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Six First-Take Reactions to Surescripts Network Expansion

Yesterday Surescripts announced their new Clinical Interoperability Services:

  • Extended Network Connectivity – As a network of networks, Surescripts will support and enable the exchange of all types of clinical messages between EHRs, HIEs and health systems that, today, are not connected with each other.
  • Net2Net Connect – Allows health systems and technology vendors that already support clinical information sharing within their network to connect to Surescripts in order to receive and send clinical information outside their network (December 2010).
  • Message Stream – Secure messaging tools for health systems and technology vendors to enable their physicians to electronically exchange clinical information (December 2010).
  • Clinical Message Portal – Simple connectivity tools intended for providers that, today, do not have an EHR system to send and receive clinical messages. (January 2011).

Many others have recapped the new Surescripts network, so I’ll simply point you to a few of these resources:

Here are my 6 first-take reactions.

1) The real news here is the rapid uptake of the The Direct Project  (formerly known as NHIN-Direct). 

What’s The Direct Project? The Direct Project specifies a simple, secure, scalable, standards-based way for participants to send authenticated, encrypted health information directly to known, trusted recipients over the Internet. It’s well worth your time reading and understanding  The Direct Project Overview.

The Direct Project is creating the standards for a new category of service provider — a HISP (health information services provider). Think of a HISP as an extension of your ISP (Internet Services Provider) for health information.

My hat is off to project coordinator Arien Malec and his dedicated teams — they have moved mountains in a very short time.

2) It’s a nhin, not “the” NHIN.   While John Moore characterized Surescripts network as a “Defacto NHIN” (the Nationwide Health Information Network URL), it’s more accurate to describe this as a “nhin” — a nationwide health information network, but likely only one of many proprietary but technologically open networks to come.

Who else? There are many possibilities.  Other transaction network companies (e.g., NaviNet, Emdeon, Availity) will consider extending their existing networks into clinical data exchange. Other possible entrants include local HIEs (Health Information Exchanges), EHR software companies, HIE software companies, traditional ISPs (e.g., Comcast), hospitals, etc.  My mom is working on a creating a HISP in her garage…write me before 10 pm and I can get you 10% off the first month’s service.

3) It’s more competitive than complementary to HIEs. The Surescripts press release and John Halamka describe this network as complementary to existing HIE initiatives.  However, John Moore believe it’s competitive.

I’m with John Moore on this one.  While I agree that HIEs should view HISPs as complementary, I believe they’re more likely to view them as competitive. Here’s my sense of how HIE executives will view the Surescripts announcement:

“Those buzzards at Surescripts! They picking off the low-hanging fruit — high value, low effort health data exchange.  That’s exactly what we’ve been planning to do.  If a doctor signs up with Surescripts, they will have less need to sign up with our regional HIE, and that’s less money for us.  The Feds are spending $600 million to promote HIEs and then they turn around and enable this new competitor.  I’m going to write my congressman and demand protection those buzzards.”

The likely result: Surescripts network further weakens the already shaky business models and value propositions of regional HIEs.

4) It’s a platform.  This allows others to build novel applications on the platform. The Surescripts press release already references applications being developed by their partner Kryptiq.

5) It’s disruptive. We already talked about HIEs. How about HIE software vendors? EHR software vendors? Hospitals? The Surescripts network tends to commoditize the exchange of health information; the next value creation challenge will be to use the data to improve outcomes and lower costs.

6) There’s potential for first-mover advantage.  Think of signing up with your own ISP — once you have one, why would you need another? and why would you switch if you’re getting good service?

Surescripts will certainly look for ways to create switching costs for customers — convenience, pricing, value added applications.

However, this is very different that the type of switching costs we’ve traditionally experienced in health IT. The previous approach has been to create switching costs based on non-interoperability of data — you can’t easily move patient data from one EMR vendor’s software to another EMR vendor’s software.

Overall — this is a very positive development for those of us envisioning a world of interoperable, modular, open, secure health information exchange.

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Comments

1.
On October 26th, 2010 at 10:11 pm, Brian Ahier said:

Great overview Vince! I agree that one the biggest implications is the importance of the Direct Project. Both the Nationwide Health Information Network (NW-HIN for now) and the Direct Project (formerly NHIN Direct) are very important components of the creation of the health Internet that is envisioned. Unfortunately, trademark issues with the acronym NHIN are forcing a rebranding effort, but this gives some opportunity for bringing some clarity and notice to the efforts.
I definitely agree with you and John that this will be a competitive and not complementary to existing HIE initiatives. However, there is still a great deal of value for local HIE efforts and I think that Surescripts may provide a platform for innovation that smart folks will use to their advantage.

2.
On October 27th, 2010 at 7:49 am, Faisal Qureshi said:

Vince, great synopsis. I would add a 7th reaction: reach. Surescripts has a brandname and reach with the majority of providers who directly or indirectly already use a Surescript product or service.

3.
On October 27th, 2010 at 3:43 pm, Vince Kuraitis said:

Brian, allow me to elaborate on your point on potential value for local HIE efforts and my earlier point that HIEs SHOULD NOT (but likely WILL) view Surescripts network as competitive.

HIE’s are in a very difficult position. A much more rational public policy position would be to view HIEs as similar to interstate highway system — it’s needed public infrastructure and taxpayers should expect to pay an ongoing subsidy.

The idea that HIEs should have 2 years to come up with viable business model (when none has emerged over the past decade) is wishful thinking.

HIEs need to get past viewing Surescripts (and many simiilar to come) as competition. What’s the value of recreating local technological infrastructure when national companies with existing networks can achieve much of the same functionality.

HIEs should focus on value added services leveraging local market relationships and local governance. Surescripts won’t be able to compete in that market.

OK, off my soapbox now.

Faisal, your point #7 is right on target. I keep telling my mom that she will have a hard time in her garage competing with companies that have established networks of hundreds of thousands of providers. But as you know, parents never listen to what their kids tell them.

Mentions on other sites...

  1. Vince Kuraitis on October 26th, 2010 at 6:17 pm
  2. Aparna M K on October 26th, 2010 at 6:45 pm
  3. Netspective Health on October 26th, 2010 at 6:58 pm
  4. Leonard Kish on October 26th, 2010 at 8:06 pm
  5. Brian Ahier on October 26th, 2010 at 10:13 pm
  6. HealthIT Policy on October 26th, 2010 at 10:17 pm
  7. Gilad Buchman on October 26th, 2010 at 11:19 pm
  8. Brian Ahier on October 27th, 2010 at 4:13 am
  9. CGCollaborative on October 27th, 2010 at 8:40 am
  10. Patric Kane Williams on October 28th, 2010 at 9:55 pm
  11. Pat Rioux on October 31st, 2010 at 5:54 pm