Ballmer on HealthCare

My last post covered the opportunity I had to meet with Microsoft CEO Steve Ballmer in a small group setting.  He said a couple of things about healthcare that I though were noteworthy.

Firstly, he said that Microsoft develops technologies that are intended to be used across all industries.  He said they were a horizontal software company.  But, he went on to say that healthcare is the one vertical that is fragmented among many software providers.  Since there are no SAPs, Microsoft is making investments in this industry.

I have had time to reflect on this and I have 2 thoughts:hvscreen

  1. Epic is nearly reaching the point of having the same market clout as an SAP (maybe they are at Lawson status).
  2. Microsoft might want to examine why that is the case and what happened to all of the other big companies that thought healthcare would be low hanging fruit for a big company (IBM, Alltel, American Express, Siemens and Ameritech come to mind).  Healthcare is complicated.

Ballmer also talked about Microsoft HealthVault.  While he was clearly a believer in a web-based Personal Health Record for patients (PHR) he wondered out loud how Microsoft would make any money doing this.  Clearly a question he has asked without getting a satisfactory answer.  Even when I suggested that the EHR incentives from the federal stimulus bill would bring new opportunities he did not sound optimistic about the contributions that investment would bring to the bottom line.

My next post will be on Ballmer’s advice for CIOs, which I loved.

12 thoughts on “Ballmer on HealthCare

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  2. Will,

    Interesting how many really smart people underestimate the complexity of healthcare. Or is it arrogance?

    Enjoy your comments…

    Dave

  3. Interesting that we’re all wondering how Microsoft (and Google) plan to make money with PHRs. Google philosophy has been to get lots of users and then worry about making money. If either of them are really interested, why don’t they help finance the hospital connections…

  4. 2 quick subjects coming out of it:

    1. Complexity of healthcare industry: what in your opinion is “slowing” the evolution of our industry? In comparison, when banks had to integrate to exchange trades or send orders to markets, their capital expenditures was very high, coming up with straight through processing and automatic a lot of their processes, relaying heavy manual work to back-office, and constant support/monitoring of their systems for front-office. In comparison, it seems to me that there are many more individual incentives for actors within the industry which prevent them from spending energy/time on the development of an integrated care continuum. To summarize all that, it seems that there is no integrating platform within healthcare because the industry is complex, and the industry is complex because there is no clear incentive to make is simpler. thoughts?

    2. Making money out of hosting PHR (or said differently offering PHR capability to “consumers”) seems to vary depending on whom offers it: Google/MS can make money from ads; healthcare professionals (hospitals/Blues|insurances) from preventive care programs (which here is more reducing MLR); drugs manufacturers from simulation pools. In every case, offering snazzy PHR with integrated capabilities will “root” more loyal users.

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    • I guess I don’t mind giving allowing a small company to advertise here. This post is not an endoresement by me – I have never heard of these folks. I hope they go on to do great things.

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