How For-Profit Medicine Chills Disruptive Health Information Technologies

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How For-Profit Medicine Chills Disruptive Health Information Technologies

By Eric Luellen

Eric Luellen, a technology executive and social entrepreneur with 20 years experience, serves as the CEO of Bioinformatix.

Recently, someone asked what struck me as an insightful question on Quora: "what incentives do hospital-providers have for patient-engagement investments?" The questioner went on to comment that "purely from a revenue perspective, if patient engagement leads to patients staying away from hospitals (read healthy), what's in it for the hospitals?"

Our experience at Bioinformatix - Home has been that much of the health information technology — including patient engagement — has been mis-marketed to providers (hospitals, practices, or clinicians) or patients. In truth and fact, neither have that much of a strong business case (e.g., justification to pay) nor do they have much money (e.g., ability to pay). The elements of the American healthcare system that have the ability and justification to pay for patient engagement are payers and pharmaceutical manufacturers.

For example, our patient engagement platform Rx&You, which is a cloud-based medication event monitoring and safety platform built with complex event processing and artificial intelligence, is licensed to payers in one format and pharma in another. Payers in the US can predict from studies and real-world evidence that around 68.1% of a group take two or more prescription medications, and 48% of them are non-adherent. Our model, based on the Pareto Principle and amalgamated from hundreds of studies published in peer-reviewed journals, shows each non-adherent patient costs payers approximately $4,800 per year in preventable medical events that are the result of medication non-adherence and adverse events. If a patient engagement system can prevent even 10% of those events, it saves payers billions of dollars, for which they are ready, willing, and able to pay handsomely. A fact recognized by the strong and high-level interest by American insurers in the platform's first six months on the market.

US providers have a more conflicted reaction because they are almost entirely for-profit (even the “not-for-profit” aim to maximize revenues and simply don’t pay as much in taxes). The clinicians love the platform because it improves clinical outcomes and coordinates their patients’ care across many providers; however, the CFO’s of those hospitals are allergic to the possibility that it could reduce medical events that result in billable services by $4,800 per patient per year.

Outside the US (and with Kaiser Permanente in the US), the reaction is almost opposite because payers and providers are one in the same entity, at least for the 30 countries that have nationalized health services. There is no pressure from CFOs at providers to maximize billable services. Payer-provider interests are aligned in those places, instead of payers and providers being financial adversaries like in the United States. Moreover, national health services, which includes countries like Sweden, Canada, Mexico, and the Kingdom of Saudi Arabia, recognize and appreciate the value of improving care while lowering costs, as demonstrated by their bias toward action of adopting platforms such as Rx&You (

Posted in Articles on Oct 12, 2016