The movement to build a medical Internet linking millions of Americans' electronic health records advanced on Nov. 11. Officials of the U.S. Health & Human Services Dept. awarded four contracts to build regional networks that will let doctors and hospitals share medical data. The network is aimed at improving medical quality and slashing health-care costs.
Contracts went to groups led by IBM (IBM), Accenture (ACN), Northrop Grumman (NOC), and Computer Sciences (CSC). Although the contracts total only $20 million, bidding by some of technology's titans reflects the industry's recognition that the $1.7 trillion U.S. health-care business could generate the next big wave of tech investment and productivity growth.
By next year, the awardees will need to develop technology standards that make all the data-sharing work. They'll have to lay the groundwork for handling sensitive issues, such as protecting the privacy of patients' information, says David Brailer, national coordinator of health information technology for HHS. "This is the artillery coming in here," Brailer says (see BW 10/31/05, "This Man Wants to Heal Health Care").
BEST IDEAS. The contracts call for the winners to build four regional networks that will let doctors, hospitals, and pharmacies share medical data. The Bush Administration is pushing for the network in hopes that letting doctors have access to a patient's complete medication history and test results will prevent dangerous drug errors and other mistakes, which consulting firm HealthGrades estimates kill 195,000 Americans a year. The idea is to distill the best ideas from the regional networks and bake them into national standards that will let both existing and future regional networks communicate freely, forming a single National Health Information Network (NHIN).
After prototype networks are built, expected by next year, a government-created standards-setting body will work to ensure that all the hardware and software used to process medical data can communicate. Private companies would then begin offering nationwide data services to doctors within about three years, Brailer says. "Without that, there's no way to meet the President's goal," which calls for all Americans to have personal electronic health records by 2014.
The NHIN will save tens or even hundreds of billions of dollars a year by reducing duplication and unnecessary hospitalization, according to several studies published in medical journals this year (see BW, 10/31/05, "Power to the Patient"). Savings include eliminating tests that doctors at a hospital might do, for example, because they don't have access to results of a test the same patient just had at a nearby clinic. The information-sharing could also reduce hospitalizations by better coordinating ongoing care of chronic disease sufferers, such as diabetics.
INFO TECH AS A "LEVER." Backers also hope the NHIN will set the stage for more informed consumer decision-making, as data from the network gets crunched and simplified so regular folks can get easy-to-understand ratings for hospitals and doctors, and the effectiveness of different regimens of care. "Health IT can be a lever to transform all of health care," says David Merritt, program director at the Washington (D.C.)-based Center for Health Transformation, a think tank headed by former House Speaker Newt Gingrich. "Medicaid, safety, anything you can name about health care the [NHIN] can improve."
The IBM group will build networks serving New York's Hudson Valley area and parts of North Carolina. The CSC team, which includes Microsoft (MSFT) and Sun Microsystems (SUNW), will build networks in Indiana, Massachusetts, and Northern California. Accenture's group, which includes Cisco Systems (CSCO) and Oracle (ORCL), will work in Kentucky, West Virginia, and Tennessee. And Northrop Grumman's group will build networks in California and Ohio.
In most cases, the new teams will help upgrade the technology and business practices as well as standardize rules for privacy at existing local info-sharing networks. "You have to do [regional projects] so you have the knowledge and confidence to build a network that's scalable enough to serve the whole country," says Neil E. de Crescenzo, vice-president for global health care at IBM Business Consulting Services in San Francisco.
PRIVACY MATTERS. Consumers generally support the idea of the NHIN, according to two recent public-opinion surveys by the Markle Foundation and the California HealthCare Foundation. But CHCF Chief Program Officer Sam Karp says confidence will quickly erode if members of the NHIN's governing body, the government-created American Health Information Community, don't act aggressively to make sure consumers believe privacy is being protected (see BW, 10/24/05, "Protecting Patients' Privacy") .
Karp points out that Americans have already filed 15,000 complaints with HHS alleging violations of their privacy rights under a two-year-old privacy law. Most grievances relate to records that are kept on paper. HHS hasn't brought a single civil case against an alleged violator. If consumers aren't confident about the safety of their records, they could forego care or withhold information from doctors to keep their private data off the record. "The standards need to be there, and the federal government needs to enforce them," Karp says.
With the help of companies led by four of technology's biggest names, that's just what Uncle Sam intends to do.
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Mullaney is E-Business editor for BusinessWeek in New York
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