Is Physician EHR Adoption Getting Past the Penguin Problem?

Remember the penguin problem described by economists?

No one moves unless everyone moves, so no one moves. 

Overcoming the penguin problem has a lot to do with creating expectations. A recent writing by Dr. James O’Connor in Physician Practice expresses a voice from the physician community that I’ve never heard before.  His essay is entitled “Meaningful Use — Doctors Have No Choice”.

Is HITECH Working? #2: Key physicians will sit on the sidelines (at least for now).








(click on any of the above graphics to be linked to the orginal source)

by Vince Kuraitis JD, MBA and David C. Kibbe MD, MBA

In the previous post in this series on “Is HITECH Working?”, we straightforwardly noted that hospitals are playing in the HITECH game. The issue of whether physicians will play is MUCH thornier.

As the headlines above succinctly convey — we conclude that for now there is too much fear, uncertainty, and doubt (FUD) to expect significantly increased EHR technology adoption by most physicians from the HITECH incentives and penalties.

Here are topics we’ll cover today:

  • Fear, Uncertainty, Doubt
  • Little Risk by Waiting a Year or Two
  • A More Granular View — Segmenting Physicians
  • Is There Another Side to the Story?
  • How Important is Physician Adoption to the Success of HITECH?

Is Gawande Right? Are Pilot Programs the Key to Delivery System Cost Reductions?

Atul Gawande’s most recent New Yorker article “Testing, Testing” addresses the critics who lament that there is no master plan to curb delivery system costs in pending health reform legislation.

Gawande retorts: “Is that a bad thing?”

…and he answers his own question by describing the value of pilot programs contained in both the Senate and House versions of health reform legislation.

Is Gawande correct?  Yes and no….

The Real Secret Sauce of Medicare’s Participation in Regional Collaboratives — Network Effects

Last week I asked whether Medicare’s Biggest Change in 40 Years is on the horizon. That post described and discussed implications of Medicare’s new direction for the medical home — the shelving of Medicare Medical Home Demonstration (MMHD) and the refocusing on the recently announced Multi-Payer Advanced Primary Care Initiative (MAPCI).

In that post I touched briefly on the potential for MAPCI to create effective networks at multiple levels — contracting networks, health IT networks, social and collaborative care networks.  I’d like to expand a bit today…

So, why is Medicare’s participation in MAPCI  and other regional collaboratives such a big deal? Here’s my hypothesis:

Medicare’s non-participation (to-date) in regional payer/provider collaboratives has been a rate limiting factor in the potential to achieve high levels of network effects that drive adoption.

Medicare’s Biggest Change in 40 Years on the Horizon?

Earlier this week CMS issued a typically cryptic Announcement indicating that they were shelving the Medicare Medical Home Demonstration (MMHD) and instead would focus on the recently announced Multi-Payer Advanced Primary Care Initiative (MAPCI). My blog post from Tuesday provides details and asks the question “What does all this mean?”

Today’s blog post will tackle:

  • Medicare’s biggest change in 40 years?
  • The rise of MAPCI
  • The fall of MMHD
  • Implications/discussion

Medicare’s Biggest Change in 40 Years?


What’s a Network Industry? Is Healthcare One?


This post is a foundational overview of characteristics of network industries.  Much of the terminology will deserve deeper discussion, but we have to start somewhere.

In his book The Economics of Network Industries, Professor Oz Shy lists four characteristics of network industries.

The main characteristics of these markets which distinguish them from the market for grain, dairy products, apples, and treasury bonds are:

  1. Complementarity, compatibility and standards
  2. Consumption externalities [network effects]
  3. Switching costs and lock-in
  4. Significant economies of scale in production

In this essay, I’ll quote from Dr. Shy in explaining each of these characteristics.  I’ll also offer a few thoughts as to how these characteristics apply to healthcare. More specifically, I’ll discuss physician adoption of EHRs (electronic health records) and patient adoption of PHRSs (personal health record systems).  

Why a PHRS instead of a plain old PHR?  Think of a PHRS as a PHR data repository platform bundled with multiple high-value applications. For a more detailed explanation, read here.   

Let’s look at the characteristics of network industries one at a time.

Table of contents for the series--Healthcare Crosses the Chasm to the Network Economy

  1. Intro to a New Series
  2. What’s a Network Industry? Is Healthcare One?
  3. We’re Building a REALLY BIG Health Internet!

Intro to a New Series

  “We need to make care linkages a core competency of American health care.” 
George Halvorson, Chairman and CEO, Kaiser Foundation Health Plan, Kaiser Foundation Hospital


There’s a double meaning to the title of this new series: Healthcare Crosses the Chasm to the Network Economy

At the level of technology, it’s a reference to Geoffrey Moore’s bestselling business/technology book — “Crossing the Chasm”. The Chasm here is the huge gap between early adopters of technology and mainstream users. The book describes the process of bringing specific technologies into mainstream usage.

At the level of clinical care, its a reference to the landmark 2001 report by the Institute of Medicine — “Crossing the Chasm”.  Here, the Chasm is a reference to the quality/safety gap existing in American healthcare, with major systemic recommendations for how to cross the chasm toward clinical improvement.

In this series, the “Crossing the Chasm” is a reference to both technology and clinical care — and to the interdependence between them. I believe we’re entering a new era in healthcare, marked by passage of the HITECH Act Federal stimulus legislation, but of which HITECH is only the beginning . While to a casual observer HITECH Act might seem focused on electronic health records (EHRs), it goes far beyond that.   

Over the past several years, I’ve had the privilege to work with many leading-edge clients who understand that health IT interoperability, networks, and platform/application technologies and business models will reshape health care over the coming years.  This has given me a chance to do a deep dive into understanding companies, business models and literature from outside health care, and then thinking through implications for health care companies (much blogging and book forthcoming).

This series will pull on concepts, terminology and lessons from two disciplines:

Table of contents for the series--Healthcare Crosses the Chasm to the Network Economy

  1. Intro to a New Series
  2. What’s a Network Industry? Is Healthcare One?
  3. We’re Building a REALLY BIG Health Internet!

Overcoming The Penguin Problem: Setting Expectations for EHR Adoption










Economists call it “The Penguin Problem”  — No one moves unless everyone moves, so no one moves. 

The role of user expectations is crucial in getting penguins to move off of ice floes and in the successful adoption of new network technologies.  I’ll cover two main points in today’s essay:

  • How “The Penguin Problem” Helps Explain Low EHR (electronic health record) Adoption To-Date
  • How Recent Federal Actions Are Setting Higher Expectations for EHR Adoption

The Penguin Problem and Low EHR Adoption To-Date

While not the only factor, the role of user expectations is a crucial element in explaining the adoption of new network technologies. Harvard Business School Professor Tom Eisenmann explains:

Adieu, LifeCOMM

“Qualcomm pulls the plug on LifeComm”  announced Brian Dolan of mobihealthnews recently. 

As demonstrated by e-CareManagement blog readership, there has been a lot of interest in LifeCOMM.  My first blog post on LifeCOMM in 2007 has been single the most commented on post and the second most widely read blog post.

It’s taken me a while to sift through my thoughts and feelings about saying “Goodbye” to LifeCOMM. At first I was deeply disappointed, but after further reflection think that LifeCOMM wasn’t the right type of platform for today’s consumer mobile health market.


My first reaction was one of disappointment.

Untangling the Electronic Health Data Exchange

by David C. Kibbe MD, MBA

The purpose of this post is to help a non-technical audience untangle some of the confusion regarding health data exchange standards, and particularly come to a better understanding of the similarities and  differences between the Continuity of Care Record (CCR) standard and the CDA Continuity of Care Document (CCD). But what I’m most interested in is getting beyond the technical, political, or economic positions and interests of the proponents of any particular standard to arrive at some principles that demonstrate in plain language what we are trying to achieve by using such standards in the first place.

Frankly, I don’t give a hoot about what standardized XML format for capturing clinical data and information about a person becomes the norm in the health care industry over the next several years. I do care that the decision is made by the people, institutions, and companies who use the standards, and not made by a quasi-governmental panel or a group of “industry experts” whose economic or political interests are served by the outcome, and dominated by a particular standards development organization with whom they are very cozy. 

In other words, I do want free and open market forces to be able to operate freely and openly as health information exchange evolves, in part because I believe market forces will work in the direction of continuously improving health IT, whereas in my experience top-down efforts are often protective of established interests and discouraging to innovation.

Herein lies the problem, in my opinion, with the standards adoption process that the Office of the National Coordinator of HIT (ONC) and HITSP have overseen during the past four years.