The Internet is on the verge of revolutionizing the healthcare industry. But that revolution isn't a sure thing.
Yes, advances in telemedicine are allowing experts to direct care to patients around the globe. Patients can schedule appointments, view lab results and obtain simple consultations online. Some physicians are using Palm Pilots to send prescriptions directly to pharmacies--all but eliminating mistakes from illegible handwriting and saving paperwork costs. From the truly extraordinary to the mundane, the Internet is poised to empower patients, cut costs and improve healthcare quality.
The key word here is poised, because the Internet has not, to date, lived up to its full potential in healthcare. Although healthcare is a fractious industry with large numbers of players and a historical reluctance to invest in information technology, are critics right to blame healthcare industry leaders for their lack of progress on e-health? Not exactly. Numerous studies have found that a complicated patchwork of state and federal laws and regulations is standing in the way of Internet-based healthcare.
A June 2000 report by the National Research Council, for example, concluded that regulatory barriers and inadequate payment policies have hindered the growth of promising Internet healthcare initiatives. Similarly, a recent report by the Information Technology Association of America found that "political and legal barriers represent another set of obstacles that have to be addressed prior to the healthcare industry's widespread adoption of advanced information technologies."
What kind of obstacles? Many states still have so-called quill-and-pen laws that require various healthcare forms to be submitted on paper. Conflicting state liability rules and onerous state-by-state licensing requirements create legal uncertainty and drive up the cost for telemedicine programs that cross state lines. Outdated federal and state reimbursement rules frequently require physical contact between physician and patient, even though many consultations could be done effectively over the Internet. Federal anti-kickback laws, designed to eliminate corrupt financial incentives to providers, outlaw many partnership and linkage agreements that are common in e-commerce and pose little risk of abuse. And while the new privacy regulations under the Health Insurance Portability and Accountability Act of 1996 should help by giving patients some assurance that their online medical information will remain confidential, the failure of Congress to enact uniform standards for medical records privacy continues to pose a serious problem.
The benefits of e-health are clear. Many of the obstacles have been identified. So what's the holdup?
Unfortunately, while the Clinton administration, Congress and state officials have sought to promote e-commerce through a hands-off approach, this will do little to address the existing barriers to e-health. Getting lawmakers to act affirmatively to reduce regulation is much more difficult than convincing them not to adopt new restrictions in the first place.
To its credit, the Clinton administration has taken steps in the right direction. Earlier this year, the U.S. Commerce Department invited the private sector to identify legal and regulatory barriers to e-commerce. While more than 100 proposals were received, in areas ranging from antitrust to telecommunications and more, not one comment was received from the healthcare industry.
Now is the time to put e-health promotion at the top of the national policy agenda, starting with an effort to reduce or eliminate unnecessary regulatory burdens. What should an agenda for change look like?
* Federal agencies. The administration's initiative to eliminate regulatory "barriers to e-commerce" was a good start, but it was virtually unknown in the healthcare industry. A separate e-health barriers initiative is needed, asking healthcare industry leaders and others to identify barriers that could be eliminated or reduced. In addition, the National Research Council, whose recent work highlighted how legal and regulatory obstacles are retarding e-health, should be asked to conduct a follow-up study with specific recommendations on how to reduce these obstacles.
* Capitol Hill. Given the reluctance of government agencies to reduce their own authority, Congress should play an active role in promoting the benefits of e-health. Hearings on the legal and regulatory barriers would be a useful start. The General Accounting Office, the investigative arm of Congress, could be enlisted to conduct a thorough review of the issue.
* Healthcare industry. Advocacy by industry officials will be an indispensable part of any effort to promote e-health. While other issues are high on the healthcare agenda, industry officials are in the best position to articulate the promise of e-health for consumers, providers and taxpayers alike.
* Technology industry. From a purely economic standpoint, hardware and software companies have the greatest short-term interest in promoting Internet-based healthcare. Moreover, because the administration, Congress and the states are actively courting the support of the high-technology sector, these firms are uniquely positioned to put the e-health issue on the national policy agenda.
While legal and regulatory barriers have stifled the e-health industry, the current situation could easily be turned around. The Internet is forcing federal and state governments to rethink their approach to regulation. Thoughtful leaders from the healthcare and technology industries should seize the opportunity by working together to put e-health promotion on the national agenda for the incoming administration and the next Congress. Such an effort would help fulfill e-health's promise of empowered patients, better outcomes and lower costs.