Daniel S. Pelino
TWST: What are the major health care solutions you focus on?
Mr. Pelino: Visualize a triangle. At the bottom of that triangle, you have to have a dynamic, virtualized, rationalized infrastructure. What does that mean? That means that your servers, your storage devices where you store your images, where you have your EMR, that kind of thing, depending on the size of health care delivery systems, between 75 applications and 250 applications are running at anytime. Now, multiply that number of applications times of number of instances - a test would be an instance, your run would be an instance, your pilot would be an instance. There are roughly six instances for every application. On top of that, you have physicians that say, "I want my own cardiology system, I'd like to have my own oncology system, I'd like to have my own diabetes system," and now you're charged with building an integrated delivery system that is based on the patient across your entire delivery system enterprise. What a challenge!
On top of that, each department is different. And why is that? It's because they have not rationalized and built a dynamic infrastructure. From a technical standpoint, when you get under the covers of building this infrastructure layer, you see tremendous levels of inefficiency. Servers that are dedicated to ISVs are running at 10%, 12%, 15%, 20% optimization. Costs are higher than you would need to if you could micropartition the software. For instance, many of the ISVs and the database companies that are out there today charge by processor, and if your processor is defined by something that is very large and it's running at 12% to 15% optimization, you're paying for all of that capacity and you are only using a small part of it. So the first step is to be able to build that dynamic, virtualized infrastructure where you can rationalize it. You can start to micropartition the work within servers, taking your cost down significantly and building out the integration that you need around patients. That first step of building that dynamic, virtualized, optimized, rationalized infrastructure is an area that IBM (IBM) does extremely well with. There is probably no other company that knows how to do that work better than IBM - actually, we work with 1,400 business partners, so we're working with all the Epics and the Cerners and the McKessons and the Siemens and the companies that provide the solutions to all of these hospitals. That is why the largest systems out there today trust IBM to manage their infrastructure for them. That is why Kaiser trusts IBM; that is why UPMC trusts IBM; that is why countries such as Denmark trust IBM to run their infrastructure for them. Scalable, secure, dynamic, virtualized, optimized, rationalized, all those big impressive words, all mean that you run a very effective and efficient infrastructure. So that's number one. With the acceleration of EMR adoption and with the requirement to have that type of infrastructure and scalability, IBM is usually the top choice when it comes to who is your infrastructure partner.
As systems get bigger, and we're certainly seeing consolidation of systems, we're seeing hospital systems grow, we're seeing countries making strong commitments into building up their health care systems. I think that infrastructure work will continue to grow. Not everyone is as far along with the EMR adoption and that infrastructure work as others. There is a maturity model or a gestation model within health care that starts with this discussion around infrastructure. The EMR work has accelerated these discussions. Our work with the EMR business partners is doing extremely well. Our customers see the logic of it. With all this EMR stuff, IBM does its optimization, virtualization and the total cost of computing is less with IBM than is with other platforms. We know how to to put this together for scalability and security. It becomes the base of the pyramid. I'm going to call this "Maslow's hierarchy of needs within health care IT" for you. Within that discussion on infrastructure, you get into discussions about EMR and the base platform that's required.
Second, you get into analytics. Now that I built this platform and I made my decisions on databases and ISVs and I bought tools like IBM Initiate for master patient indexing so I can find my patient, what do I do on decision support, how do I bring it forward? When you look at the HIMSS adoption model for EMRs, they rank these between zero and seven. They call it the seven stages of the EMR adoption. This gets into how many hospitals are moving forward. What they're showing is that today, most of the hospitals are in stage III, which gets into a lot of infrastructure. In stage IV, you start looking at clinical decision support. These reports come out in five-year increments. In 2005, the majority of the hospitals were at stage II. In 2010, the majority of the hospitals, 48%, were at stage III. When you look at stage IV, you say to yourself, "there is a maturity curve here." You can actually see the progression path of how hospitals actually transform themselves. In order to qualify for stage IV, the most important next step is around analytics. We think that by 2015, more than half of the hospitals will be enabled through analytics. Now the discussions are around big data and analytics. This is why IBM is looking to build a national comparative effective database to allow hospitals to be able to use analytics to defend and define themselves on best practices. When customers come to us and say, "I built my infrastructure, I've got my EMR, what do I do next?," We say go to analytics. Look at population health, look at disease management, look at return on investment. These are the products that you buy. These are the dashboards that you use. We even have relationships with companies and organizations that will look across the U.S. and other markets, so you can determine whether or not you're best in class or not. So going up the pyramid, after infrastructure, next is analytics.
So now going above analytics, you get into new care consideration models. What are we talking about there are Web sites and portals, how you interact with patients, the ability to do referral patterns where instead of asking the patient to make the appointment, you make the appointment for the patient. Then you respond back to them electronically or you call them and say, "this is when you have your appointment," and their records and their information follows them. A significant challenge within hospitals is when a primary care physician refers a patient to a specialist. On average, one in 10 of those referrals actually show up in that specialist's office. Not good. So how could we change that? The way you change that is that you think about the patient experiencing these new care consideration models, where you say to the patient, "I'll make that appointment for you, and we'll call you and confirm, and your medical information will follow you and be there for that physician." A lot of this is around the whole idea of continuum of care in the patient-centered medical, but that is the whole idea of this new care consideration model.
At the top of the pyramid, we get into personalized medicine. This is where you say, "I am predisposed to a certain genetic condition." I now know that I have the potential for this type of cancer, not just through family history but through genotyping, and this is a pyramid.