Health management technology goes one on one with Bill Gates - Microsoft chmn and CEO - Interview

Health Management Technology, Feb, 1995 by Carolyn Dunbar

Editor's Note: HMT caught up with Microsoft's Chairman and CEO Bill Gates to ask him about his company's approach and strategy for the healthcare information systems market.

HMT: What is the genesis of your interest in the healthcare information management market? I understand that biotechnology is of particular interest to you and that you have been involved in ICOS and have more recently invested in Darwin Molecular Corporation to work on cost-effective methods for bringing drug treatments to market more quickly. My understanding is that you take a personal interest in this effort, to the point of sitting on the board. Is your interest in the healthcare information-management market as personally compelling to you? Why or why not?

GATES: Both healthcare information management and biotechnology are compelling because they have the potential to improve the quality of life. It's exciting to see how Microsoft's enabling technology is being used across the spectrum of healthcare from family practices to neuroradiologic systems and trauma settings in the most respected healthcare facilities in the world. It is very gratifying to know that in Southern California, when a mother calls 911 after her child has been injured, the response time will be shorter than in the past, and this can mean the difference between life and death. The reason response times will be shorter is that the system from Careline, the second largest provider of emergency medical services in the United States, improves on the capabilities of the past as a result of using a Windows NT-based system.

HMT: Healthcare delivery is not simple, and, so far, information technology has not been applied very well, nor very thoroughly, nor in standard ways to healthcare delivery. Technologies are far more elegant and successful on the diagnostic and treatment side of healthcare than they are on the information-management side. Please describe Microsoft's strategic approach to selling into a market with such enormous diversity.

GATES: Economic incentives drive the major investments that companies and individuals make. These incentives inspired GE to manufacture MRI machines. Likewise, the fee-for-service environment drove companies such as SMS to develop great billing systems, encouraged by the healthcare payment system.

Today, things are different. Under managed care, organizations are economically motivated to provide more efficient care and to demonstrate improved outcomes to their customers. This can only be accomplished through improved clinical systems. For example, managed-care incentives drove Stanford University Medical Center to use Digital Medical Systems' products, which have enabled their doctors to achieve productivity gains of 60 percent and departments to see approximately 30 percent more patients without increasing staffing.

Another example is the Orlando Healthcare Group, a Prucare HMO, which has improved the utilization of its care providers while improving the satisfaction rates of its customers. Meanwhile, the company has saved more than $1 million a year over its previous approaches.

Our strategic approach to selling to the highly diverse healthcare market continues to be focused on teaming with solution providers. It is critical for us to work with providers who have expertise in the diverse areas of healthcare. One example is Radman, a radiology system company founded by a practicing radiologist.

Our goal is to provide these companies with a consistent platform on which to implement their systems so that the various systems can communicate with each other. By using an integrated platform for building applications, they can focus on the specific requirements of healthcare, rather than on the underlying "plumbing."

Microsoft reinvests roughly 20 percent of our earnings into R&D each year, which we believe continues to improve the platform. Our Microsoft Solution Providers can benefit from the fact that we have many customers who reap the benefits of this investment.

Another key to our strategy is working with organizations such as Harris Methodist Health System to help us prove that our systems can work with a diverse set of requirements, from managed-care systems to medical-imaging workstations.

We see this strategy working quite well in healthcare so far. Just two years ago, Windows was installed on only 10 to 15 percent of Intel-based PCs. We saw this jump to over 40 percent by the end of 1993 and expect it to be near 60 percent by the end of 1994. This is due in large part to our work with systems manufacturers. With 11 percent of organization-purchased 486 and Pentium PCs going into healthcare and nearly all systems manufacturers preloading Windows, that is bound to have an impact.

HMT: Specifically how do you plan to drive the consensus toward standards, other than by dominating the market? In healthcare, your operating system does not dominate. How will you "incentivize" standardization?

GATES: The vast majority of Microsoft's standards effort are on standards that are broadly applicable across industries. For example, we've made use of or actively been involved in the development of standards such as DCE RPC, X.400, OLE, TCP/IP and ODBC. Our customers have encouraged us to promote these market-driven standards. It is critical that healthcare leverage these sorts of standards wherever possible. A piece of our standards efforts is being a member of HL7. Our healthcare customers tell us that anything we can do to ease the challenge of integrating their diverse systems is of great benefit to them. Some of this integration will be facilitated by our efforts in standards such as ODBC, while some of it can be addressed by HL7's efforts.