Why Healthcare IT is So Hot Right Now

screen_shot_2015-09-02_at_3.50.13_pm_0It’s 8:15 on Friday evening.  I’m almost through editing the job description for a user interface engineer after sending off an introductory slide deck to a potential client.  Today I met with a business development prospect, held calls with a potential advisor, a potential client, finally made those changes to the website.  There’s not time to write this but when will there be?

I’m part of a growing trend of academics, programmers, and clinicians taking the startup path to try to make healthcare a better place. In fact, record breaking amounts of venture funding are pouring into healthcare with 2014 seeing $4.13 billion in digital health venture funding and 2015 showing no signs of slowing.  Established tech companies not typically associated with healthcare including Apple, Samsung, and IBM are getting in on the act with enormous investments.  It seems that nearly every hospital and insurer is launching its own incubator or innovation fund.

The real question is why, after decades of lagging behind nearly all other industries in the adoption and use of information technology, does healthcare seem to suddenly be such a hotbed of activity?

The answer: data matters like never before in healthcare.

Why data?

For as long as there were 3rd party insurers, the vast majority of care in the US has operated under a perverse incentive system.  And while every clinician I’ve met has been dedicated to providing the best care possible, today’s healthcare systems are far more likely to invest in technologies that fetch handsome reimbursement returns.  That’s why a robot to perform surgery that fetches tens of thousands of dollars per procedure (regardless of the lack of evidence of improved outcomes) has trumped investment in systems designed to predict risk and keep people out of the hospital.

As a result, if you’re interested in building systems that improve care, and said systems consume resources beyond those available from your typical governmental or philanthropic grant, you either work in another country or you take a job in one the few US systems with appropriately aligned incentives.  And for the past 8 years that’s exactly what I’ve done, chasing innovative work in government, in the non-profit sector, and overseas.

However, a US healthcare market driven by value demands efficiency + effectiveness.  Efficiency + effectiveness demands measurement and improvement.  In this new world, data is currency.  It points out inefficiencies, speeds and streamlines effective communication, and highlights opportunity.  In fact, the ability of healthcare organizations to use their data most efficiently – from the C-suite to the visiting nurse – will soon determine whether or not that system survives.

In order to measure, data silos will be opened by their owners in search of new insights and best practices to tackle the complex challenges of human health.  The solutions that are most capable of learning the relevant patterns, detecting the interesting variance, and automating the best practice tend to incorporate information technology.

Why now?

The answer has everything to do with a long overdue change that’s happening in US healthcare.  It is the gradual shift in healthcare payment incentives from rewarding volume to rewarding value:  a prerequisite for our health system to begin clawing it’s way back from being ranked 1st in cost and 37th in quality worldwide.  And it places a premium on data.

Finally, an incentive system that rewards the maintenance of good health over the treatment of catastrophic crashes seems to be taking hold.  This is thanks to changes in public policy via the American Recovery and Reinvestment Act (ARRA), the Affordable Care Act, new risk-sharing contracts offered by insurers to providers, and growing demand by large employers that buy health insurance.  As a result, it is becoming increasingly possible for healthcare systems to perceive innovation in healthcare delivery that isn’t based on high-return procedures and equipment  as a sound investment.  Enter the startups and increased attention by retail IT companies.

Of course, today’s new entrants are not the first to seek truth in healthcare data.  Health services researchers, epidemiologists, and quality improvement specialists have filled the stacks of medical libraries with not only important discoveries but often times proven formulae for improvement.

For the last 10 years these were my “customers.”  They posed the questions of the greatest clinical importance, and I built software tools designed to let them get at the truth as quickly as easily as possible.  They published papers citing newly unlocked clinical discoveries.  I published papers demonstrating the ability of these technologies to improve healthcare’s use of data.  I believed and argued at conferences around the US that the adoption of such technologies by clinics, hospitals, payors, and providers could make a real difference.

Only, they didn’t.  Not in a meaningful way.  Because there has always been a greater incentive to not know the answers when it only pays to treat, not prevent.  But for the first time in my career, that’s no longer the case.  That means that those interested in improving healthcare meaningfully are no longer limited to government grants, those few US value-based healthcare systems, and foreign universal healthcare systems.

It’s 6:23 p.m. Tues, and I’m editing this one last time (I hope).  The next few minutes of editing will come at the expense of writing up the outline of a proposal that will bring a pharmaceutical company and a dialysis company together to use their data to blur the lines between clinical science and care.  Claims, device, and EMR data will be combined to predict the most appropriate course of care for individual patients.  The project does not aim to sell more drugs or procedures but to demonstrate the value their companies can offer to clinicians operating in an accountable care model (i.e., value based).

If value-based financial reimbursement becomes a permanent fixture in our health system, such collaborations will become the norm and not the exception.  Why? Because “value” in healthcare can only be achieved when healthcare’s various stakeholders work together to keep people healthy throughout their continuum of care.  Data will be the engine driving these partnerships forward.

In time, healthcare will realize the same levels of innovation, efficiency, and capability that the US high tech industry is globally famous for.  And for a nice change of pace, billions of dollars will be exchanged not in the pursuit of better ad placement or market timing, but in turning data into better human health.

Leonard D’Avolio, Ph.D., is the CEO and co-founder of Cyft, Inc., assistant professor at Harvard Medical School, an advisor to Ariadne Labs and the Helmsley Charitable Trust Foundation.

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