Policy vs. Market-Based Reform–RHIOs as a Case Study by Brian Klepper

Brian_klepperAs Anonymouse insightfully commented over on THCB, the Harvard team’s RHIO study in Health Affairs is
very telling about the barriers facing do-gooder health care projects. That said, I wanted to add two comments.

First, while RHIOs are unquestionably good public policy, what they
might accomplish can be seen as counter to their interests of many
organizations expected to support them. (The same can be said for EHRs,
by the way)

Second, this is why health care reform will emerge not from within
health care and not from policy, but from the marketplace, driven by
non-health care interests.

Anonymous is right that one sentence in the Health Affairs article really nails the core of the problem. The authors write,

“Whether RHIOs represent small businesses that need viable business
models, which requires the ability to generate profits as well as value
for participants, or public goods that require funding is an important
unresolved issue.”

RHIOs are a great idea. Given our Babel of
complex health care information, patients (and those paying for care)
would be well served if clinicians could access their complete
information when they present for services in any facility within a
region. They’d be less likely to run duplicative or unnecessary tests,
and more likely to properly address the patient’s problem the first

But the truth is that few private health care
organizations have reason to invest in the infrastructure
required to share their data. Even though Emergency Departments could
probably save significant dollars by not having to call for tests to
determine information that already exists in records elsewhere, many
hospital executives are reluctant to share if the result could be used
to highlight their competitive weaknesses. The same goes for health
plans, physicians and employers. If there is no clear financial benefit
that will accrue from the effort or, worse, if there is a possible risk
to one’s current position, why bother, especially when there are many
competing priorities for the resources.

In other words, while
everyone acknowledges that RHIOs would create
transparency and benefit just about everyone in health care – with the
possible exception of its most powerful players – they’re unlikely to
come to fruition because few organizations really want to support them.

hasn’t been mentioned, though, is that Health 2.0 could soon make RHIOs
obsolete, finding ways to access the
data that the RHIOs have begged for. Health 2.0 firms will analyze and
reformulate these data into transparency information and decision
support tools, while making a profit and focusing on health care
pricing/performance throughout the country rather than at just the
local level. Unlike the
resource-starved not-for-profit RHIOs, Health 2.0 companies are
either very well established non-health care organizations, who don’t
have existing health care revenue streams to try to protect and who see
the opportunity to make money by rationalizing health care, or health
care startups with investment capital.

So, from my perspective,
it looks like RHIOs will go the way of the buggy whip and camera film.
They aren’t working because their missions are often seen as
potentially threatening or irrelevant by the organizations whose
support they seek.

By contrast, Health 2.0 firms will create
information that can benefit health care constituents throughout the
continuum, independent of the health care industry’s wishes. In the
process, it will infuse health care with an unprecedented level of
transparency and decision-support that will transform the way care is
delivered and the way health care products and services are sold.

it will all happen in the marketplace, where it must, because health
care policy has been effectively captured by the industry, rendered meaningful policy-based reform all but impossible.

Brian Klepper

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