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Interconnectivity though private market health information technology

Doctors Hit a Snag In the Rush to Connect

By Julie Creswell
The New York Times, September 30, 2014

Regardless of who is at fault, doctors and hospital executives across the country say they are distressed that the expensive electronic health record systems they installed in the hopes of reducing costs and improving the coordination of patient care — a major goal of the Affordable Care Act — simply do not share information with competing systems.

While most providers have installed some kind of electronic record system, two recent studies have found that fewer than half of the nation’s hospitals can transmit a patient care document, while only 14 percent of physicians can exchange patient data with outside hospitals or other providers.

Epic and its enigmatic founder, Judith R. Faulkner, are being denounced by those who say its empire has been built with towering walls, deliberately built not to share patient information with competing systems.

Where interconnectivity between systems does occur, it often happens with steep upfront connecting charges or recurring fees, creating what some see as a digital divide between large hospital systems that have the money and technical personnel and small, rural hospitals or physician practices that are overwhelmed, financially and technologically.

A research report from the RAND Corporation described Epic as a “closed” platform that made it “challenging and costly for hospitals” to interconnect with the clinical or billing software of other companies.

A sort of Microsoft of the Midwest, built on a sprawling campus on nearly 1,000 acres of farmland near Madison, Wis., the privately held Epic has emerged as a leader in the race to digitize patient medical records. Its systems hold the health records of nearly half the country.

In 2005, when it became clear to her that the government was not prepared to create a set of rules around interoperability, Ms. Faulkner said, her team began writing the code for Care Everywhere. Initially seen as a health information exchange for its own customers, Care Everywhere today connects hospitals all over the country as well as to various public health agencies and registries.

Careful in her choice of words, Ms. Faulkner offered muted criticism of regulators for, essentially, failing to create what she did — a contract to help providers connect to one another and a way to authenticate that only the correct person could view the patient information.

“I’m not sure why the government doesn’t want to do some of the things that would be required for everybody to march together,” she said.

http://www.nytimes.com/2014/10/01/business/digital-medical-records-becom...

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The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care

By David J. Brailer, MD, PhD, National Coordinator for Health Information Technology
PNHP Quote of the Day (excerpts), July 21, 2004

While the federal government plays an important role in HIT adoption, the effective use of, and value creation from, this technology lies predominantly with the private sector. The federal government will provide a vision and a strategic direction for a national interoperable health care system, but will rely on a competitive technology industry, privately operated support services, and shared investments in HIT adoption. The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system. The private sector can best ensure that HIT products are successfully implemented in ways that meet the varying needs of American health care across settings, cultures, and geographies. The private sector can also continue constant innovation in HIT and ensure that products are delivered on an affordable basis.

Comment by Don McCanne (July 21, 2004)

What has the magic of the competitive marketplace produced in the way of an integrated IT system to this date? High costs, very poor penetration, and system failures! Competitive market theory dictates that we should be leading the world with a high quality health care IT system at a low cost. What went wrong?

First of all, a fragmented system of multiple private plans, public programs and uninsurance does not provide an infrastructure that is very conducive to an integrated IT system. A single payer system, or, at minimum, a highly regulated system of universal coverage through multiple plans, would provide a framework that would ensure adaptability of an integrated IT system. Of course, a single, publicly administered system would be much preferred for an integrated IT system.

But the greatest difficulty with private IT solutions lies in the very nature of these marketplace models. Their goals are, above all, to maximize profits and to maximize the market price of their shares.

What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.

The health information technology report released today (July 21, 2004) should alarm us all. Although we all agree on the importance of an integrated IT system, the Bush administration is limiting the role of the government to being an enabler that encourages the private sector to develop a successful business model. Rather than higher quality at a lower cost, we’ll end up with mediocrity at a much higher cost, wasting even more of our health care dollars.

http://www.pnhp.org/news/2004/july/a_private_health_car.php

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Comment:

By Don McCanne, MD

A decade ago we already had a very successful, publicly-owned health information technology system (HIT) with interconnectivity - VistA - the system in use by the Veterans Health Administration. Under the leadership of President George W. Bush, it was decided that we should move forward with interconnecting our entire health care system through HIT, but that the system should be developed in the private sector instead. What has happened since?

President Bush appointed David Brailer as his National Coordinator for Health Information Technology. On July 21, 2004 he released a 178 page report describing the framework of his proposal - The Decade of Health Information Technology (a decade just completed). Although the link to their report is no longer active, perhaps the most informative sentence in the report is the following: “The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system.” Although the federal government would provide “a vision” for HIT, it would be developed and operated exclusively in the private market.

In my Quote of the Day comment on the day the report was released 10 years ago, I wrote: “What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.”

So what did they do? The New York Times article reveals that Epic, a privately held company, “holds the health records of nearly half the country.” Epic is “a ‘closed’ platform that made it ‘challenging and costly for hospitals’ to interconnect with the clinical or billing software of other companies.” “Where interconnectivity between systems does occur, it often happens with steep upfront connecting charges or recurring fees.” Recognizing the need for interoperability, Judith Faulkner, the founder of Epic, established “Care Everywhere” which performs well as a new profit center for Epic but performs poorly in establishing universal connectivity. How could anyone know ten years ago that this might happen? Well, it was known.

This is analogous to the decision made to rely heavily on private health insurance in our efforts to expand health care coverage to everyone, based on the idea that the market can do it better than the government. We have been predicting the adverse consequences of this, and every day we see more evidence that our predictions, based on solid health policy science, are all coming true. In health care we are facing excess costs and poor performance, just as we are with our private HIT systems.

Under a single payer system we would have a cost-effective, publicly-owned, integrated HIT system that is designed to serve patients and their health care professionals, rather than a system that is designed to serve, well, Judith Faulkner (#261 on Forbes 400, Net worth $2.3 billion).