Why Google, Apple & Microsoft will win the EMR battle

In the next few years, brick and mortar, immobile physician-centric EMRs and EHRs—those large EHR systems implemented by healthcare providers residing on large systems will be supplanted by portable patient-centric EMRs residing on a next generation of super smart devices—we call them smart phones today.  The limited functionality of today’s Personal Health Records (PHRs) will be replaced by these portable patient-centric EMRs; EMRs that are cloud-based and accessed through super functional next generation smart devices—the grandchildren of the iPhone and the Droid.  Why do I think that is the case?  Please keep reading.

Five billion people voluntarily purchased cell phones.  Initially, consumers had to be convinced they needed cell phones.  The uptake was slow.  Something changed, compelling us to buy cell phones.  We initially bought cell phones not because we needed phones, but because we wanted convenience—we bought convenience.  What made it convenient?  Portability.

Not much changed for several years—not until Palm created a phone-sized portable device that could do other cool things.  Then Blackberry took it one step further—a device that could handle basic email and phone calls.

Very recently, piggybacking on the success of the iPod, Apple redefined the market for smart devices.  They did not set out to build a phone, or a web browser, or a MP3 player, or an email client, or a SMS device—or a device designed to do all of those specific tasks.  Instead they built a device capable of doing just one thing—securely and wirelessly sending and receiving ones and zeros.  Those ones and zeros became emails, faxes, internet interaction, downloading and playing music, videos, images, calls, text messages, and data.  Apple also paved the way for other firms to have customers download thousands of other ones and zeroes applications.  The iPhone device simply sends, receives, reads and writes ones and zeroes.

Phone calls on the smart device (the iPhone) are but a small subset of the device’s total usage.  This breakthrough is what I think of as the “Transport Phase,” moving ones and zeros from point A to point B, reassembling them, and recreating the same thing on the other end.

In the last two years, we have seen the maturing of the Transport Phase whereby the device is even smarter, faster, has more storage and actually performs tasks.  It appears to infer and learn.  It is capable of gaming and GPS functions.  It performs more tasks than the computer on the Saturn rocket.  Last year Google made its debut with the Droid.  It is open and operating in a cloud.  The smart device’s features and usage are so ubiquitous that the pricing model commoditized.

Today’s devices can operate more than one hundred thousand apps—including hundreds of medical applications.  The vast majority of the healthcare applications are for doctors and clinicians.  Very few healthcare applications are available to customers (patients) and there is no PHR for any of the devices.

This will change, and change in a big way.  The smart device many call a phone can do things nobody envisioned ten years ago.  Those “experts” were wrong.  We have a new set of experts today.  They claim:

  • PHRs offer little value
  • PHRs have been slowly accepted by the mainstream
  • There are no good healthcare apps on smart devices for patients
  • There are no PHR apps on smart devices
  • There is no such thing as an EMR on a smart device

My take?  They are correct on all five claims—today.  What else of note is underway?  The launch of the iPad.  Bad name choice.  I would have called it the iGoogle, but neither firm would go for that.  Why the iGoogle?  Stick with me on this.  Google is in the process of transcribing every written word and digitizing the great works of art—ones and zeroes.

What did Apple do?  Apple did one thing—their new smart device made Google’s library potable.  Portable.  Ones and zeroes, colored text and images can now reside on a one and a half pound tablet one a device with a thickness of one half inch.  Complaints—it’s not a computer, it cannot take pictures, it cannot make calls.  Not yet.

Yesterday calls (ones and zeroes) were made portable, as were text messages, emails, videos, and GPS.  Tomorrow, today will be yesterday.  Look forward a thousand tomorrows.

What exactly are the electronic medical records flying around in ERHs costing hundreds of millions of dollars?  Ones and zeroes.  Nothing more.  Oh, did I mention these institutionalized EMRs are immobile.  The plan calls for them to be portable—a billion here and a billion there.  Maybe it comes down to what kind of portability you think Americans will adopt.

I think two things are in store for healthcare.  In the near-term, stationary hospital-centric EMRs and EHRs will begin to be replaced with portable patient-centric EMRs residing on super smart devices owned by individuals.  Point two; the limited functionality of today’s immobile Personal Health Records (PHRs) will be replaced by portable patient-centric EMRs, EMRs that are cloud-based and accessed through super functional next generation smart devices.  These devices will be the offspring of the iPhone, the Droid, and the iPad.  EMR functionality will be available, along with the existing functionality on these super smart devices.  Customers will not need to buy a separate device to make their EMRs portable.  They will simply gain access to that functionality when they purchase the next generation phone-camera-notebook-tablet-MP3-EMR.

Just because PHRs can’t do much today doesn’t mean PHRs won’t evolve to become tomorrow’s EMRs and EHRs.  PHRs will be replaced by EMRs in the same way mere voice applications have been supplemented by multitudes of additional powerful applications.

What business drivers will make this happen?  Apple, Google, and Microsoft are huge corporations, corporations with which almost everyone currently does business.  They are not healthcare companies.  They do not operate like the government.  They know how to build and market very high-tech, glitzy devices packed with the functionality their customers demand.  Customers line up outside of stores for days to be the first to have one.  Hospitals and physicians are not doing that to install EHRs.

Why do PHRs exist?  They exist as a way for these companies to establish a foothold in healthcare, to have their customers begin to associate their healthcare records with the likes of Apple and Google.  They know there is very little money to be made with PHRs.  The revenues will come to them as the functionality evolves the PHR into the EMR.

Measured in today’s dollars, the average US resident will spend about $650,000 on healthcare during their life, or about $8,000 a year.  Eight thousand a year doesn’t seem like much until you extrapolate it.  Eight thousand a year times three hundred and fifty million people comes out to an annual healthcare expenditure of about three trillion dollars.

Let’s compare that $8,000 a year figure to what we spend in other areas.  The average annual phone bill is around $700.  The average cable bill is $1,000; electric—$1,200.

What if these companies developed a way to build a secure, HIPAA compliant, portable EMR application that could be accessed using the next generation of the super smart device we get in line to purchase?  In addition to everything else it can do, the device will have secure access to clouds to access, update, and transport electronic medical records—combining the future functionality of the tablet and open architecture of smart devices like the Droid.

What if firms like Apple and Google made these next-gen super smart devices available for free?  This approach is almost identical to the current model of highly discounting smart phones to lock customers into service agreements.  Why would Apple and Google give away the super smart device?   The reason to give it away only makes sense if the real business opportunity is so large that the money they would have earned from the device is a drop in the bucket compared to the downstream revenues.

What if firms like Apple, Google, and Microsoft devise a way to earn a transaction fee of one percent for each dollar of healthcare services that either comes in through their device or goes out over it?  That is how phone usage is billed.  Companies bill for ones and zeroes sent and received.  They do not care what information those ones and zeroes contain.

The model of providing devices to consumers for free is no different than giving away toothbrushes to sell toothpaste.  The bulk of the revenues come not from the device; but from what consumers do with the device.  A one percent transaction fee applied to the three trillion dollar healthcare market is a thirty billion dollar business.  That’s a pretty good chunk of change for coming up with another service facilitated by moving around ones and zeroes.

Let’s suppose for a minute that as consumers adopt this model that these same corporations, using cloud computing, succeed in building an interoperable healthcare network, the same network the federal government plans to spend billions to develop.  The companies do not need to build it, it exists today—the internet—and it exists wirelessly.  The government just announced the development of a supercharged internet.

This makes Health Information Exchanges (HIEs) and the National Health Information Network (N-HIN) obsolete before they are even built.  As a result of having built the network, and having equipped customers with these EMR capable devices—next generation super smart devices—these firms then own the entire EMR food chain.  Might these firms then be able to garner some kind of usage rights to clean medical data, data that has been scrubbed so as to make it anonymous, data which they can sell to payors, providers, the government, and pharma?  It’s all about the healthcare data, or at least it will be.

The business opportunity is data usage, transporting ones and zeroes.  Data usage is what Apple and Google sell—the portable devices are simply a means to an end.  According to gigaom.com, Apple’s revenues just from its App Store exceeded $2.4 billion in 2009—pretty good money for a start up, a start up that uses a super smart device.

Microsoft doesn’t sell computers.  It sells ideas.  Microsoft is an enabler.  It sells the ability to allow people to do more and more things.  The idea about which I write is no different from Microsoft’s, Apple’s and Google’s current business models.  The smart devices, sell data, data transport, and data usage—ones and zeros.

The difficulty healthcare providers have with today’s approach to EMRs and EHRs is they are focused on now, on today.  They are costly, immobile, hurting productivity, and are driven from the top down—the government.

What if this idea comes to pass, or even something close to it?  What does that mean for physicians?  More than anything else it means physicians will face patients who will take more responsibility for their health, patients whose medical records are stored on the same smart device as their Rolling Stones records.  Physicians will be able to beam the patient’s EMR to their own EMR capable super smart device.  The demand for EMRs will shift from building immobile EHRs that may meet today’s business requirements—to a patient driven demand for portable EMR devices that will meet tomorrow’s requirements, devices which in addition to containing EMRs will meet there other smart device requirements.  It is those other requirements which will drive consumption, the EMR functionality will be a bonus.

I think in five years terms like Meaningful Use, Certification, HIEs, and incentives will be outdated.  The C-suite should be looking at what lies ahead, not at what will be outdated by the time a monolith EHR-NHIN has been implemented.

What do you think?

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

paulroemer@healthcareitstrategy.com

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11 thoughts on “Why Google, Apple & Microsoft will win the EMR battle

  1. Pingback: ICMCC News Page » Why Google, Apple & Microsoft will win the EMR battle

  2. Pingback: ICMCC Blog

  3. Most excellent piece. This is why I left a behemoth hospital-affiliated medical group to start my own solo primary care practice partnered with HelloHealth. I want to be small and mercurial so that I can participate in these changes as a physician at the point of care with my patients.

    Like

      • Paul,

        Yes, motionPHR runs best on Android. I like the iPhone and we support the device, but Apple is a difficult partner in non-content health systems. We are announcing our mobile connection bridge mHealthBridge at the upcoming Health 2.0 show in San Francisco. It provides connectivity to cloud based Patient Centric Health Record Repositories such as HealthVault, GoogleHealth and Dossia. We also are providing connectivity to Practice Fusion EHR. Check it out http://mHealthVault.com

        Jeff Brandt

        Like

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