6 August 2021

Global platform march threatens to strand local software vendors

Cloud Government Interoperability

The rapidly increasing momentum of global platforms Google, Amazon and Apple in cloud and interoperability health infrastructure threatens to strand some in our local medical software industry.

If the jungle drums of change weren’t being heard before, then surely Google Cloud’s announcement last week that it has developed healthcare interoperability platform Healthcare Data Engine to match Amazon’s Health Lake will have them resonating loud in the ears of many of our local software vendors today.

When Amazon and Google start a race to build data platforms to suit a particular industry sector, eventually something is going to give.

Until now the complexity of healthcare data, its distribution in thousands of isolated legacy IT solutions, government regulation and the natural resistance to change that large incumbent commercial players create (e.g., information blocking), had been enough to foil the major global platform behemoths.

Google’s initial fervour for the healthcare sector was tempered with some spectacular early failures. The demise of its online personal health record (PHR) project under Google Health even had some analysts suggesting that the sector might be too complex for the sort of platform plays that the digital giant is known for.

But Google Cloud Healthcare Data Engine, which is only out in preview so far, feels fairly ominous in this respect. Press releases describe the product as being able to provide organisations a holistic view of patient information in near real-time. It is designed for providers to be able to pool multiple sources of data for advanced analytics and AI applications.

The product builds on Google’s Cloud Healthcare API, which was only launched last year, and which is claimed to be able to map more than 90 percent of Health Level 7 (HL7) v.2  messages to Fast Healthcare Interoperability Resource (FHIR) standards across leading electronic health records (EHRs).

All major global EMR vendors are building to the emerging platform APIs of Google, Amazon and Apple.

Apple is hard at work making sure the iPhone ends up as the hub of communication between providers using these new platforms and patients. Google is trying the same for Android.

If healthcare providers start pooling data from their legacy disparate IT solution sources, this technology will allow them to harmonise the data to FHIR and after that they can they can analyse it and start releasing some of the power of their previously disconnected data sets.

While we are still in the early days of this technology, no healthcare provider who wants to be competitive, or transform their servicing for far greater efficiency, will be able to resist an eventual move onto platforms like this.

And as bigger providers move onto this sort of infrastructure the rest of the healthcare ecosystem will need to fall into line to be able to talk to such providers.

If you combine this march of the major global platforms with the federal government’s mooted position on mandating that local vendors and providers align to modern healthcare interoperability standards within about five years, then you’d have to think that there’s not much left for any local software vendor who think they can hang on to their old server bound solutions much longer.

The gun has gone off on a transformational change to the underlying infrastructure servicing data sharing in health now. If vendors don’t start thinking about aligning themselves a lot more closely into this infrastructure, then they are likely to find themselves stranded soon.

If local vendors were looking for any other signs of change, then this week’s announcement of a worldwide restructure at EMR global giant Cerner is surely it. Locally the group lost three of its senior state-based managers, but globally the group cut significantly into its workforce.

Despite some revenue growth returning to the group in the last quarter, the company’s net income is declining rapidly. It is starting face off healthcare digital transformation on a global basis.

Cerner is one of the global EMR behemoths to be dragged into interoperability by the US government’s decision to mandate interoperability standards five years ago, and it has done a lot of work to create systems which dovetail with the major emerging platforms of Google, Amazon and Apple via FHIR. But apparently it is already struggling and finds itself racing to catch the change.

As things stand today, about 80% of the membership of the Medical Software Industry of Australia might be classified in a Google/Amazon/Apple healthcare platform world as ‘legacy’.

And although some key ones are hard at work developing open API and FHIR interface strategies, the problem that many will still face is getting from one side of the healthcare ecosystem – the server bound model side – to the other – the cloud-based infrastructure side – and holding onto all their customers on that journey.

If Cerner is having problems, and it starting changing itself five years ago when the US government introduced a timeline in which they and all other vendors and providers had to stop information blocking by meeting certain standards of data sharing and interoperability, how hard is this change going to end up being for our local software industry, which hasn’t the capital, nor much government understanding or backing so far, to make the transition?

As the federal government moves finally to mandate interoperability standards locally, it will need to keep a close eye on the health (pun intended) of our local software sector.

Until now the local software sector has resisted change, citing that they don’t have the capital structure to change, or the confidence that they have a business model on the other side of such a change. More worryingly, some vendors are just digging in and insisting that the change is uneconomic for everyone.

But the government and Australia can’t wait any longer, and Google, Amazon and Apple obviously aren’t going to slow down.

There will inevitably be losers here, as there has been in all sectors where digital transformation has taken hold. But, in some of our local vendors there exists IP, experience, and deep industry footprints which, if disrupted too much too quickly, could end up damaging the effectiveness of our local healthcare delivery in the short term.

Overall, there shouldn’t be any doubt in the minds of government or our local vendor community that big changes are on our doorstep.

Without some meaningful co-ordination between our local software industry, government and providers, we could end up in a larger mess than we are in right now.

Wild Health will be tackling these key trends in cloud healthcare management, technology and funding in our upcoming Healthcare Cloud Summit. Read more and register online here.