Innovation, influence and business in America's medical cities.

Sam Palmisano

CLEVELAND, Ohio — IBM’s chief executive officer says electronic medical records need to go open source.

Sam Palmisano told the attendees of the Cleveland Clinic Medical Innovation Summit that health care can barely be called a “system.” “If the health system was a patient we wouldn’t be able to read its vital signs,” he told an audience of about 400 physicians, researchers, medical investors and business leaders.

To become a true system, improve results, cut medical errors and trim costs, Palmisano said the medical industry must agree to universal, open and non-proprietary standards for electronic health records. In essence, he said, electronic records have to be like generic drugs and the data must flow throughout the system in which no provider owns the process.

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“When you enforce standards then you get scale,” Palmisano said. “If you could force in your industry standards then costs will drop. They will plummet.”

The open-source argument was part of Palmisano’s four-pronged approach to creating a true system in health care, which also included emphasizing wellness, creating a new code of ethics and enhancing broad collaboration between health-care stakeholders.

Many of the concepts Palmisano proposed in his speech aren’t new. But it’s the first time the IBM chief laid out his company’s specific vision for health care.

Palmisano spoke on the same day IBM announced plans to sequence the personal genome and do it for a rock-bottom price of, ultimately, $100. IBM joins nearly 20 other companies pursuing genome sequencing, and success in the field — and for a low cost — would press the fast-forward button on personalized medicine, clinical testing of new products, and determine individuals’ predisposition for specific diseases.

“To bring about an era of personalized medicine, it isn’t enough to know the DNA of an average person,” said Gustavo Stolovitzky, an I.B.M. biophysicist, told The New York Times. “As a community, it became clear we need to make efforts to sequence in a way that is fast and cheap.”

Palmisano barely touched on genome sequencing in his speech in Cleveland, instead focusing on health reform in a room full of people directly responsible for various aspects of the health of medicine.

Along with the open-source approach, Palmisano said health care also needed to:

• Emphasize wellness. IBM, for example, pays for its employees’ doctor visits. It also plans to expand an incentive program for employee to leave healthy.
• Increase collaboration, which would require sharing of health information and data between patients, health-care providers and insurance companies as well as redistribute the payments and responsibilities in the health system. Palmisano argued that transferring a health system into a cloud computing model — “think of if it worked liked Google” — with per-transaction charges would streamline the system.
• Install aggressive ethics and public policies that accommodate the invasive nature of modern medicine. “We’re entering a different world ladies and gentlemen,” he said. “The idea of a computer chip in your body, pills you take to monitor your health, sharing data with an insurance company and your employer — I know not everyone is happy with that. Not everyone wants to be a human petri dish.”

Palmisano highlighted health care’s failings — a lack of electronic-record adoption, constant data re-entry and unnecessary testing — to question its status as a true system. He compared electronic health records as the UPC symbol or ATM machine of the health industry, allowing patients to receive better care by centralizing data and eliminating the opportunities for errors.

“Everyone agrees on its purpose: American health care must be patient-centric,” Palmisano said, but added: “Nothing is connected.”

As a company, IBM is eager to become the system manager. Palmisano noted that IBM manages Malta’s water system and the traffic systems in cities in Australia to Sweden.

But asking an IBM to take over a government’s health system has its downsides. Dan Pelino, IBM’s general manager for healthcare and life sciences, noted after Palmisano’s speech that IBM also manages the entire health system for Denmark.

When asked what would happen if Denmark ever wanted to switch vendors, Pelino said: “They probably couldn’t switch vendors.”