Supplement Reviews

Innovation: Risk Among the Algorithms

In a much-discussed recent article, “Why Software is Eating the World,” Netscape co-founder Marc Andreesen says we’re in the midst of “a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”

Andreesen sees health care as ripe for software-generated disruption — a point that will not be new to Hombre readers. But while the benefit of better HIT in health care has gotten splashy policy and media attention (e.g., use of IBM’s Jeopardy!-tested Watson for clinical decision support), there’s a subtle risk to health care innovation that seethes just below the surface.

Providing appropriate reimbursement for the fruits of innovation is hard, even in the best of circumstances. On the one hand, innovations are by definition dynamic, representing something different from what’s come before. Reimbursement systems, in contrast, are by nature static, flexing forward only grudgingly, through update mechanisms often as complex as they are lethargic. When moving forces meet static systems, collisions occur.

Software runs the risk of accelerating these collisions by using algorithms to hard wire into health care’s infrastructure misguided or outdated clinical care assumptions. Long gone are the days when HIT was viewed as being about the mere transmission of information. Today, the hardware itself is revealed as just so many dumb pipes; what counts are the outcomes that result from the content that flows through those pipes.

The HHS HIT Policy Committee’s current drawing board, for example, includes requirements for meaningful users of electronic health records to satisfy measures aimed at cutting 30-day all-cause hospital readmission rates, ensuring the appropriateness of a variety of imaging services, and fostering the use of certain named drugs in identified clinical circumstances. Right or wrong, these and other measures embody assumptions about which health care interventions are sufficiently meritorious to earn providers economic incentives.

None of this need be bad, but certainly it is different. Say what you will about CMS, CPT codes, and cost-effectiveness analysis. At least those familiar theaters of contention appear in relatively plain view, with tangible issues and well-worn trails.

The new virtual venues suggest collisions along a hazier, more challenging pathway — one for which innovators may need new capabilities to stake their claims and protect their flanks.

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