5.3.1 Key Questions for an Innovation Valuation

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From the course by University of Minnesota

Healthcare Marketplace

326 ratings

University of Minnesota

Healthcare Marketplace

326 ratings

Course 1 of 5 in the Specialization Healthcare Marketplace

In this course in the Healthcare Marketplace specialization you will identify, define, and describe potential business and public policy solutions to the challenges facing society’s growing demand for health services. Students will master a body of knowledge on the health care sectors major components through reading and reflection. Healthcare has many different cultural components that will be discussed as historic trends as well as future demographic challenges. You will understand diverse philosophies and cultures within and across societies as they relate to healthcare. This outcome is particularly critical because of the tradeoffs needed to be assessed as medical technology advances faster than budgets and perhaps cultures are sometimes willing to tolerate. At the end of the day, you will gain an appreciation for the role of creativity, innovation, discovery, and expression across disciplines in the development of new medical care solutions through and examination of the physician, medical technology and financing sub-sectors of the health economy.

From the lesson

GLOBAL MEDICAL INNOVATION

In this module you will learn about the global market trends. You will also learn the key components of medical technology valuation. The take-away messages from this module are that health economy continues to expand and there are many behavior challenges that are problems as well as opportunities. The module concludes showing a promising technology that is novel, needed, cost-effective and will deliver return – rare qualities when all are checked-off. The skills gained from this module are targeting global health market trends ripe for opportunity as well as knowledge of the checklist of key areas to be covered for the capstone project’s assessment of a promising new innovation.

5.3.1 Key Questions for an Innovation Valuation3:21

5.3.2 What is the Technology?2:02

5.3.3 Who Owns the Technology? Is it Safe?3:06

5.3.4 Will the Technology Return Investment?4:24

5.3.5 Final Summary and Next Steps4:42

Meet the Instructors

Stephen T Parente
Professor
Carlson School of Management, Department of Finance

This is the Healthcare Marketplace Specialization Healthcare Marketplace

Overview, I'm Steve Parente and this is Module 5.3.1,

Key Questions for an Innovation Valuation.

So one of the big skills of this entire course is really to come up with

some approach to evaluation of a new technology or policy innovation.

And what we're going to do now is walk through in really the module 5.3 series,

the different components of what a valuation would comprise.

So for our example, we're first of all going to

go through the executive summary of what a valuation needs to have.

The executive summary should basically make sure that any report or

structure really not have any mystery to it.

Meaning that right up front you're going to be giving a verdict on whether

the technology is going to work or not and be useful for investors.

And so, the way that I want you to approach a valuation is not so

much as a financial exercise.

It's really getting an understanding of do all of the parts of the medical

technology universe, the provider world, the technology itself,

the financial world, all of them align fairly well.

So, here are the key things that one have to take a look at.

Are the patient and physician benefits known and what are they?

Is the technology feasible and defensible?

As a friend of mine likes to say, does it defy the law of physics or not?

Is there a favorable way to get reimbursed by insurance companies?

Do market estimates appear favorable

in terms of whether this will be a good technology given the competition?

Is further clinical support needed?

This goes back to the comparative effectiveness and

cost effectiveness, some things we talked about earlier.

Is there the possibility for growth at high margins?

Is payback favorable?

Could there be any sort of disruptive technology in the market?

Is it a billion dollar opportunity?

And really the final one,

the biggest one of them all, do you invest in this technology?

Do you recommend investment?

So, we're going to talk about technology that is designed to deal with a major

cardiac issue, which is mitral valve regurgitation.

Here's an image of the heart, inside we have a mitral valve.

What normally happens in terms of blood flow is that this valve will go up and

take the blood in and then go down and seal it.

But if you have a prolapsed, that is a torn,

mitral valve, blood will escape and flow back and will actually really limit

the effectiveness of that particular heart valve.

And so one way to deal

with that technology is to have an annuloplasty ring.

This is the current procedure.

Basically if you have a torn mitral valve here, you would essentially then go in and

really do kind of an open heart procedure to find this and then sow it all up.

So that now it's no longer torn and everything works really well.

However, it's a very complicated procedure, the risk of infection is huge.

And if there's some way to be doing this in a minimally invasive way,

that would be quite beneficial.

So the next module,

we'll go talk about what the technology is that might approach this in a new way.

This concludes healthcare market

specialization focused on medical evaluation information introduction.

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