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GS1 summer talk about digitizing and standardizing

Eight explanations why standardization in healthcare really works differently

GS1 summer talk about digitizing and standardizing

Guest blogger Henk Hutink, company adviser and program manager at Nictiz (Netherlands Institute for ICT in healthcare) published in May 2017 on SmartHealth 's blog his eight statements why standardization in healthcare really works differently. Digital developments are going fast. And one prerequisite for optimizing digital developments is the standardization of information.

Standardization of information: This means that unambiguity of concepts is needed in a sector. For example, consider replacing the bank account number with the IBAN number, or the use of a barcode in the supermarket. With clear concepts in healthcare, it is better to share information digitally, measure quality, transmit files, and conduct scientific research. Standardization of information takes place in all sectors and therefore it is interesting to investigate how this is achieved in every sector.

This article gives eight explanations why standardization of information in the healthcare sector is different from the financial sector, the food sector or the education sector.

    1. The healthcare sector started relatively recent with standardization of information

    Standardization of information has been a focus for several decades in various sectors. In general when business processes are digitized, the need for standardization increases. Digitization and thus the corresponding standardization in payment traffic originated in 1955 and in the food industry in 1975. The banking sector and food industry have been busy for 40 to 60 years. In the healthcare sector, digitization started just prior to the turn of the century, where GP’s and financial reporting were in the healthcare sector. In the Netherlands the acting minister of Health, advised by the then Health Council, informed the House of Parliament in 1997 about the need for standardization of information and exchange of information in healthcare. Only in the past twenty years the healthcare sector in the Netherlands has worked on the adoption of standards. Incidentally, the same applies to the education sector.

    2. Strategy is focused on cooperation and temptation

    Like companies, sectors also adopt strategies to achieve goals. In the banking sector and the food industry, both private sectors, there is a 'planned' strategy. That is, there is a shared vision with a clear goal that is pursed. For example, Albert Heijn introduced barcoding in the food industry together with other market leaders and established the organization GS1 Nederland. The bar code concept dates back to 1948 and has been developed in the United States. The banks themselves own the standardization organizations such as SWIFT. As a result, the banks are in the process of drafting and implementing their standardization policies.

    In the banking sector and in the food industry, not complying with the standards endangers a company of getting out of business. For the simple reasons that non-standardized payment traffic cannot be executed and since products without bar coding will not be in the shelves of the supermarkets.

    The strategy in the healthcare and education sector is characterized as emerging, that is, the strategy is a response to the environment and there is alignment with stakeholders in the sector. One feature is that many partnerships are needed to achieve standardization. The introduction of standardization in the healthcare sector, and also in education, is done on the basis of "temptation". It is up to the organisations themselves to invest in standardization. The risk that a healthcare institution or an educational institution drops out of business when failing to comply with standards is virtually not existent.

    3. The healthcare sector has four governance regimes

    Each sector has a governance regime: the way in which codes of conduct and supervision in the industry are regulated. For example, the banking sector and the food industry have a private governance regime. Education has a mixed governance regime, the sector is partly private and partly public. The healthcare sector faces four governance regimes. A private governance regime for private care institutions, a public governance regime for government agencies, a social governance regime from patient participation and medical specialists have a professional governance regime.

     The reasoning is different in each governance regime. For example, in a private governance regime, 'efficiency' is the criterion for standardization. Social governance is about support, with the standard, every patient can be helped. The professionals are concerned with their professional skills. And with public organizations it is about legitimacy. Because four types of governance regimes apply to the healthcare sector, complex alignment and lasting commitment are needed, and therefore longer lead time is required to achieve implementation of standards in the healthcare field.

    4. Amount of information is 100 times larger

    Each sector has its own subject jargon, vocabulary, concepts and definitions. The information about diagnoses, treatments, laboratory results and references consists of more than 1 million definitions. Already the ICD-10 International Classification of Diseases contains about 70,000 codes for various conditions, and for a large part treatments are possible, for example with many thousands of separate medications. According to estimates, the amount of information in the healthcare sector that has to be taken into consideration is approximately one hundred times greater than the total of banks, retail and education.

    5. Market power is lacking in the healthcare sector

    Today I the Netherlands we see five purchasing organizations in the food industry. These purchasing organizations have purchasing power. The purchasing organizations determine prices, but also the use of the standards in the distribution and supply chain. Banks combine collective interests by establishing separate institutes carrying out joint activities. The banking sector is organized for banks to be the owners of umbrella institutions responsible for standardization. In the banking sector we see organizational power. The healthcare and education sector, on the other hand, consist of many stakeholders, we cannot speak of market leadership, with a market leader that would enforce standards in the sector. Can the healthcare sector be seen as a sector where regulated market forces will drive implementation of standardization?

    6. Privacy and role complexity are complicating factors

    Privacy is important in every sector. However the impact of privacy on standardization issues differs per sector. The privacy of a jar of peanut butter in the distribution chain is limited and the privacy sensitive information in the payment traffic is limited to money and name-address-residence data. In education, the situation is more difficult. In education the data concerns both students and teachers. The apprenticeship is not just about reporting grades, but for all learning outcomes throughout the entire pathway from primary education to higher education. This also concerns information from the use of digital learning resources. Digital learning resources are in the hands of publishers.

    Health information is even more comprehensive. It concerns personal data from birth to death, which may have consequences for social functioning. It is not without reason to have medical data be under the professional secrecy of healthcare providers. Privacy issues in healthcare are very complex. The patient's position is special because the patient fulfils multiple roles. The patient is both the person concerned as well as the customer, the information source, the information carrier and the co-owner of information. So standardization with the person’s multiple roles acknowledges the complexity of standardization in healthcare.

    7. Principal process in healthcare is defined as iterative and bottom-up

    A number of characteristics can be defined to differentiate the principal processes in healthcare from those in the principal processes in other sectors. Concerning payment, the food industry and education the principal processes are defined top-down and the process steps throughout the chain are predictable. The results at the end of the chain are also known. For example, in payment, the money must be credited to the beneficiary on the account. In education it is clear that a student should pass to a subsequent school year.

    Healthcare processes are iterative. The healthcare process is determined by the healthcare provider, bottom-up, on site, often in consultation with the patient. The healthcare treatment depends on the findings of the healthcare provider in the search for the correct diagnosis and the corresponding treatment. At the same time, the outcomes of treatment can only be partly predictable. The iterative actions and the process of healthcare therefore have different characteristics than the other sectors, leading to standardization being more complex.

    8. Standards are lacking in healthcare

    In the banking sector and the food industry, commercial organizations, like multinationals, have a keen interest in the provision of standardized information. For multinationals efficient business management or minimization of risks are important drivers to achieve standardization. Therefore, these organizations ensure that the products they buy contain standardized information, like the correct description of ingredients on the labels of food supplies and the unique product coding of foods made possible with barcodes.

    The healthcare system in the Netherlands operates in a different way than the food industry. Healthcare insurance companies offer contracts to civilians, purchase the healthcare at the healthcare providers, who then provide care to the citizens. From a corporate perspective, the healthcare insurance companies are responsible to purchase healthcare products. Keeping good healthcare records is a responsibility of the healthcare provider. Whether or not this should happen in a standardized manner could in fact be part of the healthcare acquisition processes. Could it be that just as multinationals include standardization of information in the procurement contracts, the healthcare insurance companies should include standardizaton of information in their procurement contracts? Could they force the healthcare professionals to keep records within their profession in a standardized way?


Market power: who?

The previously asked question (if there is market power in the healthcare sector to encourage standardization) can be answered positively. The market power lies either with the healthcare insurance companies or with the professional groups. For which of these stakeholders will the challenge be the most compelling to take action and organize this? These stakeholders can seek standardization of information in the healthcare sector. How this can be achieved is the remaining question. This discussion has now been addressed in the Information Summit, attended by all the healthcare stakeholder, as one of the most important agenda items.

Henk Hutink is a national program manager and strategic adviser for sectoral ICT issues at Nictiz .