《卫生经济学》课程参考文献：11.J.D. Kleinke_Dot-gov market failure and the creation of a national health information technology system 2005

H IT POLICY Dot-GoV Market Failure And The Creation Of A National Health Information Technology ystem The market has failed to produce a viable health information technology system; we need government intervention instead. by」D. Kleinke ABSTRACT: The U.S. health care marketplace's continuing failure to adopt information technology(Im)is the result of economic problems unique to health care, business strategy problems typical of fragmented industries, and technology standardization problems com- mon to infrastructure development in free-market economies given the information inten sity of medicine, the quality problems associated with inadequate i t, the magnitude of U. S health spending, and the large federal share of that spending, this market failure requires aggressive governmental intervention. Federal policies to compel the creation of a national health IT system would reduce aggregate health care costs and improve quality, goals that cannot be attained in the health care marketplace OE WILSON, A THIRTY-EIGHT-YEAR-OLD software engineer from Pitts burgh on his first trip to Las Vegas, is feeling out of sorts as he walks into the ca- sino. The free drinks help his mood, and he discovers after his third that he has a serious gambling problem. At the casino's cage, where cash, credit card capacity, and creditworthiness are turned into chips, Joe liquidates the $6, 324 in his check ing and savings accounts and another $8, 121 from his credit cards. twenty hours and ten drinks later, this money runs out on the craps table, but Joe secures an other $24,983 in cash, which represents 40 percent of his retirement account and 30 percent of the equity in his home. The casino was able to find out this informa tion about him-as well as his marital status, the names of his last three employ ers, the number of years he has lived at his current address and worked for his cur rent employer, the lapsed status of an earlier life insurance policy and the pai status of another, and the absence of liens against his assets-in less than five min J.D. Kleinke(idk@omnimedixorg)is executive director ofOmnimedix Institute, a nonprofit health care research and information technology development organization based in Portland, Oregon, and funded by foundations, corporations, and private individuals and vice chairman of HealthGrades Inc, a publicly traded health information company based in Lakewood, Colorado, September/october 2005 DOI 10 1377/hithaff. 24.5.1246 o2005 Project HOPE-The Peopie-to-Pcople Health Foundation,Inc

H I T POLIC Y Dot-Gov: Market Failure And The Creation Of A National Health Information Technology System The market has failed to produce a viable health information technology system; we need government intervention instead. by J.D. Kleinke ABSTRACT: The U.S. health care marketplace's continuing failure to adopt information technology (IT) is the result of economic problems unique to health care, business strategy problems typical of fragmented industries, and technology standardization problems com￾mon to infrastructure development in free-market economies. Given the information inten￾sity of medicine, the quality problems associated with inadequate IT, the magnitude of U.S. health spending, and the large federal share of that spending, this market failure requires aggressive governmental intervention. Federal policies to compel the creation of a national health IT system would reduce aggregate health care costs and improve quality, goals that cannot be attained in the health care marketplace. J OE WILSON, A THiRTY'EiGHT'YEAR'OLD Software engineer from Pitts￾burgh on his first trip to Las Vegas, is feeling out of sorts as he walks into the ca￾sino. The free drinks help his mood, and he discovers after his third that he has a serious gambling problem. At the casino's cage, where cash, credit card capacity, and creditworthiness are turned into chips, Joe hquidates the $6,324 in his check￾ing and savings accounts and another $8,121 from his credit cards. Twenty hours and ten drinks later, this money runs out on the craps table, but Joe secures an￾other $24,983 in cash, which represents 40 percent of his retirement account and 30 percent of the equity in his home. The casino was able to find out this informa￾tion about him—as well as his marital status, the names of his last three employ￾ers, the number of years he has lived at his current address and worked for his cur￾rent employer, the lapsed status of an earlier life insurance policy and the paid status of another, and the absence of liens against his assets—in less than five min￾J.D. Kleinke (jdk@omnimedix.org) is executive director ofOmnimedix Institute, a nonprofit health care research and information technology development organization based in Portland, Oregon, and funded by foundations, corporations, andprivate individuals; and vice chairman ofHealthGrades Inc., apublicly traded health information company based in Lakewood, Colorado. 1246 September/October 2005 DOI 10.1377/hlthaff.24.5.1246 O2005 Project HOPE-The Peopk-to-Pcop/c Health Foundation, Inc

DOT.GOV ' If the state of u.S. medical technology is one of our great treasures, then the state of U.S. hiT is one of our great disgraces utes, based on his name and Social Security number. In twelve more hours, Joe has burned through the last of his cash. Then the chest pain starts Leaving Las Vegas. Joe is rushed to a community hospital a few blocks from he casino. He is drunk, dizzy, and disoriented and cannot give the emergency room (ER) doctors any information about his medical history. But he is able to produce a tattered insurance card from his wallet, which includes his Social Security number, listed as his"Member ID "The hospital's admissions clerk spends twenty minutes on the phone to confirm that Joe is indeed covered by the health insurer in Pitts- burgh and that she should collect up to $500 from Joe for his visit; but the insurer's "information specialist"cannot say exactly how much, because he cannot tell from the computer"if Joe has met his deductible yet that year. He can tell the hospital ning else about Joe---not his medical history, the names of his physicians, or any medications he might be on-because"the computer"has no other information about him. That information is "in the other computers Joe's condition worsens; the er physician diagnoses a heart attack and cribes intravenous metoprolol, a generic beta blocker. What she does not know that until a month earlier, Joe had been taking 20 milligrams per day of Paxil (paroxetine)for depression. But a month before Joe's trip to Vegas, his employer's health plan had switched to a new pharmacy benefit management( PBM)com- pany, which required Joe and his coworkers to fill their medications for chron onditions via mail order. One of Joe s doctor's three medical assistants had faxed the doctor's usual handwritten prescription for Paxil to the mail-order pharmacy The mail-order pharmacist misread the prescription as "Plendil, "a calcium chan nel blocker often used for the same purposes as beta blockers and commonly dosed at 10 milligrams per day but occasionally at 20 milligrams for patients with congestive heart failure Joe had been dutifully taking the medication for the past few weeks, walking around with dangerously low blood pressure caused by high levels of the unneeded medicine. Joe's depression had also been slowly, impercepti bly returning-hence his unusual appetite for alcohol, which lowered his low blood pressure even further, resulting in wooziness and cognition problems severe enough to render Joe vulnerable to the casino s temptations In the ER, the metoprolol does the trick within minutes of entering Joe's blood stream:His blood pressure plummets, he goes into cardiac arrest, and he dies HIT market failure. The underlying cause of Joe s death is health information technology(HIt) market failure. If the state of U.S. medical technology is one ofour great national treasures, then the state of U.S. HIT is one of our great national dis graces. We spend $16 trillion a year on health care-far more than we do on per sonal financial services-and yet we have a twenty-first-century financial informa- HEALTH AFFAIRS Volume 24, Number 5 1247

D o T - G o V "If the state of U.S. medical technology is one of our great treasures, then the state of U.S. HIT is one of our great disgraces." utes, based on his name and Social Security number. In twelve more hours, Joe has burned through the last of his cash. Then the chest pain starts. • Leaving Las Vegas. Joe is rushed to a community hospital a few blocks from the casino. He is drunk, dizzy, and disoriented and cannot give the emergency room (ER) doctors any information about his medical history. But he is able to produce a tattered insurance card from his wallet, which includes his Social Security number, listed as his "Member ID." The hospital's admissions clerk spends twenty minutes on the phone to confirm that Joe is indeed covered by the health insurer in Pitts￾burgh and that she should collect up to $500 from Joe for his visit; but the insurer's "information speciahst" cannot say exactly how much, because he cannot tell from "the computer" if Joe has met his deductible yet that year. He can tell the hospital nothing else about Joe—not his medical history, the names of his physicians, or any medications he might be on—^because "the computer" has no other information about him. That information is "in the other computers." Joe's condition worsens; the ER physician diagnoses a heart attack and pre￾scribes intravenous metoprolol, a generic beta blocker. What she does not know is that until a month earlier, Joe had been taking 20 milligrams per day of Paxil (paroxetine) for depression. But a month before Joe's trip to Vegas, his employer's health plan had switched to a new pharmacy benefit management (PBM) com￾pany, which required Joe and his coworkers to fill their medications for chronic conditions via mail order. One of Joe's doctor's three medical assistants had faxed the doctor's usual handwritten prescription for Paxil to the mail-order pharmacy. The mail-order pharmacist misread the prescription as "Plendil," a calcium chan￾nel blocker often used for the same purposes as beta blockers and commonly dosed at 10 milligrams per day but occasionally at 20 milligrams for patients with congestive heart failure.'Joe had been dutifully taking the medication for the past few weeks, walking around with dangerously low blood pressure caused by high levels of the unneeded medicine. Joe's depression had also been slowly, impercepti￾bly returning—hence his unusual appetite for alcohol, which lowered his low blood pressure even further, resulting in wooziness and cognition problems severe enough to render Joe vulnerable to the casino's temptations. In the ER, the metoprolol does the trick within minutes of entering Joe's blood￾stream: His blood pressure plummets, he goes into cardiac arrest, and he dies. • HIT market failure. The underlying cause of Joe's death is health information technology (HIT) market failure. If the state of U.S. medical technology is one of our great national treasures, then the state of U.S. HIT is one of our great national dis￾graces. We spend $1.6 triUion a year on health care—far more than we do on per￾sonal financial services—and yet we have a twenty-first-century financial informa￾HEALTH AFFAIRS - Voiumc 24, Number 5 1247

HIT POLICY tion infrastructure and a nineteenth-century health information infrastructure. 2 Given what is at stake, health care should be the most IT-enabled of all our indus tries, not one of the least. Nonetheless, the "technologies"used to collect, manage and distribute most of our medical information remain the pen, paper, telephone, Eax, and Post-It note. Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on propri- etary clinical IT products that barely work and do not talk to each other. Health care organizations do not relish the problem, most vilify it, many are spending vast sums on proprietary products that do not coalesce into a systemwide solution, and the in- vestment community has poured nearly a half-trillion dollars into failed HIT ven tures that once claimed to be that solution. Nonetheless, no single health care orga nization or hit venture has attained anything close to the critical mass necessary to effect such a fix. This is the textbook definition of a market failure All but the most zealous free-market ideologues recognize that some markets simply do not work. Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning. The most obvi ous examples of such failures(such as public transit and the arts )are subsidized by society at large because such subsidies yield benefits to the public that out weigh their costs. Economists refer to these net benefits as"positive external- ties, "defined as effects that cannot be captured through the economic equation of direct cost and benefit. The positive externalities of an HIT system approaching he functionality of our consumer finance IT system include reduction of medical errors like the one that killed Joe Wilson; elimination of tens of thousands of re dundant and expensive tests, procedures, and medications, many of which are not only wasteful but harmful; and the coordination and consistency of medical care in ways only promised by the theoretical version of managed care. These public health benefits are well beyond the reach of a health care system characterized by the complexities of medicine and conflicts of multiple parties working at eco- nomic cross-purposes.They are trapped outside the economic equation, positive externalities of a stubbornly fee-for-service health care system that inadvertently rewards inefficiency, redundancy, excessive treatment, and rework a Bipartisan agreement. The U.S. health care marketplace's continuing failure adopt IT on a scale approaching that of other industries has been egregious enough to elicit the unthinkable: bipartisan political agreement. How else to explain the specter of Sen. Ted Kennedy(D-MA)and Newt Gingrich(former Republican Speaker of the House)sharing a public forum and agreeing not just on the problem but on the solution: federal funding of an interoperable HIT infrastructure. Accord ing to one press report, "The politi ut their party differences aside to tout electronic prescriptions, online patient records and an integrated, paperless health-care system. 6 Such a rare convergence of opposing political belief may be less useful for un- derscoring the seriousness of the problem than for highlighting the utter absur

H I T POLIC Y tion infrastructure and a nineteenth-century health information infrastructure.^ Given what is at stake, health care should be the most IT-enabled of all our indus￾tries, not one of the least. Nonetheless, the "technologies" used to collect, manage, and distribute most of our medical information remain the pen, paper, telephone, fax, and Post-It note. Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on propri￾etary clinical IT products that barely work and do not talk to each other. Health care organizations do not rehsh the problem, most vihfy it, many are spending vast sums on proprietary products that do not coalesce into a systemwide solution, and the in￾vestment community has poured nearly a half-trillion dollars into failed HIT ven￾tures that once claimed to be that solution. Nonetheless, no single health care orga￾nization or HIT venture has attained anything close to the critical mass necessary to effect such a fix. This is the textbook definition of a market failure. All but the most zealous free-market ideologues recognize that some markets simply do not work. Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning.^ The most obvi￾ous examples of such failures (such as public transit and the arts) are subsidized by society at large because such subsidies yield benefits to the public that out￾weigh their costs. Economists refer to these net benefits as "positive externali￾ties," defined as effects that cannot be captured through the economic equation of direct cost and benefit.'' The positive externalities of an HIT system approaching the functionality of our consumer finance IT system include reduction of medical errors like the one that killed Joe Wilson; elimination of tens of thousands of re￾dundant and expensive tests, procedures, and medications, many of which are not only wasteful but harmful; and the coordination and consistency of medical care in ways only promised by the theoretical version of managed care. These public health benefits are well beyond the reach of a health care system characterized by the complexities of medicine and conflicts of multiple parties working at eco￾nomic cross-purposes.^ They are trapped outside the economic equation, positive externalities of a stubbornly fee-for-service health care system that inadvertently rewards inefficiency, redundancy, excessive treatment, and rework. • Bipartisan agreement. The U.S. health care marketplace's continuing failure to adopt IT on a scale approaching that of other industries has been egregious enough to ehcit the unthinkable: bipartisan political agreement. How else to explain the specter of Sen. Ted Kennedy (D-MA) and Newt Gingrich (former Repubhcan Speaker of the House) sharing a public forum and agreeing not just on the problem but on the solution: federal funding of an interoperable HIT infrastructure. Accord￾ing to one press report, "The political partisans put their party differences aside to tout electronic prescriptions, online patient records and an integrated, paperless health-care system."^ Such a rare convergence of opposing political belief may be less useful for un￾derscoring the seriousness of the problem than for highlighting the utter absur- 1248 September/Octobe r 2005

D G If the health care IT market worked, it would have worked by now dity of it. In his 2005 State of the Union address, President George W.Bush reiter ated his earlier call for the creation of a personalized and universally accessible health record for every American and called for a strong federal role in developing it. That an avowed champion of free markets and states' rights would call for an expanded federal role-in a speech otherwise dominated by privatizing Social Se curity-illustrates how desperate we are for just such a solution to this intracta ble problem. Small wonder that observers left, right, and center agree that a fully wired health care system would be more efficient, more transparent, less danger- ous, less maddening, and-after an enormous initial investment-far less costly in the aggregate than the tangle of antiquated mainframes, miserable PCs, unread- able handwriting, handwork, and guesswork that holds"the system"together to day. In Gingrich's succinct words, "Paper kills. "9 Against this gloomy backdrop, the purposes of this paper are()to illustrate how the failure of the health care IT market is rooted in economic problems unique to health care and business strategy problems typical of fragmented indus tries; (2)to show how this failure is exacerbated by U.S. reliance on the zigzag of market forces to generate technology standards for infrastructure development and (3)to suggest ways in which the federal government can and should inter vene, beyond its current strategy of trying to talk HiT vendors into voluntarily adopting technical standards and providers into voluntarily buying the industry's products Health Care's Blue Screen Of Death: Reboot or Reform? The compulsion today is to find the elusive"business case"for health care IT. D Legions of IT vendors and consulting companies have struggled to cobble together the Roi"(consultantspeak for"return on investment")to prove that an individ ual health care organization would benefit by investing in better IT and that the failure to date has been merely a cultural problem on the demand side " the do tors won't use computers")or a sales problem on the supply side("it's all vapor- ware"). These objections are hardly sufficient to stop a force as revolutionary as IT. The practical reality is that the typical roi is modest at best, ephemeral for most, and attainable only well past its investment horizon-a dressed-up way of saying that it exceeds the political capital of its current CEO and CIO. If there were a strong business case for a health care organization to break from the pack and build out a twenty- first-century IT system, we would have no need for this pa- ket worked, it would have worked by now ealth Affairs. If the health care IT mar per-or, for that matter, this entire issue of The ability of the gambling industry to liquidate Joe Wilson's assets within HEALTH AFFAIRS Volumc 24, Number 5 1249

D o T - G o V "If the health care IT market worked, it would have worked hy now.'' dity of it. In his 2005 State of the Union address. President George W. Bush reiter￾ated his earlier call for the creation of a personalized and universally accessible health record for every American and called for a strong federal role in developing it.^ That an avowed champion of free markets and states' rights would call for an expanded federal role—in a speech otherwise dominated by privatizing Social Se￾curity—illustrates how desperate we are for just such a solution to this intracta￾ble problem. Small wonder that observers left, right, and center agree that a fully wired health care system would be more efficient, more transparent, less danger￾ous, less maddening, and—after an enormous initial investment—far less costly in the aggregate than the tangle of antiquated mainframes, miserable PCs, unread￾able handwriting, handwork, and guesswork that holds "the system" together to￾day.^ In Gingrich's succinct words, "Paper kills."^ Against this gloomy backdrop, the purposes of this paper are (1) to illustrate how the failure of the health care IT market is rooted in economic problems unique to health care and business strategy problems typical of fragmented indus￾tries; (2) to show how this failure is exacerbated by U.S. reliance on the zigzag of market forces to generate technology standards for infrastructure development; and (3) to suggest ways in which the federal government can and should inter￾vene, beyond its current strategy of trying to talk HIT vendors into voluntarily adopting technical standards and providers into voluntarily buying the industry's products. Health Care's Blue Screen Of Death: Reboot Or Reform? The compulsion today is to find the elusive "business case" for health care IT.'° Legions of IT vendors and consulting companies have struggled to cobble together "the ROI" (consultantspeak for "return on investment") to prove that an individ￾ual health care organization would benefit by investing in better IT and that the failure to date has been merely a cultural problem on the demand side ("the doc￾tors won't use computers") or a sales problem on the supply side ("it's all vapor￾ware"). These objections are hardly sufficient to stop a force as revolutionary as IT. The practical reality is that the typical ROI is modest at best, ephemeral for most, and attainable only well past its investment horizon—a dressed-up way of saying that it exceeds the political capital of its current CEO and CIO. If there were a strong business case for a health care organization to break from the pack and build out a twenty-first-century IT system, we would have no need for this pa￾per—or, for that matter, this entire issue of Health Affairs. If the health care IT mar￾ket worked, it would have worked by now. The ability of the gambling industry to liquidate Joe Wilson's assets within HEALTH AFFAIRS - Volume 24, Number 5 1249

HIT POLICY minutes is an example of IT market success; the inability of the health care indus- try to catch a simple medical error during his half-day in the er is an example of IT market failure. All parties involved in consumer financial transactions have an economic interest in seeing that those transactions work as smoothly as possible Not so all parties involved in health care s myriad transactions a The business case for no HIT. The first step in understanding the real intrac ability of the problem is ignoring the rhetoric. There is a veritable cottage industry involving the articulation of moral outrage over the health care quality"crisis, "much of it public relations spadework for someone s political or commercial ambition and most of it culminating in a the naive insistence that the system is on the verge of col lapse and cannot go on like this. Actually, it can and will go on like this forever, ab sent any major intervention by the nation's largest health care purchaser-the US government. Why? Because in the crude fee-for-service( FFS)reimbursement sys- tem inherited by that purchaser in the 1960s and fundamentally unchanged since then, the Las Vegas hospital has little real interest in knowing Joe s medical history In most cases, access to such information would represent a reduction in billable services. In an industry rife with dirty little secrets, this is health care's dirtiest: Bad quality is good for business and the surest road to bad quality is bad or no informa tion. The various IT systems out there are expensive to buy, implement, and train taff to use, but this expense pales in comparison to all of the pricey and billable complications those systems would prevent I Health insurers'interest. By contrast, Joe' s health insurer back in Pittsburgh has a strong interest in conveying Joe's treatment information to whatever hospital he may end up in, to reduce its bill for Joe's admission But is this rational business objective powerful enough to invest in an open, accessible information system that would, at the same time, allow Joe, his coworkers, their dependents, and every doctor, hospital, pharmacy, outpatient clinic, and lab in Pittsburgh to track every penny the insurer owes them? Of course not. The only information the insurer wants to transmit readily is what it does not owe and what Joe himself has to pony up as a copayme The principal goal of the consumer finance industry is to increase the number of transactions. By contrast, the principal goal of the health insurance industry is to slow down transactions or lose them altogether. Anyone who believes otherwise is ignorant of the central metric by which a health insurer is judged by Wall Street its"medical loss ratio. This accounting term describes the percentage of the in- surer's premiums paid out in medical claims. The lower the medical loss ratio, the higher the insurers profits and, in turn, its stock price. The conflict between this metric and the other business objectives of an insurer is the active fault line run ning beneath the entire health insurance industry. Insurers must simultaneously please their members and providers with better service(which implies more and faster claims payments)and their employer-customers with lower medical costs (which implies fewer and slower claims payments). Given which constituency September/October

H I T POLIC Y minutes is an example of IT market success; the inability of the health care indus￾try to catch a simple medical error during his half-day in the ER is an example of IT market failure. All parties involved in consumer financial transactions have an economic interest in seeing that those transactions work as smoothly as possible. Not so all parties involved in health care's myriad transactions. • Tiie business case for no HiT. The first step in understanding the real intrac￾tabihty of the problem is ignoring the rhetoric. There is a veritable cottage industry involving the articulation of moral outrage over the health care quahty "crisis," much of it pubhc relations spadework for someone's pohtical or commercial ambition and most of it culminating in a the naive insistence that the system is on the verge of col￾lapse and cannot go on like this. Actually, it can and wiU go on like this forever, ab￾sent any major intervention by the nation's largest health care purchaser—the U.S. government. Why? Because in the crude fee-for-service (EFS) reimbursement sys￾tem inherited by that purchaser in the 1960s and fundamentally unchanged since then, the Las Vegas hospital has little real interest in knowing Joe's medical history. In most cases, access to such information would represent a reduction in billable services. In an industry rife with dirty little secrets, this is health care's dirtiest: Bad quahty is good for business. And the surest road to bad quahty is bad or no informa￾tion. The various IT systems out there are expensive to buy, implement, and train staff to use, but this expense pales in comparison to all of the pricey and billable comphcations those systems would prevent." Health insurers' interest. By contrast, Joe's health insurer back in Pittsburgh has a strong interest in conveying Joe's treatment information to whatever hospital he may end up in, to reduce its bill for Joe's admission. But is this rational business objective powerful enough to invest in an open, accessible information system that would, at the same time, allow Joe, his coworkers, their dependents, and every doctor, hospital, pharmacy, outpatient clinic, and lab in Pittsburgh to track every penny the insurer owes them? Of course not. The only information the insurer wants to transmit readily is what it does not owe and what Joe himself has to pony up as a copayment. The principal goal of the consumer finance industry is to increase the number of transactions. By contrast, the principal goal of the health insurance industry is to slow down transactions or lose them altogether.'^ Anyone who beheves otherwise is ignorant of the central metric by which a health insurer is judged by Wall Street: its "medical loss ratio." This accounting term describes the percentage of the in￾surer's premiums paid out in medical claims. The lower the medical loss ratio, the higher the insurer's profits and, in turn, its stock price. The conflict between this metric and the other business objectives of an insurer is the active fault line run￾ning beneath the entire health insurance industry. Insurers must simultaneously please their members and providers with better service (which implies more and faster claims payments) and their employer-customers with lower medical costs (which implies fewer and slower claims payments). Given which constituency 1250 September/October 2005