Disruptive Innovation in. Michael L. Cowan MD, Chief Medical Officer,
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1 Disruptive Innovation in Health Information Technology Michael L. Cowan MD, Chief Medical Officer, BearingPoint, Inc.
2 Disruptive Innovation: Executive Summary Healthcare Industry IT Issues Cost, 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. HEALTHCARE 2
3 Healthcare in America Today Cost: Captures 1/7 dollars spent in U.S. Quality: Immense Potential 2007 BearingPoint, Inc. HEALTHCARE 3
4 U.S. Healthcare Spending Total Health Spending as % of GDP, 2003 United Statest Switzerland Germany France Sweden* Denmark Italy Britain Japan* EU Avg* BearingPoint, Inc. HEALTHCARE 4
5 Percentage of National Health Expenditures Spent on Health Administration and Insurance, 2003 Net costs of health administration and health insurance as percent of national health expenditures France Finland Japan Canada United Kingdom Netherlands Austria Australia Switzerland Germany United States * Includes claims administration, underwriting, marketing, profits, and other administrative costs; based on premiums minus claims expenses for private insurance. Data: OECD Health Data Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, BearingPoint, Inc. HEALTHCARE 5
6 Medical, Medication and Lab Errors Percent reporting medical mistake, medication error, or lab error in past two years International a comparison 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. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, BearingPoint, Inc. HEALTHCARE 6
7 Duplicate Medical Tests, 2005 International a comparison UK 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. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, BearingPoint, Inc. HEALTHCARE 7
8 Mortality Amenable to Health Care Deaths per 100,000 population* International a variation, at France Japan Spain Sweden Italy Australia Canada Norway Netherlands Greece Germany Austria New Zealand Denmark United States Finland Ireland United Kingdom Portugal * Age-standardized death rates, ages 0 74; includes ischemic heart disease. World Health Organization, WHO mortality database (Nolte and McKee 2003); Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, BearingPoint, Inc. HEALTHCARE 8
9 Consumer Views of U.S. Healthcare 80% dissatisfied with the cost $2.2 2 Trillion Average cost of employer sponsored insurance: $11,765 Employee contribution $3,226 Up 87% since 2000 (income up 20%) 44% Satisfied with the quality 90% satisfied with their own providers Survey by USA TODAY, ABC News, and Kaiser Family Foundation, September BearingPoint, Inc. HEALTHCARE 9
10 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 Records cannot support tthe complex information requirements of modern healthcare." 2007 BearingPoint, Inc. HEALTHCARE 10
11 Economic Value of National Health Information Network Net Estimated Annual Savings: $132B 8% 59% 34% Impatient EHR Ambulatory EHR (Advanced) Community Health Information Exchange 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, Based on the Experience of Early Adopters 2007 BearingPoint, Inc. HEALTHCARE 11
12 Current Status: HIT in U.S. Health Care Sweden Netherlands Denmark United Kingdom Finland Austria Germany Belgium Italy Luxembourg Ireland Greece United States Spain France Portugal 0% 20% 40% 60% 80% 100% Source: Laura Adams, President and CEO, Rhode Island Quality Institute 2007 BearingPoint, Inc. HEALTHCARE 12
13 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. HEALTHCARE 13
14 Misaligned Incentives Drive Lack of Capital Ambulatory Computer-based Physician Order Entry Source: Center for Information Technology Leadership, BearingPoint, Inc. HEALTHCARE 14
15 Disruptive Era "A TRIP TO THE WOODSHED" April 2004: Bush promised EHRs for all Americans in 10 years Established ONC HIT No comparable office elsewhere Resulting Acronyms NHIN RHIOs HIE EHR PHR 2007 BearingPoint, Inc. HEALTHCARE 15
16 Health Information in the 21 st Century: Current Activities Office of the National Coordinator for Health Information Technology Medicare Modernization Act (MMA) of 2003 ehealth Initiative (EHI) National Association of Health Information Technology (NAHIT) Electronic Health Initiative (IHE) Certifying Commission for Health Information Technology (CCHIT) Health Information Technology Standards Panel (HITSP) Markle Foundation Connecting for Health Many other initiatives, Private, State, Local and Federal NHIN Demos October RHIO Initiatives HIMSS National Alliance for HIT And my dog Rusty 2007 BearingPoint, Inc. HEALTHCARE 16
17 However: 3 Years Later: Progress Has Been Slow EHR usage study shows slow progress toward Bush's 2014 goal Healthcare IT News By Diana Manos, Senior Editor 10/11/06 WASHINGTON Findings released Wednesday d 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 researchers define as "a system most likely l to benefit patient care." The 81-page report, Health Information Technology in the United States: The Information Base for Progress, also showed that only 5 percent of hospitals use computerized physician order entry (CPOE) systems, an indicator of EHR adoption in the in-patient setting BearingPoint, Inc. HEALTHCARE 17
18 The Myths and Realities of RHIOs From: FCG Executive Series 2007 BearingPoint, Inc. HEALTHCARE 18
19 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 Sciences Quovadx) Why? There 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, 2007 ihealthbeat, 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. HEALTHCARE 19
20 Inducing Change: The Case for Disruption "We can't solve problems by using the same kind of thinking we used when we created them." Albert Einstein 2007 BearingPoint, Inc. HEALTHCARE 20
21 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. HEALTHCARE 21
22 Natural History of a Disruptive Innovation Performance Time 2007 BearingPoint, Inc. HEALTHCARE 22
23 Examples of Disruptive Innovations In Healthcare Pregnancy Testing Nurse Practitioners Coronary Artery Stents Same Day Surgery In Technology Desktop/GUI Internet Digital Cameras Search Engines Characteristics Shift Control Closer to the Consumer Perform mance 2007 BearingPoint, Inc. HEALTHCARE 23 Time Move Functionality to Less Costly and More Convenient Modes
24 Characteristics of Industries Ripe for Disruption OVERSHOOT: Industry Exceeds Requirements Complexity and/or expense exceeds user needs UNDERSHOOT: Industry Fails to Meet Minimum Requirements Cost & Quality & Convenience ASYMMETRIES: Different levels of value NON-CONSUMERS: (Dropouts) Potential Users Opt-out 2007 BearingPoint, Inc. HEALTHCARE 24
25 Is Healthcare Industry Ripe for Disruption? Healthcare Overshoots: Industry Focus on high-end complex interventions Organ Transplants Cardiac Surgery Resulting Expensive Infrastructure Healthcare lh 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. HEALTHCARE 25
26 Health Information Technology Industry: "In Desperate Need of Disruption" HIT Overshoots: Complexity 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. HEALTHCARE 26
27 Health Information Technology Industry: "In Desperate Need of Disruption" HIT Overshoots: Complexity 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. HEALTHCARE 27
28 Health Information Technology Industry: "In Desperate Need of Disruption" HIT Overshoots: Complexity 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. HEALTHCARE 28
29 Health Information Technology Industry: "In Desperate Need of Disruption" HIT Overshoots: Complexity 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. HEALTHCARE 29
30 Health Information Technology Industry: "In Desperate Need of Disruption" HIT also Undershoots the end-user EHR Result: Non-Consumers Productivity and training costs Investment: ~$40,000 per provider Lost productivity: it months Training: variable Break-even point ~ 3 years Changes in business and practice procedures Hospital CPOE use ~27% Small group and solo office practice ~25% 75% don't use EMR and have no plans to ever do so 2007 BearingPoint, Inc. HEALTHCARE 30
31 Information Management Organizing Principle: The Lesson of Telephone Books Search Engine "Harriet v1.2" 2007 BearingPoint, Inc. HEALTHCARE 31
32 Organizing Principles: Telephone Directories 2007 BearingPoint, Inc. HEALTHCARE 32
33 Information Management: Organizing Principle System Integration Telephone Books 2007 BearingPoint, Inc. HEALTHCARE 33
34 Information Management: Search Harriet v BearingPoint, Inc. HEALTHCARE 34
35 Search Applied to Crossword Puzzles 2007 BearingPoint, Inc. HEALTHCARE 35
36 Search Applied to Crossword Puzzles 2007 BearingPoint, Inc. HEALTHCARE 36
37 Enterprise Search Solutions: Native Capability 2007 BearingPoint, Inc. HEALTHCARE 37
38 Enterprise Search Solutions: Native Capability 2007 BearingPoint, Inc. HEALTHCARE 38
39 Search Solutions for the Enterprise: Harriet v BearingPoint, Inc. HEALTHCARE 39
40 Search Solutions for the Enterprise: Harriet v BearingPoint, Inc. HEALTHCARE 40
41 Search Solutions for the Enterprise: NOVA RHIO Initial Pilot Arlington Free Clinic VMC Arlington Healthcare for Uninsured Medications Encounters Hospitalizations Asynchronous Communication Healthcare Providers 2007 BearingPoint, Inc. HEALTHCARE 41
42 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. HEALTHCARE 42
43 Search Solutions for the Enterprise: Harriet v BearingPoint, Inc. HEALTHCARE 43
44 Ultimate Goal: Total Health Grid 2007 BearingPoint, Inc. HEALTHCARE 44
45 Anonymous Observation on a New Technology "That it will ever come into general use, not withstanding t 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. HEALTHCARE 45
46 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. HEALTHCARE 46
47 Health Information Technology Where Are We Now? 2007 BearingPoint, Inc. HEALTHCARE 47
48 Health Information Technology Where Are We Now? 2007 BearingPoint, Inc. HEALTHCARE 48
49 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. HEALTHCARE 49
50 Anonymous Observation on a New Technology "Imagination is more important than knowledge." Albert Einstein 2007 BearingPoint, Inc. HEALTHCARE 50
51 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 Your Money or Your Life, David Cutler Saving Money Saving Lives, Newt Gingrich 2007 BearingPoint, Inc. HEALTHCARE 51
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