Changing and challenging futures for eHealth companies

by Hans on 2005/05/11

Two recent articles suggest that the times are a changin’ for software companies (and eHealth companies too). The two articles are:

The first article, in my opinion, is more telling of the impending changes. Let’s face it – software companies (and technology companies in general) have not had good records of success at providing products that are reliable and available in timely fashion. In particular, large scale IT projects are notorious for cost over-runs and coming in years after they are promised. The Chief Technology Officer at Kaiser Permanente was reported as saying “The quality I get from you people is abysmal.” This comment echoes that of Richard Granger from the NHS complaining that the products he was offered were basically crap. It’s not just in health care that the track record has been horrible. Just think about everyone’s favourite whipping boy – Microsoft’s Windows with it’s security breaches and unreliability. Other executives are expressing similar thoughts – software companies need to provide better products or face the consequences.

Additionally, I think there will be another pressure on traditional software companies providing services to health care organizations – the customers themselves. In the second article, we see an emerging pattern of organizations licensing out their own internal systems to smaller groups like physicians and clinics. What we are seeing is health care trying to leverage their own infrastructure by becoming application service providers or ASPs as the industry calls this practice of “renting out” software and services. With organizations as large as Kaiser Permanente (KP), is it only a matter of time before KP decides to stop buying “off the shelf” products and buy an entire software company itself? If so, it seems like only a simple step before it enters the foray as a commercial entity, selling it’s own version of hospital record services, clinical decision support services, and whatever else health care organizations may need.

I’m not sure what types of deals the NHS has signed with its vendor community, but once the EHR roll-out in the United Kingdom is done, could the NHS also try to leverage its learning and infrastructure to other jurisdictions and start selling services? I mean, in the technology industry there is a history of licensing of intellectual property as the different parts get rolled up into something an end-user can use (e.g., IP cores).

Whether or not hospitals, HMOs, or other groups start to compete with existing health technology vendors is not the point. Software and technology providers will need to vastly improve the quality of their products as well as the type of support they provide, or else they may face a greater and more angry client base. I don’t mean just the hospitals themselves, but the population in general as a whole. Health care seems to be just on the verge of becoming the most important issue on people’s minds. With that will come scrutiny and pressure.

To all the software companies out there – you have been warned. Hopefully the message at Software 2005 Conference did not fall on deaf ears.

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