One-on-One with David Brailer, M.D., Ph.D., Part III

June 24, 2011
David Brailer, first and former National Coordinator for Health Information Technology, stepped out of his government position and into the private
David Brailer, first and former National Coordinator for Health Information Technology, stepped out of his government position and into the private sector, and took a few minutes to chat with Managing Editor Stacey Kramer about where health IT is and where it’s going.

SK: Do you think as far as health IT is concerned, do you think it makes a difference who the next President is?

DB: I don’t because I think the American public is going to be the one that decides when healthcare gets reformed, not the President. Anybody that takes on health reform has to be able to work through a thicket of lobbyists and the initial issues and challenges, and you only do that if you have the American public pounding the table and demanding that change happen. I’m not saying that the President is irrelevant. They have different theories, but I think the overall conduit of healthcare change, in how health IT is used, I don’t think that matters that much.

SK: Because either way, it’s the public?

DB: The public has to decide it’s time to change, and they have to decide that they want their information to be more portable, and more shared. I think the American public has already decided that; they just don’t know how to manifest that. We’ll see how it plays out.

SK: Do you think we’re on target for getting electronic health records by 2014 as the Presidential mandate stated?

DB: I think we’re on target. If you look at the CDC study that showed the progress of adoption, clearly just in the three year period, we took a huge step forward in hospitals and doctors. Remember what happens in a networked economy. Once you get to about 50 percent adoption of something, everyone else’s hand is forced to do it. Look at the fax machine — when about half the businesses in America had a fax machine, the other half pretty much had to have one. Because if your supplier or customer said ‘I’m going to fax this to you,’ you can't say, ‘I don’t have a fax machine.’ The same thing is starting to happen now. When enough doctors have electronic records, they're going to say to the specialists, ‘I want this sent to me electronically, as soon as you see the patient. I want the referral back, and I want it that day.’ If they say, ‘I don’t have it.’ Well, you know, there are lots of other specialists around. Or, if the hospital says, ‘We want doctors to interact with us electronically,’ the doctor can't say, ‘I want to keep admitting there, but I don’t want to do this electronically.’ The hospital will say, ‘look, there are plenty of doctors.’

We’re getting to that — I don’t want to use the word, ‘tipping point’ because I think it’s a much more complicated phenomenon than a tree falling over — but I do think there is a point where the network effect that’s so hard to go uphill starts creating momentum of its own. If we look at the President’s goal of 2014, there are six solid years left for that, and I think we’re going to be well at the tipping point before that. So, absolutely. And in fact, one of the big challenges is in smaller doctors’ offices. We made a bet with our investment that the onramp for the electronic record in the small office is going to be electronic prescribing. It’s still a first step and it builds on itself. As soon as they have that, they’re going to want electronic lab reporting, and then they’re going to want to have some ability to view images, and they’re going to want to be able to keep notes. It’s an irreversible trend.

I’m actually very confident that the President’s goals are going to be met.

SK: So then we have maybe three to four years until we see the fruits of our labor, as this pause continues?

DB: I wouldn’t call it a pause. I think it’s more of a sorting out. I think it’s a time when all the companies are starting to say, ‘Okay, where do we go from here?’ You're going to start seeing a lot of mergers of electronic records companies. You're going to start seeing companies that have been sitting on the sidelines — big global companies — come back into the market and have a significant potential acquisition strategy. You're going to see investors, like ourselves, playing substantial roles. That’s what I mean by a sorting out. It’s not going to change the products that are on the market. It’s going to change the structure of how they’re built, and change the structure of how they’re financed and organized. It happens in any industry that goes through a rapid growth period and then starts leveling off a little bit.

SK: So, maybe in the end they’ll have fewer but larger companies owning these types of things for different products?

DB: Absolutely. I think, particularly the hospital market is going to continue to consolidate. I think in the physician market you’re going to see a lot fewer companies even offering ambulatory products than we have right now because there has been this tremendous entrance and innovation. Again, I’m not making any dire prediction. I’m just saying, as an economist, I know that happens every time an industry goes through a rapid scale up, you see then this sorting out period.

It’s exciting. We've been tracking it in great depth. We have a number of strategies built around it. We’ll be playing very hard and very aggressively in this activity in the industry.