Periodic Reporting for period 1 - DigiPharm (Value-based Healthcare Platform Secured with Blockchain Technology)
Reporting period: 2019-12-01 to 2020-04-30
Healthcare systems today are under pressure to spend their resources efficiently. These financing challenges shift the focus from the traditional “fee-for-service” to the “fee-for-performance” model. This concept, which is also referred to as “value-based healthcare,” is characterised by improved health outcomes, relative to monetised inputs with provider-centred healthcare, management approach, and increasing cost-effectiveness. Value-based healthcare requires performance-based payment systems, what looks at health outcomes of treatment relative to cost.
The market-shift toward value-based care presents unprecedented opportunities for all stakeholders. However, the transition is hindered by the following:
1. Inadequate infrastructure and limited tools to cope with the administrative burden and support the movement to the new types of payments.
2. Pricing is a sensitive topic, especially for pharmaceutical companies and device manufacturers. A value-based approach requires increased security in contracting and data sharing.
3. Some of the key players resist against the implementation of new tools and systems, as the “old” fee-for-service” (FFS) payment structure is highly profitable for them.
4. Value-based healthcare requires accurate data to track patient progress and treatment outcomes and assumes sharing real-world evidence to evaluate performances.
The objective of the SME Phase-1 feasibility study was to evaluate the feasibility of the solution and provide a detailed plan for further development and commercialisation.
The market-shift toward value-based care presents unprecedented opportunities for all stakeholders. However, the transition is hindered by the following:
1. Inadequate infrastructure and limited tools to cope with the administrative burden and support the movement to the new types of payments.
2. Pricing is a sensitive topic, especially for pharmaceutical companies and device manufacturers. A value-based approach requires increased security in contracting and data sharing.
3. Some of the key players resist against the implementation of new tools and systems, as the “old” fee-for-service” (FFS) payment structure is highly profitable for them.
4. Value-based healthcare requires accurate data to track patient progress and treatment outcomes and assumes sharing real-world evidence to evaluate performances.
The objective of the SME Phase-1 feasibility study was to evaluate the feasibility of the solution and provide a detailed plan for further development and commercialisation.
During the feasibility assessment, we have performed the following activities:
a) Market analysis. Conclusions: Based on the analysis of the European and global markets, we have decided to deploy a multi-staged market introduction, started with four bellwether counties: Netherlands, Denmark, Estonia and Austria.
b) Key player profiling. Conclusion: we explored the relationship network between healthcare players in the targets countries, defined the main transaction models, and the value chains. We have built the value proposition canvases for each player to conclude the best approach to address them. These customer profiles serve as the basis for the use of case ranking and customer segmentation.
c) Detailed competitor analysis and identification of key competitors. Conclusion. The strength of North American competitors is decisive. At present, initiatives of local significance and state development experiments are known in Europe. Competitors usually address one certain issue (i.e. Real-World Evidence database, contract management platforms, and incentive tools).
Most of the key players in healthcare contracting management market are from the US, which is explained by the growing demand from the providers, mainly from the field of healthcare insurance (major representatives of the market in the US: Apttus Corporation, CobbleStone Software, Concord Contract Logix Llc., Coupa Software Inc., Determine Inc., Icertis, nThrive Inc., Optum Inc., ScienceSoft).
d) Defining further development needs. Based on the current status of the innovation and the market analysis, we have identified the following technological and methodological challenges:
• The market introduction can be hindered by the lack of data standards, which means that blockchain projects are being worked on in siloes.
• Technological difficulties in motivating (incentivise) healthcare stakeholders in the participation of the blockchain-based approach.
• Scalability issue of data storage on a blockchain.
Besides the further enhancement of the available software modules, we have defined the following additional development tasks to meet the above detailed challenges:
• Faster Healthcare Interoperability Resources (FHIR): to set the groundwork for a third-party developer ecosystem to flourish.
• Define shared data standards: necessary for many aspects of blockchain technology (e.g. smart contracts) to work.
• New cryptography techniques: allow computation to be performed on data being encrypted (e.g. zero-knowledge proofs, homomorphic encryption, and secure multi-party computation).
• Better data access models: these models can incentivise patients, hospitals and other providers’ monetise their digital assets, for example, the data of their patients.
• Scalability and sensitivity: blockchain projects are currently elaborating ways to mix on-chain solutions with off-chain ones. (On-chain solution: recorded on a distributed ledger itself; off-chain solution: actions that occur off of the ledger.) These development tasks will be elaborated in the EIC Accelerator Page 2 project proposal.
e) Commercialisation plan update with risk analysis.
Conclusions: The market entry process is designed as B2B sales, primarily targeting pharmaceutical companies and providers. Initially, direct sales are planned, and later the involvement of distributors. Based on the results of our study, there are no commercial or technological barriers to market introduction. We have defined a business goal to achieve a market share of a minimum of 15% in the first wave target markets relative to all competitor’s solution by 2026. During the feasibility study, we have updated the risk analysis with any earlier unknown or new commercial or technological risks that significantly impede or hinder market entry. We have added the possible COVID-19 implications and its effect on the project execution and the solution launch in healthcare. We have identified the target markets where our analysis shows that the highest return can be achieved with the least investment, and we have presented the local information essential for planning. Based on these, it is recommended to develop the product further and prepare for the EIC Accelerator proposal program.
a) Market analysis. Conclusions: Based on the analysis of the European and global markets, we have decided to deploy a multi-staged market introduction, started with four bellwether counties: Netherlands, Denmark, Estonia and Austria.
b) Key player profiling. Conclusion: we explored the relationship network between healthcare players in the targets countries, defined the main transaction models, and the value chains. We have built the value proposition canvases for each player to conclude the best approach to address them. These customer profiles serve as the basis for the use of case ranking and customer segmentation.
c) Detailed competitor analysis and identification of key competitors. Conclusion. The strength of North American competitors is decisive. At present, initiatives of local significance and state development experiments are known in Europe. Competitors usually address one certain issue (i.e. Real-World Evidence database, contract management platforms, and incentive tools).
Most of the key players in healthcare contracting management market are from the US, which is explained by the growing demand from the providers, mainly from the field of healthcare insurance (major representatives of the market in the US: Apttus Corporation, CobbleStone Software, Concord Contract Logix Llc., Coupa Software Inc., Determine Inc., Icertis, nThrive Inc., Optum Inc., ScienceSoft).
d) Defining further development needs. Based on the current status of the innovation and the market analysis, we have identified the following technological and methodological challenges:
• The market introduction can be hindered by the lack of data standards, which means that blockchain projects are being worked on in siloes.
• Technological difficulties in motivating (incentivise) healthcare stakeholders in the participation of the blockchain-based approach.
• Scalability issue of data storage on a blockchain.
Besides the further enhancement of the available software modules, we have defined the following additional development tasks to meet the above detailed challenges:
• Faster Healthcare Interoperability Resources (FHIR): to set the groundwork for a third-party developer ecosystem to flourish.
• Define shared data standards: necessary for many aspects of blockchain technology (e.g. smart contracts) to work.
• New cryptography techniques: allow computation to be performed on data being encrypted (e.g. zero-knowledge proofs, homomorphic encryption, and secure multi-party computation).
• Better data access models: these models can incentivise patients, hospitals and other providers’ monetise their digital assets, for example, the data of their patients.
• Scalability and sensitivity: blockchain projects are currently elaborating ways to mix on-chain solutions with off-chain ones. (On-chain solution: recorded on a distributed ledger itself; off-chain solution: actions that occur off of the ledger.) These development tasks will be elaborated in the EIC Accelerator Page 2 project proposal.
e) Commercialisation plan update with risk analysis.
Conclusions: The market entry process is designed as B2B sales, primarily targeting pharmaceutical companies and providers. Initially, direct sales are planned, and later the involvement of distributors. Based on the results of our study, there are no commercial or technological barriers to market introduction. We have defined a business goal to achieve a market share of a minimum of 15% in the first wave target markets relative to all competitor’s solution by 2026. During the feasibility study, we have updated the risk analysis with any earlier unknown or new commercial or technological risks that significantly impede or hinder market entry. We have added the possible COVID-19 implications and its effect on the project execution and the solution launch in healthcare. We have identified the target markets where our analysis shows that the highest return can be achieved with the least investment, and we have presented the local information essential for planning. Based on these, it is recommended to develop the product further and prepare for the EIC Accelerator proposal program.
The fully developed DigiPharm system unique selling points are as follows:
1) Independent value-based collaboration platform for all major stakeholders in the healthcare
2) Offer data integrity (via immutable ledger and audibility)
3) Automation in contracting processes (smart contracts), automated settlement and invoicing mechanisms, accelerated payments and decision-making
4) Offering access to a live Real World Evidence database
5) Security and enhanced privacy (cryptography and private permissioned blockchains)
6) Digital identities and bespoke integration engines.
DigiPharm’s socio-economic implications have been defined in a PESTEL analysis with the following conclusions:
a) Ageing societies exert significant cost pressure on healthcare with high unmet medical needs and multiple chronic diseases, and a whole range of providers with poor coordination.
b) There is an increasing need for data sharing among provider/delivery organisations and healthcare professionals (because of citizens’ mobility), also driven by the following factors:
- Vast differences in lifespan and quality of life between countries in the EU
- Ageing populations (more health problems)
- Persistent health inequalities in several countries
- Exponentially rising healthcare costs in later stages of life
- High expectations of the patients;
- The resistance of certain HC stakeholders to VBC.
DigiPharm’s value-based approach may contribute to addressing most of the above listed socio-economic implications.
1) Independent value-based collaboration platform for all major stakeholders in the healthcare
2) Offer data integrity (via immutable ledger and audibility)
3) Automation in contracting processes (smart contracts), automated settlement and invoicing mechanisms, accelerated payments and decision-making
4) Offering access to a live Real World Evidence database
5) Security and enhanced privacy (cryptography and private permissioned blockchains)
6) Digital identities and bespoke integration engines.
DigiPharm’s socio-economic implications have been defined in a PESTEL analysis with the following conclusions:
a) Ageing societies exert significant cost pressure on healthcare with high unmet medical needs and multiple chronic diseases, and a whole range of providers with poor coordination.
b) There is an increasing need for data sharing among provider/delivery organisations and healthcare professionals (because of citizens’ mobility), also driven by the following factors:
- Vast differences in lifespan and quality of life between countries in the EU
- Ageing populations (more health problems)
- Persistent health inequalities in several countries
- Exponentially rising healthcare costs in later stages of life
- High expectations of the patients;
- The resistance of certain HC stakeholders to VBC.
DigiPharm’s value-based approach may contribute to addressing most of the above listed socio-economic implications.