Healthcare IT Strategy — How to Create Radical Change

By: New Markets Advisors

Old habits change slowly. Just as married couples can struggle for decades to change how they interact, partners in a business ecosystem have a tough time altering ingrained behaviors. Without a specific impetus for change, the parties revert to familiar patterns. 

Habits become habitual because they work (if only just) and the upfront investment in changing well-understood systems may not be justified by the long-term, uncertain returns.
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The IT consulting firm TCS recently illustrated how this story is playing out with healthcare IT. Despite substantial investment in systems (to be augmented soon in the United States by people claiming the $17 billion stimulus provided for healthcare IT under the 2009 HITECH Act), a TCS-funded study showed that only 23% of healthcare organizations are fully interoperable with external parties and have gone paperless in care management. Doctors may be putting their filing cabinets onto disks, but they are not using that data to change their interactions with other physicians, health insurers, patients, or other key stakeholders.

This is a common phenomenon. As new markets typically develop, first an infrastructure is laid in small patches, then it is used in disconnected ways, and over time the patches are woven together into a powerful, transformative platform. The Internet developed this way, as did railroads and health systems. What speeds change is a highly-motivated party that can fund the removal of roadblocks, provide a clear roadmap, and incent entities to adapt. The change does not initially happen in a wholesale fashion, but rather in focused areas of immediate need. For instance, large organizations and universities were some of the first institutions to get people to use e-mail broadly because they had these powers, and they created a critical mass of people online that made it attractive for others to struggle with dial-up access until they heard an upbeat “You’ve got mail!”
Firms charting a healthcare IT strategy can leverage this pattern. First they should map how healthcare IT may transform relevant areas of care and the role of specific stakeholders. Then they should seek particular applications where they have both the power to make change happen and the means to benefit from being a shaper of the new landscape. The HITECH Act, and a near simultaneous move to a new procedure coding system called ICD-10 that vastly expands the detail in medical records, creates more impetus for change now than ever before. The strategic priorities of other healthcare stakeholders — resulting from both health reform and economic pressures in the industry — make them potential partners in making this change happen.
Healthcare IT may transform the practice of medicine through:

• Empowering organizations to make doctors follow evidence-based guidelines, rather than follow their highly idiosyncratic preferences that still have an inordinate influence in the healthcare system. Organizations wielding particular influence would be health insurers and certain large physician practices (some of the most motivated practices may be “Accountable Care Organizations” like Kaiser Permanente, which assume risk for patient health, deliver care, and coodinate among physicians. National health systems like Britain’s NHS are also key players, of course)
• Gathering data about the medical outcomes resulting from use of these standard protocols
• Enabling interested parties — such as insurers, disease management organizations or even patients — to better coordinate their care through centralizing records and making treatment regimens transparent to all physicians involved in a patient’s care
• Changing the way insurance is bought, through enabling more transparency about what people are buying (and facilitated by health reform reducing differentiation among plans while simplifying the purchase process)
• Creating tools for employers to motivate their workforces toward wellness goals and potentially monitor progress
• Closing the loop between the doctor’s office and everyday life, through integrating data from remote monitoring devices into physician records
• Empowering people who can interpret and explain all this information to patients. These people may not be primary care physicians, who will be overloaded with new patients due to health reform and other pressures, but perhaps alternative parties including health insurers or their representatives, such as drugstore-based nurse practitioners

From this list of potential implications from healthcare IT, three parties stand out as having the motivation, resources, and power to push through change in focused areas. Health insurers (and the self-insured employers they sometimes represent) can make healthcare IT transform care for certain patient types they prioritize, such as those undergoing cancer treatment or therapies for chronic disease. While physicians may resist a broad-reaching change in their work practices, for well-defined patient types and with the right incentives they might begin to alter long-standing habits. Health insurers could differentiate themselves on their quality of care while also reducing cost (as Japanese carmakers demonstrated long ago, high-quality work not only creates better cars but also has lower costs than production with substantial errors and re-work). Another party would be Accountable Care Organizations or health systems, which could have motivations similar to a health insurer and sometimes more leverage to get physicians to collaborate. A third party that could create change are suppliers (such as medical device or pharmaceutical companies) catering to certain disease states where the supplier either needs to differentiate from many competitors or stands to gain substantial rewards through pricing its products based on medical outcomes attained.

Healthcare IT strategy needs to look at the end-state of how healthcare will be delivered, rather than at narrow imperatives about how companies must react to new requirements. This is one of those few occasions that lay down a new infrastructure for an industry. It enables old habits to be discarded, bit-by-bit yet irrevocably.

Story by Steve Wunker.