“I still want to be able to go into the basement and kick the server!”: The State of Technology in Healthcare (Part II)

Last week I wrote about the many factors that contribute to a rapidly transforming healthcare environment and how technology is playing a role in this evolution. This dynamic also coincides with an increase in the level of interest of venture capital funds in healthcare IT businesses. Here at OpenView Venture Partners, we made our first HIT investment in a company called Kareo in July.

The provider community represents one of the segments of the market undergoing an interesting transition. Healthcare providers include physicians, nurses, social workers, psychologists and many other specialist positions. However, the physicians are the group most pondered in terms of healthcare technology adoption today.

More than 700,000 physicians exist in the United States alone and they are currently dealing with a number of external factors, forcing them to fundamentally change how they practice medicine. New compliance initiatives are being implemented, Medicare and Medicaid reimbursement rates are in flux, overhead costs are increasing and the government is mandating physicians become meaningful users of an electronic health record. This doesn’t even take into account the potential repercussions of healthcare reform!

This past weekend I spoke about these matters with a family friend who is a physician. Aside from the bemoaning of cost increases and reimbursement decreases, I was most surprised to hear his take on electronic health records.

As the owner of a three doctor practice, he had installed an ambulatory EHR last year and had nothing but negative things to say. He said that even after learning to use the system his work can take him twice as long at times. He also said the EHR offers his practice no ostensible benefits and is more of a pain than it is worth. He even received grant dollars and made money on the purchase before the $40,000+ he has coming next year!

This anecdote is an important one for anyone trying to understand the physician community’s attitude towards technology: Don’t change my workflow! I know how I do things and some days that is tough enough.

This leaves an opportunity for expansion stage healthcare IT companies to come in and change the game. Entrepreneurs should focus on products that increase charge capture, automate workflow in a practice setting, allow for recording of patient data in a non-intrusive manner and put the patient in charge of his/her well-being.