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DATE 2006-02-01

HANGOUT

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Key: Value:

Key: Value:

MESSAGE
DATE 2006-02-24
FROM Ruben Safir
SUBJECT Subject: [NYLXS - HANGOUT] Healthcare and Free Software

Commentary
Forward


VA Technology: A Federal Threat to
Private Sector Health Care IT?
by Bruce Merlin Fried, Esq.
October 07, 2004

More than a year ago, a group of
leaders from the health care
information technology vendor
community were summoned to an
invitation-only meeting at the
imposing Hubert Humphrey Federal
Office Building in Washington, D.C.,
the headquarters of HHS. Presiding
at the meeting were three federal
executives, Tom Scully, the former
administrator of CMS; Dr. Carolyn
Clancy, administrator of the Agency
for Healthcare Research and Quality;
and Gary Christopherson, the chief
information officer for the Veterans
Health Administration.

The standing-room-only meeting was
held in Scully's personal conference
room for the sole purpose of
delivering a clear message to health
care IT vendors: Hurry up! Get
interoperable! Make your products
affordable! Or else!
Or else what? The federal health
care leaders leveled this threat -
if the private sector could not
deliver health care information
technology that was interoperable,
affordable and available, the
federal government would make the
Veterans Health Administration's
VistA technologies available to the
private health care system, at no
cost.

For those not in the know, VistA is
short for Veterans Health
Information Systems and Technology
Architecture. VistA, the VHA's
underlying inpatient and ambulatory
IT architecture, has been in
development for almost two decades.
The VHA rolled out its Computerized
Patient Record System for clinicians
in 1997. The system provides a
single interface for health care
providers to review and update a
patient's medical record and the
ability to place orders including
medications, special procedures,
X-rays, patient care nursing orders,
diets and laboratory tests. VistA
also includes imaging capabilities.

Did the threat work? Well, we
haven't seen vendors deliver
low-cost, interoperable IT for
health care. Sure, there has been a
lot of work by technology companies
and others on standards of all
sorts, but no real breakthroughs on
interoperability. The cost of
outfitting a physician with an
electronic medical record system
still remains at about $20,000. Yet,
I have not seen a rush by hospitals
and doctors to request the VistA
technology.

But then I received a call from an
old friend in the investment
community asking what I knew about
an outfit called Medsphere. My
initial answer was, "Nothing." But
when I looked at their Web site, I
got interested. Medsphere touts
itself as "an innovative healthcare
information technology company and
the leading provider of OpenVista
technology, support and services."
It appears that Medsphere has been
working on commercializing VistA for
a few years.

Upon further inquiry with friends
within the VHA and others in the
private sector, I got mixed views. I
learned from my VHA friends that
Medsphere was working with the VHA
to install VistA in some of the
VHA's nursing homes and that it also
was working on installation projects
with a private rural hospital or
two. My friend at the VHA had good
things to say about the company and
its leaders. Hmm, I thought. Maybe
Medsphere is on to something. Maybe
VistA will take on the private
sector companies.

When I asked a few health care IT
leaders, both corporate and
institutional, about Medsphere's
services to commercialize VistA, the
response was basically that VistA
might work well within the VHA, but
that it was not a good fit for the
private sector. As they noted, VistA
is designed to operate within and
support the VHA, the nation's only
national integrated health care
delivery system. The VHA is a
unified health care system with what
might be described as a "command and
control" military-like structure. As
they explained, the disconnect is
technological. VistA data is
structured so that individual data
elements are highly protected. This
is acceptable in a tightly organized
health care system, like the VHA.
But in a more open system, VistA's
usefulness is unproven. One highly
regarded physician informaticist
described VistA's electronic health
record as having the ease of use and
appearance of a 10-year old system
and the speed of a car with only the
first and second gears. My contacts,
highly sophisticated health care IT
professionals but hardly a
scientific sample, were dubious
about VistA's ability to compete
within the private sector.

Still, there are lessons to be
learned here. By all indications,
there is a growing market for health
care IT. That iHealthBeat exists is
one indicator. That the federal
government is encouraging and
funding technology's use in health
care is another. Witness Dr. David
Brailer's appointment as the federal
health care IT czar, the National
Library of Medicine's arrangement to
provide virtual open access to
SNOMED (the health care terminology
standard that is critical in moving
toward interoperability) and a
variety of federal grants to support
regional and state health
information initiatives.

Leaders of private sector IT firms
are stepping up to the challenge of
interoperability. Top executives
from the commercial firms are moving
forward, demonstrated most visibly
by their increasingly frequent
participation on expert panels and
at summits. What's more important,
their development teams are
attempting to determine what
interoperability means. Integrating
the Healthcare Enterprise, a private
sector interoperability initiative,
has more than doubled in size this
year. And the Certification
Commission for Healthcare
Information Technology, formed in
July to create an efficient and
impartial mechanism to certify
electronic health records and other
healthcare IT products, is another
new private-sector initiative.

Yet it is unclear that technology
companies are giving the market what
it wants. Sure, there are wonderful,
even extraordinary technologies
available. That is at least part of
what the market wants. Perhaps the
private sector will deliver true
interoperability. But it also is
clear that provider purchasers in
the health care IT market have very
limited resources and are squeezed
by ever increasing costs of care,
growing numbers of uninsured
patients and the efforts of payers
to control spending. In that
climate, the purchasers will
certainly be searching for the very
best value.

Whether private sector health care
companies or a commercialized (and
substantially rebuilt for private
sector use) VistA deliver better
value remains unclear. Value in this
case will be a product of cost,
interoperability, utility and
service. Threats from government
officials notwithstanding, the
market will determine the winner.


About the author:
Fried is a partner and co-chair of
the Health Care Group at
Sonnenschein Nath & Rosenthal LLP.
He can be reached at
BFried-at-sonnenschein.com.

The views expressed in this column
are those of the author and do not
represent the views of the
California HealthCare Foundation or
the Advisory Board Company.

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