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Transparent or Opaque?

Gary Baldwin, for HealthLeaders Media, February 19, 2008
Surely one of the most pronounced healthcare industry trends is towards "transparency." Hospitals are beginning to post various quality metrics on their Web sites. Patients can study the details of hospitals' performance and outcomes on common procedures. Others are disclosing the likely cost of these procedures. It's a profound shift, one that is long overdue--and needed, when you consider that we consumers will be increasingly asked to foot the healthcare bill in the years ahead.

But there is one area of pricing that remains in the clouds, namely the cost of new information systems and other technology. Software vendors love to tout their new contracts. My inbox is brimming with announcements. But ask them how much the deal was for, and more often than not, you will be stonewalled. Go to the hospital or medical group customer, and oftentimes, you get the same result. I have attempted to shine light on this topic in our "Deal" feature in HealthLeaders magazine, but it has been a struggle. Sometimes CIOs are just reluctant to talk about much the hospital actually had to ante up. Other times they have signed confidentiality agreements with their software suppliers to keep quiet.

Now, who exactly is being served by this murkiness around the cost of clinical IT? Well, it's certainly not potential purchasers of clinical IT. If buyers cannot obtain realistic estimates of cost prior to even sending out the RFPs, they are working in a vacuum. And for cash-strapped physician groups, the murkiness around cost may just result in suspicion that EMR vendors are an unscrupulous bunch.

My hunch is that software vendors like these confidentiality agreements because they are cutting deals left and right, charging the well-heeled customers way more than those of lesser means. Non-disclosure may also offer psychological protection to the insecure, who wonder if they have been gouged or got a good deal.

I guess you could say that the "value" of software is kind of like a house. It is only worth what someone is willing to pay for it. But at least with housing transactions, it's easy to see what somebody else paid. I'm all for free markets. I also think that transparency on cost helps keeps them that way.


Gary Baldwin is technology editor of HealthLeaders magazine. He can be reached at gbaldwin@healthleadersmedia.com.

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