The RAND Report: Are healthcare and health IT in a dysfunctional relationship?

What a week! First the disgraced cyclist confession and later the baffling college-football-player-and-his nonexistent-(dead)-girlfriend story, with the RAND report sandwiched somewhere in between. It’s positively a scandal-palooza.

What’s that? You don’t feel like the recent RAND report, which basically says that a 2005 RAND study financed by GE and Cerner was wildly optimistic in predicting about $81 billion in potential health care cost savings through widespread adoption of electronic health records, qualifies as a genuine hoax, controversy, scandal?

Me neither.

But it does neatly frame what is arguably a unique characteristic of the healthcare industry—a trait that extends to peripheral industries as well. Basically, healthcare is an interconnected environment. Call it the systems theory of healthcare, co-dependency … or just regular dependency. Call it what you want, but there is an interconnectedness in healthcare that we ignore at the expense of national wellness.

Witness key data points provided by the RAND report:

  • Modern health IT systems are not interconnected and interoperable, functioning “less as ‘ATM cards,’ allowing a patient or provider to access needed health information anywhere at any time, than as ‘frequent flier cards’ intended to enforce brand loyalty…”
  • Neither are they widely adopted, with an estimated 27 percent of hospitals utilizing a basic electronic record. Without broad adoption, interoperability is far less relevant.
  • Improvements in quality of care / patient safety and reductions in healthcare costs (which have grown by $800 billion since 2005) are not manifesting with EHR adoption, in part because hospitals and clinics are rushing to adopt mediocre solutions and garner federal funds.
  • The provision of care is the same as it ever was, even though EHRs are frequently promoted as the optimal tool for a different kind of care.

The reasons for these disappointing stats are readily apparent and unalterably interconnected.

  1. We still live in a fee-for-service healthcare system: Doctors and hospitals are still paid based on the procedures and examinations they perform. And because most EHRs evolved from billing systems, it now appears EHRs have made it easier to bill but not easier to provide quality care.
  2. Many doctors are not on board: In a fee-for-service system, doctors understandably don’t want to adopt a technology that will make their jobs harder. They don’t want to see fewer patients in a day and bill less than before they invested millions in health IT. And they don’t want to stay at work until after dark updating patient records. They can hardly be blamed for not embracing this scenario when …
  3. EHR solutions are hard to use: We’ve succeeded in creating technological solutions that would be most impressive to a physician in 1985. Now? Not so much. And the vendor community really doesn’t want to do the interoperability dance to the extent that the RAND report said some industry insiders are convinced many health IT vendors are “opposed to interoperability.”

As I survey the health IT landscape, I see four groups of stakeholders—health IT vendors, hospitals and clinics, government, and patients—with sometimes overlapping and sometimes conflicting goals. If this health IT project is going to make a difference in healthcare, each group may have to take some initiative and make a few sacrifices to keep this whole endeavor on the rails.

  • Health IT Vendors: Are we really making systems doctors want to use? If not, we need to step it up and improve the quality of our offerings, and we need to make our systems communicate. Can the format wars between Blu-Ray and HD DVD, Betamax and VHS, in consumer electronics serve as some kind of industry standards guide? Can HIMSS play a constructive role?
  • Hospitals and Clinics: Admittedly, significant change will be difficult while fee-for-service is predominant, so some initiative will be required. Until EHRs are used to keep patients well instead of billing for itemized treatments after they are already sick, costs will not come down.
  • Government: Personally, I think the use of incentives / penalties by the government is appropriate. I know many people disagree and think the market should be permitted to function. But for how many years did the AMA, AHA and other industry groups fail to act before the government stepped in? Healthcare threatens to bankrupt the nation. We need action. And if healthcare IT can’t establish standard formats ourselves, I would argue the government is correct in doing so.
  • Patients: Even when you visit those hospitals and clinics that offer personal health records, you aren’t using them. As a consumer of healthcare, you need to take some control over the product you receive and insist on quality and prevention. Do your research. Be aware of your own personal health data. Ask your physician why he still uses paper.

Can we all work together to ensure this grand health IT experiment contributes to saving healthcare in America? I don’t know. If it requires putting aside personal and organizational concerns for the greater good, I’m skeptical.

What are your thoughts? Should we slow the Meaningful Use train, as an increasingly loud chorus suggests? Who should step up, and how, to make this all work? Are we all just rearranging the deck chairs?

Coming soon:  Looking for a culprit? It’s the business model, not the technology.

Edmund Billings, MD, is the chief medical officer for Medsphere Systems Corporation.


The problem is the order in which things have been done. By stimulating the use of IT on a dysfunctional healthcare system we have automated and embedded a dysfunctional system. What was needed was healthcare reform first and then embedding it with technology.
It has not been a total waste, but I suspect in hindsight the US will look upon it as a wasted opportunity. Maybe if they had been more willing to give healthcare reform a chance back in Bill Clinton’a day they would now not be in such a dire situation.
Other countries such as Australia and the UK can’t be too smug either. Failure to first implement the required system change before using technology to embed it is a major failing. It doesn’t need to be centrally planned, but it does need physician involvement and it does need to be courageous enough to change the status quo with a long term view. Payment reform is at the center, but quality and safety need to be intrinsic goals as well.

The real value in Health IT will be seen when we efficiently utilize data, and improve workflow for all constituencies. Under our current system, neither can be achieved. The short-term profitability and success of existing vendors is dependent upon carrying on in a traditional fashion, while new market participants must straddle trying to provide solutions which address where the market wil eventually go, versus what the market demands today. Further, the current pay for service approach contradicts the objective of minimizing the life-cycle cost of healthcare.

I am confident that we will eventually improve our system, but we will make significant investment in interim steps and solutions on the path to improvement. Building solutions for a dysfunctional system can never be efficient, but politically may be the only path.

We have put the cart before the horse! There are no good Health Informatics Standards and too many Standards Development Organizations (SDO) each with they own vested interests attempting to rapidly write standards, often with overlaps and cross purposes. They read like alphabet soup–IHTSDO, HL7,IEEE,IHE, ISO,IEC, WHO, ICD-10 not to mention each countries national organizations.
All of these groups need to cooperate and produce informatics standards for the 21st century and not ones mired in the past.
HL7 is not sufficiently granular to be a serious standard for all healthcare needs.
We need to look at real-life clinical and business scenarios, and then determine what we need to meet these goals, and write standards that solve these problems.
We need to take a step backwards, take a big breath, and then write a proper medical controlled vocabulary (SNOMED CT, ICD-10 and others) and then write a proper XML based data communications standard based on open proven standards such as Data Distribution Services (
Once we have sufficiently completed this task, should we them move forward.

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