Philips created a new venturecalled Healthcare Informatics, Solutions and Services (HISS). Philips believed that this group was destined for rapid expansion and launched a program called HealthSuite Digital platforms (HSDP) in 2014.

HSDP leverages open cloud-based data infrastructure allowing hospitals and care providers to integrate and analyze patient-specific data.

Link to purchase the case: https://hbsp.harvard.edu/import/937031

Pleasecreate a professional PowerPoint report that answers the following questions:

1. What customer needs does HSDP address?

2. Go in and outside the case and provide secondary research sources to justify why Philips has the capabilities and credibility to deliver on projects like the HSDP. Then go on to describe whether Philips should leverage partners or not?

3. How can CRM be leveraged to execute Philips' strategy?

\fDigital Health Platform and the Radboud University Medical Center In October 2014, Philips and Radboud university medical center (Radboudumc), an innovative teaching hospital and medical center based in Nijmegen, the Netherlands, partnered to launch a new care approach for patients with chronic obstructive pulmonary disease (COPD). In the U.S., COPD was the third leading cause of death," and it was estimated that nearly 13 million adults suffered from the disease." COPD was a progressive disease that required complex treatments and frequently resulted in higher rates of hospital admissions. In the past, the typical assessment used to determine the diagnosis of COPD required a two-hour test that had a margin for error of +/- 30%. Readmissions were very costly for hospitals, so a platform that could help clinicians identify and prioritize care for patients most at-risk for readmission could yield significant savings. Philips and Radboudume piloted a program that would produce a more accurate diagnosis by leveraging inexpensive sensor technology and HSDP. During the first visit to the Radboudumc clinic, patients thought to have COPD were given a small sensor (to be worn on the chest), a spirometer," "Data produced enabled the home monitoring group to anticipate heart attacks six hours in advance. The data would be made available to third-party developers (in accordance with FDA and EU regulations). "Spirometers were medical devices used to measure the volume of air the lungs took in and expelled. his document is authorized for use only by claudia quintanilla in CRM700 bought by WILLIAM SEIDNER, Seneca College from May 2022 to Nov 2022. For the exclusive use of c. quintanilla, 2 515-082 Philips Healthcare: Marketing the HealthSuite Digital Platform and a tablet with an EKG' sensor wrapped around it. The sensors tracked the patient's physical activity (or inactivity), heart rate variability, heart rhythm, sleeping patterns, and respiration. All of the sensor data were fed into the two Philips-created HSDP apps: the eCareCompanion and the eCareCoordinator. In addition, the eCareCompanion application on the tablet prompted patients to answer questions such as how they felt that day. Both the sensor data and the qualitative data were tracked and shared with doctors through the eCareCoordinator app. The Radboudume clinic allowed patients to call at any time to receive triage care from its medical staff. Tas commented, "Unlike other wearable solutions recently introduced to the market, this prototype collects more than just wellness data from otherwise healthy people. We are demonstrating the power of harnessing both clinical and personal health information to better manage chronic disease patients across the health continuum, from healthy living, prevention, diagnosis, treatment, recovery, and home care."\f\f\f\f\fEndnotes Dan Munro, "Annual U.S. Healthcare Spending Hits $3.8 Trillion," Forbes, February 2, 2014, http://www.forbes.com/sites/danmunro/2014/02/02/annual-u-s-healthcare-spending-hits-3-8-trillion/, accessed April 2015. World Population Ageing- Department of Economic and Social Affairs, United Nations, http://www.un.org/esa/population/publications/worldageing19502050/, accessed April 2015. 3 "About Chronic Diseases," National Health Council, July 29, 2014, http://www.nationalhealthcouncil.org/sites/ default/files/NHC_Files/Pdf_Files/ AboutChronicDisease.pdf, accessed April 2015. "About Chronic Diseases," National Health Council, 2014, accessed April 2015. Dan Mangan, "Health care IT investment boom: Who's the next winner?," CNBC, July 14, 2014, http://www.cnbe.com/id/101829949, accessed April 2015. ""HER Incentives & Certification," HealthIT.gov, January 15, 2013, http://www.healthit.gov/providers-professionals/chr- incentive programs, accessed February 2015. 7 "Company overview," Babycenter Website, http://www.babycenter.com/help-about-company, accessed April 2015. David F. Carr, "Apple Partners With Epic, Mayo Clinic For HealthKit," Information Week, June 3, 2014, http://www.informationweek.com/healthcare/ mobile-and-wireless/ apple-partners with-epic-mayo clinic-for- healthkit/d/d-id/1269371, accessed April 2015. ""Philips and Salesforce. com announce a strategic alliance to deliver cloud-based healthcare information technology," Philips press release, June 26, 2014, http://www.newscenter.philips.com/us_en/standard/ news/press/2014/20140626-Philips-and- Salesforce announce a strategic alliance to deliver-cloud-based-healthcare-information-technology.wod#.VRq3_n192C. accessed April 2015. Jon Gertner, "BEHIND GE'S VISION FOR THE INDUSTRIAL INTERNET OF THINGS," Fast Company, June 18, 2014, http://www.fastcompany.com/3031272/can-jeff-immelt-really make-the world-1-better, accessed April 2015. 11 "Cerner to Acquire Siemens Health Services for $1.3 Billion," Cerner press release, August 5, 2014, http://www.cerner.comewsroom aspx7id-17179877489/blogid-2147483710&langType-1033, accessed April 2015. 12 Brian Dolan, "10 Reasons why Google Health failed," MobiHealthNews, June 27, 2011, http://mobihealthnews.com/11480/10-reasons why-google-health-failed/, accessed April 2015. 5 Centers for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics Report, "Deaths: Final Data for 2010," 61, no. 4 (May 2013). Centers for Disease Control and Prevention, National Center for Health Statistics, National Health Interview Survey Raw Data, 2011. Analysis performed by the American Lung Association Research and Health Education Division using S155 and SUDAAN software. 15"Hereismydata," Hereismydata.com (Kadboudume), http://www.hereismydata.com/, accessed April 2015.Tas, chief executive of Philips's Informatics Solutions and Services business group, stated: "I have hypertension, my daughter has juvenile diabetes, and my dad has cancer. We are a normal family." The combined pressures on the healthcare system in the U.S., as well as the passage of the Affordable Care Act (ACA) in 2010, led to a shift among healthcare providers toward fee-for-value models rather than fee-for-service (FPS). The ACA stipulated that hospital compensation be determined in part by the quality of outcomes, rather than on a simple FFS basis as before. Hospitals could receive financial rewards for high-quality outcomes or patient satisfaction scores, but also faced penalties for high rates of readmission or hospital-acquired conditions. The shift to fee-for-value presented new opportunities for providers to focus on holistic wellness and population health management initiatives that would not have been as easy under the old FFS model. Many healthcare providers needed better analytics and measurement capabilities in order to track quality improvements and shift the organizational focus to the integrated delivery of care and continuous improvement of patient outcomes. Healthcare providers invested in a host of IT-based solutions, including electronic medical records (EMRs), acute care information systems, telehealth services, health information exchanges, and analytics. The growing investment was reflected in venture capital funding for healthcare IT companies, which increased from $1.9 billion in 2013 to $2.4 billion in the first six months of 2014 alone.' In 2011, the U.S. Centers for Medicare and Medicaid Services (CMS) established incentives for doctors' offices and hospitals to switch from paper to EMRs. Hospitals that served Medicare patients received up to $2 million for adopting EMRs." Patients could view and request corrections to their medical records, but EMR vendors made it difficult for providers to extract EMR data for use in other healthcare applications or services. Comprehensive efforts to upgrade healthcare IT in hospitals were often limited by poor interconnectivity between data systems, difficulty extracting data from its home network, and lack of training for physicians on how to incorporate data and analytics into their workflows. In addition to these challenges, healthcare providers in developing countries also dealt with poor infrastructure and staff shortages. As hospitals ramped up their IT investments, consumers began using technology to become more engaged and better educated about their health than ever before. Although healthcare lagged other industries in terms of digitization, consumers had shown a willingness to engage. The success of sites like J&J's Babycenter," which reached 40 million parents each month, demonstrated the consumer interest in digital health resources. Consumers had access to more health data than before; not only could they access their medical records, they could also track their health status and wellness with devices from new entrants like FitBit, Apple, Google, and others. In 2014, Google and Apple each launched consumer-friendly healthcare dashboards that aggregated data from wearable devices (including scales, running apps, and sleep trackers). Apple even partnered with several EMR vendors to incorporate medical records and lab results into its Healthkit iOS dashboard."Philips Company Background Philips was established in 1891 as a light-bulb factory in the Netherlands. In 2014, Philips had sales of EUR 21.4 billion" (see Exhibit 1 for selected financial data) and over 105,000 employees worldwide. Philips was organized into three sectors: healthcare (which included imaging devices, J&J's Babycenter was a website and mobile app designed for expectant mothers and families with infants to receive health education and build a community. "Estimated at an exchange rate of $1 22 per euro. 2 This document is authorized for use only by claudia quintanilla in CRM700 taught by WILLIAM SEIDNER, Seneca College from May 2022 to Nov 2022. For the exclusive use of c. quintanilla, 202 Philips Healthcare: Marketing the Health Suite Digital Platform 515-052 hospital-to-home monitoring equipment, other devices sold to hospitals and clinics), lighting, and consumer lifestyle (such as toothbrushes, electric razors, and fryers sold directly to consumers). Roughly 35% of Philips's headcount worked in the healthcare sector, with 36% in lighting and 16% in consumer lifestyle. The Innovation, Group, & Services (IG&S) unit accounted for the remainder of the workforce (approximately 13%). Philips's primary competitors varied by business sector, but in healthcare, Philips competed primarily against General Electric (GE) and Siemens AG to sell medical devices to hospitals. Philips was organized in a matrix; it included centralized "innovation to market" (12M) teams, and market organizations that were responsible for sales. In the healthcare sector, the 12M and market organizations had joint responsibility for in-market product performance and customer support. Creation of the HealthTech Organization In 2013, Philips chief executive Frans van Houten led a transformation of Philips's organizational structure in order to better support the consumer journey. Philips started by analyzing the journeys experienced by consumers who suffered from specific health conditions, such as pregnancy or diabetes, along a "health continuum." The continuum included six stages: healthy living, prevention,\f\fPhilips HealthSuite Digital Platform In June 2014, Philips announced the creation of a cloud-based data platform for healthcare providers: the HealthSuite Digital Platform (HSDP). Philips HSDP was an open cloud-based data infrastructure that supported the secure collection of data related to health and lifestyle, enabling hospitals and care providers to integrate and analyze data. By providing a secure and private home for all data collected from Philips and health and lifestyle products, the HSDP allowed care professionals and consumers to use the information to improve decision making. The development of the HSDP was headed by Philips's HISS group, which led a large team spread among offices in Best, the Netherlands; Bangalore, India; Foster City, California; and Tel Aviv/Haifa, Israel. The platform development included an alliance with Salesforce.com to leverage the company's leadership in enterprise cloud computing, innovation, and customer engagement. HSDP would incorporate state-of-the-art privacy and data security elements for sensitive healthcare data and allow additional applications to be layered on top. Philips planned to open the platform to third-party app developers who could use the data it held to create apps covering the health continuum (see Exhibit 4 for the This document is authorized for use only by claudia quintanilla in CRM700 taught by WILLIAM SEIDNER, Seneca College from May 2022 to Nov 2022. For the exclusive use of c. quintanilla, 20 Philips Healthcare: Marketing the HealthSuite Digital Platform 515-052 platform development). Philips executives believed that a unified hardware and software offering from Philips would drive incremental sales. HSDP and its app ecosystem were intended for use in both continuous healthcare delivery and personal health management to collect and exchange data between multiple stakeholders such as patients, general practitioners, diagnostic centers, clinics, hospitals, home-care organizations, andpatients, general practitioners, diagnostic centers, clinics, hospitals, home-care organizations, and pharmacies (see Exhibit 5). Philips mapped numerous consumer journeys to identify gaps in their experiences and concluded that HISDP's first apps should support care delivery in triage and screening, cardiac non-acute diagnosis and chronic disease management, and maternity and obstetric care. HSDP primary users would be Philips's customers: the hospitals. HSDP would store and carry images and information essential to patient care across different hospital departments, while also offering only the most relevant information to each doctor. Unlike EMRs, which were typically built upon legacy platforms that were decades old, HSDP was supported by new cloud and data technologies, which meant it quickly retrieved information and wrote apps, and would be usable by clients for many years. HSDP would help Philips become an even more trusted clinical partner by supporting customized hospital workflows that produced better outcomes at a lower cost. Patients could also use the platform's apps to access and update their health records. In addition to helping patients and customers, HSDP would enable Philips's business units to avoid steep investment in individual IT capabilities, help to integrate products and applications across business units (to better serve consumers and cross-sell), rapidly develop and test new applications, easily scale applications through the cloud, decrease operating expenses, and support in-market innovation by opening up access to a common platform. Partner Alliances Philips and Salesforce, the world's largest customer relationship management (CRM) and enterprise cloud computing service provider, had worked together since 2011. Salesforce generated revenues through the sale of software subscriptions. By 2013, Philips had become one of Salesforce's most important customers in the healthcare sector. That year, Salesforce announced the creation of customized solutions for industry verticals. Philips and Salesforce observed a "perfect storm" occurring in healthcare: healthcare providers worldwide were straining to keep pace with increasing demand and constrained resources, while the declining cost of data storage made building an extensive library of clinical data easier than ever. Salesforce chief executive Marc Benioff commented, "We have entered a new transformative era for healthcare, and technology is enabling the industry to connect to, care for and engage with patients and each other in a profound new way."" In addition to Salesforce, Philips tapped several other firms to support HSDP so that it could focus on leveraging its core strengths, such as knowledge of the healthcare data regulatory landscape, clinical workflows, and integration of medical devices. Philips engaged Amazon Web Services (AWS) to provide cloud infrastructure as a service, including raw data storage, computing power, and analytical tools. Given that Philips imaging software was expected to generate one petabyte of data per month, Philips needed the ability to scale quickly and economically. On top of the infrastructure layer, Philips used Pivotal, a cloud platform, as a service provider to enable other types of infrastructure as needed for hospital customers who had specific needs or legacy infrastructure that would be utilized beyond AWS. Philips was also building or collaborating with other companies to create tracking and metering tools, so as to enable multiple types of business models. HSDP wanted to retain flexibility to create models that would attract app developers, hospitals, and other potential partners.The HealthSuite App Ecosystem The success of HSDP was dependent on reaching a critical mass of users, which required the creation of an application ecosystem. In October 2014, Philips launched its eCareCompanion and eCareCoordinator apps (see Exhibit 6). A part of Philips H2H suite of telehealth programs, eCareCoordinator and eCareCompanion focused on patient care within the home and were the first clinical applications to be available through the cloud-based HSDP. CareCoordinator was a population health management tool designed to give clinicians real-time access to vital signs data (as well as output from patient questionnaires and notes from the care team) and combine these with the patient's medical profile. The app would assist clinicians' daily review of their patients to prioritize interventions and adjust treatments. eCareCompanion was a personalized app designed to help patients engage with and self-manage their care. Patients could receive medication reminders and answer questions about their health, and send data on their health status to their clinicians. The app also connected to devices such as scales, blood pressure meters, oximeters, and medication dispensers. In October 2014, the eCareCoordinator and eCareCompanion apps received pre-market approval from the U.S. Food and Drug Administration (FDA). Third-party developers were expected to create many types of apps for HSDP, including consumer-facing apps that incorporated data from devices like FitBit, once the application program interfaces (APIs) were launched. HSDP offered developers an open system and access to the clinical data collected from Philips devices. HSDP was designed as an open platform from the beginning in order to allow large numbers of consumers and third-party developers to leverage the HSDP data to develop useful applications and algorithms for customers. HSDP's philosophy of openness differed significantly from its competitors in the healthcare space, many of which operated closed systems that prevented data sharing between apps and limited the functionality of any given app. Philips hoped developers would create specialized apps for various conditions, e.g., pregnancy, heart failure, etc. Go-to-Market Strategy When HSDP was announced, Philips was in the process of rationalizing its sales force following the company reorganization. Before the ACA was passed, Philips sales teams sold devices to departments within the hospital, such as radiology. The shift to fee-for-value care delivery led many hospitals to centralize purchasing decisions and focus more on cost control (rather than buying the top-of-the-line machine for a given department). Initially, the leaders of HSDP visited Philips's top customers personally to explain the value proposition of the platform. Philips also saw the potential of HSDP's data for use by pharmacies and pharmaceutical companies, which were not visited by the Philips sales force at that time. Some at Philips believed that it could easily leverage its existing sales team and contacts to expand HSDP's reach to include pharmacies and other outlets. Philips performed very little direct-to-consumer marketing in the initial stage of the HSDP launch, as consumers typically engaged with Philips clinical devices through providers or payers (with the exception of pregnancy-related products and services). Products and services that supported consumer journeys like pregnancy, where more purchases were made directly by consumers, were promoted and priced differently than those that supported consumer journeys like heart disease, where the clinicians (and payers) bore the majority of the costs.\f