As one of the world's largest healthcare companies, Philips sought to reach beyond the walls of the hospital and expand its hospital-to-home program to gain future competitive advantage through technology solutions combining predictive analytics with care delivery. By its estimation, 40% of hospital admissions could be avoided, and its variety of home-based resources could be delivered at 30% less cost than the same level of care in a hospital. This tremendous potential left the chief executives at Philips wondering how best to commercialize these solutions. Should they position themselves as a technology-commercializer relying on clinical partnerships to capture value through data insights; or should they own the patient care experience as a clinical enterprise or as a cost-reducer?

Would the advent of global payment models and ACOs create sufficient demand for a telemedicine offering covering the care continuum, from hospitals to the home? This was the decision facing Royal Philips Electronics (Philips), the Netherlands-based producer of lighting, consumer electronics, and health care products, in 2012. Philips already offered several remote monitoring systems for hospitals, including the eICU, which it obtained through the 1998 acquisition of Visicu. In the eICU model, patients in hospital ICUs were monitored using bedside devices, which transmitted patient data to a remote station from which clinicians monitored and directed care as needed. The model aimed to improve care quality by enabling early interventions and reducing adverse events, and to cut costs by allowing clinicians to care for a larger number of patients. Building on this and other offerings in its portfolio, including numerous home care devices, Philips could extend this model to create an integrated remote monitoring offering managed through a centralized clinician-staffed station. In doing so, it could gain a deep and early foothold with ACOs and position itself as a leader in telemedicine-enabled care. However, U.S. telemedicine adoption to date was slow, in part due to insufficient cost-effectiveness evidence, and ACOs-the likely target customer-remained underdeveloped. Philips would also contend with a complex selling process and numerous operational challenges. Was it too early to invest? And, if not, who were the ideal ACO beta sites?