August 29, 2007

Data Warehouse Model to Be Used for Health Care

Next week Intel, Wal-Mart, BP and others will reveal a plan to provide digital health records to their employees and to store them in a multimillion dollar data warehouse that will link hospitals, doctors and pharmacies. The goal is to cut health care costs by having the employees/consumers coordinate their own health care among doctors and hospitals.

Next week the companies will also announce their collaboration on a health record standard and 10 companies will contribute about $1.5M each to construct a data warehouse to store and update the health e-records.

Once in place the data warehouse will allow consumers and insurers to evaluate price and performance data from millions of employees. Eliminating duplicate tests and erroneous information would also cut administrative overhead which is estimated to account for 40% of medical costs. Electronic prescriptions alone could help prevent nearly 100,000 serious illnesses or deaths annually from prescription mistakes. Doctors could use the records to benchmark which worked best for seriously ill patients. Patient medical records often handwritten would transition to readable and understandable files.

But the idea of portable medical records and a massive repository still faces hurdles. Privacy advocates worry that the records will be misused and one patient advocacy group urges employers to shun the idea until adequate protections are in place.

The 10 company collation expects to apply market pressure and incentives to get Doctors and hospitals on board. Wal-Mart will apply its purchasing power to get bar codes on products intended for hospitals and clinics.

The health record data in the repository will be the property of the employees and the data will be mined by insurers and others after the identity is stripped off and authorization access is set up.

Each of the 10 companies share a common enemy: benefit costs. Intel estimates that its health care spending will be as much as 1/5 of its R&D costs by 2009. Wal-Mart says the costs for its U.S. employees if unchecked will climb $1B annually for the next 5 years. While healthcare in the U.S. has remained paper based and fragmented we only need to look at Denmark where hospitals, pharmacies and doctors communicate via a secure network and where Danes can go online to book appointments, renew prescriptions, view records and query their doctors.

With health care costs being one of the biggest concerns in the electrical industry maybe this model merits some consideration? We already have the data warehouse infrastructure built! Now if we can only get through the concern about using IDW2 for delivering Net Price into Stock.