The Bases of Competition in Healthcare – Open vs Closed

I’m sure that many of you have read the always insightful and intriguing Vince Kuraitis and his e-CareManagement blog. If you haven’t you should start doing so now. I just recently came across his post called “Getting an Epic Opinion Off My Chest” about the proprietary solutions and walled gardens that have and are being created in healthcare.

He starts off really strong with the following points:

What are acceptable bases of competition in health care?

My sense is that the distinctions here are not well understood and often go undiscussed, so I’ll quickly get to the point:

It’s OK for care providers to compete on the bases of quality, price, patient satisfaction, and many other factors

It’s NOT OK for care providers to compete on the basis of controlling or limiting access to patient health information. It’s just not right.

He later goes on to assert that in many industries the idea of creating proprietary, non-interoperable technology is an acceptable means of competitive differentiation, but Health Care is different.

Certainly there are people’s lives involved in this and so it’s a different animal all together. If I can’t transfer my music from one MP3 to another it might be unfortunate, but having a loved one die because the right healthcare information was stuck in a closed system is a much more serious issue and one that should require careful consideration.

Outside the ethical reasons to support the benefits of access to patient information, I think there’s a great business case for doing so as well.

One example of the business case I outlined in my post about EMR data liberation. That’s a subtly different situation than what Vince described, but I believe you can make the business case for the benefits of an open system.

For those familiar with SalesForce.com, they could have easily been a few hundred million dollar company on the back of their CRM software. They could have then expanded into other related business verticals as they built off a closed garden. Instead, they opened up their system to allow a lot of other companies to build on their Force platform. As a platform, they’re a multi-billion dollar company.

Why healthcare IT vendors can’t see the value of open is a bit beyond me? I guess some might argue that the GE and Microsoft announcement was a step towards this type of open environment. Based on the analysis I’ve read, I think this is part of their vision for what they’re trying to create.

Whether Microsoft and GE will be able to execute on the vision of the platform is still not clear. However, what I believe is clear is that directionally this is where the market will eventually go. There will be a healthcare platform that does a great job connecting heterogeneous systems.

So, yes, I think that morally the right thing to do is to open your system, but I also think it makes great business sense to do so as well. The closed garden strategy might work well in the short term, but long term open always seems to find a way to win in a much bigger way.