CEIBS Health Club Shanghai, China May 28, 2012 Future Direction of Health IT and Emerging Business Opportunities in China

CEIBS Health Club

Shanghai, China May 28, 2012

Future Direction of Health IT and Future Direction of Health IT and

Emerging Business Opportunities Emerging Business Opportunities

in Chinain China

CEIBS HEALTH CLUBCEIBS HEALTH CLUB DORENFEST CHINA HEALTHCARE GROUPDORENFEST CHINA HEALTHCARE GROUP22

Presentation Agenda

PagePage

About the Dorenfest GroupAbout the Dorenfest Group 33

A Foreigner’s View of Healthcare in ChinaA Foreigner’s View of Healthcare in China 1515

Current Status and Future Direction of HIT in ChinaCurrent Status and Future Direction of HIT in China 2525

Where Does China Stand on the Global HIT Continuum?Where Does China Stand on the Global HIT Continuum? 3434

Emerging Business Opportunities in China HealthcareEmerging Business Opportunities in China Healthcare 4141

Career ConsiderationsCareer Considerations 4747


The Dorenfest Group

40 years experience in HIT40 years experience in HIT

Offer healthcare improvement services through a variety of businesses.Offer healthcare improvement services through a variety of businesses.

– SoftwareSoftware

– Hospital Operations Improvement for over 300 HospitalsHospital Operations Improvement for over 300 Hospitals

– Consultation with over 200 Technology and Software Vendors in HealthConsultation with over 200 Technology and Software Vendors in Health

– Created the Product That Became the HIMSS Analytics DatabaseCreated the Product That Became the HIMSS Analytics Database

Our work focuses on improving patient care and operational efficiency Our work focuses on improving patient care and operational efficiency through better change management through better change management

– Work process improvementWork process improvement

– Management systems improvementManagement systems improvement

– Improvement in services for patientsImprovement in services for patients

– Improvement in quality of patient care Improvement in quality of patient care


Dorenfest’s Investigation of China Healthcare in 2005-2006

1.1. Visited 17 cities in ChinaVisited 17 cities in China

2.2. Met 100’s of healthcare industry leaders in ChinaMet 100’s of healthcare industry leaders in China

3.3. Visited over 100 hospitals to review hospital operations and define Visited over 100 hospitals to review hospital operations and define opportunities for improvementopportunities for improvement

4.4. Met provincial and city health bureau leaders in cities visitedMet provincial and city health bureau leaders in cities visited

5.5. Met with many companies selling products and services to the healthcare Met with many companies selling products and services to the healthcare industry in Chinaindustry in China

6.6. Evaluated a group of hospital ownership and management opportunities and Evaluated a group of hospital ownership and management opportunities and assessed viability of the Dorenfest “model hospital” in Chinaassessed viability of the Dorenfest “model hospital” in China

7.7. Developed a strategy for bringing Dorenfest skill and experience to ChinaDeveloped a strategy for bringing Dorenfest skill and experience to China


Dorenfest Vision of a Model Hospital

Provides improved quality of care to its patientsProvides improved quality of care to its patients

Operates at a highly efficient level through effective use of systems and Operates at a highly efficient level through effective use of systems and better work processesbetter work processes

Offers its services to patients at an affordable costOffers its services to patients at an affordable cost

Creates a highly satisfied patient population with the patients observing a Creates a highly satisfied patient population with the patients observing a noticeable improvement in the services and treatments provided by the noticeable improvement in the services and treatments provided by the hospitalhospital

Utilizes appropriate digital technology to create a state of the art “digital Utilizes appropriate digital technology to create a state of the art “digital hospital”hospital”


China Healthcare Leaders Want to Leapfrog the World in IT Use

Chinese hospitals and health bureaus are carefully considering how to be Chinese hospitals and health bureaus are carefully considering how to be more successful in taking next steps forward in IT usemore successful in taking next steps forward in IT use

There is a recognition that for China to accomplish its objectives in HIT There is a recognition that for China to accomplish its objectives in HIT requires the following: requires the following:

– Learning quickly from the global experienceLearning quickly from the global experience

– Overcoming resistance to changeOvercoming resistance to change

– Knowing how to manage changeKnowing how to manage change

– Doing more of what the rest of the world did right and less of what they Doing more of what the rest of the world did right and less of what they did wrong to avoid mistakes other countries have made and China is did wrong to avoid mistakes other countries have made and China is still makingstill making

– Developing more expertise in these areas of need quickly Developing more expertise in these areas of need quickly


Chinese Hospitals Needed Help in the Following Areas

The creation of IT plansThe creation of IT plans

The buying of IT systems The buying of IT systems

The implementation of IT systemsThe implementation of IT systems

Change management to gain benefits and improvements from new IT Change management to gain benefits and improvements from new IT systemssystems

CEIBS HEALTH CLUBCEIBS HEALTH CLUB DORENFEST CHINA HEALTHCARE GROUPDORENFEST CHINA HEALTHCARE GROUP

1.1. Hospital Operations Improvement and Change ManagementHospital Operations Improvement and Change Management

2.2. IT Program Improvement, Problem-solving, Strategy, and Planning IT Program Improvement, Problem-solving, Strategy, and Planning

3.3. New Approaches to Buying IT Systems in a Stronger Partnership with Users New Approaches to Buying IT Systems in a Stronger Partnership with Users

4.4. New Ways to Implement IT Systems New Ways to Implement IT Systems

The Dorenfest Group Is Bringing Needed New Skills to China

88


Project Examples

The Dorenfest China Healthcare Group was formed in 2006 to offer consulting The Dorenfest China Healthcare Group was formed in 2006 to offer consulting services to China Hospitals and Health Bureaus. We have worked with over 25 services to China Hospitals and Health Bureaus. We have worked with over 25 hospitals and health bureaus to help them use information technology more hospitals and health bureaus to help them use information technology more effectively and have consulted with a variety of Chinese and Western healthcare effectively and have consulted with a variety of Chinese and Western healthcare companiescompanies

Examples of health bureau clients for RHN and digital hospital planning Examples of health bureau clients for RHN and digital hospital planning

– ShenzhenShenzhen

– ChongqingChongqing

Examples of hospital clients Examples of hospital clients

– Peking University Third HospitalPeking University Third Hospital

– Foshan City First People’s HospitalFoshan City First People’s Hospital

– Shanghai Changning Maternity & Infant Health InstituteShanghai Changning Maternity & Infant Health Institute

– Rizhao City People’s HospitalRizhao City People’s Hospital


Project Examples (Continued)

Examples of Western clients bringing their skills to mainland China Examples of Western clients bringing their skills to mainland China

– Hong Kong Hospital AuthorityHong Kong Hospital Authority

– IMS ChinaIMS China

– Microsoft ChinaMicrosoft China

– Philips Healthcare ChinaPhilips Healthcare China

Examples of Chinese company clients Examples of Chinese company clients

– DonglianDonglian

– Heren HealthHeren Health

– Simcere PharmaceuticalsSimcere Pharmaceuticals

– SINOPHARMSINOPHARM


Dorenfest Education in China – Tongren Hospital, Beijing 2005


Dorenfest Education in China – Zhejiang Medical Association 2009


The Dorenfest Group Business Model

1.1. The Dorenfest Group operates as a healthcare investment and consulting The Dorenfest Group operates as a healthcare investment and consulting company with a small team of full-time experts, supplemented by a large company with a small team of full-time experts, supplemented by a large number of partners to provide the necessary skills to our clients and our number of partners to provide the necessary skills to our clients and our affiliatesaffiliates

2.2. The Dorenfest Group assembles the project team with the skills and The Dorenfest Group assembles the project team with the skills and experience needed for the client’s successexperience needed for the client’s success

3.3. We partner with a number of major universities and companies. Examples We partner with a number of major universities and companies. Examples of those we regularly partner with include:of those we regularly partner with include:

Johns Hopkins InternationalJohns Hopkins International

maxIT maxIT

MicrosoftMicrosoft

PhilipsPhilips


The Dorenfest China Healthcare Group Current Status as of May 28, 2012

Still in Phase 1. Still in Phase 1. Timing of Phase 2 not determined yetTiming of Phase 2 not determined yet

All our current clients like our work a lot and buy more projects from usAll our current clients like our work a lot and buy more projects from us

The market is booming with interest and opportunity in the areas we have skill inThe market is booming with interest and opportunity in the areas we have skill in

We made our entry at the right time and developed the experience and reputation We made our entry at the right time and developed the experience and reputation before all of these new opportunities emerged, abefore all of these new opportunities emerged, and as a result are positioned with nd as a result are positioned with great understanding of the current situation and a good reputation in Chinagreat understanding of the current situation and a good reputation in China

Issues for us:Issues for us:

– Consulting market in China HIT still very smallConsulting market in China HIT still very small

– Dorenfest operates in China as a small entrepreneurial company, because Dorenfest operates in China as a small entrepreneurial company, because the consulting market is small. This will not always be true, so we are now in the consulting market is small. This will not always be true, so we are now in the process of building critical mass to handle the expected growth in the the process of building critical mass to handle the expected growth in the marketmarket

– Finding and training the right people to bring these new services to China is Finding and training the right people to bring these new services to China is an important factor in the next steps in growthan important factor in the next steps in growth


A Foreigner’s View of A Foreigner’s View of Healthcare in ChinaHealthcare in China

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The Development of Healthcare in China

1.1. In the change to a more market driven economy in China, there was a shift In the change to a more market driven economy in China, there was a shift from government funding of the healthcare system to citizen funding, which has from government funding of the healthcare system to citizen funding, which has made China the highest “patient pay out of their pocket” healthcare system in made China the highest “patient pay out of their pocket” healthcare system in the worldthe world

2.2. China’s healthcare spending has made it one of the most efficient healthcare China’s healthcare spending has made it one of the most efficient healthcare systems in the world systems in the world

3.3. China’s outpatient care has followed a different model than the rest of the China’s outpatient care has followed a different model than the rest of the world, with most outpatient care now provided on hospital campusesworld, with most outpatient care now provided on hospital campuses

4.4. Most countries’ healthcare systems now have problems, which generally come Most countries’ healthcare systems now have problems, which generally come from not managing past changes properly from not managing past changes properly

5.5. China, on the other hand, has not changed its healthcare system as rapidly as China, on the other hand, has not changed its healthcare system as rapidly as other countries, so its problems are different other countries, so its problems are different


Healthcare Cost Trends($ and RMB in billions)

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1990 1995 2000 2002 2003 2004 2005 2006 2007 2010

GovernmentGovernmentSocial InsuranceSocial InsuranceOut-of-pocketOut-of-pocket

SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOKSOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK

RMB inRMB inBillionsBillions

13.8%13.8% 15.2%15.2% 14.1%14.1% 13.6%13.6%

Annual Growth Rate Annual Growth Rate

14.6%14.6%

75 RMB75 RMB($9.6)($9.6)

216 RMB216 RMB($27.8)($27.8)

459 RMB459 RMB($59.1)($59.1)

579 RMB579 RMB($74.7)($74.7)

659 RMB659 RMB

($84.9 ($84.9 ))

759 RMB759 RMB

($97.0) ($97.0)

984 RMB984 RMB($144.0 ) ($144.0 ) 866 RMB866 RMB

($126.7 ) ($126.7 )

1128 RMB1128 RMB

($165.0) ($165.0)

Forecasted GrowthForecasted GrowthRate – 15% in 2008 and Rate – 15% in 2008 and 20% in 2009 and 201020% in 2009 and 2010

1900 RMB1900 RMB($275.0)($275.0)


Average Medical Expense Per Outpatient Hospital Visit ($ and RMB)

0

25

50

75

100

125

150

175

1995 2000 2004 2005 2006 2007

DrugDrugExam/TestExam/TestMedical ServicesMedical Services

40 RMB40 RMB($5.8 )($5.8 )

86 RMB86 RMB ($12.6) ($12.6)

118 RMB118 RMB ($17.3)($17.3)

127 RMB127 RMB ($18.6)($18.6)

129 RMB129 RMB ($18.8)($18.8)

136 RMB136 RMB($19.9)($19.9)

RMBRMB

SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOKSOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK


Outpatient Registration Is an Example of the Problems of Being an Efficient Investor


Waiting to Pay for Services


The Outpatient Health Record Which Patient Keeps


Customer Service Has Been a Lower Priority

1.1. Long wait timesLong wait times

2.2. Very few advance appointment systemsVery few advance appointment systems

3.3. Average time of physician visit is 2-5 minutesAverage time of physician visit is 2-5 minutes

4.4. Collecting money and making profits are a major focusCollecting money and making profits are a major focus


Challenges of the Chinese Healthcare System

1.1. Over 50% of healthcare costs are paid directly by patients out of their pocketOver 50% of healthcare costs are paid directly by patients out of their pocket

2.2. Access to healthcare for the poor has been limited, but now changingAccess to healthcare for the poor has been limited, but now changing

3.3. The middle and upper classes are dissatisfied with healthcare services The middle and upper classes are dissatisfied with healthcare services

4.4. Doctor income earning methods weaken the doctor-patient relationshipDoctor income earning methods weaken the doctor-patient relationship

5.5. Drugs and tests have funded too much of the healthcare costsDrugs and tests have funded too much of the healthcare costs

6.6. Hospitals have needed to earn profits to support themselvesHospitals have needed to earn profits to support themselves

7.7. Primary care is just beginning to separate from hospitals to newly-developed Primary care is just beginning to separate from hospitals to newly-developed community clinicscommunity clinics

8.8. Healthcare reform will cause healthcare costs to rise more rapidlyHealthcare reform will cause healthcare costs to rise more rapidly


Healthcare Reform in China is Bringing Many Changes and Much New Spending

1.1. Basic care for people in China who cannot afford to pay for careBasic care for people in China who cannot afford to pay for care

2.2. Large stimulus spending is being made to improve healthcareLarge stimulus spending is being made to improve healthcare

3.3. Many major changes are being implemented all at once. Some are:Many major changes are being implemented all at once. Some are:

Public hospital reformPublic hospital reform

Community clinicsCommunity clinics

Modernizing facilitiesModernizing facilities

Clinical pathwaysClinical pathways

Regional health networksRegional health networks

Electronic health recordsElectronic health records

Many moreMany more

4.4. The challenge for China and the opportunities for wise business people is The challenge for China and the opportunities for wise business people is in the management of all of these changes in a short period of time to in the management of all of these changes in a short period of time to accomplish the desired outcomesaccomplish the desired outcomes


Current Status and Future Direction Current Status and Future Direction of HIT in Chinaof HIT in China

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The Development of HIT in China

1.1. Chinese hospitals began to computerize in the early 1990s Chinese hospitals began to computerize in the early 1990s

2.2. The initial focus of computer efforts was on financial systems The initial focus of computer efforts was on financial systems

3.3. In the early 2000s, Chinese hospitals began to implement IT for clinical In the early 2000s, Chinese hospitals began to implement IT for clinical systemssystems

4.4. Many software solutions are now available, with well over 1,000 smaller Many software solutions are now available, with well over 1,000 smaller software companies now operating in the HIT market in Chinasoftware companies now operating in the HIT market in China

5.5. Between 2005 and 2010, China hospital spending on IT grew from 5 billion Between 2005 and 2010, China hospital spending on IT grew from 5 billion RMB in 2005 to 16 billion RMB in 2010, and to 21.5 billion RMB in 2011 RMB in 2005 to 16 billion RMB in 2010, and to 21.5 billion RMB in 2011

6.6. This rapid growth in spending will continue at an even more rapid pace over the This rapid growth in spending will continue at an even more rapid pace over the next several years next several years


Factors Contributing to Future Spending Growth in China HIT

1.1. Redundant, expensive, and error-prone hospital work processes led to the initiation Redundant, expensive, and error-prone hospital work processes led to the initiation and development of HIT in China and development of HIT in China

2.2. Fueled by the Ministry of Health (MOH) guidelines for health IT development issued in Fueled by the Ministry of Health (MOH) guidelines for health IT development issued in 2003, calling for all cities in China to implement RHNs and digital hospitals by 2010, 2003, calling for all cities in China to implement RHNs and digital hospitals by 2010, hospitals began to purchase clinical systems in a variety of areas hospitals began to purchase clinical systems in a variety of areas

3.3. In 2009, China Healthcare Reform was passed, and a stimulus spending program of In 2009, China Healthcare Reform was passed, and a stimulus spending program of almost one trillion RMB in new spending was initiated to support Healthcare Reformalmost one trillion RMB in new spending was initiated to support Healthcare Reform

4.4. Improved use of IT is one of eight pillars of the new China Healthcare Reform. The Improved use of IT is one of eight pillars of the new China Healthcare Reform. The 3521 project national vision for HIT was summarized in the twelfth five-year plan for 3521 project national vision for HIT was summarized in the twelfth five-year plan for HIT to provide the framework for HIT and RHN development in China from 2011 to HIT to provide the framework for HIT and RHN development in China from 2011 to 2015. Focuses of HIT development include:2015. Focuses of HIT development include:

Improve hospital IT systems leading to digital hospitalsImprove hospital IT systems leading to digital hospitals

Implement electronic health records (EMR and EHR)Implement electronic health records (EMR and EHR)

Create the second wave of RHN development to provide data sharing throughout Create the second wave of RHN development to provide data sharing throughout cities, provinces, and at a national levelcities, provinces, and at a national level

IT systems to support expanded healthcare insurance IT systems to support expanded healthcare insurance


Factors Contributing to Future Spending Growth in China HIT (Continued)

5.5. The vision document for 3521 is comprehensive and extensive, and may be The vision document for 3521 is comprehensive and extensive, and may be summarized as follows: summarized as follows:

3 levels of health information platform – nation, province and region (city or 3 levels of health information platform – nation, province and region (city or county)county)

5 groups of applications – public health, healthcare service, health 5 groups of applications – public health, healthcare service, health insurance, drug administration, general managementinsurance, drug administration, general management

2 basic databases – resident electronic health record and electronic 2 basic databases – resident electronic health record and electronic medical recordmedical record

1 dedicated health infrastructure network1 dedicated health infrastructure network

2 sets of systems – data standards system and network security system2 sets of systems – data standards system and network security system

6.6. Much spending is going on right now to implement first steps in the Much spending is going on right now to implement first steps in the execution of this vision. execution of this vision.


HIT Is One of Eight Pillars of China Healthcare Reform

Core of Health Reform: Establish Basic Healthcare System

Healthcare system that covers all urban and rural residents

Public healthcare systemMedical service systemMedical insurance systemSecured pharmaceutical

supply system

Managem

ent M

echanism

Operation

Mechanism

Investment

Mechanism

Pricing M

echanism

Supervision M

echanism

Talent Supply

HIT

Construction

Legal System

Further Implement Health Reform


The Competitive Environment

1.1. There are over 1,000 small software vendors active in China HIT There are over 1,000 small software vendors active in China HIT

2.2. The market segments with the most vendors are HIS, PACS, RIS, LIS, and The market segments with the most vendors are HIS, PACS, RIS, LIS, and EMREMR

3.3. All HIT vendors in the market started in a city and most are still operating in All HIT vendors in the market started in a city and most are still operating in that city or a small region around the city. that city or a small region around the city. Many of these smaller local vendors Many of these smaller local vendors have a dominant market share in the area they service. have a dominant market share in the area they service. Some HIT vendors Some HIT vendors have become more national in scopehave become more national in scope

4.4. Many vendors in the hospital computer systems market offer heavily Many vendors in the hospital computer systems market offer heavily customized solutions rather than products. These heavily customizable customized solutions rather than products. These heavily customizable solutions create greater dependency on the software vendor and are more solutions create greater dependency on the software vendor and are more difficult/expensive to keep current when vendors release new software updates difficult/expensive to keep current when vendors release new software updates periodically periodically

5.5. Chinese hospital leaders would like to see a new generation of HIT software Chinese hospital leaders would like to see a new generation of HIT software developed for the country to assist in helping them accomplish their “leapfrog” developed for the country to assist in helping them accomplish their “leapfrog” objectives objectives


The Current Computing Environment in a Typical Large Complex Chinese Hospital Today

Major Ancillary Systems

Note: Chart taken from a couple of real hospital situations with each vendor or product family shown in a different color

Sample Current Systems (High Level View)

Major FinancialSystemsMajor Clinic

OR/Anesthesia(Vendor 5)

R.I.S./PACS(Vendor 4)

L.I.S.(Vendor 3)

Blood Bank(Vendor 3)

Bar Code(Vendor 3)

Ultrasound(Vendor 6)

Stomatology (Vendor 7)

Financial(Vendor 2)

MD Workstation(Vendor 2)

Pharmacy(Vendor 2)

L.I.S.(Vendor 3)

Core Vendor(Vendor 1)

Inpatient EMR(Vendor 8)

Cashiering(Vendor 2)

General Accounting (Vendor 2)

Medical Records(Vendor 11)

Medical Ins(Vendor 9)

Medical Ins(Vendor 10)

Human Resources(Vendor 12)

Performance Assessment System

(Vendor 13)Policy Exchange

Platform (Vendor 13)

Webport System(Vendor 13)

Hospital Website (Vendor 13)

Office Automation

Systems

MajorAdmin Systems

Order Management

Inpatient Physician Workstation

Outpatient PhysicianWorkstation

Inpatient Pharmacy

Outpatient Pharmacy

Inpatient ADT and Billing

Outpatient and ER Registration

Outpatient Pricing and Charging

Material Supply

Smart Card

Patient ConsultationSurvey

Lab Price System

Instrument and Equipment

Management

InpatientInsurance Interface

RF Card Producing Sub-System

Many Other Niche andSpecialty Systems


Major Areas of Future Development and Opportunity in the China HIT Market

1.1. Application software will become more productized with greater tools to support Application software will become more productized with greater tools to support the growing use of IT in hospitals the growing use of IT in hospitals

2.2. New application software to serve the not yet automated areas of clinical work New application software to serve the not yet automated areas of clinical work processes are emerging very quickly processes are emerging very quickly

3.3. Integration tools to facilitate the development of an improved IT environment Integration tools to facilitate the development of an improved IT environment will emerge will emerge

4.4. Data analytics products and support tools to facilitate better data analysis, Data analytics products and support tools to facilitate better data analysis, reporting, and decision making will emerge as Chinese Hospital Managers reporting, and decision making will emerge as Chinese Hospital Managers grow in sophistication grow in sophistication

5.5. New service and implementation approaches are beginning to emerge New service and implementation approaches are beginning to emerge

General contracting for entire efforts with some company software and General contracting for entire efforts with some company software and some partner softwaresome partner software

Front end planning, buying, and implementation services purchased from Front end planning, buying, and implementation services purchased from independent third parties to help hospitals make better buying decisions independent third parties to help hospitals make better buying decisions and create more successful implementation of software and create more successful implementation of software


Today Chinese Hospital HIT Investment Is Spent Differently Than the Rest of the World

SOURCE: CCW ResearchSOURCE: CCW Research

2005 GLOBAL H.I.T. INVESTMENT STRUCTURE

28.9%20.2%

27.8%

64.7%12.2%

13.2%

20.7%

22.3%58.9%

66.6%

51.5%

13.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Global U.S. Europe China

Service

Software

Hardware


Where Does China Stand on the Where Does China Stand on the Global HIT Continuum?Global HIT Continuum?

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Broad Comparison of US and China HIT Situations

. .

Key Element US China

Per Capita Healthcare Spending $7,500+ $100+

Employees per bed 6+ 1 to 2

HIT Spending Very high Very low

Number of Software Vendors in a Hospital 80+ 20+

Integration Status Okay Very bad

Size of IT Staff Very Big Small

Dependence on Software Vendors Medium Very High

Implementation Approaches Fair Bad

Historic Data Available in Any Form Lots Very Limited

Historic Data Available in Accessible Automated Form Considerable Very limited

Clinician Use of Data Growing Limited to none


How Did the Rest of the World Get to Their Present Level?

1.1. The U.S. started first, made a huge amount of error from inexperience, and The U.S. started first, made a huge amount of error from inexperience, and has created an advanced, but very inefficient HIT program has created an advanced, but very inefficient HIT program

2.2. The next group of adopters, including Canada, Europe, and Australia, did The next group of adopters, including Canada, Europe, and Australia, did better than the U.S. by learning from the U.S. experience better than the U.S. by learning from the U.S. experience

3.3. Later adopters in Asia, such as Hong Kong, have accomplished the best Later adopters in Asia, such as Hong Kong, have accomplished the best results in the shortest period of time by paying very close attention to the results in the shortest period of time by paying very close attention to the experience of others and doing more of what they did right, and less of what experience of others and doing more of what they did right, and less of what they did wrongthey did wrong


What Are the Key Success Factors in HIT Use in the Rest of the World?

1.1. Good front end methods for buying and implementing new HIT systems, Good front end methods for buying and implementing new HIT systems, with a focus on functional specifications and user buy-inwith a focus on functional specifications and user buy-in

2.2. Physician and user leadership with the involvement of many physicians and Physician and user leadership with the involvement of many physicians and usersusers

3.3. Good integration tools to support the purchase of software products from Good integration tools to support the purchase of software products from different vendors in a more seamless waydifferent vendors in a more seamless way

4.4. Software products with user modification tools that match the needs of the Software products with user modification tools that match the needs of the hospitals and can easily be upgraded to reflect changes and new ruleshospitals and can easily be upgraded to reflect changes and new rules

5.5. Careful learning from their own experience and the experience of other Careful learning from their own experience and the experience of other countries to minimize mistakes in the process of buying and implementing countries to minimize mistakes in the process of buying and implementing HIT systemsHIT systems


China Has Moved Too Fast in the Following Areas of HIT Development

1.1. Oversimplifying vision and ideas so that execution brought disappointment Oversimplifying vision and ideas so that execution brought disappointment

2.2. Buying HIT systems too quickly with too little front end planning and too little Buying HIT systems too quickly with too little front end planning and too little user involvement user involvement

3.3. Adopting best of breed software acquisition approaches without adequate Adopting best of breed software acquisition approaches without adequate attention to how these different software vendor products would fit together as attention to how these different software vendor products would fit together as a unit and work seamlessly in the hospital a unit and work seamlessly in the hospital


China Has Moved Too Slow in the Following Areas of HIT Development

1.1. To recognize the value and to invest in the methods to integrate a variety To recognize the value and to invest in the methods to integrate a variety of different software vendors, and to not use too many software vendors of different software vendors, and to not use too many software vendors if they cannot be integratedif they cannot be integrated

2.2. To address cultural impediments to good change management by To address cultural impediments to good change management by involving the users more and adopting processes that lead to good involving the users more and adopting processes that lead to good buying decisions buying decisions


Creating More Success in the Current China Healthcare Environment

1.1. There is much momentum for change. More money will be spent and better There is much momentum for change. More money will be spent and better results are mandatoryresults are mandatory

2.2. Because of limited investment for many years in China HIT, Chinese hospitals Because of limited investment for many years in China HIT, Chinese hospitals have created a poor foundation for implementing its HIT vision of the future, have created a poor foundation for implementing its HIT vision of the future, and have made many of the same mistakes that the U.S. made in its early and have made many of the same mistakes that the U.S. made in its early adoption of HIT adoption of HIT

3.3. Now China is at a crossroads. It is spending much money to accomplish a very Now China is at a crossroads. It is spending much money to accomplish a very grand HIT visiongrand HIT vision

4.4. But more careful front end planning at every level of the country – from the But more careful front end planning at every level of the country – from the hospital to the health bureau to the national level – must be done to support the hospital to the health bureau to the national level – must be done to support the execution of what could be a wonderful vision if successfully implementedexecution of what could be a wonderful vision if successfully implemented

5.5. By recognizing what the rest of the world learned from their successes and By recognizing what the rest of the world learned from their successes and failures, and doing more of what the rest of the world did right, and less of what failures, and doing more of what the rest of the world did right, and less of what the rest of the world did wrong, China will be able to make much faster and the rest of the world did wrong, China will be able to make much faster and better progress in the future of HIT implementation better progress in the future of HIT implementation


Emerging Business Opportunities Emerging Business Opportunities in China Healthcarein China Healthcare

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Western Businesses Now Operate in Many Markets in China

1.1. Most major Western companies and many Western investors have reviewed Most major Western companies and many Western investors have reviewed China for investment opportunitiesChina for investment opportunities

2.2. Large multinational companies are now operating in most industries in China Large multinational companies are now operating in most industries in China

– First for low cost manufacturingFirst for low cost manufacturing

– Later to serve the Chinese marketplaceLater to serve the Chinese marketplace

3.3. Western companies operate in China at the pleasure of the Chinese Western companies operate in China at the pleasure of the Chinese governmentgovernment

– When there is a strong need for what the Western company offers, the When there is a strong need for what the Western company offers, the Chinese government will make it easier Chinese government will make it easier

– When the need is reduced, the Chinese government can create a When the need is reduced, the Chinese government can create a variety of obstacles for the progress of that companyvariety of obstacles for the progress of that company

– The size and future growth of the Chinese marketplace is like a magnet The size and future growth of the Chinese marketplace is like a magnet that attracts these companies, even though there are lots of challenges that attracts these companies, even though there are lots of challenges for them for them


Western Businesses Now Operate in Many Markets in China (Continued)

4.4. Doing business in China is different than doing business in the West. Doing business in China is different than doing business in the West. When Western companies come to China, there are many things they When Western companies come to China, there are many things they must learn in order to be successful in operating a business in Chinamust learn in order to be successful in operating a business in China

5.5. When Chinese companies come to the West, they experience similar When Chinese companies come to the West, they experience similar adjustment issuesadjustment issues

6.6. The Chinese people are very entrepreneurial and in general are great The Chinese people are very entrepreneurial and in general are great business people. Doing business with them on their turf presents a business people. Doing business with them on their turf presents a variety of challenges for Western companies variety of challenges for Western companies


Western Companies in the Healthcare Industry in China

1.1. Many Western companies operate in the Chinese healthcare industryMany Western companies operate in the Chinese healthcare industry

2.2. Most dominant market segments served by Western companies are:Most dominant market segments served by Western companies are:

– Pharmaceuticals Pharmaceuticals

– Medical devices Medical devices

– Medical imagingMedical imaging

3.3. Many companies in these markets have operated in China for a long time Many companies in these markets have operated in China for a long time and have been quite successful in serving the Chinese healthcare and have been quite successful in serving the Chinese healthcare industryindustry

4.4. In addition, multinational technology companies such as IBM, Hewlett In addition, multinational technology companies such as IBM, Hewlett Packard, Cisco, Microsoft, Intel, and others that operate in many Packard, Cisco, Microsoft, Intel, and others that operate in many industries in China also sell their products in the healthcare industry in industries in China also sell their products in the healthcare industry in China China


China Healthcare Offers New Opportunities for Foreigners

1.1. Rapid growth in healthcare spending and a desire to improve healthcare Rapid growth in healthcare spending and a desire to improve healthcare services services

2.2. A desire to move toward international standards for serving the growing A desire to move toward international standards for serving the growing middle class and wealthy populationmiddle class and wealthy population

3.3. Skills missing in China to accomplish healthcare improvement objectivesSkills missing in China to accomplish healthcare improvement objectives

4.4. Foreign skills are valued and many universities, hospitals, and Foreign skills are valued and many universities, hospitals, and companies are bringing their skills to Chinacompanies are bringing their skills to China

5.5. Ways to serve the emerging needs profitably are still not clear Ways to serve the emerging needs profitably are still not clear


Some Opportunities Emerge in Healthcare Services

1.1. With the emergence of healthcare reform, China has a much bigger desire to With the emergence of healthcare reform, China has a much bigger desire to learn from the USlearn from the US

2.2. China is serving the middle class and wealthy with the same healthcare system China is serving the middle class and wealthy with the same healthcare system they serve the poor people with, and there is an opportunity for better they serve the poor people with, and there is an opportunity for better healthcare provided by foreigners to the upper middle class and wealthy healthcare provided by foreigners to the upper middle class and wealthy

3.3. New opportunities are emerging in senior care, rehab medicine, and a variety New opportunities are emerging in senior care, rehab medicine, and a variety of medical specialties where China has limited skill (a good example is what of medical specialties where China has limited skill (a good example is what happened in cosmetic care a number of years ago)happened in cosmetic care a number of years ago)

4.4. Opportunities are emerging in HIT software and servicesOpportunities are emerging in HIT software and services


Career ConsiderationsCareer Considerations

CEIBS Health Club


Career Considerations

It is a great opportunity for me to talk with so many young people just starting It is a great opportunity for me to talk with so many young people just starting their working career their working career

Questions on your mind I am sure include the following:Questions on your mind I am sure include the following:

− What should be my career entry point?

− In what geography should I start my career?

− What should be my career objectives?

What other questions do you have?What other questions do you have?


THANK YOU.THANK YOU.FOR MORE INFORMATION CONTACT:FOR MORE INFORMATION CONTACT:

SHELDON I. DORENFESTSHELDON I. DORENFEST

THE DORENFEST GROUPTHE DORENFEST GROUP THE DORENFEST CHINATHE DORENFEST CHINANBC TOWER, SUITE 2725NBC TOWER, SUITE 2725 HEALTHCARE GROUPHEALTHCARE GROUP455 N. CITYFRONT PLAZA DRIVE455 N. CITYFRONT PLAZA DRIVE HUAIHAI EAST ROAD NO. 45HUAIHAI EAST ROAD NO. 45CHICAGO, IL 60611-5555CHICAGO, IL 60611-5555 HUAIHAI PLAZAHUAIHAI PLAZAUS OF AMERICAUS OF AMERICA SUITE 908SUITE 908PHONE: 312-464-3000PHONE: 312-464-3000 SHANGHAI, CHINASHANGHAI, CHINAFAX: 312-467-0541FAX: 312-467-0541 PHONE: 021-51001821PHONE: 021-51001821

WEB SITE ADDRESS: WEB SITE ADDRESS: www.Dorenfest.com

E-MAIL ADDRESS: E-MAIL ADDRESS: [email protected]

SHELDON’S E-MAIL ADDRESS: SHELDON’S E-MAIL ADDRESS: [email protected]

Documents

CEIBS Health Club Shanghai, China May 28, 2012 Future Direction of Health IT and Emerging Business Opportunities in China