To witness the paradox of health-care technology, take a stroll down the hallway of any hospital or medical center with Dr Michael Hodgkins.
"I'm always struck by the contrast. I walk past an exam room and see the latest, greatest diagnostic tools, embedded with the most sophisticated computer chips available, and outside in the hallway there's a clerk pushing a shopping cart filled with paper," says Hodgkins, executive vice president and chief medical officer of Kinetra, a US-based health-care network services company.
While health care's diagnostic technologies continue to advance at an astounding pace, the squeaky wheels on those shopping carts full of medical records, lab reports and insurance forms just keep on squeaking. "Information exchange between doctors, insurers, labs, pharmacies and hospitals is still mostly [done] on paper," says Hodgkins. And in a $1.2 trillion industry, replacing the shopping carts with reliable, secure, high-speed computerised transactions could mean savings in the billions. Not to mention the human benefits of speeding up information flow in an industry where timing is everything and errors can have costs not only in dollars but in lives.
Why hasn't it happened yet? "If you view health care as a process, then it is the most complicated process that exists," says John P. Glaser, vice president and CIO of Partners HealthCare System in Boston. There are more than 10,000 known diseases, 3,000 drugs to treat them, 300 different radiology procedures and 1,100 available lab tests, according to research at Brigham and Women's Hospital in Boston.
Throw in the convoluted insurance reimbursement process where customers (patients) walk out the door without paying, leaving providers to figure out who should pay and insurance companies to decide how much they will pay, and you have information sickness.
All this helps explain why Lois Gargotto has been toiling for most of her career to integrate health-care information systems for Humana, one of the country's largest managed-care companies. And after some 20 years, she's still not done. In fact, she acknowledges that she may never be done. Today about 58 per cent of the different providers with which Humana does business on a regular basis can exchange information about medical services and insurance coverage with Humana's systems. But Gargotto, who is vice president of systems development, says that connecting the remaining 42 per cent may just not be worth the time and expense.
"If you're going to get poorly formatted transactions with poorly formatted codes, exchanging them electronically doesn't do anybody a whole lot of good," she says.
Hence, the paper-filled shopping carts in the hallway.
The integration problem in health care is so bad-and the gains to be had by solving it so great-that it may be the only industry with its own connectivity middlemen, integrators that link the different entities in health care into private networks and then charge those entities to access the network and share information. Companies like Kinetra and Santa Clara-based Healtheon crawl under the hoods of hundreds of different computer systems at insurance companies, hospitals, X-ray and lab providers, and doctors' practice groups to translate the different codes and formats they use into terms that all the other computers linked to the network can understand.
Building these networks is incredibly slow and labor intensive for both the middlemen and their clients. It may take weeks or even months to build a single computer interface between a customer and a connectivity provider's network.
But something new is happening that promises to cut the Gordian knot of health-care systems integration and change the nature of the competition between integrators from delivery mechanism to information payoff. It's called (no surprise) the Internet.
The Promised Land awaits ... and waits
In an industry that cannot agree on what a cold is, let alone the format for sending the diagnosis from doctor to hospital to insurer, the Internet is a standard that everyone could embrace. It is already causing a reshuffling among integration middlemen, with dozens of Internet-based services springing up to serve local and national markets, according to Hodgkins.
Yet even the Internet faces a roadblock on the path to ubiquity. Many offices have their own customised, proprietary computer systems, known as practice management systems, that were built long before the Internet came into common use. Less than 28 per cent of these systems in use today are capable of accessing the Internet, says Vinson J. Hudson, president of Jewson Enterprises, a California-based health information systems research company.
Though there has been some consolidation in the market recently (IDX Systems has the largest share of the market, with $322 million in revenues in 1998, according to Hudson), most of these systems are rats' nests of outdated technology that require custom software even to dial into a modern network. And Hodgkins doesn't see doctors upgrading or switching from these systems anytime soon-unless they run into the Y2K wall. Getting rid of expensive practice management systems simply to get a new Internet-enabled system doesn't offer much of a lure for doctors, he says.
Indeed, in the short term, "It's a possibility that costs will increase with the Internet rather than decrease" because of the need to buy new computers, says Terry Sherb, CIO of California Healthcare Association, a health-care providers' membership organisation based in Sacramento. "So if our members are going to start exchanging secure data over the Internet, then there needs to be a good ROI that doesn't take additional money out of providers' pockets and put it in someone else's." But doctors are not the only constituency affected by the Internet. Patients may make the Internet trade-up decision for them. Traditionally reticent in the debate over health care, patients are now speaking loud and clear over the Internet (see "Patient Power").
As patients begin to demand more health information online, the pressure to provide secure access to specific patient information will also increase. And that means someone is going to have to reach back into all the old legacy systems of insurers, pharmacies, labs, hospitals and doctors' offices and grab that information. This is the hard part, and it is the foundation of Kinetra's and Healtheon's businesses. For health-care companies lacking the IS staff or the expertise to do the work themselves, the middlemen offer the last, best hope-for today, anyway.
"Take the Internet and call me in the morning"The power players among the connectivity vendors are those that have large private networks customers can dial into through private connections. What Healtheon's and Kinetra's customers want are networks connected to the insurance companies, labs and hospitals they do business with as well as the software functionality of the network (for example, online claims reimbursement or checking lab results), or some combination of the two. Healtheon and Kinetra have become two of the largest middlemen in the industry mostly by acquiring small, localised private network companies and gluing them together into a national service. But there is still no single network middleman, large or small, that offers the full range of information sharing services that a typical hospital might need; most vendors focus on a particular process, like claims reimbursement or lab results. Most hospitals have multiple connectivity providers, though companies like Kinetra and Healtheon are rapidly closing the functionality gaps in their systems. For example, at press time, Healtheon planned to merge with WebMD , a medical information Web site for doctors and patients.
Increasing the power and reach of their networks should become easier as Kinetra and Healtheon shift toward Internet-based application development and as more customers' systems become Internet-ready. "Right now, it's expensive for us to install our service in a doctor's office," says Bob Ashworth, Kinetra's executive vice president and chief technology officer. "We have to send technicians to the office and install software that matches the many different types of practice management systems out there. Once we're Internet enabled at the doctor's office, much of that [trouble] will go away." The Internet has already made Ashworth's life easier back at Kinetra's headquarters. "We've converted our network to a TCP/IP backbone, and we have converted to a single database and a single programming language, Java," he says. "That has really allowed us to standardize our own environment." But Ashworth isn't ready yet to offer a complete endorsement of the Internet.
Access to Kinetra's network is being converted to Internet technologies from old fashioned, private dial-up connections (larger customers get dedicated connections to the Kinetra network), but Kinetra's clients never actually touch the public Internet, just Kinetra's private one.
"People can access us through a Web browser now, but they're still dialing us up through the 30 different network nodes we have around the country, not the public Internet," says Ashworth. "Our approach is to eliminate the frailties of the public Internet, where reliability and availability are not always what we'd like them to be." Not coincidentally, Kinetra has a huge investment in its private network, which is being managed by Electronic Data Systems (EDS) in a huge server farm in EDS's New Jersey-based information processing center. And EDS (which owns Kinetra in a joint venture with pharmaceutical giant Eli Lilly) will be investing its integration skills to co-develop new transaction services with Kinetra, possibly online claims reimbursement, electronic patient referrals and patient insurance eligibility, according to Paul Tavano, a vice president in the EDS Health Care business unit.
Healtheon, formed by Netscape Communications founder Jim Clark, is more bullish on the Internet in the short term and distinguishes itself from Kinetra through its Web-only services, such as one that allows companies to update their employees' health information from a browser. Yet Kinetra executives gleefully point out that for all its Internet efforts, Healtheon accrued most of its $49 million in earnings last year from transactions over its private network lines, not the Internet. Wall Street analysts nervously point out that Healtheon posted a $54 million loss last year during a frenzy of building and acquisition, while WebMD also bled-taking a $7.8 million loss against just under $100,000 in revenues, according to industry watchers. Kinetra, like WebMD, is privately held and does not reveal its numbers.
Why doctors don't like computers
Regardless of whether the services reach their offices through the Internet or a private network, most doctors don't see integration as brightening their days. "Our members would like to see these systems play a more effective role in helping them do their day-to-day jobs if they are really going to take hold," says California Healthcare Association's Sherb.
That lack of excitement is widespread among analysts too. "No vendor has designed a system that has been totally embraced by the physician community," says Michael Davis, research director for health care at consultancy GartnerGroup. "No one has designed a good GUI, and the functions don't match how physicians do their job." (See "Doctors of the World, Unite!" below.) Digitising an already byzantine bureaucracy has not given doctors more time with patients. "More and more of doctors' time is administrative rather than actual care giving," says Charles Saunders, vice president of strategic planning and medical director for Healtheon. "They would view it as an enormous benefit to give time back to them, but computers haven't done that." No one knows that better than Glaser of Partners HealthCare, who sounds evangelical when he says, "Going from paper to computer isn't the point. Making care better is the point." But in trying to make computers work better for doctors, Glaser and his CIO peers in health care are faced with a moving target.
"Doctors walk around a lot," he says. "They bop back and forth between exam rooms, and they have a three- to four-minute window for gathering information about a patient and making a decision. Unless they have a computer wherever they are, it's easier for them to just jot down notes on paper. There's a lot of value to paper-that's why it has lasted so damned long." Glaser sees doctors getting interested in information integration but says there won't be significant interest until they can take the computer with them and have their hands free. "Things like very cheap, robust voice recognition and headsets that project a computer screen onto your retina-those will help," says Glaser.
Until that day comes, Glaser's IS group eschews the connectivity vendors in favor of doing it themselves. "We benefit from having so many entities [to connect with] concentrated around us in the Boston area," he says. Glaser is developing a Web-based extranet service for Partners' doctors that will offer the same kind of functionality as the connectivity providers offer.
Demonstrating value to doctors is difficult, he says, but physicians will be more apt to use the service as they begin to see more value in the Internet itself.
For health-care information integration veterans like Gargotto and Glaser, anything that pushes the industry toward standard ways of communicating and exchanging information is welcome. "The standards will continue to evolve, and the push to reduce administrative costs will eventually convince people to let go of some of the unique requirements [for example, idiosyncratic diagnostic codes] in information transactions," says Gargotto. "But the reality in health care is that for the foreseeable future, information transactions will continue to be a mix of standardized, proprietary and 'whatever you can get.'" This reality troubles the connectivity middlemen too. "We're competing based on the quality of information delivery mechanisms," says Kinetra's Ashworth. "We should standardize the delivery mechanism so that the competition can be moved to the next level, where the quality of the information itself is the competitive advantage. The Internet will level the playing field so we can do that." Patient Power Armed with information gathered online, health-care consumers are taking chargePatients are out of patience. The doctor's office, never a model of efficiency, is becoming intolerable. Waiting rooms increasingly live up to their names. And when patients finally see the doctor (for three or four minutes), they're often left with not much more than a prescription and a bunch of questions they forgot to ask.
That's why so many people are going to the Internet for help. Approximately 40 per cent of the search queries submitted to Web sites like Yahoo, Excite and AOL are for health-care information, estimates Michael Davis, a research director in health care for GartnerGroup. "Look at what's happening to stockbrokers and car dealerships on the Internet, and you can get a glimpse of what's going to happen to health care," he says. In other words, instead of dropping in, patients will be logging on. And they'll be demanding more information and better service.
Health-care information Web sites directed at patients, like drkoop.com (presided over by Dr. C. Everett Koop, former US Surgeon General), are growing fast. Consumers are already buying prescription drugs online. "I have patients who have learned about a new treatment or a new drug before I have," says Charles Saunders, vice president of strategic planning and medical director for Healtheon, a health-care e-commerce company.
"There is an incredible increase in consumerism in health care," says Gordon Heinrich, vice president of Web services for First Consulting Group, a health-care consulting and technology management company based in California.
"I think this will drive more efficiency into the health-care supply chain.
You'll be able to post your medical record on the Internet on a secure site, and control the information in it," says Heinrich. "Then you could make it available to doctors or others when you want to." (In February, drkoop.com announced plans to do just that sometime this summer.) Giving consumers more control over their health-care records can only improve the messy redundancy and inaccuracy of record keeping today, adds Heinrich.
Not all doctors are happy about ceding more control to patients, however. They don't like the idea of patients showing up at their offices with fistfuls of printouts from the Internet because the information can often be misinterpreted or downright wrong. But doctors still have control over the relationship, notes Saunders. "Physicians are still going to be the ones prescribing the drugs and doing the treatment," he says. "Regardless, doctors may as well get used to it [better informed patients] because it's going to happen whether they like it or not."Doctors of the World, Unite! MDs want to customise technology for the common good. Dr. Pete Dysert, chief medical information officer for Baylor Health Care System, an integrated health-care organisation in Dallas, has a sign on his office wall that depicts a file clerk with the infamous red circle and slash-the international "no" symbol-over it. Dysert is convinced that information technology in health care today does little more than make file clerks out of doctors. "Using IT effectively in health care shouldn't be about capturing a charge for a bill; it should be about capturing information to make a better clinical decision," he says.
Dysert isn't just a typical IS basher. He's trying to do something about the lack of empathy between doctors and their computer systems. His approach is part Yahoo progenitor Jerry Yang and part United Mine Worker saint and CIO (as in AFL-CIO) founder John L. Lewis. In partnership with Bob Pickton, senior vice president and CIO at Baylor, Dysert is working with Healtheon to develop an Internet portal service for physicians that fits the ways doctors do their jobs-"a sort of 'My Yahoo' for doctors," says Dysert. To get insurance providers, X-ray labs and other entities interested in hooking into those services, Dysert is organizing a nonprofit group of the 4,800 physicians in the Baylor and two other Dallas-area health plans that will own the as-yet-unnamed portal service (which is now being piloted with a handful of physicians) and bargain collectively with insurers and other entities that want access to the doctors.
"Physicians have traditionally organized themselves around reimbursement," says Dysert. "We are organizing around reengineering the delivery of health care by using technology." With help from Healtheon, the group will develop information-sharing standards that insurers and others will have to adhere to if they want to do business with the doctors in the group. "If they don't adhere to the standards, we won't sign the contract," says Dysert.
The "role-centric" network, as Dysert calls it, will allow nurses, administrators and technicians to develop their own secure home pages that provide them with services such as appointment scheduling, insurance authorizations or lab test reporting. The goal is to improve information sharing by reducing the number of phone calls and the amount of paper floating around the office. "Instead of rifling through stacks of prescriptions, the doctor could click on a hyperlink and the prescription would be automatically sent," says Dysert. With insurance companies spending around $2 to process a typical patient referral request over the phone, there is a vested interest for everyone in health care to put services online, where the cost of a transaction could be one-tenth to one-fiftieth that of a phone-based transaction, according to Charles Saunders, vice president of strategic planning and medical director for Healtheon.
Pickton sees the goal clearly. "The more services we offer that make the phone system seem less efficient, the better we will be doing," he says.
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