A private health care information technology system

By Don McCanne, M.D.
Physicians for a National Health Program, Quote of the Day, July 21, 2004


The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care

By David J. Brailer, MD, PhD, National Coordinator for Health Information Technology
Health and Human Services, July 21, 2004

Health information technology provides a mechanism for refocusing care delivery around consumers without substantial regulation and industry upheaval. Information technology can result in better care (care that is higher in quality, safer, and more consumer responsive) and at the same time, more efficient (care that is appropriate, available, and less wasteful).

The private sector role

While the federal government plays an important role in HIT adoption, the effective use of, and value creation from, this technology lies predominantly with the private sector. The federal government will provide a vision and a strategic direction for a national interoperable health care system, but will rely on a competitive technology industry, privately operated support services, and shared investments in HIT adoption. The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system. The private sector can best ensure that HIT products are successfully implemented in ways that meet the varying needs of American health care across settings, cultures, and geographies. The private sector can also continue constant innovation in HIT and ensure that products are delivered on an affordable basis.

Federal and state governments have delegated most components of quality assurance to voluntary private organizations, including but not limited, to the JCAHO, NCQA, the National Quality Forum, residency review committees, and others. This will be true of quality and performance accountability in the future world of HIT. New market institutions need to be developed that can support clinician adoption of HIT, provide interoperability, and enhance the value realized by these investments. Close collaboration between public and private sectors can develop new methods for improving care without creating unnecessary regulation and minimizing reporting burdens on private industry.

Comment by Don McCanne, M.D. (7/21/04):

The private, competitive market has produced for us computers that are powerful yet inexpensive. Software that is used widely is quite inexpensive, and that in the public domain is essentially free after the initial development costs. With inexpensive computers and software developed in the public domain, the cost of an integrated health care IT (information technology) system should be quite modest. And the return in error reduction and administrative efficiency would far more than offset any real costs.

The Veterans Administration is far ahead of the rest of the nation in developing and utilizing an integrated IT system. And this has been developed in the public (government!) sector. Many other nations with universal health care systems have also introduced integrated IT systems primarily through the public sector.

What has the magic of the competitive marketplace produced in the way of an integrated IT system to this date? High costs, very poor penetration, and system failures! Competitive market theory dictates that we should be leading the world with a high quality health care IT system at a low cost. What went wrong?

First of all, a fragmented system of multiple private plans, public programs and uninsurance does not provide an infrastructure that is very conducive to an integrated IT system. A single payer system, or, at minimum, a highly regulated system of universal coverage through multiple plans, would provide a framework that would ensure adaptability of an integrated IT system. Of course, a single, publicly administered system would be much preferred for an integrated IT system.

But the greatest difficulty with private IT solutions lies in the very nature of these marketplace models. Their goals are, above all, to maximize profits and to maximize the market price of their shares. To achieve those goals, corporate behavior varies from that of a public entity that has a simpler goal of establishing an effective and efficient high quality system that serves the heath care system and its patients well. The public system does not have to be concerned about being a successful business enterprise, but the private model does.

What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.

But without market incentives, wouldn’t innovation be suppressed? We have market innovations now, and they have not resulted in the IT developments that we desperately need. Public innovations have been effective in developing systems in other nations and in the VA that are already working. If private entrepreneurs can develop innovations that could benefit a public system, there is no reason that they couldn’t be sold to the government to place in the public domain. But they should be priced to reflect costs plus a fair one-time profit. We really don’t need more superfluous profit centers in our health care system.

The health information technology report released today should alarm us all. Although we all agree on the importance of an integrated IT system, the Bush administration is limiting the role of the government to being an enabler that encourages the private sector to develop a successful business model. Rather than higher quality at a lower cost, we’ll end up with mediocrity at a much higher cost, wasting even more of our health care dollars.

We desperately need strong leadership from our government in developing a health care IT system that will serve us all well. But based on the current leadership that has failed to address even the fundamental issue of adequate health care coverage for all, it is unlikely that we’ll see any enlightened leadership on this in the near future.



Meeting Meaningful Use Criteria and Managing Patient Populations

By Philip A. Verhoef, M.D., Ph.D.
Annals of Internal Medicine, November 19, 2013

To the Editor:

I read with interest DesRoches and colleagues’ article on assessing physician use of EHRs and whether such use was meaningful, as outlined by the Centers for Medicare & Medicaid Services. The fundamental flaw in the authors’ research question (and in the Centers for Medicare & Medicaid Services’ misguided use of this metric) is that the meaningful use criteria pertain to patient care, but the commercially available EHRs are invariably designed to optimize billing and insurance reimbursement. Thus, the finding that fewer than 1 in 10 physicians reported being able to use their systems to meet meaningful use criteria is hardly surprising.

The commercial EHR has resulted in more money in the pockets of physicians who use it, although it has failed to facilitate meaningful use or show overall cost-savings. Further, one need only look at the U.S. Department of Veterans Affairs Veterans Health Information Systems and Technology Architecture (VistA) Computerized Patient Record System as an example of an EHR that was designed to optimize patient care and has successfully achieved meaningful use. The West Virginia Department of Health implemented a statewide modified VistA system for one tenth the cost of the introduction of the Epic system (Epic Systems, Verona, Wisconsin) at West Virginia University.

The VistA system within the U.S. Department of Veterans Affairs allows easy exchange of information with physicians around the country because all of the hospital inpatient and outpatient sites are linked. Both Veterans Affairs and non–Veterans Affairs hospitals using the VistA system are among the few in the nation that achieve measurable meaningful use according to the Healthcare Information and Management Systems Society. Finally, the VistA system has won repeated accolades over the past 2 decades for its ease of use and for improving efficiency and optimizing prescription accuracy.

Why, then, would a physician or health system implement anything other than the VistA EHR if they seek to use an EHR in a meaningful way, as the Centers for Medicare & Medicaid Services mandates? Stated differently, and in parallel with our current health financing crisis, why do we pay so much more for a privately delivered product that is so much less effective than one developed with taxpayer dollars?



National Coordinator Rucker Urges CMIOs to Participate in Helping to Improve Interoperability, Usability

By Mark Hagland
Healthcare Informatics, March 5, 2018

Moving forward towards greater interoperability and usability will take time and effort, (National Coordinator Donald) Rucker said, but he said he remained convinced that much will change in the coming years, some of it stimulated by the federal government, but a great bulk of it stimulated by consumer empowerment and the mechanisms of the free market.


Yesterday’s message discussed the failure of our conservative government stewards, past and present, to move forward with an effective plan that would establish much needed interoperability of the health care IT system throughout the nation. More needs to be said now because the current path will have serious negative consequences for decades to come for our health care delivery system and its patients. And ultimately health care should be all about the patients.

It was mentioned that David Brailer, the first National Coordinator for Health Information Technology, had decided that the system, including interoperability, should be developed in the private sector. In a Quote of the Day message published in 2004 (above), he said that the federal government “will rely on a competitive technology industry, privately operated support services” in the creation of “a national interoperable health care system.”

Rather than repeating here, please read my comment from 7/21/04 (above). The state of the art at that time was the VA’s VistA system. It was owned by us, the people of the United States, and was a far better system at a small fraction of the cost of the systems being privately developed. Most important, the VistA system was designed to benefit patients, whereas the private systems were designed to fulfill entrepreneurial dreams of control and wealth.

A decade later, Philip Verhoef, in the Annals of Internal Medicine, describes the consequences of the decision to place control of electronic health records in the hands of the private sector. As he says, “why do we pay so much more for a privately delivered product that is so much less effective than one developed with taxpayer dollars?” And now, over four years later, the politicians still have learned nothing. (Philip Verhoef is a board member of Physicians for a National Health Program – an organization with a mission dedicated to patients.)

The current National Coordinator for Health Information Technology, Donald Rucker, at a meeting this week said that moving forward towards greater interoperability and usability will be stimulated by consumer empowerment and the mechanisms of the free market. VistA certainly is not a free market creation. Even the Internet was a government creation.

Perhaps the most arrogant comment this week was by the White House’s Jared Kushner who gleefully took credit for the “huge win” in bringing in the private IT vendor Cerner to displace the VistA system at the time that the VistA system was successfully undergoing an upgrade. The “win” is that the VA will copy the Cerner system currently being implemented for the active duty military – a process that has been described as “We took a broken system and just broke it completely.” That’s okay as long as it’s the private sector that gets to break it.

There are some things that the government does better than the private sector, like health IT. The issue is not public versus private, both have a role. The issue is that you do not elect/appoint as your government stewards people who do not believe in government, especially those individuals who support policies that take very good care of the wealthy while leaving the rest of us flat.

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