Peter Lee from Microsoft Health

Microsoft

In the era of Satya Nadella, Microsoft has transformed from a company that once acted as a near-monopoly with its proprietary operating system to a business that embraces partnerships and teams up with former rivals.

Peter Lee, the corporate vice president for Microsoft Healthcare, said that same ethos of openness endorsed by Nadella is now needed in the health-care industry, where a battle is raging over whether patients should be able to get easy access to their medical data and share it with the app makers of their choice.

“When it comes to interoperability, Satya is enlightened,” Lee said in an interview. Nadella took over as Microsoft CEO in 2014, and sparked a massive rally in the stock as he pushed the company to the cloud.

Lee sees a parallel in the health-care industry. The Department of Health and Human Services proposed the regulatory changes last year to keep companies from blocking patient information.

“When the rules were proposed, we made a comment endorsing the technical choices,” Lee said. “Directionally, we think these rules are correct because they’re based on modern data standards.” He said that Josh Mandel, Microsoft’s chief architect, suggested a few tweaks.

The changes, if approved, would update the 21st-Century Cures Act, signed in 2016 to accelerate the development of new cures for disease. They would make medical records accessible through application programming interfaces (APIs), enabling a wider swath of health developers to build apps that could make the data available.

Many patient advocates and doctors have joined Microsoft in speaking out in favor of the regulation, but among the opponents is Judy Faulkner, the CEO of Epic Systems, one of the top medical records providers. On Wednesday, Faulkner sent a letter to executives from some of the largest U.S. hospitals, which are also Epic customers, asking them to reject such interoperability, on concern that patient privacy could be compromised and that costs would go up for health systems to meet the regulatory requirements.

“Epic’s focus is on saving lives and helping people get and stay well,” a company spokesperson said in an email. “Our goal is to work with HHS to help make the proposed rule a good one. We hope that the rule will safeguard privacy of data, especially for family members who will not know that their health information has been shared.”

Politico reported on Friday that Faulkner is now considering a lawsuit if HHS finalizes the data-sharing regulations.

Microsoft is in a sensitive spot. The software giant has tight relationships with Epic and Cerner, another large medical record vendor, particularly as those companies move workloads to the cloud. But Microsoft stands to benefit if the health-care industry makes it easier for patients to store and access their medical data from smartphones and cloud-based apps and if doctors can more simply exchange that data with providers at other hospitals.

A Cerner representative told CNBC in a statement that it supports the “spirit of the proposed rule.”

During the public comment period, Microsoft and Google shared their views with lawmakers. Microsoft said that “advances in care and outcomes cannot be achieved without improvements in the state of interoperability between various systems and stakeholders in the health care ecosystem.”

Judith Faulkner, CEO of healthcare IT giant Epic Systems.

Source: Epic Systems

A Google spokesperson said in a statement to CNBC that the company is “supportive of initiatives to prevent information blocking and facilitate secure data access to patients.” Other tech companies have been largely silent on the issue of late, though Apple is attending a meeting on Monday, along with Microsoft, hosted by an organization called Carin Alliance that’s supporting the policy change.

The broad effort is to modernize the health data system. Today, many patients are still given their data on a PDF printout or on a CD-ROM and hospitals still sometimes rely on fax machines. That’s held back the efforts of technology companies, like Google, Microsoft and Amazon, as they’ve attempted to move into the health-care sector and has been a hindrance to third-party app makers and start-ups that are struggling to access clinical information.

However, Lee also acknowledged that companies like Epic and Cerner have helped push the industry in a digital direction and away from paper, a feat that he admires. Government data shows that close to 90% of doctors’ offices are using an electronic health record system, up from around 20% in 2004 in part because of regulation like the 2009 HITECH Act.

“People under-appreciate how major, and how quickly this happened,” Lee said. “It’s a commendable accomplishment.”

Lee is careful not to pit Microsoft against opponents of the new rule, and said that it isn’t Microsoft’s place to make specific recommendations on how and when to fix the problems. He also said that Microsoft will pay close attention to the needs of health providers, including doctors and nurses, and keep an open dialog with the health-care industry.

‘Putting engineers behind it’

Epic has garnered support for its focus on privacy from some customers in the medical industry like Omar Lateef, the CEO of Rush University Medical Center in Illinois. Lateef applauded Faulkner’s concern for patient privacy, but told CNBC that regulatory progress is important because “making it difficult for a patient to access their own data in any way is not acceptable.”

A spokesperson for Mayo Clinic, another Epic customer, agreed, saying in an email that it’s “supportive of initiatives to prevent information blocking and facilitate secure data access to patients.”

Over the next decade, Lee says health data interoperability is critical. But in his view one thing that’s missing is a better way to authenticate patients using some kind of digital credentialing system. Hospitals face big hurdles around identity management partly because there’s no unique code, like a social security number, that pulls all patient medical information together. He used the example of his own name, Peter Lee, which is fairly common. How would a hospital know that they’re treating the right Peter Lee?

But progress starts with opening up data sources, Lee said.

In terms of the open standards, “we wholeheartedly support them,” he said. “We’re also putting engineers behind it.”

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