Property, Privacy, and the Pursuit of Interconnected Electronic Medical Records

• Author: Mark A. Hall
• Position: Fred D. and Elizabeth L. Turnage Professor of Law and Public Health, Wake Forest University
• Pages: 04

Fred D. and Elizabeth L. Turnage Professor of Law and Public Health, Wake Forest University. This research was supported by a Robert Wood Johnson Foundation Investigator Award in Health Policy Research, and it benefited greatly from participants in colloquia at Harvard Law School and the University of Texas Law School, and from conversations with and comments by Kevin Schulman, Craig Richardson, Kristin Madison, Nicolas Terry, Brian Baum, and Greg Vetter. Naturally, the views expressed here should not necessarily be attributed to any of these individuals or institutions.

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To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years all of America's medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won't save billions of dollars and thousands of jobs, it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.

-President-Elect Obama, Jan. 8, 2009¹

[W]e have a twenty-first-century financial information infrastructure and a nineteenth-century health information infrastructure. . . . Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on proprietary clinical IT products that barely work and do not . . . . coalesce into a systemwide solution, and the investment community has poured nearly a half-trillion dollars into failed HIT ["health information technology"] ventures . . . .

-J.D. Kleinke, Health Care Economic Analyst ²

I Introduction

Medical information is one of the most prominent, puzzling, frustrating, and entrenched aspects of dysfunction in U.S. health care finance and delivery. We each confront this reality every time we go to a new doctor. Each doctor-often even those who practice in the same medical system-starts a new medical relationship virtually from scratch, as if we have never been examined before. Unless our referring physician has dictated a personal note, the only convenient way to transmit information from our existing medical records is by the patient's own word of mouth, which the new doctor enters by hand and then painstakingly reconfirms by direct reexamination. Frustration also extends to researchers forced to use primitive and cumbersome methods of primary data collection rather than being able to access consolidated information from existing medical records. A myriad of such inefficiencies extend throughout our kaleidoscopic medical system.

President Obama vows to remedy this dystopia³ with an estimated $20 billion⁴ through the American Recovery and Reinvestment Act of 2009 Page 634 ("ARRA"),⁵ but skepticism remains. The constipation of information automation in health care has frustrated the best intentions and brightest minds for years, if not decades.⁶ A 1991 Institute of Medicine report first brought widespread attention to the problem.⁷ Since then, an array of prominent organizations and individuals have dedicated themselves to overcoming the barriers that keep health care providers from efficiently compiling and sharing a patient's complete medical record⁸-but so far their efforts have been to no avail. The costs are staggering-from the $100 billion spent each year on needless duplication of procedures to the half trillion dollars annually associated with medication errors, lost worker productivity, and, in the most extreme cases, loss of life.⁹ Page 635

The vision of what better health information technology ("HIT") could accomplish is well formed and has been discussed at length.¹⁰ Agreement on the need for interconnected electronic medical records is nearly universal- from the President, to both Houses of Congress, to both major political parties, to hospitals, physicians, patients, payors, and the business community at large. But, even though e-health is growing steadily and the economic stimulus package will undoubtedly provide a huge spur, the current widespread move toward automating clinical information does not ensure that medical information systems will actually interconnect to form consolidated medical records.¹¹ Existing medical record systems rarely interconnect,¹² and the economic stimulus act contains no legal requirement that funded systems actually interconnect to form a consolidated medical record for each patient-it requires only that interconnection be possible.¹³ If interconnected clinical-information systems do not emerge, much of this information's potential utility will never be achieved and, consequently, the huge capital investments will be largely wasted.

The challenge is to move an enterprise representing one-sixth of U.S. gross domestic product, with 13 million employees and potentially 300 million patients, from a decentralized, fragmented, paper-based world, to an interconnected, automated, networked world where information follows the patient, information-based tools aid in decision making, and population Page 636 health data can be mined to improve the quality and outcome of care for all. This shared goal has failed so far and could easily continue to elude. The most well-meaning individuals driven by a common commitment have encountered an all-too-consistent pattern. While starting with a grand vision, they have invariably met resistance in the trenches. And so it goes-more money spent, more lives lost due to error, and more time lapsed without momentum toward achieving comprehensive, interconnected electronic health records in any foreseeable future.

These market failures prompted the government to intervene by facilitating electronic medical records ("EMRs") through various means.¹⁴But, the many previous efforts to create interconnected EMRs ("I-EMRs") through central community planning have failed miserably, owing to the difficulties in meeting all the concerns of all the various stakeholders.¹⁵ If all else fails, perhaps the government will have no choice but to require EMR adoption and integration,¹⁶ but there would be significant opposition to a "command-and-control" approach.¹⁷ To paraphrase Winston Churchill, Americans usually resort to government mandates only after they have first tried everything else. This Article explores whether any hope exists for market-driven integration of health information systems.

With so much to gain, why are I-EMRs not emerging in the same spontaneous organic way that the Internet did? The primary barriers are not technological.¹⁸ Instead, they are economic,¹⁹ but these economics are Page 637 shaped and driven by basic legal rights in networked medical information. The law's uncertainty over ownership and control of medical information is widely regarded as a major barrier to effective networking of EMRs, and policy analysts consider the legal status of medical information to be a critical question at or near the top of issues needing resolution.²⁰ Therefore, this Article explores whether the law is responsible for, or might be a solution to, the Balkanization of medical information. Part II introduces the network economics of EMRs to explain why network development has not occurred spontaneously. Part III dissects the uncertain and competing claims of property and privacy rights in medical information in order to find a possible solution for what is called the "anticommons" problem. Part IV reviews competing arguments for and against commercializing medical Page 638 information, and searches for a common ground between them. Part V concludes that allowing patients to license limited rights to their medical information with trusted and regulated intermediaries will help stimulate market development of interconnected EMRs by placing these rights in a stream of commerce that rewards those who contribute to, and use, comprehensive EMRs.

II The Network Economics of Electronic Medical Records

We start with the field of network economics, which developed over the past generation to study the market dynamics of telecommunications, the Internet, consumer credit, and other large and complex interconnected services.²¹ The defining characteristic of these networks is that each user receives more benefit as the network's size increases. Network effects exist whenever there are increasing returns to scale,²² meaning that "'the utility that a user derives from consumption of a good increases with the number of other agents consuming the good.'"²³

There are obvious network economies in connecting electronic medical records.²⁴ The more providers that are connected, the more comprehensive and useful the medical information is for any single patient. And, the more patients that are included, the more likely that providers will agree to participate. More patients, providers, and information not only make the network more useful for clinical work, but also for health-services research and public health monitoring. If including more people produces more bang for the IT buck, why do these win-win dynamics not snowball into widespread EMR interconnection?

Medical information networks are stalled because no one constituency is in a position to capture anywhere near the full social benefits of building the network. No matter who takes the initiative, many of the collective benefits are externalized to other actors.²⁵ An individual patient benefits Page 639 from better quality and research relating to the patient's...