Rock Report: Personalization in Consumer Health by @Rock_Health
diabetesProject
1.
2. Value Proposition
We provide the health care industry with
data to decrease business risk by providing
incentive to diabetics to improve health,
reducing the risk and associated expense
of long-term complications.
4. Product
We provide a hub to be kept at home that collects data from a range of partner
products.This includes but is not limited to blood glucose meters,“Diabetic Game,”
“Bag o tricks,” food scales, etc.Through design elements (the blue circle is the
symbol for the diabetic community) the hub gives the diabetic a sense of community.
It transmits data to our company where we compile the data and then send it
to businesses in the health care market. Our target markets include insurance
companies who want to encourage healthy lifestyles and decrease long-term
health complications, and researchers who use data to understand and positively
influence daily diabetic routine. Ultimately, our product provides benefits for diabetics,
such improved health and decreased insurance costs, as well as other forms of
compensation for their data contributions and associated behavior changes.
6. Service Script
Diabetics:
- Hear about hub and benefits from doctor, commercials, or events
- Call insurance company and order hub
- Receive hub at home and unpack
- Plug in
- Use devices programmed to work with our hub as they normally would
- Receive health coverage or rewards once healthy habits are established and
maintained and documented
- Keep using hub and down the line potentially gain better coverage and more
rewards
Insurance Companies:
- Hear about the benefits of our services at a trade show or pitch by a sales
representative
- Sign a contract with our business to implement service and hub
- Receive weekly (time to be negotiated with the company) data that has been
organized and presented in a way useful for the company.This can be
individual reports on diabetics and daily life or a compilation of a
population’s data.
- Data proves healthy habits of health insurance customers so coverage or rewards
can be given (specifics on reward system is the insurance company’s choice).
9. Competition
This process of obtaining and distributing current health related
data in the medical environment is new. We provide current
diabetic data in a new way unlike any other businesses.Through
up-to-date data, companies gain a deeper understanding of their
customers, as individuals and as market segments.
10. Possible Markets
There are several markets that can benefit from our service, however suring
our initial efforst our target market will consist of diabetics in the U.S. and their
insurance providers.After we have gained a significant hold in these markets we
will branch out to health care facilities and providers as well as researchers.
Diabetics
Insurance Companies
Health care facilities
Physicians
Researchers
Dieticians
Charitable Foundations
11. Market Characteristics Size Need How needs met
Diabetics
Diabetics in
Virginia
Health
Insurance
Companies
Diabetic
Researchers
Physicians
Individuals diagnosed or
have undiagnosed
diabetes.
Individuals diagnosed or
have undiagnosed
diabetes within the state
ofVirginia.
Companies that cover
families or individuals
diagnosed with diabetes.
Researchers studying a
range of issues concern-
ing Diabetes.
Physicians who poten-
tially treat and monitor
patients with Diabetes.
2007 National Diabetes Fact Sheet
Total: 23.6 million children and adults in the
United States—7.8% of the population
Diagnosed: 17.9 million people
Undiagnosed: 5.7 million people
Pre-diabetes: 57 million people
New Cases: 1.6 million new cases of diabe-
tes are diagnosed in people aged 20 years
and older each year.
In 2007,
Diagnosed: 466,883 adultVirginians
Undiagnosed: 233,441
Direct Life, health, and medical insurance
carriers: 14,615
Direct Health and Medical insurance
carriers: 3,209
Blue Cross: covers diabetics inVirginia
Money, coverage,
sense of community
Money, coverage,
sense of community
Healthier people so
have to cover less,
current data to
inform future
decisions
Current data
Current data,
monitor
patient
Hub shows contribution
to Diabetic treatment
advancement, discounts
for healthy behavior,
coverage when healthy
lifestyle proven
Hub shows contribution to
Diabetic treatment advance-
ment, discounts for healthy
behavior, coverage when
healthy lifestyle proven
Receive assurance customer
is living a healthy lifestyle,
current data
Access to a large database
of current data
Data
Market Analysis
12. SWOT Analysis
Strenghts:
Weaknesses:
Opportunities:
Threats:
New service for insurance companies and the health care system
Enforces a sense of community with the diabetic
Little to no effort is required of the diabetic
Encourages a healthy lifestyle that can prevent long term problems thus
saving the diabetic and insurance company money
Provides current and relevant data
Need to reach agreements with other products (such as blood glucose
monitors, scales, etc.) to work with our hub and collect data
Usually only one insurance company/state covers diabetics (only one
insurance company to target)
People may be unwilling to share health data that may be perceived as
sensitive
Insurance companies
Society is placing more emphasis on healthy lifestyles.The hub becomes a
way to prove health to insurance companies.
Competitors creating their own health data service
Fitness tracking apps and similar services
13. The key to success of our product is clearly explaining the service while also
conveying the multiple benefits it provides
Our product is a service.As a result, it is intangible, and care must be taken to
appropriately communicate the benefits of the service, as well as its appropriate
use. Central importance of marketing communications.
Contracts and work relationships with other product lines (such as blood glucose
monitors, scale, games, etc.)This can lead to lots of other good opportunities for
data acquisition and reward provision
Laws and regulations that concern the sharing and confidentiality of medical data.
Economic issues that may influence the willingness of companies to invest in our
service and hub.Also adoption of a relatively discontinuous innovation may be
hard to foster
Keys to Success
Critical Issues
Macroenvironmental Factors
Microenvironmental Factors
14. Marketing Strategy
Create awareness of hub and service among diabetic community
Become known by diabetics as a product trusted to help make
their life easier
Become known by insurance companies as tool that is a critical
investment in improving their coverage and customer
relationship
Implement service inVirginia within 15 months of intital investment
(We are initially targetingVirginia due to its accessibility to us)
After year 2 inVirginia we will expand by implementing service in 5
neighboring states.
During year 5 we will implement service nationwide
Marketing
Objectives
Financia
Objectives
15. Positioning: The hub will be positioned to diabetics to be a helpful tool in obtaining insurance and saving
money while also contributing to the diabetic community.
Diabetics currently have to prove their health to insurance companies through multiple visits
to the doctor’s office and careful monitoring over a long period of time.Through our product, they
can eliminate the hassle by simply living a healthy lifestyle.The hub collects all the data and sends it
to the insurance company making it simpler for all parties involved. Users also know that their data
is being used to help the diabetic community.
The service will be positioned to Insurance companies as a straightforward tool that provides
relevant, up-to-date data to enhance their business. Insurance companies need data to inform
business decisions such as coverage but lack current diabetic data.There are millions of diabetics in
the U.S. so we provide data in a clear, convenient, and concise manner.
Strategy: When targeting diabetics, our strategy is to create brand known for it’s ease of use and
helpfulness. It is a key element to the diabetic community that can be used to obtain health
coverage and financial security with little to know effort by the consumer. It is straightforward and
effective.
When targeting the insurance companies, our strategy is to create a service that provides
relevant, current data in a straightforward manner that can be used to improve their involvement
with diabetic coverage. Not only does it inform companies on the current state of diabetic health
of an entire population, but it proves individuals are living healthily and are preventing further
complications. Our service will become a necessary tool to advance health care for diabetics.
16. Markets Hub Service
Consumer
Market
Organizational
Market
Diabetics (firstVirginia then other
states):
Type 1 andType 2
All ages have trouble and frustrated
with the process of obtaining coverage
from insurance companies.
Want financial security.
Need to treat diabetes for life.
Need to constantly monitor blood
glucose levels and live a healthy lifestyle
to avoid health consequences.
Insurance companies:
Some required by law to cover
diabetic[EC2]
Most are hesitant to cover diabetics
because it is a diagnosed, life-long
disease
Need current data to inform decisions
Insurance companies:
Buy the hubs to distribute to diabetics
Eventually to increase distribution and expand our business,
we will target researchers and health care providers.They will
purchase our service and the hub to distribute to diabetics.
17. Pricing
Price of the hub is undetermined at this point since more research needs to
be done on material and manufacturing costs.The price of the service will be
negotiated with the company.This may be influenced by the company we are
working with along with the scale of the population in which the service and
product is being implemented.
18. Promotional Strategies
Television advertising:We will purchase relatively inexpensive add space on local cable channels to
targetVirginian diabetics.They will be played during morning shows with a high number of viewers
as well as during evening primetime shows to reach the largest market possible. It will be played
during news or other informative programming to enforce the validity and helpfulness of our
product
Radio advertising:We will purchase air space during listening times with the highest
amount of listeners.These will also be target during more informative programs,
such as news and educational programs, to enforce the legitimacy of our product
while still conveying the ease and benefits it provides.
Diabetic Organizations’ events:We will gain popularity among the diabetic community
through promotional efforts in these events. Diabetics will become aware of
the benefits our service can provide them, become interested, and ask their insurance
provider about HSC for diabetics.
Pamphlets and doctor recommendations: Diabetics look to doctors for their expert
opinion. Placing informative material in doctors’ offices creates the impression out
product is a quality service than can improve their life.This also creates opportunity
for healthcare providers to reach diabetics who may not see theTV commercials.
For the
Diabetic
19. For the Insurance Company
Pitch to Insurance Company:There is usually only one insurance company/ state, so we will target
insurance companies by sending a sales representative to inform the company on specifics of our
service while focusing on the benefits and how the service can be tailored to help them in the
most effective way possible.We can also develop partnerships with insurance companies to share
costs as well as benefits of getting more people to use the system.
Trade Shows:Through trade shows, we can show the larger insurance market the ease of our
service. Potentially other insurance companies can create their own competitive market to cover
diabetics while using our service as the main tool.
20. Implementation Strategies
First Round of Funding: $80, 000
Month 1-3:
Establish Relationship with insurance company (Anthem Blue Cross Blue Shield inVirginia)
We first make initial contact by giving a concise presentation of our service. Later we will further elaborate and
hopefully gain their interest and a contract. Later we will refine the details of how our service will be tailored to
their needs and work for them in the most efficient way possible.
Higher a medical expert to work on research and establish service
Finding manufacturers of our hub and monitoring equipment
Month3-8:
Establish relationship with doctors, practices, professional medical organizations, and diabetic organizations
Begin work on hub prototype
Second Round of Funding:
Month 8-15:
Finish building prototype and begin testing.
Get device approved
(add computer stuff)
Finish negotiating sales and terms of service with insurance company
Build IT and database infrastructure.
Gain interest among the diabetic community
Promote our product in trade shows and diabetic organization events
Month 15-
Make sale contracts
Start providing service to the diabetic community
Further advertise our product and service to the diabetic community by adding television and radio advertising.
26. Financial Projections
In the near future, our business is looking to finish the extensive research we have already begun. Our operating
expenses will include costs of living and hiring a medical expert to validate our claims.These expenses will run at
about $10,000 per month.We are looking for a seed investment of $80,000 to cover the next 7 months.
After conducting research, we will begin the development and manufacturing process. Costs of prototypes,
manufacturing, and testing will increase quickly during this period. Sales will begin in 15 months, and some of
these manufacturing expenses will persist.
In projecting the finances, we began by estimating our market presence at the end of 2 years.We will have
a 10% market share inVirginia.The revenues were based on the amount of money to be saved by insurance
companies if people with diabetes participated in diabetes management programs. Research has shown that 50%
of people with diabetes choose to participate in these programs.We will assume to split 50% of the savings with
the insurance company.We also estimate the market size inVirginia to be over $600 million.With our target of
10% in the first year of sales, that gives us a revenue of $30 million per year.We hope to grow the business by
the average of most business 9% per year.We estimate that costs will grow as 25% of the growth in revenues.
Therefore, our market share needs to grow by 12% inVirginia.With this model and a little calculus, we derived
our maximum operating budget would be $34 million in the 4th year.Again, assuming worst case scenario we
calculated the minimal amount of capital to get us through the 4 years.This would be covered by a second round
of fundraising with $50 million in investments. Being the worst case, we expect that $25 million in investments
will be sufficient to remain well capitalized.
We would like to break even in 4 years to recoup capital for our investors and also have a strong presence in
theVirginia market.These two goals will lead to strong growth as we expand our business to our states in the
region. It will be a testament to our skill if we can keep manufacturing costs from raising and lower the capital
requirements. Multiple fundraising rounds will increase founders’ stock dilution, but our team believes that we are
providing a valuable service to under-served consumers.
27. Contingency Plan
If we are unable to implement our service and product within the health insurance
system, we plan to target other markets identified earlier.This will include researchers
who would be interested in the data to inform factors in diagnosis, monitoring, and prevention
of diabetes.Also, we would move to health care providers and physicians who
would use the data to monitor patients’ blood glucose levels and overall health.
