Is the Healthcare IT companies’ announcement of seamless interoperability marketing hype or a social awakening?

At the recent HIMSS trade show, six large healthcare IT companies (McKesson, Cerner, athenahealth, Allscripts, Relay Health, Greenway Medical Technologies) announced the formation of a not-for-profit company called CommonWell Health Alliance. The purpose of this organization is to create frictionless movement of patient-centered data across all settings of care and among all health care IT systems[1].

This is a profound announcement from companies that did not embrace the frictionless movement of data across systems within an acute care setting let alone outside the four walls of a hospital. This is great news for all of those organizations that lacked the clout or financial assets to interface their best of breed systems with the large name brand solutions. Historically, the price and effort of sharing data with the larger acute care vendors was cost prohibitive. The price and effort became a barrier to entry keeping best-of-breed competition out of a healthcare provider’s operation. This barrier to entry creates fertile ground for the large incumbent Healthcare IT solution vendor to sell their own products. This strategy worked well for a few years until healthcare providers became tired of being held hostage by their clinical or financial system vendor.

As any free market operates, healthcare providers started looking for alternatives. A little company in Madison Wisconsin had a different vision and executed it correctly. They had the vision to develop a fully integrated ambulatory and acute care setting solution. It is worth noting that this vision was not unique nor was this Madison Wisconsin company the first to try. The difference is their predecessors failed where they succeeded. This Madison Wisconsin company built market credibility by delivering a quality product and building a loyal following. What allowed this little company to grow into a market goliath is strong leadership, vision and Kaiser Permanente’s financial support. Kaiser Permanente standardized on this solution giving the little Madison Wisconsin company clout and opportunity to grow. Without the financial support of Kaiser Permanente, this little company would not have achieved their impressive rate of market share capture and deal size growth as quickly as they demonstrated.

As this little company grew, the larger healthcare IT companies were on the outside of the market growth looking in as this organization took away their dominance. The free market is a wonderful thing. The barrier to entry used by these larger organizations has become an Achilles heel. The leaders of these large organizations are some of the brightest minds in the industry. They realize that the playing field needed to be changed so they can compete with this little Wisconsin company. The leaders of these organizations aligned to create a united front against a competitor they could not win against stand-alone. Thus, we have the announcement of CommonWell Health Alliance.

Therefore, the moral of this story is who benefits from the dynamics of free market. We all do. The CommonWell Health Alliance initiative may be a means that helps healthcare providers cost effectively share data across settings of care. A limited number of hospitals cannot afford the cost and effort to implement the solution from this little (now big) Wisconsin company. Most healthcare providers will stay on their aging systems and continue to make the most of their investment. The market is rapidly changing where healthcare providers will need to share data between traditional and non-traditional settings of care. This little (big) Wisconsin company cannot build a solution for every setting of care. It is a relatively closed system. Since they do not embrace the exchange of data between their system and outside solutions, this could create a problem for their customers. This potential problem creates an opening for the traditional large healthcare IT companies to re-energize their competitiveness in the market. The question is can they execute and live up to the promise. We shall see. The failure to execute in the past has cost the traditional large healthcare IT companies customers, business, and shareholder support.


[1] CommonWell Health Alliance, purpose, http://www.commonwellalliance.org/about#purpose

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