Digital Healthcare White Paper

Digital Healthcare 1 Industry Analysis Fall 2013
Table of Contents

Preface 2

The Four Stages of Healthcare Digitization 3

Unlocking the Value of Data 7

The Demographic Trends Driving Digital Healthcare
and Why Investors Should Pay Attention 13

The Accelerators of Digital Healthcare Innovation 26
Qualcomm Life 27
Rock Health 30
StartUp Health 31
Healthbox 32
Blueprint Health 33

Digital Healthcare Technology Industry Overview 34

Many Exciting Opportunities and Many Ways to Invest 38
Clinical Back-Office and Clinical Front-Office 40
Analytics 45
Health and Wellness/Gamification 47
Medical Devices (Sensors/Monitoring/Imaging) 49
Diagnostics/Genomics/Clinical Trials 51
Provider Information/Insurance/Education 52
Fitness 53
Diabetes 54
Cardiovascular Diagnostics/Sensors 56
Telehealth 57

Conclusion: Who Leverages Digital Healthcare and Investment Potential? 59

Important Disclosures and Certifications 60

Stifel does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making
their investment decision.

All relevant disclosures and certifications appear on pages 60 and 63 of this report.


Preface

What is Digital Healthcare? We believe digital healthcare companies are engaged in the pursuit of
leveraging technology to transform all aspects of healthcare. Digital healthcare technology companies
specifically look to leverage Internet and mobile technology to improve healthcare by providing networks
with interoperability and providing mobility to the clinic. At the same time, digital healthcare companies
are leveraging these technologies to incentivize consumers to engage and take ownership of their health.
What is Health Information Management? We define health information management as the
maintenance of health records by pen and paper or digitally in hospitals, physician offices, health
departments, and insurance companies. In our view, electronic medical records (EMRs) and electronic
health records (EHRs) are creating the basic digital foundation needed to create a fully integrated digital
healthcare eco-system.
What are the Four Stages of Healthcare Digitization? In our view, digital healthcare technology and
health information management are converging to create a digitized healthcare system. We believe that
convergence will move the focus of healthcare digitization from building a foundation to an integrated eco-
system that drives reduced healthcare costs through the value of analytics. In our view, there are four
stages of healthcare digitization, which we describe below.
Stage 1 Digitizing the Clinical Back-Office (enterprise systems solutions). We believe Stage 1
consists of building the basic digital infrastructure for healthcare. We believe the focus of Stage 1
revolves around companies developing technology around EMRs/EHRs, revenue cycle management
(RCM), and pharmacy benefit management, essentially digitizing the back-office infrastructure of a
doctors office or hospital. Stage 1 solutions are often enterprise-type systems and do not always
exhibit robust interoperability between disparate systems.
Stage 2 Digitizing the Clinical Front-Office and Back-Office (Internet and mobile solutions).
We believe Stage 2 consists of developing and implementing digital healthcare technologies that
involve the patient (e.g., wireless monitoring, health and wellness tracking, et al.). In our view, the
commonality among Stage 2 companies is a focus on leveraging the web, mobile, and the cloud to
create interoperable solutions, provide mobility to the clinic, as well as facilitating consumer
engagement in healthcare decisions.
Stage 3 Integration. We believe integration consists of healthcare IT companies and digital
healthcare companies uniting through partnerships or acquisitions to create a complete eco-system
(closed loop of patient, provider, and healthcare organization/institution). We believe interoperability
and mobility will allow healthcare to transform outcomes and cost of care by unlocking the value of
data.
Stage 4 Monetization. We believe monetization consists of unlocking the value of healthcare data
via analytics to all participants in the healthcare industry (e.g., healthcare IT companies, digital
healthcare companies, managed care organizations, and even pharmaceutical companies).
Where Are We Now in Terms of the Four Stages? We believe the digital transformation of healthcare is
currently in Stage 1 and the beginning of Stage 2. Clinician adoption of EMR/EHR technology illustrates
that the basic digital foundation is in place. In our view, the development of digital healthcare technologies
is driving the next stage of development by striving for interoperability of systems, mobile solutions, and
engaging patients in healthcare decisions and processes.
Our Thesis. We believe the digital transformation of healthcare will occur in four stages. In our view,
current efforts remain focused on building out the necessary technological infrastructure to drive
digitalization. We believe that digital healthcare technology will provide the catalyst for the digitalization of
healthcare to move from the foundation stage to the integration stage, which is characterized by
interoperability of disparate systems and solutions. Digital healthcare technology is engaging patients with
their healthcare, providing the necessary foundation to drive healthcare costs lower in the future. In our
opinion, the creation of a fully integrated digital healthcare system will lead to the ability to unlock the
value of healthcare data in order to drive down costs of care throughout the system.


The Four Stages of Healthcare Digitization

We believe the digitization of healthcare represents an important secular investing theme that will play out
over the next decade. The promise of healthcare digitization lies in the possibility of driving reduced
healthcare costs. We note that McKinsey estimates that digital healthcare technology may drive $300
billion to $450 billion in cost savings annually. In our view, these estimates represent the potential
associated with the digitization of healthcare. We believe that the digitization of healthcare remains in the
very early stages and the current focus lies in building the digital foundation (digitizing the clinical back-
office and clinical front-office). Once all constituents of the healthcare industry (clinicians, hospitals, and
patients) are digitized, then new technological solutions leveraging mobile and other new technologies
born out of digitization should move healthcare toward the goal of significant cost reductions.
In our view, healthcare digitization will develop through four stages. The focus of Stage 1 is developing a
basic digital infrastructure that moves the clinical back-office (medical records, billing, et al.) from pen and
paper to digital. Stage 2 will be driven by the development of new digital healthcare technologies that
leverage the wireless infrastructure digitizing the clinical front-office (communication with patients,
scheduling, monitoring, diagnostics, et al.). The focus of Stage 2 is on developing wireless healthcare
solutions leveraging mobile technology (smartphones and tablets) that allow patients and clinicians to
better understand healthcare issues. In our view, an important aspect of Stage 2 lies in driving consumer
adoption and closing the digital healthcare eco-system. We believe without patient buy-in, the digitization
of healthcare will likely begin and end with the clinical back-office.
In Stage 3, companies will begin to integrate developments achieved in Stage 1 and Stage 2; at this point
we believe companies will focus on how to close the eco-system in terms of their respective business
models. Lastly, in Stage 4, constituents will begin to focus on driving meaningful analysis off of the vast
data created by digitized healthcare. We believe Stage 4 represents the greatest opportunity for the
digitization of healthcare, but also represents the least defined opportunity, as we remain in the early
stages of healthcare digitization. In Exhibit 1, we provide a diagram that explains our framework, The
Four Stages of Healthcare Digitization.

Exhibit 1: The Four Stages of Healthcare Digitization Explained
Investment Area(s) Beneficiaries
Technological
Focus
The Four Stages of Healthcare Digitization
Stage 1
Digitizing the Clinical Back-Office
Stage 2
Digitizing the Clincial Front-Office
Stage 3
Integration
Stage 4
Monetization
EMRs/EHRs
RCMs
PBMs
CROs
Digital
Healthcare
Combines
Stage 1 and
Stage 2
Entire Healthcare
SupplyChain
Clinicians
Hospitals
Consumers
Clinicians
Closes the
Eco-system by
Integrating
Stage 1 and Stage 2
Constituents
Focus on
Leveraging
the Value of
Data
Healthcare IT Companies
Digital Healthcare Companies
In Stage 3, we believe Healthcare IT
companies will acquire Digital Healthcare
companies. Additionally, Digital Healthcare
companies will become IPO candidates
The Entire Eco-system:
Healthcare IT
Digital Healthcare Technology
Managed Care Organizations (MCO)s
Pharmaceuticals

Source: Stifel

Stage 1 Digitizing the Clinical Back-Office. Stage 1 of healthcare digitization focuses on building a
digital infrastructure that allows clinicians (doctors, nurses, healthcare providers), hospitals, and other
healthcare organizations to move operations from pen and paper into the digital era, bringing medical
records, billing procedures, pharmacy management, and other relatively basic tasks online. Investment
opportunities in Stage 1 are for the most part healthcare IT companies focused on providing EMR/EHR
technology to healthcare, but also include companies focused on revenue cycle management, pharmacy
benefit management, and even contract research organizations. As clinicians become more comfortable
with digitization over time, we believe workflow will become more efficient and clinicians will become more


receptive to leveraging more complex digital healthcare solutions. We note that Government stimulus
represents a major catalyst driving Stage 1 as the Health Information Technology for Economic and
Clinical Health (HITECH), part of the American Recovery and Reinvestment Act (ARRA) of 2009,
authorized $22 billion in incentives to drive the modernization of health information technology systems.
Stage 2 Digitizing the Clinical Front-Office. In Stage 2, the digitization efforts focus not only on the
clinical back-office, but also the clinical front-office. We believe Stage 2 digitization is about closing the
digital healthcare eco-system through interoperability, mobility, and consumer engagement. The focus of
Stage 1 is digitizing basic clinical back-office tasks that will likely result in more efficient clinician workflow.
In our view, Stage 1 does not involve using digital technology to transform patient care or provide
technological solutions that allow patients an easier time of tracking their own health. Really, the focus of
Stage 2 digitization lies in leveraging wireless technology (smartphones and tablets) to develop digital
healthcare solutions that allow patients to not only better understand their health, but also allow them to
make behavioral adjustments to their health. In our view, this stage represents the beginning steps for
healthcare leveraging digital technology to drive reduced healthcare costs. We note that Stage 2
digitization is being driven by multiple catalysts: (1) the Affordable Care Act, which shifts the focus of
healthcare decisions to consumers/patients, and (2) the proliferation of wireless technology and high
adoption rates among consumers and physicians. The convergence of these two catalysts has led to the
development of myriad companies focused on attacking different areas of healthcare through digital
technology.
Stage 3 Integration. We believe Stage 3 represents the creation of a fully integrated digital healthcare
eco-system, which includes clinicians, hospitals, and patients. In Stage 3, companies will focus on ways
to integrate the digitized clinical back-office and the digitized clinical front-office. The goal of integration
will be to provide more complex solutions that help lead to reduced healthcare costs throughout the
system. We believe the integration of Stage 1 and Stage 2 will provide the necessary technological tools
for Accountable Care Organizations (ACOs) and other healthcare organizations to truly better understand
their patient populations, leading to improved healthcare outcomes and reduced costs.
Stage 4 Monetization. We believe Stage 4 represents the Holy Grail of healthcare digitization as it
represents monetizing the value of data through reduced healthcare costs. In Stage 4, the integrated
digital healthcare tools of Stage 3 allow numerous constituents to analyze large data sets in order to drive
better understanding of patients and their health, in turn leading to lower costs. According to a recent
McKinsey & Company study, the promise of integrating digital healthcare and analytics may lead to an
estimated $300 billion to $450 billion in cost savings for the U.S. healthcare complex.

Where Are We in Terms of the Four Stages?

In terms of the Four Stages of Healthcare Digitization, we believe that we are in the early development
phase of Stage 1 and Stage 2. In terms of Stage 1 Digitizing the Clinical Back-Office, we believe that
digitization remains low, as according to HIMSS roughly 80% of clinicians are using a component of a
basic EMR/EHR, and less than 40% of clinicians are using a more complex integrated EMR/EHR
solution. In our view, these statistics suggest that the digitization of the clinical back-office remains a
developing theme. At the same time, we believe that innovative digital healthcare technologies are
beginning to hit their stride. Technology companies are conducting clinical trials testing wireless devices
(e.g., Qualcomm Life testing devices from Asthmapolis and Zephyr) in order to understand the possible
impacts digital healthcare technology may have on care outcomes. We believe that wearable computing,
especially devices focused on tracking health data, seem to be one of the more well developed areas of
digital healthcare. Also, we believe there are companies already working to monetize healthcare data,
most notably managed care organizations (MCOs) with a health data analytics function.
We believe numerous companies are participating in the continued digitization of healthcare. In our view,
some participants are focused on a single stage of digitization. Companies participating in healthcare
digitization range from healthcare IT companies to digital healthcare companies, to technology companies
and managed care organizations, as well as pharmaceutical companies. At the same time, some
companies are starting to extend their focus to other stages (e.g., EMR/EHR companies integrating digital
healthcare technologies into their platforms (Athenahealths acquisition of Epocrates or Aetnas


acquisition and integration of iTriage)). We believe that companies focused on creating integrated
solutions across all stages of digitization are best positioned to capitalize on the ongoing digitization of
healthcare. Below we provide a breakdown of companies participating and companies that are possible
beneficiaries of digitization by stage and focus.
The first stage of healthcare digitization, in our view, focuses on digitizing the clinical back-office. We
define the clinical back-office as tasks associated with health information management (e.g., medical
records, billing, revenue cycle management, or essential tasks not associated with direct influence of care
outcomes). The solutions and technologies that are digitizing the clinical back-office are aimed at
generating a more efficient infrastructure. Companies participating in Stage 1 likely fall into one of four
categories: EMR/EHR providers, revenue cycle management providers, pharmacy benefit managers,
logistics, or contract research organizations. We provide a list of prominent public and private companies
that we believe are participants in Stage 1 digitization in Exhibit 2.

Exhibit 2: Key Companies Participating in the First Stage of Healthcare Digitization
($ in millions)
EMRs / EHRs Ticker
Market
Cap
Revenue Cycle
Management (RCM) Ticker
Market
Cap
Pharmacy Benefit
Managers (PBM) Ticker
Market
Cap Logistics / Misc. Ticker
Market
Cap
Athenahealth ATHN $3,956.1 MedAssets MDAS $1,422.1 BioScrip BIOS $779.5 Owens & Minor OMI $2,153.2
Cerner CERN $16,023.2 HMS Holdings HMSY $2,103.9 ExpressScripts ESRX $53,346.3 Omnicell OMCL $807.6
Allscripts MDRX $2,565.9 Accretive Health AH $904.6 Walgreens WAG $46,739.9 Merge Healthcare MRGE $250.1
Greenway Medical GWAY $474.5 Quality Systems QSII $1,264.5 CVS/Caremark CVS $72,019.3
Computer Programs and Systems CPSI $638.2 Premier, Inc. Private Catamaran Corp CTRX $11,471.6
Epic Private
eClinicalWorks Private
M*Modal Private
MEDITECH Private
Stage 1: Digitizing the Clinical Back-Office: EMRs / EHRs / RCMs / PBMs / Logistics / Misc.

Source: Company documents, FactSet, and Stifel
The second stage of healthcare digitization, in our view, focuses on digitizing the clinical front-office. We
define the clinical front-office as essential tasks in a clinicians workflow aimed at driving a healthcare
outcome (e.g., monitoring, tracking information, et al.). We believe an essential component of digitizing
the clinical front-office consists of bringing patients into the fold. In our view, innovative companies
focused on developing digital healthcare technologies seek to solve a healthcare issue through
wireless/mobile technology, but also recognize that patient participation is vital to reducing costs. Both
public and private companies are participating in Stage 2 with public company participants being Internet
healthcare focused companies, large technology companies, and even diagnostic companies. Innovative
private digital healthcare companies are focused on a myriad of topics: medical records, analytics,
diagnostics, wearable computing, health and wellness, et al. We provide a list of prominent public and
private companies we believe are participants in Stage 2 digitization in Exhibit 3.
Exhibit 3: Key Companies Participating in the Second Stage of Healthcare Digitization
($ in millions)
Company Ticker
Market
Cap Company Ticker
Market
Cap Company Ticker Company Ticker
WebMD WBMD $1,667.0 Vocera VCRA $450.9 Jawbone Private Sotera Wireless Private
eHealthinsurance EHTH $513.8 Streamline Health STRM $92.1 Castlight Health Private Prodea Systems Private
Google GOOG $292,918.6 iRobot IRBT $966.3 PracticeFusion Private RedBrick Health Private
Apple AAPL $452,631.4 Nuance NUAN $6,101.1 AirStrip Technologies Private Healthline Networks Private
Samsung 005930.KS $163,245.0 Model N MODN $337.9 23andMe Private CareCloud Private
Medidata Solutions MDSO $2,434.8 Illumina ILMN $9,902.1 MedSynergies Private Glumetrics Private
Healthstream HSTM $933.6 Orasure OSUR $287.4 ZocDoc Private Kareo Private
c8Medisensors Private Audax Health Private
FitBit Private Oscar Private
Blue Health Intelligence Private Kinnser Software Private
Humedica Private Withings Private
Stage 2: Digitizing the Clinical Front-Office and Clinical Back-Office (Interoperability/Mobile/Consumers)

Source: Company documents, FactSet, Rock Health, StartUp Health, and Stifel


The third stage of healthcare digitization, in our view, focuses on integrating the technological advances
in digitizing the clinical back-office and clinical front-office. Participants in this stage seek to build
platforms that provide innovative solutions aimed at changing clinical outcomes, but also providing the
essential digital backbone needed to do so. We believe that large technology companies, diagnostic
companies, and even managed care organizations are early participants in this stage of digitalization. We
provide a list of select prominent public companies we believe are participants in Stage 3 digitization in
Exhibit 4. First, we list Qualcomm because of its significant efforts to build a digital healthcare eco-
system through its Qualcomm Life subsidiary. Alere represents a medical diagnostics company working to
integrate diagnostics, health monitoring, and information technology solutions in one eco-system. In terms
of Healthcare IT companies, we list Athenahealth because of its acquisition of Epocrates, Cerner as it
begins to focus on leveraging the value of data, and Allscripts because of its focus on population health
management, and acquisitions of digital healthcare companies dbMotion and Jardogs. We include United
Health, Aetna, and WellPoint, as each of these managed care organizations operates an analytics
organization, and these organizations have started to collaborate with other healthcare constituents to
leverage the value of data.

Exhibit 4: Key Companies Participating in the Third Stage of Healthcare Digitization
($ in millions)
Company Ticker Market Cap Company Ticker Market Cap Company Ticker Market Cap
Qualcomm QCOM $116,683.3 Athenahealth ATHN $3,956.1 United Health UNH $75,296.8
Alere ALR $2,614.5 Cerner CERN $16,023.2 Aetna AET $24,227.4
Dexcom DXCM $1,903.6 Allscripts MDRX $2,565.9 WellPoint WLP $26,096.3
Stage 3: Integration: Technology Integrators and Analytics

Source: Company Documents, FactSet, and Stifel

The fourth stage of healthcare digitization, in our view, focuses on unlocking the untapped value of
healthcare data through monetization. We believe the participants and beneficiaries of Stage 4
encompass a wide range of industries and constituents ranging from healthcare IT companies to
technology companies to pharmaceutical companies. Any company extracting value from healthcare data
or providing services to reduce healthcare costs through better outcomes or more targeted advertising, et
al., is a participant in this stage.
While we believe there are many participants and possible beneficiaries of healthcare digitization, we
believe there are companies at risk of disintermediation. First, we believe the greatest risk is posed to
companies focused on solutions that target either just the clinical back-office or just the clinical front-
office. Companies that do not extend their focus to understanding the possible opportunities associated
with integrating current technologies with new digital healthcare innovations will likely be (1) acquired, (2)
disintermediated, or (3) become irrelevant.
Additionally, we believe the wearable computing space, specifically those companies focused on tracking
health data, e.g. FitBit, Jawbone, Withings, et al., may disintermediate global-branded consumer weight-
loss services companies. Wearable computing companies are combining social networking with wearable
computing to allow consumers to more easily track their fitness, health, and even weight. Furthermore,
these companies are using social networking to engage consumers, allowing them to compete against
one another, or get support from peers. Lastly, these companies are analyzing consumer data inputs in
order to provide feedback on how to make the healthiest choices in real-time. We would not be surprised
to see wearable computing companies disintermediate global-branded consumer weight-loss services
companies over time.
Now we attempt to better understand the potential value of healthcare data and the potential cost savings
that healthcare data may provide in the next section of this report, Unlocking the Value of Data.


Unlocking the Value of Data

The ultimate potential for digitizing healthcare lies in the ability to drive reduced costs. The U.S.
Government has committed significant stimulus dollars via HITECH/ARRA to be used for updating
healthcare information technology infrastructure. We believe these efforts are building the foundation for
the further digitization of healthcare. Additionally, the Affordable Care Act is shifting the focus of
healthcare decisions to the consumer, which is serving as a catalyst to drive the development of digital
healthcare technology solutions focused on the clinical front office. What remains untapped is the
potential value locked in the massive data sets generated throughout the healthcare supply chain. In our
view, the Holy Grail of healthcare digitization lies in reducing healthcare costs through data and
analytics.
We believe several government initiatives are helping drive the digitization of healthcare, including the
HITECH Act, the Health Data Initiative, and the Affordable Care Act. In our view, the goals of these
programs align well with our Four Stages of Healthcare Digitization framework. Through the HITECH Act,
the government funding has created an impetus for healthcare professionals to adopt electronic medical
record technologies, in turn creating a foundation for further digitization. Through the Health Data Initiative
and Affordable Care Act, the government is providing the impetus for the healthcare industry to create a
foundation for digitized data and analytics, which we believe represents a significant catalyst for the
continued development of digital healthcare technologies.
In Exhibit 5, we provide a summary of these key government programs, as well as their key provisions
and potential outcomes. First the HITECH act provides $22 billion worth of incentives for providers to
adopt and utilize electronic health technology and records. The Health Data Initiative (HDI), launched in
2010, and now known as the Health Data Consortium, represents a public-private partnership made up of
17 organizations. The Health Data Initiative aims to help Americans understand health and health care
performance in their communities, and ultimately facilitate improvement. Lastly, the Affordable Care Act
(ACA) focuses on bringing affordable care to consumers and brings roughly 30 million new patients under
coverage. We believe the Affordable Care Act makes numerous provisions that will help further
development of a digitized data and analytics eco-system for healthcare.

Exhibit 5: Summary of Key Government Programs Driving Healthcare Digitization
Enables new payment models
Provides new ways for patients and providers to engage
Reduces medical errors
Increases use of latest research and evidence
Patients can compare provider value
Providers can better evaluate appropriate use of drugs and
treatments
Manufacturers can optimize R&D
Insurers can design more engaging programs
Organizations can distill quality information and create
products to inform consumers
Enables coverage for about 30 million more patients
Providers focus on outcomes, perform newer unneeded
activities
Reduces reimbursement for readmissions Providers increase productivity
Eliminates reimbursement for hospital-acquired infections Demand for hospitals declines
Supports patient-centered medical homes Patients become sensitive to value
Creates Accountable Care Organizations (ACOs)
Moves toward paying for full episodes of care rather than fee
for service
HITECH Act:
Health Data
Initiative:
Affordable Care
Act:
Provides incentives for use of electronic health technology and
records
Releases government health data into the public sector
Initiative Provisions Potential Outcomes

Source: Castlight Health, HITECH Act (www.healthit.gov), Health Data Initiative (www.hhs.gov), and the Affordable Care Act (www.hhs.gov)

In our view, the HDI initiative and the ACA provide a major catalyst for moving towards a fully integrated
digital healthcare eco-system. The HDI initiative liberates health data allowing innovators and
developers across the country to tap into data sets from CMS, CDC, FDA, and NIH, in order to drive


innovation. Information provided by HDI includes clinical care provider quality information, nationwide
health service provider directories, databases of the latest medical and scientific knowledge, consumer
product data, community health performance information, government spending data, et al. A major focus
for HDI has been on making existing data machine-readable, downloadable, and application
programming interface accessible, while protecting privacy. Furthermore, HDI sponsors innovation using
its library of data sets through numerous events as well as its annual Health Data Initiative Forum (Health
Datapalooza).
We note that the ACA also makes several provisions for a digitized data and analytics eco-system for the
improvement of healthcare. While the ACA focuses on expanding the insured population by more than 30
million, the ACA also makes numerous provisions focused on building an integrated digitized data and
analytics eco-system. Several sections of the ACA represent provisions for the development of data and
analytics applications for healthcare; we highlight a few of the provisions below:
Section 3013 Quality Measure Development. This section sets the standards for measuring
performance and improvement of population health or of health plans, providers of services, and
other clinicians in the delivery of health services.
Section 3022 Medicare Shared Savings Program. This section outlines the establishment of
Accountable Care Organizations (ACOs).
Section 4302 Understanding Health Disparities. Data Collection and Analysis. The section
calls for healthcare programs to enhance their data collection and data reporting in order to
reduce disparities.
Section 6301 Patient-Centered Outcomes Research. This section sets guidelines for
comparative clinical effectiveness research and establishes a Patient Center Outcomes Research
Institute (PCORI).
Section 10305 Data Collection; Public Reporting. This section calls for a strategic framework
for public performance reporting.
Section 10332 Availability of Medicare Data for Performance Measurement. This section
calls for the creation of qualified entities; establishes qualifications for using Medicare claims data
for analysis.
A major provision of the ACA revolves around the development of Accountable Care Organizations. The
Centers for Medicare and Medicaid defines ACOs as: groups of doctors, hospitals, and other health care
providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.
These organizations exist to drive lower healthcare costs, improve the quality of outcomes, and improve
the care experience. ACOs achieve these goals through payment models that reward quality care
coordination and quality outcomes. We believe a key component of ACO success will be the use of data
and analytics.
In January 2013, McKinsey published a study entitled The big data revolution in healthcare:
Accelerating value and innovation, which analyzed the possible impact of data analysis on the healthcare
industry. The report estimates that unlocking the value of data in healthcare might lead to between $300
billion and $450 billion in savings compared to the $2.6 trillion baseline U.S. healthcare costs as of 2010.
In Exhibit 6, we illustrate the estimated savings scenarios based on five focus areas: health tracking,
coordinated care, best provider, accountable care, and digital healthcare. Health tracking, which consists
of patients taking control of their health through tracking and behavioral change, is estimated to drive
between $70 billion and $100 billion in savings. The coordinated care category, which represents a fully
integrated digital healthcare organization, is estimated to drive between $90 billion and $110 billion in
savings. The best provider category, which focuses on ensuring patients always see the highest quality
provider and provider of best fit, is estimated to drive between $50 billion and $70 billion in savings. The
accountable care category, which consists of tying provider reimbursement to performance, is estimated
to drive savings between $50 billion and $100 billion. Lastly, the digital healthcare category, which
consists of leveraging new technologies to improve healthcare, is estimated to drive between $40 billion
and $70 billion in cost savings.


Exhibit 6: The Potential of Unlocking the Value of Healthcare Data
$70
$90
$50 $50
$40
$-
$20
$40
$60
$80
$100
$120
Health
Tracking
Coordinated
Care
Best Provider Accountable
Care
Digital
Healthcare
E
s
t
i
m
a
t
e
d
S
a
v
i
n
g
s
(
$
b
i
l
l
i
o
n
s
)
Estimated Cost Savings: Low Estimate
$100
$110
$70
$100
$70
$-
$20
$40
$60
$80
$100
$120
Health
Tracking
Coordinated
Care
Best Provider Accountable
Care
Digital
Healthcare
E
s
t
i
m
a
t
e
d
S
a
v
i
n
g
s
(
$
b
i
l
l
i
o
n
s
)
Estimated Cost Savings: High Estimate
Total Estimated Costs Savings
(Low Estimate) = $300 Billion
Total Estimated Costs Savings
(High Estimate) = $450 Billion

Source: American Diabetes Association, American Hospital Association, HealthPartners Research Foundation, McKinsey Global Institute, National Bureau of
Economic Research, U.S. Census Bureau

While we believe that the potential of unlocking healthcare data remains untapped, we do believe there
are examples of companies that are working on unlocking the value of data. We provide a few examples
of these companies below.
At the most basic level, we believe companies such as WebMD (WBMD, $33.09, Buy) and competitors
are analyzing vast consumer data sets to drive more efficient healthcare advertising. These companies
have been able to develop robust mobile app eco-systems, creating a stickier user experience across
their platforms. A consumer using mobile apps makes the platform a daily or weekly destination in order
to track health data, whereas before a consumer might visit once every few months. The stickier user
experience has led to the development of vast consumer data sets regarding demographics and other
health-related information. The data can then be analyzed in order to drive better ad targeting, as well as
more efficient marketing ROI. We believe the use of general healthcare-like data to drive more efficient
advertising represents an early step toward unlocking the value of healthcare data.
We note that wearable computing technology companies are focused on driving consumer health
engagement, but also utilizing data to provide health behavior advice. Companies such as Fitbit,
Jawbone, and Withings are developing a suite of smart-devices that allow consumers to better track their
health and fitness. Providing consumers the ability to track their health information creates large data sets
and allows these companies to leverage analytics to provide feedback to consumers. Each of these
companys device suites not only collects a consumers health information, but also uses that information
to provide feedback allowing the consumer to make optimal health choices.
Additionally, there are several companies in the managed care space working to better monetize and
understand healthcare data. We note that managed care providers United Health (UNH, $74.06, Buy,
covered by Tom Carroll), Aetna (AET, $65.11, Buy, covered by Tom Carroll), and WellPoint (WLP,
$87.29, Buy, covered by Tom Carroll) each operate their own analytics division. United Healths
OptumInsight provides technology, consulting, and analytics solutions to different stakeholders
throughout the healthcare system. Aetnas ActiveHealth provides population health management
solutions in order to help manage healthcare costs. We note that ActiveHealths MyActiveHealth personal
health record is integrated with its consumer-facing mobile app iTriage. Lastly, WellPoints Healthcore
provides clinical outcome research services to health plans, pharmaceutical companies, and government
agencies. We believe each of these entities shows that significant value lies in analyzing and
understanding vast healthcare data sets to drive reduced healthcare costs.


Exhibit 7: Real Life Examples of Leveraging Healthcare Data
Pharma and Payors
Employers and
Employees
Tracking Employees Health and Wellness Drive Benefit Costs Lower
Blue Cross Blue Shield of
California
Nant Health
AstraZeneca
Well Point's HealthCore
CVS/Caremark
Use HealthCore and AstraZeneca Clinical
Trial Data to more efficiently allocate
R&D spending
WebMD
Conducting studies to determine the most effective and
economical treatments for chronic illnesses and other
common diseases
Constituents Partners What Are They Working On Goal
Payors and Providers
Developing an integrated technology system allowing
doctors, hospitals, and health-plans to deliver more
coordinated and personalized evidence-based care.
Performance Improvement

Source: McKinsey & Company, and Stifel

In Exhibit 8, we provide a diagram of who we believe are the key constituents of digital healthcare. In our
view, constituents include consumers, digital health technology providers, healthcare IT companies,
managed care organizations, and biopharmaceutical companies. The commonality among these
constituents is that each entity has the opportunity to extract value from innovation in digital healthcare
technology. Consumers are able to better track their daily activities, allowing consumers to more easily
adopt healthy habits and healthy lifestyles. Digital healthcare technology companies are able to provide
innovative mobile apps and devices that foster healthier lifestyles and life choices for consumers. The
opportunity for healthcare IT companies lies in integration of these innovative technologies. We believe
that integrating these consumer-focused technologies allows healthcare IT companies to go beyond
digitizing the undigitized medical records by providing a more efficient, convenient, and interactive
healthcare experience for consumers and physicians. We believe the integration of consumer-focused
digital healthcare technology will also unlock value to managed care organizations and biopharmaceutical
companies. First, MCOs will be able to utilize the vast amounts of consumer- and physician-generated
data to better understand their patient populations, which should help drive costs down. Lastly,
biopharmaceutical companies will be equipped to better target possible consumers of drugs, leading to
greater marketing efficiency and likely better patient outcomes.

Exhibit 8: Key Constituents of Healthcare Data
Physicians Technology Companies Healthcare IT companies
Healthcare Professionals Digital Healthcare Companies Managed Care Organizations
Patients Pharmaceutical Companies
Constituents of the Digital Healthcare Ecosystem

Source: Stifel

We provide a diagram of what we believe to be a representation of the digital health eco-system in
Exhibit 9. The eco-system consists of the key constituents we identified in Exhibit 8, but also includes
technology companies and digital healthcare companies. In our diagram, Qualcomm Lifes 2Net Hub
represents the center of the eco-system. The hub allows several digital technology companies to leverage
3G technology, providing mobile solutions to physicians and patients. Entities like WebMD are working
with technology providers such as Qualcomm Life and other digital technology providers to aggregate
data across several different devices to help patients better understand their health. We believe this
portion of the network offers significant promise to healthcare IT companies, MCOs, and even
biopharmaceutical companies. In our view, leveraging consumer-facing digital healthcare technologies
shifts electronic health records from a nice technological advancement to an essential innovation that
truly drives value through the healthcare chain through cost reductions. We believe this extends even


further to MCOs and ACOs, as these entities should be able to better analyze and understand health
risks with those patients they cover.

Exhibit 9: The Digital Healthcare Eco-System
We Believe Integration of Digital Healthcare
Technologies with EMR / EHR Technology
Creates a Greater Value Proposition for
Healthcare IT Companies
The Risk is That MCOs May Be Able to Extract
Value Through Direct Relationships with Digital
Healthcare Companies
Digital
Healthcare
Technology
Companies
WebMD
Physicians
Healthcare
Professionals
Patients
Managed Care
Organizations
(MCOs)
Healthcare IT
Companies
Pharmaceutical
Companies

Source: Company documents, and Stifel

We believe the crux of digital healthcare lies in the continued development and leverage of mobile
technologies. In our view, the ways in which WebMD and other online health information companies use
mobile in their business models can be applied to the digital healthcare industry. Both WebMD and other
online health information companies operate consumer- and physician-facing portals for health
information that combine both the PC-based Internet and mobile devices to deliver information. We
believe the development of integrated multi-screen PC/Mobile app eco-system represents an essential
component of success for online health information companies.
In Exhibit 10, we provide a diagram of what we call the Mobile Virtuous Circle, which describes the value
and how WebMD and other online health information companies leverage mobile eco-systems. These
companies have developed their own eco-system of mobile apps and data trackers that allow consumers
to further customize how they interact with their own health. The apps these companies have built allow
for customization and allow consumers to track some form of health data. In turn, the ability to track
health data makes the app sticky, driving increased and more frequent consumer engagement. At the
same time, user engagement and data input creates a large database of information, which can then be
analyzed and monetized. Given these companies are predominantly advertising driven, the data analysis
can be used to prove out ROI metrics to biopharmaceutical advertisers and consumer products
companies. We believe the mobile Virtuous Circle extends to all digital healthcare companies as they
seek to monetize data and reduce costs.


Exhibit 10: The Mobile Virtuous Circle
Consumers Use
Eco-System to
Track Health Data
Mobile Eco-
System
Becomes
Destination
Large Data
Set
Develops
Company
Drives
Value Via
Data
Analysis
Mobile App
Eco-System
Created

Source: Stifel

The promise of digitized healthcare lies in analyzing data in order to drive cost of care reductions. We
believe that as healthcare professionals and hospitals continue to build out a digital foundation, new,
more complex digital healthcare technology solutions will emerge. In our view, healthcare IT companies,
managed care organizations, and even pharmaceutical companies will utilize these technologies to
analyze data in order to extract value throughout the healthcare industry. Next, we review the
technological and demographic trends driving the shift toward digital healthcare technologies.


The Demographic Trends Driving Digital Healthcare and Why Investors Should Pay Attention
We believe the adoption of digital healthcare among clinicians and consumers remains in the early
stages. The ubiquity of Internet access and usage among Americans and increasing proliferation of
mobile devices (smartphones and tablets) has created an environment rife for adoption of digital
healthcare. Clinicians exhibit a high rate of adoption of mobile technology, which we believe is
significantly higher than mainstream America. Despite high adoption rates, we believe that the utility of
digital health technology among clinicians remains untapped, as utilized technologies are for the most
part focused on performing the simplest of tasks (drug information and medical research).
At the same time, we believe consumer adoption of digital healthcare remains nascent, but we believe
consumers/patients exhibit a strong appetite for digital solutions to their healthcare problems.
Consumers/patients seem to be digitally engaged across all age groups, as well as gender. Currently,
consumers/patients exhibit an appetite for digital health information via the online channel. While
consumer/patient adoption of mHealth remains relatively low, we believe that adoption trends will improve
as more meaningful solutions for healthcare problems are introduced, and note that demographic trends
(high adoption among Millennials and Generation Xers) further support improving adoption trends.
The ubiquity of Internet access and mobile connectivity continues to grow in the United States and
globally. We estimate Internet penetration in the United States to be roughly 87% as of 2012 (Exhibit 11).
Additionally, estimates from Nielsen Online and The Pew Internet & American Life Project suggest that
smartphone penetration and tablet penetration are roughly 56% and 34% in the United States as of 1H13,
respectively. In our view, these trends are providing the foundation for the development of digital
healthcare technologies, and have set a foundation for widespread adoption of digital healthcare
solutions. We believe digital healthcare remains in the early innings of development and adoption, as we
believe adoption trends will continue to grow, and digital healthcare solutions are in the early stages of
development with the expectations that a plethora of new solutions and business models will be
introduced over time.
Exhibit 11: Internet Usage Has Become Ubiquitous in the U.S.
2007 2008 2009 2010 2011 2012
301.2 304.1 306.8 309.4 311.6 313.85
212.1 220.1 227.7 239.9 245.2 273.8
70% 72% 74% 78% 79% 87%
U.S. Population
U.S. Internet Users
% Penetration
60%
65%
70%
75%
80%
85%
90%
95%
100%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2007 2008 2009 2010 2011 2012
U
.
S
.

I
n
t
e
r
n
e
t

U
s
e
r

P
e
n
e
t
r
a
t
i
o
n
U
.
S
.

I
n
t
e
r
n
e
t

U
s
e
r
s

(
m
i
l
l
i
o
n
s
)
U.S. Internet Users and Penetration 2007 to 2012
U.S. Internet Users % Penetration

Source: Internet World Stats, ITU, Nielsen Online, and U.S. Census Bureau
While Internet usage has become ubiquitous as 87% of Americans now have access to the Internet, we
believe that smartphone and tablet usage will continue to increase over the next several years. In Exhibit
12, we illustrate mobile computing device penetration for the 2009 to 1H13 period. Between early 2009
and early 2013, we estimate that smartphone penetration in the United States has nearly tripled, no doubt
driven by the innovative iPhone and Android devices. Additionally, we note that tablet penetration among


Americans has increased more than 10 times between 1H10 and 1H13. Current estimates from Nielsen
Online and the Pew Internet & American Life Project suggest that smartphone and tablet penetration
among Americans stands at an estimated 56% and 34%, respectively. Over time, we believe that these
devices will prove to be invaluable to changing healthcare in the United States and abroad.

Exhibit 12: Mobile Device Adoption Continues to Ramp in the U.S.
Devices 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
Smartphone Penetration 16% 19% 21% 26% 35% 45% 46% 47% 56%
Tablet Penetration 0% 0% 3% 5% 8% 10% 18% 25% 34%
0%
10%
20%
30%
40%
50%
60%
1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
U
s
e
r

P
e
n
e
t
r
a
t
i
o
n

(
%
)
U.S. Mobile Computing Device Penetration 1H09 to 1H13
Smartphone Penetration Tablet Penetration

Source: Nielsen Online, and Pew Internet & American Life Project

We believe clinician adoption of digital technologies (smartphones and tablets) will play an important role
in the digitization of healthcare. If mobile technologies are prevalent among mainstream Americans, then
clinicians and physicians represent power users of mobile technologies. Mobile technology adoption
among physicians appears to be significantly higher than for mainstream America. According to
Manhattan Researchs Taking the Pulse 2012 survey, smartphone and tablet adoption among
physicians stood at 85% and 62%, respectively, as of 1Q12 (Exhibit 13). A more recent survey from
Epocrates suggests that adoption rates may be higher and the survey estimates that smartphone and
tablet adoption among physicians will be 94% and 85%, respectively, by 2014 (Exhibit 14).
In Exhibit 13, we provide an illustration of physician adoption of mobile technology (smartphones and
tablets) for the 2001 to 2012 period. Physician adoption of smartphones more than doubled between
2001 and 2012, whereas physician adoption of tablets has doubled in roughly a year. Based on
Manhattan Researchs Taking the Pulse U.S. 2012 survey of 3,015 practicing physicians across the
U.S., roughly 85% of physicians utilize a smartphone and 62% utilize tablets. We expect adoption to
increase further over the coming years as new technologies are tested and proven in terms of monitoring
chronic diseases, diagnostics, health and wellness, and data analytics. In our view, as new digital
healthcare solutions are validated, mobile devices will become an essential part of a physicians daily
workflow.


Exhibit 13: Historical Adoption Trend for Physicians and Mobile
2001 2004 2007 2009 2010 2011 2012
30% 40% 50% 64% 72% 81% 85%
35% 62%
Mobile Device
Smartphone
Tablet
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2001 2004 2007 2009 2010 2011 2012
U
s
e
r

P
e
n
e
t
r
a
t
i
o
n

(
%
)
Physician Adoption of Mobile Technology 2001 - 2012
Smartphone Tablet

Source: Manhattan Research, Taking the Pulse U.S. 2012, 1Q12

According to Epocrates 2013 Mobile Trends Report: Maximizing Multi-Screen Engagement Among
Clinicians, adoption of mobile technologies among clinicians will increase significantly in 2014. The
survey queried 1,063 healthcare professionals regarding their usage of mobile devices and likelihood of
mobile device usage over the next 12 months, illustrated in Exhibit 14. The survey illustrates the already
high digital engagement among clinicians, as the overwhelming majority of respondents are multi-screen
users (PC, smartphone, and tablet). According to the survey, roughly 82% of respondents will be multi-
screen users by 2014.

Exhibit 14: Clinician Adoption of Mobile Devices Continues to Increase
99%
78%
34%
28%
100%
86%
53%
47%
100%
94%
85%
82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Computer Smartphone Tablet Digital HCP
M
o
b
i
l
e

P
e
n
e
t
r
a
t
i
o
n

(
%
)
Clinicians' Adoption Of Mobile
2012 2013 2014E

Source: Epocrates 2013 Mobile Trends Report: Maximizing Multi-Screen Engagement Among Clinicians


Additionally, the increasing appetite for multi-screen solutions among clinicians is not limited to a few
indications, but rather extends across many healthcare professional focus areas, including clinicians
focused on chronic health, general practitioners, nurse practioners, as well as physician assistants. In
Exhibit 15, we provide an illustration of current adoption rates and expected future adoption rates for
several types of clinicians. We think as doctors become more connected across mobile devices, they will
begin to accept new digital healthcare technologies. In turn, we believe this will lead to increased
consumer usage of digital healthcare technologies and applications. Physician comfort should lead to
broad acceptance of mobile solutions, which should help further increase consumer adoption of more
advanced digital healthcare solutions.

Exhibit 15: Clinician Mobile Adoption Extends Across Several Categories
59%
54%
48%
44%
40%
30%
84%
88%
85%
77% 77%
76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Oncology Cardiology Primary Care Psychiatry Nurse
Practitioner
Physician
Assistant
M
o
b
i
l
e

P
e
n
e
t
r
a
t
i
o
n

(
%
)
Mobile Adoption By Clinician Focus
2013 2014E

Source: Epocrates 2013 Mobile Trends Report: Maximizing Multi-Screen Engagement Among Clinicians

Not only are clinicians adopting mobile technology more so than mainstream society, but also clinicians
are utilizing mobile technologies in their daily workflow as well. In Exhibit 16, we provide an illustration of
physician usage of smartphones and tablets in their daily workflow based on the Wolters Kluwer Health
2013 Physician Outlook Survey conducted in April 2013, which queried 300 physicians. The survey
found that eight of 10 physicians are using smartphones and six of 10 physicians are using tablets.
According to the survey, smartphone and tablet usage seems to make up about 25% or less of a
physicians workday.
In our view, these estimates seem low, and likely do not reflect physician usage of these tools outside of
work hours. We note that the Epocrates 2013 Mobile Trends Report: Maximizing Multi-Screen
Engagement Among Clinicians found that smartphone usage can account for upwards of 40% of a
typical clinicians time at work. Additionally, the report found that nurse practitioners and physician
assistants were the predominant users of mobile devices during the workday. Additionally, the study
found that clinicians usage of mobile devices dominated the hours of 5 P.M. to 5 A.M., suggesting that
mobile devices currently do more to extend the clinician workday.


Exhibit 16: Physicians Usage of Mobile During the Workday
51-75% of day
8%
76-100% of day
11%
26-50% of day
14%
No usage
21%
1-25% of day
46%
Smartphone Usage (iPhone, Android, et al.)
51-75% of day
4%
76-100% of day
7%
26-50% of day
13%
1-25% of day
37%
No usage
39%
Tablets (iPad, Kindle Fire, et al.)

Source: Wolters Kluwer Health 2013 Physician Outlook Survey, April 2013

We note that physicians are using mobile in a variety of ways to aid their daily workflow. In Exhibit 17, we
illustrate how physicians are using mobile devices based on the Wolters Kluwer Physician Survey.
According to the survey, physicians typically use mobile devices for looking up drug information, medical
research, and evidence-based clinical reference tools at the point of care. Other workflow uses for mobile
seem to be dictated by form factor, as more physicians use tablets to access medical records/data (think
large screen size), or more physicians communicate with patients via smartphone than tablet. In our view,
the survey really only provides details on some of the most basic usage of mobile in a physicians daily
workflow. We believe the promise of mobile for physicians lies beyond the uses reflected in Exhibit 17.
We note that entities such as Qualcomm Life are actively partnering with hospitals to test mobile medical
devices and applications that go beyond basic physician uses of mobile. In our view, the physician use of
mobile reflected in Exhibit 17 illustrates how clinician adoption of digital healthcare technologies remains
in the very early stages.

Exhibit 17: What Physicians Are Using Mobile Devices for in Their Workflow
13%
24%
43%
17%
50%
63%
20%
55%
9%
12%
17%
33%
42%
43%
44%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Other Reimbursement /
Billing
Medical Records /
Data
Communication
w/ Patients
Evidence-Based
Clinical Reference
Tools at Point of
Care
Medical Research Communication
w/ HCPs
Drug Information
R
e
s
p
o
n
d
e
n
t
s

(
%
)
Mobile Device Uses
Tablets Smartphone

Source: Wolters Kluwer Health 2013 Physician Outlook Survey, April 2013

In Exhibit 18, we go one step further and analyze how clinicians use mobile applications in their daily
workflow based on the 2
nd
Annual HIMSS Mobile Technology Survey, which queried 180 healthcare
professionals. We find it striking that the majority of mobile application usage remains focused on the
most basic healthcare functions: viewing patient information and viewing non-protected health information
(non-PHI). We note that between 45% and 55% of respondents are using mobile apps for moderately


complex functions such as clinical notifications, tracking work lists, education/training, and collecting
patient data at the bedside. Less than 40% of respondents are using mobile apps for complicated
healthcare functions such as patient data analysis and monitoring patient data from medical devices, and
less than 25% of clinicians are referring patients to mobile apps. In our view, the potential of digital
healthcare remains untapped, as clinicians continue to underutilize mobile apps for the most part. We
expect that clinicians will begin to use mobile apps for more complex healthcare functions over the next
few years, and that clinicians referring patients to mobile apps will increase significantly as well.

Exhibit 18: How Clinicians Are Using Mobile Applications in Their Daily Workflow
23.9%
26.7%
34.4%
34.4%
37.8%
37.8%
38.3%
45.0%
45.0%
46.1%
51.7%
64.4%
65.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Refer Patients to the Use of Apps for Health-Related Items
Capture Visual Representation of Patient Data
Monitor Data from Medical Devices
Secure Communication Regarding Patients
Analysis of Patient Data
E-prescribing
Use Bar Code Reader on Mobile Device
Collect Data at the Bed Side
Use for Educational / Training
Tracking Work Lists
Clinical Notifications
Look Up Non PHI Health Information
View Patient Information
Clinicians' Use of Mobile Apps in Workflow

Source: 2
nd
Annual HIMSS Mobile Technology Survey, sponsored by Qualcomm Life

In our view, the adoption of electronic medical records and electronic health records represents the
foundation of developing a digitized healthcare system. At the most basic level, the adoption and
implementation of EMRs and EHRs provide clinicians a basic familiarity with digitized healthcare that will
help clinicians accept technological advances in the healthcare space. In Exhibit 19, we provide an
illustration of EMR/EHR system adoption among office-based physicians in the United States according
to the Healthcare Information and Management Systems Society (HIMSS). Based on the survey, an
estimated 72% of office-based physicians were using some form of EMR or EHR. Additionally, the survey
estimated that roughly 40% of office-based physicians were using a basic EHR system (patient history
and demographics, patient problem lists, physician clinical notes, comprehensive list of patients
medications and allergies, computerized orders for prescriptions, and ability to view laboratory and
imaging results electronically). While the significant acceptance of some form of EMR/EHR suggests
mainstream adoption of digital healthcare, the much lower 40% penetration of basic EMR/EHR systems
suggests there is room to improve. We believe that as office-based physicians increase their adoption of
basic EMR/EHR systems, clinicians comfort with developing digital healthcare technologies will increase.


Exhibit 19: Clinician Adoption of EMR and EHR Technology
18.2% 17.3% 17.3%
20.8%
23.9%
29.2%
34.8%
42.0%
48.3%
51.0%
57.0%
71.8%
10.5%
11.8%
16.9%
21.8%
27.9%
33.9%
39.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E
E
M
R
/
E
H
R

P
h
y
s
i
c
i
a
n

P
e
n
e
t
r
a
t
i
o
n

(
%
)
Office-Based Physicians with EMR/EHR Systems
Any EMR/EHR Basic System

Source: CDC/NCHS, National Ambulatory Medical Care Survey, 2001 - 2012

In Exhibit 20, we provide a deeper analysis regarding EMR/EHR adoption trends by looking at the
HIMSS Analytics Electronic Medical Record Adoption Model (EMRAM). The data in Exhibit 20 looks at
EMR/EHR adoption rates across healthcare organizations according to the eight stages of adoption
according to HIMSS Analytics. According to HIMSS Analytics, the EMRAM represents an eight-step
process that allows a healthcare organization to track their level of EMR adoption compared to other
healthcare organizations. Adoption stages range from Stage 0, where EMR integration remains nearly
non-existent, to Stage 7, where the entire healthcare organization has integrated EMR technology.
Additionally, ambulatory-focused healthcare organizations can track their progress using the Ambulatory
Electronic Medical Record Adoption Model (A-EMRAM).
We believe the data provided in Exhibit 20 further illustrates how the digitization of clinicians and
healthcare organizations remains focused on the digitization of the most basic core functions. We believe
the digital healthcare companies focused on EMRs/EHRs, health and wellness, diagnostics, analytics,
sensors, and telehealth will ultimately drive EMRAM adoption higher. The introduction of new, innovative,
and meaningful digital healthcare solutions should provide an impetus for clinicians and healthcare
organizations to digitize, as these solutions will increase the need for these constituents to digitize.

Exhibit 20: HIMSS Analytics EMRAM Adoption Trends
2%
10%
19%
15%
35%
9%
4%
7%
1% 1%
5%
1%
10%
27%
5%
50%
0%
10%
20%
30%
40%
50%
60%
Stage 7 Stage 6 Stage 5 Stage 4 Stage 3 Stage 2 Stage 1 Stage 0
E
M
R

A
d
o
p
t
i
o
n

B
a
s
e
d

o
n

H
I
M
S
S

A
n
a
l
y
t
i
c
s

D
a
t
a
b
a
s
e

(
%
)
EMR Adoption Model (EMRAM) Trends 2Q13
EMRAM A-EMRAM

Source: HIMSS EMR Adoption Model (EMRAM)


We believe consumer adoption of digital healthcare technology represents an important and necessary
step toward the digitization of healthcare. As we note in our framework, Four Stages of Healthcare
Digitization, the ultimate goal of healthcare digitization is to drive the cost of care lower. Fundamentally,
we believe that the only way to truly reduce healthcare costs is to include consumers/patients, as they
ultimately have the final say in whether or not they choose to live a healthy lifestyle or not. Given the
importance of the consumer/patient population, we believe it is worthwhile to review how these
constituents are using digital healthcare currently.
In our view, consumer/patient adoption of digital healthcare remains in the early stages of development.
Nevertheless, we believe that consumers exhibit a strong appetite for digital healthcare solutions. In our
view, consumer/patient usage of digital healthcare, much like clinicians, remains focused on the simplest
solutions and significant opportunity exists to further develop digital healthcare capabilities. Lastly, we
believe that investors should think not if, but when in terms of consumer adoption of digital healthcare.
We believe that current trends suggest that as consumers/patients exhibit a strong appetite for digital
healthcare solutions, adoption trends should improve over time as digital healthcare solutions move
beyond weight-related and information-focused apps to more complex solutions. Additionally, we believe
that consumer/patient adoption trends benefit from demographics, as both Millennials and Generation
Xers exhibit a high proclivity for technology, which should in turn translate into interest in meaningful and
useful digital healthcare apps.
In Exhibit 21, we provide a breakdown of online health-related search trends for American adults based
on a survey from the Pew Internet & American Life Project. According to the survey, roughly 72% of
respondents stated they had performed an online health-related search query in the last 12 months,
whereas in 2010, roughly 66% of respondents had never done an online health-related search query.
Additionally, most American adults searching for health-related information online are focused on a
specific disease or medical problem, or a certain treatment or procedure. We believe American adults
online health-related search activity illustrates a strong appetite to engage with better understanding their
healthcare, as well as engaging new digital healthcare technology solutions. We believe that as digital
healthcare technologies begin to tackle more complex issues, more adults will be engaged digitally with
their healthcare.

Exhibit 21: American Adults Go Digital in Order to Understand Their Health
11%
12%
14%
15%
16%
16%
19%
20%
25%
27%
43%
55%
72%
0% 20% 40% 60% 80%
Reduce Healthcare Costs
Pregnancy
Caring for an Aging Relative / Friend
Test Results
Drug Safety / Recalls
Advertised Drug
Food Safety / Recalls
Other Health Issues
Health Insurance, including Medicare and Medicaid
Weight Loss / Control
Certain Medical Treatment / Procedure
Specific Disease or Medical Problem
At Least One of the Topics Below
Online Health Search Trends

Source: Pew Internet & American Life Project, Health Online 2013, January 15, 2013

We believe that the digitization of healthcare benefits from demographics, specifically the high proclivity
for technology among younger generations, which should help drive consumer adoption of digital
healthcare technology over time. In Exhibit 22, we provide a look at online health-related search queries
of American adults by age group. Overall, online health-related search queries skew toward younger
generations as expected, but we note that all age groups exhibit a high proclivity for online health-related


searches. Specifically, more than 70% of respondents aged 18 to 64 performed an online health-related
search query in the last 12 months and more than 50% of respondents over the age of 65 had performed
an online health-related search query as well. More importantly, when looking at online health-related
search queries regarding specific diseases, medical problems, medical treatments, or procedures,
engagement among older populations increases significantly. Based on the Pew survey, more than 39%
of respondents aged 18 to 64 performed an online health-related search query regarding a specific
disease or medical problem, and of those 65 and older 36% of respondents had performed a similar
search query. We believe these results illustrate the basic fact that consumers/patients turn to digital
channels to better understand their health, as well as to find healthcare solutions.

Exhibit 22: Profile of Online Health-Related Search Queries by Age Group
0% 20% 40% 60% 80%
Other Health Issues
Pregnancy
Test Results
Advertised Drug
At Least One of the Above Topics
Online Health Searches By Age
65+ 50-64 30-49 18-29


In Exhibit 23, we look at the demographics of online health-related search queries among American
adults by gender. According to the Pew survey, online health-related search queries are well utilized by
both men and women, as 72% of all respondents reported conducting an online health-related search
query in the last 12 months. The results also found a striking difference between male and female usage,
as 65% of males had performed an online health-related search query, but 79% of females had
performed similar queries. As one drills down into specific topics, the results suggest that women are
more engaged with their health through digital channels. We believe the high usage rates among both
men and women further suggest our belief that consumers/patients remain interested in increasing their
usage of digital healthcare technology.


Exhibit 23: Profile of Online Health-Related Search Queries by Gender
0% 20% 40% 60% 80% 100%
Other Health Issues
Pregnancy
Test Results
Advertised Drug
At Least One of the Above Topics
Online Health Searches By Gender
Women Men


According to a Brookings Institute study from May 2012, roughly 75 million individuals (roughly 30% of the
U.S. population) had used mobile phones for health information and apps in 2012. Despite seemingly
strong adoption, a recent study from Ruder Finn suggests that American adoption of mHealth apps
remains nascent. According to Ruder Finns mHealth Report, only 16% of all respondents accessed
mHealth apps regularly (at least once a week), which is about one-fourth the amount of respondents
accessing social media and games via mobile regularly (Exhibit 24). The Ruder Finn survey also found
several reasons as to why consumers do not use mHealth apps: 27% reported no need, 26% preferred to
talk to a clinician in person, 11% expressed privacy concerns, 9% said mHealth apps were not useful,
and 7% were unaware of mHealth apps (Exhibit 24). We believe consumers lack of mHealth app usage
will dissipate over time as clinicians become more digital and new innovative mHealth apps are
introduced.

Exhibit 24: Mobile App Consumption Among American Adults
0% 10% 20% 30% 40% 50% 60% 70% 80%
Do Not Use
Other
Health/Healthy Living
Hobbies
Travel
Sports
Shopping
News
Games
Social Media
Consumer Mobile App Usage
Tablet Smartphone All

Source: Ruder Finn, mHealth Report, March 2013


Despite the fact that mHealth app usage seems low, consumers/patients seem to exhibit a high degree of
interest in using mHealth apps. According to the Ruder Finn survey, more than 50% of respondents ages
18 to 44 were highly likely to adopt mHealth technology (Exhibit 25). Additionally, those with chronic
health conditions and families seem to have a higher interest in adoption of mHealth solutions. We
believe the survey findings illustrate that adoption is not a question of if, but when consumer/patient
adoption of mHealth will go mainstream. As new digital healthcare solutions are tested, proven, and
introduced to society, we believe that consumers will likely embrace digital healthcare solutions that can
solve complex healthcare needs, especially if these solutions can be integrated to make daily life easier.

Exhibit 25: American Adults Show High Interest in mHealth Solutions
42%
59%
42%
53%
31%
31%
40%
54%
52%
65%
0% 10% 20% 30% 40% 50% 60% 70%
No Children
Has Children
No Chronic Condition
Has a Chronic Condition
65+
55 to 64
45 to 54
35 to 44
25 to 34
18 to 24
Likelihood of mHealth Adoption


In Exhibit 26, we illustrate consumer mHealth app usage trends according to the Ruder Finn mHealth
Report. According to the survey, more than 40% of respondents are using mHealth apps for what we
believe represents basic functionality (e.g., health and wellness, fitness, weight-loss, and general health
information). We believe the list of functions the survey queried for further illustrates the opportunity for
new and innovative uses in the future. We believe that the significant adoption of mHealth for the most
basic health and wellness functions highlights the potential of digital healthcare adoption for more
complex healthcare issues. In our view, consumers/patients will adopt strong digital healthcare
technologies that allow better management of their healthcare.

Exhibit 26: The Potential of mHealth Apps Remains Significant
1%
4%
7%
9%
9%
10%
13%
23%
41%
46%
48%
48%
49%
0% 20% 40% 60%
Smoking Cessation
Other Health Info
Private Medical Provider
Medication Reminder
Health Education (Children)
Sleep Aid / Monitor
Advice on Long-term Medical Conditions
Apps to Acces Magazines, et al.
General Health Info
Nutrition
Fitness / Training
Calorie Counter
Healthy Eating
Consumer mHealth App Usage



In Exhibit 27, we illustrate areas where consumers believe health apps can be introduced to improve
patient care. We note that less than 50% of respondents had an opinion that health apps can improve
patient care. Consumer/patient responses identified access to test results, monitoring, and patient health
records as the greatest areas for mHealth apps to improve patient care. Again, we believe that survey
results show that consumers remain focused on digitization of basic opportunities.

Exhibit 27: Areas Health Apps Can Improve Patient Care
11%
13%
18%
21%
24%
26%
30%
33%
42%
0% 10% 20% 30% 40% 50%
Lifestyle / Healthy Living Advice Sent to Patients
Apps Will Not Improve Care
Virtual Consultations for Remote Patients
Text Message Updates from GP's and Surgeons
Mobile Devices to Record Data
Real-Time in-Home Monitoring Data
Patient Health Records
Monitoring Devices That Send Alerts
Access to Test Results
Health Apps for Improving Patient Care


We note that both clinicians and consumers/patients are utilizing mobile apps to better understand health
issues. In Exhibit 28, we provide an illustration of consumer health app growth between February 2010
and April 2012. According to mobi health news, there were 13,607 consumer health apps available for
Apples iPhone as of April 2012. Additionally, Exhibit 28 provides a breakout of these 13,607 consumer
health apps available for Apples iPhone by category as of April 2012.

Exhibit 28: The Proliferation of Consumer Health Apps
118
226
271
336
493
665
694
739
962
1,111
1,415
1,915
2,207
2,455
0 500 1,000 1,500 2,000 2,500 3,000
PHR
Medication
Smoking Cessation
Emergency
Sleep
Calculator
Chronic Conditions
Mental Health
Women's Health
Strength Training
Stress & Relaxation
Diet
Cardio
Other
Consumer Health Apps by Category: April 2012
2,993
5,081
8,924
13,607
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
Feb 2010
Aug 2010
Jul 2011
Apr 2012
Consumer Health Apps Growth: February 2010 to April 2012

Source: mobi health news, An Analysis of Consumer Health Apps for Apples iPhone 2012, July 2012
In Exhibit 29, we provide a list of major fitness apps and their reported number of downloads as of
August 2013. According to mobi health news, MyFitnessPal exhibited the greatest amount of downloads
at 40.0 million, and Endomondo exhibited the least amount of downloads at 16.0 million. The list compiled
by mobi health news reflects those app developers that report downloads and user metrics regularly. We
note the list omits both Fitbit and Jawbone, as these companies do not regularly update their user
metrics.


Exhibit 29: Fitness Apps Show Strong Consumer Traction
16.0
18.0
18.0
18.0
20.0
22.5
40.0
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
Endomondo
Runtastic
MapMyFitness
Nike+
Azumio
RunKeeper
MyFitnessPal
Major Fitness Apps > 16 Million Downloads

Source: Company documents and mobi health news, August 2013
We believe that Stage 1 and Stage 2 of healthcare digitization are occurring concurrently, and remain in
the very early stages of development. The high levels of adoption associated with the Internet,
smartphones, and tablets has set a solid foundation for the digitization of healthcare to move forward.
Clinicians exhibit significantly higher mobile adoption rates than consumers/patients, but clinician
digitization remains focused on basic functions. While consumer/patient adoption of the Internet for
understanding health issues remains high, consumer/patient adoption of mobile for understanding health
remains relatively low. We believe that digital healthcare innovation in areas such as analytics,
diagnostics, health and wellness, medical records, sensors, and telehealth will help drive increased
adoption among clinicians and consumers/patients. In our view, digital healthcare innovation will continue
to provide new and compelling solutions to complex healthcare problems, which should help clinicians
and patients better manage health outcomes. Over time, we expect that digital healthcare technology
innovation will drive the integration of the digital clinician and digital patient over the next few years. Next,
we explore the important entities responsible for driving digital healthcare innovation forward.


The Accelerators of Digital Healthcare Innovation
We believe several digital healthcare accelerators and technology companies are driving the
development of Stage 2 (digital healthcare adoption and development) and subsequent shift into Stage 3
(integration). Since 2011, several digital healthcare-focused accelerators have emerged to help digital
healthcare focused startups get up and running. We note that these accelerators typically provide
startups with seed capital typically around $20,000, significant back-office resources, mentoring, and
advice from extensive expert networks. In return, startups provide the accelerator with an equity stake
typically between 2% and 10%. In this section, we provide a summary description of these accelerators,
as well as one hybrid called Qualcomm Life.
In Exhibit 30, we provide a timeline illustrating the development of digital health accelerators between
2005 and 2011, which comes from the California HealthCare Foundation. The timeline highlights the
convergence of three major trends, which have led to the successful emergence of health accelerators.
Since 2006, the U.S. Government has placed significant emphasis on facilitating the digitization of
healthcare. Second, venture capital models have evolved from simply providing capital in exchange for
equity to providing startups a wider suite of mentoring and business development solutions to go along
with modest capital investment. Lastly, the proliferation of digital and mobile device (smartphones and
tablets) has been exponential since the introduction of innovative devices such as the iPhone and iPad.
The convergence of these three trends has led to a proliferation of entrepreneurs focused on solving
healthcare problems by developing digital solutions.

Exhibit 30: The Development of Health Accelerators: 2005 to 2011
Health Care
Accelerators
Digital / Mobile
ONC
Established 1st Health 2.0
Conference
ARRA
ACA
Health
Accelerators
Emerge
Facebook at 1
million users
iPhone
Launched
App Store
Introduced
iPad
Launched
Y Combinator
Founded
TechStars,
Seedcamp
Excelerate Labs, 500 Startups, TechStars
Boston
2005 2007 2009 2011

Source: California HealthCare Foundation, Greenhouse Effect: How Accelerators Are Seeding Digital Health Innovation, February 2013
ARRA stands for American Recovery and Reinvestment Act
ACA stands for Affordable Care Act

Below we provide summaries regarding Qualcomm Life and important digital healthcare accelerators
including Rock Health, StartUp Health, Healthbox, and Blueprint Health, below. Other healthcare
technology-focused accelerators include NY Digital Health Accelerator, StartX Med, and TigerLabs
Health. We note that several technology companies working on digital healthcare solutions include Apple
(AAPL, $498.22, Buy, covered by Aaron Rakers), Intel Ventures (INTC, $22.67, Buy, covered by
Kevin Cassidy), Nuance (NUAN, $19.66, Hold, covered by Tom Roderick), IBM (IBM, $183.03, Buy,
covered by David Grossman), et al. Our list below reflects those entities that we have come across
most in the course of our research. We realize that our list may omit some entities and fully expect this list
of entities to grow significantly over time.


Who Is Qualcomm Life?
Qualcomm Life is a subsidiary of Qualcomm (QCOM, $68.02, not covered) focused on helping
healthcare companies solve their wireless medical device connectivity issues. The company was founded
in response to medical device manufacturers who approached Qualcomm for help in solving wireless
connectivity and interoperability issues. The primary goal of Qualcomm Life is to develop a wireless
health eco-system based on the Qualcomm Life 2net Hub device. We note that the Qualcomm Life 2net
Hub device is driving Qualcomm Lifes development of a wireless digital healthcare eco-system. Rick
Valencia serves as Vice President and General Manager of Qualcomm Life. Don Jones serves as Vice
President, Global Strategy and Market Development for Qualcomm Life. James Mault serves as Vice
President and Chief Medical Officer for Qualcomm Life. Qualcomm Life is a subsidiary of Qualcomm and
is based in San Diego, California. More information can be obtained at the companys website
www.qualcommlife.com.
What is the Qualcomm Life 2net Platform? The eco-system consists of wireless medical device solutions
integrated on Qualcomm Lifes 2net Platform, analytics for aggregating medical device data, and
interfaces facilitating interoperability between different devices. The Qualcomm Life 2net Hub sits at the
nexus of the eco-system and facilitates 3G and 2G connectivity with wireless medical devices, and is an
FDA Class I medical device. Entities focused on healthcare services or disease management can
leverage the platform to treat a patient remotely via various medical devices from eco-system partners.
The 2net Platform business model consists of facilitating wireless healthcare solutions via its managed
network of digital healthcare technology services. Secondly, the 2net Platform is working to develop
solutions for biometric data aggregation and further data analysis. Lastly, the company provides
application support to its eco-system partners.
We note that the Platforms partner eco-system consists of three types of companies: (1) wireless medical
device companies, (2) healthcare services companies, and (3) healthcare payers. According to
Qualcomm Life, these companies can then connect with the platform through four gateways: (1) a
standalone FDA-listed external device (2net Hub), (2) medical devices with an embedded cellular
component, (3) medical data sent from mobile phones, and (4) service platform integration between the
medical grade 2net Platform to an eco-system partner via application programming interfaces (APIs).

Exhibit 31: Qualcomm Life Key Developments
August 2013 Announces investment in Fitbit
March 2013
May 2013
July 2013
Announces investment in AirStrip Technologies
and additional partnerships
Launces 2net Hub in Europe with Telbios and
Cystelcom as its first customers
Announces additional partnership and expands
2net Hub to Canada
Announces WebMD partnership
Acquires HealthCircles and expands 2net Hub to
Scandanavia with Infogosoft, e-mergency, and
Viewcare A/S as its first customers
Announces first wireless health care customer in
France: MEDECIN DIRECT
February 2012
November 2012
Qualcomm Life Development Timeline
2net Hub by Qualcomm Life Date Event
December 2012
Qualcomm forms the Qualcomm Life subsidiary
and launches $100 million venture fund
December 2011

Source: Company documents


Qualcomm Life Announces Partnership with WebMD. In March 2013, Qualcomm Life and WebMD
announced a partnership focused on enabling consumers to access and manage wireless health data
across an array of fitness, wellness, and medical devices. The goal of the partnership is to make
biometric data available, actionable, and relevant to consumers in order to help consumers better
manage their health and fitness. Furthermore, the partnership allows for integration of the Qualcomm Life
2net Hub with various WebMD offerings, ultimately providing consumers and physicians a connected
healthcare experience. Most importantly, the partnership establishes an open eco-system of digital health
apps and third-party devices across various disease categories and lifestyle interests. We believe this
represents an integral partnership for the future success of both Qualcomm Life and WebMD. In our view,
the open app eco-system allows WebMD to better personalize health offerings, possibly extend its mobile
advertising reach to additional devices, and provides Qualcomm Life with a meaningful aggregation
platform for consumers to track their health data flowing through the 2net Hub eco-system.
Qualcomm Life Acquires HealthyCircles. In May 2013, Qualcomm Life announced the acquisition of
HealthyCircles, which marked a shift for Qualcomm Life into front-end software. We believe the
acquisition provides important new capabilities for Qualcomm Lifes 2net eco-system that further
entrenches Qualcomm Life at the forefront of developing digital healthcare technologies. HealthyCircles is
a care coordination management platform providing enterprise clients with private-label branded web,
mobile, and multi-lingual solutions and services. The company was founded in order to address the
shifting reimbursement landscape under the Affordable Care Act (ACA). HealthyCircles provides services
addressing hospital readmission reduction, care transitions, home health monitoring and management,
Accountable Care Organizations, and Patient-Centered Medical Homes (PCMH). The acquisition allowed
Qualcomm Life to combine its 2net Hub and HealthyCircles to capture new data sets focused on
medication history, lab data, care teams, and self-assessment data.
Qualcomm Life Launches Clinical Trial in San Diego to Test Digital Healthcare Technology for
Treatment of Childrens Asthma. Recently, Qualcomm Life and partner Rady Childrens Hospital-San
Diego announced the launch of a digital healthcare technology clinical trial focusing on children with
asthma. The clinical trial will test digital healthcare technology from Asthmapolis and Zephyr, as well as
the Qualcomm Life 2net Hub. Fifty participants between the ages of seven and 17 will be selected, as
the project seeks to understand the correlation between time and location, as well as patient health
indicators (heart rate, respiratory rate, and activity) in order to better individualize asthma treatment. Each
participant will receive a 3G-enabled testing kit consisting of two Asthmapolis sensors used to track
inhaler usage, a Zephyr BioPatch used to track heart rate, respiratory rate, and activity, as well as a
Qualcomm Life 2net Hub. Additionally, parents and patients can track health information via Asthmapolis
mobile apps and patient dashboard. Physicians can access patient data via the ZephyrLIFE Home portal
to view wireless contextualized vital sign data.
Scripps Wired for Health Trial Tests Digital Healthcare Technology, Including the Qualcomm Life
2net Hub. In July, the Scripps Translational Science Institute (STSI) launched its Scripps Wired for Health
Trial. STSI will select trial participants from its employee population with a focus on employees and family
members that have generated high healthcare costs during the 2012 plan year. The clinical trial will test
digital healthcare technology from several companies; some devices include Sanofis IBG Blood
Glucose Meter, Withings Blood Pressure Monitor, and the AliveCor Heart Monitor with each device
being linked via Qualcomm Lifes 2net Hub. Participants in the wireless device group will also test
Qualcomm Lifes HealthyCircles Care Orchestration Engine, an enterprise platform designed for care
coordination and management.
Qualcomm Life and Palomar Health launch Google Glass Incubator. Qualcomm Life and Palomar
Health launched an incubator, based in San Diego, California, to evaluate the application of wearable
computing in medicine. The incubator will focus on assessing the medical benefits of Google Glass in
both consumer and clinical applications with a focus on improving biometric data and wireless health
management. Research and development efforts will focus on (1) augmented reality guided clinical
applications, (2) user experience paradigms for clinical navigation of complex data, (3) physiological
monitoring, (4) genomic information mapping, and (5) consumer-oriented health and wellness
applications. Additionally, the incubator will leverage Qualcomm Lifes HealthyCircles orchestration
engine, which facilitates communication between doctors, EHRs, and biometric medical devices.


Qualcomm Life Invests in Fitbit. In August 2013, Qualcomm Life announced an investment in Fitbit
through its Qualcomm Life venture fund. The Fitbit investment marks the ninth such digital healthcare
investment made by the Qualcomm Life Fund in 1.5 years.
Strategic Partners. We believe Qualcomm Life is at the forefront of developing a highly functional
wireless network for digital healthcare companies. The Qualcomm Life wireless eco-system consists of
more than 100 companies and ranges from universities to startups to publicly traded healthcare
technology companies such as Greenway Medical (GWAY, $15.95, not covered) and WebMD. We
provide a summary of Qualcomm Lifes eco-system partners in Exhibit 32.

Exhibit 32: Qualcomm Lifes Eco-system Partners
Ximed
Zeo, Inc.
Zephyr
Viewcare A/S
VRI
WebMD
Wireless-Life Sciences Alliance
Withings
Worrell Inc.
Telcare
Telsano
Trapollo
Tri-City Medical
U.S. Preventive Medicine, Inc.
Venture Manufacturing
Santech Health
Scripps Health
Sensei
Sotera Wireless, Inc.
Sweetwater Health
Telbios SpA
Predictably Well
Preventice
Radish Systems
Rady's Children's Hospital and Health Care
Rock Health
S3 Group
Omron Healthcare, Inc.
Open mHealth
Orange Business Services
Perminova
PMD Exports, Inc.
Polymap Wireless
MD Revolution
Messe Dusseldorf GmbH
mHealthAlert
Microsoft HealthVault
MIR - Medical International Research
Monitored Therapeutics
myHealthAccount
Nonin Medical, Inc.
Noom, Inc.
NurseBuddy
Infogosoft
Ingram Micro
Integron
Ion IT Group
Jointly
Lifetime Health Diary
HealthyCircles
Heart To Heart Network
HelloHealth
HMM Group
IDG
Independa, Inc.
Greenway Medical Technologies
Happtique
Health Companion, Inc.
Health Founders
Health Numeric
HealthSaaS, Inc.
FitLinxx
ForaCare, Inc.
Geneva Healthcare
Get Real Health
GlobalLogic
goBalto, Inc.
Diversinet Corp
e-mergency
Elbry's
Entra Health Systems
ERT
FatSecret
CellTrust
Ceretec, Inc.
ChoiceMMed
Citrusbyte
CleverCap
Connected Care Solutions
Continua Health Alliance
ConversePoint
Dexcom, Inc.
Digifit, Inc.
AT&T Mobility
Aventyn, Inc.
BodyMedia, Inc.
Cambridge Temperature Concepts
Care Technology Systems
Case Western Reserve University
American Heart Association
American Stroke Association
American Telemedicine Association
ANT+
Apsora
Asthmapolis
Qualcomm Life Eco-system Partner Companies
A&D Medical
ActiveCare
Advanced Warning Systems, Inc.
Agile Edge Technologies, Inc.
AirStrip
AliveCor, Inc.

Source: Company documents, Qualcomm Life

In Exhibit 33, we provide a summary of Qualcomm Lifes investments that comprise the Qualcomm Life
Fund. We note that the Qualcomm Life Fund portfolio consists of nine interesting digital technology
startup companies.

Exhibit 33: Qualcomm Life Portfolio Company Summary
Qualcomm Life Portfolio Companies

Source: Company documents, Qualcomm Life


Rock Health
Rock Health is a non-profit seed accelerator for digital health startups. The accelerator boasts a strong
network of startup executives, industry executives, and venture capital investors. Halle Tecco serves as
the Chief Executive Officer and was a co-founder of Rock Health. Sarah Pollet is the Chief Operating
Officer, and oversees the daily business operations of Rock Health. Nate Gross serves as Medical
Director and was a co-founder of Rock Health. Rock Health is headquartered in San Francisco; additional
information can be found at the accelerators website www.rockhealth.com.
Structure and Focus. The accelerator is exclusively focused on digital healthcare startups in the concept
stage or early stages of development (pre-VC). Typical startups selected for the accelerator are
developing software or hardware products for consumers and/or enterprise customers. Residencies last
four months and include a demo day with roughly 15 startups per class. Startups can elect to receive
funding in the form of a $100,000 convertible note. Terms of the note vary by the startups maturity, and
startups can still participate in the accelerator without accepting investment.
Strategic Partners. Rock Health benefits from several strategic partners ranging from venture capital
investors to the government to technology providers. We provide a recap of Rock Healths important
strategic partners in Exhibit 34.

Exhibit 34: Rock Healths Strategic Partners
Rock Health Strategic Partners
Medical Partners Venture Capital Partners Corporate Partners Programming Partners

Source: Company documents, Rock Health

In Exhibit 35, we provide a summary of Rock Healths current portfolio companies. We note that Rock
Healths current portfolio consists of 58 interesting digital technology startup companies.

Exhibit 35: StartUp Health Portfolio Company Summary
San Francisco 2011 Spring 2013 Fall 2013 Boston 2012 San Francisco 2012
Rock Health Alumni Portfolio Companies

Source: Company documents, Rock Health


StartUp Health
StartUp Health is a national academy for health and wellness entrepreneurship. StartUp Health Academy
provides health and wellness innovators with a structured curriculum to help build a sustainable long-term
growth business in the healthcare sector. The Academys goal is to help 1,000 Health Transformers
(entrepreneurs) build sustainable growth businesses over the next decade. Steven H. Krein serves as the
Chief Executive Officer and was a co-founder of StartUp Health. Unity Stoakes serves as President and
was a co-founder of StartUp Health. Howard Krein, M.D., Ph.D. serves as StartUp Healths Chief Medical
Officer. StartUp Health is headquartered in New York City. More information can be found at the
Academys website www.startuphealth.com.
Structure and Focus. The accelerator is stage agnostic, but presents itself as grad-school for
startups, whereas incubators are undergrad. The curriculum lasts 12-36 months and is focused on
customer development in order to build sustainable long-term growth businesses in healthcare. The first
class consisted of 24 companies and the second class will consist of nearly 75 companies. The
accelerator provides infrastructure, resources, and services to entrepreneurs focused on building
sustainable growth businesses in healthcare. StartUp Health receives between 2% and 10% of equity in
the entrepreneurs company with a cost of 6% to 7% of equity for early-stage startups.
Strategic Partners. StartUp Health benefits from several strategic partners ranging from venture capital
investors to the government to technology providers. We provide a recap of StartUp Healths important
strategic partners in Exhibit 36.

Exhibit 36: StartUp Healths Strategic Partners
Government Partners Scholarship Partners Perk Partners Advisor Partners StartUp Community

Source: Company documents, StartUp Health

In Exhibit 37, we provide a summary of StartUp Healths current portfolio companies. We note that
StartUp Healths current portfolio consists of 40 interesting digital technology startup companies.

Exhibit 37: StartUp Health Portfolio Company Summary
StartUp Health Portfolio Current Companies

Source: Company documents, StartUp Health


Healthbox
Healthbox offers an accelerator program for healthcare technology entrepreneurs focused on stimulating
innovation, and enabling entrepreneurial success through a collaborative, global ecosystem in order to
drive change in healthcare. Healthbox is focused on early-stage high-potential healthcare technology
startups addressing meaningful industry challenges. Promising healthcare technology startups can
receive resources, support, and a network to enable rapid development and growth through the
Healthbox accelerator program. Nina Nashif serves as Chief Executive Officer and founded Healthbox.
Yechiel Engelhard serves as Entrepreneur in Residence. More information can be found at the
accelerators website www.healthbox.com.
Structure and Focus. The Healthbox accelerator program typically lasts four months, and includes a
demo day, as well as one to two classes per year. Accelerator classes typically consist of 10 companies
and are based in one of five cities: Chicago, Boston, London, Jacksonville, or Nashville. Startups receive
$50,000 in seed capital, as well as a wide range of resources and support. We note that startups benefit
from particularly close ties with BlueCross BlueShield Venture Partners.
Strategic Partners. Healthbox benefits from several strategic partners ranging from venture capital
investors to healthcare IT to technology providers. We provide a recap of Healthboxs important strategic
partners in Exhibit 38.

Exhibit 38: Healthboxs Strategic Partners
Healthbox' Strategic Partners
Boston Chicago London Service Providers

Source: Company documents, Healthbox

In Exhibit 39, we provide a summary of Healthboxs current portfolio companies. We note that
Healthboxs current portfolio consists of 43 interesting digital technology startup companies.

Exhibit 39: Healthbox Portfolio Company Summary
Healthbox' Portfolio Current Companies

Source: Company documents, Healthbox


Blueprint Health
Blueprint Health is an accelerator program geared toward healthcare companies seeking help to find
customers and capital. The program lasts three months and the majority of the startups executives must
commit to work from Blueprints New York headquarters. The foundation of the program is access to a
network of more than 150 healthcare entrepreneurs, investors, and industry executives. Blueprint Healths
headquarters are in New York City. More information can be obtained at the accelerators website
www.blueprinthealth.org. Startups receive $20,000 in cash, as well as over $50,000 in perks, which
include legal, hosting, human resources, public relations, and other services. In return for these perks and
resources, startups must provide a 6% equity stake to Blueprint Health.
Strategic Partners. Blueprint Health benefits from several strategic partners ranging from venture capital
investors to healthcare IT to technology providers. According to the Blueprint Health website, the
accelerator program benefits from partnerships with insurance companies (eight total), hospitals (12
total), healthcare IT companies and startups (31 total), biopharmaceutical companies (two total), and
venture capital firms (22 total). We provide a recap of Blueprint Healths important strategic partners in
Exhibit 40.
Exhibit 40: Blueprint Healths Strategic Partners
Union Square Ventures
OrbiMed
Blueprint Health's Strategic Partners
Physic Ventures
Psilos
Rho Ventures
Safeguard Scientifics
WebMD
Allscripts
Epocrates
Medivo
Sermo
HLM Venture Partners
InterWest
Byers
Milestone Venture Partners
Mohr Davidow Ventures
Decision Resources
Massive Health
Health 2.0
Zeo
Objective Health
Kaplan Health
Healthcare IT / Startups
Everyday Health
Teladoc
Zeel
Patients Like Me
Founder Collective
Google Ventures
Health Enterprise
Partners
Heritage Group
Highland Capital
Partners
Aberdare Ventures
Partners
Cardinal Partners
Edison Ventures
Essex Woodlands
FirstMark Capital
HealthiNation
Vitals
Everyday Health
Pfizer
Johnson & Johnson
Simplee
Red Brick Health
Definity Health
Eliza
Liazon
Cerner
ZocDoc
Phressia
ShapeUp
Keas
Alliance Health
Activate Networks
Happtique
MedHelp
Community Health Systems
Ascension Health
Kaiser Permanente
New York Presbyterian
Montefiore Hospital
Partners Healthcare
Johns Hopkins Hospital
University of Pennsylvania
Health System
Greenwich Hospital
University Hospital
Cedars Sinai Medical
Center
Mayo Clinic
United Healthcare
Cigna
Premera
BCBS
Regence BCBS
Insurance Partners Hospital Partners Biopharmaceuticals Venture Capital
Aetna
Humana
Well Point

Source: Company documents, Blueprint Health

In Exhibit 41, we provide a summary of Blueprint Healths alumni portfolio companies. We note that
Blueprint Healths alumni portfolio consists of 39 interesting digital technology startup companies.

Exhibit 41: Blueprint Health Alumni Portfolio Company Summary
Blueprint Health Alumni Portfolio Companies
Summer 2013 Winter 2013 Summer 2012 Winter 2012

Source: Company documents, Blueprint Health


Digital Healthcare Technology Industry Overview

We believe the unique transformative potential of digital healthcare technologies lies in the opportunity to
drive reduced costs throughout the healthcare supply chain over time. In Exhibit 42, we illustrate U.S.
national health expenditures (NHEs) for the period 2010 to 2021, as forecast by the Centers for Medicare
and Medicaid Services. As of 2010, total national health expenditures were $2.594 trillion, are expected to
rise to $2.916 trillion by 2013, and are expected to rise to $4.781 trillion by 2021.
Exhibit 42: Domestic Healthcare Costs Are Forecast to Increase Through 2021
16.5%
17.0%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
$0.0
$1,000.0
$2,000.0
$3,000.0
$4,000.0
$5,000.0
$6,000.0
2010 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E
N
H
E

a
s

a

%

o
f

G
D
P
N
a
t
i
o
n
a
l

H
e
a
l
t
h

E
x
p
e
n
d
i
t
u
r
e
s

(
N
H
E
,

$
B
i
l
l
i
o
n
s
)
National Health Expenditures, 2010 to 2021E
National Health Expenditures (NHE) NHE as a % of GDP
McKinsey & Company estimates digital
healthcare technology might lower annual
NHEs by $300 billion to $450 billion

Source: Centers for Medicare and Medicaid Services, Office of the Actuary

We provide an illustration of where the U.S. healthcare dollar is spent in Exhibit 43. According to the
Centers for Medicare and Medicaid, the U.S. is forecast to spend $2.916 trillion on healthcare
expenditures in 2013. The majority of these expenditures are for hospital care and physician and clinical
services, which represents 51% of total expenditures. We believe digital healthcare technology
companies are poised to become a catalyst to help reduce these expenditures.
Exhibit 43: How the U.S. Healthcare Dollar Is Spent
Hospital Care
32%
Physician and Clinical
Services
19%
Other Professional
Services
7%
Other Health, Residential,
and Personal Care
5%
Home Health Care
3%
Nursing Care Facilities
and Continuing Care
6%
Prescription Drugs
10%
Other Medical Products
3%
Government
Administration
1%
Net Cost of Private
Health Insurance
6%
Government Public
Health Activities
3%
Investment (R&D and
Structures & Equipment)
5%
National Health Expenditures, 2013E
Total
=
$2.916 Trillion

Source: Centers for Medicare and Medicaid Services, Office of the Actuary


Triangulating the Digital Healthcare Technology Industry Opportunity

We believe the revenue-generating potential of the digital healthcare technology industry is quite vast and
its potential remains relatively untapped. Estimates regarding the total addressable market opportunity for
digital healthcare are quite diverse. In our view, most estimates seem conservative and likely only
address mHealth in terms of mobile applications rather than the entire industry opportunity. Additionally,
most estimates regarding digital healthcare technology focus solely on wearable devices. We note that
mobile health industry estimates range from a low of $10.2 billion in 2018 to a high of $23.0 billion in
2017. We provide a recap of several estimates below.
Transparency Market Research estimates worldwide mobile health technologies and services
revenue will reach $10.2 billion by 2018.
Deloitte estimates worldwide revenue mobile health technologies and services revenue will reach
$11.7 billion by 2018.
PwC/GSMA estimate worldwide mobile health revenue will reach $23.0 billion by 2017.
PwC/GSMA forecast nearly 50% of revenue share will go to mobile operators. Adjusting for this
assumption, PwC/GSMA forecast worldwide mobile health revenue (excluding mobile operators) will
reach $11.5 billion by 2017.
PwC/GSMA forecast roughly 28% of worldwide mobile health revenue in 2017 will go to device
vendors, content/application players, and healthcare providers. This translates into a total revenue
opportunity of $6 billion.
In Exhibit 44, we provide estimates regarding global mHealth revenue according to a PwC/GSMA study
published in February 2012. While these estimates are at the high end of the range, we believe they are
conservative. Our assessment that these estimates are conservative is based on the fact that PwC/GSMA
believe that nearly 50% of global mHealth revenue will go to mobile operators. PwC/GSMA forecast that
U.S. mHealth revenue will reach $5.9 billion by 2017.

Exhibit 44: Worldwide Addressable Market
($ in billions)
$4.5
$6.9
$10.2
$15.4
$23.0
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2013E 2014E 2015E 2016E 2017E
Global mHealth Revenue
U.S.
Market
2017E =
$5.9B
Global mHealth Revenue is Forecast to
Grow at a 50% 4-YR CAGR (2013-2017)

Source: PwC and GSMA, Touching Lives Through Mobile Health: Assessment of the Global Market Opportunity, February 2012

In Exhibit 45, we provide the PwC/GSMA breakout of global mHealth revenue by market participant. We
note that the report suggests that mobile operators will garner roughly 50% of global revenue share by
2017. Adjusting the PwC/GSMA worldwide global mHealth revenues to exclude mobile operators, their
global mHealth revenue estimate becomes $11.5 billion, which is somewhat similar to Deloitte ($11.7
billion in 2018) and Transparency Market Research ($10.2 billion in 2018). While we believe these
estimates illustrate the vast opportunity facing digital healthcare, we believe that these estimates may
prove conservative.


Exhibit 45: The Digital Healthcare Opportunity Remains Vast; Estimates Seem Conservative
($ in billions)
$2.3
$2.6
$6.6
$11.5
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
Healthcare Providers Content / Application
Players
Device Vendor Mobile Operator
Global mHealth Revenue by Market Participant
Mobile Operators Are Expected to
Represent 50% Market Share in 2017E.
This Assumption Makes Us Believe
Estimates Are Likely Conservative


In our view, data regarding consumer spending for digital healthcare technology products from Rock
Health suggests the opportunity may be larger than PwC/GSMA forecast. According to Rock Health
estimates, consumers could spend $14 billion on just three areas of digital healthcare technology alone:
mHealth apps, health-related video games, and resources rating doctors and hospitals. We illustrate
Rock Healths consumer spending estimates in Exhibit 46. We believe these estimates speak to the vast
size of the digital healthcare technology opportunity.

Exhibit 46: Consumer Spending for Digital Healthcare Technology Products
($ in millions)
$700
$4,000
$8,900
$0
$2,000
$4,000
$6,000
$8,000
$10,000
mHealth Apps Health-Related Video Games Resources Rating MDs & Hospitals
Consumer Spending Estimates

Source: Rock Health, Business Models in Digital Health Consumer & Enterprise, May 2012.

We note that PwC/GSMA break down their global mHealth revenue estimates by treatment category
(Exhibit 47). According to their report, monitoring services are expected to generate the majority of
mHealth revenue, consisting of $10.7 billion in revenue for chronic disease management services and
$4.3 billion in revenue for independent ageing services. The report notes that chronic disease
management revenues will likely be from monitoring services for metabolic conditions (diabetes and
obesity) and cardiovascular conditions (hypertension, coronary artery disease, and congestive heart
failure). The diagnostic services category consists of interactive messaging to help patients self-diagnose
minor ailments, medical call centers manned by healthcare professionals, and telemedicine solutions


allowing doctors to consult with patients via wireless broadband. The third and fourth largest categories
are treatment and healthcare systems improvement. The other category includes administration,
healthcare surveillance support, and emergency response.

Exhibit 47: The Digital Healthcare Opportunity Encompasses Numerous Categories
($ in billions)
$0.9
$1.4
$2.3
$3.4
$15.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
Other Healthcare
Systems
Improvement
Treatment Diagnostic
Services
Monitoring
Global mHealth Revenue by Treatment Category
Monitoring Revenues Consist of:
$10.7 Billion for Chronic Disease Management
and
$4.3 Billion for Independent Ageing


In our view, the area of digital healthcare technology with the most reliable estimates is fitness
tracking/wearable computing. IMS Research estimates that sports and fitness device shipments will total
43.8 million in 2013 and forecasts shipments to grow to 56.2 million by 2017 (Exhibit 48). Additionally,
IMS Research estimates that total cumulative sports and fitness device shipments for the 2013 to 2017
period will total roughly 250 million units. We note that IMS Research forecasts that the global market for
wearable technology will reach 171 million shipments with an associated market opportunity of $6 billion
by 2016.

Exhibit 48: IMS Health Sport & Fitness Device Shipment Forecast
(in millions)
43.8
56.2
0
10
20
30
40
50
60
2013E 2017E
Sports & Fitness Device Shipments
IMS Health Estimates Cumulative Sports & Fitness Device Shipments,
Between 2013E and 2017E, To Be Roughly 250 million Units
4-YR CAGR
of 6.4%

Source: IMS Research, The World Market for Sports & Fitness Monitors, May 2013


The Digital Healthcare Industry: Many Exciting Opportunities and Many Ways to Invest

We believe digital healthcare technology companies represent an important change agent that will help
facilitate the further digitization of healthcare. Based on the StartUp Health database, we have identified
more than 350 public and private digital healthcare companies, and using StartUp Health and FactSet
estimates we believe total cumulative funding for the 2000-to-present period is between $7 billion and $8
billion. In Exhibit 49, we provide an illustration of cumulative venture investments in digital healthcare
technologies for 2011, 2012, and 2013 according to Rock Health.

Exhibit 49: Digital Healthcare Venture Investments, January 2011 to June 2013
($ in millions)
$216
$312
$365
$533
$670
$849
$757
$1,401
$343
$890
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Digital Healthcare Venture Funding 2011-2013
2013 2012 2011

Note: Each year represents the cumulative total venture funding for that year
Source: FactSet, Rock Health, StartUp Health

While some digital healthcare startups find it difficult to attract customers, we note that there are several
proven business models utilized throughout the space. In Exhibit 50, we provide an analysis that
compares several different business models of selected digital healthcare technology companies. The
diagram maps select digital healthcare companies by business model according to who uses the
product/service (business or consumer) and who pays for the product/service (business or consumer).
Companies making fitness trackers are at the most basic level as these devices are sold to and used by
consumers. Other models provide consumer-facing services and monetize their services through
advertising or physician payments. At the farthest end of the spectrum exist digital healthcare companies
with consumer-facing products paid for by insurance or pharmaceutical companies. Lastly, there are
those companies providing products or services that are paid for and used by a single organization.


Exhibit 50: Business Model Comparison Who Uses Versus Who Pays?
Consumer Business
Business
Who
Pays?
Who Uses?
Consumers Use
and Purchase
Consumers Use,
Physicians Pay
Consumers Use,
Ad Supported
Consumers Use,
Insurance / Pharma
Pays
Doctors Use Free,
Ad Supported
Organizations
Use &
Purchase

Source: Rock Health

In Exhibit 51, we provide a summary of venture capital funding for digital healthcare technology
companies by focus area. Our summary divides the digital healthcare technology private company
universe into 10 focus areas. We estimate total cumulative funding to date across the 178 companies that
comprise our 10 categories totals approximately $7.0 billion.

Exhibit 51: Digital Healthcare Venture Funding by Focus Area
($ in millions)
Category Funding
Clinical Back-Office & Clinical Front-Office $1,681.0
Analytics $928.8
Health and Wellness/Gamification $874.7
Med Devices (Sensors/Monitoring/Imaging) $827.8
Diagnostics/Genomics/Clinical Trials $591.8
Provider Information/Insurance/Education $582.0
Fitness $436.9
Diabetes $409.3
Cardiovascular Diagnostics/Sensors $387.5
Telehealth $253.5
Total Funding $6,973.3
Venture Funding by Focus Area
$0.0 $500.0 $1,000.0 $1,500.0 $2,000.0
Telehealth
Cardiovascular Diagnostics / Sensors
Diabetes
Fitness
Provider Information / Insurance / Education
Diagnostics / Genomics / Clinical Trials
Med Devices (Sensors/Monitoring/Imaging)
Health and Wellness / Gamification
Analytics
Clinical Back-Office & Clinical Front-Office

Source: FactSet, Rock Health, StartUp Health, and Stifel estimates

We note that the largest area based on funding is the clinical back-office and clinical front-office category.
We define the category to include digital healthcare companies working on digital EMR/EHR solutions,
digital practice management solutions, digital revenue cycle management solutions, as well patient/doctor
communication solutions. Analytics represents the second largest category and represents companies
focused on analyzing and unlocking the value of data in numerous ways. Health and Wellness
encompasses companies focused on consumer-facing solutions for tracking or improving health. Med
Devices consists of companies developing solutions focused on sensors, monitors, and imaging.
Diagnostics/Genomics/Clinical Trials includes companies focused on creating and improving testing to
genetic sequencing technology. The Provider Information category represents companies focused on
digitizing the appointment process or building consumer-driven healthcare provider rating systems. The


Fitness category includes companies developing wearable computing devices to track health information.
The Diabetes category includes companies focused on developing blood monitoring devices or
glucometers. The Cardiovascular Diagnostics/Sensors group consists of companies developing sensors
or applications specifically for heart-related monitoring. The Telehealth category consists of companies
developing solutions that help remove time and geography constraints from healthcare. We now provide
a directory of important digital healthcare companies according to our 10 focus areas below.

Exhibit 52: Important Digital Healthcare Companies Medical Records
($ in millions)
Company Venture Funding Company Venture Funding Company Venture Funding
Castlight Health $177.3 NuScriptRX $31.7 Healthrageous $15.0
Practice Fusion $137.0 COMS Interactive $28.8 Change Healthcare $15.0
Airstrip Technologies $131.8 PatientsLikeMe $25.8 gloStream $14.3
MedSynergies $118.0 Valant Medical Solutions $24.1 Privia Health $14.1
PatientSafe Solutions $90.3 PerfectServe $22.9 Healthation $14.0
PatientKeeper $86.4 Wavemark $21.9 Truveris $13.8
Awarepoint $73.3 Hello Health $21.5 Resilient Network Systems $13.2
Healthline Networks $59.0 Remedy Partners $20.5 PathCentral $13.0
CareCloud $47.4 Medley Health $20.0 DocuTAP $11.9
Kareo $44.5 AventuraHQ $19.6 Razor Insights $11.4
LifeImage $43.4 Silverlink Communications $19.4 Shareable Ink $11.0
Audax Health $42.5 Modernizing Medicine $19.1 ConsultingMD $11.0
Skylight Healthcare Systems $39.8 Alliance Health Networks $17.9 Clinicient $10.9
ABILITY Network $38.3 Medicalis $16.9 Kit Check $10.4
InstaMed $37.9 Doxo $15.3 MD Tech Pro $10.0
Digital Healthcare Companies - Clinical Back-Office and Clinical Front-Office

Source: FactSet and StartUp Health

Company:
Castlight Health

Company Description: Castlight Health provides healthcare transparency solutions to consumers,
employers, providers, and health plans. Healthcare transparency involves providing the ability for
constituents to analyze provider-specific information on costs and quality of medical services. The
Castlight solution encompasses multiple channels, including online, mobile, and phone. The company is
based in San Francisco, California. Additional information can be found at www.castlighthealth.com.
Product: The Castlight healthcare management suite is a software-as-a-service solution customizable to
all types of health benefit designs. The suite integrates with health plan carrier data to simplify benefits
information and provides a common, cross-carrier experience.
Management: Giovanni Colella serves as Chief Executive Officer, and co-founded the company in 2008.
John Doyle serves as Chief Financial Officer, and Dena Bravata serves as Chief Medical Officer and
Head of Products.
Key Investors: Allen & Co., Athenahealth, Cleveland Clinic Innovations, Maverick Capital, Morgan
Stanley, Oak Investment Partners, Redmile Group, T. Rowe Price, U.S. Venture Partners, Venrock,
Wellcome Trust Centre for Stem Cell Research.


Company:
Practice Fusion

Company Description: Practice Fusion is an online electronic health record (EHR) community. The
company provides a free web-based EHR solution to physicians. The Practice Fusion community consists
of more than 150,000 physicians and practice users. Practice Fusion monetizes its web-based EHR
solution through advertising. The company is based in San Francisco, California. Additional information
can be found at www.practicefusion.com.
Product: Provides a fully functional web-based EHR to physicians. Features included are charting, e-
Prescribing, labs, scheduling, referrals, and billing.
Management: Ryan Howard serves as Chief Executive Officer and co-founded the company in 2005.
Matthew Douglass serves as Vice President of Platform and co-founded the company in 2005. Jonathan
Malek serves as Senior Vice President of Technology. Todd Martin serves as Senior Vice President of
Business Development.
Key Investors: Artis Capital Management, Band of Angels, Felicis Ventures, Founders Fund, Ghost
Angel, Glynn Capital Management, Hadi Partovi, Morgenthaler Ventures, Scott Banister, and SV Angel.

Company:
Airstrip Technologies

Company Description: AirStrip is focused on leveraging mobile innovation and technology to change the
way healthcare is practiced. The AirStrip ONE enterprise mobility solution helps to improve quality and
timeliness of care, increases patient and clinician satisfaction, enhances financial performance, and
reduces risk. The company is based in San Antonio, Texas. Additional information can be found at
www.airstriptech.com.
Product: AirStrip ONE is an enterprise platform solution that provides the architecture and ability to
rapidly exchange information for clinical decision-making across disparate systems while providing clinical
mobility. The AirStrip ONE has FDA clearance, facilitates data communication across multiple systems
and providers, provides dynamic feedback improving patient care, and allows for customization to fit
provider workflow.
Management: Alan Portela serves as the Chief Executive Officer. Angela Pierce serves as the Chief
Financial Officer. Wm. Cameron Powell serves as the Chief Medical Officer.
Key Investors: Health Insight Capital, Hospital Corporation of America, Qualcomm Ventures, Sequoia
Capital, Wellcome Trust for Stem Cell Research.

Company:
Medsynergies

Company Description: MedSynergies provides revenue cycle management, practice management,
consulting, business process, analysis, and software integration services to healthcare providers. The
company partners with healthcare organizations to meet the challenges of healthcare delivery and
physician alignment. MedSynergies focuses on the business side of medicine by providing innovative
financial and operational systems to healthcare clients. The company is based in Irving, Texas. Additional
information can be found at www.medsynergies.com.


Product: MedSynergies MSIGHT helps physicians better manage the business side of their practice,
allowing greater focus on quality of care. The company states that clients experience a 25% increase in
revenue after implementing MSIGHT. The platform helps hospitals understand physician-alignment
components. Additionally, practices and hospitals can integrate with existing technology while only using
one provider.
Management: Bill Hutton served as the first Chairman and Chief Executive Officer of MedSynergies, and
helped found the company in 1996. John Thomas serves as Chief Executive Officer and has held
progressively more senior roles since joining the company in 1996. Frank Marshall serves as President.
Bill Murray serves as Executive Vice President and Chief Financial Officer.
Key Investors: Financial Technology Ventures Management Co., Texas Health Resources, Inc.

Company:
PatientSafe Solutions

Company Description: PatientSafe Solutions focuses on transforming healthcare through the
convergence of consumer mobile technologies and enterprise clinical systems. Through the PatientTouch
system, the company gives care providers an intuitive interface, mobile-enabled workflows, which can be
built upon existing EHR infrastructure. The PatientTouch platform enables Connected Patient Care
through a suite of smart point-of-care mobile solutions. The company is based in San Diego, California.
Additional information can be found at www.patientsafesolutions.com.
Product: The PatientTouch system is a smart point-of-care mobile solution that orchestrates people,
data, and processes in a healthcare setting in real time. The system operates on an easy-to-use
handheld Apple iOS based device.
Management: Joseph Condurso serves as President and Chief Executive Officer. Frank Pecaitis serves
as Senior Vice President of Sales. Bruce Eklund serves as Senior Vice President of Operations. Paul
Seelinger serves as Vice President of Clinical Affairs and Services.
Key Investors: American River Ventures, Camden Partners, Integral Capital Partners, J.F. Shea and
Company, Menlo Ventures, Merck Global Health Innovation Fund, North Bay Angels, Psilos Group,
Sacramento Angels, Shoreline Venture Management, and TPG Capital.

Company:
PatientKeeper

Company Description: PatientKeeper is a provider of healthcare information systems with highly
intuitive software, improving workflow in order to improve productivity and patient care. The company
provides a suite of solutions, most notably PatientKeeper CPOE, physician documentation, HIE, and
other applications across multiple screens (PC, laptop, smartphones, and tablets). PatientKeeper works
with more than 53,000 physicians across more than 450 hospitals, which equates to 5% of total U.S.
physicians and 10% of U.S. physicians seeing patients in a hospital. The company is based in Waltham,
Massachusetts. Additional information can be found at www.patientkeeper.com.
Product: PatientKeeper CPOE (PatientKeeper Computerized Physician Order Entry) designed for
meaningful physician use.
Management: Paul Brient serves as Chief Executive Officer. Donald Burt serves as Chief Medical
Officer. Jim Melanson serves as Chief Financial Officer.


Key Investors: Flybridge Capital Partners, Frazier Healthcare Partners, J.H. Whitney & Co., Lighthouse
Capital Partners, Mediphase Venture Partners, Mosaix Ventures, New Enterprise Associates (NEA),
Pacific Venture Group, and Saints Capital.

Company:
Awarepoint

Company Description: Awarepoint provides cloud-based real-time location systems to help enable
predictive workflows to manage assets, patients, and personnel across the healthcare organization. The
companys main product offering is the aware360Suite, which automates core processes in the hospital
environment using real-time locating system (RTLS) technology. The company is headquartered in San
Diego, California. Additional information can be found at www.awarepoint.com.
Product: Awarepoints aware360Suite is a web-based hospital automation system, which automates
and streamlines patient flow, medical equipment and medical tray logistics, monitoring and
documentation of personnel, temperature control, and patient turnover. The companys awareAssets
offering is a web-based enterprise visibility and workflow automation system that maps and provides real-
time interaction between staff and patient movements. Awarepoints awareHandHygiene is an auto-ID
hand hygiene monitoring solution using RTLS technology. The companys awareED provides automated
patient and asset tracking. Awarepoints awareSurgical provides an automated surgery scheduling
system.
Management: Jay Deady serves as President and Chief Executive Officer. Tim Roche serves as Chief
Financial Officer. Matt Perkins serves as Chief Technology Officer & Senior Vice President of
Engineering. Dennis OLeary serves as Chief Medical Officer.
Key Investors: Avalon Ventures, Cardinal Partners, Heritage Group, Jafco Ventures, Kleiner Perkins
Caufield & Byers (KPCB), New Leaf Venture Partners, Top Tier Capital Partners, and Venrock.

Company:
Healthline

Company Description: Healthline Networks provides health information to consumers via
www.healthline.com, but also provides a suite of health information solutions for Internet portals and
healthcare companies. The companys solutions identify, organize, and present healthcare information
powering health search, content, applications, and advertising services to a broad array of leading health
plans, employers, publishers, and marketers. According to Healthline Networks, the companys Healthline
HealthWeb portfolio generates 54 million unique visitors per month. The company is based in San
Francisco, California. Additional information can be found at www.healthline.com.
Product: Healthlines HealthSTAT is the companys contextual ad targeting technology used to broaden
condition-specific reach for health advertisers. The companys Medically Guided Search and Healthline
HealthWeb (a filtered set of 200,000 consumer health public websites) uses a customers database to
crawl, index, and present clinically accurate search results. Other consumer-focused offerings are
Healthline BodyMaps and Bodies in Motion, interactive 3-D models of the body; HealthlLinks, allows
customers to hyperlink from any health concept to other relevant/related health content; SmartAnswers,
provides highly relevant health-related search results. Healthlines clinical applications include
SymptomSearch, TreatmentSearch, DocSearch, and DrugSearch.
Management: Dean Stephens serves as President and Interim Chief Executive Officer. Niraj Katwala
serves as Chief Technology Officer. Paul Auerbach serves as Chief Medical Officer. Scott Heys serves as
Vice President, Finance.


Key Investors: Aetna Ventures, Comcast Ventures, Investor Growth Capital, JHK Investments, Kaiser
Permanente Ventures, Mitsui & Co. Venture Partners, Reed Elsevier Ventures, Peacock Equity, Vantage
Point Venture Partners.

CareCloud
Company:

Company Description: CareCloud provides cloud-based practice management, electronic health record,
and medical billing software and services to healthcare professionals. The companys products and
services provide healthcare professionals a fully integrated digital healthcare ecosystem accessible
across any browser or mobile device. CareCloud currently works with physicians in over 46 states and
helps manage over $2 billion in annualized accounts receivable on behalf of its clients. The company is
headquartered in Miami, Florida. Additional information can be found at www.carecloud.com.
Product: CareCloud Central comprehensive practice management software. CareCloud Charts is the
companys cloud-based EHR solution. CareCloud Concierge represents the companys revenue cycle
management solution. CareCloud Community is the companys healthcare social network, which
facilitates meaningful patient and physician interaction in a secure portal.
Management: Albert Santalo serves as President and Chief Executive Officer. John Walsh serves as
Chief Technology Officer.
Key Investors: Adams Street Partners, Intel Capital, Norwest Venture Partners, and Tenaya Capital.

Company:
Kareo

Company Description: Kareo provides cloud-based software to help doctors, practice managers, and
billing companies better manage their businesses. The companys software solutions are aimed at
helping small practices succeed. Kareo is based in Irvine, California. Additional information can be found
at www.kareo.com
Product: The company offers a web-based EHR, Kareo Practice PM, a practice management solution,
and Kareo Billing Service.
Management: Dan Rodrigues founded Kareo in 2004 and currently serves as the Chief Executive
Officer. Jason Gardner serves as the Chief Executive Officer. Tom Giannulli serves as the Chief Medical
Information Officer. Rob Pickell serves as the Chief Marketing Officer.
Key Investors: Greenspring Associates, Minor Ventures, OpenView Venture Partners, Western
Technology Investment.


Exhibit 53: Important Digital Healthcare Companies Analytics
($ in millions)
D-Wave Systems $119.9 Liaison Technologies $40.9 iVantage Health Analytics $18.6
RainDance Technologies $89.2 Ayasdi $40.9 DNAnexus $16.6
Access MediQuip $77.9 Phytel $40.4 Aglium Healthcare Intelligence $16.2
Blue Health Intelligence $63.5 xG Health Solutions $40.0 Activate Networks $16.0
Humedica $63.0 Valence Health $30.0 Lineagen $15.8
WorldOne $60.0 Healthx $22.0 Explorys $15.1
Roambi $50.0 Enclarity $22.0 RemitDATA $10.5
Health Catalyst $41.0 Kyruus $19.6
Digital Healthcare Companies - Analytics


Company:
D-Wave Systems

Company Description: D-Wave Systems designs and develops quantum computer systems. The
companys primary quantum computing product is the D-Wave Two System. D-Wave Systems is
headquartered in Burnaby, British Columbia. Additional information can be found at www.dwavesys.com.
Product: The companys D-Wave Two System is a high-performance computing system designed to
solve industrial problems encountered by Fortune 500 companies, government, and academia.
Management: Vern Brownell serves as President and Chief Executive Officer. Dr. Geordie Rose serves
as Chief Technology Officer and co-founded the company in 1999 with Eric Ladizinsky, who serves as
Chief Scientist. Steve Cakebread serves as Chief Financial Officer and Chief Administrative Officer.
Robert Bo Ewald serves as President, D-Wave U.S. and Chief Revenue Officer. Warren Wall serves as
Chief Operating Officer.
Key Investors: BDC Venture Capital, Bezos Expeditions, British Columbia Investment Management,
Business Development Bank of Canada, Discovery Capital, Draper Fisher Jurvetson (DFJ), GrowthWorks
Capital, Harris & Harris Group, In-Q-Tel, International Investment and Underwriting, Kensington Capital,
and PenderFund Capital Management.

RainDance Technologies
Company:

Company Description: RainDance Technologies, the Digital Biology Company, develops innovative
microdroplet-based solutions for human health and disease research. The companys RainStorm
technology generates million of discrete droplets that can encapsulate a single molecule, cell, or reaction,
and allows these droplets to be digitally analyzed and sorted individually. The company is headquartered
in Billerica, Massachusetts. Additional information can be found at www.raindancetech.com.
Product: RainDance Technologies offers the RDT-1000, a fully automated low-to-medium-throughput
sequencing system for accelerating the targeted sequencing of the human genome. The companys
ThunderStorm System is a fully automated, high-throughput targeted sequencing solution that facilitates
increased sample processing and generates higher-quality data. RainDance Technologies also offers the
RainDrop Digital PCR System.
Management: S. Roopom Banerjee serves as President and Chief Executive Officer. Andy Watson
serves as Chief Commercial Officer.


Key Investors: Alloy Ventures, Arcadia Wood Partners, JDS Capital Management, Mohr Davidow
Ventures, Pequot Partners, Quaker Partners, and Sectoral Asset Management.

Company:
Access MediQuip

Company Description: Access MediQuip is a surgical and implant management company (SIMS). The
companys Implant Management Platform gives payers analytic insights into implant costs, the quality and
safety of surgical procedures, and provides full access and choice of implants to facilities, surgeons, and
patients. Access MediQuip is headquartered in Lake Mary, Florida. Additional information can be found
at www.accessmediquip.com.
Product: Access MediQuips Implant Management Platform provides services to help manage the
surgical/implant treatment cycle beginning with preauthorization and continuing through billing and
reimbursement.
Management: Prakash Patel serves as Chief Executive Officer. Steven Arnold serves as Chief Medical
Officer. Jorge Amaro serves as Chief Information Officer.
Key Investors: Cohesive Capital Partners, Mistral Equity Partners, and Water Street Healthcare
Partners.

Company:
Humedica

Company Description: Humedica is a clinical intelligence company that provides software-as-a-service
business solutions to healthcare companies. The companys analytic tools help healthcare providers and
life sciences organizations improve decision-making capabilities by unlocking the value of unconnected
data from multiple sources. Humedicas analytic tools address several healthcare constituencies:
inpatient and outpatient healthcare providers, pharmaceutical and biotechnology firms, medical device
manufacturers, government agencies, and even financial services firms. We note that the company was
acquired by UnitedHealth Group in January 2013. Humedica is headquartered in Boston, Massachusetts.
Additional information can be found at www.humedica.com.
Product: Humedica offers three solutions: Humedica MinedShare, Humedica NorthStar, and Humedica
Customized. Humedica MinedShare provides business analytics for healthcare providers across the
entire continuum of care. Humedica NorthStar allows life sciences companies to better understand how
physicians are adopting brands. Humedica Customized combines de-identified electronic health record
data with claims, prescription, and practice management information to generate deeper analytic insights.
Management: Michael Weintraub serves as Chief Executive Officer and co-founded the company with
Allen Kamer and A.G. Breitenstein in 2008. A.G. Breitenstein serves as Chief Product Officer, Provider
Markets. Stan Norton serves as Chief Technology Officer. Bill Romeo serves as Vice President and Chief
Financial Officer.
Key Investors: Bain Capital Ventures, General Catalyst Partners, Leerink Swann, and North Bridge
Venture Partners.


Exhibit 54: Important Digital Healthcare Companies Health and Wellness/Gamification
($ in millions)

Company A $153.0 Welltok $25.8 Cerego $18.0
Company B $108.5 Keas $25.5 Health Guru $17.5
Lumos Labs $67.4 Sharecare, Inc. $22.8 INRange Systems $16.2
MindBody $60.6 Medivo $22.7 OneHealth $16.0
RedBrick Health $59.2 Treato $20.0 HealthiNation $12.0
HealthTap $37.9 QuantiaMD $20.0 Ecomom $11.2
SeeChange Health $37.0 Affectiva $19.4 Retrofit $10.7
Posit Science $36.6 Sebacia $18.6 OPTIMIZERx $10.0
Linkwell Health $28.3
Digital Healthcare Companies - Health and Wellness / Gamification


Company:
Lumos Labs

Company Description: Lumos Labs focuses on cognitive neuroscience research and development
working to develop software tools for improving brain health and performance. The companys first brain
fitness program is called Lumosity. Lumos Labs is headquartered in San Francisco, California. Additional
information can be found at www.lumosity.com.
Product: Lumosity is Lumos Labs first web-based brain fitness program.
Management: Kunal Sarkar serves as Chief Executive Officer and co-founded the company in 2005 with
Michael Scanlon and Dave Drescher. Michael Scanlon serves as Chief Scientific Officer. Dave Drescher
serves as Chief Technology Officer. Krishna Kakarala serves as Chief Financial Officer.
Key Investors: Discovery Communications, FirstMark Capital, Harrison Metal Capital, Menlo Ventures,
Michael Dearing, Norwest Partners, and Pequot Ventures.

Company:
MINDBODY

Company Description: MINDBODY provides web-based business management solutions to the health,
wellness, and beauty industries. The companys primary customers are fitness, yoga, Pilates, salons,
spas, and martial arts businesses. The company is headquartered in San Luis Obispo, California.
Additional information can be found at www.mindbodyonline.com.
Product: The companys MINDBODY Processing solution provides an integrated merchant account that
enables business owners to organize and streamline their business. MINDBODYs online business
management software allows customers to connect with their business from any Internet connected
device and ranges in cost from $75 per month to $175 per month.
Management: Rick Stollmeyer serves as Chief Executive Officer and co-founded the company in 2001
with Robert Murphy. Robert Murphy serves as Chief Operating Officer and Chief Sales & Marketing
Officer. Chet Brandenburg serves as Chief Product Officer & Co-Creator. Bill Donohue serves as Chief
Information Officer.
Key Investors: Catalyst Investors, Bessemer Venture Partners, and Institutional Venture Partners.


RedBrick Health
Company:

Company Description: RedBrick Health is a health engagement technology company offering employers
solutions that reinvigorate their health and wellness programs. The company combines financial
accountability, clinical and behavioral insights, social networking and gamification, as well as data
analytics to create a personalized customer experience. RedBrick serves large self-insured employers
and strategic distribution partners. The company is headquartered in Minneapolis, Minnesota. Additional
information can be found at www.redbrickhealth.com.
Product: The RedBrick Solution allows employers to offer personalized health programs to their
employees, offers social interaction, and utilizes financial incentives to reward healthy behavior.
Management: Dan Ryan serves as Chief Executive Officer. Gregg Waldon serves as Chief Financial
Officer. Jeff Dobro serves as Chief Medical Officer. Eric Zimmerman serves as Chief Marketing Officer.
Key Investors: Fidelity Ventures, Kleiner Perkins Caufield & Byers (KPCB), Highland Capital Partners,
Versant Ventures, and Volition Capital.

Company:
HealthTap

Company Description: HealthTap offers a mobile health platform connecting people with their doctors.
The company offers an interactive health network, as well as mobile apps, connecting physicians and
patients in more meaningful ways. Additionally, HealthTap provides education and disseminates trusted,
vetted, and peer-reviewed health information. As of November 2012, the companys health network
consisted of 1.2 million doctors and dentists who speak 101 languages. HealthTap is headquartered in
Palo Alto, California. Additional information can be found at www.healthtap.com.
Product: The HealthTap Interactive Health Network and mobile apps facilitate more meaningful patient-
to-physician communication. Patients can leverage a vast network of physicians in order to obtain the
most relevant health information. Physicians have the ability to control and develop their online
reputation. The platform seeks to link patients with the best doctors available.
Management: Ron Gutman serves as Chief Executive Officer and co-founded the company with Sastry
Nanduri and Dr. Geoff Rutledge in 2010. Sastry Nanduri serves as Chief Technology Officer. Dr. Geoff
Rutledge serves as Chief Medical Information Officer. Michael Nichols serves as Chief Privacy Officer.
Key Investors: Esther Dyson, Innovation Endeavors, Khosla Ventures, Mayfield Fund, and Mohr
Davidow Ventures.


Company:
SeeChange Health

Company Description: SeeChange Health provides value-based health insurance plans through its
SeeChange Health Insurance and SeeChange Health solutions offerings. The company utilizes value-
based benefit solutions to create better health and quality of life for employees. SeeChange Health uses
value-based service offerings to incentivize patients to manage their own health in order to prevent,
detect, and treat health issues today, so that they do not escalate into something more serious. The
company is based in Studio City, California. Additional information can be found at
www.seechangehealth.com.
Product: SeeChange Health Insurance offers value-based benefit plans to small and mid-size employers
in California and Colorado. SeeChange Health Solutions offers value-based benefit plans and services to
self-insured companies and carriers.
Management: Martin Watson serves as Chief Executive Officer and founded the company in 2004.
Daniel Boivin serves as Chief Legal Officer. Christopher Chang serves as Chief Information Officer.
Susan Cotton serves as Chief Marketing Officer. Mark Gastineau serves as Chief Operations Officer.
Vince Iantorno serves as Chief Underwriting Officer. Sean Penwell serves as Chief Medical Officer. Don
Powers serves as Chief Financial Officer.
Key Investors: Maverick Capital and Psilos Group.
Company:
Posit Science

Company Description: Posit Science offers consumers brain training software clinically proven to
improve cognitive performance. The companys brain exercises are available online at www.BrainHQ.com
and have been proven to significantly improve brain speed, attention, and memory. The company is
headquartered in San Francisco, California. Additional information can be found at
www.positscience.com.
Product: The companys brainHQ platform provides cognitive fitness training using exercises proven to
make real and lasting improvements in brain function. Think of brainHQ as the gym for mental fitness.
Management: Henry Mahncke serves as Chief Executive Officer and Dr. Michael Merzenich serves as
Chief Scientific Officer.
Key Investors: Aberdare Ventures, Cooley Goodward Kronish, Draper Fisher Jurvetson (DFJ), and VSP
Capital.

Exhibit 55: Important Digital Healthcare Companies Med Devices (Sensors/Monitoring/Imaging)
($ in millions)

Proteus Digital Health $117.3 Watermark Medical $53.2 Movea $18.9
VisionCare Ophthalmic Technologies $76.2 MC10 $40.5 TrueVision Systems $16.8
InterAct911 $63.5 EarlySense $37.0 Pathfinder Therapeutics $15.8
Sotera Wireless $61.1 LumoBack $35.4 Vital Connect $14.0
LensAR $59.3 Foundation Radiology Group $25.5 Zephyr Technology $11.3
iWalk $57.0 DICOM Grid $24.9 Valkee $10.2
Sensimed $56.0 OrSense $24.2 Rapid Diagnostek $9.9
Digital Healthcare Companies - Medical Devices (Sensors, Monitors, Imaging)



Company:
Proteus Digital Health

Company Description: Proteus Digital Health is focused on creating a new category of products called
Digital Medicines. The company works with device, pharmaceutical, and biotechnology companies to
better understand how its ingestible sensor technology can aid therapeutic areas with great complexity.
Proteus is currently working on solutions for three therapeutic areas: cardiac disease and heart failure,
central nervous system disease (MS, Huntingtons, schizophrenia, Parkinsons, and Alzheimers), and
transplants. The company is headquartered in Redwood City, California. Additional information can be
found at www.proteusdigitalhealth.com.
Product: Proteus Digital Health provides patients and care providers a real-time medicine tracking
information system called Helius. Additionally, the company continues to work on developing its ingestible
sensor technology.
Management: Andrew Thompson serves as Chief Executive Officer and co-founded the company in
2001. George Savage serves as Chief Medical Officer and co-founded the company in 2001. Mark
Zdeblick serves as Chief Technology Officer and co-founded the company in 2001. David OReilly is
Chief Product Officer.
Key Investors: Adams Street Partners, Asset Management Company, The Carlyle Group, Essex
Woodlands, Fletcher Spaght Ventures, Frazier Healthcare Partners, Kaiser Permanente Ventures,
Medtronic, Novartis, ON Semiconductor, Oracle, Otsuka, Sino Portfolio, Spring Ridge Ventures, and St.
Jude.

Company:
Sotera Wireless

Company Description: Sotera Wireless is a medical device company focused on the development,
marketing, and sale of a new generation of vital signs monitoring devices. The company is based in San
Diego, California. Additional information can be found at www.soterawireless.com.
Product: Sotera Wireless developed and operates the ViSi Mobile System, which is a platform for
comprehensive vital signs monitoring. The platform monitors all core vital signs and is designed to
provide information output in electronic form.
Management: Tom Watlington serves as Chief Executive Officer. James Moon serves as Chief
Technology Officer. Mark Spring serves as Chief Financial Officer.
Key Investors: 3i Group, Cerner Capital, Delphi Ventures, EDBI, Intel Capital, Qualcomm Life Fund,
Safeguard Scientifics, Sanderling Ventures, and West Health Investment Fund.


Exhibit 56: Important Digital Healthcare Companies Diagnostics/Genomics/Clinical Trials
($ in millions)
23andMe $121.7 Nant Health $31.1 Interleukin Genetics $15.5
Foundation Medicine $89.5 VirtualScopics $27.1 aMDx Laboratory Science $13.5
Applied Proteomics $54.5 Seno Medical Instruments $25.5 Intellicyt $13.3
Veran Medical Technologies $38.8 STAT-Diagnostica $25.4 Second Genome $12.7
Quanterix $38.6 Daktari $22.4 BINA Technologies $10.3
Acutus Medical $34.4 goBalto $17.5
Digital Healthcare Companies - Diagnostics / Genomics / Clinical Trials

Company:
23andMe

Company Description: 23andMe is a personal genetics company providing genetic information
regarding ancestry and health traits. The company performs DNA analysis on an individuals saliva and
provides web-based interactive tools to help individuals better understand their genetic information. The
company is headquartered in Mountain View, California. Additional information can be found at
www.23andMe.com.
Product: Provides a Personal Genome Service that enables individuals to garner more information about
their ancestry and inherited traits.
Management: Anne Wojcicki serves as Chief Executive Officer and co-founded the company in 2006.
Andy Page serves as President. Jeffrey Pollard serves as Director of Medical Affairs.
Key Investors: Anne Wojcicki, Esther Dyson, Google Ventures, MPM Capital, New Enterprise
Associates (NEA), Sergey Brin, and Yuri Milner.

Company:
Foundation Medicine

Company Description: Foundation Medicine is a commercial stage company focused on the
development of diagnostic tests designed for use in the routine care of patients with cancer. The
companys comprehensive cancer diagnostic test helps physicians recommend treatment options based
on the particular molecular subtype of a given patients cancer. The company is headquartered in
Cambridge, Massachusetts. Additional information can be found at www.foundationmedicine.com.
Product: FoundationOne is a genomic profile that complements traditional cancer treatment decision
tools, and helps expand treatment options by matching patients with targeted therapies relevant to
molecular changes in their tumor.
Management: Michael Pellini serves as President and Chief Executive Officer. Steven Kafka serves as
Chief Operating Officer. Kevin Krenitsky serves as Chief Commercial Officer. Ronald Collette serves as
Chief Information Officer. Vincent Miller serves as Chief Medical Officer. Jason Ryan serves as Vice
President, Finance.
Key Investors: Casdin Capital, Deerfield Capital, Google Ventures, Kleiner Perkins Caufield & Byers
(KCPB), Redmile Group, Roche Venture Fund, Third Rock Ventures, and the WuXi Corporate Venture
Fund.


Exhibit 57: Important Digital Healthcare Companies Provider Information/Insurance/Education
($ in millions)
ZocDoc $97.4 Oscar $40.0 HealthTeacher $14.3
One Medical Group $76.5 Liazon $31.9 Bloom Health $12.5
Vitals $63.3 Medical Simulation Corp $31.6 My Health Direct $10.9
Phreesia $46.9 Doximity $27.8 HealthEngine $10.4
Best Doctors $45.5 Analyte Health $22.0 TigerText $10.1
Orbis Education $41.0
Digital Healthcare Companies - Provider Information / Insurance / Education


Company:
ZocDoc

Company Description: Founded in 2007, ZocDoc provides a web-based service with complementary
mobile apps that facilitate booking doctor and dentist appointments. Patients can access physician
availability via ZocDoc.com or ZocDocs mobile apps, check for insurance plan compatibility, and book an
appointment. The company claims that most patients are able to receive access in 2472 hours.
According to ZocDoc, more than 2.5 million people use ZocDoc each month across more than 1,800
cities. The company is headquartered in New York City. Additional information can be found at
www.zocdoc.com.
Product: The companys products include its web-based appointment booking website ZocDoc.com, as
well as iPhone and Android apps. ZocDoc Check-In allows patients to fill out paperwork online in advance
of their appointment. ZocDoc en Espanol is ZocDocs Spanish language product.
Management: Cyrus Massoumi serves as the Chief Executive Officer and co-founded the company in
2007. Oliver Kharraz serves as Chief Operating Officer and co-founded the company in 2007. Nick Ganju
serves as Chief Technology Officer and co-founded the company in 2007. Netta Samroengraja serves as
Chief Financial Officer.
Key Investors: Bezos Expeditions, DST Capital, Founders Fund, Goldman Sachs, Jason Finger, Khosla
Ventures, SV Angel, and Yuri Milner.

Company:
Vitals

Company Description: Vitals provides tools to help people make more informed decisions about the
quality and cost of their medical care. According to Vitals, more than 150 million patients are served by
Vitals annually. The majority of patients served are women with a household income greater than
$100,000 and are college educated. Additionally, 81% of Vitals users plan to see a doctor within 30 days
of visiting the Website, and 72% take a prescription on a regular basis. The company works with 13 of
the 25 largest health plans. Vitals is headquartered in New York City. Additional information can be found
at www.vitals.com.
Product: Vitals Patient Exchange allows patients to find doctors, schedule appointments, discuss
treatment options, and helps patients prepare for their visit.


Management: Mitch Rothschild serves as Chief Executive Officer and co-founded the company in 2008.
Ken Mulley serves as President. Orlena Yeung serves as Chief Marketing Officer. Bryan Perler serves as
Chief Executive Officer.
Key Investors: Cardinal Partners, Cross Atlantic Partners, Greycroft Partners, Health Enterprise
Partners, Health Venture Group, Milestone Venture Partners, and Piper Jaffray & Co.

Company:
Phreesia

Company Description: Phreesia provides automated patient check-in and payment collection
technology to physicians. The company is headquartered in New York. Additional information can be
found at www.phreesia.com.
Product: Provides self-service patient technology to the doctors office, facilitating accurate patient
information collection and automated payment collection.
Management: Chaim Indig serves as Chief Executive Officer and co-founded the company in 2005.
Ralph Gonzales serves as Chief Medical Advisor. Mark OLeary serves as Chief Marketing Officer.
Key Investors: Blue Cross Blue Shield Venture Partners, HLM Venture Partners, Long River Ventures,
Polaris Venture Partners, Sandbox Industries, and Village Ventures.

Exhibit 58: Important Digital Healthcare Companies Fitness
($ in millions)
Company Venture Funding Company Venture Funding
Jawbone $198.3 MapMyFitness $20.7
FitBit $66.4 Basis $20.5
BodyMedia $44.1 MyFitnessPal $18.0
Withings $36.7 Runkeeper $11.5
Netpulse $20.7
Digital Healthcare Companies - Fitness

Company:
Jawbone

Company Description: Jawbone is a technology company focused on developing wearable technology
for humans. The companys principal products include wireless speakers, speakerphones, Bluetooth
headsets, and a fitness tracker. Jawbone has three principle brands, including: Jawbone, NoiseAssassin,
and JAMBOX. We note that Jawbone acquired BodyMedia in April 2013 for more than $100 million. The
company is headquartered in San Francisco, California. Additional information can be found at
www.jawbone.com.
Product: Jawbone UP is a wristband and app that allows users to track sleep, movement, and food
intake. Based on collected user data, the app provides users with information that helps the user take the
necessary action needed to feel his or her best.


Management: Hosain Rahman serves as Chief Executive Officer and founded the company with
Alexander Asseily, Chairman, in 1999. Michael Tamaru serves as Chief Financial Officer. Yves Behar
serves as Chief Creative Officer. Monica Rogati serves as Vice President of Data.
Key Investors: Andreessen Horowitz, Deutsche Telekom AG, Khosla Ventures, Kleiner Perkins Caufield
& Byers (KPCB), Mayfield Fund, and Sequoia Capital.

Company:
Fitbit

Company Description: Fitbit is a wearable computing company focused on developing devices used to
track an individuals health data. The companys wearable computing devices allow users to track a wide
variety of activities including: calories burned, sleep quality, steps, and distance. Individuals can monitor
their progress using the data collected allowing them to monitor self-set measurable goals. Fitbit is
located in San Francisco, California. Additional information can be found at www.fitbit.com.
Product: Fitbit offers four primary product offerings: Fitbit Flex, Fitbit Zip, Fitbit One, and Fitbit Aria. Fitbit
Flex allows users to track steps, distance, and calories burned during the day, and at night tracks sleep
quality and silently wakes the user in the morning. Fitbit Zip allows users to track steps, distance, and
calories burned, and syncs these stats to the users computer and select Smartphones. Fitbit One
provides users a comprehensive lifestyle tracker. Fitbit Aria is a WI-FI enabled smart scale that tracks
weight, body fat percentage, and BMI, allowing users to track long-term progress.

Management: James Park serves as Chief Executive officer and co-founded the company with Eric
Friedman, Chief Technology Officer, in 2007. Hans Hartman serves as Chief Operating Officer. Woody
Scal serves as Chief Revenue Officer.
Key Investors: Felicis Ventures, Foundry Group, Qualcomm Life Fund, SAP Ventures, SoftBank Capital,
and True Ventures.

Company:
PatientKeeper

Company Description: Withings is a technology company focused on creating and developing
connected objects that help consumers better track their health. The company offers several products
including: a smart body analyzer, wireless scale, blood pressure monitors, smart baby monitors, baby
companion, and health mate applications. Withings was founded in 2008 and is headquartered in Paris,
France. Additional information can be found at www.withings.com.
Product: Withings core product is a wireless scale and offers both the Wireless Scale WS-30 and Smart
Kid Scale. The Withings Blood Pressure Monitor allows a consumer to measure their blood pressure via
the iPhone, iPad, or iPod touch. The Withings Smart Baby Monitor allows the consumer to turn their iOS
or Android device into a baby monitoring system. The Withings Pulse is the companys smart tracker that
allows consumers to track any number of statistics regarding their daily mobility and exercise. The
company also provides the Health Mate app suite.
Management: Cedric Hutchings serves as Chief Executive Officer. Eric Carreel serves as Chairman.
Key Investors: 360 Capital Parnters, Bpifrance, IDInvest Partners, and Ventech.


Company:
MapMyFitness

Company Description: MapMyFitness is a health and fitness technology company that provides a suite
of Internet and mobile apps through a social network for fitness enthusiasts. The company provides two
flagship product suites: MapMyRun and MapMyRide, which allows users to map, record, and share their
exercise routes in an online database. Additionally, users can search a database of over 120 million
global exercise routes, online training tools, nutrition tracking, fitness calculators, event listings, and at the
same time share their activities with others. MapMyFitness is based in Austin, Texas. Additional
information can be found at www.mapmyfitness.com.
Product: The company offers five product suites that consist of a website, mobile app, and social network
that provide access to route and activity information for the U.S., Ireland, Scotland, and Canada.
MapMyFitness allows consumers to search and map exercise routes, track fitness activity, log food data,
and share their data with others socially. MapMyRun allows consumers to search and map running routes
track running activity, log food data, and share their data with others socially. MapMyRide allows
consumers to search and map cycling routes, track cycling activity, log food data, and share their data
with others socially. MapMyWalk allows consumers to search and map walking routes, track walking
activity, log food data, and share their data with others socially. MapMyHike allows consumers to search
and map Hiking routes, track hiking activity, log food data, and share their data with others socially.
Management: Robin Thurston serves as Chief Executive Officer. Daniel Hurwitz serves as Chief Media
Officer.
Key Investors: Austin Ventures, Competitor Group, Milestone Venture Partners, Running Specialty
Group, Square 1 Bank.

Exhibit 59: Important Digital Healthcare Companies Diabetes
($ in millions)

Intuity Medical $116.0 TelCare $28.0
Company C $101.8 Glytec $12.7
c8 MediSensors $84.4 Integrity Applications $11.0
Glumetrics $45.4 LabStyle Innovations $10.0
Digital Healthcare Companies - Diabetes


Company:
Intuity Medical

Company Description: Intuity Medical focuses on developing technology to simplify diabetes
management. The companys main product is the Intuity POGO Blood Glucose Monitoring System. Intuity
is headquartered in Sunnyvale, California. Additional information can be found at www.presspogo.com.


Product: The Intuity POGO Blood Glucose Monitoring System.
Management: Emory Anderson serves as President and Chief Executive Officer. Robb Hesley serves as
Vice President of Corporate Development and Finance. Kelley Lipman serves as Vice President of
Marketing.
Key Investors: Accuitive Medical Ventures, FirstMark Capital, Investor Growth Capital, Oxford Finance,
Sarnoff, Silicon Valley Bank, Thomas McNerney & Partners, U.S. Venture Partners, Venrock, and Versant
Ventures.

Exhibit 60: Important Digital Healthcare Companies Cardiovascular Diagnostics/Sensors
($ in millions)
CardioMEMS $208.1 AliveCor $13.5
Heartflow $87.2 VasoNova $12.0
iRhythm $66.6
Digital Healthcare Companies - Cardiovascular Diagnostics / Sensors


Company:
CardioMEMS

Company Description: CardioMEMS designs and manufactures wireless sensor and communication
technology for the human body. The companys efforts are focused on improving the management of
severe chronic cardiovascular diseases, such as heart failure and aneurysms. CardioMEMS is
headquartered in Atlanta, Georgia. Additional information can be found at www.cardiomems.com.
Product: CardioMEMS develops and manufactures wireless sensors using microelectromechanical
systems to help manage severe chronic cardiovascular diseases.
Management: Jay Yadav serves as Chief Executive Officer and founded the company in 1999. Mark
Allen serves as Chief Technology Officer. Sandeep Yadav serves as Chief Operating Officer. Daniel
Bauer serves as Chief Financial Officer.
Key Investors: Arcapita Ventures, Aperture Venture Partners, Arboretum Ventures, Boston Millennia
Partners, Deerfield Capital, Easton Capital, Foundation Medical Partners, Georgia Department of
Community Affairs, Guidant, Johnson & Johnson Development Corp., Medtronic Ventures, Rockport
Venture Partners, St. Jude Medical, and Vision Capital.
Company:
HeartFlow

Company Description: HeartFlow focuses on developing technology to allow physicians to non-
invasively diagnose coronary artery disease. The companys Fractional Flow Reserve Computed
Tomography technology is based on 15 years of research completed by the founders at Stanford
University. The company is headquartered in Redwood City, California. Additional information can be
found at www.heartflow.com.


Product: HeartFlow provides Fractional Flow Reserve Computed Tomography to provide a non-invasive
tool to help guide treatment decisions for patients with coronary artery disease.
Management: Dr. John Stevens serves as Chairman and Chief Executive Officer. Dr. Charles Taylor
serves as Chief Technology Officer and co-found the company in 2007 with Christopher Zarins. Dr.
Campbell Rogers serves as Chief Medical Officer. Christopher Zarins serves as Senior Vice President of
Medical Affairs.
Key Investors: Blue Cross Blue Shield Venture Partners and U.S. Venture Partners.

Exhibit 61: Important Digital Healthcare Companies Telehealth
($ in millions)
Prodea Systems $60.4 SoloHealth $23.3 TruTouch Technologies $16.3
InTouch Health $49.8 Healthsense $22.5 HealthSpot $14.7
Kinnser Software $40.0 Reach Health $16.4 American Well $10.0
Digital Healthcare Companies - Telehealth


Company:
Prodea Systems

Company Description: Prodea Systems focuses on simplifying peoples digital lifestyles to facilitate
better communication. The company provides a platform to deliver telehealth solutions to the home
across existing wireless infrastructure. The company is based in Plano, Texas. Additional information can
be found at www.prodeasystems.com.
Product: Provides a lifestyle-immersive solution to improve health by grouping an easy-to-use, powerful
health management service with incentives such as educational VOD offerings, and social TV apps.
Management: Amousheh Ansari serves as Chairman and Chief Executive Officer, and co-founded the
company in 2006 with Hamid Ansari and Amir Ansari. Hamid Ansari serves as President. Amir Ansari
serves as Chief Technology Officer.
Key Investors: Amir Ansari, Anousheh Ansari, Hamid Ansari, Modab Venture Group, and Mubadala
Development Co. PJSC.
Company:
InTouch Health

Company Description: InTouch Health focuses on the development and manufacturing of remote
presence telemedicine medical devices. The company uses robotics and wireless technology to enable
physicians the ability to conduct medical and consulting operations from a single location to patient
wards, ambulances, and homes. The company is based in Santa Barbara, California. Additional
information can be found at www.intouchhealth.com.
Product: InTouch provides a suite of FDA-cleared class II telemedicine remote presence medical
devices. The companys suite of robots includes RP-VITA, RP-7i, RP-Lite, RP-Vantage, and RP-Xpress.
Clinical apps provided by InTouch include Stroke Respond and Sure PACS. Additionally, the company
provides a suite of services solutions to support its products.


Management: Yulun Wang serves as Chairman and Chief Executive Officer, and Mr. Wang founded the
company in 2002. David Adornetto serves as Chief Operating Officer. Stephen Wilson serves as
Executive Vice President and Chief Financial Officer.
Key Investors: InvestCare Partners, iRobot, and Twenty One East Victoria Investments.
Company:
Kinnser Software

Company Description: Kinnser Software is focused on improving the home healthcare industrys ability
to deliver a better quality of life to patients. The company provides web-based home health software and
customer support. We note that Kinnser Software serves more than 1,500 home health agencies across
the United States. The company is headquartered in Austin, Texas. Additional information can be found
at www.kinnser.com.
Product: Kinnser Software provides two software platforms to the home health industry: Kinnser Agency
Manager and Kinnser Therapy Manager. The Kinnser Agency Manager is a web-based electronic health
record and billing services platform accessible across all Internet-enabled devices. The Agency Manager
is utilized by 1,200 agencies coordinating care for more than 130,000 patients. The Therapy Manager is a
web-based electronic health record and billing services platform for therapy companies.
Management: Christopher Hester serves as President and founded the company in 2003. Keith Davis
serves as Vice President for Finance and Operations.
Key Investors: Insight Venture Partners.


Conclusion: Who Leverages Digital Healthcare and Investment Potential?

We believe healthcare is undergoing a digital transformation. Government stimulus funding from the
HITECH/ARRA and ACA have enabled healthcare providers and enterprise electronic medical record
companies to build the necessary foundation for a digital healthcare eco-system. As the number of
physicians using EMRs/EHRs increases and the level of usage becomes more sophisticated, we believe
the digitization of healthcare will move toward adding new solutions to this foundation. Currently, the
Affordable Care Act is providing an impetus for digital healthcare innovators who are focused on
leveraging the Internet and mobile to create interoperable solutions, provide mobility to the clinic, and are
providing solutions that engage patients in their healthcare decisions. Over the next few years, we believe
that several of the well-funded private digital healthcare companies will likely seek an Initial Public
Offering, or combine with existing healthcare IT companies. We note that several enterprise-focused
healthcare IT companies already exhibit an acquisitive appetite (e.g., Athenahealths purchase of
Epocrates and Aetnas purchase of iTriage). We believe the most relevant companies will be those that
integrate the best technologies of Stage 1 and Stage 2 digitization. In our view, digital healthcare
companies that provide innovative solutions via new technology and focus on improving quality of care
via physicians or patients will become the most relevant. Finally, we believe the creation of a fully
integrated digital healthcare eco-system will provide the foundation for healthcare to reach its Holy Grail
using healthcare data to reduce healthcare costs.
While we believe the framework we put forth regarding the digitalization of healthcare seems sound, we
realize the framework is not perfect. We look forward to updating our thoughts and views on the
digitization of healthcare as new information becomes available.

All prices in this report are as of the market close on 9/6/13.


Important Disclosures and Certifications

I, Steve Rubis, certify that the views expressed in this research report accurately reflect my
personal views about the subject securities or issuers; and I, Steve Rubis, certify that no part of
my compensation was, is, or will be directly or indirectly related to the specific recommendation
or views contained in this research report. For our European Conflicts Management Policy go to
the research page at www.stifel.com

For a price chart with our ratings and target price changes for AET go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=AET

For a price chart with our ratings and target price changes for UNH go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=UNH


For a price chart with our ratings and target price changes for WBMD go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=WBMD

For a price chart with our ratings and target price changes for WLP go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=WLP

Stifel is a customer of Aetna, Inc.

Aetna Inc. is provided with non-securities related services by Stifel or an affiliate or was provided with
non-securities related services by Stifel or an affiliate within the past 12 months.


Aetna Inc. is a client of Stifel or an affiliate or was a client of Stifel or an affiliate within the past 12 months.

Stifel or an affiliate has received compensation for non-investment banking, securities related services
from Aetna Inc. in the past 12 months.

Stifel expects to receive or intends to seek compensation for investment banking services from WebMD
Health Corp. in the next 3 months.

Stifel makes a market in the securities of Aetna Inc., UnitedHealth Group Inc., WebMD Health Corp., and
WellPoint, Inc.

Stifel.'s research analysts receive compensation that is based upon (among other factors) Stifels overall
investment banking revenues.

Our investment rating system is three tiered, defined as follows:

BUY - For U.S. securities we expect the stock to outperform the S&P 500 by more than
10% over the next 12 months. For Canadian securities we expect the stock to
outperform the S&P/TSX Composite Index by more than 10% over the next 12
months. For other non-U.S. securities we expect the stock to outperform the
MSCI World Index by more than 10% over the next 12 months. For yield-
sensitive securities, we expect a total return in excess of 12% over the next 12
months for U.S. securities as compared to the S&P 500, for Canadian securities
as compared to the S&P/TSX Composite Index, and for other non-U.S. securities
as compared to the MSCI World Index.
HOLD - For U.S. securities we expect the stock to perform within 10% (plus or minus) of
the S&P 500 over the next 12 months. For Canadian securities we expect the
stock to perform within 10% (plus or minus) of the S&P/TSX Composite Index.
For other non-U.S. securities we expect the stock to perform within 10% (plus or
minus) of the MSCI World Index. A Hold rating is also used for yield-sensitive
securities where we are comfortable with the safety of the dividend, but believe
that upside in the share price is limited.
SELL - For U.S. securities we expect the stock to underperform the S&P 500 by more
than 10% over the next 12 months and believe the stock could decline in value.
For Canadian securities we expect the stock to underperform the S&P/TSX
Composite Index by more than 10% over the next 12 months and believe the
stock could decline in value. For other non-U.S. securities we expect the stock to
underperform the MSCI World Index by more than 10% over the next 12 months
and believe the stock could decline in value.

Of the securities we rate, 47% are rated Buy, 50% are rated Hold, and 3% are rated Sell.

Within the last 12 months, Stifel or an affiliate has provided investment banking services for 16%, 7% and
6% of the companies whose shares are rated Buy, Hold and Sell, respectively.

Additional Disclosures

Please visit the Research Page at www.stifel.com for the current research disclosures and respective
target price methodology applicable to the companies mentioned in this publication that are within Stifels
coverage universe. For a discussion of risks to target price please see our stand-alone company reports
and notes for all Buy-rated stocks.

The information contained herein has been prepared from sources believed to be reliable but is not
guaranteed by us and is not a complete summary or statement of all available data, nor is it considered
an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without


notice and do not take into account the particular investment objectives, financial situation or needs of
individual investors. Employees of Stifel or its affiliates may, at times, release written or oral commentary,
technical analysis or trading strategies that differ from the opinions expressed within. Past performance
should not and cannot be viewed as an indicator of future performance.

Stifel is a multi-disciplined financial services firm that regularly seeks investment banking assignments
and compensation from issuers for services including, but not limited to, acting as an underwriter in an
offering or financial advisor in a merger or acquisition, or serving as a placement agent in private
transactions. Moreover, Stifel and its affiliates and their respective shareholders, directors, officers and/or
employees, may from time to time have long or short positions in such securities or in options or other
derivative instruments based thereon.

These materials have been approved by Stifel Europe Limited, authorized and regulated by the Financial
Conduct Authority (FCA) in the UK, in connection with its distribution to professional clients and eligible
counterparties in the European Economic Area. (Stifel Europe Limited home office: London +44 20 7557
6030.) No investments or services mentioned are available in the European Economic Area to retail
clients or to anyone in Canada other than a Designated Institution. This investment research report is
classified as objective for the purposes of the FSA rules. Please contact a Stifel Nicolaus entity in your
jurisdiction if you require additional information.

The use of information or data in this research report provided by or derived from Standard & Poors
Financial Services, LLC is 2013, Standard & Poors Financial Services, LLC (S&P). Reproduction of
Compustat data and/or information in any form is prohibited except with the prior written permission of
S&P. Because of the possibility of human or mechanical error by S&Ps sources, S&P or others, S&P
does not guarantee the accuracy, adequacy, completeness or availability of any information and is not
responsible for any errors or omissions or for the results obtained from the use of such information. S&P
GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no
event shall S&P be liable for any indirect, special or consequential damages in connection with
subscribers or others use of Compustat data and/or information. For recipients internal use only.

Additional Information Is Available Upon Request

2013 Stifel, Nicolaus & Company, Inc. One South Street Baltimore, MD 21202. All rights reserved.
2013 Stifel Nicolaus Canada Inc. 79 Wellington Street West, 21st Floor Toronto, ON M5K 1B7.

All rights reserved.

Digital Healthcare White Paper

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Digital Healthcare White Paper

Enviado por

Direitos autorais:

Formatos disponíveis

Digital Healthcare 1 Industry Analysis Fall 2013

Você também pode gostar