In a post for Tech Tank, a blog hosted by the Brookings Institution’s Center for Technology Innovation, Niam Yaraghi, PhD, a fellow of the center, argues the reason for the inefficiencies of the IT industry is because there is no true competition between IT vendors, so they have little incentive to develop efficient products.
To illustrate, Dr. Yaraghi compares IT vendors’ products to a Microsoft Excel spreadsheet. “If it was very difficult to work with Excel or it did not have much functionality, then many potential customers would have stuck with their paper spreadsheets or would have purchased better alternative software,” he writes. “Microsoft has to constantly increase the functionalities of Excel and make it more user-friendly in each release….Since the consumers have to pay for such products, they carefully evaluate all the alternatives and purchase the one that best addresses their specific needs.”
The case is not so in healthcare, according to Dr. Yaraghi, because HITECH incentives revolve around government reimbursement. At the end of the day, healthcare providers aren’t paying for IT products themselves, as long as the products they purchase meet a certain set of requirements, he says. As long as the government picks up the tab, hospitals may be less judicious about the products they adopt.
“It is not hard to imagine what would have happened if government had defined a set of features for certifying spreadsheet software and had a policy that mandated every student to buy a certified copy of such software to qualify for federal loans,” Dr. Yaraghi writes. “IT vendors would have a secured source of revenue from spreadsheet software; there would be no need to compete and no need to improve.”
Dr. Yaraghi says value-based payment models can help push healthcare providers to be more efficient and, in doing so, providers would understand their own needs and select IT solutions that address those specific concerns.
“Without HITECH incentives and regulations, the IT products would not be limited to janky EMRs, and there would be sufficient competition to drive IT vendors to come up with improved and innovative products,” Dr. Yaraghi concludes.
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