The Systems Approach

Tough new questions reshape the health IT sales arena

By Joe Flower

From H+HN Most Wired, February 16, 2006

We are moving inexorably to a health care future that is highly automated, digitized and networked. Mounting cost pressures, clinical necessity, technological opportunities and the demands of increasing transparency are pushing us down this path.

We call this the “health care system,” yet in an individual institution or an integrated system, there seems to be little “systemness.” But these pressures are pushing health care to become more systemlike, which will change everything.

This change is already visible in the relationship between buyers and sellers of health IT and medical devices. The purchasing decision is shifting from clinicians to policy committees and finance staff. They are looking not just at clinical value, but at a value equation that includes financial, workflow, connectivity and efficiency arguments. In response, sellers are changing their strategies and the shape of their organizations.

The medical device and IT markets are driven by new capabilities built into products that are often semi-customized. Their prices grow incrementally with each year, and by leaps with each new generation of innovation. Sellers face the daunting challenge of demonstrating that each new generation of their product is truly worth the higher price, both clinically and financially.

Buyers no longer ask, “Does this technology produce better outcomes than what it replaces?” Instead, they ask, “Does this technology produce outcomes so good that it is worth paying several times the price of what it replaces?” Then they’ll ask questions about workflow and efficiency: “Will this technology truly replace older technologies?  Could it actually reduce FTEs? Can it save the clinicians time? How much retraining will it require?”

Other questions that buyers increasingly will ask are: “How well does this technology integrate with others? Can its output be automatic input for another device? Can it be driven by an EHR?” If much of the future’s medicine is conducted by linked semiautonomous devices, then any technology bought today that does not fit that picture quickly becomes just another piece of legacy iron.

Some of the first examples of devices that play well with others already are appearing in the marketplace. Medtronic this year announced new technologies that can wirelessly query and reprogram implanted defibrillators and pacemakers, deliver the data to its cardiac rhythm management data system, and feed the results directly into other vendors’ EHR systems. The military’s Advanced Research Projects Agency is commissioning concept studies and prototypes of MRI and CT scanners connected to autonomous surgical devices, anticipating the eventual production of autonomous robotic emergency battlefield surgeons. Just as Intuitive Surgical’s da Vinci Surgical System derived from military prototypes in the 1990s, this model will pervade health care in the next 10 to 20 years.

Moving toward digitized, automated, networked health care does not just mean new machines. It means new relationships, new organizations and utterly new thinking.

Moving toward digitized, automated, networked health care does not just mean new machines.
It means new relationships, new organizations and utterly new thinking.


— Joe Flower