Whats Really Going On? or PHRs, Platforms, & Consumer Trends By: John Moore, Managing Director John@ChilmarkResearch.com 1/12/09 1 Copyright: Chilmark Research For internal use only, not for distribution

Three Take-Aways What is State of PHR Market Today Advent of Health Clouds Implications Trajectory Drivers Challenges What to Watch 1/12/09 2 Copyright: Chilmark Research For internal use only, not for distribution

While Consumers Increasingly Go Online for Health Info Source: Pew Research 2006 74% of all adults are online 1/12/09 3 Copyright: Chilmark Research For internal use only, not for distribution

Few Manage Their Health Records That Way Source: Forrester Research Q208 Survey n= 5,242 Today, Meager 3.3% iManage PHI 1/12/09 4 Copyright: Chilmark Research For internal use only, not for distribution

iPHR Adoption is Widely Dispersed Entity Type No. of PHR Features Users Platform Kaiser- Provider 2.5M MyChart EMR portal w/email & transaction services Permanente Portability w/HealthVault Veterans Admin Provider 650K RYO (VistA) EMR portal, Not portable WebMD ISV 500K WebMD Client defined, claims-based HRA & alerts Rarely portable Aetna Payer ~250K ActiveHealth Focus on HRA, DM, aggressive build-out Portability w/HealthVault United Health Grp Payer ~200K HealthAtoZ Claims-based, part of new OptumHealth Div. Portability w/HealthVault Cleveland Clinic Provider 100K MyChart Similar to KP Portability w/Google BIDMC Provider 40K RYO Aging portal w/email Portability w/Google & HealthVault All Others Mix 3M Countless Highly variable, most 5 simple 1/12/09 Copyright: Chilmark Research templates Little portability For internal use only, not for distribution

iPHR Market has Moved to B2B Model High Barriers to Entry in Provider Market Entrenched EMR Employer & Health Plan Markets Similar Consumer Plays Often Legacy Not actively supported B2C is Road to Ruin for PHR Vendors 1/12/09 6 Copyright: Chilmark Research For internal use only, not for distribution

Stand-Alone, Consumer PHI Apps: Manage Health nt e nt Co Attributes Rating Notes Data Source NA Self-entry, Fax, Cumbersome, Current/Trusted? Control High Owned & managed by consumer Interoperability Medium Standards adoption increasing (CCR dominant) Portability Medium Highly variable across vendors Tools Modest Highly variable across vendors Personalization Low Generic, simplistic solutions dominate 1/12/09 7 Copyright: Chilmark Research For internal use only, not for distribution Adoption Low Self-entry key detriment, Highly motivated only

Employer & Health Plan Sponsored Platforms: Manage Risks, Lower Costs a nt at te sD n Co m lai C s ol A HR To Attributes Rating Notes Data Source(s) NA Claims, PBM & HRA, Partial View Control Low Sponsor controlled Interoperability Medium Potential there, more talk than action Portability Low Tethered to employer or insurer Tools Good Significant activity, behavioral change Personalization High Copyright: Chilmark Research claims Leverage HRA & data 1/12/09 8 For internal use only, not for distribution Adoption Medium Trust, Incentives often required

Provider Sponsored Platforms: Consumer Retention nt e ta nt a Co lD ca i lin C Attributes Rating Notes Data Source(s) NA EMR, Gold Standard, Myopic Control Low Portal to host EMR Interoperability Low Disparate systems, competitive pressures Portability Low Tethered to EMR Tools Medium Communication for engagement/retention Personalization Low-Med.Copyright: Chilmark poor job, some exceptions Most do Research 1/12/09 9 For internal use only, not for distribution Adoption Variable Perceived value?

Utility Service Model for PHI: Creating an Ecosystem ns s ce io ur at So ic pl ta Ap Da Secure Repository Attributes Potential Notes Data Source(s) NA Virtually any pertinent data source Control High Strong consumer control of data Interoperability High Adoption of Open Systems and standards Portability Medium Still under development Tools Very Good Multiple tools/widgets, communications??? Personalization High Copyright: Chilmark Research the Farther down road 1/12/09 10 For internal use only, not for distribution Adoption High Perceived value?

Utility Service Model for PHI: A Health Cloud Ecosystem ns s ce io ur at So ic pl ta Ap Da Secure Repository Attributes Potential Notes Data Source(s) NA Virtually any pertinent data source Control High Strong consumer control of data Interoperability High Adoption of Open Systems and standards Portability Medium Still under development Tools Very Good Multiple tools/widgets, communications??? Personalization High Copyright: Chilmark Research the Farther down road 1/12/09 11 For internal use only, not for distribution Adoption High Perceived value?

Personal Health Platforms (PHP): Model & Attributes Business Model (+) (-) PHP Dossia Lg. Employer Sponsors Instantaneous user base of Poor partner strategy = over 8M+ employees ecosystem non-existent Initial joiners fee (founding mbrs, $1.5M ea.) Built on open, Indivo Health Lack of traction, slow uptake platform by employers Annual fee based on number of subscribing Future biometrics, via Continua Portability of records? employees Free to employees Google Attract more visitors to Clean, easy to use interface Limited to structured data Google properties Good consumer controlled Limited to CCR standard Health Ubiquitous in all aspects of process for data collection Small internal development consumers life Reasonable ecosystem grp (commitment) to build out Have not ruled out ads in platform Future biometrics, via Continua future TBD - ability to attract Free to consumer consumers Microsoft Similar to Googles Largest & most complete Cumbersome, messy ecosystem (>14,000 SDK interface Become base for MSN HealthVault downloads) Health Mish-mash of partner apps Largest investment of Extend desktop OS to Ulterior motives? (no resources health e.g., Connection support for Apple OS) Center Unique biometric capabilities TBD - ability to attract Advertising revenue via Free to consumer consumers health search 1/12/09 12 Copyright: Chilmark Research For internal use only, not for distribution

Dossias Ecosystem: Where is It? Date Sources 3rd Party Apps/Services Only WebMD Live Today 1/12/09 13 Copyright: Chilmark Research For internal use only, not for distribution

Googles Ecosystem: Stalled Date Sources 3rd Party Apps/Services Slow Progress Recruiting Data Sources 1/12/09 14 Copyright: Chilmark Research For internal use only, not for distribution

HealthVaults Ecosystem: Expanding Date Sources 3rd Party Apps/ Services Excellent Partner Recruitment 1/12/09 15 Copyright: Chilmark Research For internal use only, not for distribution

Engaging the Consumer: Google Health vs MS-HealthVault Consumer Consumer ISV1 ISV3 ISV5 ISV2 ISV4 ISV1 ISV3 ISV5 ISV2 ISV4 Models will Significantly Affect Adoption 1/12/09 16 Copyright: Chilmark Research For internal use only, not for distribution

Listening-In: Early Reports on PHPs Few Click-thrus from HealthVault But good enterprise visibility Connection Center gaining traction Over 20K users of AHA widget for BP monitoring Highly structured, significant resources, political Grumblings: Wheres the marketing? Significant Traffic from Google ~4k/day seen by partner ISV Loosely structured, few resources Are they serious about healthcare? Dossia Remains an Enigma Slow roll-out, only one ISV live, APIs to build ecosystem? No new members/employers Wheres the value? 1/12/09 17 Copyright: Chilmark Research For internal use only, not for distribution

Looking to the Future for PHPs HealthVault No Longer Standalone Property Embedded in MSNHealth Maintains strong clinical underpinnings Google Focuses on Wellness Healthy consumer centric Turns to ad-rev model for support Ads outside private domain Dossia Slowly Fades New members slow to appear Governance challenges Not an influencer in the market Fourth Entity Appears Many circling today 1/12/09 18 Copyright: Chilmark Research For internal use only, not for distribution

Is the iPhone a Platform? Leading Mobile Web Platform 46% NA mkt share 32% WW mkt share Tremendous Momentum Over 10K Apps Over 450 in Health & Wellness Technically, Not a Cloud Platform but Becoming de facto platform 1/12/09 19 Copyright: Chilmark Research For internal use only, not for distribution

Evolution Accelerates PHR Adoption Adoption High User Value Proposition Gen 4: Personal, Users Actionable, & (Millions) Connected 80 Gen 3: Data Aggregation (Health Clouds Form) Gen 2: Online 40 20 Gen 1: Isolated Low Time 2000 2003 1992 2008 2011 (Online) 1/12/09 20 Copyright: Chilmark Research For internal use only, not for distribution

Generation 4: Convergence Personal, Actionable, Connected Value: About Me, By Me, With Me, For Me, Because of Me 1/12/09 21 Copyright: Chilmark Research For internal use only, not for distribution

Moving Ahead: Adoption Challenges Remain Data Liquidity EMR adoption Standards Adoption Policies & Incentives Portability, Privacy, Liability Trust Health Plan, Employer, 3rd Party Consumer Apathy/Indifference Education Incentives Solution Capabilities Immature, Disparate 1/12/09 22 Copyright: Chilmark Research For internal use only, not for distribution

Drivers to Overcome Challenges Accelerating, Employer-led Initiatives Employees Financial Skin Accelerating IT Adoption Among Providers Incentives, e.g., eVisits, eRx Consumerism Entering Healthcare Visibility, Education New Consumer-centric Technologies & Tools Delivering Radically New Capabilities Disintermediation of Care Retail Clinics, Med Tourism, etc. Providers Becoming Consumer-Savvy 1/12/09 23 Copyright: Chilmark Research For internal use only, not for distribution

What to Watch Traction of Platform Plays Data Sources (agreements) E.g., Cleveland-Google, KP-MS Consumer Adoption Which sub-groups adopt Developer Adoption What are popular apps/services Market Consolidation Rationalization & Acquisitions New players entering Employer Successes Demonstrable ROI All Things mHealth Smartphones App Ecosystems Biometrics + Smartphone 1/12/09 24 Copyright: Chilmark Research For internal use only, not for distribution

Final Thoughts Privacy is a Ruse Value is the Metric Most PHRs are Garbage Time to Kill PHR Term Dated, confusing, and not reflective of consumer needs Govt. Sponsored RHIOs & NHIN are Folly Self-forming Clouds rain on parade HIT Stimulus may be Wet Cement Difficult to chip-out later 1/12/09 25 Copyright: Chilmark Research For internal use only, not for distribution

www.ChilmarkResearch.com 5 JFK St., Suite 404 Cambridge, MA 02138 1/12/09 26 Copyright: Chilmark Research For internal use only, not for distribution