Harvard Business Review wonders whether the U.S. health technology sector has run out of gas

Recently I wrote that Innovation in healthcare IT is dead (but hopefully only temporarily). I thought, after my HIMSS trip, that there was very little innovation happening probably because of the deep freeze caused by all the regulatory activity and new Meaningful Use and Certification requirements.

Today I saw one of my favorite publications, Harvard Business Review, ask a more general question: Has the U.S. Health Technology Sector Run Out of Gas? There is a discussion of lack of innovation in pharma, medical devices, and our health IT industry. Here’s what they said about the IT sector:

Enterprise clinical information technology seems to have hit a similar flat spot. The major commercial IT platforms for hospitals and health systems are more than a decade old. Some of the older platforms are written in antique computer languages like COBOL and MUMPS, which predate the Internet by 20 years. Despite a societal investment of more than $100 billion, these tools have yet to demonstrate that they can reduce the cost or improve the efficiency of patient care. They remain cumbersome, expensive to install, maintain and operate. The user interfaces feel a lot like Windows 95 in an iPhone era.

What happened to the medical technology field? It certainly hasn’t been a shortage of cash, or of research investment. It seems like the process of commercialization of medical innovation has broken down.

The HBR article points to the following likely causes:

  • Risk-Averse Managements
  • Size Is Actually a Handicap
  • Losing the Competition for Global Talent

They conclude by offering the following vague and general suggestion:

Medical technology firms must create environments where the brightest minds from around the world want to come to work, a viable alternative to venture backed start-ups or academia. They must create a responsive, risk seeking, fast-to-fail, but also fast-to-succeed and fast-to-market corporate culture. It isn’t continual refinement of mature technology platforms that will get the job done. To create definitive solutions to complex disease problems, we’re going to need a new generation of knowledge-driven executives who actively seek and master risk.

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15 thoughts on “Harvard Business Review wonders whether the U.S. health technology sector has run out of gas

    1. This is a great, Geoff and I've been wondering this as well. In fact, so much so that I've put together a team of people trying to do something similar. If you're interested, feel free to contact me privately via email and join us.

  1. I have been wondering and saying this same thing for a while now. I think Point and click is dead. The computing platforms continue to move forward and HIT seems to sit stagnant. I am a CRNA who is currently pursuing a Masters of Medical Informatics degree and I see this both in practice and in my studies as well.
    We wonder why EMR/EHR adoption and use are so low , the fact is innovation has stalled and no one is really interested in following up with a system or systems which really push the format forward.

  2. Agree that there are a lot of products that are “long in the tooth”. Might I somewhat selfishly suggest that we talk about the only EMR with Microsoft Office embedded, a 100% implementation success rate (compared to a 30-40% industry failure rate), sold and supported exclusively by a network of local, certified IT companies. gloStream has a fresh, easy-to-use EMR that allows each Doctor in a practice to easily tailor it to they way they work.

  3. This is an undeniably lucrative business, giving lenders the opportunity to grow fat on a never-ending stream of technology,It should be for everyone to reach not just the top most ones.Advanced Technology

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  5. Shahid:

    I don't think that healthcare IT has run out of gas. And when you consider all the money being thrown at it by the government, I think innovation will result…maybe not the most cost-effective innovation, but innovation all the same.

    Then there are some remarkable small company stories that need to be told. Here is an example of one that directly relates to innovation in healthcare IT.

    I am aware of a company that has made a significant break-thru with respect to ontological engineering and disease control that is worth note.

    It's a small privately held SaaS development company based in Colorado that has developed and deployed an ontologically-based, GIS integrated disease management decision support system in Africa to fight malaria. This is a significant system that was funded by the global combatants of this disease and the system can be rapidly customized for deployment to other disease environments…especially if you are talking about vector-borne disease.

    The company, TerraFrame TerraFrame is interested in leveraging its technology to fight global diseases and is happy to entertain creative conversations to that effect.

    For more information please contact Ray Hutchins at rh@terraframe.co

  6. Shahid

    its more likely Healthcare IT is a decade in arrears on delivering promised value potential. For the most part, its not the industries fault. First, healthcare IT firms have 'followed the money' to payer and provider information silo's. But the bulk of unrecognized value in medical and cost outcomes will occur when the silo's become transparent. Second, the incentives in healthcare are largely 'pay for procedure'. The strong yet to be recognized value in healthcare IT will be recognized once the industry shifts to 'pay for performance'. Third, healthcare must shift focus from caring for sick, to wellness (avoiding millions of unnecessary procedures by keeping people healthy). Payers recognize the need here, but aligning incentives for healthy behavior (smoking cessation, exercise, diet, etc) is largely cultural and social. Shifting money from specialists to PCPs is an excellent start. Arming PCP's with HIT they can afford will occur and be a next big step in fueling the HIT subsector.

    ALL this means fewer therapeutic and diagnostic procedures, or at least less expensive procedures. And healthcare technology providers are shifting R&D from the next new $3 million diagnostic system, to much less costly tests (both in vivo and in vitro).

    Bottom line is the sector has not run out of gas, rather its wrapping up one phase (the age of specialty care centric) and ramping up on another (the age of diagnostic/therapeutic services as supplemental to a care system with the patient (and their designated PCP advocate) in the middle).

  7. I think its the people. A widely held perception in the job marketplace is that 1) healthcare IT has not been very innovative and 2) nearly all IT jobs in the healthcare field require prior healthcare experience. In essence, healthcare IT management is not willing to invite people from outside the industry. This is especially true at the CIO level. This stifles the influx of new talent, ideas, energy, and approaches to problems.

  8. Part of the problem lies with the accumulated hubris of IT and hypertrophied investment business cultures because they managed to generate a whole new economic world (much of it delusional) with IT gadgets and services that people now want to extend out into healthcare, so they can get giddy and rich again. Unfortunately, (a) health care systems are vastly more complicated than buying books over the internet, or getting your horoscope on your cellphone and (b) the get-rich-now mentality has already been thoroughly monopolized and driven over the cliff by big pharma profiteering, insurance company profiteering, and the inclination of too many doctors to put personal enrichment ahead of public wellbeing (ordering needless tests that drive up gov't costs, are profitable for docs without clinical benefit; denying care to the indigent or to Medicare patients; prescribing expensive brand drugs they own stock in, rather than generics, etc.).

    The only room left is for truly useful, virtuous innovations that improve health and reduce costs. These are not likely to make people as rich as fantasy products do, especially when you factor in the long-term risks and liabilities associated with health care systems, and a highly litigious populace. The American mania for gluttonous innovation at any cost is fast becoming unstainable; investors will need to adjust their greed for inflated ROI that leverages unsustainable fantasies and be content with lower ROI that merely generates useful, sustainable healthcare services. The shift from the metastatic exponentialism of greed to mere integrity will be difficult, if not inconceivable, to most of those who have created the current, highly professionalized institutional travesties that have taken us to the brink of societal dysfunction, where we close schools and home-health programs for the disabled so we can afford to bomb schools abroad and give bonuses to flagrantly criminal Wall Street shysters. Unless the fantasy and predatory values that pervade contemporary Titanic capitalism are fundamentally re-worked, the opportunistic marriage of IT and healthcare will just be another exercise in societal magical thinking, like privatizing the military to improve military effectiveness (a la Blackwater and Abu Gharib). Greed and incompetence gradually will crowd out authentic business or societal value. IMHO, not-for-profit and single-payer systems are the only way to insure that IT actually serves true health values in the endless struggle of ROI for the few vs. ROI for the whole society. For-profit systems have had decades to prove their social value, and the result has been disgraceful for the most part…. millions of uninsured, shameless bureaucracies created to deny care, failure to promote wellness, addiction to pharmaceutical pseudo-solutions, and organized obstruction of true national solutions. If we are to cultivate a new generation of experts in Mastering Risk, they should focus as much on the perverse economic incentives underlying predatory and opportunistic capitalism as they do on 4G gadgetry and disease management actuarial tables. Putting private profits before public welfare will always yield a product tilted toward the benefits of investors. We can't afford to lose this generational gamble by allowing big money, once again, to blueprint our future on its selfish terms. If everybody persists in trying to “make a killing”…. we all ultimately die in proportion. Some more, some less.

  9. “This is a great, Geoff and I've been wondering this as well. In fact, so much so that I've put together a team of people trying to do something similar. If you're interested, feel free to contact me privately via email and join us”

    Did you Guys ever get anything sorted regarding this? Is there any events for this year

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