A Cynic's View on Why Data Gets Short Shrift in Health Care

Loraine Lawson

A recent opinion piece in Information Management tries to make a case for better data management in health care. I say "tries," because it really does-there are some fantastic arguments here. Sadly, however, I think the column inadvertently points out the real reason better data management ranks so poorly with health care organizations.

The article is written by Tony Fisher, CEO of DataFlux, and Joyce Norris-Montanari, president of DBTech Solutions. Both companies specialize in data integration and management. They point out a number of statistics and rationale for better data management, any one of which should send health care organizations scrambling to the IT department. For instance:

  • Better data would help to better identify patients and their correct records, leading to better health care.
  • Better data would provide a more holistic picture of patients, leading to better health care.
  • 10 percent of U.S. medical expense is fraud, according to stats from the FBI and the Center for Disease Control.
  • 31 percent of the national health care budget goes to claims processing and administrative overhead, according to the Physicians for a National Health Program. (You'll note that's nearly a third of their budgets going to what's technically not strategic, i.e., furthering patient care.)


I think they make an excellent case for why health care should take data management -- and integration -- seriously. But I rather cynically propose that the real obstacle to spending on data is found in this paragraph from the piece. See if you can pick it out:

Health care providers are in the business of providing the best service to patients, and realistically, there is only so much money they can spend. When presented with the option of spending money on a new MRI machine or spending money on improving data, just about every single time, the organization will opt for the MRI machine. It provides them with better patient care and additional revenue.

Now, obviously, their point is to say that given health care's mission, there's an incentive to purchase machines related to actual health care. I agree. But I've italicized the part that I think is actually the key to understanding why data management has been so mishandled in health care:

It provides them with better patient care and additional revenue.

You can charge for using an MRI machine. Nobody gets to charge for a data-integration platform. See the problem?


Health care is a business, but it isn't financed in the same way. Patients aren't the customers-insurance and government are the real customers. And the truth is, more holistic care, better identification of patients-these things may be better for patients, but they're not always good for the bottom line, at least, not in any clear-cut way. More likely, just the opposite will happen: If you can readily find lab results and X-rays, there's no need to "just do them over." And better patient care doesn't result in more business. Unlike in the rest of the business world, healthy patients will see you less often, which means you've either got to increase your patient load or lose revenue.

Consider what Kaiser Permanente discovered after its electronic medical records overhaul: There were 7 percent fewer patient visits-and no cost savings. And certainly no increase in revenue.

The column does make a bit of a revenue argument, but, frankly, it wasn't very strong, and largely had to do with patients taking their business elsewhere. I just don't believe health care is that concerned with a few patients taking their business elsewhere-unless, of course, they're among the doctors who practice private pay, and, let's face it, that practice largely provides better patient care only for those who can afford it.

That's why I think government incentives for electronic medical records projects may be the only thing that will finally get this sector moving in the right direction on data: They only get the money if they spend it on management of health care records - although, I should note many leading organizations are already balking at what they consider too stringent and unrealistic government requirements. But, basically, they're getting paid to make their systems more effective, so they can provide better treatment for us. Given the odd way health care is financed, it's probably the only way this change will happen: It provides a financial incentive to invest in cost-savings and more effective data systems, without requiring doctors or hospitals to cut spending on news ways to increase revenue.

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