Monetizing Medicine

Monetizing Medicine

by / May 31, 2007

Medicine is perhaps one of the last sectors of the U.S. economy to not find a place for open source software in its IT shops. 

The software's bona fides aren't the issue. During the past 10 years, open source software proved itself in the business world in corporations of all sizes, in federal organizations like the National Security Agency and the Department of Defense, and in more mundane agencies from all levels of government. 

No, it looks to be about money. More specifically it looks to be about attaching monetary value to solving problems. 

Open source software is inspiration freely shared with other people. A programmer runs into a vexing problem, whips up some code to fix it and freely shares the solution with the world. A group of like-minded people who coalesce around a particular application create an "open source community" to continuously refine the application and freely distribute it. 

Members of the far-flung community donate their time to the hard work of improving open source software. 

The question is whether an open source community, as a software development model, can be created around enterprise-class applications for the world of medicine, a world that desperately needs IT. 

At the end of the 1990s, most U.S. industries spent approximately $8,000 per worker for IT, but the health-care industry invested a mere $1,000 per worker, according to the Office of the Press Secretary in the White House. 

Since 2004, the federal government has pushed hard on the medical sector to wean itself from paper-bound procedures and hospital and patient records, and to weave health IT into practicing medicine. It's a staggering task. The health-care industry is arguably the most fragmented sector in the U.S. economy. 

Several open source communities have launched health IT projects targeting electronic health records or practice-management software, and a few of their applications have been fine-tuned over the years. 

How will these open source communities compete with software firms looking to monetize medicine? 

This isn't to suggest that communities lack the skills to compete. It's about wherewithal. With their deep pockets, software firms can consistently dedicate more resources to solving a health IT problem. The executives running the firms don't mind spending money because of the potential payoff: Big-money contracts nationwide in hospitals and hospital systems. 

Playing the devil's advocate, such software firms often shoot across the sky in a blaze of temporary glory. The "solution" a firm creates and sells is only good if the company survives the meat grinder of the marketplace to support and enhance the product. Open source communities might have more staying power because they donate their time and they don't face marketplace pressures. 

Let the competition begin.
Shane Peterson Associate Editor