We have a market failure in healthcare data sharing

10 minute read

The duopoly of Medical Director and Best Practice in primary care is stalling meaningful progress.

Lately all of our state premiers, federal Health Minister and even our Prime Minister are using the term integration like they think they know what it means.  

Our hospitals, primary care and aged care sectors are not connected digitally, so our politicians are suggesting we integrate them.  

Seems simple, right?  

The reality is that it’s a very complex problem to solve. 

The problem started in the early 90s when someone clever in the government decided we needed to get GPs to write scripts electronically.  

In 1991, the federal health minister endorsed the development of an organisation called Health Communications Network. 

A workshop was held in Sydney in December on the “National Health Information Systems and Technology Strategy”. Forty-five people were in attendance, mostly from government agencies and hospitals, although members of the Australian Hospitals Association, the Medical Records Association and the Royal College of Nursing also attended.  

Observations arising from this workshop included (thanks to rogerclarke.com; emphases in original): 

  • the health information system was not client-centred, but treatment-location centred; 
  • information flow between the various groups was complex, often incomplete and slow; 
  • many people had “only a limited understanding of the nature, use and benefits of [health care] information and information technology”; 
  • “substantial IT investments are under way … but run the risk of having limited utility and efficiency if they proceed without due recognition of, and links to, a coherent vision of the broader health information system requirements”; 
  • “the future health system can be envisaged as a?partnership?between consumers, service providers and governments. It is?centred around the client?(patient) and?continuity of care?for the client. The basic building block for the information system is that information exchanged between the client and the service provider in the course of an ordinary?service encounter?… Where information is required, it should be?pulled?along the system, based on?value added?principles”; 
  • a?Health Information Network?would provide “a means to move information in a secure way from where it was held to where it was needed, and to gain access to a wide variety of information products and services provided by?information brokers. [It] would, by design, not hold any personal information. This would be held, as now, by clients, general practitioners, specialists, etc. off the network”. 

The workshop concluded that:  

“The HCN promises much to Australians. Depending on how it is conceived, designed and implemented, it may also threaten much that is valuable to Australians. 

“It is imperative that the scheme’s design, and the philosophy underlying it, be subjected to critical consideration, negotiated over and approved by a body representing all affected parties. 

“To achieve that end, health care professionals, health care consumers and privacy and civil liberties groups must urge the creation and empowerment of a suitably constituted vehicle to drive the HCN project. The governments and government agencies which have initiated the project must adjust from the hitherto closed procedures to open mechanisms directly involving all constituencies.” 

It appears that HCN’s bold vision has failed primary care and, through that, Australian patients.  

Where did things go off the rails?  

Health Communications Network acquired a fledgling Medical Director in 1994, a software platform that went on to dominate and control information flow into and out of primary care though the 90s and early 2000s. When founder Dr Frank Pyefinch left HCN upset with how the company was treating his product, he started Best Practice, which now with Medical Director form a duopoly that controls around 95% of the market.  

While highly innovative in the 90s, neither is innovative by 2023 standards, both still relying on 1990s-style server-bound software architectures that ignore boundless opportunities to share data more openly across the web with other providers and patients. 

But thanks to the complexity of Australia’s health funding models around which these products kept building integrations, and because Australia is a small software market where capital for development is limited, both Medical Director and Best Practice decided to sit on their old technology and reinforce the barriers to entry in the market.  

Our PHNs and state health departments contribute to building up and maintaining the barriers around each product by funding programs and incentives that lock in and reinforce the use of the older technology. Examples include PIPQI, Primary Sense and public hospital specified e-referral platforms built by companies like HealthLink and BPAC. Building deep integrations into BP and MD means that they too can extend their commercial lives well beyond the reasonable use of such old technology.   

This has created a wicked problem for Australia’s healthcare system because these old systems are not and will never be interoperable: any layer you build on top of them will only ever be extracting data from systems designed with code from the 1990s.  

I first encountered Medical Director and Best Practice back in 2015 while I was working with the appointment booking platform Jayex which had just acquired Appointuit.  

That was the first time I heard the word “integration”.  

What I learned very quickly was the power these two companies wielded. An integration into either system offered a valuable ticket to growth for various application builders.  

These two platforms became the gatekept primary care data access. If you wanted to get distribution to general practice quickly, you needed to do a deal with both platforms to get in. 

In the 90s and early 2000s integration was mostly bespoke and very expensive. We used terms like stored procedures, and deep integration. It took a long time, was expensive and only provided benefits to the two parties integrating. We only integrated with those willing to pay.  

Fast forward to 2017 and I landed a job with one of the market-leading PMS platforms and very quickly found myself leading the commercial negotiations for much coveted clinical integration.  

What I quickly discovered was the technology I was representing was ageing and that the world was rapidly changing. Day after day I met CEOs and CTOs from some of our most innovative tech companies asking for our APIs to integrate, assuming our technology was in line with global innovation.  

APIs and standards like FHIR and SNOMED were rapidly evolving, but these old platforms were designed well before this was even a thought bubble.  

I began to understand that securing an integration was very much a money-making business for a PMS and I was in the unenviable position of being the gatekeeper. The age of the technology and development required meant an integration could take years and cost hundreds of thousands.  

If you were willing to pay for a bespoke development and then a substantial clip on the ticket commission we were happy to integrate. The government was oblivious to all of this, probably thanks to a lack of commercial understanding of how commercial forces were moulding how data would be shared.  

What had happened to that grand vision of what the Health Communications Network could deliver for Australia?  

HCN did foresee what has happened: “Substantial IT investments are under way … but run the risk of having limited utility and efficiency if they proceed without due recognition of, and links to, a coherent vision of the broader health information system requirements”. 

I quickly became disillusioned in my role at the PMS provider. 

Nearly two years went by and hundreds of meetings resulted in very few integrations, despite meeting some of the most incredibly forward-thinking health tech players in Australia and internationally, to whom I had to say no.  

In 2020 I joined a local cloud EMR platform developer to lead strategy thinking as it felt like this was clearly the way of the future. It was already happening globally and surely the government should understand this by now.  

By now I understood a lot more about software and understood the difference between terms like stored procedures integration and an API. I understood the challenges of consuming data and knew that software had to be designed in a way that it could consume and understand data and the format and logic of the coded data was key. I knew the meaning of single sign-on technology and the power of this when treating a patient moving across the health system. And I understood the significance of FHIR and SNOMED to the building a modern health system.  

What surprised me is how few people in government understood this and how they were continuing to reinforcing primary care dependence on old technology through their funding incentives and policies while the rest of the world was making moves to modern digital infrastructure over 15 years ago.  

The effect of what Best Practice and Medical Director came to be is now described in a book called Chokepoint Capitalism.  

This book outlines how the likes of Amazon, Apple, Microsoft, Facebook, Spotify and similar global software platforms have built gate keeping digital distribution networks where controlling data access is power. 

Best Practice and Medical Director never intended to be gate keepers of data, effectively blocking open and effective data sharing across our healthcare system.  

It wasn’t a plan.  

But the dynamics of digital platforms and the small amount of capital available in Australia twisted the path of these two platforms to a point where to continue to survive and be profitable, controlling access to data in an old style of technology became the most viable business model.  

In the US something not dissimilar occurred among the giant global EMR vendors, whereby information was deliberately not shared effectively between systems in order to optimise profits. 

The US government recognised this situation as a market failure for the American people and stepped in 10 years ago to legislate to correct how data is enabled to flow in their system. The legislation, the 21st Century Cures Act, came into effect in April 2021 and since then there has been a revolution in how data is shared in that system between providers and with patients.  

In the incumbency of Medical Director and Best Practice’s old technology in primary care, Australia’s healthcare system has a market failure as well.  

Addressing the failure should not mean nobbling these two innovative local software companies.  

But it should somehow act to force each company, and others, to upgrade their offerings to modern web-based data-sharing protocols that encourage the sort of seamless real-time data-sharing that is now occurring in the US. 

There is no better time than now in Australia to move this way: proposed changes to funding models and innovative new models of care are in play that will break down the barriers that this old technology has been built around.  

Perhaps we could even take some inspiration from the wise health minister back in 1991 who had the vision to build an innovative public private technology partnership that might lead to Australia being seen as a front runner in the adoption of electronic medical records.  

Why couldn’t we do that again by creating a policy and funding levers to drive the adoption of Cloud enabled EMRs in Australia that could deliver the interoperability our health system so desperately needs?  

We need to urgently incentivise investment in the API Economy in healthcare and legislate for standards to drive innovation in our health technology in Australia. 

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