Tag: Information Technology

Business Plan For Seed Stage Telemedicine Company

December 1st, 2017 by

Two leading Silicon Valley venture capital funds were incubating a seed stage telemedicine company that proposed to leverage nurse practitioners as an alternative for certain primary care conditions. The investors sought out Health Business Group to assist in understanding the market landscape and segmenting prospective customers. We were compensated with a combination of cash and equity in the new venture.

We worked closely with the entrepreneurs and investors to:

  • Identify, profile, and estimate the size of target customer segments
  • Identify distribution partners and models, then evaluate the implications of channel partner choices by target customer segment
  • Lay out alternative pricing structures, estimate target fee ranges and variations by service type
  • Identify services, functionality and workflow components of interest to target customer segments
  • Identify criteria for conditions that could be diagnosed and treated
  • Predict the timing and rate of uptake for the offering

We developed a set of personas corresponding to the customer segments and used these to help the entrepreneurs tell the story of the market opportunity. Our work formed a key part of the business plan that was pitched to prospective Series A investors.

Ultimately the company determined that regulatory barriers were too high to proceed and the venture was dissolved.

Enterprise Pricing Strategy For Health It Vendor

December 1st, 2017 by

A health information technology company had achieved strong market penetration with hospitals, health systems and individual healthcare professionals. However, advances in technology and computer networks, consolidation of the provider market, and the company’s lack of a comprehensive pricing strategy had created challenges. The client realized that it was time to develop a more rational approach to the market and turned to Health Business Group to assist.
We developed a robust customer segmentation model based on extensive quantitative analysis of customer usage patterns, created a cross-segment pricing formula based on value realization, supported development of a plan to communicate the new approach to customers, and devised a migration path to smooth the transition for customers.

The client rolled out the model with its salesforce over a two-year period and achieved real-world success. In addition, the customer segmentation model has been used as a guide for product development, which was an unexpected but welcome byproduct of the original work.

Health plan IT systems due diligence for private equity firm

December 1st, 2017 by

A large private equity firm asked Health Business Group to assist in the commercial due diligence of a core information technology provider for health plans.

The target was a leading player with smaller health plans and was aggressively trying to gain ground with larger customers but encountering entrenched competitors. The target had a compelling offering that matched up well with competitors along the areas of benefit administration, care management and member engagement. In addition the target offered a more modern, modular system design that provided superiority in terms of performance, flexibility and cost. Health Business Group was asked to focus efforts on validating the aggressive revenue plan necessary to justify the deal terms and valuation.

We provided input into key questions upon which valuation would depend:

  • From the customer perspective, how does the target’s offering compare to other direct and indirect competitors?
  • How satisfied are existing customers? What are the key sources of satisfaction and dissatisfaction?
  • What industry trends will drive new product requirements (e.g., ICD-10, new HEDIS reporting requirements, new payment models)?
  • How do prospective customers view the target? How well-positioned is the company to move up market?
  • What is the decision-making and contracting process? Who are the decision makers and influencers? How is the process conducted? What is the timeline?
  • What are typical budgets and price points?

Based upon management meetings, industry conferences, and discussions with health plan management across marketing, operations, IT, and provider services domains, the due diligence findings showed significant upside revenue potential but a longer sales cycle than projected. The transaction was ultimately completed but at a lower valuation.

Diversification strategy for healthcare analytics vendor

December 1st, 2017 by

A client with cutting-edge technology for point-of-care clinical decision support for providers was pursuing opportunities to expand into the adjacent payer and pharmaceutical markets.

Expansion into new markets meant a whole new set of direct and indirect competitors. Health Business Group provided an in-depth perspective on the market and competitive environment for healthcare analytics across the relevant markets and helped the client understand how the market would evolve over time.

We segmented the analytics market by major customer type, estimated the size and growth of each segment, and identified the leading players in each segment. We did extensive analysis of the top 15 to 20 competitors in each major segment. This work included a detailed outline of service offerings, customer segments served, key customers, value proposition, size and growth, alliances, M&A activities, sources of data, pricing structure and levels, reputation, and strategic intent. A fact base was constructed through a combination of primary and secondary research, including company and customer interviews, industry conferences, market research, SEC filings, and analyst reports.

With a shared, in-depth understanding of the current and evolving healthcare analytics marketplace and the key players, we worked with management to develop a set of strategic and tactical implications, including business development, product development, pricing, positioning, and bundling.

The client highly valued our work product and collaborative process. Over the following year, the client was successful in expanding into new markets and was ultimately acquired by a national health plan.

Mobile strategy for clinical decision support company

December 1st, 2017 by

A leading provider of physician clinical decision support tools asked Health Business Group to assist in developing a business case for a platform for professional mobile medical apps. The mobile app market had undergone rapid growth and transformation over the past several years and all indications were that this space would continue to be highly dynamic. We structured our work to focus on three areas:

Competitive environment to understand how the overall app market was evolving, how the medical apps segment fit into the overall market, and how competitors were approaching the space.

Customer demand to understand current mobile hardware and apps usage by customers, considerations for pricing models, and expectations for future spending
Internal capabilities to assess the client’s ability in addressing the mobile app market (e.g., app development, curation, hosting, marketing, support), to identify gaps and to develop strategies to fill those gaps

We built a fact base by conducting extensive primary and secondary research including interviews with established and emerging players, electronic surveys of customers, and review of market research and analyst reports. With the fact base in place we collaborated with the client team to develop and evaluate strategic options and made introductions to several potential business development partners and acquisition targets.