Been meaning to blog a post on this for ages.
It’s pretty obviously to any entrepreneur who runs a medical software company why technology in health care tends to lag behind what other industries have. The best technology to be found is in the consumer sector – consumers buy products they themselves want to use. They buy on price and functionality and there are huge economies of scale.
The process of how buying decisions are made in health care IT – and the heavy impact of government regulation – gives a very different landscape for health care IT.
If you are an EMR vendor selling to hospitals, the quality of your software product can almost be secondary to other issues when it comes to getting the business. Decision making in healthcare is highly centralized. The decision makers that have the budget are typically not the people that use the products. So products tend to be sold on the basis of arguments of return on investment. These decision makers are highly risk adverse so they prefer to adopt solutions they know other people bought.
The sales process is highly political. To be a successful medical software vendor the game is actually more about optimizing your sales process than your actual technology. Companies often get acquired in health care IT not for their technology, but for their customer base. A very common play in health care software is to acquire a portfolio of different ‘solutions’ so you can sell them to the customers you have that look to you as their vendor to help them.
Now throw into that mix the huge role that governments play in regulating the industry, creating various compliance standards that vendors are constantly having to leap through instead of focusing on improving their products and you can start to understand the sorry state of health care IT. This is not an environment which greatly encourages technical innovation and progress.
My hope for the industry is that progress can be found coming from the physician EMR side of the house. This is where there is the smallest gap between people making buying decisions – i.e. the doctors buying these systems and their staff who use them. The money is not as great as it is for hospital IT but the structure of the market in this area offers much better hope for long term technological progress.
But government regulations in this area have great potential to screw things up. That’s one of the big risks of things like “Meaningful Use”. Some really bad ideas could be forced on companies that could otherwise become the engine for innovation in healthcare IT.