PHI as ‘The Platform’

I believe major EHR vendors have a disruptive innovation cycle pending, and whether they survive or not will largely depend on the degree they rearrange their business model. The ONC has already laid out its roadmap for EHR interoperability, and sounded the gavel within the 21st Century Cures Act with the Final Rule. This threatens the market hegemony of large EHR vendors, which has thrived on customized installs atop siloed data with toll booths on interoperability; they certainly attempted to salvage their business models.

As COVID sequestered people at home, consumers of means began truly realizing the ease of access provided by modern technologies — grocery delivery, e-commerce, Zoom meetings, etc. — and traditional healthcare institutions scrambled to accelerate along IT roadmaps to match. Telehealth technologies that were forecasted years away were implemented within months, and virtual visits skyrocketed. Healthcare institutions awoke to the power of health IT, and have realized their shortfall from its potential, relative to other IT fields. In that discordance, private investment has started circling. There are hundreds of emerging VC-backed health care market players who are looking to capitalize on the next diamond mine of data — patient health information — through the guise of a more modern, connected, easy-to-schedule health care experience, using custom EHR software implementations that makes patient data easier to examine and explore. Their market impacts are diluted by the hundreds of millions institutions already pay into keeping traditional EHR vendors afloat, but these start-ups are starting to bite around the edges of the EHR raft.

While EHR vendors may be initially keep pace with updates every 3-6 months, overtime, if these new healthcare market players are successful, more patients will realize they are consumers, and choose with their feet and wallets. As digital amenities’ importance grows, healthcare institutions ability to tamp consumer churn will be tied to the ability of traditional EHRs players to innovate meaningfully. This seems a daunting task, given that each custom EHR installation implies variability across deployments.

One strategy for traditional EHR vendors could be to convert from a vertically integrated product that they are now, to a platform, much like the Apple App Store, upon which other developers may build new and/or better functionalities. Compete to be the most interoperable and take a percentage of profits made by developers who build provider specific applications, like an oncology or a cardiology module; health care institutions can then select modules a lá carte to Lego together their own full healthcare stack that’s responsive to business needs. Encrypt your PHI platform with blockchain, bank standards, or whatever else seems most appropriate.

If a VC has a choice between funding healthcare solutions de novo, or fund a small dev team building a module atop a platform that already has millions of patient data points within it, the choice becomes seemingly obvious.

Build it, and they will come. If you don’t, Olive Health might beat you to it.