At the SDForum Healthcare IT Symposium held on June 8, 2010 in the Palo Alto office of Pillsbury, experts said that healthcare IT, while still in its infancy, is poised for transformative growth. High-tech firms are making huge investments, entrepreneurs are launching promising new businesses, and the government is contributing substantial funds to push the industry forward.
Presenting the opening keynote, Lonne A. Jaffe, Director of Healthcare & Life Sciences, Government, and Education Industry Solutions at IBM Software, said that IBM Research is making a “transformational bet” on healthcare IT. It is conducting research programs in DNA sequencing, biomolecular system simulations, and the modeling of the brain.
In a research project titled Human Health Factor Analytics, IBM Research is collecting massive quantities of data from a variety of sources to understand the factors that influence health. And expanding its scope across time and geography, IBM Research is collaborating with the National Geographic Society on a genographic project to study human migratory history from genetic data.
Jaffe told the audience how IBM applies its many software platforms in the field of healthcare IT: InfoSphere and Cognos for data warehouses and dashboards; SPSS for predictive analytics; Tivoli Software for identity, access, and audit management; WebSphere for integration and interoperability; and Lotus for workflow and collaboration. Building on these technologies, IBM is creating an IBM Health Integration Framework as a basis for collaboration with partners and clients.
Jaffe expressed hope that healthcare IT will enable physicians to make better treatment decisions based on individual medical history, guidelines from experts, and the latest data on the comparative effectiveness of available treatments. He expects healthcare IT will lower costs by reducing errors, by enabling earlier detection, and by improving collaboration among all of the parties involved in healthcare.
Following the opening keynote, Gerry Hinkley, Co-Chair of the Health Care Industry Team at Pillsbury, led a panel discussion on healthcare IT that included Ryan Howard, Founder and CEO of Practice Fusion; Dr. Wayne Pan, MD, PhD, MBA, Senior Managing Partner of SciMed Partners; Dr. Ron Jimenez, Associate Medical Director of Clinical Informatics at Santa Clara Valley Health and Hospital System and a member of the board for Cal eConnect; Marco Smit, President of Health 2.0 Advisors; and Linda Drumright, President and COO of DecisionView.
Howard, whose firm Practice Fusion offers physicians a free, web-based application for managing all clinical and administrative functions, explained the challenges of bringing electronic health records to primary care physicians, most of whom work in small practices of five or fewer practitioners and face tight time and budget constraints. Dr. Pan, whose consulting firm SciMed Partners helps innovative companies achieve commercialization, likewise emphasized the importance of primary care physicians, stating that “healthcare is local.” Dr. Pan also works for Pacific Partners Management Services, which produces software “by clinicians for clinicians.” Physicians working in associated independent practice associations in California access the software for free over the web for administrative and clinical functions.
Emphasizing the value of data sharing, Dr. Jimenez spoke about Cal eConnect, a non-profit entity that will apply $38 million in government funding to implement technology to facilitate collaboration among healthcare providers in California and to connect providers to the National Health Information Network. Agreeing that there is value to be gained from the greater use of data in healthcare decisions, Smit said that data is central to what he calls Health 2.0, an idea promoted by his organization, Health 2.0 Advisors, which organizes conferences and provides market intelligence. Speaking of data related to research in the life sciences, Drumright said that DecisionView aggregates data and enables visualization and predictive analytics.
In response to a question about whether there is demonstrable return on investments in healthcare IT, Howard explained that enabling primary care physicians to enter personal health records correctly has a ripple effect through the entire healthcare system and that the lack of such data is responsible for about two hundred thousand deaths a year. Dr. Jimenez said that there are studies that demonstrate ROI in emergency room settings, where access to data saves on tests and avoids unnecessary admissions. Smit told how IT systems have doubled patient adherence to medication instructions.
Presenting the symposium’s second keynote, Adam Bosworth, Founder, President, and CEO of Keas, said that the United States does not have a healthcare system, not even a sick care system, but rather a “sick care mess.” The system does not provide incentives for doctors to promote good health, as opposed to reacting to sickness, nor does it encourage patients to participate actively in improving their own health through better diets and more exercise. Bosworth insisted that there will be no improvements in healthcare without greater patient involvement. Incentives as low as a few hundred dollars a person, said Bosworth, no more than one percent of current healthcare costs, have been proven to make a real difference in promoting healthy behaviors.
Bosworth argued that technology can help by enabling patients to better manage their own care and by encouraging self-service wherever possible, freeing doctors to focus on the difficult decisions that require expert judgment. In support of this approach, the Keas web site lets users personalize their healthcare strategy, access motivational tools, and actively participate in their own healthcare.
Following Bosworth’s presentation, Philip Korn, who leads the venture capital relationship for the human resource outsourcing firm TriNet, moderated a panel on venture capital investment in healthcare IT, which included Jeff Calcagno, Principal, Scale Venture Partners; Dr. Louis G. Lange, MD, PhD, Partner, Asset Management; and Brian Ascher, Partner, Venrock. The panelists agreed that entrepreneurs pitching healthcare IT start-ups to venture capital firms need to work with both the healthcare and high-tech teams and must focus on business models as opposed to just technology. Calcagno warned entrepreneurs that the venture capital industry has contracted and become more risk averse. To build confidence, he advised entrepreneurs to compare their company to companies in which the venture capital firm has already successfully invested.
Asked whether the structure of venture capital funds was adequate to handle the long-term investments required in healthcare IT, investments that span seven to ten years, Ascher explained that funds are typically based on ten-year agreements with limited partners and that this structure does not need to change. Calcagno added that venture capital investments are longer than most people realize; quick exits of one or two years are rare. Dr. Lange explained that venture capital firms are really venture builders; they succeed by making long-term commitments to companies in their portfolio.
In the closing keynote, Jaap Suermondt, PhD, Director of the Business Optimization Lab at HP Labs, said that “today is an amazing time to be in the life sciences.” Personal medicine is becoming real, with patient-specific medications, custom prediction of risk factors and side effects, and new dosing algorithms. And the government is serious about health IT: the American Recovery and Reinvestment Act of 2009 includes $17.2 billion in incentives for hospitals and physicians to encourage the meaningful use of electronic medical records.
Electronic medical records are important, Suermondt argued, because they create data liquidity, allowing patients to switch doctors without having to start from scratch, a freedom that is essential for efficient markets. According to Suermondt, “You are not going to get a more efficient system until people can freely move from one doctor to another.”
Suermondt said that the effective application of IT in healthcare could reduce the 44,000 to 120,000 deaths caused by mistakes each year in US hospitals. He cited the example of Lucile Packard Children’s Hospital, where researchers credit a computerized physician order entry system with a twenty percent decrease in mortality rates over an eighteen-month period.
Concluding the symposium on an optimistic note, Suermondt told the Silicon Valley audience that IT as an industry can transform the healthcare system.