How can SME's make European business in health care information technology?

Brussels 11 May 1998 From the viewpoint of Small and Medium sized Enterprises (SME's), the implementation of Information Society Technologies (IST) in health care is not a question of research and product development. There is a sufficient choice in all kinds of medical IT applications. The problem is rather situated at the level of how to create a European market for innovative health care solutions. The Strategic Requirements Board has addressed the issue in its report on "Needs and Options for Future Research in Information Society applications for health care", published by order of the European Commission's DG XIII. A detailed analysis of the various aspects forming part of the market and health care environment, has led to several useful recommendations.

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From the viewpoint of Small and Medium sized Enterprises (SME's), the implementation of Information Society Technologies (IST) in health care is not a question of research and product development. There is a sufficient choice in all kinds of medical IT applications. The problem is rather situated at the level of how to create a European market for innovative health care solutions. The Strategic Requirements Board has addressed the issue in its report on "Needs and Options for Future Research in Information Society applications for health care", published by order of the European Commission's DG XIII. A detailed analysis of the various aspects forming part of the market and health care environment, has led to several useful recommendations.

The reporters have observed a shift in the philosophy of health care IT industry, characterized by three specific trends, which have already manifested themselves earlier on in other industries. First, health care organizations are rather interested in integrated IT solutions than they are in separate products. Second, companies tend to exploit their core capabilities and will try to network with other partners or subcontractors, displaying a supplementary range of competencies. Third, system integration services and companies are conquering the market. Instead of manufacturers, they are consulters, who integrate existing with new, best-in-breed applications through message broker or interface engine systems.

Health care institutions in fact are annoying customers for the IT SME's business. We're talking non-competitive and non-profit organizations, breeding low-to-medium margin with little room for IT investments. In addition, they are reluctant to re-engineer their procedures and working models for the sake of new IT system implementation. The total absence of a deadline culture turns the decision-making into a time-consuming effort, particularly since one awaits the final state-of-the-art solution to emerge. Core applications for patient diagnosis and treatment are very popular but constitute too high a price for the common SME to remain competitive and obtain sufficient market visibility. Furthermore, health care organizations are not willing to outsource their IT services, which turns health care into a dangerous and unattractive business for the IT industry.

The SME's often develop products which are too customer tailored or country specific. Having to adapt the application to international practices implies enormous investments. Software translation is not enough since culture and market differences equally play an important role. The trade barriers between the member states are considerable because of standardization lack. It is also very difficult for SME's to acquire useful information with regard to health care structures, regulations, adopted classifications, key authorities, customer needs, purchasing plans, health care IT companies, and products in the different member states and other European countries.

SME's can be successful in particular health care areas dealing with simple interfaces and subsystem architecture, such as clinical laboratories, x-ray, operating rooms, intensive care units, and so on. However, they take too little advantage of similarities and synergies between health care and other industries. The use of interoperability standards is capital and can be reached in two ways, whether the practical one, by means of de facto industry standards or the official one, through an agreements and acceptance process with the major players. The creation of a common platform is indispensable for both customers and industry. A solution may be found in the definition of a "common kernel", consisting of all aspects needed to generate interoperability of IT applications.

The European application manufacturers are lagging several years behind in comparison with the United States market, especially in fields like resource and outcomes management, clinical pathways and protocols, process control paradigm, workflow support, and so on. As a result, IT applications with "next step" functionality are purchased in the US. It would help if SME's didn't stick to one or two countries but would launch a profound European market analysis before designing any product at all. Production of IT applications should be focused on citizens and patients, starting with prevention and ending up in nursing homes and hospices.

The business problems of the hospital are at the core of important growth opportunities for IT industry, in terms of system integration development, IT operations services for both servers and networks, and help-desk and other support services. On the one hand, there exists an urgent need for centralised, "top down" system support with regard to the integrated care process, and on the other, for a local, "bottom up" IT support by means of help-desk functions to meet and understand the local user needs. As it is, health care business plays a tough competition with other industries to acquire high quality IT experts, who combine superior customer process knowledge with the software engeneering competencies to implement complex IT systems. For the full report, which is illustrated with enlightening figures and tables, we refer to the Telematics Applications Programme Web site.


Leslie Versweyveld

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