Friday, May 4, 2001

Online Data Sharing Will Reinvent Europe's Healthcare

Administrative, financial, and clinical connectivity between care providers and other stakeholders across the healthcare value chain will reinvent Europe's healthcare providers, according to a new report by Forrester Research. But getting there will require governments and private stakeholders to invest in ubiquitous access, national connectivity backbones, and incentives for participation.

"Today, funding and management attention for eHealth is focused on trade -- moving the buying and selling of goods online," said Hellen K. Omwando, associate analyst at Forrester. "But we believe that these efforts will have no deep impact on Europe's healthcare industry because trade regulation and consumer apathy halt B2C trade and B2B trade isn't unique to the healthcare industry. The limited impact of online healthcare trade means that current online efforts are misguided. The Internet's real transforming power lies in information sharing. Forrester refers to this online information sharing as connectivity, defined as: Internet-based transaction processing, communication, and sharing of healthcare data in real time between care providers and other groups in the healthcare value chain with the aim of providing better care."

Connectivity will take three principal forms, Forrester asserts: administrative, financial, and clinical. Administrative connectivity shifts nonfinancial transactions online, like processing invoices, tracking orders, and scheduling doctors' appointments. It will lower operational costs for care providers, speed delivery of supplies, enhance management of patient information, and free physician time for better patient care. Financial connectivity will shift payment and billing for care online. Automating the claims process between care providers and their payers or between hospitals and their suppliers will reduce costs and delays associated with manual payments. Finally, clinical connectivity will enable sharing of diagnostic and treatment data via the Internet across the value chain making it possible for care providers to diagnose collaboratively in real time and lowering costs by tracking treatment progress online.

"Connectivity's barrier isn't technology, the challenge lies in making sweeping changes in a complex industry that no one group can carry out alone," added Omwando. "To transform, care providers need three elements: ubiquitous Net access, national connectivity backbones, and incentives to compel participation. To lay the groundwork for connectivity, national governments must remove each of these barriers in turn by providing cheap Internet access, security solutions to boost confidence in data sharing, and training on Internet use."

According to Forrester's Report, connectivity will only bear fruit when administrative details, financial transactions, and clinical records are posted and stored in a standardized database accessible by caregivers, payers, and manufacturers -- with appropriate levels of access control. Without an incentive structure, care providers that stay within their budgets won't embrace connectivity -- and manufacturers with proprietary EDI links to large customers won't shift to open, Net-based alternatives. National governments play a critical role in curing the crippling effect of organizational inertia.

"European countries are at different phases of the journey to connectivity," Omwando concluded. "Not surprisingly, the Nordic countries have zoomed ahead of the pack because their disposition to fast technology adoption, aggressive government initiatives in centralizing healthcare systems, and small populations remove friction in building connectivity. But the UK, Germany, Switzerland, and the Netherlands will also grab a spot in the leadership group."

For the Report "Europe's eHealthcare Cure: Connectivity," Forrester interviewed 25 major European hospitals and executives at 24 leading pharmaceutical manufacturers, in addition to interviews with systems integrators, government officials, insurance firms, and eHealth sites. Forrester also analyzed data from Forrester's Consumer Technographics™ Q4 2000 Europe Benchmark Study of 26,000 consumers' behavior toward healthcare online.