Skip to main content

Where the Money Is: Healthcare Technology

 |  By smace@healthleadersmedia.com  
   October 09, 2012

As the November election approaches, money isn't flowing only into the political campaigns. Last week, healthcare seemed to be swimming in money in motion, all of it having to do with investing in technology initiatives.

The Health 2.0 conference, which began yesterday, has doubled in size in the past two years, after growth had slowed for a few years. The halls of the San Francisco Hilton are thronged by a fast-talking crowd. Deals are being made in corridors and every third person you meet seems to be a doctor with a dream and some startup capital talking to an investor looking to get in the game.

The bad news for many healthcare systems is that a lot of this money doesn't presume the continuation of the current hospital-oriented care system as we know it. Calculating the new Medicare penalties for 30-day readmissions are even the subject of a startup's website (whose URL I won't give here because the first thing the site asks for is an email address). But some hospitals will be desperate enough to take the bait, just to see how bad the news is.

Meanwhile, it turns out that CMS miscalculated some of those penalties due to a computer "programming error." As if technology isn't already playing enough of a role in determining the fiscal fate of hospitals.

Win or lose, Obamacare has unleashed private business to solve the healthcare problem. Central planning isn't ruling the day: witness the ONC's recent decision to put off governing the nationwide health information network. Everywhere government chooses not to go in healthcare, private money appears ready to rush in.

Just look at this past week's deals. The Qualcomm Foundation awards $3.75 million to Scripps Health to develop wireless biosensor systems to help detect and treat heart attacks, type 1 diabetes, and certain types of cancer.

But that was dwarfed by the $100 million UPMC pledged to spend in the next five years on a personalized medicine data warehouse.

"Our intention is to add to our existing investment in electronic health records and financial information systems, with additional investments to support data models and technologies, appliances, tools, applications to really unlock the power of our digital information, and to really be able to study and understand and answer questions related to patient care, patient outcomes, quality, quality metrics, care delivery, and especially science," explains Lisa Khorey, vice president of enterprise systems and data management at UPMC.

"Appliances" translates to purpose-built servers that drive analytics speed and efficiency. Those don't come cheap.

Khorey says it's money UPMC would spend anyway, and the system "will drive efficiencies that will pay for it." But the investment is also a mix of outcomes-oriented work and research, because personalized medicine based on analyzing genomic data is still a bit of a science project. "New models of care and good science is the UPMC agenda for personalized medicine," she says.

When UPMC looked around a year ago, no comparable institution had made a similar investment in personalized medicine analytics R&D. "We have friends at Intermountain and Kaiser and other large organizations that have huge analytics shops, but they tend to be focused on one facet of the problem, whereas we're basically saying it's a personalized medicine agenda, and we're going to solve the information management problem for all," Khorey says.

Of course the money can't just sit there for five years with nothing to show for it. "The goal is to do something quickly," Khorey says. She rattled off a punch list of early efforts: patient outcomes related to cardiothoracic patients; a small, intersecting set of breast cancer genomic and phenotypic data; some CMS quality compliance reporting. If any of them click, they can be scaled up quickly, she says.

Keep in mind that UPMC already has a substantial set of data warehouse technologies in place throughout the organization. The new $100 million effort doesn't replace any of those. Down the road, there could come a point at which they get combined into a larger, unified warehouse. But the effort to get something done now in personalized medicine doesn't afford UPMC the luxury of stopping to sort all that out.

"There are data warehouses associated with our electronic health records that lend insight to the clinicians who you know are just trying to understand their own departments and tend to find efficiencies there," Khorey says. "What the higher-level personalized medicine data warehouse really seeks to answer are the points of intersection, where either the business units cross boundaries, or the patient crosses boundaries. And it's not limited just to discrete data, but also has an unstructured data or a ‘big data' element to it that actually is not available in the other data warehouses."

Non-profit status allows UPMC to avoid paying $42 million in property taxes to municipalities, school districts and the county, which helps explain why the system didn't have to fish around under the couch cushions for that kind of scratch.

It's all happening at once in healthcare. As small community hospitals try to scrape together the resources they need to attest to Meaningful Use guidelines, large systems like UPMC double down on mind-numbingly large capital and operating outlays to push patient care and science through technology. Somewhere down the road, the big are bound to swallow the small, don't you think?

Scott Mace is the former senior technology editor for HealthLeaders Media. He is now the senior editor, custom content at H3.Group.

Tagged Under:


Get the latest on healthcare leadership in your inbox.