Welling Digital

Excerpted from a special report I wrote for this week’s Australian Doctor

Jim Clark was known as Silicon Valley’s $3 billion man: the first person to start up three companies that were each capitalised at $1 billion or more. Starting in the 1980s with Silicon Graphics, a pioneer of film and CGI animation, he grew bored with that and helped found Netscape, which launched the world’s first widely used web browser, in the early 1990s.

But his timing failed him when it came to the third venture, an attempt to automate health care. In the late 1990s, Clark set up Healtheon, an online platform joining payers, providers and consumers in an effort to squeeze inefficiencies out of the $US7 trillion a year US industry. The company was quickly capitalised at $US20 billion, largely on the strength of Clark’s reputation.

However, Healtheon struggled to get any of its projects off the ground, encountering resistance from every angle. Doctors said they were too busy to learn new things, and besides, they didn’t want better communication with patients — face-to-face was just fine with them. Health maintenance organisations and insurance companies, meanwhile, turned their backs on a no-risk opportunity to save 90% on transaction costs — they didn’t want to make it easy for people to make claims, because the more arcane the rules for reimbursement and the more complicated the claim process, the easier it was to delay payment and the more likely customers would drop lengthy appeals for payment.

As Healtheon’s value tumbled to less than a hundredth of its peak value, in 1999 Clark merged the company with WebMD, an online medical company formed from the combination of several medical information web sites which had turned over only $US75,000 the previous year, and sold down his stockholding of Healtheon, telling reporters at the time: “I was naive — I’ll never invest in health care again.”

Ten years later, a reinvigorated WebMD is a billion-dollar company again, arguably the world’s most popular medical news web site for both consumers and health professionals, reportedly receiving 40 million visits a month as well as offering web-based services including online personal health records to users.

Meanwhile, Microsoft and Google have also entered this space, and thousands of patients are sharing their records electronically with providers, hospitals, pharmacies and general practices in dozens of countries, including Australia. Jim Clark, on the other hand, now spends most of his time building and sailing super-yachts and is perhaps best known in Australia as model Kristy Hinze’s boyfriend.

Clark had the right idea, but back in the last decade he was too far ahead of the curve to make it work. Now, however, e-health is an idea whose time has come.

“E-health is an idea whose time has not only come, it is overdue,” says Associate Professor Ron Tomlins, associate professor of general practice at the University of Sydney, who spent several years as chairman of the General Practice Computing Group.

Professor Tomlins said government and professional initiatives in Australia over the past 10 years that put computers, powerful software and broadband in practices have prepared a foundation that will enable GPs to harness the new online technologies that have been developing independently over the same period.

As more and more doctors turn to the Internet as a professional information source, more than 80% now report that the Internet is essential to their practice, according to research in the US by Manhattan Research. Consumers today, meanwhile, get more health information from the Internet than from their doctors, according to market research firm iCrossing.In Australia, trials of electronic health records and other online applications are under way in most states (see Case studies), while the Federal Government tries to set standards through the National E-Health Transition Authority (NEHTA) to ensure consistency, portability and security of records.

In Canada, the government has set a target of 50% of the population to have electronic personal health records by the end of 2009. In Australia, meanwhile, the government is “dragging the chain”, according to Professor Tomlins, with NEHTA recently announcing that it would be another 10 years before personal health records were in established use in Australia. Professor Tomlins said NEHTA is not moving fast enough, pointing out that it underspent its budget by almost $40 million last financial year.

“General practice is frustrated as hell in the lack of interest from the Commonwealth,” Professor Tomlins said. “The state governments are moving things along with projects such as Healthelink in NSW, SHER [shared electronic health records] and secure messaging projects in the Northern Territory and chronic health management programs in South Australia. But there’s a real danger that they won’t be interoperable and we will end up with a rail gauge situation.”

But regardless of that danger, Professor Tomlins says, the increase in data available to GPs puts them in a good position to use new technologies to improve patient care. “GPs have spent the past few years building up electronic databases for their practices,” according to Professor Tomlins. “Tools are now available to use that data to better understand how better care can be delivered to their patients. They can conduct clinical audits to mine that data, both clinical and financial, and benchmark themselves against other practices to find ways to improve the way care is delivered.