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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Add Comment      Leave a comment on this blog post
Jun 25, 2010 7:01 PM Bob Brauer Bob Brauer  says:


This is a nice, thought-provoking article.

I certain understand your cynicism. You do give the Kaiser Permanente example, however Aneesh Chopra (The Whitehouse/Federal CTO) also cites several successful examples in his presentations in both the public and private sector where health care data improvement initiatives have provided many benefits.

One example is the National Cancer Institute's open source Patient Outcomes Data Service.

Based on terminology and standards of NCI's Cancer Biomedical Informatics Grid, the service provides a means of patient engagement and data exchange allowing doctors to collect and share information about cancer diagnoses and treatment across many different institutions.

Another example (one of many he uses in the private sector) he points out is the Truman Center in Kansas City and the successful implementation of their "electronic health record" and how it leads to better care.

Often, not utilizing concepts such as a "master patient index" can lead to the failure of projects and their failure to produce ROI. The people involved in the planning, approach, and implementation of these projects is equally if not more important than the actual concepts themselves, and this is why some of these projects will not have the desired level of success, and some will flat out fail. This is as true with car repair as it is with data integration platforms and solutions - and I'm sure we all suspect mechanics often hope to see us back sooner rather than later, but in general this is probably more the exception than the rule (insert cynical statement here).

While the direct benefits are sometimes hard to see, the indirect and ongoing/residual benefit of data integration platforms can be tremendous. And often, to be trite, a penny saved is also a penny earned of course.

Bob Brauer


Jul 1, 2010 8:54 AM John Schmidt John Schmidt  says:

Excellent article Loraine. You hit the nail on the head. The data problem in health care is a reflection of the silo fragmentation in the industry - which is reinforced by the payment system and fee-for-piece-work structure.  The system is structured to compensate health care providers for performing specific discrete activities - there is no financial reward for working together to keep people from getting sick in the first place.

If we want to fix the data challenges (which would definitely help improve health care) then we need to fix the system.  We can't (and shouldn't) wait for some top-down magical solution.  Instead, there is something we can do. We can use Lean principles to focus everyone (doctors, nurses, pharmacies, insurance companies, labs, etc.) on the customer (the patient) by using techniques such as Value Stream Mapping. This is a bottom-up approach that allows the silos to continue to operate as silos, but brings everyone together to understand the end-to-end picture of patient care and work together to find better solutions.

I've also been writing about this topic for a number of weeks on my blog at http://blogs.informatica.com/perspectives/index.php/2010/05/14/health-information-is-a-matter-of-life-and-death/


Jul 1, 2010 10:29 AM User07728 User07728  says:

I am a physician myself.  I find it interesting that your interest is in securing more money for IT, not in improving care, and certainly not in making medicine more efficient.  If IT is frustrated with healthcare providers, we are exponentially frustrated with IT.  Exploring EMR systems myself, they are very good at generating loads of information that has very little utility.  Every presentation about adopting electronic medical records urges one to accept the fact that your productivity will decrease 25-50% while adopting them.  The government dangles the "stimulus money" (I still don't understand how this stimulates the economy; maybe it will still be offered five years from now) and the companies charge higher prices.  Why not concentrate on developing products that actually work and allow the practice of medicine to be more efficient and better.  Isn't that what computers were supposed to do in the first place

Jul 1, 2010 12:03 PM John Schmidt John Schmidt  says:

It's good to hear from a physician. I for one would only spend money on IT in health care if it did indeed improve health care.  That said, I suggest that the industry doesn't spend enough on the right IT solutions and that with the right EMR systems and effective information sharing, health care providers could do a better job - especially for patients with chronic co-morbitities that require a team effort over an extended period of time.

As a patient myself, I am frustrated that I cannot get at my own medical data because it is locked up in paper in my doctor's office. I should be able to access it over the web just like I access my financial data at the bank.



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