While there is almost universal agreement on the need to transform our nation's healthcare system, few stakeholders agree on specific solutions. From pundits to politicians, everyone has recommendations on to how to fix healthcare, including expansion of access, increased individual responsibility, more competition, less competition, more government control or less government control.
One area of growing consensus, however, is that the information technology infrastructure underlying our healthcare system is woefully inadequate to the task of transformation. Evidence of this recognition was recently reinforced by the Obama White House and its inclusion of expanded funding for electronic medical records as part of the economic stimulus package.
In any case, healthcare transformation will require new models for sourcing, processing and distributing richer, more complex data in ways that facilitate collaboration, real-time decision-making and hands-free automation. Numerous obstacles lie on the path to real-time digital collaboration, however, including healthcare claims clearinghouses that remain the dominant electronic conduit among providers and payers.
In a 2004 Harvard Business Review article, "Redefining Competition in Healthcare," renowned strategy expert Michael Porter and innovation expert Elizabeth Teisberg argue that with the right kind of competition "the healthcare system can achieve stunning gains in quality and efficiency." The authors argue that relevant information is key to any well-functioning competitive market but is all but absent in our current healthcare system.
Imagine how an information-driven healthcare system might look and feel. Not only would consumers be better equipped to make informed decisions, but those decisions could influence other aspects of their healthcare experience, such as the cost of services or adjustable rate premiums.
In this information-rich environment, coaching and advisory services firms would emerge to guide consumers faced with making critical care decisions. Physicians would prescribe treatments based on the latest protocols and the patient's up-to-date longitudinal health record.
During recent years, vendors have leveraged their experience and assets to provide enhanced cleansing and transformation services to help payers achieve regulatory compliance at a fraction of the cost of internal development. These economics proved favorable as clearinghouses maintained their dominant position of connecting hundreds of payers with thousands of providers who lacked sufficient technology and know how.
Challenges extend well beyond technology, however, because of a business model that incentivizes exclusive relationships and controls the flow of critically important information. This situation is incompatible with the demands of today's consumer-directed health plans, incentive-based reimbursement models and the retail revolution for providers.