Executive Summary

eHealth after the “Bubble” Period: Focusing on the Value Proposition

Thomas R. Eng, VMD, MPH, President, and Linda Harris, PhD, Consultant, eHealth Institute

This is a summary of the discussions at the eHealth Developers’ Summit 2001, a national forum of executive-level eHealth developers, investors, sponsors, and funders. More than 100 commercial, academic, government, and nonprofit institutions participated in 2001.

eHealth is the use of emerging information and communication technology, especially the Internet, to improve or enable health and health care. The rapid rise and equally dramatic fall of many “dotcoms,” including eHealth companies, in the last few years has injected a heavy dose of realism into the sector. eHealth developers now recognize that there are no easy business models and more hard thinking and experimenting are needed for financial success. Compared to a few years ago, capital to support the development and implementation of eHealth solutions will be more difficult to obtain. Hence, eHealth developers should be cognizant of the disparate interests of investors and funders from the private and public sector. Despite current market conditions and investor sentiment, however, most observers believe that eHealth deployment will likely escalate in the near future.

Return on investment (ROI) was an important theme for many Summit participants. Unfortunately, strong proof of ROI remains elusive for most eHealth solutions, and realizing tangible financial benefits from eHealth is probably a long-term process. In addition, tested models and the underlying data necessary to calculate and document ROIs for many eHealth solutions in specific health settings and contexts are not readily available.

The aging population, the increasing volume of biomedical knowledge, consumer demand for control and choice in a complex health care system, the desire to control costs, improve quality, reduce errors, and, recently, national security concerns will help drive the adoption of eHealth solutions in both the health care and public health sector. Unfortunately, financial and systemic barriers and the inherent fragmentation within the US health care delivery system contribute to the relatively slow adoption rates of many eHealth applications. Rapid growth in clinical eHealth adoption probably requires health care system reform and a realignment of financial incentives that reward quality and positive health outcomes. Standardization of eHealth technologies and their seamless integration into clinical workflow and IT infrastructure are high priorities for increasing clinician adoption.

Almost half of all Summit participants believed that large health care corporations (i.e., health plans, pharmaceutical/medical device companies) will be the most important drivers of eHealth in the near term. If so, eHealth developers will need to be cognizant of corporate interests. At the same time, however, they should not lose sight of the fundamental need to understand their users—patients, consumers, and providers. Five out of six Summit attendees believed that open source solutions will become increasingly important in the eHealth sector. Because the open source model is not commonly applied to health or health care software in the United States, it will be interesting to see if this model develops momentum and is sustainable in an environment with such diverse needs and incentives.

Emerging information and communication technologies promise to usher in a wealth of innovative solutions for seemingly intractable problems in health and health care, including quality, access, and cost. eHealth developers are currently faced with major issues including evolving business models and sustainability, elusive ROIs, and barriers to the adoption of new technologies. To prosper in the near term, eHealth developers will need to understand the larger set of forces that influence the likelihood of success. They also need to develop strategic relationships, support standards development, and collectively tackle common barriers to application and infrastructure development and dissemination. This is particularly important for developers who do not focus on immediate bottom-line issues.

From: Eng TR, Harris L. eHealth after the “Bubble” Period: Focusing on the Value Proposition. Seattle, Washington: eHealth Institute, April 2002.

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