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Archive for August, 2009

The Power of M&M: Advice to Congress, Obama Administration and Healthcare Leaders

A remarkable article by Stephen Kim and Bill Powell appeared in last week’s Time Magazine titled Seoul: World’s Most Wired Megacity Gets More So.  In short, the article describes the results of South Korea’s massive investment in information technology infrastructure when their economy collapsed in the 1997 Asian financial crisis.  The outcome is a massively connected nation that has spurred economic growth, reduced corruption through transparency and many other gains. Hidden in this article is the validation of Metcalf and Moore’s laws … what I call the M&M Principle that I think should guide many healthcare decisions today.


Metcalf’s Law: Robert Metcalf, inventor of the Ethernet and 3Com founder, suggested the power of a network is proportional to the square of the number of nodes on that network.  A healthcare analogy is that the power of an Electronic Medical Record in an individual physician office is marginally better than the paper it replaces.  Connect that EMR to one or more reference labs and it becomes much more powerful.  Connect it to local pharmacies and PBMs (Pharmacy Benefit Managers) and it becomes even more robust.  Connect it to other doctor’s office systems, especially those sharing the same patient watershed, and it becomes much more robust.  Connect it to local hospitals and the power surges again.  Connect it to Payers and it’s strength increases.  Connect it to Personal Health Records and it grows even larger.  It doesn’t take very many connections before the value of the connects dwarfs the value of the EMR.  Imagine the power of a single EMR if it was connected to all of the other EMRs in the nation

Moore’s Law:  Gordon Moore, Co-founder of Intel, published his law in 1965 which states the number of transistors that can be placed on a circuit board will double every 2 years.  There are many variations of this but the essential message is that digital computing and performance increases exponentially and the cost decreases exponentially.  This has led us to every smaller devices doing so much more than massive devices could do just a few years ago.  What used to take a building now can be done in a small hand-held device.  In short there’s a large amount of computational power available in just about anything imaginable.

The combination of Metcalf and Moore’s laws is exhibited clearly in Seoul where individuals can connect to governmental agencies through their cell phones while commuting and pick up official documents at finger-print enabled kiosks in a subway station as described in the article.

A similar healthcare analogy would be traveling patients could access their medications from their cell phones, order refills and pick them up at any local pharmacy or grocery store.

Next Steps Here

What does it take to make this happen?  We need to begin building roads not cars. Right now Congress and the Administration have many proposals but one that seems to be leading is to provide physicians with up to $40,000 incentive to purchase EMRs (which cost $25,000 – $50,000 per physician on average).  While this may prompt some physicians to do so many are finding out that a stand alone EMR is marginally better than the paper systems they replace. Many physicians that do invest in an EMR are shocked by the cost and difficulty of connecting that EMR to other sources of relevant patient information.  Most may be connected to one or more reference labs and can connect to PBMs but the majority are not. Consequently, each physician’s office must re-enter de novo every new patient’s clinical information, just like they do now in their paper worlds.  An analogy would be where the government would help every individual purchase a car to place in their driveway but would leave the individuals to build the roads.  What good is a car if there aren’t any roads?

That’s essentially the value proposition being given to physicians with the proposed $40K incentive.  It really doesn’t accomplish much.

If, on the other hand, the proposals would completely underwrite the cost of connecting any EMR to all of the necessary reference labs, pharmacies, other offices and hospitals then all of a sudden the paradigm changes.  The physician who stays in paper cannot leverage the connectivity.  For these physicians spending $25,000 – $50,000 on an EMR will be trivial as the cost of connecting to the world will be nothing.

All of a sudden they will gain the benefit of not having to reenter that new patient’s information but will know something about every new patient they see. This suddenly increases the value proposition of an EMR.

In short, the power of an EMR is exponentially proportional to the number of other EMRs and clinical information systems to which it connects.

Advice to Congress, Obama Administration and Healthcare Leaders

Build Roads not Cars!  The current proposals should be amended and the government should return to the business of building and supporting connectivity infrastructure and get out of the business of certifying and subsidizing the purchase of individual EMRs.  The government should completely underwrite the medical interfacing of all clinical systems whether they are physician office, pharmacy, payer or personal health systems and leave it up to the individuals who purchase these systems whether they want to plug in.

Will they?  Do you know of anyone who purchase a TV but doesn’t want the signal? A cell phone that doesn’t connect to the network?  A car that won’t be driven on the roads?

The value proposition of an EMR explodes when it can plug in to all of the other EMRs.  In short it really then becomes and Electronic Health Record rather than an Electronic Medical Record. 

Doing so will enable us to see many of the benefits the citizens of Korea now experience as described in the Time article referenced  earlier.