Top 10 Takeaways from WTIA’s Healthcare-IT Event: Follow the Money, Startup Opps, & More

9/24/09Follow @gthuang

The role of information technology in healthcare reform is such a huge, sprawling topic that it’s hard to make any real progress in just an hour or two of discussions. Yet that’s just what transpired at a stellar event last night called “Healthcare-IT—Innovations That Will Transform Healthcare Now and in the Future.” It all took place at the Herban Feast in Sodo Park, South Seattle, and it was organized by the Washington Technology Industry Association.

Over some fancy appetizers, a distinguished panel of technologists, executives, and entrepreneurs debated everything from the technical and cultural issues of privacy and security in electronic medical records to who’s going to get a piece of the $19 billion in federal stimulus funding for digital healthcare; everything from whether consumers really want e-health enough to drive regulatory changes to—and this was particularly interesting to Xconomy—what the real opportunities are for startups in the space. The panel showcased some of the first-rate expertise we have here in the Seattle and Portland regions.

Moderator Joel French, the founder and managing director of Nephalios Group, a management consultancy, kicked things off by saying the whole healthcare debate boils down to four things: a cost problem, quality variability, access and coverage, and wellness. In each of these issues, IT plays an important role. “You can’t really share information if it’s not digital,” French said.

With that, it was open season on the panelists:

—Henry Albrecht, CEO of Bellevue, WA-based Limeade, an online health and productivity startup making software-as-a-service for employers (we reported Limeade raised money in July).

—Carla Corkern, CEO and chairman of Bellevue, WA-based Talyst, a company that makes software and systems to help pharmacies manage medications in hospitals and long-term care facilities (we reported on Talyst’s broader strategy and funding in June).

—Luis Machuca, CEO of Hillsboro, OR-based Kryptiq, a maker of collaborative software that lets healthcare providers share information with patients, labs, and physicians (we’ve reported on some of Kryptiq’s deals and customers, including NASA).

—Mohan Nair, executive vice president and chief marketing executive of Oregon-based Regence, the largest health insurer in the Northwest (he has a background in tech entrepreneurship).

—Michael Raymer, global market strategist and general manager for Microsoft’s Health Solutions Group (we’re reported on HealthVault, the company’s Web platform for medical records).

For the next hour, some tough questions flew out from the audience, and among the panelists. Here are my takeaways from the discussion:

1. “The magic pill is data liquidity.” That was from Luis Machuca, who argued that patients need to be able to own and access their own digital health information and use it to get better healthcare. “Universal health will fail, everything will fail, if we don’t have data liquidity and digitization,” Machuca said.

2. An open market, human behavior, and connectivity are important too. Nair argued that the present closed marketplace for healthcare services encourages entitlement instead of earned rewards. Albrecht noted that we should pay more attention to behavior, and less to technology. Raymer added, “Data liquidity needs to be coupled with tools to empower people to make changes, and connect people together.”

3. If you want better healthcare, go to jail. “We see the best compliance for keeping track of patients’ health is, surprisingly, in corrections,” Corkern said. The lesson here is that if there’s incentive to be careful, the technology is already there. Corkern added that she has to use Outlook to keep track of her family’s health records. (“That’s not great, because my phone’s not syncing today.”)

4. Privacy and security are cultural as well as technical issues. Raymer said that with HealthVault, “Patients determine what data they store, who they share it with, we’re not going to repurpose that data in any way, and the data is in one of the most secure data centers within all of Microsoft.” Mohan added that Regence’s data security is “like Fort Knox.” But Corkern pointed out that 10 years ago, people worried about buying things over the Internet. “Culturally, this is changing,” she said. “I hate to say privacy is an illusion, but some of it is. I think people are getting used to that.”

5. Consumers want digital healthcare—or do they? Albrecht said, “Demand from the consumer isn’t there, because they don’t know they’re getting suboptimal care, and employers don’t really care one way or another.” Later, he added, “Until there’s real consumer demand to change things, the regulations won’t change.” Machuca disagreed, noting that surveys show 75-80 percent of people say they want to do things like schedule appointments online and send e-mails to their doctor.

6. In a nation where most people get health insurance through their companies, employers are inhibitors of change. “You have to question what employers value. The reality is if they had their choice, they’d get out of the way,” Machuca said. “As an employer, we are inhibitors.”

7. There are some real opportunities for startups. “We need help from you, the entrepreneurs,” Nair said. Raymer suggested pursuing startups in three areas: electronic connections for families, coordination of care among caregivers, and population health (surveillance and disease management). “CIOs at hospitals understand where their gaps are. Go in, find out where they’re gapped, and partner with them to build an application to fill the gap,” he said. Corkern said she’d like to see an iPhone app for electronic administration of medications—being able to check if your mom has taken her meds, say. “There are a lot of small, ‘meaningful use’ pieces that could be an exciting platform. I’d aim for something fast to market like that,” she said. (Vitality, a Cambridge, MA-based company Wade profiled in August, is a perfect example. The startup makes an Internet-connected pill bottle top that reminds patients to take their medicines via a series of escalating lights, sounds, and phone calls.)

8. But look out for Microsoft, as always. Raymer pointed out that HealthVault’s platform already exists, allowing patients to download their medications and exchange their records online. “So before you rush out to build that kind of exchange architecture, we’ve built a platform entrepreneurs can build portals on top of,” he said. Sounds like he’s saying there’s room for startups to build consumer-facing applications on top of Microsoft’s existing platform. (And there’s always Google, too, which has its competing Google Health system.)

9. Follow the money. So who will actually get a piece of the $19 billion stimulus pie? Raymer said hospitals and physicians are eligible. But Machuca said his study of the fund shows no money will actually go directly to doctors—a radical claim. “They’re just starting to draw the strings attached to the $19 billion,” he said. “The presence of strings attached is the biggest inhibitor.” Nevertheless, he said, “I’m optimistic about this. Doctors are businesspeople, and they will go digital to serve their customers. Even with all the regulation, the real market force is demand.”

10. It’s about family. At the end of the day, Nair pointed out, the healthcare debate should not be about physicians, regulations, insurance companies, and so forth. It needs to return to why we’re talking about all of this in the first place, which is how to take better care of people and their families.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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