If You Build It, Don’t Expect Them to Come

Aug. 1, 2008

There’s a problem with imposing top-down HIEs on localized healthcare communities. They may not work.

One interesting problem with health information exchanges (HIE), as we know them today, starts with the implied promise in the name itself. There is little to no focus on actual information exchange; rather, most HIEs are about consolidating information and channeling access to that information. Yet healthcare communities have a real need for an efficient means of exchanging data.

There’s a problem with imposing top-down HIEs on localized healthcare communities. They may not work.

One interesting problem with health information exchanges (HIE), as we know them today, starts with the implied promise in the name itself. There is little to no focus on actual information exchange; rather, most HIEs are about consolidating information and channeling access to that information. Yet healthcare communities have a real need for an efficient means of exchanging data.

Ask practitioners to describe their primary operational challenges and the list will probably include some reference to the transactional friction that impedes the efficient exchange of information that is essential to patient care, such as placing orders, obtaining results and reports, and managing patient referrals. Unfortunately, the vast majority of HIEs do little to ease this friction.

It’s little wonder that many communities are losing interest in grand, all-encompassing HIEs, which are often funded by research grants. It is also becoming clear that, despite an availability of technology and a substantial investment in financial and human resources, most HIEs have yet to produce a sustainable business value. Continued failure to achieve this value could well relegate HIEs to the dust bin of history, alongside the community health information networks (CHINs) of the last decade.

Three failings illustrate why HIEs generally have not succeeded; and, with a change of focus, how this can be rectified:

Starting too big: Many HIE efforts start with the goal of sharing patient information across the community — anywhere, anytime. This requires a significant investment in technology, resources and time to connect and integrate all of the participants in the community before value can be realized, often requiring participants to wait years before the HIE is usable.

Aggregating information also requires complex manipulations, such as mapping patient identifiers, standardizing clinical information and data types. Given the current state of national standards, and commercial products based on those standards, each HIE must build a system based on proprietary standards today, and evolve to standards-based systems if and when they become available.

In order for HIEs to be effective, it is important to realize that starting with a big bang approach or one that requires significant agreement across the community should be avoided. Instead, an entrepreneurial approach that looks to start small and grow from the bottom-up has consistently proven to be the best way to bring a new innovation to market.

Value proposition too low: One of the most cited reasons for HIE failures is the inability to achieve a sustainable business value. It is difficult to escape the conclusion that if the HIE really served the needs of the community, it would have earned the support of the community it was meant to serve. Yet few HIEs are designed to deliver the hard-dollar business value necessary to justify the investments made in them.

Too often, the HIE is seen as an “investment in the future,” where everybody ultimately benefits from its use. Unfortunately, we humans are not inherently predisposed to do what’s best for us long-term (e.g., eating right, exercising regularly and not smoking). Instead, we tend to act selfishly to gain immediate satisfaction or pain relief. Understanding this aspect of human nature is what enables entrepreneurs to create breakthrough innovations by looking for problems that cause pain and creating the relief. If one applies this thinking to an HIE, it becomes clear that the community would be better served were the HIE to focus on more practical things, such as reducing labor costs (pain) and improving the efficiency of information exchange (satisfaction), rather than preparing the community for the future.

By shifting the initial focus from aggregating patient information to improving existing workflows, HIEs could leverage labor reduction as the business driver needed to financially support the HIE. Interestingly, an HIE built to initially improve transactional friction would virally grow into an HIE capable of aggregating patient information at a much lower cost than current approaches require.

The HIE market is artificial and distorted by grant funding: One does not have to be a free-market ideologue to see that HIE markets — initially funded by substantial private, state and federal grants — have distorted and even thwarted the normal, healthy market dynamics that drive innovation, efficiency and value. Specifically, artificial funding removes the need to establish a toe hold in the market (what Geoffrey A. Moore coined the “beachhead” in his book “Crossing the Chasm”) and reduces the market’s ability to react and kill off unsuccessful ideas.

For example, grant funding has spurred a kind of feeding frenzy among IT vendors who see the HIE as a viable market for product purchases. This has led to a situation where experts are defining the success criteria for an HIE, effectively eliminating the natural selection that normally empowers customers to determine what works and what does not. Quickly killing off bad ideas before they propagate is an essential element of market function; it eliminates waste and ensures that only the best solutions succeed.

As long as artificial funding remains a core part of the equation, solutions that customers will not buy will continue to be propagated, and innovators who, by their very nature, perform best in early stage markets, will not have a seat at the HIE table.

These shortcomings underscore the challenges facing communities as they build an HIE, and point to a common-sense conclusion: Success depends not on waiting for broad standards and choosing the anointed technology, but rather, on identifying existing pain points, using the HIE to deliver value by reducing the pain, then expanding the system across the community in a natural, incremental fashion. Until then, communities participating in HIEs run the risk of being part of a doomed enterprise.

Robert E. Connely is president and CEO of Novo Innovations, Alpharetta, Ga. Contact him at [email protected]  or 770-641-9063.

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