The following is a guest blog post by Oleg Ganopolskiy is VP of Operations at Aria Systems.
A few years ago, a global manufacturer of medical equipment developed a new line of CAT scan and MRI machines.
Sales executives soon hit a wall, however, because of the limited number of customers who could pay for these machines, which cost hundreds of thousands of dollars.
Smaller regional hospitals wanted the machines but couldn’t afford them, so what to do?
The manufacturer began leasing the equipment to the regional hospitals on a pay-per-use basis. Pay-per-use, by the way, is one of the many iterations of recurring revenue, a payment model that’s quickly gaining adoption in the marketplace, even down to the level of the small clinic and solo practitioner.
Thus, in going from direct sales to pay-per-use, the manufacturer opened a new market and everyone benefited, including front-line providers of care.
The manufacturer shifted from selling devices to selling a service, and added smaller, regional hospitals to its market for CAT scan and MRI machines.
Regional hospitals preserved their capital and patients received care locally without the additional time and expense of traveling to distant facilities. Everyone won.
Medical care is at the leading edge of industries embracing innovative delivery of services through the recurring revenue model. But medical organizations must protect the privacy of both front-line providers and patients with secure, cloud-based technology.
That’s why we recently went through the rigorous HIPAA certification process for our monetization platform, so that our customers migrating to recurring revenue models can continue to protect patient privacy.
That new level of protection couples with our PCI DSS v.3 certification for protecting credit and debit card transactions. As a result, we exceed the administrative, physical, and technical safeguards required to protect patient privacy.
Security becomes increasingly critical as entrepreneurs pursue ideas to build new patient services using mobile healthcare and the Internet of Things (IoT), which links billions of devices to a vast, interconnected network, to unlock recurring revenue.
Monetizing the Internet of Things & New Healthcare Services
Market research firm Gartner predicts that by 2020, 26 billion devices will connect to the IoT, providing a vast array of services worth $300 billion-plus in annual sales. For example, the automatic monitoring of biometric and other devices will soon become pervasive as companies like Apple pioneer new technologies.
Apple’s much-anticipated Apple Watch will include the ability to collect medical research data on a large scale, including data from clinical trials involving thousands of patients. This capability is expected to revolutionize how trials are conducted. Apple said its new ResearchKit for application developers, to be launched as the Apple Watch goes on sale April 24, is a game changer.
Research organizations such as Cornell University, Dana-Farber Cancer Research Institute and Stanford Medical Center are planning to target asthma, breast cancer, cardiovascular disease, diabetes and Parkinson’s disease with new programs enabled by the data-collecting devices.
In the near future, doctors and hospitals will be able to do consultations with “health kiosks” via video conference and access patient monitoring devices securely and quickly for vital signs and recent history. These new businesses will often leverage recurring revenue models to cover the costs of providing these services.
Another possible recurring revenue application: providers offering new services to patients based on their medical histories, such as physical therapy. Cloud-based case management systems could generate recurring payments for the providers during the course of treatment. For instance, a provider could recommend physical therapy through medical records, and recommend facilities where the patient could go for therapy. The provider generates revenue by managing subscriptions to the health club facilities.
With the proper security measures in place, the rush to recurring revenue is on in the healthcare sector. Wall Street rewards it, the competition is doing it and customers and patients are beginning to embrace it.
About Oleg Ganopolskiy
Oleg Ganopolskiy is VP of Operations at Aria Systems where he ensures that all systems provide the highest level of security, compliance, performance, capacity and reliability. Oleg joined Aria Systems from Nokia, where he was responsible for operational capacity, planning, analytics, and modeling across the company’s Global Services Platform. Previously, he managed technology operations at AOL, spent eight years in operations at eBay, and has held senior technical roles at Oracle Corporation and Nordic Systems, Inc.