frost & sullivan best practices award - data-driven … · medication regimen. however, the...

FROST & SULLIVAN BEST PRACTICES AWARD

Company of the Year 2019

DATA ANALYTICS SOLUTIONS FOR HEALTHCARE NORTH AMERICA

BEST PRACTICES RESEARCH

© Frost & Sullivan 2019 2 “We Accelerate Growth”

Contents Background and Company Performance ...................................................................... 3

Industry Challenges............................................................................................ 3

Visionary Innovation & Performance and Customer Impact of Inovalon ...................... 4

Conclusion ........................................................................................................ 9

Significance of Company of the Year ......................................................................... 10

Understanding Company of the Year ......................................................................... 10

Key Benchmarking Criteria ................................................................................ 11

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ............................................................................................................... 12

The Intersection between 360-Degree Research and Best Practices Awards .................... 13

Research Methodology ...................................................................................... 13

About Frost & Sullivan ............................................................................................ 13



Background and Company Performance Industry Challenges Health systems in the United States (US) struggle to contain costs and drive revenue. The Centers for Medicare and Medicaid Services (CMS) estimates the national health spending to grow at 5.5% per year from 2018 to 2027, reaching around $6.0 trillion by 2027.1 Moreover, the cost of inefficient inter-department operations and communications per US-based hospital averages $1.75 million, while supply chain inefficiencies constitute 45% of the total operating cost.2 Inadequate insight into patients’ comprehensive disease burden or disease progression, clinical outcomes, optimal care plans, and patient-specific challenges regarding access to care and ongoing management of care, all introduce barriers to care, achievement of risk adjusted payment accuracy, quality incentive payments, medical loss ratio (MRL) efficiency, and commercialization of new diagnostics, medications, or device efforts. Medical records (MRs) are necessary for compliance, clinical quality documentation, medical claims reconciliation, etc. However, many health systems aggregate, review, and analyze MRs manually, which is inefficient, inaccurate, time-consuming, and involves high personnel costs. Besides poor interoperability, non-uniform data structure and access issues prevent streamlined review and autonomous analysis. Similarly, current medical billing and claims reconciliation inefficiency and falsification bear massive costs due to fraud, abuse, and service overcharges.

Healthcare digitization is creating a big data explosion. Aggregating and synthesizing data volume, velocity, and variety to derive meaningful insights is crucial for optimal healthcare delivery. The rise of value-, quality-, and risk-driven reimbursement programs stimulate evidence-based care. These programs necessitate the capture, storage, and analysis of disparate patient data, especially chronically diseased patients requiring high-cost and complex personalized pharmacological care. However, life sciences companies do not have access to primary-sourced data sets for patient-level analysis, programming, and commercialization.

Pharmaceutical players struggle to advance precision medicine as they need to precisely locate specific patients and providers and analyze distinct indications, contra-indications, payment models, and payer relationships to research and develop a high-impact medication regimen. However, the life sciences market has long operated in siloes. Limited interaction and interoperability between pharmaceuticals, diagnostics, health plans, pharmacies, and provider systems preclude leveraging publically available and commercially relevant reimbursement and outcome data for informed business decisions. Specialty pharmacies, focused on high-cost and high-complexity care, face supply chain constraints, requiring tools to manage stock, establish high-quality assurance, and drive personalized clinical outcomes. Thus, the need to enable digital convergence of healthcare stakeholders through seamless connectivity is profound.

1 Centers for Medicare & Medicaid Services. "NHE Fact Sheet." April 2019. CMS.Gov. August 2019 <https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html>. 2US Healthcare Data Analytics Market, Forecast to 2020: How to Design, Implement, and Govern Value-based Healthcare Analytics (Frost & Sullivan, April 2017)



Information technology (IT) analytics platforms can deliver optimal clinical and financial results; however, their potential utility depends on the type of data sourced and submitted to the platform. Unstructured, secondary-sourced, and inaccurate data hinders analytics algorithms’ ability to become fully advantageous to end-users.

In North America, most healthcare organizations (such as payers, providers, life science companies such as pharmaceutical and clinical diagnostics companies) embrace fragmented IT tools and platform combinations. A lack of seamless interaction results in a loss of actionable patient intelligence to identify care gaps, personalize medical interventions, and optimize profitability for enterprises. Major industry participants are adopting a value-based patient evidence solution, available in real-time, versus an on-demand business intelligence solution.

CMS advocates aggressive mandates for payers and providers concerning IT interoperability, care coordination, and performance reporting. Therefore, health systems are utilizing precision analytics applications—a key enabler of value-based care—to improve operational efficiencies and patient outcomes. However, suboptimal healthcare IT solutions’ interoperability can hinder capture and integration of patient data, limiting quality analytics. Hence, analytics adoption among US healthcare payers and providers is inconsistent, with only 50% of US-based hospitals utilizing enterprise intelligence software.3

Next-generation health data analytics providers offering flexible and scalable IT and vendor-agnostic solutions will enjoy a significant competitive advantage. Specifically, solutions that can rapidly assess and report service-level enterprise performance, e.g., regulatory adherence, patient risk; and clinical, financial, and operational outcomes are well-poised to lead the US market.

Visionary Innovation & Performance and Customer Impact of Inovalon Founded in 1998 and headquartered in Bowie, Maryland, Inovalon is a data-driven healthcare solution provider to the healthcare marketplace. The company's cloud-based platform enables the meaningful use of data and analytics to optimize clinical outcomes and healthcare economics.

Besides serving four significant segments in the US healthcare ecosystems—payers, providers, pharmaceutical companies, and pharmacies—Inovalon also supports medical device and clinical diagnostics manufacturers. The company’s customers include 22 of the top 25 global pharmaceutical companies, more than 50,000 provider sites, and 24 of the top 25 largest US health plans.

With a national-scale data platform of 287 million patients and a dominant US presence, Inovalon is exploring business relationships with Japanese and European companies. The company’s solutions have a high brand penetration, which is a testament to its quality and reliability.

3US Healthcare Data Analytics Market, Forecast to 2020: How to Design, Implement, and Govern Value-based Healthcare Analytics (Frost & Sullivan, April 2017)



Advancing Value-Driven Care through a Cloud-based, Extreme-scale Platform

“We [Inovalon] are focused on being the Intel Inside, the intelligent player that enables and empowers data-driven healthcare.”

—Dr. Keith R. Dunleavy, M.D, Chief Executive Officer, Inovalon

The Inovalon ONE® Platform – Connecting the Healthcare Ecosystem

Source: Company Overview

Inovalon’s capabilities allow for the harnessing of massive-scale data and advanced analytics, thus benefitting the healthcare ecosystem. The cloud-based Inovalon ONE® platform comprises nearly a hundred interconnected modules to provide highly sophisticated capabilities serving four critical areas. The Inovalon ONE® platform:

• Links the data of approximately 980,000 US providers with laboratory, claims, electronic medical records (EMRs), decision support systems, and administrative structures and health plans, providing highly extensible national-scale connectivity.



• Converts data into intelligence leveraging extensive analytical capabilities, including artificial intelligence (AI), machine learning (ML), natural language processing (NLP), and deep learning.

• Accesses the point-of-care through its intervention platforms and links back to cost standards, electronic health records (EHRs), decision support systems, and patient and provider interactions.

• Enables the healthcare ecosystem to operate and execute within regulatory standards empowered by capabilities on business intelligence, reporting, and the regulatory submission process.

Inovalon differentiates in the marketplace by offering extreme-scale data—48 billion medical events in size—that spans across decades and the largest primary-source, longitudinally matched healthcare datasets in the US.

Unlike competitors who purchase and receive data in a de-identified format, the company’s data is primary-sourced and identifiably links and matches its analytical processes, thus enabling precision medicine platform capabilities. As patients traverse their healthcare journey, Inovalon harnesses the patient data spread over time across disparate providers, health plans, and hospital systems to conduct deep analyses. Furthermore, the platform offers real-time massive scale cloud computing capacity with results in less than a second. Clinically relevant in driving personalized care, patient data analytics also advances novel drug and diagnostics research, outcome-based contracting, and quality improvement platforms.

The company also facilitates the high-end ecosystem relationship of pharmaceutical companies, health plans, and provider networks to deliver unique capabilities. Likewise, Inovalon employs top-notch healthcare organizations’ personnel, e.g., CMS, drug manufacturing industries, and payment model marketplace, and, powered by matchless subject matter expertise, enables converting unstructured data into meaningful commercial strategies for global healthcare companies.

Establishing High–Value Impact of Drugs and Diagnostics through Outcome-based Contracting

Inovalon allows pharmaceutical companies to differentiate in the market by assisting in the discovery and commercialization of high-cost, high-impact medicines.

Payers are resistant to expensive high-impact drugs. To that end, the company’s analytics platform compares a particular medication’s total cost of care and impact against alternative options. The evaluation implements an outcome-based contract platform, which combines analytics, pharmaceutical, and payer experts. The platform identifies patients in the population ideal for the medication and notifies the physicians about the unique clinical opportunity, supports patient and provider medication compliance, clinically tracks the corresponding data to disease outcome and care cost, and reports it back to the payer, pharmaceutical company, physician, and patient. By demonstrating high-value impact, Inovalon enables health plans to provide optimal patient-specific solutions in



large-scale, driving down the overall healthcare cost while enhancing the value impact realization of novel discoveries.

Similarly, platform analytics in molecular diagnostics matches genetic testing and clinically cleansed data to assess the test’s frequency, prevalence, and results. The assessment informs about test utilization for specific immuno-oncology drugs. By linking the outcomes associated with medical costs and overall patient health, the company provides improved visibility of drug and diagnostic combinations driving clients’ commercialization strategy. Frost & Sullivan believes that by offering an extensive ability to connect, aggregate, and analyze outcome data, Inovalon is propelling precision medicine.

Enabling Regulatory Approvals, Outcome Analysis, Breaking Life Sciences Siloes

Inovalon provides real-world data to fortify clinical submission material. The company’s solution enables life sciences companies to carry their analytical and regulatory submission process seamlessly, expand their market, and strengthen product indications for quicker approvals.

Inovalon’s Avalere Policy 360® experts are federal and state regulatory agencies’ alumni and focus on translating and navigating regulatory payment models and compliance initiatives for large-scale pharma programs. For instance, AstraZeneca recently announced leveraging Avalere and the Inovalon ONE® Platform to design a value-based program to commercialize an innovative treatment for chronic obstructive pulmonary disease. The company’s cloud-based QSI-XL® platform supports approximately 76% clinical outcome data submission of nearly 1,800 organizations, e.g., diabetes management and cardiovascular disease and medication compliance progress, to federal and state regulatory bodies.

Clinical progression and outcome insights enable healthcare stakeholders to understand disease evolution, medication compliance, care costs, variances, and implications driving

Platform Capabilities for Healthcare Stakeholders

Source: Annual Report, Inovalon



personalized care implementation, allowing them to improve health outcomes, commercialization, and care economics.

Correspondingly, its relationship with hundreds of key stakeholders enables Inovalon to bring programs with large-scale impact on life, thus breaking the life sciences market siloes. For instance, the high-value specialty pharmacy segment, driven by rising novel pharmacological discoveries, precision medicine, and complex and chronically diseased patients, benefits from the ScriptMed® Cloud—the Inovalon ONE® Platform’s specialty pharmacy configuration optimizes diagnostic plans, patient treatments, and the overall patient experience.

The ScriptMed® Cloud allows AllianceRx Walgreens Prime to link specialty pharmacies’ medications with Blue Cross Blue Shield organizations and provider systems in real-time, lower time-to-fill and cost, and enhance quality, reliability, and operational efficiencies with high clinical and quality outcomes.

Accelerating Scale, Speed, Capability, and Resiliency through New Technologies

Inovalon focuses on the platform's continuous improvement. Elastic Container Technology upgrades allow for massive-level computational AI, ML, and outcome analytics engines to operate across hundreds of millions of patients at extreme speed, scale, and resiliency resulting in operating cost efficiencies for clients.

The company’s Clinical Data Extraction as a Service (CDEaaS™) and NLP as a Service (NLPaaS™), access one in three US patients’ data and holistically evaluate disparately located records in real-time. CDEaaS™ facilitates data exchange through EHRs and health information exchange systems—independently captures and aggregates patient data in a CMS and NCQA-compliant digital MR in seconds. NLPaaS™ utilizes NLP and ML to enable clients to analyze non-structured MRs for clinical quality, payment reconciliation, diagnosis, disease progression, outcomes, treatment, and financial performance. Compared to manual review, AI-powered algorithms deliver records ten times faster, more accurately, at a 70% lesser cost.

Grounded in the platform's utilization, Inovalon follows a software-as-a-service subscription-based pricing model, comprising 90% of revenue. With a monthly base fee and per member/patient per month revenue model, charges depend on the program's patient size. Advisory services, data and analytics, charge a fixed cost and analytics fee, comprising 10% of its revenue. The company’s 2018 revenue increased by 17% to $527.7 million, compared to 2017 and is projected by the Company to increase another 21% to $641 million in 2019.4

Partnerships with major health plans, such as Humana Inc. and the FORTUNE 500 Molina Healthcare, allow Inovalon to serve large employer groups, coordinate member interactions with providers and pharmacies, improve member care interventions, and expedite clinical documentation. The company’s solution works on a high-value subscription-based model that enhances the customer’s financial performance.

4 http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_INOV_2018.pdf, https://investors.inovalon.com/static-files/134e02a0-8f61-4894-91d3-9021775b60da

http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_INOV_2018.pdf

https://investors.inovalon.com/static-files/134e02a0-8f61-4894-91d3-9021775b60da



Growing its brand through strategic partnerships, new technology implementation, and global geographic expansion drive Inovalon’s sustained leadership, increasing its customer base while spearheading client’s success manifold.

Conclusion Rising impetus on value-driven care, precision medicine, and data-driven healthcare necessitate vast amounts of data, excellent healthcare stakeholders' connectivity, advanced analytics, effective point-of-care intervention tools, and purpose-designed reporting capabilities to drive lower costs, propel outcome-based care, enhance the value impact of sophisticated treatments, and manage financial performance.

Inovalon is a cloud-based connectivity data and intelligence player allowing health plans, providers, pharmaceuticals, medical device, and diagnostics organizations to achieve their commercial and clinical goals through data-driven healthcare. The Inovalon ONE® Platform enables national-scale connectivity within the healthcare ecosystem and highly intelligent, massive-scale, real-time point-of-care analytics in seconds. The platform allows for the seamless integration of electronic health records, decision support systems, patient-provider interactions, business intelligence, reporting, and regulatory submissions, helping healthcare stakeholders to achieve regulatory compliance. Leveraging primary-sourced data and industry-leading subject matter expertise, Inovalon bolsters outcome analysis for better care, efficiency, financial performance, and precision medicine research. By determining the high-value impact of high-cost novel medications, the company lowers the overall cost of care through outcome-based contracting while spearheading the financial success of innovative drug discoveries.

With its strong overall capabilities and performance, market-leading Inovalon earns Frost & Sullivan’s 2019 North America Company of the Year Award in the data analytics solutions for the healthcare market.



Significance of Company of the Year To receive the Company of the Year Award (i.e., to be recognized as a leader not only in your industry, but among non-industry peers) requires a company to demonstrate excellence in growth, innovation, and leadership. This excellence typically translates into superior performance in three key areas—demand generation, brand development, and competitive positioning—that serve as the foundation of a company’s future success and prepare it to deliver on the 2 factors that define the Company of the Year Award: Visionary Innovation and Performance, and Customer Impact).

Understanding Company of the Year Driving demand, brand strength, and competitive differentiation all play critical roles in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on Visionary Innovation and Performance to enhance Customer Impact.



Key Benchmarking Criteria For the Company of the Year Award, Frost & Sullivan analysts independently evaluated each factor according to the criteria identified below.

Visionary Innovation &Performance Criterion 1: Addressing Unmet Needs Criterion 2: Visionary Scenarios through Mega Trends Criterion 3: Implementation Best Practices Criterion 4: Blue Ocean Strategy Criterion 5: Financial Performance

Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience

Criterion 5: Brand Equity



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

• Conduct in-depth industry research

• Identify emerging sectors • Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

• Interview thought leaders and industry practitioners

• Assess candidates’ fit with best-practice criteria

• Rank all candidates

Matrix positioning of all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

• Confirm best-practice criteria • Examine eligibility of all

candidates • Identify any information gaps

Detailed profiles of all ranked candidates

4 Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

• Brainstorm ranking options • Invite multiple perspectives

on candidates’ performance • Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5 Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

• Share findings • Strengthen cases for

candidate eligibility • Prioritize candidates

Refined list of prioritized Award candidates

6 Conduct global industry review

Build consensus on Award candidates’ eligibility

• Hold global team meeting to review all candidates

• Pressure-test fit with criteria • Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing success stories worldwide

7 Perform quality check

Develop official Award consideration materials

• Perform final performance benchmarking activities

• Write nominations • Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8 Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

• Review analysis with panel • Build consensus • Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

• Present Award to the CEO • Inspire the organization for

continued success • Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company able to share Award news with stakeholders and customers

• Coordinate media outreach • Design a marketing plan • Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degreeview of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry participants and for identifying those performing at best-in-class levels.

About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation, and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages more than 50 years of experience in partnering with Global 1000 companies, emerging businesses, and the investment community from 45 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS

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