Wireless vendors struggle to stimulate broader adoption of devices and applications

February 21, 2001

Few would deny that healthcare-oriented mobile devices provide impressive capabilities. Mobile monitoring systems let nurses track patients’ vital signs from a distance. PDAs provide doctors with patient records and reference materials, and they can

Few would deny that healthcare-oriented mobile devices provide impressive capabilities. Mobile monitoring systems let nurses track patients’ vital signs from a distance. PDAs provide doctors with patient records and reference materials, and they can transmit legible prescriptions to pharmacies. But with medical providers already facing spiraling costs, the new, largely experimental, technology is proving to be a hard sell.

Early wireless adopters in healthcare tend to be individual physicians and nurses who bring in their own PDAs or use free ones plastered with ads from pharmaceutical and other suppliers. These devices are typically part of a Trojan horse strategy for the vendors that supply them: They use the doctors and nurses as the entrée into hospitals, hoping that the hospitals will at some point integrate those devices into their technology infrastructures.

So far, few healthcare professionals—and even fewer hospitals—are taking the bait, even though there’s no shortage of gadgets targeted at doctors and nurses. According to a Gartner Group study conducted last June, fewer than 5% of physicians write prescriptions electronically—and electronic prescription pads are considered one of healthcare’s leading wireless applications.

Part of the problem is that, with the exception of charge-capture systems that offer billing cycle benefits that are relatively easy to quantify, the return on investment on mobile healthcare technology is hard to pin down. The devices and applications are so unproven that it’s hard to gauge just how much money, if any, can be saved by implementing a particular product.

“The medical community tends to be very cautious of new technologies,” says Bruce Elkington, CIO of Overlake Hospital Medical Center in Bellevue, WA. “It’s important to determine whether a new product really provides any benefits and if those benefits are worth the cost.”

Kenneth Kleinberg, Gartner’s healthcare industry research director, notes that healthcare lags behind several other industries in the use of mobile devices.

“That doesn’t mean (the field) won’t take off in the future,” Kleinberg said. “But vendors and their partners have to prove there’s a compelling reason to use this technology.”

Although critical-care systems represent an exciting use of mobile technology, the bulk of portable healthcare tools are targeted at routine patient-care tasks. Applications in this area are designed to help physicians fax prescriptions to pharmacies, check drug references and formulations faster and more accurately, and handle other routine tasks such as accessing medical records and scheduling appointments. By simplifying administrative processes, mobile devices prevent routine tasks from overwhelming healthcare professionals and their staffs. There are also financial benefits associated with accurate billing. According to Synergy Medical Informatics, a benefits-management firm, lost billings average about $60,000 per year for each of the roughly 450,000 physicians in active clinical practice in the U.S.

Dominant Tools and Applications

Despite slow uptake of mobile healthcare applications, dozens of vendors are entering the market. More than 20 companies are offering electronic prescription technology, including Allscripts, iScribe, and PocketScript. Another half dozen or so offer software and services that run on PDAs sponsored by pharmaceutical, benefits-management, and other companies seeking to reach doctors. Better-known firms in this niche include ePhysician and ePocrates. ePhysician charges doctors a monthly fee for access to its network, while ePocrates offers a free prescription database and charges for other services.

There are also a few systems-oriented companies such as Data Critical, which has offered its mobile alert StatView system for two years and is working on a wireless prescription tool; ParkStone Medical Information Systems, which provides a variety of wireless applications for physicians; and Aether Systems, an ASP that entered the healthcare field in August to offer wireless applications to device providers such as ParkStone and Becton Dickinson (now known as BD). Aether Systems has also invested money in Data Critical’s wireless technology.

What is common to these firms is an emphasis on selling to the physician rather than the more conservative hospital. With relatively few hospitals venturing into mobile technologies, the field’s strongest advocates tend to be individual physicians rather than hospital administrators and board members.

Johnson & Johnson, for example, has established partnerships with ParkStone and iScribe, two medical technology vendors that provide prescription-pad and clinical decision-support tools. Both deals allow Johnson & Johnson to distribute handheld prescription pads to physicians via its national sales network in return for the right to sponsor advertising and other health-related information on the devices. And drugmaker Eli Lilly sponsors ePocrates’ network, which allows electronic prescriptions and access to medical databases, while drugmaker Bristol-Myers Squibb offers cardiologists free Palms in a trial effort with ePocrates. PCS Health Systems, the pharmacy benefits management subsidiary of drug chain Rite-Aid, also provides PDAs to physicians.

“Physicians are the ones really driving this field,” said Andrew T. Jay, director of medical technology research for First Union Securities. “They know the technology, and they know how it can help them.”

Slowly warming up to the potential of wireless healthcare devices are those who pay the bills or manage expenses: the insurers and managed-healthcare companies. They hope to reduce costs by directing physicians to less expensive drugs when doctors have a choice of medicines to prescribe.

Edgar Black, chief medical officer of Blue Cross/Blue Shield of the Rochester, NY, area, said his organization has helped more than 400 physicians acquire Palm handhelds. Black said he hoped the mobile devices could eventually shave up to 5% from the $250 million it now spends annually for prescription drugs by steering more doctors to lower-cost drugs. Similarly, Cigna HealthCare, a national HMO, provides its formulary of approved drugs via ePocrates’ network; its goal is to help physicians prescribe drugs covered by the insurer.

Ironically, a Harris Interactive poll of physicians found that access to such pharmaceutical formularies was one of the least desired services. Instead, they want access to lab results and patient records, which many services are beginning to offer but requires that the devices be integrated with hospital networks.

Integration Issues

Giveaways appear to be a win-win situation: Physicians receive a useful new technology and the donors get to advance their particular interests. But some observers believe that the cozy relationship isn’t necessarily a good idea. Michael Barrett, a senior analyst at Forrester Research, said the arrangement encourages physicians to adopt new products with little thought toward possible future implications.

“There are so many products being offered that they could be worn in a bandolier,” he said. “It’s not the sort of rollout that’s likely to please hospital administrators, who would prefer a more organized implementation of mobile technology.”

As more hospitals begin supporting mobile technologies, it’s unclear whether the current approach of free or subsidized systems will continue to be the prevailing model. For those hospitals that try to integrate wireless devices into their infrastructure, the growing PDA clutter raises a whole slew of issues, from system compatibility to legal responsibility:

  • Data exchange. Transferring software and files between devices and IT legacy systems is often problematic. Although most vendors boast that their systems are legacy-compatible, formatting and other glitches are commonplace, said Josh Fisher, a research analyst with brokerage firm W.R. Hambrecht.

  • Data ownership. In some cases, sponsors retain legal ownership of both the hardware and software, hampering the free flow of information between systems owned by hospitals and physicians. Barrett said the American Medical Association should step forward and act as a mediator to hammer out technology and business frameworks for preserving open platforms. The AMA, however, shows no interest in taking on such a task.

“We’re just a physician’s membership organization,” said AMA spokesperson Ross Frazier. “We don’t test products or set standards.”

  • Emissions fears. Even more ominous than the problem of system integration is the ability of wireless devices to coexist with sensitive medical equipment. Many healthcare facilities post prominent warnings about the use of mobile phones and other types of wireless hardware, concerned that the radio-frequency energy that the units emit could cause heart monitors and other critical devices to shut down or provide false readings.

“It’s an interesting situation, not dissimilar to the problem of using wireless devices in aircraft,” said First Union’s Jay. “Vendors will have to certify to hospitals that their products won’t interfere with other equipment and that their equipment is itself resistant to outside interference.”

The need for such assurances will certainly add to the cost of healthcare wireless technologies and could also slow the introduction of products. Cell-phone-based applications are banned in most hospitals because of the potential for interference with medical devices, said Steve Bass, vice president of healthcare solutions for Aether Systems.

Another concern is the electromagnetic radiation that the devices themselves emit, although the risk is small because of Federal Communications Commission regulations that govern just how much electromagnetic energy can escape a unit’s case.

  • Privacy and security. As healthcare professionals begin flinging medical and financial data through the air, concerns about system security and patient privacy are emerging. Strict federal rules covering the sharing of patient data have hindered the transfer of information on many fronts, including Internet access and electronic patient record exchanges. Wireless security issues are likely to make things even worse for wireless healthcare device users, said Gartner’s Kleinberg.

Existing safeguards for mobile applications are far from ironclad. The Wireless Application Protocol (WAP), for example, doesn’t yet provide end-to-end security. While wireless security vendors such as Diversinet, Certicom, and VeriSign are working to fill the WAP gap with proprietary solutions, an industry-wide standard to protect the transfer of sensitive data doesn’t yet exist.

A security issue perhaps even more troublesome than network interception is the problem of lost or stolen PDAs. Regular backups would help alleviate the problems associated with losing valuable data, but physicians aren’t known for their meticulous attention to system or data upkeep.

  • Legal worries. As mobile gadgets enter hospitals and doctors’ offices, it’s natural to think about the technology’s legal implications. Mobile systems may actually help reduce lawsuit exposure, said Kleinberg. Units that record events, transactions, and doctor-patient conversations can also provide valuable documentation in the event a lawsuit does arise.

Future Prognosis

Despite the current challenges facing the mobile healthcare industry, many observers expect adoption rates to rise quickly over the next few years. A report issued in October by W.R. Hambrecht forecasts that 20% of U.S. physicians will use handheld devices for daily transactions by 2004, generating more than $2 billion in sales for device vendors.

But what will really drive the market over the next few years? The growing desire of physicians to use mobile devices will play a major role, said Hambrecht’s Fisher.

“Hospitals can afford to maintain the status quo when only 5% of physicians use handhelds, but when that number reaches 20% and higher, they won’t be able to be so complacent,” he said.

Maturing technologies will also help boost market penetration, said Gartner’s Kleinberg, making mobile devices and their users more productive.

“Broader bandwidths, modems integrated into PDAs, and wireless local area networks will all work to boost adoption rates,” he said. “It’s important to remember that today’s problems are transitory. This field has too much potential to remain untapped.”

Reprinted with permission from M-Business magazine.