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EHR Is Not Disruptive…And Never Will Be

Ben Wanamaker and Devin Bean have an outstanding blog post on the Disruptive Innovation blog (Clayton Christensen Institute for those following at home) called Why EHRs are not (yet) disruptive. If you care about the EHR market, you should go and give it a slow thorough read. Well worth pondering what they’re saying. For those who don’t want to read the whole article, here’s a small excerpt:

The reason EHRs are not “roiling the health care landscape” with disruption is not that the technology is bad—rather it’s the business model in which they are being implemented. While there is some evidence that EHRs can help increase clinical quality, the technology is by and large being crammed into sustaining business models and used as an expensive sustaining innovation to replace paper records with complex electronic systems. Implementing new technology to sustain the way you already make money almost always keeps costs high and prevents true disruption. Indeed, the history of innovation is littered with companies that had a potentially disruptive technology such as EHRs within their grasp but failed to commercialize it successfully because they did not couple it with a disruptive business model.

Plus, this powerful quote:

EHRs have little reason to use the new electronic system differently from the old paper system, and so EHRs often neither decrease cost nor increase quality. They’re just next year’s more expensive model of paper-based patient records.

As I read this I thought, EHR weren’t meant to be and they won’t ever be disruptive. In fact, they cement in the status quo. I think we see this playing out more and more every day.

To be disruptive, we’ll need something to come from outside of EHR. It likely will have to buck the current reimbursement model. Payers and government really control the environment. As Steve Case said at SXSW V2V, government is the biggest customer of healthcare. That makes disruption difficult unless you go outside the current system.

The disruptive technology that comes will in many ways feel like an EHR, but it won’t be an EHR like we know it. My point is that technology will disrupt healthcare and many in the EHR world will see the disruptive technology and say that it looks very much like the EHR software of today. However, what they won’t realize is that it’s not the technology, but the business model that’s paired with the technology that’s so disruptive.

April 28, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 14 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

EMRs Investors Stuck In Old Patterns

Today I read an intriguing piece in The New York Times which looked at different ways capital can be invested, and how over-reliance on one style may be cramping our economy.

In the piece, Harvard professor Clayton Christensen asserts that there are three main models for investing in innovation:

Empowering: These innovations “transform complicated and costly available to a few into simpler, cheaper products available to many,” Christensen says.  Obviously, the reduction of the mainframe into consumer desktops is one example.  These products open up new markets.

Sustaining:  These innovations replace old products with newer ones that improve on the old (his example: The Toyota Prius hybrid).  They don’t necessarily open new markets, as people often buy the improved model instead of the previous version, but they do keep the market moving.

Efficiency:  These innovations reduce the cost of making and distributing products and services, making capital available to keep the improvement process. They generally don’t expand markets at all.

In Christensen’s model, industries cycle through each of these stages and create new markets and jobs in the process. But that engine seems to be stuck in neutral of late, he suggests.

At this point, he argues, VCs and companies with excess cash are focused on a new finance model which discourages investment in brand new, empowering innovations. Capitalists want to make big money but are being channeling into spending only on the third stage of the cycle.

So, why all of this economic analysis in an EMR publication?  Well, because I’d argue that the EMR business has already fallen into just such a stall.  Rather than come up with paradigm-shifting innovations which really empower doctors, vendors are falling over themselves to create more efficient models of the same basic thing.

Not only is that bad for the health IT economy, it’s bad for end users, few of whom are rapturously happy with the basic EMR paradigm.  It discourages innovations that are patient-facing — such as a fascinating three-dimensional avatar I just heard about which can be used as a PHR — since there’s little if any funding for such projects.

Worst of all, focusing on efficiency doesn’t inherently improve patient care either, something we’d hope would be the fundamental goal of any EMR.

Given the stakes involved, let’s hope investors decide that chasing efficiency by reworking old models isn’t the best way to keep the EMR business alive.  Otherwise, we may stay bogged down for many years to come.

November 7, 2012 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.