The Innovator’s Prescription #2

The Innovator’s Prescription (InnoRx) addresses the current state of electronic medical records: Role of Information Technology in Coordinating Care. (p 130) It deals with the complications and a possible solution. This post includes quotations, summaries from the book and comments by the author.

“As has proven to be the case in most of our other studies of innovation, there are predictable, rational reasons why good people aren’t doing what the rest of us feel they ought to be doing—and equally relational reasons explain why, for more than a decade, EHRs have always seemed to be just a few years away …

“The job that an EHR is designed to do is a systemic job, not [just] a local one. It is designed to enable different providers in different locations to see what kinds of care other doctors and institutions have given or are rendering to a patient. It would be an extraordinarily selfless act for the independent physicians’ practices that care for over 60% of America’s population to invest in and adopt the EHR systems that would make it easier for other caregivers to care more effectively for their patients. [Emphasis added] For many providers, patient records can even serve as a strategic asset, since paper records increase switching costs for patients.  [Costs in terms of dollars but also time to recreate portions of the record with a new provider and an almost certain loss of some quality in the record. But these costs are incurred today each a provider hands off a patient to a specialist.] …

“For the average doctor who gets paid on a per-transaction basis, writing paper prescriptions and keeping paper records still cost less, and are a lot more convenient, than adopting an electronic health record.” (p131-135)

The authors draw an analogy between enterprise resource planning systems (ERP) and EMR.  They both have to be designed to (a) optimize the system and then re-organize operations to fit the system or (b) the system must be optimized to fit the organization’s operations.

There are only a limited number of ERP systems in the marketplace, SAP is one of them. “Companies often pay firms like Accenture or Deloitte over $100 million to help them implement the SAP System. In the end, the company’s processes must give way and conform themselves to SAP. … It is very, very difficult!” (p 137)

ERP systems have become sufficiently standard that there are benefits in changing the way an organization does business. The two most important are: (a) the organization benefits from the prior experience of others to optimize the performance of the system and reduce the impact of periodic change and (b) the future cost of keeping the system current can be amortized over hundreds of installations instead of each installation bearing the full cost of upgrades.

Today’s pace of technological innovation means that almost any large computer system is obsolescent before it is fully installed and will be seriously handicapped in communicating with newer versions in a matter of just a few years. At this stage in the implementation and development process, there are no comparable levels of standardization or concurrent benefits with regard to EMR. As more and more systems are tailored to the needs of specific organizations it will become even more difficult and costly to standardize on a limited number of types of systems. As some systems are allowed to fall further and further behind, the interfaces for all will become more complex.

The pace of change is illustrated by a blog’s note that “SAP’s shift from 6 to 8 months for each enhancement package to 1 year may need to be reexamined in light of the quarterly pace of innovation found with the SaaS vendors.” Another simple illustration is that documents written and saved using Word 2007 cannot be read by people using Word 2003 without the aid of conversion software; relatively simple systems and just four years of differentiation.

The authors proceed by suggesting that the most likely course is “virtualization—essentially a technology for translating ‘foreign languages’ into a common one that allows previously incompatible formats to work seamlessly tougher.” They discuss VM Ware but not Microsoft Amalga.

“We see something like this beginning to emerge from … the Indivo system.” (see prior post: Indivo – part of the InnoRx disruption) “The Indivo system resolves [the problem] by inserting a layer of virtualization … It makes the data open, modular, and conformable, to that the applications using the data can be optimized. … [in the future] profits in the industry will be made by firms that build applications that use the data.”  (p 138 and 142)

See notes in the prior post that draw an analogy with the application flexibility of the iPhone. Other articles even suggest that gym workouts and other health related/non-medical information could be included to the patient’s PHR if the patient chose or perhaps their doctor’s urging. Who knows when or how this might be useful as part of the process of assessing outcomes: What role, if any does physical condition or exercise play in the results of a particular medication?

“We cannot overstate how important PHRs are to the efficient functioning of a low-cost, high –quality health –care system. … We thing that the Indivo system, or something like it, is a good place to start.” (p 143)

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