social networks
3. Patient personas
Need “video dial tone” for frictionless, on-demand collaboration
Rich: “Run, run, jump” to work with and scale early stage companies. Test in one setting in Dignity and
set them against clinical and quality goals. Then the second run turns the dynamics on its head, but held
to same clinical and quality goals.
Amir: “Work with whomever you can work with where you can get real-world demonstrations.”

2. Molly: “Free those of us who are trapped in enterprise organizations. There hasn’t been a substantive,
large offering in the cloud that a health system could buy. The carrying cost as an operating expense
cost easily half of what it costs to install the system in the beginning. Every single thing that we are
interested in doing from an innovation point of view require an HER interface. We need the big hairy
impossible goals of getting the data to flow to health plan, the patient, the employer.”
Amir: “All of these systems have built their own data warehouses. Epic rolling out an API… this is
coming. But this has been an excuse and hasn’t been the REAL problem.”
John: “There are 3 markets we’re addressing: 1 - fully autonomous patient data streams, 2 - enterpriselevel integrations so the technology is an enabler to take friction out, 3 - the hybrid between to motivate
healthcare behaviors. How do you safely integrate a consumer interface with a provider? The triage of
streams of data is going to be complicated. Will have trend-based outlier that are escalated to a human,
everything else gets triaged to a decision support/AI system. We need to know where data has been
because all data is not equal.”
Brad: “Built 5 ACO’s and began to cannibalize own volume-based business. Then we sold the company.
There’s a really important lesson in there in terms of the level of the challenge. The people inside
government want to do a good job designing rules without an understanding of the capital markets
structure. The people inside the systems don’t know what the structure looks like. There’s a very
narrow flight path to get (Vanguard) on the other side of the ditch. There’s a whole bunch of money
used to making money without working very hard. There’s a generation of leaders who aren’t willing to
work.”
Rich: “Shared Clarity is trying to shine a light on the medical device industry to understand the impact of
Stent A vs. Stent B on readmissions rate. We’re partnering with Optum and other health systems.
Brilliant stuff that we hope every physician wants to know. That confronts a tremendous amount of
history and to overcome that requires new leadership and new business models that show value in 6
months but also today – in the cost of purchasing.”
John: “A lot of what is needed to motivate change is developing a culture of a person-centric view of the
world.
Molly: “You have to create an environment where physicians feel relief when they join you. Provide
acceptable income stability. If you make your physicians really happy and you make your patients really
healthy, you are going to win.”
Amir: “We’re going to be first in doing these innovations. We’re doing whole genome sequencing.
We’re doing stem cells. We don’t have to be a third of the market to do that. We can partner with
other leading systems to do that. Design a system, a workflow, and we need leading people to help.
That’s the journey we’re on.”
Brad: “At a service line level, we were going to standardize. We’ve done that with radiology, primary
care, critical care, etc. Then we were going to start hiring new physicians into the transformed model.
The cost structure to services models is not biopharm-like (where 60% of opex is R&D). So we invested
in a later stage VC fund. Heritage Fund constitutes 10% of the systems of the US. Making an investment
in that structure enabled us to get high volume of deal flow but remove the cost from operating
expenses.”

3. Rich: “Think hard about a first customer being a standalone hospital. Make sure your first customers are
integrated into something larger.”
Molly: “I think we have a good model in the VA with chronic disease. Hospitals were closed and primary
care centers opened. Many of us are on the same pathway. If you really want to disrupt things,
workflow gets thrown out the window. Something that used to be treated in the clinic is now being
handled by the patient in their home. This is Henry Ford of healthcare. Re-engineer the process of
production.”
Amir: “Decide what your future model is and then go do it. We’re doing virtual care in San Diego with
Qualcomm. How exactly this works, we don’t know, but we partnered with an innovative company.”
John: “Having a deep recognition within large existing organizations that doing the right thing for the
right things sake is most important. Then get the business considerations in place. We’re going to need
to collaborate as consortiums of care providers.”
Brad: “Build solutions for Moms – the Chief Health Officer for families. Get radically customer-centric.”
John: “80% of primary care could be self-service. We’re going to find ourselves with excess capacity.”
John: “Vast amount of research will be in silico and in vitro by 2020. RCT’s will still have value for
confirming prospective theses, but the majority will be simulated with big data.”
Molly: “75% of Americans nearing retirement have less than $30k saved, 1/3 of households have no
retirement savings. We cannot use the same ratio of physicians. Think of what solves problems
upstream and early. Lots of baby boomers won’t be able to afford any of the things being talked about.”
John: “Don’t rely on the democratization of technology to raise all boats. Read George Packard’s book.
We need to think about the unemployment and the models of how purpose is provided to people
disintermediated by innovation.”
Best Advice for Startups:
Rich: It’s hard work.
Brad: Bring whole solutions and not just the technology but the ability to work with doctors on
the ground to transform the way they practice. Make an intentional decision about whether
you’re going to bet with or against incumbents.
Molly: Sympathetic to companies that don’t approach a system. Talking and trying to find ways
to be in with circles of large systems of health plans.
Amir: Understand several large considerations. Privacy. These are NYTimes front page
“distinctions.” If you’re collecting external data, can it really get EMR integrated? Think about
from a liability perspective if that didn’t work. Process and incentives. Appreciate what it would
take to implement in a system and think about how you can help solve that. There might be
different ways to do pilots. What’s the business model for the provider?
John: Make that better experience for Mom. Vet early and often for enterprise solutions.

4. How Will Payment and Insurance Changes Affect Healthcare Delivery?
KEN YALE (ActiveHealth Management)
Started co in the 90’s to mine the data
Insurance is going to expand on the wholesale side
33% of Aetna’s revenue comes from this market
BRADLEY FLUEGEL (Walgreens)
Delivering low cost care is a trend that is happening
Wants to play at the bottom of the pyramid in wellness
A role to play via the stable of products: looking at med adherence and chronic conditions (4
drugstore visits/month)
GORDON NORMAN (xG Health Solutions)
Overhanging threat that we don’t have forever to get the new payment models right
GLENN HIBLER (Medical Home Exchange)
Get data that’s relevant to the patient
Educate the patient on better care
Help physician understand the costs involved in various procedures
SEAN PENWELL (SEECHANGE HEALTH)
Focus on the explosion of chronic disease
Take ownership of health via financial incentives
Brad: “All of 160,000 benefit taking employees will go into a private exchange in January. The exchange
is funded by employers and employees. Interested in staying in the benefits business. Create a
marketplace to encourage carriers to keep their prices down. Provide more choice to consumers. If
public exchanges are functional, more employers will view this as an option. Important distinction:
outsourcing the benefits, not the care. We’re still engaged in the care process.”
Gordon: “Understanding the leadership, culture, work processes, level of engagement, performance
against metrics, etc is not easy work. There are no plug and play cookie cutter solutions. There are
room for different approaches. Most people can’t merge payer and clinical data to get a single view.
This is the worldview of a Kaiser doc. But that is very difficult to do for Main Street. Want to make
changes and measure impact. It’s a long haul – a lifestyle – a commitment.”
Ken: “We monitor and do analytics on our own operations. We have performance metrics that we must
maintain to get paid or we must give the money back. It’s about putting the incentives in and making
the care management real at the point of care.”
Glenn: “Give the physicians upside in the discussions and interactions with physicians. We’re
independent and we’re representing the group that’s funding the care. It’s how you show data to the
physician in their day to day working, plus enabling them to get paid more. Make 50-100% more by
having a direct relationship with the payer. Physicians have a different outlook of what’s happening in
the marketplace and how they’re getting treated.”

5. Sean: “There’s a small subsegment that drives savings by improving BMI and cholesterol. We have to
focus on the analytics and improving health. If it’s incentives, that’s great. If we can figure out a better
way that’s cost effective, then we should look at those options.”
Brad: “The primary care physician is being disrupted. More and more will be pushed down to lower
level personnel in the healthcare system. More will be done on own. Theranos is doing 1,000 lab tests
with one drop of blood and will charge half of what the government can pay. That’s the kind of thing
that works. We’ll scale it across the network. I think all the innovation is trying to make all these things
easier, cheaper, more convenient. 6.5M people everyday go through one of our stores as part of their
healthcare journey.”
Ken: “You always have the problem of churn when the employer goes from one payer to another.
There’s a huge incentive to have the employer maintain that function but where the real opportunity
lays is with the individual. All of a sudden the risk being pushed down to the individual. All the data in
the world doesn’t matter if it’s not put in the right place at the right time.”
Sean: “The missing component to price transparency is the incentive piece.”
Brad: “Coming at this from the perspective of retail, we’ve spent decades figuring out how to get people
to buy more stuff. There’s a science around some of that. The thing that we sometimes do is we tend
to think about how we push without taking it from the individual’s perspective.”
Gordon: “Having a third party clean the data and map it to find the insight is what’s missing. Very few of
us have the insight we need, yet we’re awash in data. I worry about the degree of carve out that we
have across systems. Yet the unit transaction cost is what we ought to be worried about. We’ve moved
towards using choice as a proxy for quality. You’ve got a choice to escape when you have bad quality
and good luck with the next choice.”
Sean: “If you’re passionate about improving health, you’ll find the channels for your product. You’ll find
your way.”
Glenn: “Most of the money in healthcare is spent on administrative responsibilities and paying claims.
We asked, what could be our cost to provide an ROI back to a customer? Along the physician side we
sat down and talked about what would be needed to pay attention to the data. As far as getting our
first customer, it was a lot of calling, networking, and a lot of things of that nature. We started focused
solely on the medical home but since we have such a great platform, we’ve been able to create other
partnerships.”
Gordon: “We have a lot of people coming to us that want to take the journey before their competitors
do. It’s not expensive when you consider the opportunity cost. It’s a big list and a serious journey.
Shortcuts may not and have not worked. We’ve had less trouble selling the fee structure but in many
cases providers have tried other causes and are disillusioned that it’s going to get done on the cheap.”
Brad: “When it comes to entrepreneurs, you enter with a fair amount of skepticism. You’ve seen it all
before and none of it has worked as promised. United Healthcare had more pilots than United Airlines.
Need to scale. Approach with humility. Most of the decision makers have been doing something their
entire lives. Understanding the context of payers and reimbursement dynamics will help you be
successful.”

6. Ken: “Fit is what you have to focus on. There’s regulation and reimbursement. You need to be paid for
or avoiding penalties. Don’t become a burden; be part of the organization.”
Sean: “The Blue Button initiative is very exciting. If that becomes reality, that means you as the
individual can decide who to share the data with. Build products for that possibility.”
Gordon: “Personally identifiable information should be controlled by the individual.”
Brad: “Clearly the data should be owned by the consumer. Having access to the data is great for the
individual. Without a way to interpret or understand, it’s not that helpful.”
Recommendations for entrepreneurs: what not to do
Glenn: Never give up. Don’t put yourself in a box. Continue to see where the market is going
and where you can find your customers.
Gordon: Don’t confuse tools for competencies. If you want to focus on reimbursement, get a
CPT code otherwise focus on higher quality, lower cost care.
Brad: Don’t come into a discussion without proof points for how something will work. Don’t
mistake passion for algorithm.
Ken: “When you approach an organization like Aetna, you have to have a high degree of flexibility.
Many times there are other issues. You’ll find fuller success in doing that than coming in with a fully
baked solution.”
Brad: “Administrative costs are due to the complexity of the system.

7. Early Business Partners Panel
FRANK WILLIAMS (Evolent Health)
Move away from fee for service
Put infrastructure around
Launched company two years ago
Advisory board had a great reputation in terms of understanding needs and getting in the door
Believed that using data builds confidence in the plan
RAFAEL TORRES (GE Ventures)
Healthymagination was launched 5 yrs ago for health-related thought leadership
GE wanted to put its money where its mouth is and be part of the innovation strategy
Venture unit tries to be part of the solution
There has been a reduction in the number of funds and fund size
Wants to be the leader in diagnostics, precision medicine, and devices of the future
Has a charter from the board to invest $150M/year
Themes: diagnostics, affordable medical procedures, utilization of data
KYLE AMBRESTER (athenahealth)
Birth center in San Diego  wanted value-based clinics
Trying to build a platform as a service to handle interconnectivity in the cloud (updated
once/month for free)
No license or maintenance fees
Charges a percentage of net collections
Aligns physicians to drive revenue, take workflow off their hands, reduce cycle time
Goal is for their EMR to suck the least
MARGARET LAWS (California Healthcare Foundation)
Private non-profit foundation doing $40M of grants, projects, and investments to improve
healthcare in CA
Focus on underserved (public and rural hospitals)
Access: improving specialty care via telehealth (ie: dermatology; made an investment in Direct
Dermatology which offered lowered overhead model)
Half of portfolio is still grants
Cost improvement due to readmission and poor care transitions: investment in Carein Sync
(bring technology to amplify paper processes)
Frank: “Communication critical. UPMC is a $11B system with a $5B health plan. Power in launching
their own plan. Some customers want to build their own population health tools and would prefer not
to have their own brand in the market. We’re data animals in terms of collection as much as we can. In
the case of Advisory Board, it was all about membership and the whole nature of the value system of
the organizations that we partnered with.”
Margaret: “Access is an important challenge for everyone. Safety net providers and entrepreneurs
don’t regularly encounter each other. A big part of our effort has been to enable entrepreneurs to
better understand what safety net providers need and to help safety net providers understand what
entrepreneurs can offer. So we’ve tried to help create the innovation ecosystem to bring tech and

8. services companies together in a way that responds to the needs of the biggest providers in California.
A biggest part of our screening process is what do we think can offer demonstrable improvements in
cost.”
Kyle: “At some point we want to put our own marketing dollars and sales efforts into something. I don’t
believe the system we’ve created has drawn the best engineers, artists, creators. We put our money in
our convertible note structure that allows entrepreneurs to get out of it. Because they get scaling
growth doesn’t make it any easier to surmount our other competitors.”
Frank: “The more an entrepreneur can understand a customer’s problem – deep immersion in the
problem (how they talk about it, how it manifests itself) – the better. Get a customer and help them
solve a real need. Show the impact of a tool. Not another demo or another page. Invest a lot in selling.
It’s a hard problem. Readmissions is a good example. How does the solution fall into much broader
workflow?”
Rafael: “Follow the money and get a paying customer. We interviewed companies that we failed in
partnership with. We have a pragmatic but painful approach now to working with companies. Twelve
or thirteen companies are at a Series B level and the rest of the crop (n = 36) are a little earlier. They
work together by putting the worst case scenario on the table.”
Margaret: “One of the most important things that people can do is at least have a view on how they are
differentiated. One thing people don’t do well is understand how they are differentiated.”
Frank: “Nothing creates more urgency than having another alternative. The investment community can
wait and keep you locked in a process.”
Kyle: “I have R&D and partner marketing teams that report into me. The entrepreneurs that move
things quickly stop talking to the head of BD and start talking to operations folks to build an internal
network within the organization.”
Frank: “Anticipate what the investor is going to be asking for. If you haven’t thought through the unit
economics and if you can’t get back relatively quickly, that can really slow things down. Really be ready
by the time that you have the conversation.”
Frank: “Companies that got a paying customer and did a prove case within that client and turned them
into a reference client with a working client. Those organizations are the ones that advance fastest out
of the pilot phase. Healthcare is very tough. When you get into the implementation, it’s running at
sacred cows or you’re selling into the wrong buyer.”
Margaret: “If someone comes to us and has done a small pilot; we look for other organizations that are
interested in doing paid demonstrations to understand level of interest.”
Closing thoughts:
Frank: Get the buyer nodding their head early in the process.
Rafael: Follow the money. Understand the buyer.
Kyle: Healthcare is not for the 1% entrepreneurs. Have to be all in.
Margaret: Clearly communicate what problem you’re trying to solve.

9. How is Mobile Health Changing Aging at Home?
DAVID LINDEMAN (Center for Technology and Aging)
Working with 4 UC campuses to work on telehealth, sensors and service and gaming/apps
Now focus on chronic disease management
Biggest opportunity is bringing family caregivers more into play through mobile as well as the
ways that large systems can be linked with data analytics
JODY HOLTZMAN (AARP)
$1.4B in annual revenue
Mission is to find technologies to benefit people over 50
$3.1T in consumer spending/yr - $1.6T on health specifically
Quality of services and marketing efforts are all problematic
Enabling ecosystem through pitch day; trying to get investment community to adopt longevity
economy as an investment theme
Start asking question: “What’s your strategy for people over 50?”
The greatest opportunity is not in a particular market, but in getting into the workflow and the
lifeflow
You must adopt to older people and not vice versa
JACK YOUNG (Qualcomm Ventures)
13 year old, $500M evergreen fund, digital health investments since 2007, 10 portfolio
companies
2 more investments to be announced in Q4’13
Opportunity is in who is willing to pay for what
Interested in the adoption of consumers paying for personal health/wellness (due to willingness
to pay)
DAVID WILLIAMS (Involve Care)
Really about psychology; feeling like a failure to ask for help (pride issue)
Parents don’t want to depend on their children to provide care
Distribute the work that has to be done and use social and mobile to care for each other
Build the infrastructure to care anywhere; make a flexible product to address family dynamics
MICHAEL YANG (Comcast Ventures)
14 year old VC fund investing on behalf of
Comcast has pipes into 20M homes and 2M businesses in the US
Internet and voice service provider; also home security – where future automation will happen
Comcast has a connected home thesis
Currently intrigued by hardware for seniors
Jody: “I think one of the key things is that people do want to stay connected. What’s happened is that
technologies are all about remote monitoring and then adding on connected living stuff. I think it’s the
other way – enable me to live my life and then add the monitoring layer.”
Jack: “Technology of today is designed for people 75+ except that those folks aren’t quite there
technologically. Must enable the alpha daughter and alpha son.”

10. David L: “Look across the continuum of aging. We’re talking about a heterogeneous group with formal
and informal caregiving and a rapidly changing technology environment. There are many gaps and
many opportunities. ”
David W: “Make sensors and monitoring relationship based so that parents know that you want to keep
them at home. Who will interact with the senior? Home health aids will be the #1 growing field by
2020. Will double in 6-7 years due to demand. You have to get the behavior of these aides. More
technology needs to help get data from these interactions.”
Jody: “There are dominant middleman – the agencies. There are startups that are trying to go direct to
consumer: CareLinx, Care.com. This is the last bastion of disintermediation.”
Michael: “Are you sick and therefore chronic or more healthy? Can you live independently or on an
assisted basis?”
Jody: “I do see a day when these costs will be covered.”
Michael: “We have organizations that are interfacing with seniors that haven’t historically done so. Or
we expect seniors to be able to activate and use sensors/devices/etc on a self-service basis. What will
be the tact on installation, returns, call centers?”
David W: “Right now the children are the ones who are paying. Whether it eventually becomes CMS,
that will take the longest. Today employers pay. People who are family caregivers miss 6 days of
work/year due to caregiving. Change the loss curve for employers. Employers are piloting these aging
in place platforms because they think they can reduce the number of lost days and get better
productivity on the revenue side. Employers want the ROI and get the goodwill over time. Working
capital problem for home care agencies that expect to be paid in 60 days, but aren’t seeing the checks
hit until 90-120 days.”
Jody: “Senior Link is tied into the state Medicaid program and they pay family caregivers that were
previously unpaid. The results have been that people who felt unvalued or undervalued are all of a
sudden getting a paycheck. The health outcomes have improved and the Medicaid system has saved
millions of dollars.”
Jack: “This is the first wave of these devices. The potential is huge. If you look at the watch business
globally, it’s still a $53B industry.”
David L: “Real challenge in the utilization of technologies that are perceived as being imposed upon or
observed. The key issue is not just that older adults have an issue about purchasing the technology but
that it goes to their whole social ecosystem.”
Jody: “Voice recognition will be key. Products and technologies designed specifically for the age group
are good, but the business/investment opportunity is in products that work across the age spectrum.”
Michael: “All these other things are on the fringe or haven’t gotten to mainstream customer
acquisition.”
David W: “Technology needs to remind people to use human behaviors and interactions.”

11. Jack: “Only 10% of elderly wish to remain in their homes. The cost for an alpha child to put their parent
into an assisted living facility is roughly the same as selling a time share.”
Jody: “We’ve started playing with business models that allow us to work with startups. We’re doing rev
shares with some services. We’re very conscious of our need to develop this but it’s going to take time.”
Michael: “There’s a plethora of content. People are focused on discovery and personalization. I
challenge startups to look at brute force feet on the street. There are door knockers, multi-level
marketing, all sorts of things that could be applied in this space. SEM/SEO may not be relevant if your
audience isn’t using facebook.”
Jody: “Every time we run ads in our AARP magazine, these companies get a huge lift.”
David W: “We’re in a position with Aetna where we can introductions to employers. That’s been very
helpful. An employer based distribution channel can be good but there are still trust issues. Reaching
consumers requires using channels like ADT uses.”
Michael: “I don’t think direct to consumer telemed doesn’t work. The general population is not
conditioned to seek this on an ad hoc transactional basis.”