FW: Open Source Model Needed to Rein-In "Unsustainable" Health IT Expenditures, Says Frost & Sullivan

[michael gurstein]

Not quite Open Data but a potential step along the way.

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Open Source Model Needed to Rein-In "Unsustainable" Health IT Expenditures,
Says Frost & Sullivan

"Healthcare expenditure is reaching unsustainable levels on a global scale"
according to the international consulting firm Frost & Sullivan. In a
strongly worded press release, Frost & Sullivan says that "there is an
urgent need for sustainable business models that can curb expenditure and
promote better healthcare delivery." Frost & Sullivan concludes in its
recently released analysis that the only way to end these "spiraling
expenditure[s]" is to shift "from traditional to newer, more sustainable
business models." The analysis specifically recommends a shift to open
source as well as software as a service (SaaS), Managed Services, and the
Freemium business models.

Some Western European countries have been closely monitoring the performance
and cost-effectiveness of their healthcare systems and the delivery of
healthcare, according to Frost & Sullivan Senior Research Analyst Simone
Carron-Peters, and "as a result of such endeavours, Europe is witnessing a
rise in the adoption of innovative business models in healthcare information
technology." She says that "business models such as SaaS, Managed Services,
Open Source and Freemium are gaining prominence, alongside traditional
capital investment and licensing alternatives."

According to Carron-Peters, software service providers should work with
hospital management to ensure that their IT goals are aligned with overall
business objectives. This would enable hospital staff to focus on their core
competencies and provide quality patient care.

Carron-Peters emphasizes that there is a need to devise a business model
with a workable core architecture that would provide social and economic
benefits, thereby achieving a profound transformation of the health system
in the long-term. A partnership-based approach towards managed services will
provide the flexibility to face challenges pertaining to changes in
technology, regulations and user needs.

"IT managed service providers should focus on long-term relationship
building and finding strategic win-win solutions by maintaining regular
communication and ensuring mutual adjustment," concludes Carron-Peters.
"Software vendors should ensure the safe exchange of medical data across
national borders, respecting the need to protect health data and the
personal integrity of the patient."

Frost & Sullivan's new report, titled "Strategic Analysis of Healthcare IT
Implementation Business Models" provides a comprehensive analysis of the
various innovative business models in healthcare information technology in
Europe. This research service includes an analysis of Open Source, Software
as a Service (SaaS), Managed Services, and the Freemium business models. It
also details a value chain analysis, pricing, competitive and impact
analysis of these business models. The research also provides information on
the market potential of these innovative business models.

Interestingly enough, the report also outlines how these sustainable Health
IT business models can not only significantly cut down on out-of-control
health IT expenditures, but also provide lucrative market opportunities to
vendors that embrace those sustainable business models. The Frost & Sullivan
report has an entire section on Open Source sustainable Health IT models,
which is then followed by another entire section on the "Market Potential"
of the open source business models.

We should note that Frost & Sullivan is not a fly-by-night operation. It is
one of the world's leading consulting firms, employing over 1,800 analysts
in 40 offices around the world. It is clear that while U.S-based consulting
firms, from Gartner to HIMSS Analytics continue to cheerlead and promote the
proprietary approach to Health IT, as well as the growing Health IT bubble,
Frost & Sullivan has taken a step back and realized that this approach is
unsustainable. They have clearly recognized that the open source approach is
both the solution and as well as a potentially lucrative business for the
vendors that embrace it.

In other words, this Frost & Sullivan report validates the concepts that
Open Health News staff have been discussing for over a decade now. It also
validates the approach that the U.S. Department of Veterans Affairs (VA) has
been taking for the past 35 years. This open source, collaborative and
transparent approach is being re-affirmed by the current leadership of the
VA as we detail in this article.

Hopefully this report, coming from such a well-known consulting firm, will
have a sobering impact in an industry that is rapidly spiralling down into a
financial catastrophe due to the excessive cost of proprietary EHR
solutions.