George Mason University

Why Online Services Fail?

Based on Alemi F.  Management matters: technology succeeds when management innovates. Front Health Serv Manage. 2000 Fall;17(1):17-30.    

Success is seductive.  When technology-based companies succeed, we imagine we could too.  We imagine how technology can help us do what we are doing better.  We inevitably think that better technology is better business.  Thus we fall in a race to adopt new technologies.  At some unconscious level the idea seems to be that one buys technology, turns a switch, and transforms the company from what it is to a shiny, rapid pace, technological new company.  But nothing can be further from truth.  The premise of this paper is that there is no technological pill that can transform us.  In fact, money and time will be wasted, and technology's promise will go unfulfilled, unless management modifies the very nature of its business.  Far more important than technology, what matters is redoing the business in novel ways.  In this paper, I would highlight the dependency between technology and new delivery systems and speculate about key clinical and management processes that are likely to change as a consequence of new technologies.  My point is that technology cannot just make us efficient.  It will inevitably change what we do.  At first technology seems to serve our needs but all the time, in ways that are alarming, it radically changes what we need.  It not only refines what we do but also re-defines us.

What is the promise, where is the evidence?

Computers have been around for sometime and the promise that these devices can transform patient care and cut costs have been made for decades.  In recent years, with the growth of Internet, many patients have accessed computer services from home.  When patients and consumers are online, it is natural to think of ways that health services can be delivered to them online.  Thus it is not surprising that the growth of Internet has led to a resurgence of interest in the role that information technology can play in health care delivery.  The new promise is very much an old one:  that computers, now web enabled, will reduce cost of care and improve quality of services.  Is the promised nirvana at hand or are the claims, like many before them, unsubstantiated?  To answer this question we briefly review the literature on online services to patients.  We include in this review all interactive services that could have been delivered over the Internet (e.g. kiosks, telephone services, compact disk services) and we exclude from this review computer services to providers (e.g. enterprise wide medical records, clinical guidelines).

Impact on patients’ health

The evidence from the literature on impact of computers on patients’ health is mixed.  In 1998 Kraut and colleagues showed that online services could be harmful.  They examined longitudinal communication patterns among members of 73 households. Over time, greater use of the Internet was associated with declines in face-to-face communications with family members and increases in depression and loneliness.  Other studies have pointed out the misinformation and incorrect medical information that is available on Internet and argued that it can cause harm.

Not all studies suggest that online services may harm patients.  In fact, studies reporting Internet having a negative impact on patients’ behavior and health are rare.  A more likely scenario is that online health services will have no impact, wasting time and effort.  In 1995, Alemi and Higley examined the influence of online health risk appraisal on patients’ behavior and found that despite heavy use it had no effect on patients’ behavior.  Brennan and colleague examined the influence of online services on caregivers and found that despite reducing stress and improving decision making, it had no effect on cost of care or health status of the patients.  Similarly, investigators such as Fitzgerald and Alterman and their colleagues found that technology did not help recovery from alcohol or substance abuse.  Similarly, a 1996 study by Alemi, Stephens and colleagues found that use of online health education did not lead to better health status.

At the same time, a set of studies report statistically significant impact on health outcomes.  Consoli and colleagues showed that computers can reduce hypertension.  Krishna and colleagues showed that computerized health education improve health status.  Lando and colleagues showed that telephoned instructions can reduce cigarette smoking. 

Studies of impact of computers on patients have shown harmful, no impact and positive impact.  No conclusion can be arrived at this time regarding the potential effect.  The real question is not “what works?” but “when does it work?”  A review of the literature can help us understand circumstances under which computers may improve patients well being.  At least three factors are catalyst for a positive impact of computers.  First, when patient services have included role-playing and support groups, computers have been more successful in bringing about behavior change.  In 1992, Gustafson and colleagues reported successful examples of combining patient education with online support for HIV/AIDS patients and patients with breast cancer.  In 1989, Alemi and colleagues reported that computer role-playing helped teenagers better assimilate health messages.   When computer services include role-playing and social support they are more likely to have a positive impact on patients’ health status.

Second, when health education is tailored to the patients’ situations, interactive communications have changed patients' behavior. For example, Campbell and colleagues showed that smokers who received a letter tailored to their circumstances were more likely to quit than those who received a general message.   Strecher continued the earlier study on smoking and showed that it also applied to modification of diet to reduce fat intake.  When messages were tailored to patients’ specific situation, they were more likely to loose weight.

Third, when online services are used frequently and the use is sustained over time, messages are more likely to change patients' behavior.  Brief interventions seem to loose their effectiveness over time. In Alemi, Stephen and Colleagues randomized clinical study of cocaine using pregnant patients, for example, no beneficial impact was measured unless patients had used the system for at least 3 times a week.  Taylor and Gustafson report that better health is observed for HIV/AIDS patients at even higher use patterns.  

What is exciting is that these studies provide a blueprint about what works.  Investigators can duplicate these proven interventions to improve patients’ health.  The bad news is that computers are no panacea; sometimes they work and sometimes they do not.  The good news is that we can learn from instances where computers have been effective in changing patients’ health to organize systems that work.

Impact on cost

Several studies have examined the impact of online services on cost of care.   It has been known for sometime that health education can reduce unnecessary visits.  For example, Fries and colleagues had shown that a book on self-care could reduce demand for care with no adverse health effects.  They have adapted this book to the Web environment.   Their earlier success with behavior change suggests that the online version of the book may also be successful. 

Direct evidence that computer-based health education can reduce unnecessary visits comes from a 1989 study by Robinson.  This study compared two randomly assigned groups of graduate and under graduate students who did or did not receive computerized health education.  The group that received the computerized health education had 22.5% lower medical visits than the group that did not receive it.

Of particular interest is a randomized clinical study by Gustafson and colleagues at University of Wisconsin, which combined computer health education and computer support groups.  In this paper we will repeatedly return to this study as it highlights some of the best that can be expected from online health services.  These investigators provided 200 HIV patients with several computer services, including a computer bulletin board -- where patients could post written messages to a public forum.  Patients were randomly assigned to control and experimental groups.  Only the experimental group had access to the computer services.  Experimental patients used the computer forum to communicate their experiences with the health care system, and their difficulties in communicating with their family and friends.  Among the various computer services provided to the experimental patients, computer mediated social support was the most frequently used service.  Investigators evaluated the project after 3 months and 6 months.  They found that patients with access to the computer, as compared to control patients, were more likely to report higher quality of life in several dimensions including social support and cognitive functioning.  The experimental patients had fewer office visit (dentists, primary provider and alternative care providers) and shorter time per visit to the primary care provider, HIV provider or the mental health provider.  The experimental patients were also less likely to be admitted to a hospital and more likely to have a short stay.  In summary, experimental patients had 1/3 lower total health care cost than control patients did.  These data confirmed the importance of electronic communities in bringing about behavior change and showed that use of electronic support groups could lead to drastic reductions in cost of care. 

Other studies have confirmed the importance of electronic support groups in reducing cost of care.  Alemi and Stephens and colleagues studied the impact of voice-based electronic support groups on cost of care in a randomized clinical study.  Over time, the groups that met online were eight times more likely to meet.  Furthermore, subjects who used the electronic bulletin boards were 30% to 45% less likely to come in for both mental health as well as physical health visits.  Reduced visits did not lead to poor health status.  These data highlight that online services to patients may reduce cost of care without adversely affecting their health status.  

Other forms of interactive health communications can also reduce the cost of care.  In a very successful study, Wasson and colleagues replaced office follow up visits with three scheduled telephone calls.  Over a 2-year period, the telephone care group had 28% less cost per patient than the usual care group.  The savings of 28% on costs are large and practically significant for many health care operations. Swinson and colleagues confirm the potential of telephone-based delivery of health services.

In summary, four randomized clinical studies by independent groups of investigators, who used different modes of communication on different types of patients, report that online services reduce visits by 28% to 45% without adverse health outcomes. These studies are notable because they reduce doubts that the results of an individual study are inaccurate, and because the impact of the interventions are large.  The magnitude of reduction in visits is not small and is significant for many delivery systems.  These studies suggest a technological fix for the crisis in health care costs. 

The commercial promise unfulfilled

Despite different clinical studies showing that computer services can significantly reduce cost of care, health care companies have not adopted the proposed changes and companies that have adopted these technological solutions have not done well as a business.  The bank and finance industry have radically changed through use of information technology, health care industry has not.  For all practical purposes, computers have not changed the delivery of health services to patients.  The evidence that health care industry is having problems with information technology comes from their lack of use of electronic medical records. Office of Technology Assessment reported that despite all that is published about the value of electronic records, electronic records exist in islands of automation.  To date, widespread use of electronic records has eluded us.

Even when organizations try to use technology they face large-scale problems.  Standish Group International studied 7500 information technology projects and reported that 30% of projects were abandoned or scaled back and 45% were late or over budget.  Only 25% of projects were on time and within budget.  The problems persist even after technology projects have been successfully implemented as few clinicians use electronic medical records. 

The problems with information technology in health care is more clear if we follow the faith of companies that try to sell these technologies to health care organizations.  Large and small investments in information technology companies in health care have come to naught.  Time Life invested $50 million in video taped health education, only to close its operations within two years.  Sony developed systems for shared decision-making and patient consent.   They failed to find a market and had to close their operation.  Ameritech invested in community wide medical record and successfully implemented it in Milwaukee but could not find buyers in other communities.   Price of stock of health care portals such as Dr. Koop has plummeted as they have failed to attract advertisers. 

I have personally been involved with two failures.  In the first one, Harvard Community Health Plan and Electronic Data Systems invested $15 million dollars to create a clinic that served patients who had access to computers.  After seven years, the project failed. In the second one, an Interactive Voice Response company named TelePractice sold its service to Medicaid managed care companies but failed within three years because many of its customers could not use the technology they had bought. 

Earlier I mentioned the Wisconsin study, in which cost of care to AIDS patients was radically reduced through computer services.  CHESS, a by-product of this clinical study, failed as a commercial endeavor.

What will explain why randomized clinical trials that show large cost savings, a sure bet by any standard of evidence, seem to fail as business models?  After all, nothing is more carefully examined than an idea that has been put through randomized clinical study and shown to save money.  Why can't we turn these savings into business models?  Take the example of Wisconsin study that showed that cost of HIV/AIDS care can be reduced by 1/3 through use of computer education and support.  If I was managing 1,000 AIDS patients, at cost of $40,000 per year, computers can save me $ =40000*1000/3 13,333,333 in the first year of operations.  A company, which has a first year profits of more than $13 million, can be sold for $130 million.  So for all practical purposes, the reader who can take this study and replicate it will by the end of first year be $130 million dollars richer.  Why are these proven technologies not leading to successful businesses?  

What will it take to succeed?

Technology requires new business processes.  It is not sufficient to take the technology and implement it in existing environment.  It is the thesis of this essay that technology must transform and not just improve existing businesses.  When technology is used in existing operations it is like a person buying the latest car, the fastest model, but insisting to take it for a walk.  You cannot take cars for walks; you must drive them to new destinations.  Many mangers and clinicians want the car but do not want to go to new destinations.  They like where they are.  They buy technology not to change clinical processes but to continue with existing practices. 

What exactly are the business policies and processes that must change to allow technology to succeed?  No one can tell.  No one can predict how the mix of technology and clinical care will end up.  It all depends on what you want to do.  But for the sake of an example, let us examine the management innovations that are necessary to turn the Wisconsin study into a business success.  Recall that in the Wisconsin study a randomized clinical study had shown that cost of care of HIV/AIDS patients can be reduced by more than 1/3.  Let us suppose that armed with the lessons learned from this experiment, we want to start a company.  By thinking through this example, I hope to make the reader sensitive about how much non-technological and innovative policies are necessary for success of a technological firm.

No software sale

One simple step we can take is to start selling the software developed in this experiment.  Insurance companies and health care managers could buy this software.  Since the software was developed in the experiment, selling it requires no additional development and therefore it should be a profitable business.  But the reality is different.  Selling software to health care mangers is difficult.  First of all, health care organizations are not in the habit of purchasing software for patient care.  They may have bought software for billing but few if any have bought software for clinical care.  Most managers hire people, buy or sell care, organize service, but few if any buy or sell patient care software.  Therefore, the firm we set up must not only sell the product but also work to educate the managers.  It would need to both create the market and sell within the market it creates.  As is, selling is an expensive activity.  If in addition one has to educate buyers about needs that they have not yet articulated, then it is considerably harder, more time consuming and more expensive.

While health care managers are not in the habit of buying Internet software, they are in the business of purchasing clinical services. If they see a less expensive and better outcome health delivery, they will recognize the benefits – independent of whether or not it is based on a technological solution.  If technology can create better value, they can see and appreciate the benefits.  Take for an example a market study done by TelePractice.  This company asked an outside consulting firm to review its market condition.  The firm approached senior executives in more than 50 health care organizations.  The majority showed interest in technology based demand management; but when asked if they are willing to purchase the software, 88% of the respondents said they were willing to purchase a bundled product, which included the software, technical assistance and clinical services.  But they did not wish to purchase the software alone.  If through technology we can create a better more efficient clinical service, then clinicians and managers are likely to buy it.  But they are not willing, or in the habit of, buying technology alone.

Let us accept for the sake of argument that one should bundle software and clinical experience into one product and sell the combined product.  How hard is it to do so?  Given that through clinical studies we have already developed the software; we have tested it on real patients; we have gained experience with delivery of care using this method; then how hard it is to re-organize our software and clinical experience into a new technology-based clinic?  If technology can make clinics more efficient and purchasers want to buy clinical service, how hard it is to start a technology based clinic?  As we will see, it is a lot harder than we imagine.   For ease of reference, I refer to a technology-based clinic that sees patients on the Internet as a Virtual Managed Care Organization (VMCO).

Policies must change

Today, health care organizations do not specialize in one disease.  Their scope of work includes many diseases so that people from one locality may select the organization independent of their disease.  Small health care organizations have grown by affiliating or acquiring others and providing broad array of services.  They have established brand names that are well known in their locality and sometimes nationally.  A VMCO, in contrast, can operate in different localities and a focus on a single disease does not limit the growth of the company.  Therefore, in thinking through our VMCO it is important to assess whether it is better to continue to be everything to everyone or focus and specialize.

First in manufacturing and later in health care, influential authors such as Skinner (1974) and Herzlinger (2000) have called for operating units to reduce the scope of their activities to their central mission and to their core competencies.  Authors such as Malone and Laubacher point out that large massive mergers are failing while singly focused organizations are succeeding.   It is important to note that:

  •         Vertically integrated systems such as Humana merged health delivery and insurance organizations to protect the demand for their services.  But, in time, they found out that the merged units have alternative objectives and that there is no better arbitrator of the internal conflict than the external market forces.

  •         Even successful integrated systems are operated as a shell for many focused organizations.  Take the example of British Petroleum.  Each department within this firm is managed as small micro organization that sells and buys product from other units, competes with external markets, and de facto is managed as a small focused group.  British Petroleum is a large firm only in name.  In reality it is a loose collection of focused firms. 

  •           The fastest growing sector in the US industry has been temporary help and contract workers.  While number of people employed for Fortune 500 has been declining, the number of contract workers and small businesses has been growing.

  •         Salick Cancer Clinics in New York, an example of focused factory, grew in a short time period to capture the market from established large health care organizations.  It did so because they specialized in one disease, took advantage of economies of scale and changed organizational policies to tailor the organization to the needs of cancer patients.

  •         It used to be carve-outs were restricted to behavioral health; now patients are carved out for many different chronic diseases including diabetic, cancer, and HIV.  These sub-contractors may combine patients of one HMO with another, increasing the volume of their service to patients with the same disease. Thus, specialized contractors are emerging that focus on one disease.   For example, a number of organizations have emerged to manage AIDS patients under risk sharing contracts. These include the AIDS Healthcare Foundation in Los Angles area, the Johns Hopkins University School of Medicine, the New York State Department of Health's AIDS Institute, the East Boston Neighborhood Health Center and the Visiting Nurse Association of Los AnglesThe emergence of AIDS only subcontractors is one way that large organizations are focusing their care. 

Why are smaller focused firms succeeding when larger firms are failing?  Both large and small organizations have access to information about their customers and markets.  But small organizations that focus on a single disease can act on the information to reorganize themselves in ways that enhances the value to their customers.  Larger organizations cannot do so as what one group of patients need; others do not need or may abuse.  Organizations that focus on different diseases cannot change their operations policies to satisfy any specific constituents. 

Before the availability of modern information technologies it was difficult to tailor organizations to groups of customers.  Now with detailed data on client's needs and utilization patterns, small focused organizations can tailor their operations in ways that has never been possible.  If cancer patients come to clinic at late hours, Salick clinics can open and close later to serve them better.  Larger organizations cannot modify hours as easily as some patient group may want the early hours.  If CABG patients are better cared for in Texas, an insurance company can provide thickets for CABG patients to fly over and get the best care.  But it is futile for a large organization to expand the fly-to-care policy to patients with different diseases.  Each disease has its own peculiarities and needs policies that fit it.

VMCO have access to vast amount of information on their patients.  If these organizations do not use the information they have, they forfeit their main advantage.  Why should we be a technology focused company if we are not planning to take advantage of the information we are collecting?

When the scope is large, the economies of scale are lost.  High volume, good quality, low cost services would mix with low volume, poor quality and inefficient service creating a bundled product that can not aggressively compete in the market.  If VMCOs want to compete with established HMOs, as they surely would need to, they must shed their less competitive services and focus on a single disease.  They would need to take advantage of their information to flexibly design services for their patients, to deliver high volume and high quality care, and to pass efficiencies they achieve to purchasers in terms of lower price.  Only when they do so, they can emerge in already saturated health care markets.  Therefore, despite the fact that theoretically it is possible to create a VMCO that serves all disease market, we need to focus on one disease.

Recruitment and training must change

One obvious impact of the new technology is that clinicians, especially physicians, will be more involved in remote management of patients in the community.  Remote management of patients is not new.  Clinicians have used telephones to manage patients, but mostly they have done so for prescription refill, prevention assessment, and triage.  However, remote management can include a great deal more.  It could include:

  • Computer assisted collection of history, signs, and symptoms from patients at the time of making appointments.

  • Distributed medical record system available to the visiting nurses and laboratory technicians in the community as well as to the institutional clinicians.

  • Computer assisted triage of patients to appropriate laboratories for needed tests before final meeting with the clinicians.

  • Advising patients over the telephone and through electronic communications.

  • Prescribing medicine over the telephone.

  • Computer assisted and automated follow-up visits with the patient. 

  • Mobile test units that visit the patient.

  • Automated home monitoring and assessment.

The premise of a VMCO is remote management of patients.  But clinician use of remote management to date has been superficial.  If they were to do what is imagined in many remote management schemes, they have to learn new skills.  What are these skills?  Traditionally, physicians attend to the care of patients who visit them. Under the new practice model, clinicians will direct a host of services in the community including mobile test units, home test kits, pharmacy services, triage decisions and visiting nurses.  Many clinicians will contact the patient, some even may meet with the patient, but the role of the patient's physician is to orchestrate these services and analyze the data from these services and not to actually deliver services.  In the end, the physician may spend most of his/her time in a communication center and not with the patient.  Are our physicians ready for this?  No.

The part that some physicians find the hardest to accept, besides the role of the computer, is that in the new system of care they are held accountable for the health of patients who may or may not visit them.  In the current system, with all its frustrations, patients still visit physicians.  The patient and the physician make decisions about care during these visits.  The "visit" is the core building block for the organization of care.  In the new system, physicians need to think about health issues of patients who are not in their office, who when contacted may not be pleased about the physician's meddling in their life.  They need to prepare for advising non-compliant patients, because contrary to existing system of care information systems will alert them concerning who is not taking their medication.  New information will prompt them into actions for which they have little or no training.

Remote management of patients increases the physical distance between the patient and physician, yet makes the physician more accessible, and over time may make the relationship between the physician and the patient a more lasting one.  Most clinicians value their relationship with the patient and have no understanding of the type of relationship that can emerge from online contacts.  Therefore, many dismiss online care as interfering with patient care.  In reality, however, online care does not replace face-to-face care or interfere with it.  Online care is a different form of patient care, which the clinician is not familiar with.  Online care fundamentally changes the nature of the relationship; it does not terminate the relationship.  Clinicians are not ready for these changes.  Their training has not prepared them.  To solve this problem, VMCOs may need to organize themselves as staff models with extensive in-house training.

Capital purchases must change

A large percent of total health care cost is the capital cost.  A VMCO will have a high capital cost for information technology.  If it does not succeed to reduce the overhead elsewhere, it cannot compete with existing face-to-face programs on cost.  Data show that office visits can be reduced through use of information technology.  If so, then we do not need existing buildings.  One way VMCOs can reduce their overall capital costs is to reduce the money spent on real estate. 

Many brick and mortar organizations that are trying to create online services, try to do so within the existing cost structure.  They price their products and services by including their existing real estate cost structure.  Thus they mix a competitive low-cost delivery system with their existing high-cost brick and mortar operation.  If VMCO saves them visit, building may go unused, but they still need to pay for these buildings even when not used.  So they undermine their own effort.  They have created a system that does not need all of its components.  They have priced their product on the basis of unneeded components.  Thus, they are not able to price their services competitively and increase their market share.  To succeed VMCOs need to operate without large real estate costs.

Take as an example the difference between traditional banks and financial institutes and the new emerging electronic trading companies.  Traditionally, large banks and financial institutes bought land and built large buildings in prime real estate areas, usually downtown.  In contrast, the new electronic companies like Schwab do not have visitors and have moved their offices to less expensive neighborhoods and reduced the size and statute of their corporate offices.  By doing so, these companies are taking advantage of the technological advantages they have.  When health care companies start online services and continue their massive investment in buildings, something is wrong.  In these circumstances, someone has not thought through the business case for going online or has thought of online as a cost and not a profit center.

Gatekeeper must change

It used to be that you received health education through the physician's office.  Now, with the new technology, health educators have direct access to the patient and they are the first gateway to clinical care: they will refer patients to primary care physicians.  Such a juxtaposition of who makes referral decisions will change the nature of practices.  In the last two decades there was a frenzied rush to sign up primary physicians to capitated or preferred provider plans in order to take advantage of the referrals that these providers might make.  When health educators have direct links to patients, when they are making (perhaps under supervision of a physician) triage decisions, then it stands to reason that future health care contracts will focus on the activities of these individuals. 

If one wishes to encourage referrals to one’s hospital, the logical place to intervene is not primary care providers but online triage clinicians.  These clinicians, after all, are the first point of contact, they maintain contact with the patient after the office visits, and in the long run they may enjoy the closest relationship with the patient.  The price for physician clinics always includes the value of the referrals they might make.  If the gatekeeper changes, the value of primary care clinics is likely to drop.

The gatekeeper will also change in a different way.  Currently, the chronically ill must visit a primary care provider before visiting a specialist.  In the VMCO, because care can be delivered remotely, it will be possible to put patients in diverse geographical settings in the same capitated plans.  Thus, capitated plans will emerge that specialize in one type of illness.  For example, all patients with HIV who live in Ohio may belong to the same capitated plan. The gatekeeper for services will then be a specialist not a family physician or internist.  An infection specialist may decide that the patients' complaint can be addressed by a family physician.  The referral will be from the specialist to the family physician, reversing the current pattern.  Because of this arrangement, patients will be under the care of a specialist who is most knowledgeable about their illness.  Patients may receive better care since they will receive care from a person who focuses on their chronic illness.  For example, AIDS patients are often frustrated when they visit their provider, who sees one or two AIDS patients, and find that he/she is not aware of the latest advances in the field.  In the VMCO, the situation changes.  AIDS patients are under the care of infection specialists.  Their first point of contact is the specialist who may refer them to others. 

Data show that compared to primary care physicians, specialists provide better quality care to patients that need their service.  By shifting the gatekeeper role away from primary care physician to a specialist, VMCO can improve quality of services.

Medical records must change

As more care is managed remotely in the community, care will become more fragmented.  Thus, coordination of care through medical records becomes more important.  One reason patient care is not well coordinated is because the patient's medical record is often unavailable.  There are many reasons for this situation.  The medical record may be in use by another provider, may be in transit from or to the record room, or it may be kept at another institution.  Some investigators have suggested that computerized medical records can solve the problems that currently exist with the unavailability of the paper medical records.  Unfortunately, data entry into computer records cannot occur immediately and often lags behind by several weeks, making such records less useful.  When patients are online, much of the data entry is automated and collected directly from the patient or community clinicians; thereby, resolving an important problem in keeping automated medical records up to date.

But electronic records are more than glorified version of paper records.  They would need to have functionality not available in paper records.  Advances in automated guidelines for care, automated patient education tailored to patient record, automated case management and assessment, self triage, and many others are only possible when electronic medical records are available and used beyond their storage capacity.  For VMCO to take advantage of its investment in electronic medical records, it needs to do more with the data it collects.   It should build in automated services that improve patient care.  Thus, the entire relationship between medical record and institutional care will change.  To the extent possible, patient medical records should be used to anticipate patient conditions and problems, to detect errors in clinical practice, to detect lack of compliance in medication use, and in short to optimize care.  Without taking advantage of its medical record system, the VMCO cannot effectively recuperate its investment in electronic records. 

Patients' Attitudes Will Change

The patients' expectations of what is an illness that requires health services and what should be accomplished in a visit are likely to change and with it a number of policies for organization of care will change.  Compare the status of the health care system to banking before Automatic Teller Machines.  Today, we expect to have access to money anytime day or night.  We transfer funds by telephone and think little of it. New technologies alter the way business and their clients interact.  As the technology made the service possible, consumers became aware of it and adjusted their expectations.  Likewise, as VMCOs grow, consumers are likely to demand more services and services we have not thought through yet.

One consequence of electronic support groups is that health care consumers will be more organized as a group.  Today, only a small portion of patients participates in support groups.  Study of electronic support groups by Alemi, Stephen and Colleagues showed that 96% of patients might participate in electronic support groups.  Thus, almost everyone who has a chronic illness may belong to a support group.  Consequently, they will be more informed and motivated individually.  Patients, collectively, will better articulate their needs and entitlements.  Patient advocacy groups, like Act Up for AIDS/HIV illness, will be more common in other disease categories.  These groups will want to participate in funding decision about research issues, encourage quality care, make information about quality public, have a say in the way patients share medical decisions with their physicians, and in a host of other patient rights.

Patients will also change; they will become more knowledgeable.  One can imagine a day when, as a consequence of intensive education, many patients with chronic illness will know more about their illness than a primary care provider seeing patients with a variety of problems.  What would be the role of the clinician in such a setting?  It is quite possible that chronically ill patients might visit their primary care doctor with a copy of an article recently published and ask for modification of their care plans.  In anecdotal reports, where computer services were provided to patients with breast cancer, investigators reported that clinicians were aware who belonged to the experimental group because this group was more prepared for the clinic visit.  The patient would come to the visit with lists of questions and concerns, fully aware of potential alternative methods and with a host of references to the medical literature.  In short, the patient was better informed and clinicians could see this from interactions with them.  In the extreme, these changes in patients’ information level may change the clinician role to one of a librarian -- helping the patient sift through massive amount of information.

An anecdote from our own experience can demonstrate how much patients change as a consequence of new technologies.  We were conducting a research in which the computer would make weekly calls to patients’ homes and ask about their condition.  The university was concerned about computer calls being annoying.  We have all experienced the computerized sale call and can understand the problems it may cause.  After weeks of negotiation, the university allowed us to call a handful of clients to see their reactions and to expand if we did not face a complaint.  For five months we delivered the service with no complaint.  When the research ended as planned, the number of and veracity of the complaints shocked us.  One client put it in following terms:  “You have mothered us for months by calling and asking how we are doing.  How dare you stop now?”  The point is that patient’s attitudes and expectations change as a consequence of availability of technologies.  Today's online services are tomorrow's entitlements.

Management Matters: 
Technological innovations succeed when accompanied with management innovations

I have identified a number of non-technological changes that are, in my view, necessary for success of online technology applied to the health care industry.  You may disagree with specific changes that I have proposed.  You may have an online service in mind that does not require these changes.  But the point of this paper is not to claim that any particular change is necessary; only that some process changes, including those not mentioned here, are necessary.  In the end, management innovations make the difference between success and failure of new technology.  Surely, technology is important but it is not enough.  We must enlist the active imagination of health care managers to find new radical ways of organizing health care systems.  Without the adoption of new practices, we can buy the technology but will fail to effectively use it.  As always the core issue is the relationship between the clinicians and patients.  Managers need to think radically about how they wish to organize the patient/clinician relationship in the context of new technological world.  The needed technology is available and ready for use.  What is missing is how to re-organize the delivery system.  It is the task of reorganizing care, not the technology, which holds us back.  In the end, what matters is management and not the technology.


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The following additional resources are available to help you think through this lecture:

What do you know?

Part one: value beyond face-to-face

Identify 2 health care technology companies that have failed.  Contact the last person in charge of the company and interview them.  Explain if their services complemented or replaced face-to-face services.  Explain if their online services had features not available in face-to-face services.  Describe why they think the company failed. What did they plan to do that could not be done well in face-to-face visits.

Part two: how will treatment online be different from face-to-face

The article "Management Matters" claims that a virtual managed care company will differ in methods of management from managed care companies.  List what the article identifies as the main differences.  Add to the list one other difference in management of virtual and typical managed care companies.

Part three:  Modify your web

This section emphasized how management innovations must go hand in hand with technological innovations.  Suggest a management innovation that could or does accompany the web site you have used for search engine marketing.  

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Please send this information to your instructor.

Always remember that one indication of your participation in the class is your active formulation of questions about the lecture topic.  Your questions help your instructor gauge your understanding of the topic.  In addition, they help you get more information.  The answers to your questions are posted on the web, in the lecture in which you asked the question, under the section titled:  Recently Asked Questions.

Learn one, teach one

In the "What do you know?" section we asked you to identify 2 health care technology companies that have failed.  Select one of these two and present your findings.  We had asked you to contact the last person in charge of the company and to interview them.  Describe how did you identify the company, and the people involved.  How did you find the people?  What did they think was the strength of their company and why they thought the company failed.  Put together slides to present your findings.  Engage the class in speculation of why the company failed. 


This page was created by Farrokh Alemi, Ph.D.  Last revised on 10/22/2011.  This page is part of the course on Electronic Commerce and Online Market for Health Services.  This is the session on Why Online Services Fail