Philips Visicu

Hospital - to - Home : Integrator

● eICU allowed a small team to monitor patients across multiple ICUs remotely
● They offered technologies for critically ill, high-risk patients and chronically ill
patients
● Various offerings by Philips included,
● Used to measure vital signs and send to
Tools for chronically ill remote providers
01
patients ● Helped in avoiding expensive long term
nursing and hospital settings
● Diagnostics and monitoring tools for
Philips INR monitoring sleep apnea
02
services ● Measuring anticoagulation levels for
prosthetic heart valves
● Tracked if patients dispensed
03 Philips Tracking device medication at the correct time and sent
electronic alerts
Accountable Care Organizations(ACO) - Pricing
● Healthcare systems which included hospitals, outpatient centers and physician groups
etc.
● Insurers pay a preset global payment to coordinate and deliver health care across
various settings
● Incentive was based on meeting quality benchmarks rather than service volume
● ACO Contracts typically included a shared savings component wherein insurer and ACO
shared any leftover funds
● It also included shared risk in which ACO partly paid for any costs excess to the global
payments
● Another emerging model was bundled payments covering all aspects of care delivery
along with efficiency and quality
● We recommend that risk sharing along with bundled payments is a good option as it will
help ACO as well as the insurer to keep a check on the expenses and not get
overburdened with the extra costs incurred
Types Of ACOs Targeted
The team developed three profiles of health systems likely to form ACOs,

● Academic System with ● Non-Profit system with ● Monopoly system in vast rural
15 hospitals and range of dominant presence in area of northwestern US state, it
clinics in highly three Midwestern states comprised 10 hospitals
competitive urban included more than 20 ● It had a insurance organization
markets hospitals close to 300000 members
● More than 20000 ● 30000 employees and generating $875 million
employees and 1200 3000 physicians ● The system had a global
physicians ● It did not have insurance payment program, single fee paid
● 450000 members in arm by insurer covering all tests and
insurance arm ● The system used treatment
generating $1 billion telemedicine services ● Total revenue generated : $3.9
● Total Revenue : $4.2 ● Total Revenue : $5.2 billion
Billion Billion
Analysis
Academic System with an Insurance arm and in non-competitive market
● Large providers have a bigger population than smaller providers. The increased population size of
large providers allows them to more effectively manage variations in service requirements and
costs and, hence manage risk better
● An ACO consisting of physician groups and hospitals generally lacks the requisite accounting,
actuarial, underwriting, and financial experience, and capability for managing risk.
● However, their most significant issue is the greater degree of variation in estimates of annual
average patient costs. An ACO must acquire and integrate data from all participating constituents
including hospitals
Services vs Technology
● Philips should offer services as revenue from healthcare segment is 11146.9 million dollars as given
in Exhibit 11 and philips annual sales revenue was 25,892 in 2014
● Intel’s was 55,870, GE’s 148,462 and siemens 90,768.
● From exhibit 15 it is clear that market of U.S. Hospitals offering “Non-Hospital” services is still
untapped to some extent
● Hence Philips should offer services to compete with Intel,GE and siemens.
Other Aspects
● From Exhibit 3, it is evident that they have a tough competition from big firms like American Well
and Care Innovations and they new GE-Intel partnership
● Intensivist sitting at the remote location and working on the eICU should be competent enough that
they are able to understand the changes while monitoring.
● Also, they will need to ensure that action is taken on time and there is no delay in it. Proper
connectivity must be ensured by the organization in order to take a step on time.