Information and Data Handling Developments in Medicine

Barbara Breindel

INTRODUCTION

STUDY GOAL AND OBJECTIVES

This study, INFORMATION AND DATA HANDLING DEVELOPMENTS IN MEDICINE, HIGHLIGHTING OPPORTUNITIES FOR HARDWARE, SOFTWARE AND SERVICES, focuses on the market opportunities for goods and services for handling the overwhelming information and data handling requirements of the healthcare industry.

By the year 2000 the demand for healthcare will increase far beyond what we can currently imagine. Numerous opportunities will emerge, particularly for hardware, software and services that will handle the information and data generated within the healthcare system and for adequately trained personnel to develop, market, purchase, install and operate these systems. Accurate and up-to-date information is essential to continuous quality improvement and in the lowering of costs in most organizations, and is even more important in healthcare. Furthermore, healthcare is considered the fastest growing market segment. Healthcare reform efforts focusing on cost containment are anticipated to expand the data handling marketplace as healthcare deliverers search for methods to reduce costs associated with servicing an increasing number of patients. The handling of information by computers and the exchange of this information through computer-based systems in medical applications has led to the emergence of an area now known as healthcare information systems or healthcare informatics. The wider availability of communications capacity, advances in networking capabilities, and the availability of lower cost information technologies are causing an evolution in the information segment of the U.S. healthcare delivery segment.

Healthcare information systems include the use of computers in the areas of:

• patient care and management - care providers are using data entry devices to document care given both at the bedside and at central terminals
• patient records - compilation of patient or test data, maintenance and retrieval of these records and use of these records for billing and usage and outcome analysis
• patient monitoring - by recording patient data on-line and from various tests
• exchange of medical data - from the compilation and maintenance of databases.

Computer systems are also being used for:

• interactive medical education - from database and tutorial software
• physician decision making - from the use of patient records and other databases.

Consequently, it is not hard to imagine that in addition to the traditional use of computers in medicine we most likely will see a "medical information superhighway." It is the purpose of this report to identify all opportunities and to define the current market in its entirety.

REASONS FOR DOING THIS STUDY

The large volume of data produced within the health care industry, and the high cost of processing this information, makes manual processing an overwhelming and nearly impossible task. Doctors and nurses spend an inordinate amount of time on paperwork. It has been estimated that physicians spend 38% of their time and nurses 50% of their time on routine paperwork. In a recent study by Ira Magaziner, Senior Advisor to President Clinton for Policy Development, it was found that nurses often spend more time with paper than with patients.

Consequently, the health care segment has seen and will continue to see the introduction of electronic data processing products and systems. Any systems developed must be capable of handling the large, complex and growing knowledge or database of the medical field. This database includes scientific knowledge, as well as the operational aspects of providing daily health care, with particular emphasis on the handling of the financial and medical records generated for each patient.

CONTRIBUTIONS OF THE STUDY AND FOR WHOM

This study should prove of particular value to all participants and observers of the health care industry and the related information handling industries, including manufacturers and marketers of computer hardware and software and suppliers of data handling services. The report defines this markets with emphasis on:

need for information and data handling systems in the healthcare industry
current market structure and size with forecasts through 2000 in constant 1994 dollars
new marketing concepts and trends
technological aspects
market segments
major participants by area of participation
impact of outside influences such as national healthcare programs and the regulatory environment with identification of potential market barriers
government regulations and participation
identification of niche areas offer opportunities
corporate strategies
international aspects of the market
analogous markets

SCOPE AND FORMAT

Both the health care and data handling industries are examined in this report with particular emphasis on those companies that are taking innovative technological development and marketing actions to position themselves as market leaders through the year 2000.

The market is segmented into hardware, software and services for the purposes of this report with each of these segments finding applications in numerous segments of the health care industry.

METHODOLOGY

The methodologies employed in this study include use of both primary interviews with industry personnel and analysis of secondary data. Among the primary data sources are company personnel, government and regulatory representatives, industry observers, and industry professional organizations.

Growth forecasts are made in constant 1994 dollars based on the manufacturers (wholesale) price level unless otherwise noted.

All data collected was reviewed by BCC's specialists in the health care industry and all findings and projections were confirmed with numerous industry sources.

INFORMATION SOURCES

Data sources for this report include information obtained from interviews with various market participants and observers. BCC's extensive library also served as a data source as did corporate and industry trade association publications and industry data banks.

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TABLE OF CONTENTS

 Page
INTRODUCTION  xi
 STUDY GOAL AND OBJECTIVES xi
 REASONS FOR DOING THIS STUDY xiii
 CONTRIBUTIONS OF THE STUDY AND FOR WHOM  xiv
 SCOPE AND FORMAT xv
 METHODOLOGY xv
 INFORMATION SOURCES xvi
 RELATED BCC WORK CREDENTIALS xvi
 
SUMMARY xviii
 REPORT FINDINGS xix
 
OVERVIEW  1
 INFORMATION AND DATA HANDLING SYSTEMS WITHIN MEDICINE 1
 THE NEED FOR INFORMATION AND DATA HANDLING SYSTEMS
 IN THE HEALTHCARE INDUSTRY 2
 PREVENTING ERRORS, PRACTICING BETTER MEDICINE 3
 THE "PAPER TRAIL" 4
 THE IMPACT OF CAPITATION REIMBURSEMENT 6
 FOUNDATION FOR ACCOUNTABILITY  7
 MEDICAL INFORMATICS 8
 American College of Physician Executives (ACPE) 9
 Health Informatics Initiative 9
 CURRENT STATUS INFORMATION HANDLING IN THE
 HEALTHCARE INDUSTRY 11
 EXISTING CONFUSION WITHIN MARKET 12
 
THE HEALTHCARE INFORMATION INDUSTRY  14
 THE IDEAL HEALTHCARE INFORMATION NETWORK 14
 MARKET SIZE 15
 MARKET SEGMENTS 18
 SALES BY MARKET SEGMENT 20
 MARKET SHARES 22
 ACCREDITATION STANDARDS 24
 GOVERNMENT REGULATIONS AND PARTICIPATION 25
 LEGISLATION 25
 OUTLOOK 25
 TECHNOLOGY DEVELOPMENTS 27
 Advanced Technology Program (ATP) 27
 STANDARDS 27
 Medical Device Software Standards 27
 FDA Standards for Internal Device Software 28
  SEI Capability Maturity Model (CMM) 28
 TUV Principles for Computers in Safety Related
 Systems 29
 Standards for the Electronic Exchange of Clinical
 Information 29
 National Association for Home Care (NAHC) Uniform
 Data Set Standards 30
 HEALTH INFORMATICS INITIATIVE (HII) 30
 HIGH PERFORMANCE COMPUTING AND COMMUNICATIONS
 PROGRAM 30
 MEDLARS/MEDLINE  31
 GRANTS 31
 
TECHNOLOGY 32
 TECHNOLOGICAL MAKEUP OF INFORMATION HANDLING
 IN HEALTHCARE  32
 HARDWARE 32
 COMPONENTS AND PARTS 37
 COMPUTERS 37
 PERIPHERALS 38
 Input Devices 38
 Output Devices 38
 COMPONENTS  39
 PERIPHERAL DEVICES 39
 Bar Code Printers and Readers 39
 Laboratory Sample Tracking  40
 Two-Dimensional Bar Coding 40
 Bar Coding to Avoid Drug Errors 40
 Universal Product Number (UPN) 42
  Health Industry Number (HINTM) Demonstration
 Project 43
 CD-ROM 44
 MARKET SIZE  45
 MAJOR MARKET PARTICIPANTS 46
 SOFTWARE 47
 OPERATING SYSTEMS 48
 MARKET SIZE 49
 APPLICATIONS SOFTWARE 50
 MAJOR MARKET PARTICIPANTS 51
 CLIENT-SERVER TECHNOLOGY  58
 LOCAL AREA NETWORKS (LANs) 60
 Typical Hospital LAN Structure 60
 MAJOR PARTICIPANTS 61
 Novell 61
 Microsoft 61
 Chen Systems Corporation 62
 WIDE-AREA NETWORKS (WANs) 62
 ELECTRONIC DATA INTERCHANGE (EDI) 63
 INFORMATION SYSTEMS AND SERVICES 63
 EQUIPMENT FOR SPECIFIC USE IN HEALTHCARE  
 INFORMATION HANDLING 65
 PEN-BASED COMPUTING SYSTEMS 65
 
HEALTHCARE INFORMATION HANDLING PRODUCTS 66
 HEALTHCARE INFORMATION SYSTEMS 66
 MARKET PARTICIPANTS 69
 MARKET SIZE  72
 MANAGEMENT INFORMATION SYSTEMS 74
 HMO MANAGEMENT 74
 LABORATORY MANAGEMENT SYSTEMS 77
  LISLink 81
 Reference Laboratory Client Link 81
 OFFICE MANAGEMENT 82
 Appointment Scheduling and Billing 82
 Reimbursement Oriented Systems 83
 Insurance Company Oriented Software 84
 MEDICAL RECORDS  87
 POTENTIAL MARKET SIZE 87
 SECURITY ISSUES 89
 PICTURE ARCHIVING AND COMMUNICATIONS SYSTEMS 89
  TELEMED 90
 KAISER PERMANENTE/MAYO CLINIC UNIVERSAL
 COMPUTERIZED MEDICAL RECORDS 92
 WINCARE COMPUTERIZED PATIENT-RECORD SYSTEM  93
 COMPUTERIZED MEDICAL RECORDS 94
 ClicaLogic Software 96
 CoStar 97
  Quantitative Sentinel (QS) 97
 Digitizing of Patient Records 98
 Optika FilePower 98
 3M Coding, Grouping, and Reimbursement System 99
 PATIENT INFORMATION PROCESSING 100
 VoiceType Dictation 101 
 ELECTRONIC CLAIM HANDLING 102
 Fraudulent Claims 103
 OUTPATIENT DATA HANDLING 104
 AccessHealth Net Inc. 105
 MEDICAL EDUCATION  105
 DATABASES 107
 CDC Public Health Information 108
 National Library of Medicine  109
 Consumer Information Databases 110
 Physicians' GenRx 111
 MEDS 111
 AHCPR-Sponsored Clinical Practice Guidelines 111
 World Health Organization International Digest of
 Health Legislation 112
 DATA ANALYSIS  112
 Cost Analysis 112 
 VIRTUAL REALITY 112
 INFORMATION SOURCES - "MEDICAL INFORMATION 
 SUPERHIGHWAY" 113
 SHARED MEDICAL SYSTEM (SMS) 114
 INTERNET 115
 Using the Internet As an Employment Agency 116
 Preventing "Unwelcome" Internet Users 117
 ELECTRONIC BULLETIN BOARDS 117
 VIRTUAL HEALTHCARE DELIVERY AND PRODUCT
 DEVELOPMENT 117
 Virtual Medical Center (VMC) 117
 Virtual Product Development Work Teams 118
 PHYSICIAN'S ONLINE INCORPORATED  118
 TELEMEDICINE 118
 TYPICAL TELEMEDICINE NETWORK 120
 CURRENT USES 121
  MARKET SIZE/MARKET SHARE 122
 MARKET PARTICIPANTS 123
 AT&T Picasso Phone 123
 NYNEX  124
 MOBILE COMPUTERS 124 
 DEVELOPMENTAL RESEARCH 124
 GOVERNMENT EVALUATIONS  126
 ROBOT SURGERY/VIRTUAL REALITY 127
 SATELLITE TRANSMISSION OF ULTRASOUND IMAGES 127
 DIAGNOSIS AND TREATMENT 128
 AUTOMATED DIAGNOSIS 128
 Market Size and Structure 128
 Artificial Intelligence - Heuristic Programming 129
 CADUCEUS  131
 ILIAD 131
 DIAGNOSIS ASSISTANCE 132
 Evaluation of Cardiac Patients 132
  Confirmation of Pap Smears 132
 Visual Analysis Software 133
 On-Line Medicine 133
 PATIENT MONITORING  134
 Telemetry 134
 Mobile Diagnosis 135
 Mobile Data Acquisition  135
 Data Analysis 136
 Market Size 137
 INTERNATIONAL MEDICAL ADVICE 138
 INFORMATION HANDLING AND THE PATIENT 138
 MARKET POTENTIAL 138
 ON-LINE HEALTH CARE INFORMATION 139
 Personal Health Advisor  139
 At-Home Healthcare Information Services 140
 Comprehensive Health Enhancement Support System
 (CHESS) 141
 Patient Advise and Consent Encounter (PACE) 141
 HEALTH ADVISORY SERVICES 142
 PATIENT EDUCATION 142
 Interactive/Multimedia Systems  142
 HealthNet 143
 On-line Healthcare Network 144
 On-line Diabetes Forum 144
  Health Diaries 145
 Computerized Dental Radiography 145
 PATIENT EDUCATION SOFTWARE 146
 
VETERINARY INFORMATION HANDLING  147
 VETERINARY MEDICINE 147
 VETERINARY INFORMATICS 148
 VETERINARY INFORMATION HANDLING SYSTEMS  148
 Market Size 149
 Market Participants 149
 TELECOMMUNICATIONS 150
 ANIMAL DIAGNOSTIC PROGRAMS 151
 VETERINARY LABORATORY MANAGEMENT SYSTEMS 151
 V-LAB Datamaster Information System 151
 INTERNET DISCUSSION GROUPS  152
 
COMPANY PROFILES 154
 APPLE COMPUTER 154
 AST RESEARCH INCORPORATED 154
 AT&T 154
 COMPAQ COMPUTER 155
 CONNER PERIPHERALS INCORPORATED 155
 DELL COMPUTER  155
 DIGITAL EQUIPMENT CORPORATION 156
 FIRST DATA CORPORATION/HEALTH SYSTEMS GROUP 156
 HBOC  157
 HEWLETT-PACKARD COMPANY 157
 IBM 157
 MICROSOFT CORPORATION 158
 NOVELL INCORPORATED 159
 SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (SAIC) 159
 SHARED MEDICAL SYSTEMS (SMS) 160
 SUN MICROSYSTEMS INCORPORATED  161
 3M HEALTH INFORMATION SYSTEMS 162
 UNISYS CORPORATION 162
APPENDIX 1
 OVERVIEW OF U.S. HEALTHCARE INDUSTRY 163
APPENDIX 2
 PROFESSIONAL SOCIETIES 167
APPENDIX 3
 TYPES OF COMPUTERS USED 168
APPENDIX 4
 TYPES OF OPERATING SYSTEMS SOFTWARE 172
APPENDIX 5
 NATIONAL TECHNICAL INFORMATION SERVICE 177
APPENDIX 6
 ACCESSING THE INTERNET 180
APPENDIX 7
 MAGAZINES AND NEWSLETTERS SPECIALIZING IN
 MEDICAL INFORMATION PROCESSING 182
APPENDIX 8
 AHCPR GUIDELINES AVAILABLE ON CD-ROM 183
INFORMATION AND DATA HANDLING DEVELOPMENTS IN
 MEDICINE, HIGHLIGHTING OPPORTUNITIES FOR
 HARDWARE, SOFTWARE AND SERVICES 185
 COMPANY LISTING 185
 COMPANY DIRECTORY 198 

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LIST OF TABLES

  Page
 SUMMARY TABLE 1: MARKET SIZE INFORMATION HANDLING
 IN THE U.S. HEALTHCARE INDUSTRY xxiii
 SUMMARY TABLE 2: U.S. HEALTHCARE INFORMATION
 HANDLING MARKET BY APPLICATION xxiv
 1 FIRMS WORKING WITH C. EVERETT KOOP INSTITUTE HEALTH
 INFORMATICS INITIATIVE NSIT COALITION 10
 2 MARKET SIZE INFORMATION HANDING IN THE U.S. HEALTH-
 CARE INDUSTRY 17
 3 SALES OF INFORMATION HANDLING PRODUCTS FOR HEALTH-
 CARE BY MARKET SEGMENT - 1995 21 
 4 U.S. HEALTHCARE INFORMATION HANDLING MARKET BY
  APPLICATION 23
 5 U.S. MANUFACTURER'S SHARE OF WORLDWIDE INFORMATION
 HANDLING INDUSTRY 34
 6 RELATIVE SHARE OF COMPUTER HARDWARE INDUSTRY HELD BY
 U.S. MANUFACTURERS 36
 7 TYPES OF COMPUTERS 38
 8 MARKET SIZE BAR CODING DEVICES USED IN HEALTHCARE
 INDUSTRY  44
 9 MARKET SIZE COMPUTER HARDWARE FOR U.S HEALTHCARE
 INFORMATION HANDLING 45
 10 INFORMATION HANDLING HARDWARE MARKET SHARE OF
 MAJOR MARKET PARTICIPANTS  47
 11 MARKET SIZE SOFTWARE FOR U.S HEALTHCARE INFORMATION
 APPLICATIONS 50
 12 MAJOR HEALTHCARE SOFTWARE COMPANIES BY TYPE OF
 APPLICATION  52
 13 SOFTWARE MARKET SHARE OF MAJOR MARKET PARTICIPANTS
 HEALTHCARE INFORMATION MARKETPLACE 58
 14 MARKET SIZE INFORMATION SERVICES FOR U.S. HEALTHCARE
 INDUSTRY 64
 15 HEALTHCARE INFORMATION SYSTEMS MARKET 70
 16 SOURCE OF INCOME REVENUE, HEALTHCARE INFORMATION
 SYSTEMS MARKET  71
 17 HEALTHCARE INFORMATION SYSTEMS' MARKET SHARES
 FISCAL 1994 71
 18 HEALTHCARE INFORMATION SYSTEMS' MAJOR PARTICIPANTS
 BY AREA OF PARTICIPATION  72
 19 THE HIS INDUSTRY MARKET 73
 20 INFORMATION HANDLING COMPANIES SERVING MANAGED
 CARE SEGMENT 75
 21 HMO MANAGEMENT SYSTEMS FOR THE U.S. HEALTHCARE
 INFORMATION HANDLING MARKET 77
 22 LABORATORY MANAGEMENT SYSTEMS FOR THE U.S.
 HEALTHCARE INFORMATION HANDLING MARKET 79
  23 SELECTED LISTING LABORATORY INFORMATION SYSTEMS
 COMPANIES 80
 24 OFFICE MANAGEMENT SYSTEMS FOR THE U.S. HEALTHCARE
 INFORMATION HANDLING MARKET  85
 25 SELECTED LISTING OF OFFICE MANAGEMENT HEALTH
 INFORMATION SYSTEMS COMPANIES 86
 26 POTENTIAL MARKET FOR COMPUTERIZED MEDICAL RECORDS
 SYSTEMS  88
 27 MARKET SIZE OF "PARTIAL MEDICAL RECORD" SEGMENT OF U.S.
 INFORMATION HANDLING MARKET 95
 28 MARKET SIZE OF PATIENT INFORMATION HANDLING SEGMENT
 OF U.S. INFORMATION HANDLING MARKET 101
 29 MARKET SIZE OF ELECTRONIC CLAIMS HANDLING SEGMENT
 OF U.S. INFORMATION HANDLING MARKET 103
 30 OUTPATIENT INFORMATION HANDLING MARKET 104
 31 MEDICAL EDUCATION INFORMATION HANDLING MARKET 107
 32 TELEMEDICINE MARKET 122
 33 U.S. AUTOMATED DIAGNOSIS MARKET 129
 34 U.S. PATIENT MONITORING INFORMATION HANDLING
 MARKET 137
 35 INFORMATION HANDLING AND THE PATIENT MARKET 139
 36 U.S. VETERINARY MARKETPLACE 148
 37 VETERINARY HOSPITAL INFORMATION HANDLING
 SYSTEM MARKET 150
 38 MARKET SIZE UNITED STATES HEALTHCARE DELIVERY
 SYSTEM 166

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LIST OF FIGURES

 Page
 
 1 "A VISIT TO THE DOCTOR" 5
 2 IDEAL HEALTHCARE INFORMATION NETWORK 15
 3 THE HEALTH CARE MARKET 18
 4 TYPICAL HOSPITAL LAN STRUCTURE 61
 5 HIS APPLICATION SEGMENTS 69
 6 MEDICAL INFORMATION SUPERHIGHWAY  114
 7 UNITED STATES HEALTH CARE DELIVERY SYSTEM MATRIX 165