New ILR School-led research offers a comprehensive overview of the role of health information technology (IT) in the financialization of the health care industry - the extent to which Silicon Valley and Wall Street investors have profited on health IT systems that have often failed to deliver promised gains.
While these systems promised increased efficiency and reduced costs, the evidence suggests that these benefits have been elusive. Instead, health IT systems have frustrated medical professionals - leading to burnout and high quit rates - while hospitals and physician practices have spent millions retrofitting or upgrading flawed systems.
Rosemary Batt '73, the Alice H. Cook Professor of Women and Work, is lead author of the two-part report, "Financialization through Health IT," released Feb. 13 by the Center for Economic and Policy Research. The report is co-authored by Batt's long-time collaborator, Eileen Appelbaum, co-director of the center.
The papers (Part I: Lessons from Electronic Health Systems and Part II: From Electronic Health Systems to AI) provide systematic evidence of what has gone wrong in health IT implementation to date and caution against future unregulated AI in health IT.
The Health Information Technology for Economic and Clinical Health Act, passed in 2009, required health care organizations and providers to implement electronic health record systems that were interoperable - meaning they could speak to each other across different vendors.
But "some five decades since electronic health records were first introduced, and almost 20 years since the federal government subsidized their adoption, many systems today still lack interoperability - despite the legal requirement to do so," Batt said. "Only recently have the large IT vendors begun to comply with federal rules - after years of making billions at the expense of taxpayer-funded Medicare and Medicaid."
According to the study, federal rules did not require real testing of health IT capabilities prior to implementation, nor have they required evaluations to assess whether federal dollars are being used effectively.
Empirical evidence shows that electronic health records have led to better billing and internal communications, but these studies do not calculate the hidden costs of installing, maintaining and upgrading systems, as well as hiring, training and retraining the health care workforce as systems continually change.
"Behind the electronic health records, data analytics and financial management systems that health care organizations and providers depend on are private equity, venture capital, IT vendors and data-mining firms that own, operate or control health IT - and have made billions in the process," Batt said.
The reports serve to guide federal regulations over experiments to embed AI and machine-learning applications into existing platforms that fail to adequately protect the privacy and security of patient health records. While well-intentioned, the authors wrote, federal rules have not provided adequate safeguards for patient information privacy and security, resulting in an unregulated multi-billion-dollar industry monetizing patient data without patients' or health care providers' knowledge.
Increasingly, health care organizations have outsourced their health IT infrastructure to companies owned and operated by private equity, venture capital and Big Tech firms that view them as platforms to experiment with unproven AI and machine-learning tools.
"The unregulated integration of AI tools into these systems will make it even harder to protect patients' rights," Appelbaum said.
"Moreover, because these records contain so much information and are centralized, they are among the most lucrative targets for cyberattacks and hackers," Batt said, noting that in 2024, data breaches exposed the health records of more than 200 million Americans.
As a result, health care organizations must now invest billions more in cybersecurity systems owned and operated by venture capital, private equity and Big Tech.
The authors argue that the federal government is once again behind in setting safeguards for the adoption of new health IT, and that the lessons from 30 years of attempts to set adequate standards for information-sharing in electronic health systems - as detailed in these reports - should spur regulators to act quickly and rein in unregulated financial activities in health IT.
Said Batt: "The history of the health IT implementation and the lack of sufficient regulatory oversight and enforcement of standards should give us great pause for the current enthusiasm over the adoption of AI and machine learning in health information systems."
Julie Greco is a senior communications specialist for the ILR School.
