Capturing Value in Digital Health Eco-Systems

Validating Strategies for Stakeholders

Felix Lena Stephanie, Ravi S. Sharma

• Publisher: CRC Press
• Year: 2021
• ISBN:
  9781000476415
• Edition: 1
• Topic: Business
• Subtopic: Service Industry
• Index: Business

The United Nation's Sustainable Development Goals call for the establishment of Good Health and Well-being and target a universal digital healthcare ecosystem by 2030. However, existing technology infrastructure is ineffectual in achieving the envisioned target and requires massive reconfiguration to achieve its intended outcome. This book suggests a way forward with fair and efficient digital health networks that provide resource efficiencies and inclusive access to those who are currently under-served. Specifically, a fair and efficient digital health network that provides a common platform to its key stakeholders to facilitate sharing of information with a view to promote cooperation and maximise benefits. A promising platform for this critical application is 'cloud technology' with its offer of computing as a utility and resource sharing. This is an area that has attracted much scholarly attention as it is well-suited to foster such a network and bring together diverse players who would otherwise remain fragmented and be unable to reap the benefits that accrue from cooperation. The fundamental premise is that the notion of value in a digital-health ecosystem is brought about by the sharing and exchange of digital information. However, notwithstanding the potential of information and communication technology to transform the healthcare industry for the better, there are several barriers to its adoption, the most significant one being misaligned incentives for some stakeholders. Thisbook suggests among other findings, that e-health in its true sense can become fair and efficient if and only if a regulatory body concerned assumes responsibility as the custodian of its citizens' health information so that 'collaboration for value' will replace 'competition for revenue' as the new axiom in delivering the public good of healthcare through digital networks.

CHAPTER 1 Introduction to Digital Health

DOI: 10.1201/9781003224150-1

1.1 Nature of the Research Problem

It is no exaggeration to say that an “e-revolution” has radically transformed the conventional landscape of business and consumerism, as is evident from the variety of e-initiatives successfully launched over the past several decades. Today, with the Internet and digital services dominating most key aspects of day-to-day living, online means of communication, entertainment, education, banking and a host of e-commerce transactions are not merely convenient but tangibly efficient, cost-effective and time-saving. However, despite the Internet having revolutionized most aspects of human life, its foray into healthcare has been relatively inconsequential possibly on account of the complexities inherent in the industry (Wickramasinghe, Fadlalla, Geisler & Schaffer, 2005; Hill & Powell, 2009; Black et al., 2011; Kellermann & Jones, 2013).

This is quite apparent, for instance, in the way the health data of the patient seeking medical help is typically collected and stored in the present day. It is common knowledge that such vital patient information continues to get recorded, processed and stored on paper in much the same way as done a century ago without recourse to information systems, decision aids and prompts (Middleton, 2008; Serbanati, Ricci, Mercurio & Vasilateanu, 2011; Jaroslawski & Saberwal, 2014). The danger involved in this situation is that the data stored on paper may get increasingly disjointed, incoherent or even inaccessible over a period of time as it gets passed on from hand to hand. This apart, inherent in this practice is the potential risk that any updates and changes incorporated on paper may not all come to the attention of the current healthcare provider which may, in turn, seriously compromise the quality of the healthcare provided.

The arrival of e-health may be recent, but its long-term potential is immense (Dyer & Thompson, 2001; Bulgiba, 2004; Tripathi, Delano, Lund & Rudolph, 2009; Parmar, Mackenzie, Cohn & Gann, 2014; Rothenhaus, 2015). A case in point is the dramatic rise in the number of people in the United States of America (US) looking for health information online, which jumped from 10 million in 2000 to 100 million in early 2007¹. It was also estimated that by 2013 about 45% of US adults with a chronic condition would be using the Internet to manage their condition². This trend, needless to say, is increasingly getting conspicuous all over the world including developing countries. This may be seen as an indication of healthcare consumers’ “unquenchable need for more and greater access to health information and services” (Wen & Tan, 2003, p 2).

¹ Manhattan Research LLC Survey, 2007 ² Manhattan Research LLC Survey, 2013

Coupled with the above observation is the policy imperative of many governments to reform healthcare by making substantial investments in health information technology (HIT) to improve its safety, quality and value (Clancy, Anderson & White, 2009; Black et al., 2011; Ross, Stevenson, Lau & Murray, 2015). Such trends are gaining traction globally, as evidenced by the plethora of e-health projects that have stemmed worldwide in recent years³. According to Markets and Markets (2015)⁴, the world healthcare IT market is expected to grow to $228.7 billion in 2020 at a CAGR of 13.4% during the forecasted period of 2015 to 2020.

³ https://www.moh.gov.sg/content/dam/moh_web/Publications/Information%20Papers/2014/NEHR/English%20Brochure%20(Final).jpg; http://www.computerweekly.com/news/2240215175/UK-shows-biggest-take-up-of-electronic-Health-records-in-Europe; Arizona telemedicine network, USA ⁴ http://www.marketsandmarkets.com/Market-Reports/healthcare-it-252.html

Ideally, e-health should encompass medical informatics, public health and business, and include within its purview health services and information that are delivered and enhanced through the Internet and related technologies (Eysenbach, 2001). With the integration of tele-health technologies with the Internet, e-health has the potential to enhance the quality and value of health services delivery through improved efficiencies and diminished costs thereby developing new markets (Wen & Tan, 2003; Baur, Fehr, Mayer, Pawlu & Schaudel, 2011). In essence, e-health comes with the promise of improved quality care, greater safety, reduced costs, reduced medical errors, increased efficiency of information flow and most importantly, empowerment of healthcare consumers in their healthcare decisions (Walker, Pan, Johnston, Adler-Milstein, Bates & Middleton, 2005; Vishwanath & Scamurra, 2007; Tripathi et al, 2009; Ebel, George, Larsen, Neal, Shah & Shi, 2012).

Although e-health envisages endless possibilities for the healthcare industry, there are several barriers to its adoption, the most significant ones being those that come from the healthcare providers’ perspective. Some of the major barriers are high investment costs (Reed, 2007), uncertain returns on investment (Steele, 2006), loss of productivity (Clarke & Meiris, 2006) and, most significantly, misalignment of incentives (Glaser, 2007). Overcoming these deterrents is crucial because healthcare providers are supposedly the harbingers of the future of e-health. If the barriers faced by them go unresolved, their participation and cooperation cannot be secured. As a result, the ideal of a patient-centric e-health system may not materialise.

Currently, healthcare providers may feel that they are unduly burdened with the responsibility of promoting e-health through investments in Electronic Health Records (EHR) systems. This may be because building such a system would obviously require huge investments and maintenance costs of equal magnitude. Further, costs may also come in the form of licensing and upgrading fees from time to time. Despite such investments, there is no guarantee of returns, however, owing to a lack of demonstrable evidence for the long term sustainability of an e-health system (productivity paradox). While the investment in EHRs is considerable - not only in terms of direct costs but also in terms of the time spent on staff training and the consequent loss of productivity, the returns on such investments may often be disappointingly low to warrant any justification.

To create a patient-centric e-health network, the combined power of technology and the Internet must be harnessed to foster a totally ’connected‘ health network that encompasses all the key stakeholders, and provides a common platform for interfaces and transactions among them, seamlessly connecting them in the process, for an exchange and reuse of health information. Since such a network is in fact an interconnected ‘network of networks’ that delivers a product or service through both competition and cooperation, it can be thought of as a ‘business ecosystem’. James Moore, who pioneered the concept in 1996, describes the ecosystem as being made up of “customers, market intermediaries (including agents and channels, and those who sell complementary products and services), suppliers, and of course, oneself” (Kandiah & Gossain, 1998, p. 29). In addition, such an ecosystem should be able to create value for its customers by providing additional information, goods, and services, through the use of the Internet and related technologies (Kandiah & Gossain, 1998). The type of patient-centric e-health network envisaged in this monograph may be said to have the attributes that characterize a business ecosystem and may henceforth be referred to as an “e-health ecosystem”.

Such an ecosystem may however be a difficult proposition in the current lopsided scenario where one stakeholder in particular, namely the healthcare provider, views itself as creating more value than it can capture from the network, with the other stakeholders benefiting more from the value created, a phenomenon known as the “tragedy of the commons”.

A patient-centric e-health network is also expected to reduce information gaps in the provider-patient relationship, benefitting patients and empowering them in their healthcare decisions and choices. Such an outcome may not be desirable for healthcare providers who have been traditionally leveraging this information gap (information asymmetry) to their advantage. And given the huge investments they need to make in order to progress into e-health, they may feel that it is neither logical nor reasonable to have to share the benefits of their investments with others including patients.

Even though some healthcare providers may seem willing to share their patients’ health data over the network, they may only want to do so within a private network. A private network is an arrangement entered into by players (strategic decision makers) for mutual benefits. Data is strictly shareable only within the network thus restricting patients’ healthcare choices to such players as are part of the network (information blocking).

Issues (dilemmas) such as the ones discussed above have not, as yet, been addressed and resolved to the satisfaction of healthcare providers. In this context, research has an important role to play inasmuch as it can establish the fact that a patient-centric e-health network may be feasible provided that certain conditions are met. To resolve these issues, appropriate trade-offs between conflicting notions such as fairness and efficiency must be achieved for every key player in the e-health network, particularly the healthcare provider. Fairness in this context would mean the pay-off received by a player proportionate to its contribution to the achievement of the total output, whereas efficiency would mean the benefits resulting from reduced information asymmetries.

1.2 Prior Research and Gaps

Over the last decade and a half there have no doubt been several studies exploring the potential opportunities of e-health and its resultant benefits to the key players, but these studies were, by and large, limited in scope and findings, perhaps owing to the nascence of the field.

For example, Parente (2000) and Wen & Tan (2003) based their study on the business models of the then-existing health e-commerce websites, Aggrawal & Travers (2001) highlighting some innovative changes that could be introduced into healthcare through B2B and B2C e-commerce business models and Joslyn (2001) showed the significance of patient-centric e-health business models in the context of rising consumerism. While these studies have made a meaningful contribution inasmuch as they helped identify some of the key players in the field as well as recognizing new values that are likely to be created and captured in the e-health network, they were, as a rule, narrowly focused in that they failed to take a holistic view of the e-health ecosystem, or adequately representing all the key stakeholders or players in terms of their roles and interactions.

Later, deBrantes, Emery, Overhage, Glaser & Marchibroda (2007) explored the potential of health information exchanges (HIEs) to function as economically sustainable intermediaries that could create value by reducing the information asymmetries among its customers, namely the healthcare market players, through information feedback loops. The study specifically focused on the values generated for the e-health market players through such information feedback loops, but barely touched upon business model arrangements which are necessarily a part of such systems.

Busch (2008) identified some key market players in the healthcare continuum and classified them as primary and secondary depending on how the players used health information – whether for direct and indirect patient-care related activities or for roles outside of these patient-care activities. Even though the roles of these players were clearly mapped, Busch’s notion of value was from an audit perspective; it largely dealt with how a health information system should be audited for content, infrastructure and process to ensure appropriate internal controls, and not so much with how to organize the e-health ecosystem.

Raghupathi & Kesh (2009), on the other hand, examined the concept of total digital health systems (TDHS) that could offer both intra- and inter-enterprise benefits by fostering a sharing of health information among the various healthcare delivery participants. However, the focus of the study was on the TDHS technical design issues rather than on the design of a business model to organize the players in the e-health ecosystem.

DesRoches et al. (2010) conducted a study of the US hospitals to determine the relationship between EHR adoption and key metrics like quality and efficiency, and found a strikingly weak relationship between them. This led them to acknowledge the lack of evidence on how best to implement the EHR to achieve maximum gains in healthcare. Mensink and Birrer (2010) discussed the case of the Dutch Electronic Health Record, the progress of ...