Health Reform and IT Innovation: A Potential Partnership?

February 6, 2007

John Edwards has come out with his healthcare reform plan (.pdf description here). We now have several state proposals to consider, as well as Ron Wyden’s Healthy Americans Act and the implicit statements in Sen. Barack Obama’s first speech on the issue. (I summarized and commented on that speech last week.)

Other leading Democrats might be expected to follow similar paths. In a recent speech, Gen. Wesley Clark endorsed the concept of single-payer insurance but suggested a gradualist approach that “harnessed” the talents of the health insurance sector. Sen. Clinton has not presented her health proposal, but her 1994 initiative bore some resemblance to both the Edwards and Wyden plans (although they go considerably further in some areas).

There’s always the possibility that none of these initiatives will come to pass, but wary investors may already be withdrawing from health sector investments. If the health sector begins to suffer financially because of political uncertainty, the result could be higher premiums and less coverage than we’re seeing today.

There are, however, areas where health reform goals and private sector investment might work together extremely well. Certain types of health venture funding, particularly in IT, could be sound investment decisions that would a) enhance the likelihood that health reform could succeed, and b) have a good chance of succeeding even if wholesale reform doesn’t happen in the next few years.

Here are some examples of investments that have a better-than-average chance of succeeding – and improving the healthcare system – both under an Edwards/Wyden type plan, and if our basic system remains essentially unchanged:

Infrastructure Support for Health Markets/Health Help Agencies

Both the Edwards and Wyden proposals create agencies at the state or regional level that enroll members, collect premiums, negotiate with health plans, and monitor healthcare effectiveness at the plan and provider levels.

The information tools and technical sophistication for each of these functions varies, but there are great improvements to be made in each of these functions. There are, therefore, a variety of opportunities to develop tools that could either a) be marketed to these agencies (called “Health Markets” under the Edwards plan and “Health Help Agencies” under Wyden’s).

These include:

  1. data mining and analysis tools for measuring the efficacy of health pland and providers
  2. Member enrollment, support, and assistance tools: The Internet sales and customer support industry has developed sophisticated tools that combine IT with call center staff to sell and support software and other products. There’s a great deal of opportunity for using these tools to help people navigate the health system
  3. Information-access tools: The Edwards, Wyden, and even the Bush plan (by implication) want people to be smarter healthcare “consumers.” That suggests that tools which enable them to access, interpret, and use information on hospital and doctor performance would gain wider support under this kind of reform.

There are a number of current and potential projects that could fall into these three general categories. Overall, the implication of the market-based approach under both Edwards and Wyden is this: That government would first guarantee full access to reasonable coverage at affordable costs (with subsidies), and that after that individuals would have a range of choices to select from.

The ideal scenario may sound radical, but it’s this: Social insurance meets the Internet. Individuals would be given the right to care, then provided with tools that harness the power of eBay/Amazon-like technology – plus sophisticated health data interpretation tools to help them make choices.

A daunting task, but not an impossible one.

Primary Care IT

There are other private-sector possibilities under healthcare reform, too. One is to improve the dismal state of information access for primary care physicians in this country. As I’ve reported before, North American primary docs lack the more sophisticared tools readily available to those in the UK and elsewhere in Europe.

Interconnectivity That’s Safe, Secure, and Human-Centered

Doctors and patients want to be able to communicate via the Internet and wireless tech. Hospitals and patients should be able to exchange information far more quickly and intelligently. HIPAA and other needed privacy initiatives raise the tech bar. Given the history of security breaches we’ve experience with insurance information in this country, privacy’s a very real concern.

Providing a smart, secure bridge is one investment opportunity. Making it user-friendly, and consistent with the sociology of human interactions in the healthcare system, is another.

Why do I say these types of projects are sound investments, even if we don’t get meaningful health reform? Because the insurance industry could do better in each of these areas, and its inefficiencies are being passed on to the public in the form of higher premiums.

The best possible outcome for health reform in this country would be to provide all Americans with universal coverage, improve an inefficient system – and harness the inventiveness of our tech sector.

One Response to “Health Reform and IT Innovation: A Potential Partnership?”

  1. Charles H. Riggs, III Says:

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