What's Holding Back Health IT Innovation?What's Holding Back Health IT Innovation?

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The U.S. healthcare system is so complicated and the status quo so entrenched that many good IT ideas fail to take hold. But the future of healthcare--and of the U.S. economy itself--depends on such innovators finding ways to get healthcare costs under control, according to Mark Smith, president and CEO of the California HealthCare Foundation.

"From left to right, from Paul Krugman to Paul Ryan," there's widespread agreement that the fiscal future of the country depends on getting healthcare costs under control, Smith said Monday at the Health 2.0 Conference in San Francisco, a gathering of innovators, entrepreneurs, dreamers, investors, and the occasional cheerleader with unrealistic expectations. But, he said guild rules, payment rules, and the culture of healthcare stand in the way of the kinds of improvements many people want.

"The graveyard ... is littered by fantastic ideas that never got traction," Smith said. "They've been humbled by the complexity of healthcare," he added in an interview with information Healthcare.

According to Smith, healthcare is stacked against anything that hits the bottom line of established interests, such as providers who are paid based on volume of services delivered. Usually, something that saves money for one party in healthcare is quite profitable for another. "My question is, where are the rat bastards that are making everything cost more?" Smith quipped.

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"The system is not set up to propagate the kinds of things that you do," Smith said, noting that an entrepreneur or a CIO can't walk into the office of a chief medical officer and say, "I've got a gadget that's going to blow your budget out of the water."

He recommended that innovators approach those who will save money from their creations to help align the investments to where the savings are, in the process softening the rules and culture that hold back true reform. "My suggestion to you is to attack these perversities one at a time," Smith said.

Patients need to be educated that there is a better way to navigate healthcare. "We sometimes underestimate what people are willing to pay for convenience because the system is just so damn inconvenient," Smith said.

He asked the audience to imagine what the world would be like if one needed a master's in library science to use Google or if bank tellers decided the locations of ATMs. The rest of the world has changed in the last 15 years, but healthcare largely looks exactly the same as it did at the dawn of the public Internet. "The only thing that we do the same way we did 15 years ago is healthcare," he said.

Smith, an internist who treats HIV/AIDS patients through a program at San Francisco General Hospital, said that there is a misnomer among healthcare professionals and executives that people with serious ailments want to be defined by their diseases."You want to spend as little time as possible on your diseases," he said. The same goes for interaction with the administrative side of healthcare, according to Smith, who noted that interactive "health 2.0" technologies have a tremendous opportunity to ease the process of enrolling the uninsured via the health insurance exchanges that will spring up by 2014.

Sure, there has been some progress. Two years ago, when the American Medical Informatics Association (AMIA) met in the same San Francisco hotel, Smith expressed the wish that there were a healthcare version of restaurant reservation site OpenTable.com, where people could get last-minute doctor's appointments and physicians can fill their schedules, and now there is, in the form of ZocDoc.

Smith also noted that CHCF is investing in companies and in accelerators to help good ideas become sustainable companies. "We are tired of seeing successful pilots die on the vine once the grant money is gone," he said.