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Disruptive Innovation in Health Information Technology Health Information Technology
Michael L. Cowan MD,Chief Medical Officer,BearingPoint IncBearingPoint, Inc.
Disruptive Innovation: Executive Summary
Healthcare Industry IT Issues
Cost Quality & AccessCost, Quality & Access
Promise of Health Information Technology
Current Status & Projected Progress Line
Complexity & Expense of System Integration
Potential for Disruption
Age of Networks
© 2007 BearingPoint, Inc. 2HEALTHCARE
Healthcare in America Today
Cost: Captures 1/7 dollars spent in U.S.
Quality: Immense PotentialQuality: Immense Potential
© 2007 BearingPoint, Inc. 3HEALTHCARE
U.S. Healthcare Spending
U it d St t
Total Health Spending as % of GDP, 2003
Germany
Switzerland
United States
Denmark
Sweden*
France
Britain
Italy
Denmark
0 3 6 9 12 15 18
EU Avg*
Japan*
© 2007 BearingPoint, Inc. 4HEALTHCARE
0 3 6 9 12 15 18
Percentage of National Health Expenditures Spent on Health Administration andInsurance, 2003
Net costs of health administration and health insurance as percent of national health expenditures
4 85.6
7.3
6
8
1.9 2.1 2.12.6
3.34.0 4.1 4.2
4.8
2
4
0
Fran
ce
Finlan
dJa
pan
Cana
da
Kingdo
m
herla
nds
Austri
a
Austr
alia
tzerla
nd
Germ
any
d Stat
es
* Includes claims administration, underwriting, marketing, profits, and other administrative costs; based on premiums minus claims expenses for private insurance.Data: OECD Health Data 2005.
F F Ca
United
King
Nethe
r A Aus
Switz
eGe
United
S
© 2007 BearingPoint, Inc. 5HEALTHCARE
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
Medical, Medication and Lab Errors
Percent reporting medical mistake, medication error, or lab error in past two years
International comparison
2730
34
30
40
te at o a co pa so
22 2325
27
10
20
0
10
UK GER NZ AUS CAN US
UK=United Kingdom; GER=Germany; NZ=New Zealand; AUS=Australia; CAN=Canada; US=United States.Data: Analysis of 2005 Commonwealth Fund International Health Policy Survey of Sicker Adults; Schoen et al. 2005a.
© 2007 BearingPoint, Inc. 6HEALTHCARE
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
Duplicate Medical Tests, 2005
International comparison
20
30
te at o a co pa so
69 10 11
1820
10
20
6
0UK NZ CAN AUS US GER
UK=United Kingdom; NZ=New Zealand; CAN=Canada; AUS=Australia; US=United States; GER=Germany.Data: Analysis of 2005 Commonwealth Fund International Health Policy Survey of Sicker Adults; Schoen et al. 2005a.
© 2007 BearingPoint, Inc. 7HEALTHCARE
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
Mortality Amenable to Health Care
Deaths per 100,000 population*
International variation, 1998te at o a a at o , 998
97 97 99 106 107 109 109 115 115129 130 132
7584 88 88 8881
92100
150
75 81
0
50
0
Fran
ceJa
pan
Spain
Swed
en
Italy
Aust
ralia
Cana
daNo
rway
Neth
erland
sGr
eece
Germ
any
Aust
riaNe
w Z
ealand
Denm
ark
Unite
d St
ates
Finlan
dIrelan
d
nite
d Ki
ngdo
mPo
rtug
al
N U
Unit
* Age-standardized death rates, ages 0–74; includes ischemic heart disease. World Health Organization, WHO mortality database (Nolte and McKee 2003);
© 2007 BearingPoint, Inc. 8HEALTHCARE
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
Consumer Views of U.S. Healthcare
80% dissatisfied with the cost
$2 2 Trillion$2.2 Trillion
Average cost of employer sponsored insurance: $11,765
Employee contribution $3 226Employee contribution $3,226
Up 87% since 2000(income up 20%)
44% Satisfied with the quality44% Satisfied with the quality
90% satisfied with their own providers
© 2007 BearingPoint, Inc. 9HEALTHCARE
Survey by USA TODAY, ABC News, and Kaiser FamilyFoundation, September 2006
Current Status: Importance of Information Technology – Cost & Quality
"We have repeatedly performed the definitive experiment and conclusively proven beyond any shadow of a doubt that paper based Health R d t t th lRecords cannot support the complex information requirements of modern healthcare."
© 2007 BearingPoint, Inc. 10HEALTHCARE
Economic Value of National Health Information Network Net Estimated Annual Savings: $132B
8%
34%
59%
Community Health Information Exchange
Ambulatory EHR (Advanced)
Impatient EHR
© 2007 BearingPoint, Inc. 11HEALTHCARE
Sources: Johnston, J., et al. The Value of CPOE in ambulatory Settings; and Pan, E., et al. The Value of Health Information Exchange And Interoperability, Center for Information Technology Leadership, 2004, 2004. Based on the Experience of Early Adopters
Current Status: HIT in U.S. Health Care
h l d
Sweden
Finland
United Kingdom
Denmark
Netherlands
Italy
Belgium
Germany
Austria
United States
Greece
Ireland
Luxembourg
0% 20% 40% 60% 80% 100%
Portugal
France
Spain
© 2007 BearingPoint, Inc. 12HEALTHCARE
Source: Laura Adams, President and CEO, Rhode Island Quality Institute
0% 20% 40% 60% 80% 100%
Current Status: No Simple Answers
Economic "Judo" Industry
Unintended Results of Public Policies
─ Stark and anti kickback rules
─ HIPAA: "Portability and Accountability"
Economics
─ Poor Response to Cost Pressures
• New Car
─ Weak Premium for Quality
• "Your Money or Your Life"
─ Mismatched Return on Investment
Underdeveloped IT Structure
© 2007 BearingPoint, Inc. 13HEALTHCARE
Misaligned Incentives Drive Lack of Capital
Ambulatory Computer-based Physician Order Entry
© 2007 BearingPoint, Inc. 14HEALTHCARE
Ambulatory Computer based Physician Order EntrySource: Center for Information Technology Leadership, 2003
Disruptive Era "A TRIP TO THE WOODSHED"
April 2004: Bush promised EHRs for all Americans in 10 yearsy
Established ONC HIT
─ No comparable office elsewhere
Resulting Acronyms
─ NHIN
─ RHIOs
─ HIE
─ EHR
─ PHR─ PHR
© 2007 BearingPoint, Inc. 15HEALTHCARE
Health Information in the 21st Century:Current Activities
Office of the National Coordinator for Health Information Technology
Medicare Modernization Act (MMA) of 2003Medicare Modernization Act (MMA) of 2003
eHealth Initiative (EHI)
National Association of Health Information Technology (NAHIT)
El t i H lth I iti ti (IHE)Electronic Health Initiative (IHE)
Certifying Commission for Health Information Technology (CCHIT)
Health Information Technology Standards Panel (HITSP)(HITSP)
Markle Foundation Connecting for Health
Many other initiatives, Private, State, Local and Federal
NHIN Demos October 2005
30+ RHIO Initiatives
HIMSS
National Alliance for HIT
─ And my dog Rusty
© 2007 BearingPoint, Inc. 16HEALTHCARE
However: 3 Years Later: Progress Has Been Slow
EHR usage study shows slow progress toward Bush's 2014 goal
Healthcare IT News Healthcare IT News
By Diana Manos, Senior Editor
10/11/06
d l d d d f fWASHINGTON – Findings released Wednesday from a first-ever, comprehensive study on the use of electronic health records in the United States revealed that 24.9 percent of physicians use some form of loosely defined EHRs, although fewer than 10 percent employ what
h d f " l k l b f "researchers define as "a system most likely to benefit patient care."
The 81-page report, Health Information Technology in the United States: The Information Base for Progress, also showed that onlyStates: The Information Base for Progress, also showed that only5 percent of hospitals use computerized physician order entry (CPOE) systems, an indicator of EHR adoption in the in-patient setting.
© 2007 BearingPoint, Inc. 17HEALTHCARE
The Myths and Realities of RHIOs
From: FCG Executive Series
© 2007 BearingPoint, Inc. 18HEALTHCARE
RHIO Progress Has Been Slow
On December 31, 2006, the Santa Barbara County Care Data say it’s in our Exchange (SBCCDE) ceased to exist. (now Coordinated by Care g ( ) ( ySciences Quovadx)
Why?
There were no technical difficultiesThere were no technical difficulties
There were no legal impediments
What Killed the Santa Barbara County Care Data Exchange? By Bruce Merlin Fried, Esq. March 12, 2007iHealthbeat, California HealthCare Foundation
The Santa Barbara County Care Data Exchange is no more. There was hardly an obituary to note its passing. A fitting tribute might have included phrases like: "ahead of its time"or "potential never realized" or "it was harder than it looked."
© 2007 BearingPoint, Inc. 19HEALTHCARE
or potential never realized or it was harder than it looked.
Inducing Change: The Case for Disruption
"We can't solve problems by using the same kind of We can t solve problems by using the same kind of thinking we used when we created them."
– Albert Einstein
© 2007 BearingPoint, Inc. 20HEALTHCARE
An Underused Alternative: Disruptive Innovation
Disruption: a technological innovation, product, or service that eventually overturns the existing dominant technology or product in the market.
– Wikipedia
© 2007 BearingPoint, Inc. 21HEALTHCARE
Natural History of a Disruptive Innovation
Perf
orm
an
ce
Time
© 2007 BearingPoint, Inc. 22HEALTHCARE
Examples of Disruptive Innovations
In Healthcare
Pregnancy TestingPregnancy Testing
Nurse Practitioners
Coronary Artery Stents
man
ce
Same Day Surgery
In Technology
Desktop/GUI
Perf
orm
Internet
Digital Cameras
E-MailTime
E Mail
Search Engines
Characteristics
Shift C t l Cl t th C
© 2007 BearingPoint, Inc. 23HEALTHCARE
Shift Control Closer to the Consumer
Move Functionality to Less Costly and More Convenient Modes
Characteristics of Industries Ripefor Disruption
OVERSHOOT: Industry Exceeds Requirements OVERSHOOT: Industry Exceeds Requirements
Complexity and/or expense exceeds user needs
d lUNDERSHOOT: Industry Fails to Meet Minimum Requirements
Cost & Quality & Convenience
ASYMMETRIES:
Different levels of value
NON-CONSUMERS: (Dropouts)
Potential Users Opt-out
© 2007 BearingPoint, Inc. 24HEALTHCARE
Is Healthcare Industry Ripe for Disruption?
Healthcare Overshoots: Industry Focus on high-end complex interventions
Organ TransplantsOrgan Transplants
Cardiac Surgery
Resulting Expensive Infrastructure
l h l d h ff l fHealthcare also Undershoots: Difficult Navigation for Routine Care
Earache
Patient/Provider Information Asymmetry
─ Consumer Empowerment
─ "Doctor Knows Best"
Asymmetries and Non-consumers
43 million uninsured
$100B expenditures on alternative medicine
© 2007 BearingPoint, Inc. 25HEALTHCARE
Health Information Technology Industry:"In Desperate Need of Disruption"
HIT Overshoots: Complexity
RHIO and NHIN Work RHIO and NHIN Work
Semantic Integration of Proprietary Systems and Data
Software (Electronic Health Record) Solutions
Complex HIT Systems on Unprecedented Scale
Competing Standards
© 2007 BearingPoint, Inc. 26HEALTHCARE
Health Information Technology Industry:"In Desperate Need of Disruption"
HIT Overshoots: Complexity
RHIO and NHIN Work RHIO and NHIN Work
Semantic Integration of Proprietary Systems and Data
Software (Electronic Health Record) Solutions
Complex HIT Systems on Unprecedented Scale
Competing Standards
© 2007 BearingPoint, Inc. 27HEALTHCARE
Health Information Technology Industry:"In Desperate Need of Disruption"
HIT Overshoots: Complexity
RHIO and NHIN Work RHIO and NHIN Work
Semantic Integration of Proprietary Systems and Data
Software (Electronic Health Record) Solutions
Complex HIT Systems on Unprecedented Scale
Competing Standards
© 2007 BearingPoint, Inc. 28HEALTHCARE
Health Information Technology Industry:"In Desperate Need of Disruption"
HIT Overshoots: Complexity
RHIO and NHIN Work RHIO and NHIN Work
Semantic Integration of Proprietary Systems and Data
Software (Electronic Health Record) Solutions
Complex HIT Systems on Unprecedented Scale
Competing Standards
© 2007 BearingPoint, Inc. 29HEALTHCARE
Health Information Technology Industry:"In Desperate Need of Disruption"
HIT also Undershoots the end-user
EHR
─ Productivity and training costs
• Investment: ~$40,000 per provider
L t d ti it th• Lost productivity: months
• Training: variable
• Break-even point ~ 3 yearsy
─ Changes in business and practice procedures
Result: Non-Consumers
H it l CPOE 27%Hospital CPOE use ~27%
Small group and solo office practice ~25%
─ 75% don't use EMR and have no
© 2007 BearingPoint, Inc. 30HEALTHCARE
plans to ever do so…
Information Management Organizing Principle: The Lesson of Telephone Books
Search EngineSearch Engine
"Harriet v1.2"
© 2007 BearingPoint, Inc. 31HEALTHCARE
Organizing Principles:Telephone Directories
© 2007 BearingPoint, Inc. 32HEALTHCARE
Information Management:Organizing Principle – System IntegrationTelephone Books
© 2007 BearingPoint, Inc. 33HEALTHCARE
Information Management: Search Harriet v.9.6
© 2007 BearingPoint, Inc. 34HEALTHCARE
Search Applied to Crossword Puzzles
© 2007 BearingPoint, Inc. 35HEALTHCARE
Search Applied to Crossword Puzzles
© 2007 BearingPoint, Inc. 36HEALTHCARE
Enterprise Search Solutions:Native Capability
© 2007 BearingPoint, Inc. 37HEALTHCARE
Enterprise Search Solutions:Native Capability
© 2007 BearingPoint, Inc. 38HEALTHCARE
Search Solutions
for the Enterprise: Harriet v.9.6
© 2007 BearingPoint, Inc. 39HEALTHCARE
Search Solutions
for the Enterprise: Harriet v.9.6
© 2007 BearingPoint, Inc. 40HEALTHCARE
Search Solutions for the Enterprise: NOVA RHIO Initial Pilot
Arlington Free Clinic VMC Arlington
Healthcare for Uninsured• Medications• Encounters• Hospitalizations• Asynchronous Communication
© 2007 BearingPoint, Inc. 41HEALTHCARE
Healthcare Providers
NOVA RHIO Enterprise Search: First Stage
• “Good Enough” Solution• Solve small problems• Avoids “boiling the ocean”
Laboratory
Radiology
` Medical
Doctor Office Workstation Claims
© 2007 BearingPoint, Inc. 42HEALTHCARE
Search Solutions
for the Enterprise: Harriet v.9.6
© 2007 BearingPoint, Inc. 43HEALTHCARE
Ultimate Goal: Total Health Grid
© 2007 BearingPoint, Inc. 44HEALTHCARE
Anonymous Observation on a New Technology
"That it will ever come into general use, not ith t di it l i t l d btf lwithstanding its value, is extremely doubtful
because its beneficial application requires much time and gives a good bit of trouble, both to the patient and to the practitioner…"
© 2007 BearingPoint, Inc. 45HEALTHCARE
Anonymous Observation on a New Technology
"That it will ever come into general use, not withstanding its value, is extremely doubtful because its beneficial application requires much time and gives a good bit of trouble, both to the patient and to the practitioner…"
(The Stethoscope)
© 2007 BearingPoint, Inc. 46HEALTHCARE
Health Information TechnologyWhere Are We Now?
© 2007 BearingPoint, Inc. 47HEALTHCARE
Health Information TechnologyWhere Are We Now?
© 2007 BearingPoint, Inc. 48HEALTHCARE
The Payoff I:ELECTRONIC HEALTH RECORD
More than a “Record”
Person Centric Health
Interactive Decision Support
New Meaning of “Knowledge”
Research
Best Practice
Collaboration
© 2007 BearingPoint, Inc. 49HEALTHCARE
Anonymous Observation on a New Technology
"Imagination is more important than knowledge."
– Albert Einstein
© 2007 BearingPoint, Inc. 50HEALTHCARE
Health IT Innovation References
Healing the 800 Pound Gorilla: Excerpted from "Seeing What's Next: Using the Theories of innovation to Predict Industry Change," C. M. Christensen et al, Harvard Business School Press
© 2007 BearingPoint, Inc. 51HEALTHCARE
Harvard Business School Press
Your Money or Your Life, David Cutler
Saving Money Saving Lives, Newt Gingrich