The leap from PHR to PHS

I’ve devoted a fair amount of column space to developments concerning efforts by Microsoft, Google and others to usher Personal Health Records into an era of common practice. We’ve weighed the privacy and security concerns, evaluated the competitive landscape, measured the potential value of strategic partnerships with major drugstore chains—even paid close attention when payers started getting into the mix, endorsing their contender of choice through a flood of announcements.

Now, Chilmark Research has issued a report detailing not only how Microsoft and Google will change the health care industry by delivering new tools to consumers that enable them to get involved in managing their health, but how the two companies will likely affect competing PHR vendors as well.

Although there’s no shortage of health related portals for consumers to choose from, Microsoft and Google clearly are leading the pack—ahead of companies like IndivoHealth, WebMD and RevolutionHealth—in linking to data that is already being stored by health care providers, eliminating the need for consumers to input the bulk of information themselves. What these vendors are racing towards, or gearing up to introduce, is a Personal Health System—an offering that exceeds the personal health record by providing consumers with a health-data ecosystem. Such an ecosystem would not only deliver a repository for PHR-type files and possibly data from various health devices, but would likely facilitate social networking communities and communication with health and wellness providers.

While acknowledging that it’s still very early in the ballgame, the new report from Cambridge, Mass.-based Chilmark Research examines the critical issues affecting these future PHSs, including an outline of current models, features and architectures, and input on which are experiencing early market adoption and success. The report also covers how PHS offerings are evolving; how standards, interoperability and health information exchanges are likely to impact PHSs; which partnerships matter and which don’t; and, how providers of personal health systems plan to address privacy and security of records in a network care ecosystem.

Compiled over the last several months and drawing on input from over 100 interviews with PHR users, enterprise buyers and PHR vendors, the report emphasizes the fastest growing sector—Internet-based PHR solutions—and goes so far as to declare that the presence of Microsoft and Google will significantly impact the PHR market, altering its future direction and affecting all stakeholders.

Indeed, as Managing Director and research project leader John Moore sums it up: “Google and Microsoft have already had an impact on the market simply be raising consumer visibility…PHR vendors are now directly experiencing the impact of this visibility with a significant increase in the number of Request for Proposals from the three major markets: employers, providers and health plans. But with this increase in demand, consumer expectations will also rise, putting significant pressure on smaller, less capable PHR vendors and thus putting them at risk.”

My two cents: we’re looking at a hot market, ripe for consolidation (at some point in the not too distant future). No word yet on a proposed Microsoft-Google merger, but keep your eyes on the little guys. As the increased number of RFPs starts translating into orders, the smaller players will no doubt compete on the uniqueness of their solutions and the quality of their service, spurring innovation across the board.