We all have a boring uncle who wouldn’t stop going on and on about the good old days (chances are we sounded just like him more than once ourselves). Next time it happens, make him take a look at this and then immediately after make him watch this.

Unequivocally, the new medical technologies and breakthrough therapies that were developed over the past century represent a quantum leap for medicine but nowadays, caring for patients means much more than simply treating them with drugs and medical equipment. With the touch of a tablet, doctors and nurses are now able to consult their patients’ medical history, access lab tests results, check drug-drug interactions on a medical database before e-prescribing a new medication, share that information with others across the care continuum, request a second opinion…etc. Information technology opens the door to an endless array of solutions that enable patients and healthcare professionals to be better informed and connected. As described in an earlier post by Jean-François Pariseau, IT solutions have the ability to dramatically improve productivity, workflow, access, transparency and efficiency. The information age, or more specifically digital health technologies, have made patient care better, safer and more efficient than ever before. And this is just a start: in a report published earlier this year, McKinsey estimates that the “big-data revolution” could help reduce the US healthcare spend by $300-450 billion!

Needless to reiterate we strongly believe in the tremendous Healthcare IT opportunity, both from a patient-care and a pure investment perspective. Hopefully, we are far from being the only venture capital fund to believe that. As it was evidenced by the most recent CBI Insight report, VCs have a growing appetite for the space: digital health companies raised over $1.5 billion last year (a 23% YoY growth and 3x more than 2010).

At this point, some of you may have started wondering how the post’s title is at all relevant to the text…

The healthcare industry is probably the last major industry to having adopted IT as a leverage to improve efficiency. In the US and Canada, CMS and Health Infoway put in place a set of incentives which largely contributed to a relatively fast adoption of IT solutions within hospitals over the past few years. In the US, the pure “digitization” stage is far behind for most hospitals and CMS is already getting ready to launch Meaningful Use Stage 2. But what happened last month at the Jewish General Hospital (article) begs a question: if hospitals are still not able to adequately manage heat loads in their server rooms, is their core IT infrastructure even ready to reliably support all these new layers of technology being adopted and to which caregivers and patients are becoming increasingly dependent?

Up until recently, hospital personnel mostly consisted of doctors, nurses, a few administrators and a small IT team, if any. From an IT infrastructure perspective, hospitals were likely not completely ready for the exponential growth of digital health solutions (EHRs, CPOE, CDS, PACS…etc.) and as a result, many hospitals IT teams end up spending most of their time in a fire-fighting mode. Some may argue that hospitals should simply migrate to cloud based solutions and refrain from trying to build in-house talent and host their own servers. Make no mistake, the cloud is not a magic solution: last year’s Cerner outage took down their entire hospital network, which is far more serious than the JGH episode.

Don’t get me wrong, I am a firm believer that the cloud will be part of the solution. The migration to cloud will certainly help improve application performance and availability, reduce maintenance and energy costs and enhance disaster recovery if planned properly [1] but until then hospitals should give serious consideration to a major overhaul of their underlying IT infrastructure and to rethinking their business continuity processes. Ironically enough (although not related to hospitals), even the website supposed to manage what is probably one of Obama’s flagship reforms (Affordable Care Act) and what eventually led the republicans to force a government shutdown, is currently plagued with functional problems…

Mounting a Ferrari engine on a Go-Kart will eventually make us hit the wall and the boring uncle will have every right to remind us of the good old days.

— Amine Benmoussa

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(1)  Canada Health Infoway published an interesting white paper highlighting the cloud risks and opportunities for healthcare. 

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Amine Benmoussa

I love my job. Nothing can match the thrill of building companies and helping big ideas come to life, with the added benefit of having a real impact on human health. But if you had asked me when I was 18, I would never have thought I would be where I am. I pursued computer science in school, and quickly found myself in banking after graduating, which was a great learning experience but not the best fit. In search of bigger challenges, I went back to school for an MBA, with the dream of becoming a management consultant. That was until an internship at a VC firm changed my mind; as a VC, you get to dive deep into companies and provide strategic recommendations like a management consultant, with the added excitement of implementing and living with the consequences of those recommendations.  I’ve been happily living and breathing (and eating and sleeping) VC ever since, while still trying to make time for family, golf, and of course good food and wine.

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  • amyallstar

    November 3, 2013 at 11:29 pm

    Thank you for this perspective! Too many times the companies designing the new technology fail to take into account the long process needed for the hospital to amend their IT, their data AND their human processes to accommodate the change. Thank you for also mentioning the tertiary planning needed around cyber loss and risk management, vendor management and more that is often forgotten. Notwithstanding the Obamacare example (a different root cause of failure), these young innovative companies would do well to accommodate this reality into their sales cycle and healthcare systems to aggressively plan for the new realities in their budgets.

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