By Thomas L. Friedman

First Posted at The New York Times on 5/25/2013

Thomas L. Friedman, columnist, New York Times

Thomas L. Friedman, columnist, New York Times

Listening to the debate about President Obama’s health care plan, some critics argue that Obamacare is going to need Obamacare — because it’s going to be a “train wreck.” Obama officials insist they’re wrong. We’ll just have to wait and see whether the Affordable Care Act, as the health care law is officially known, surprises us on the downside. But there is one area where the law already appears to be surprising on the upside. And that is the number of health care information start-ups it’s spurring. This is a big deal.

The combination of Obamacare regulations, incentives in the recovery act for doctors and hospitals to shift to electronic records and the releasing of mountains of data held by the Department of Health and Human Services is creating a new marketplace and platform for innovation — a health care Silicon Valley — that has the potential to create better outcomes at lower costs by changing how health data are stored, shared and mined. It’s a new industry.

Obamacare is based on the notion that a main reason we pay so much more than any other industrial nation for health care, without better results, is because the incentive structure in our system is wrong. Doctors and hospitals are paid primarily for procedures and tests, not health outcomes. The goal of the health care law is to flip this fee-for-services system (which some insurance companies are emulating) to one where the government pays doctors and hospitals to keep Medicare patients healthy and the services they do render are reimbursed more for their value than volume.

To do this, though, doctors and hospitals need instant access to data about patients — diagnoses, medications, test results, procedures and potential gaps in care that need to be addressed. As long as this information was stuffed into manila folders in doctors’ offices and hospitals, and not turned into electronic records, it was difficult to execute these kinds of analyses. That is changing. According to the Obama administration, thanks to incentives in the recovery act there has been nearly a tripling since 2008 of electronic records installed by office-based physicians, and a quadrupling by hospitals.

The Health and Human Services Department connected me with some start-ups and doctors who’ve benefited from all this, including Dr. Jen Brull, a family medicine specialist in Plainville, Kan., who said that she was certain she had been alerting her relevant patients to have colorectal cancer screening — until she looked at the data in her new electronic health care system and discovered that only 43 percent of those who should be getting the screening had done so. She improved it to 90 percent by installing alerts in her electronic health records, and this led to the early detection of cancer in three patients — and early surgery that saved these patients’ lives and also substantial health care expense.

Todd Park, the White House’s chief technology officer, said many new apps being developed have been further fueled by the decision by Health and Human Services to make available massive amounts data that it had gathered over the years but had largely not been accessible in computer readable forms that could be used to improve health care.

It started in March 2010 when Health and Human Services met with “45 rather skeptical entrepreneurs,” said Park, “and rather meekly put an initial pile of H.H.S. data in front of them — aggregate data on hospital quality, nursing home patient satisfaction and regional health care system performance. We asked the entrepreneurs what, if anything, they might be able to do with this data, if we made it supereasy to find, download and use.” They were told that in 90 days the department would hold a “Health Datapalooza,” — a public event to showcase innovators who harnessed the power of this data to improve health and care.

Ninety days later, entrepreneurs showed up and demonstrated more than 20 new or upgraded apps they had built that leveraged open data to do everything from helping patients find the best health care providers to enabling health care leaders to better understand patterns of health care system performance across communities, said Park. In 2012, another “Health Datapalooza” was held, and this time, he added, “1,600 entrepreneurs and innovators packed into rooms at the Washington Convention Center, hearing presentations from about 100 companies who were selected from a field of over 230 companies who had applied to present.” Most had been started in the last 24 months.

Among the start-ups I met with are Eviti, which uses technology to help cancer patients get the right combination of drugs or radiation from Day 1, which can lower costs and improve outcomes; Teladoc, which takes unused slices of doctors’ time and makes use of it by connecting them with remote patients, reducing visits to emergency wards; Humedica, which helps health care providers analyze their electronic patient records, tracking what was done to a patient, and did they actually get better; and Lumeris, which does health care analytics that uses real-time data about every aspect of a patient’s care, to improve medical decision-making, collaboration and cost-saving.

Obamacare will be a success only if it can deliver improved health care for more people at affordable prices. That remains to be seen. But at least it is already spurring the innovation necessary to make that happen.