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Why healthcare in the U.S. needs Amazon (or anyone) to shake things up

Brian Eastwood | April 29, 2014
As healthcare in the United States embarks on what PwC describes as its most radical shift in 80 years, most health IT incumbents just aren't cutting it.

It's tough to make generalizations about an industry as tumultuous as technology, but there are arguably two certainties: Technology changes rapidly and innovation rarely comes from expected places.

Largely, that is, but not entirely true. The healthcare industry offers evidence to the contrary. Technology doesn't change rapidly - systems that use MUMPS, a programming language developed in the 1960s, still process many of today's electronic health records - and innovation rarely comes at all.

Some blame the risk-averse nature of an industry built on the oath "first do no harm." Some point to the murky nature of healthcare data, which is largely unstructured and therefore hard to standardize, let alone analyze and send to a smartphone. Some say the strength of healthcare's fee-for-service model gives cash-strapped hospitals and clinics little incentive to try anything new when treating sickness remains more profitable than promoting wellness.

Whatever the case, it's almost universally accepted that healthcare needs to innovate - and recent research suggests that healthcare's IT incumbents aren't up to the task.

'New Health Economy' Biggest Shift Since Employer-subsidized Care
"The ground is shifting rapidly," PwC's Health Research Institute writes, "giving way to what we call the ' New Health Economy.'"

Fed up with not getting their money's worth from a healthcare system valued at $2.8 trillion in 2013, PwC says patients will use technology to better consume services that keep them well, instead of just treating them when they're sick. Healthcare providers have little choice but to cut the fat, stop making errors, better manage chronic conditions and treat patients where they work, play and live.

Simply put, PwC says, "the New Health Economy represents the most significant re-engineering of our health system since employers began covering workers in the 1930s." Change will hit everyone, too: Hospitals, insurers, pharmaceutical companies, employers, retailers, patients and IT vendors of all stripes.

When the dust settles, those able to adapt to what analyst firm IDC calls technology's third platform - social media, big data, cloud computing and mobility - will stand tall. Everyone else will fall.

Reluctance to change drove athenahealth from the EHR Association, an industry group that the cloud healthcare IT vendor sees as stuck in the past. EHR vendors such as Epic Systems say customers don't buy into the healthcare IT cloud. athenahealth disagrees - and does IDC, PwC and, it's safe to say, most of the rest of the economy.

Reluctance to change also explains why EHR systems don't work for accountable care organizations, according to KLAS Research. ACOs have complex technical needs, and most major EHRs don't handle care management, quality reporting and information sharing very well.


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