An assessment of the VR market with a focus on payor

1. Virtual Reality- A Payor Opportunity
Assessment
Rick Krohn, M.A., M.A.S.
President HealthSense
rkrohn@healthsen.com

2. Virtual Reality is a century–old idea ……..

3. …that has evolved from a mass market entertainment medium
to a personalized, immersive class of technologies

4. VR describes several related technologies
Virtual reality (“VR”) is an artificial environment created with software and presented to the user in such a way
that the user suspends belief and accepts it as a real environment. In a digital environment, VR is primarily
experienced through two of the five senses: sight and sound.
Virtual reality can be divided into:
the simulation of a real environment for training and education; and
the development of an imagined environment for a game or interactive story.
(http://whatis.techtarget.com/definition/virtual-reality)
Augmented reality (“AR”) is the integration of digital information with the live video of the user's environment
in real time. AR takes an existing visual digital feed and blends new information to create an augmented
environment. Medical AR takes its main motivation from the need of visualizing medical data and the patient
within the same physical space.
(http://whatis.techtarget.com/definition/augmented-reality-AR)
[While VR aims at immersing the user into a computer generated virtual world, AR takes a
different approach, in which virtual computer generated objects are added to the real physical space.]
Real 3D displays an image in three dimensions. This is a significant difference from stereoscopic displays, which
display only two offset images and use the observer’s head and eye movement to “fill in” for the more limited
amount of data present.
Real Holographic differs from 3D in that it has the ability to display binocular disparity, motion parallax,
accommodation and convergence.

5. VR market snapshot
Piper Jaffray analyst Gene Munster has dubbed VR and AR “the next technology megatrend” with “the
potential to make every computer and entertainment interface disappear.”
According to DigiTrends, the addressable market will surpass $90 Billion in 2020.
Healthcare has not been a headliner for VR investment….
…but that will change, according to Goldman Sachs. Healthcare VR applications are forecast to top
$5.1 billion in sales by 2025, with 3.4 million active users, including 1.5 million medical professionals.

6. In healthcare, the tools and technologies of VR have
evolved…..
February 1925 cover of Science and Invention magazine

7. …and the enabling devices have gotten better, too

8. Source: Health –e Everything: Wearables and the IoT for Healthcare, Krohn and Metcalf, Editors
-VR most effective as a training and education tool
-AR effective in the ER, OR as 3D imagery, simulation and heads up display with
checklists that improve outcomes
Notably, VR is Getting traction in the healthcare enterprise

9. …but in other verticals it’s still early days – VR development is
still largely in the pilot and boutique solution stage. Industry-
wide, it’s a green field for innovation.
VR in the Physician Office
Behavior change
Virtual diagnosis
Education and Prevention
VR in Pharma
PTSD
Rehabilitation
Pain management
Behavioral health (ex. pain management, drug efficacy)
VR/AR applications for patients and consumers
Immersive health/wellness
Gamification
Brain injuries
Behavioral health (ex. anxiety, body image, phobia)
Chronic disease management

10. A short video that demonstrates the value of AR as a training and
“Guidance System” in the ER…..click on image

11. VA and DoD are leading development of VR and AR
healthcare apps
• Training and Education – field medicine
• PTSD
• Rehabilitation
• Pain management
• Behavioral health

12. Cleveland Clinic VR
Parkinson’s Disease
… some Enterprise VR Deployments
St. Jude’s Children's Research Hospital

13. Cigna Virtual Relaxation Pod™, an
innovative 3D meditative
experience
…and some Payor Deployments
Disney’s Habit Heroes (sponsored by
Florida Blue, Anthem), the EPCOT
exhibit was built around educating guests
about kicking some unhealthy habits, and
improving health and fitness.

14. Who are the leading players in Healthcare VR?
Whether the clinician is in the operating room or providing emergency care, having quick,
contamination-free access to vitals and medical records without turning away from the patient
helps increase quality of care. Doctors and nurses can view medical data from a wide range of
monitoring devices, on the go, helping them properly respond to any medical situation.
Oculus (acquired by Facebook) radically redefines digital entertainment. Immerse yourself in
games or go inside your favorite movies. Time travel, space travel, or hang out with friends in
VR. Endless worlds await. ($600)
Magic Leap is developing the next computing platform that will enable you to seamlessly
combine and experience your digital and physical lives.
The IMMY iC 60 is a complete AR/VR experience in a single ($1,500) device.
…it’s cardboard

15. VR Opportunities in the Payor Space
• Potential cost savings and quality gains can be captured across multiple verticals – health system,
providers, pharma, consumer.
• Clinical opportunities to impact cost and quality include provider and patient education, best
practices, wellness and prevention, behavioral health, chronic disease management, rehabilitation,
drug therapy.
• Clinical opportunities to introduce VR replacement therapies that are personal, engaging, on-
demand, clinically and cost effective.
• Business opportunities to drive member enrollment and retention, member satisfaction, sales
support, promotions, alliances, networks.
• Cross-industry co-branding and co-marketing: some examples
• Brain injury – NFL
• Aging in place- AARP
• Behavioral health - Facebook
• The Customer – engaging the member base:
• Retail solutions (Gear, etc.), are inexpensive, apps can be quickly developed
• Consumers enjoy immersive experiences
• Gamification and incentives
• Unique outreach, compliance and education tools for high cost members

16. There are, of course, hurdles to VR/AR Adoption in
Healthcare
• Infrastructure, Integration and Gadget cost
• New technology aversion – VR is a young technology not easily deployed in
enterprise environments (but has shown effectiveness in ER, OR and with field
staff to drive better outcomes).
• Creating a truly engaging augmented reality experience in a practical, consumer-
ready device.
• User experience (disorientation, motion sickness)
• Initial training on 3D environment degrades experience
• Privacy, compliance
• Pushback from doctors unaccustomed to retail solutions
- Why should providers care? (managing risk, education, outreach, outcomes,
chronic disease management, compliance).

17. Strategizing VR in the Payor space
• Multiple Benefits: VR not only leverages market trends like population health,
consumerization, value, risk management and personalized care, it positions Payors to
avoid disintermediation and cement provider and member relationships.
• Payors can “Tier” VR solutions. Ex.
• Tier one: low cost/high yield (education, wellness, prevention)
• Tier two: high cost/high yield (rehab, best practices)
• From Clinical Education to Marketing, technology isn’t the centerpiece of the VR solution
– the message or the story is.
• Architect Technology to immersive experience and delivery capabilities (i.e. mobile).
• Mitigate cost, development and adoption through partnerships and affordable-device
enablement.
• Leverage proven techniques to incent viewer – gamification, social media, narrative,
visioning, goal setting, and rewards.
• Know the customer - younger gens, millennials will be more receptive, comfortable with
virtual worlds.
• Gain internal buy-in with early wins: (ex. childhood obesity, replacement drug therapy,
smoking cessation).
• The usual disclaimers apply: privacy and security, access, validation.

18. VR Innovation – Trends
• Blending of VR and AR products
• Commoditization and retail availability of VR tools, devices and solutions
• Increasingly immersive – from passive viewing to active engagement
• Granular range of apps, better resolution, heightened expectations for
creative content
• Form factor – lighter, more comfortable, less scary
• Gaming industry will provide substrate for NextGen VR - from VR
experience to VR environments – ex. The Void

19. Acknowledgements
David Metcalf, Ph.D. , Director, Mixed Emerging Technology Integration Lab,
University of Central Florida Institute for Simulation and Training
Paul Szotek, MD, Assistant Professor of Clinical Surgery
Indiana University Health