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4 Reasons U.S. EMR Firms Won’t Try China

Posted on October 23, 2013 I Written By

James Ritchie is a freelance writer with a focus on health care. His experience includes eight years as a staff writer with the Cincinnati Business Courier, part of the American City Business Journals network. Twitter @HCwriterJames.

If you have something to sell, chances are you’ve thought about selling it in China.

With a population of 1.35 billion, it’s become an attractive market for U.S. companies pushing everything from athletic shoes to light trucks to Tide. Given the natural limits of their home market, you’d assume that American EMR firms would eventually size up China’s nascent health IT scene.

And it’s likely they have. In a report a few years ago, 100 percent of vendors surveyed told the consulting firm Accenture that they saw global markets as an opportunity in the long term.

But health IT doesn’t export quite as easily as Pringles and KFC. I’ve seen China’s healthcare system up close several times, and if you ask me, making headway in the world’s most populous nation will be beyond difficult.

China, which is in the midst of its own health care reform, could certainly be tempting for companies such as Epic, McKesson and Cerner. As Benjamin Shobert wrote for Forbes, the country in 2009 extended basic health coverage to 97 percent of its citizens. It also promised to build 31,000 hospitals, upgrade 5,000 existing ones and train 150,000 new primary-care doctors.

McKinsey & Co. last year said health care spending in China would grow to $1 trillion in 2020 from $375 million in 2011.

Meanwhile, U.S. EMR companies are going to need new markets to conquer. Estimates of how much growth potential is left are many and varied. But no matter how you look at it, at some point every American healthcare organization of any size will have an EMR. Millennium Research Group last month predicted declining EMR-industry revenue from this year on because of “market saturation.”

Of course, plenty of IT firms, including Oracle and IBM, have a major presence in China. But the China market won’t happen in a significant way for U.S. health IT companies any time soon, and here’s why:

  • China’s healthcare is different. The private physician’s office that Americans are used to is more or less nonexistent. You go to a hospital-based clinic and see the doctor who’s available. Patient privacy hasn’t taken hold, so there could be other clinic-goers and family members milling about near — or in — your exam room. Chinese traditional medicine is practiced alongside the “Western” variety. Even with insurance, you typically pay up front and get reimbursed later. A U.S.-centric EMR would not map neatly onto China’s workflows. There’s an overview of China’s system here. I’ve written about a Chinese dental clinic here.
  • No one understands China’s health IT. OK, I’m sure some people do, and I hope they comment. But it’s a challenge. The health information firm KLAS Enterprises isn’t even attempting to cover China. A KLAS executive vice president, Jared Peterson, told Modern Healthcare, “The Chinese market, that’s a big mystery.” Meanwhile, Accenture omitted China from its 2010 report “Overview of International EMR/EHR Markets” because of “conflicting opinions of overall EMR maturity.”
  • The language barrier will be formidable. Epic CEO Judith Faulkner told Modern Healthcare how her company had adapted its system for another language. “We’ve only done it once, for Dutch,” she said in January 2012. “It’s a lot of mapping. It’s a task, but it hasn’t been that bad of a task.” But Dutch is not Chinese, and Chinese doesn’t use the Roman alphabet. I’m betting that when you throw Chinese characters into the mix, the conversion will be “that bad of a task” and then some.
  • Cloud-based systems could raise security issues. Some experts expect cloud-based services to play a significant role as health IT spreads to developing countries. But according to a U.S.-China Economic and Security Review Commission report, “Regulations requiring foreign firms to enter into joint cooperative arrangements with Chinese companies in order to offer cloud computing services may jeopardize the foreign firms’ information security arrangements.”

It’s worth mentioning that three years ago, China was mentioned as Cerner announced plans to develop global markets. It wanted to get into emerging regions before its U.S.-based competitors did.

There’s not much sign of life now in any China-related plans the company might have had, though. According to a message from Chad Haynes, managing director for Cerner Asia, on the firm’s website: “We look forward to improving the health of communities in ASEAN, China, and beyond.”

In the case of China, that could be a while.

Is the ‘Internet of Things’ Health IT’s Next Big Thing?

Posted on October 17, 2013 I Written By

James Ritchie is a freelance writer with a focus on health care. His experience includes eight years as a staff writer with the Cincinnati Business Courier, part of the American City Business Journals network. Twitter @HCwriterJames.

Gartner Inc. has come out with a bullish report on the “internet of things,” which it predicts will add nearly $2 trillion in value to the economy by 2020 and transform the way all businesses operate.

As many as 30 billion devices with unique IP addresses will be connected, the majority of them being products, according to Gartner. That’s compared with a 2009 figure of 2.5 billion, 80 percent of them being devices such as laptops and phones.

One of the most often quoted descriptions of the internet of things comes from Helen Duce, director of the RFID Technology Auto-ID European Centre at the University of Cambridge: “We have a clear vision: to create a world where every object — from jumbo jets to sewing needles — is linked to the Internet.”

Health care would, of course, be part of the vision, which Gartner, a Stamford, Conn.-based IT research and advisory firm, calls the Digital Industrial Economy. The sector receives prominent billing, along with retail and transportation, in Garner’s latest news release on the topic.

The thinking is that physical objects — “from roadways to pacemakers,” as McKinsey & Co. put it in one report — will produce constant data streams that can be analyzed and acted on. The possibilities for systems such as inventory control are obvious enough, as the inventory would report on itself.

In health care, a major application could be in patient monitoring. Marketplace has quoted Dr. Anthony Jones of Philips Healthcare on the possibilities: “If I now have a continuous monitor, and I have that data going up into a central repository, I can write algorithms and put some intelligence into that repository that allows me to look for trends. So part of what the Internet of things will allow is much more sophisticated, much more continuous monitoring.” Sounds a bit like what John described in his post “Every Organ Will Have an IP Address.”

It sounds promising. But it also sounds much more incremental than it’s being portrayed by Gartner and other consultants.

Consider how Peter Sondergaard, senior vice president at Gartner, explained the future in a recent talk covered by ZDNet:

“The Digital Industrial Economy will be built on the foundations of the Nexus of Forces (which includes a confluence and integration of cloud, social collaboration, mobile and information) and the Internet of Everything by combining the physical world and the virtual.”

The predictions — Sondergaard said every object costing more than $100 will be smart by 2020 — look optimistic. Or pessimistic, depending on how you look at it: Gartner also estimates that one in three knowledge workers will be displaced by the new technologies.

About 60 percent of respondents to Gartner’s own recent CEO survey said the idea that the internet of things would replace millions of workers over the next decade-and-a-half was a “futurist fantasy,” according to SiliconANGLE. In health care, it’s hard to imagine that CIOs have much attention to devote to the internet of things amid the Meaningful Use and ICD-10 requirements they’re up against, although, as Jennifer Dennard wrote, health IT nowadays is much more than that.

The internet of things will get here. But it will probably develop in a piecemeal fashion, not in the dramatic way that Gartner envisions. Lots of “things” will get connected as companies see business reasons to put sensors in and bring them online. It will arise ad hoc from existing projects, with some industries joining the trend earlier than others.

When it does get here, there’s a good chance it won’t even be called the internet of things. In 2005, after all, Gartner was calling it the “real-world web.”

It was also predicting: “By 2015, wirelessly networked sensors in everything we own will form a new Web.”