Crazy Like a Fox

When it comes to managing patients' electronic medical records, insurance companies would not be an obvious choice for the job. After all, insurers are notorious for using information to deny claims. Can you say "pre-existing condition?" The seemingly inherent conflict of interest is akin to that of having the proverbial fox guard the eternally vulnerable hen house. In health care as in poultry management, the well-being of entities under care is brought into question.

So what to make of the rush by health insurance companies to enter the fast-expanding health IT sector, which is precisely what is happening, according to the Wall Street Journal:

Insurers are jumping into a feeding frenzy among companies that peddle health information technology. They are rushing to be picked by regional centers set up by the government to help doctors adopt technology, and by the American Medical Association, which is promoting a few preferred providers. Quality Systems Inc.'s NextGen Healthcare unit last week won a preferred designation from AMA. But the first solution picked was one from Ingenix, the IT unit of insurer UnitedHealth Group Inc.

In the wake of the health-reform law passed by Congress this year, the billions of dollars pouring into health IT, particularly electronic medical records, is "an opportunity for insurers to diversify their operations as the federal health overhaul presents new challenges to their core business of collecting premiums and paying claims."

The Journal reported Humana and athenahealth, a health-IT company, will offer subsidized electronic medical records; Aetna and IBM are launching a Web-based system for managing patients' records, including lab and claims data; and WellPoint has plans to help rural hospitals finance health-IT infrastructure.

Aetna says it won't have access to patients' health data, an arrangement that presumably will protect privacy and security, yet privacy advocates are unlikely to be assuaged. Deborah Peel, a psychiatrist who runs Patient Privacy Rights, a nonprofit watchdog group in Austin, Texas, emphasized that insurers "have a conflict of interest, since they want to know about you so they can better price products to you or deny you products," the Journal reported.

The vast amounts of money being spent to shift the health care sector from paper to electronic medical record will result in "the single-fastest transformation of any industry in the history of the U.S.," Glen Tullman, chief executive of AllScripts, told the Journal.

So, who's watching the fox?