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Innovation Principles: What Might Healthcare Sector Learn from Others

by John Moore | September 24, 2008

I’m here today at my alma mater, MIT to attend Technology Review’s annual conference, EmTech (short for emerging technologies). And why am I attending an event that appears to have little relevance to healthcare? Well, there is one session this afternoon addressing EMRs and another tomorrow on personalized medicine, but those are periphery to my real reason to attend.

Simply, I am a firm believer that in any industry sector, the Black Swans will almost always come from outside the industry. In healthcare, this will be particularly true as this industry is calcified with countless special interests unwilling to give ground to improve the overall system. Healthcare will see some pretty serious tectonic shifts over the coming years and innovations (black swans) will be a key contributor to those shifts.

I’ll be reporting sporadically from the event throughout the day. Warning – usually I take notes at an event, digest them and publish a summary a couple of days later. Today, I’ll report live the distillation process that usully occurs will not be present today.

10:15am First keynote was giving by V. Khosla, founder of Khosla Ventures. Very interesting and engaging talk on the principles that Khosla uses to assess innovations to invest in. Though the company focuses on “Green Technology”, here are some takeaways for healthcare innovators and investors. (Khosla’a presentation was so much better than Clayton Christensen’s that I heard last April at the WHCC. If you ever get a chance to hear Khosla speak, do it!)

Rules of Investing
Attack manageable, but material problems
Technology that achieves unsubsidized competitiveness
Technology that scales, scales at a competitive cost structure
Manageable start-up cost & short innovation cycles

Forecasts are almost always horribly wrong. Don’t trust them.

Always look at the total relevancy of an innovation. Understanding potential impact of technology requires one to look at what is relevant scale, without this, you do not/will not be able to capture the full opportunity if full relevancy is not considered.

When considering innovation scenarios, consider true total costs. Gave a very good example of photovoltaics and the current policies/push for low cost/low efficiency. The big costs in solar farms are, according o their calculations, infrastructure and construction costs – both of which scales dramatically in costs when pursuing low cost photovoltaics. Makes me wonder what in the healthcare sector has strong support today but total costs of adoption will negate its true long-term value.

11:00 Second morning keynote by Ning founder & CEO Gina Bianchini. Ning is a Web 2.0 type of social networking platform and not a “Walled Garden” which Gina called other social network sites such as Facebook, mySpace & YouTube. Gina demonstrated, through static screenshots, ala PowerPoint, a wide array of current Ning social community sites.

Honestly, not all that impressed with what I saw or her presentation. Static presentation that focused on only the big success stories and not the challenges/market needs that they are really trying to solve – the interesting problems today that Ning may facilitate in getting answers to.

Became quickly bored with her talk and went to the Ning site. Did a search on healthcare to see what kind of communities have been created. Search turned up loads of communities addressing a whole wide range of issues from job postings, to HIT, to consumer drected health and healthcare marketing. There are now over 400 different healthcare communities on Ning. Sounds like a lot doesn’t it.

Dig a little deeper and what I find is that most of these communities are very sparsely populated (e.g., almost all the ones I visited had less than 10 members) and not exactly dynamic (most “discussions” in these communities I visited were several months old). Looks like another emperor has no clothes story to me.

Hot Technology Tip: Most recent highpoint: great little demo by one of the TR35, an incredibly slick application for managing your Outlook email called Xobni (inbox spelled backwards). Technology was developed by an MIT grad while he was in the undergraduate program. Though I run on the Mac (Xobni is lost on me), person sitting next to me whispered he uses Xobni and absolutely loves it.

Panel on Mobile Technology of the Future:

Motorola rep just stated that Google’s Android does not have much of a future. Requires too much computing resources for the low cost mobile phones that make up the majority of the market.

Google responded that yes, Android is targeted at more full-featured phones but due to Moore’s Law, within 18 months, mid and even some low tier phones will be able to run Android. Claims that they have already run Android on phones at the $100 price point.

Adobe rep (Kevin Lynch, CTO) stated that most apps are still developed with the PC in mind, that developers have yet to fully re-think how apps might be used, displayed and leverage within the context of mobile platforms. Went on to say that there are far too many OSs for mobile platforms which makes it difficult for developers to create apps, becomes too expensive. Holy grail – develop once, use on any platform.

Ques: When will be see SDKs for mobile platforms based on Web technology? Web app development environments for mobile apps is still not there yet. Must use native apps today. Google stated that they are quickly moving in that direction and fuly believe in Web app development environments. Adobe also stated that their development of “Air” is targeted at creating a Web-based development environment for mobile apps, but it is still at least a year to two out.

Ques: How big and how fast will this market grow:

  • Google response: Android has had 100M downloads so far. It is moving very fast and changing very quickly.
  • Motorola: Yes, calling is still the primary function and will remain so until some really interesting apps arrive on the market and shift consumer perspectives
  • Adobe: We need break-throughs in battery technology for today, Moore’s Law does not apply to mobile until this problem is solved.

12:30 Lunch talk by Amazon CTO: Spoke of Amazon’s hosting services (Elastic Compute Cloud), how they came into being, how they leverage Amazon’s existing infrastructure, etc. More of a techie sales pitch. Gave some examples of those using the Amazon services. Focused on multi-media companies that are targeting consumers. Not exactly barn burner/difficult, services to provide. Definitely not “mission critical” examples. Will have to talk with him at one of the breaks to see if Amazon hosted services are being used in more challenging applications that may give some perspective as to how it might be used in healthcare.

Big selling point for something like Amazon services is that it is nearly infinitely scalable and can be tapped, as needed at a fairly reasonable cost. Such a service could be of value to PHR vendors (note, most are already using hosted services/data farms for their PHR). More broadly, HIEs and RHIOs als appear to be ideal applications for Amazon’s services. Though Amazon is not a “covered entity” I’d place my bet on them on keeping my health records secure and private than any hospital or IDN in the country today.

Do know one HIT company using Amazon today, MedCommons, who turned to Amazon due to Amazon’s proven ability to handle very rich data, for MedCommons, that means medical imaging. Spoken with one of the founders of MedCommons who has been quite impressed/happy with Amazon’s services.

1:30, Session on Cloud Computing: Nice panel representation that includes senior exec from Salesforce.com, Google exec, the Amazon CTO and one of the founders of VMWare (MIT has always done an excellent job of attracting some very talented, high-level speakers).

Overall theme – Internet as the platform, the operating system with applications sitting on top, this is what cloud computing is all about. Thus, not too surprising that there is a land-rush on right now by just about everyone in the computing industry (and even those you would not associate with hi-tech e.g., Amazon).

Comment by Salesforce.com – Right now the current regulatory structure and policies, on an international level are far-beyond where the technology is today. This could create some serious issues, potentially, in the future. Not unlike the current challenges and issues that have been raised regarding industry storage of medical records by non-covered entities.

Pricing for cloud computing services and apps are moving from user-based pricing to usage (pay as you go) pricing. In healthcare sector we’ll see a mixed model with a low subscription price supplemented with usage/transactional fees.

For software developers, start thinking about just the application and not worrying about the OS and underlying technologies so much. For example, it is now pretty easy to put together a service that combines Amazon data services, with Salesforce and Google to create an interesting offering for the market. Not much different than what Google and Microsoft are proposing with their healthcare plays. Will be interesting to see what someone like RelayHealth develops as they have a fairly high level strategic relationship with HealthVault.

3:15, Session on EHRs (note, I’ll use EMR acronym): Panel includes John Halamka (Beth Israel’s CIO), Karen Bell (HHS), Craig Feied, (Chief Strategy Officer, Microsoft Health Solutions, he developed Azzyxi at MedStar) and Girish Kumar Navani, (President, eClinicalWorks). Karen started off basically setting the stage giving a broad landscape overview of the challenges in healthcare and subsequently HIT, for the audience with the HIT Hierarchy of Needs slide (pyramid, privacy at the base up to public good at the pinnacle).

Decent size audience, easily a third of the total attendees at EmTech (there are currently 3 concurrent sessions).

Halamka followed with the common statement regarding lack of EMR adoption. Claims EMR is still too expensive at $40-60K per practice with a corresponding drop in productivity for first 6 months of 25%. Beth Israel s requiring all affiliated physicians to adopt and use an EMR. They are offering a hosted eClinicalWorks for these affiliated practices at a big discount to encourage adoption. Hopes that better P4P metrics will result in higher payments from CMS and other payers to augment the cost of hosting the EMR. Halamka also talked of consumer’s abilty to move PHR data from BI’s PatientSite to either Google Health or HealthVault. Today, the only thing you can move into either repository is medications and allergies. Not much value there!

Kumar was next. eClinicalWorks is now in over 20k physician offices. Talk in broad terms, not terribly specific. Does believe that “patient-center healthcare” is the next major change in healthcare that will be a forcing function for EMR adoption. Not to surprising to hear from an EMR vendor. He does not like the term of EMR, sees it more as a technology that helps patients get better care and allows a doctor to deliver better, more informed care. Hmm, like this statement – he is absolutely right, EMR is a dead term, we need something new.

They just did a quick survey of audience, Managing Personal Health Information: 14% would trust lab or pharmacy, 32% would trust a company such as Google or Microsoft and 54% would trust only themselves or a doctor.

Craig talked about the development of Azzyxi and how what all he wanted to do was try to provide the most information possible at the point of care, in this case the ER. Believe that errors/failures in medicine are not about Execution, but in Planning. Unfortunately, he claims all the effort now is on Execution (meds, wrong patient, wrong procedure, etc.), rather than upfront Planning. Talked of the “Spectrum of Wellness” as core to MS’s health sector strategy – a rethinking of what healthcare is and how it is delivered, not only when you are sick, but when you are well. Good speaker, a bit heavy on the sales pitch.

Q&A Session: What’s the value to a primary care physician in adopting EMR. Halamka claims that P4P and quality reporting is becoming an ever bigger issue for physicians and that these systems can actually help doctors ultimately earn more and earn it easier (HT can greatly facilitate all sorts of transactional processes). Kumar also followed up stating that it will help physicians better understand what they are doing as well as help doctors prepare more effectively for patient visits. Supported Halamka’s view that quality and P4P will also push adoption going forward. These programs start to really put some cost justification behind EMR adoption. Craig thought that it is up to software vendors to create sufficient value in their solutions that will lead to adoption.

Status oF PHRs: Halamka – we have 40K users of Patientsite and believe in patient control, thus opening up to Google Health and HealthVault. Karen, still informative stages but right now pretty wide open as the apps are simple today and maybe not what consumer will use tomorrow.

Addendum to EMR Session – picked-up through conversations after formal session:

  • According to recent HHS calculations, there is over $700M in incentives, via payers, through various P4P and quality improvement programs that can be used to subsidize EMR adoption by practicing physicians. Clearly, there is money to be had, not sure though that most physicians know how to capitalize on it. EMR vendors need to start educating the market on these opportunties and not leave it up to the physicians to learn about them.
  • Today, Beth Israel is allowing their customer to export their PatientSite PHR data to either Google Health or HealthVault. Problem is, they are only exporting medications (includes immunizations) and allergies. Ask Halamka why they are not exporting the full record and he told me that neither Google nor Microsoft’s offerings can handle anymore than that – the data model is just not there yet. So, all you consumers waiting with baited breadth for a full feature service from either of these companies will be waiting a little longer.
  • eClinicalWorks is seeing no issue with reluctance in adoption of EMR solutions, Kumar told me they have plenty of business and are still on a very rapid growth path. Early problems precipitated by a couple of huge orders (e.g., NYC) are behind them now. Also, despite all the rumors, and the fact that Kumar is originally from India, over 80% of all employees are based right here in the US. Kumar does use resources in India, but on a flex model to address pressing, unexpected customer needs – not an every day occurrence.

As I mentioned earlier, this is the first time that I have just reported directly from the event. Let me know, via comments, if you found this useful or prefer my former approach of distillation then reporting within a couple of days of actual event.

Stay up to the minute.

“As biometric data becomes cheaper and easier to collect through smart sensors, devices, and mobile apps, expect to see more innovations in consumer health.”

-Alicia Vergaras