BLOG on IT/IS in Healthcare & Life Sciences Joerg Schwarz on Healthcare [Health + Care]

Open source economy has been covered in this blog several times under different aspects. The short, short version is, of course, that Sun likes open source and open standards. All -or almost all- of our software is open source, and with the addition of mySQL we built a complete, commercial grade LAMP stack based on open Solaris. But while open source is still a relatively new concept in health IT, it becomes evident that more and more governments and provider organizations understand the benefits of open data architectures for interoperability in long term infrastructure projects. Open source is coming to the health care industry, after it captured already the attention, budgets and RFP requirement space of many CIOs in other industries.

It is therefore with a bit of slightly concealed pride and great excitement that we can now discuss the Open eHealth Foundation, in which Sun is a founding member and contributor of substantial intellectual property. The press covered an official announcement of this international cooperation between its founding members Agfa, ICW and Sun at HIMSS 2008 extensively, I use this space to comment on the background and purpose of this activity and invite comments and participation.

As you can read on the foundation web space,  several open source packages based on Sun's intellectual property, like Glassfish, our new, open source application server, and open ESB, are core components of the foundation.  Open ESB is a very comprehensive SOA framework, with substantial components from the previous JCAPS suite. Since JCAPS and its predecessor, the Seebeyond ICAN suite, have many installations in health care, anyone would be hard pressed to find an open source SOA framework representing more experience and installations in hospitals, health systems and health information exchanges around the globe. Combine this with the experience and intellectual property of AGFA, one of the large players in Healthcare IT worldwide with hundreds of installations in areas as diverse as PACS, RIS, EMR and of course eHealth, and the cool PHR and health card technology developed by ICW, and it becomes clear that this foundation adds professionalism and depth to the health care open source scene not previously seen.

The purpose of the open eHealth foundation is not developing new standards, and thus not competitive to HL7 or IHE.  Quite the opposite, it represents an opportunity to implement eHealth infrastructure with commercial grade quality - and I use this term here as a differentiation from academic software that is often developed without rigorous SDLC - based on open source and open data architectures, thus building an implementation base for those standards.

As more and more governments seek to build eHealth infrastructure, they realize they can not lock them selfs into vendor specific, proprietary architectures. Many failed projects in eHealth are proof to this fact, and every hospital CIO knows the pain of connecting various proprietary applications that do not adhere to a common data architecture.

The business model behind open source is common to high technology: the more participants join a specific market segment, the richer and more attractive it becomes for buyers, and therefore for vendors. Economists like Alvin Roth call this phenomenon thickness of a market, and thickness is a critical success factor in market design. In Marketing, the same concept is called demand side increasing returns or network externalities¹. The more vendors of different , complimentary applications create products that are inter operable, the higher the value for each product in such an ecosystem. Its actually simple. If every company has to build and maintain its own eHealth stack, the purpose of an ehealth stack, enabling interoperability, is defeated. Resources are diverted from true value creation with applications that exploit the underlying stack. The open eHealth foundation will create one standards based, open stack, so many application providers can build interoperable applications around it. This could create a rich ecosystem, or in economic speak thickness of a market, and in return create network externalities for all companies that participate.

Open source, and I mentioned this many times in this blog, is really not about saving cost on license fee. Beyond that, it is a concept of creating a rich ecosystem which benefits health care institutions, which are not locked into a ecosystem of one vendor, but have a choice between many applications arond a common architecture. It also benefits vendors, who can focus on value creation around their core competence, hence creating differentiation among competitors. And that is why Sun likes open source - we like to generate network externalities around open technology, like we did with JAVA or NFS or Solaris and so on.

If you find this model appealing, feel free to comment or ask questions about joining the open eHealth foundation

¹ You can learn more about network externalities and horizontal cooperation in "Jakki Mohr, 2001, Marketing of High Technology Products and Innovation, Prentice Hall, New Jersey"