Open Source Software Could Lower Software License Fees
Here's an interesting story in the Kansas City Business Journal on the early impacts that open source software and what it might mean for Cerner.
2015, “it's a great time for a company like Cerner,” U.S. Sen. Sam
Brownback, R-Kan., said during an April 11 visit to the company's North
Kansas City headquarters.
Yeah, right. Just because EHRs and RHIOs are all the buzz, does not mean that industry or government is whipping out their checkbooks to write big (really big) checks for software they've never had to have before. Most hospitals don't even have paperless charting, and with EMRs for a mid sized hospital going for $20 million a pop, don't expect rapid growth of a new HIT product category. Hospitals only have a fraction of the budget needed to purchase all kinds of new technology that's available to improve patient safety and reduce operating costs – most with attractive ROIs – so how are they going to pay to play in EHRs? What's needed is some serious commoditization to substantially lower costs.
Medical device and IT vendor's business models have remained relatively unchanged over the past 30+ years – while outside of health care, business models and product strategies have gone through earth shaking transitions. The open source software movement could significantly impact health care, just not today.
For the near future, Forrester Consulting's Brown doesn't expect
open source to “lay waste to the commercial market” either, he said.
“At this point, the Cerner product is more feature-rich and
robust,” he said. “But open source has the potential to create some
downward pricing pressure because it offers a lower price point.”
That doesn't mean open-source systems are free.
“The all-in cost includes all the systems integration, implementation, support and training,” Brown said.
Therefore, he said, the price difference between an estimated $40 million electronic medical record system that The University of Kansas Hospital expects to buy soon and an open-source system “is not the difference between $40 million and nothing.”
True, but the cost of open source in most cases is closer to nothing than $40 million. In other industries, buyers tend to drive innovation. But among health care delivery organizations there are few innovators like Wal-Mart, GE and IBM.
Hospital, said the savings offered by open-source software would not
justify the lesser performance and higher in-house IT demands that
would come with such a system.
That may be true today, but the open source effort is making progress. Most open source software targets modules or specific applications; successful implementations include the Apache web server, rules engines, enterprise service busses, Java application servers, and HL7 parsers. Open source Linux is gaining significant adoption, from corporate data centers to embedded medical devices (Siemens/Acuson ultrasound systems for example). Open source software is built into many currently available health care products, and larger projects like RHIO software are gaining traction in health care.
Browsersoft also is part of Connecting for Health, one of four
consortiums chosen in November to receive a total of $18.6 million in
federal grants to create prototypes for the proposed Nationwide Health
Information Network.
Using a record locator system within OpenHRE, the Connecting for
Health team recently marked something of an “Alexander Graham Bell
moment” for the sharing of electronic medical records, Browsersoft
President Don Grodecki said.
For the first time, Grodecki said, the team was able to exchange clinical records stored by disparate RHIOs in three states.
Although not widely publicized, the event was as significant as the
first exchange involving disparate automatic teller machine systems,
Grodecki said. And Connecting for Health released all of the technical
data that made it possible on April 6.
There are many areas in health care ripe for application of disruptive technology and especially business models that have seen success in other industries. Vendors like Cerner still have time to prepare, if they get started soon.
UPDATE: Reader, and board member of NYC's MIT Enterprise Forum, Stephanie, thought we should know about the following MIT EF meeting titled Connected Healthcare, a $34 Billion Dollar Market Opportunity:
Moderator:
Elizabeth Boehm – Principal Analyst, Healthcare & Life Sciences, Forrester Research
Panelists:
George Boyajian, Ph.D – EVP, Strategy and R&D, Living Independently Group
William Burkoth – Senior Manager, Strategic Investments Group, Pfizer
Mary Furlong – President, Mary Furlong Associates
Donald Jones – Vice President, Business Development, Healthcare, Qualcomm
Douglas McClure – Corporate Manager, Technology Services, Partners Telemedicine
Astro Teller, Ph.D – CEO, Body Media.”
Be there Thursday May 4th, at 5:15 p.m. If I was a little closer I would love to attend.
Medtronic Receives 510(k) Approval for Insulin Pump and Continuous Glucose Monitoring System
Metronic announced FDA approval for the MiniMed Paradigm REAL-Time Insulin Pump and Continuous Glucose Monitor. (Press release)
REAL-Time Continuous Glucose Monitoring (CGM) System, and a MiniMed
Paradigm insulin pump. The REAL-Time CGM System relays glucose
readings every five minutes from a glucose sensor to the insulin pump,
which displays to 288 readings a day – nearly 100 times more
information than three daily fingersticks. REAL-Time glucose
information displayed on the insulin pump allows patients to take
immediate action to improve their glucose control after taking a
confirmatory fingerstick. The REAL-Time CGM System component is
indicated for any patient 18 years of age or older, and insulin pump
therapy for all patients requiring insulin.
The MiniMed Paradigm REAL-Time Insulin Pump and Continuous Glucose Monitor is Medtronic's fourth generation insulin pump that was originally introduced in 2002. The MiniMed pumps also have the ability to download data to the CareLink Therapy Management website – you can read a review of the MiniMed 512/712 pumps here. One of the ultimate objectives of wireless sensor technology, is to make possible a true closed-loop system that would mimic biological systems.
the development of a “closed-loop” insulin delivery system that may one
day mimic some functions of the human pancreas. Medtronic is testing
future systems that would employ advanced scientific algorithms to
proactively recommend insulin dosages to patients. Through this
process, Medtronic anticipates developing an external, closed-loop
system designed to simplify and improve patient diabetes management.
The market targeted by the MiniMed Paradigm REAL-Time Insulin Pump and Continuous Glucose Monitor has been pretty hot lately – you can read posts on similar products here, here and here.
Pictured right is the MiniMed Paradigm REAL-Time Insulin Pump and Continuous Glucose Monitor in use. Components include A) the insulin pump, B) the cannula, a soft tube that delivers insulin for up to 3 days, C) the blood glucose sensor that can be worn for up to 3 days, and D) sensor electronics and radio that communicates to the pump.
