Microsoft's Rx for health care

The rest of the world has embraced e-mail, online forms and iPhone apps, but health care still communicates in the centuries-old technology of paper.

For the last four years, a raft of tech companies, including Microsoft, have been hoping to change that, making a major push into developing software for the health-care industry, what CEO Steve Ballmer refers to as "the largest segment of the world's economy."

The rush of companies, from niche players such as Epic to large newcomers like Google, comes as the White House and Congress debate the future of health care, how to provide coverage to the uninsured and the disparities in costs. Companies such as Microsoft, not surprisingly, say software is key to providing more effective and efficient care.

There is money to be made converting hospitals from paper to electronic records. Kaiser Permanente, a nonprofit health plan based in California, spent $4 billion making the switch, in what Kaiser claims was the largest nonmilitary installation in the country.

At a company known for building software for the masses, a single operating system to rule them all, the Microsoft Health Solutions Group has been targeting this one industry with new software products. The group, which has grown from a team of four to 600, wants to bring the unautomated parts of health care into the digital era.

"If you go see doctors, they ask you a bunch of questions to solve a set of problems, they apply some logic and arrive at a solution, rinse and repeat," said Peter Neupert, corporate vice president of the health group, part of Microsoft Research.

"It's fundamentally a data-management problem and it's a hard one. It needs a lot of help in being innovative and thoughtful and aggressive about how to help solve those problems to deliver better value for the provider and better outcome for the consumer."

Neupert is a former chief executive of Bellevue, Wash.,-based drugstore.com. Before that he was director of operating systems at Microsoft until 1998. He rejoined the company in 2005.

Neupert now travels frequently to Washington, D.C., to lobby on why Microsoft thinks technology is key to health-care reform, and he maintains a blog called "Neupert on Health."

An excerpt from a recent post: "I haven't received the multiple confusing bills and outrageous line items of detail from the hospital stay yet. Nonetheless, when it comes to getting a quality outcome from an advanced surgical procedure, I prefer the current U.S. health system with all its flaws to the alternative future of less consumer choice and innovation."

Under his leadership, Microsoft has developed two products: HealthVault, a system to store electronic medical records, and Amalga, a database platform for large hospitals and pharmaceutical companies.

HealthVault gives patients and doctors a place online to house their medical records, and Microsoft has built partnerships with institutions such as the Mayo Clinic that are adopting the technology.

The data are formatted to work with other devices, including a digital scale or a blood-pressure cuff, which could send your medical information to your doctor or be shared with a physical trainer.

The federal economic-stimulus package passed in February includes funding for hospitals that switch to electronic medical records, which could help Microsoft sell its health-care software.

"I think they're already being successful. They were able to sign an agreement with Telus in Canada," said John Moore, analyst at Chilmark Research. "When we start seeing a major rush of consumers and providers actually signing on and using platforms, then we'll see success. That hasn't happened yet."

Competition from other companies already in the health-care industry is stiff. Epic, a Verona, Wis., software company that serves the health-care industry, for instance, supplied Group Health Cooperative with its electronic health-record service. Kaiser is another customer of Epic, and half of Kaiser's 8.8 million patients are using the system.

Another rival, Google Health, has focused on signing up individuals rather than building the large partnerships Microsoft has.

Amalga, Microsoft's software product, is focused on the other end of the health-care spectrum _ researchers and doctors who want to bring together data from different silos. Neupert says he wants to "liberate core systems" in the hospital. While the software is still in the early phase, several hospitals are testing it, including Seattle Children's hospital.

New York Presbyterian Hospital, which handles 20 percent of medical care in New York City, has been using the software to study infection rates in patients using chest tubes to drain blood and fluid or to allow their lungs to expand.

Using Amalga, doctors were able to correlate the chance of infection with how long the chest tubes remained in patients. Dr. Craig Smith, chief of cardiothoracic and chairman of surgery at New York Presbyterian, says it has helped. "Infection rates certainly have gone down and this system played a factor certainly," he said.

Neupert says getting the health-care industry to adopt technology is key to the debate on changes to health-care."We need to figure out ways to cover more people but also deliver more health and better outcomes at lower costs," Neupert said. "I'm very convinced that information technology and consumers' empowerment around their health information are critical to all solutions that lead to better health-delivery systems in the future."
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MICROSOFT'S PROGRESS IN HEALTH CARE

Amalga customers: University of Washington, Seattle Children's hospital, New York Presbyterian Hospital, MedStar Health, Johns Hopkins Health System, Cook Children's.

HealthVault partners: Mayo Clinic, Aetna, American Cancer Society, American Heart Association, Walgreens, Kaiser Permanente
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