Word on the Street: The Standard Deduction

Published: Friday, Feb 08, 2008
Wall Street has seen dramatic productivity improvements through the implementation of a few rigorously enforced standards, such as SWIFT ISO 15022, which “sets the principles necessary to provide the different communities of users with the tools to design message types to support their specific information flows.” Although Wall Street could benefit from even more convergence around additional standards, the financial community is far ahead of healthcare in terms of standardizing information exchange and other data transactions, and is realizing the concomitant benefits.

When it comes to setting IT standards in healthcare, the prevailing mentality seems to be more is better. This is not necessarily the case, since multiple standards often address different facets of the same issue, resulting in a multiplicity of standards that can produce the same effect as a lack of standards. Adoption of IT standards in healthcare has been delayed by many factors, but principally by special interests groups—including IT vendors who are seeking to sell dated technology by locking their customers into proprietary solutions; lobbying groups who oppose data transparency, which is one of the benefi ts of wide adherence to standards; and bureaucrats who have tied their careers to adoption of a particular standard.

Allow me to share a specific example to illustrate the magnitude of the problem as it pertains to proprietary healthcare software applications. I’ve omitted the names of the companies involved, as there are many other examples that are equally egregious. Several years ago, one of the larger vendors of database management systems decided to build a universal database management system (DBMS) that was designed to resolve most healthcare-specifi c data management problems. Representatives from the company interviewed large vendors of EMR systems to determine their exact needs.

The DBMS vendor made massive changes to its existing product in order to address the needs of specialized healthcare transactions. Having spent well over $100 million on this project, the DBMS vendor tried to sell the product to existing EMR vendors as soon as it was completed. The sales process seemed to be moving along well, until one vendor asked a particularly insightful question: “If we build our EMR application on your system, the basic data storage structure will be exactly the same as my competitor who would also use your product; is that correct?” Th e answer was “theoretically, yes.” The vendor’s follow-up question was: “Does that mean that a large medical center could trade my product for my competitor’s product with minimal eff ort?” Again, the answer was “theoretically, yes, but they would be able to replace his product with yours just as easily.”

The EMR vendor thanked them for their time and ended the meeting. Several years have passed, and no established EMR vendor has chosen to use the product built by the DBMS vendor as the base for its healthcare applications, despite the fact that the new product would have dramatically improved the proprietary vendor’s development productivity and reduced its time to market. Obviously, vendors are more interested in keeping their customer base locked into proprietary technology than they are interested in widespread adoption of a standard storage system, because it threatens their revenue streams.

The opposition to standards comes from many sources in addition to vendors. Most organizations act based on their own self-interest. Given this, can standards be established that are fair and benefi cial to all stakeholders? The answers will be determined in part by three factors:

The marketplace - No one officially anointed XML or HTML as standards, but their usage became so widespread that they have become de facto standards without an official mandate.

Consortium of stakeholders - If relevant parties are included, this can be a reasonable, albeit slow, approach to setting standards. Occasionally, competing groups of stakeholders form their own consortiums, leaving us with situations such as the HL7 competition with CCR.

Government agencies – They can also be effective at setting standards. However, when the government puts its weight behind a standard, it is essential that the standard fill the needs in the marketplace or we can be left with a situation like the debacle with the Department of Defense standardization of the Ada language, which

became a multi-billion dollar mistake.

Of course, the obvious drawback to each standard-setting option is that each takes a long time to develop and adopt. While healthcare waits for more clear articulation of a few standards, our industry continues to waste money that we can little aff ord to lose.

Dr. Kennedy is the President and Chief Executive Officer of RemedyMD.


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