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IBM doesn’t make electronic medical records. But it does make hardware and software that aims to make electronic health records work better. From algorithms that help health-care providers determine for certain the identity of a patient, to clinical protocols in China that guide providers’ decisions on whether it’s best to employ Eastern or Western medicine, IBM’s reach in the health-care sector is growing. The company’s vice president of Global Healthcare Delivery Systems, Sean Hogan, will be in Boston for next week’s Health IT conference, convened by Gov. Deval Patrick and featuring U.S. Secretary of Health and Human Services Kathleen Sebelius. This comes on the heels of today’s deal with Watertown-based athenahealth Inc. to provide voice, data and administrative support for revenue cycle management and clinical data management products. IBM has made 12 acquisitions in Massachusetts since 2003. Hogan spoke to Mass High Tech’s Julie Donnelly.
Why is health care important to IBM?
We look at it like this. We’re self insured and we provide health coverage to 430,000 lives in the United States, that’s our employees, their dependents and our retirees.... Since we are a global company, we’ve been able to look at patterns of care internationally and domestically. In general, we’ve seen an inverse relationship between what we spend and what we get out. Higher cost areas tend not to deliver the best quality. We’ve used our understanding of that to help inform the solutions we develop into the market.
How big is this part of IBM’s business?
We don’t break out revenue for the division. Our chairman has said publicly that it’s a $4 billion business. It’s actually probably substantially bigger than that, depending on how you define the extent of it. It’s growing, it has been growing for quite some time now and we see a lot of potential for it because of the stimulus money, because of the changes that are playing out in the system and a broad recognition that information technology is a big part of what’s going to enable the improvements in the system that we need.
IBM is heavily involved with health data analytics, secondary use of data to help improve health outcomes. But the average community hospital is just starting to move away from clipboards. How do we get from here to there?
For the past decade we’ve been on this slow walk of adoption, and essentially it’s just been taking paper process and making it digital, which on one level is valuable but the extent of value that that can provide is relatively limited. When you have the information that can actually connect between systems and you have enough of a usage base, you can go into whole new sources of information. You can trigger alerts, you can see patterns in care.
You’re here for the governor’s conference. Do you hope to contract with the state on its fledgling Health Information Exchange, designed to connect health-care institutions and providers across the state?
We are very active in the state information exchanges. Earlier this year we acquired a company called Initiate Systems and they already do a fair amount of work in this state. What their core technology is, it’s probabilistic algorithms that help reconcile identities, so if you have information from different sources you can tell whether the information is truly about the same person or not. If you’re going to be exchanging information, you got to know that the person that you’re talking about is the same Sean Hogan. We’re working with about a dozen states on health information exchangers. We also do fraud detection work to help states identify medical fraud, which is a huge issue. It’s estimated that between 3 percent and 10 percent of all health-care cost is fraudulent. So for Massachusetts, for instance, that’s running into hundreds of millions of dollars.
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