Guest Post by John Hagedorn, "IT Enabled Personalized Solutions to U.S. Health Care: Status and Challenges"

06 March 2012 Personalized Medicine Bulletin Blog
Author(s): Antoinette F. Konski

The collection, analysis and sharing of digitized information between patients and medical providers is promising to revolutionize the doctor-patient relationship. This new paradigm is enabled through recent innovations in information technology (“IT”), i.e., software, hardware, wireless access and mobile communications, rather than by the delivery of traditional health care such as pharmacology and biotechnology. New information- and communication-enabled applications are personalizing health care, increasing its effectiveness and reducing its cost. This article will review this emerging field of IT-enabled health care and discuss challenges to its wide-spread adoption in the United States.

U.S. Health Care Spending Comparisons and Demographics

Patients, families, doctors, hospitals and legislators face a myriad of problems in the delivery, efficiency, effectiveness and cost of health care in our country. These challenges are structural, regulatory, demographic, technical, and most of all personal. 

U.S. health care spending in 2010 was $2.6 trillion, 17.9% of GDP and averaged $8,402 per person[1] – over double the average $4,100 spent in the 15 other most economically advanced countries.[2] Those aged 65 to 74 spent 11.4% of total U.S. expenditures, while those 75 and over accounted for 15.1%. In 2010 the 65+ cohort spent an average of about $21,000 on health care, 2.5 times the average American.[3] The population 65 to 74 is projected to increase from 21.7 million in 2010 to 31 million in 2020 (44%) and that 75+ from 18.5 million to 24 million (28%) in the decade.[4]

Poverty among those over 65 is a major contributor to that cohort accounting for 36.5% of health care spending while representing only 13% of the population. A Supplemental Poverty Measure (SPM) survey found a poverty level for American over 65 of 15.9%, 75% greater then the 9.0% national average, mainly due to medical out-of-pocket expenses.[5]

Treatment of the chronically ill constitutes 78% of U.S. health care spending but is hampered by a fragmented delivery systems and discontinuities of care. In 2011, 20% of our population or 16 million Americans had some type of disability that limited their ability to perform basic personal activities or to live independently. That condition exists for 40% of those 65 and older and 49% for those 85 and older.[6] As many older Americans have multiple chronic conditions, the percent of our citizens with limitations in activities of daily living is growing rapidly. This is the major reason that 15% of the medical patients treated in the U.S. in 2011 accounted for 90% of the country’s health care bills.[7]

Fragmented and Discontinuous U.S. Health Care Delivery System

The fragmentation and lack of continuity in U.S. health care delivery is a fundamental contributor the high comparative and absolute costs and the poor overall performance of our system. Gone are the days when primary care physicians took care of 3 generations of family members, watching them grow, understanding their mental and physical health intimately, and helping them to get the right care at the right time.[8] The fragmentation and discontinuity causes patients and families to experience:[9]

  • Expensive, time consuming and dangerous practices, including unnecessary check-ups, tests, diagnoses, treatments and mistreatments due to non existent or poor communication and lack of clear accountability among multiple providers in the maize of general practitioners, specialists, general hospitals and specialty providers.
  • High cost and inconvenience due to inefficiencies, indifference, and errors by health care providers who don’t have a personal relationship with the patient and little motivation to foster one since an insurance company or Medicare is paying. In this environment, in which high-cost, intensive medical intervention is rewarded over higher-value primary care, including preventive medicine and the management of chronic illness.
  • Lack of transparency or fairness in pricing for the uninsured; a doctor might bill $10,000 to a patient for a procedure for which Medicare pays $800.
  • Employers who to combat rising insurance premiums, choose health plans that raise co-payments and deductibles, discouraging employees from seeking appropriate care from primary care providers and disrupting on-going treatment of chronic diseases.

The fragmentation and discontinuity causes doctors and hospitals to experience:[9]

  • Tremendous waste of time due to voluminous and disparate insurance company policies, procedures and forms. For instance Medicare has separate prospective payment systems, participation requirements, and even cost sharing requirements for each discrete type of service it covers.
  • Low efficiency levels due to thought, expense and energy diverted to dealing with conflicts with health insurers over treatment authorizations and payments and avoiding and defending malpractice lawsuits.
  • Absence of peer accountability, quality improvement infrastructures.

Personalized Health Care Technology Is the Solution

The new technology and communication enabled tools can provide critical infrastructure for a more organized delivery system, making it safer, more effective, and more efficient. Over time most providers and patients should implement and utilize certified electronic health records that meet functionality, interoperability, and security standards, and participate in health information exchange across providers and care settings so that:[9]

  • Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
  • Patients have easy access to appropriate care and information, including after hours; there are multiple points of entry to the system; and providers are culturally competent and responsive to patients’ needs.
  • This information can be accessed either through a portal to providers’ electronics health record (HER) system or through a direct transfer of information to patients’ personal and portable health records. In addition to providing timely and relevant clinical information, EHRs have tools to support providers, including clinical decision support systems, reminders for preventive services, and disease registries for prescription management.

The New Technology Enabled Personalized Heath Care Solutions

The most complex and promising of these solutions have the potential for dramatically improving chronic care management which consumes 78% of national health spending. They incorporate care management techniques and some combination of telehealth, online health and mobile health tools to facilitate data exchange between patients in their homes and care providers in clinical settings.

While established companies like Bosch and Microsoft are providing some innovative solutions, the personalized health care technology need is being met increasingly by startups. In 2010 and 2011, 27 San Francisco Bay Area startups with creative inventions in this space received $372 million in venture capital financing over 39 rounds.[10] A chart summarizing recent financing in this space is attached. Here are examples of some of these exciting new companies.[11]

WellnessFX of San Francisco was founded in 2010. It provides a personalized wellness platform allowing individuals to measure, understand and improve their health by combining state-of-the-art medical science with social media. Funds raised to date $5.85 million.

Proteus Biomedical of Redwood City founded 2009 has raised $25.4 million for its solution to personalizing therapy by connecting it to the mobile phone via the Internet using a wireless device to remotely monitor heart rate, physical activity, body position and events logged by the patient. Its mission is to assist caregivers taking care of themselves or loved ones, of which there are 50 million in the U.S.

Healthline Networks founded in 2002 in San Francisco, enables 100 million consumers a month to make more confident, informed health care decisions. The company’s consumer health care taxonomy powers a suite of comprehensive health search, content and advertising services. Health line partners with 50 trusted destination sites that include publishers, portals, search engines, employers and health plans. Equity investment in the company totals $49 million.

Practice Fusion of San Francisco provides a free, web-based Electronic Medical Record (EMR) system to physicians with charting, scheduling, e-prescribing, billing, lab integrations, referral letters, and unlimited support. Its EMR community has over 100,00 users and 20 million patients. It has raised a total of $36 million.

Allocade of Menlo Park offers an A.I.-based command and control system that dynamically manages and communicates constantly changing patient logistics, including variability of procedures as well as the flow of new inpatient and emergency room demands. The system delivers real-time visibility of schedule changes to all interested personnel throughout the hospital. The company raised a series “C” of $5 million in April 2010.

The SmartPhone’s Role in Personalized Health Care

With their ability to create, store and communicate in real time all kinds of data about a patient’s condition, smartphones are being leveraged by many of the new personalized health care solutions. In the U.S., usage of this mobile platform is forecast to rise from 19.5% of the population in 2010 to 36% in 2016.[12]

Mobile health can be broken down into four services:[13]

  1. Information services delivered through a smartpone app as is provided by Eprocrates or involving electronics health records (EHRs) or electronic medical records (EMRs) or personal health records (PHRs) via a mobile device.
  2. Health care information programs available through the internet with some providing automated feedback using mobile technology such as SMS or voice mail.
  3. Remote patient monitoring of chronic disease, cardiac outpatients, or just user fitness activities, typically using a standalone device now but eventually tethered to a smartphone application. Juniper forecasts that by 2016, there will be 3.08 million individuals worldwide benefiting from remote patient monitoring for chronic diseases with 2.2 million of them in the U.S.[13]
  4. Remote diagnosis and treatment.

Retarding/Driving Forces for Personal Health Care Technology Use

While the potential gains from greater use of personalized health care technologies are apparent, patients and providers in the U.S. are still facing major implementation and adoption challenges. Thus, the use of technology in the health sector still lags behind many other parts of the economy.  However, it is catching up.

The fragmentation and discontinuity of the U.S. health care delivery system is both a driver and a retarder of adoption of these solutions as there is both a need for and a resistance to improving communication and accountability among the patients and providers in the maize of general practitioners, specialists, general hospitals and specialty providers.

Part of this resistance is based on a fear of violating the Health Insurance Portability and Accountability Act (HIPPA). Most of the new personal solutions entail use of electronic medical records (EMRs). While EMRs make health care cost-efficient by consolidating data in one place, facilitating communication transfer between patients, primary care physicians and hospitals and improving the continuity of care before, during and after hospitalization, many patients and providers fear they are a threat to privacy. The planned incorporation of genetic data in EMRs further adds to the public’s fear of incursion into their private sphere.[14]

Another strong impediment to wide-spread adoption of health care technology by seniors who account for 36.5% of health care spending is this group’s current low use rate of the enabling communication platforms levered by many personalized health care solutions. These platforms include the internet, smartphone, tablets and social media.

However, the adoption rates of these platforms by the 65+ cohort in the U.S. is forecast to expand dramatically from 2010 to 2016. Over that period, monthly internet use by seniors is expected to increase from 31% to 41 %.[15] Monthly smartphone use is predicted to grow from 6% to 23%. And social media use is expected to leap from 28% to a surprising 43%.[16]

The Affordable Healthcare Act, (ACA) is motivating IT companies to introduce and providers to adopt personalized health care technology. Under ACA the Secretary of Health and Human Services (HHS) established measures of quality and cost under which physicians and physician group fees are paid by Medicare. Beginning January 2015, doctors who do not meet the criteria face a 1% reduction in Medicare payments in 2015 rising to 3% in 2017.[17]

ACA also established a value-based purchasing program for hospitals which will go into effect in 2013. The program will incorporate efficiency measure, including spending per Medicare beneficiary. It will provide incentive payments to hospitals meeting certain performance standards and enact payment reductions for excessive readmission rates.  Hospitals failing to meet standards will eventually lose annual increases in their Medicare payments.[17]


Information and communication technology based heath care solutions are playing a growing role in medical delivery, improving access to care, quality of care, and health system productivity. These solutions provide personalized health care through online systems for patient, drug, and genetic diagnosis using collective data analysis and digitized doctor and patient communication platforms, enabling personal monitoring online and over smart phones.


  1. Health and Human Services Department report published in Health Affairs, January 2012.
  2. Organisation for Economic Co-operation and Development (2011),”OECD Health Data”, February 2012.
  3. Centers for Medicare & Medicaid Services, Office of the Actuary. National Health Expenses Aggregate and Per Capital Amounts, Percent Distribution, July 14, 2010.
  4. U.S. Census Bureau “Projections of Population by Age” showing 2010 actual and forecast to 2020, July 2011.
  5. U.S Census Bureau Report “Supplemental Poverty Measure Survey” Kathleen S. Short, November 21, 2011.
  6. National Institute on Disability and Rehabilitation Research in cooperation with the Administration on Aging, February 2011.
  7. Agency for Healthcare Research and Quality report, “The Concentration and Persistence in the Level of Health Expenditures over Time” January 2012 based on Center for Medicare and Medicaid Services (CMS) report September 2011.
  8. Brandeis University / The Heller School for Social Policy and Management: “Foundations and Health Care Reform” July 14, 2010.
  9. Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics Harvard Law School, June 14, 2008.
  10. Quarterly Surveys by PriceWaterhouseCoopers, Thomson Venture Economics and National Venture Capital Association, Reported in San Jose Mercury News. May 2010 – Feb 2012.
  11. CrunchBase, The Free Tech Company Database
  12. eMarketer “Individuals in U.S. who use smartphones at least once per month, December 2010. eMarketer Forecast 2009 – 2014, projection by author through 2016.
  13. Juniper Research report “mHealth ~ Vital Signs,” January 2012.
  14. Healthcare IT News “Privacy concerns accompany push for EMRs” Report from National Committee on “Vital and Health Statistics February 28, 2005
  15. Pew Research Center’s Internet and American Life Project Survey on Use of the Internet September 2011 Pew Research actual 2005 through 2010. Projections to 2016 by author based on 5 year trends.
  16. eMarketer “Percent of U.S. Population by Age Group that Uses Social Media Sites”, February 2011. eMarketer Forecast 2009- 2014, projection by author through 2016.
  17. The Commonwealth Fund Commission Report on “A High Performance Health System,” August 2008.
  18. The Gallup-Healthways Well-Being Poll, January 24, 2012.
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