CFO Perspective: Fiscally Sound Interoperability

Feb 3, 2014

Executive Insight

The importance of medical device interoperability
for streamlining healthcare delivery and
coordination is explored By Henry Kotula

Almost 20 years ago, before the Internet,
the Health Information and Management
Systems Society (HIMSS) held a
conference to discuss the future of healthcare
information technology. The group of physicians,
technologists, visionaries, engineers and
entrepreneurs shared one idealistic goal—to use
information systems and technology to fundamentally
change healthcare. Computerization
would enable improvements in the practice of
medicine and make it safer, higher quality, more
affordable and efficient all at the same time. We
wanted people to be healthier The Institute for Medicine calculated many
Americans were dying each year from preventable
paper prescription errors, which led to the
development of the electronic prescription. Today,
according to industry source SureScripts,
about 600 million prescriptions out of 1.5 billion
in the U.S. are written electronically.
The next phase, electronic health records
(EHR), is under way with the goal of making all
physician practices and hospitals digital. After
two decades, the process of getting from zero to
nearly half a million physicians using EHRs has
been significant. While people understand that
making digital records work is critical to fixing
healthcare, the impact of IT on healthcare over
the past decade has been modest.
Today our ability to integrate electronic health
information about a patient and exchange it
among clinical providers remains the exception
rather than the rule. As these systems begin to
talk to each other and to patients, everything
will change. For the past few years the focus of
healthcare IT has been the installation of EHR
by hospitals and other providers, but the benefits
of these investments remain unclear. The
rapid adoption of EHRs has been driven by government
funding to providers who demonstrate
so-called “meaningful use” of EHRs. Many providers
are struggling to meet the requirements
of Stage 2 Meaningful Use, which requires the
ability for an EHR to participate in a health information
exchange, facilitating the flow of patient
data between providers. Medical device
interoperability has been mostly an afterthought
for hospitals busy meeting government requirements
for the use of EHRs.
“Connectivity” refers to medical devices communicating
with each other, and the patient’s
EHR. e Transparency Market Research report
defines connectivity as to “control, configure
and monitor patient’s administration data such
as dose, rate, timing, etc., physiological data and
other key information.” The shift from fee-forservice
to performance payment based on care
coordination is making the linking of medical
devices and EHRs a priority.
Lack of interoperability, which prevents patients
and doctors from electronically communicating medical information, is a major obstacle
that thwarts EHRs from reaching their full
potential. For competitive reasons, hospitals and
vendors have kept patient data proprietary, but
are now under pressure from the government to
facilitate exchange.
We have significant technological challenges
around the issue of interoperability. Having the
ability to choose different devices and technologies
to collect and store our data and be able to
move that data from one health plan to another
or across healthcare providers is no easy feat.
One of the issues that Republicans and Democrats
agreed on was the incentive for EHR adoption
in the stimulus package. e right approach
to interoperability is greatly needed and can help
reduce uncertainty and risk for medical device
manufacturers and even those working downstream
in analytics. Making sure devices are interoperable
requires the creation, validation, and
recognition of standards that help manufacturers
develop products that are harmonious and
can plug and play.
e medical device makers have little incentive
to overcome the interoperability problem, yet
hospitals and insurers increasingly share the right
ones. New payment models that will increasingly
favor pay for value, rather than volume, are
emerging and together, the hospitals and insurers
can influence device makers to adopt common
standards to facilitate connectivity which is good
news for patients, payers, and taxpayers. In addition,
the West Health Institute announced the
formation of the Center for Medical Interoperability,
which will focus on setting standards to facilitate
communication between medical devices
in hospital settings, as well as between devices
such as electrocardiographs, vital signs monitors,
and infusion pumps and EHRs.
Transparency Market Research recently published
a report anticipating a 38% compound
annual growth rate in the market for medical device
connectivity through 2019, from $3.4 billion
in 2012. e Center for Medical Interoperability
estimates the lack of medical device interoperability
cost hospitals, payers, device manufacturers,
and patients $30 billion in redundant testing,
misdiagnoses, and misallocation of labor, among
other issues. The industry must do better with
the development of the new iPad and other mobile
The current EHRs have to be changed from
information retrieval tools to those that create
value. e current EHRs do not help the doctor
practice better or the patient learn from the data.
Once records are open, connected and more
user-friendly, we can start to add intelligence to
the network that will help doctors, nurses, care
coordinators and patients all do a better job improving
health, not healthcare.
As remote monitoring increases to reduce
hospitalization costs, hospitals need to keep readmissions
for certain chronic conditions below
the national rate. Interoperability plays a key role
in doing that. However, an enormous challenge
posed by interoperability is how to standardize
what is a wide array of disparate systems so that
relevant patient information is transmitted accurately
and reliably into EHRs. ere are promising
signs these tools can be mobilized to make a
dent in some of the major challenges we face, including
obesity, diabetes, environmental health,
and many other areas if we can bring politics,
technology, and both public and private sectors
into the right relationship in the coming years.
Technology can’t do it alone.
Current health information systems are very
fragmented and hard record systems struggle
not only with remote data, but with data from
core hospital devices like fusion pumps and ventilators.
Amidst the recognition that improved
interoperability could save lives, the hope is that
efforts to enhance data integration will not only
reduce medical mistakes, but generate data that
will enable researchers to extract insights about
the causes of disease and glean clues into potential
therapeutic strategies.
A major opportunity lies in the area of sophisticated
analytics that search healthcare data for
meaning. As useful as these approaches are for
enhancing patient care and improving clinical
decision making, the real excitement will be the
use of sophisticated analytics to yield fundamental
disease insights, and point the way to radically
new treatments.
According to Research2Guidance estimates, the world market for
mHealth applications will reach over $1.2 billion this year. ese
applications would run the gamut from exercise and fitness, dieting,
wireless weight scales, heart monitors, sleep trackers, mood
trackers, and a host of peripherals that attach to your phone to
provide everything from diagnostics for diseases to EKGs, and eye
exams. ere are many who are looking to mobiles to help improve
one of the sticky problems of healthcare—behavioral change that
is often required to manage multiple chronic diseases. Successful
mHealth applications will have to demonstrate the ability to move
the dial on behavioral change to warrant investment in the coming
years. “ePatients” are challenging the traditional medical encounter
armed with data they’ve tracked on a mobile or iPhone application
and with the latest research or information gleaned from platforms
that provide access to clinical trials and data.
From a technology perspective, the government has a vital role in
areas such as standards, core infrastructure development, and regulatory
frameworks to protect everything from privacy to the security
of your health data. e right mix of regulatory standards and
frameworks may actually help business flourish. We need policy
innovation in healthcare to keep pace with technological change.
Data privacy, ethics, and ownership are issues we need to address.
e emergence of Big Data allows us to mine and analyze massive
amounts of data and has brought the issue of privacy to the
forefront. Furthmore, Big Data raises ethical issues from the ways
data can be used against us, to making us over confident in projections
and forecasts. More work needs to be done in this area to
make sure that the circle of beneficiaries of Big Data is wide and
includes the marginalized. Industry frontrunners are advocating
the creation of a Global Data Alliance to bring together the best
minds on data together to develop policy and ethical frameworks
that build trust and value across the stakeholder value chain.
Still prevalent in healthcare today is the idea that providers own
patient data because payment models encourage it, and this remains
one of the big barriers of widespread interoperability. Institutions
and practices want to hold onto that data for competitive
reasons. Our culture does not specify or provide absolute recognition
that the data belongs to the patient.
ere is also a lack of a compelling case for interoperability. In a
fee-for-service environment, there is little financial disincentive or
penalty because the more testing done, the more the provider gets
paid, even if it’s already been performed. is financial barrier will
eventually play out in policy and work is being done in Washington
to redesign reimbursement.
In a managed risk environment, medical device interoperability
and connectivity to the EHR are paramount to the success of those
involved in healthcare delivery and coordination. e reduction of
medical errors, redundant testing, readmissions and misallocation
of resources are key benefits. e ability to have this connectivity
occur in real-time will be a key differentiator of organizational performance.
In addition, the ability to convert existing data retrieval
systems to value creating via sophisticated data analytics will be
critical, especially for managing chronic disease populations. EHR
completeness may mitigate medical denials and malpractice risks.
In fee-for-service environments, better medical device connectivity
to the EHR will provide enhanced charge capture with the
promise of enhanced patient service net revenue.