maybe health cares not so different

Maybe health care's not so different after all......

The following is an outline of a recent Wall Street Journal article:

Costs are rising, and a large purchaser is putting pressure on its

providers to invest in technology to reduce costs and make data

collection easier. The providers complain that while they're being

forced to make the investment, the purchasers are going to reap the

benefit. Further, providers argue that the new technology hasn't

simplified their offices, but on the contrary, has created more

complicated workflows. Consumers are concerned that their privacy will

be compromised by this system that makes their personal data

electronic.

Sounds like another tired tale of the barriers to adoption of

electronic health records, doesn't it? Well, it isn't.

The title of the article is "Wal-Mart's Radio-Tracked Inventory Hits

Static" (subscription required for the full article). It's not about

health care at all, in fact, but the parallels with the ongoing

discussion of barriers to adoption of EHRs seemed striking to me.

Some excerpts from the article are below (I learned from Paul Levy's

blog not to copy the entire article):

Wal-Mart Stores Inc.'s next leap forward in ultra-efficient

distribution is showing signs of fizzling....

A pioneer in low-cost practices widely copied by competitors,

Wal-Mart has pushed its suppliers to use exotic radio-activated

tags to chop labor and inventory costs anew. But tests using the

tags aren't showing any savings, and suppliers forced to invest in

the relatively expensive technology are grumbling....

Wal-Mart is pushing the RFID technology on the idea it will

increase efficiency and eventually save everyone money --

manufacturers as well as Wal-Mart. Yet as Wal-Mart searches for an

answer to its rising costs, suppliers are saying RFID isn't it....

The current generation of RFID tags cost about 15 cents apiece

while bar codes cost a fraction of a cent. Beyond the tags,

suppliers have had to bear the cost of buying hardware -- readers,

transponders, antennas -- and computer software to track and

analyze the data.... On top of that, suppliers say that instead of

saving labor, RFID tagging actually takes more: While bar codes are

printed on cases at the factory, because most manufacturers have

yet to adopt RFID, those tags have to be put on by hand at the

warehouse....

More problems have come into play in recent years,

including...consumer concerns that once the tags are on each item

on a store's shelves -- from tubes of toothpaste to personal

computers -- that they could be used to track individual buyers....

Wal-Mart wants to get the value of this technology, and they want to

do it fast. I suspect that they will eventually just invest in their

supply chain by splitting the cost of the RFID investments with the

suppliers. Happens all the time in every industry: "Require" your

suppliers to do it themselves, but if they don't do it fast enough, or

well enough, or it threatens to put them out of business, roll up your

sleeves and partner with them to make the joint investments that

benefit everyone.

For some reason, most health insurers and purchasers (and even

Wal-Mart) aren't applying this same logic to their health care

delivery supply chains. That isn't as much a market failure as it is a