Top of Mind: Heath IT Security and Privacy

With the passage of health care reform and its requirements for electronic medical recordkeeping and information exchange, the security and privacy of the medical records of individuals and organizations nationwide will become more of an issue and concern than ever.

At the recent Healthcare Information Management Systems Society (HIMSS) conference in Atlanta, the current thinking about the security and privacy of the Nationwide Health Information Network (NHIN) was explored by Capto’s health IT expert Nick Vennaro, who is deeply involved in the design and development of the NHIN architecture.

NHIN, a Department of Health and Human Services, is at the center of the various initiatives surrounding health care and IT services.  The NHIN is a set of standards, services and policies that enable health information to be securely exchanged over the Internet. Once fully implemented, the NHIN will provide a foundation for the exchange of health information between diverse entities, within communities and across the country, helping to achieve the goals of the Health Information Technology for Economic and Clinical Health (HITECH) program, which provides various funding opportunities to advance health information technology.

Nick, working within the Office of the National Coordinator for Health IT, is a principle architect on the NHIN. The work group is developing recommendations for extending the secure exchange of health information using NHIN standards, services and policies to the broadest audience possible.  In his presentation at HIMSS Nick explained that NHIN is not a database – no healthcare information is stored here; the network is rather the zone for transporting health information between gateways, the NHIN provides security certificates, a services registry, membership agreements and a test environment for candidate participants.

Security elements of the NHIN will include: Managed PKI (Public Key Infrastructure) to provide message encryption between gateways insuring message confidentiality and encryption.

Security infrastructure factors outlined by Vennaro will also include:

• Security guidelines – the industry standard best practices that should be adhered to by NHIN participants. According to Nick, these will be non-binding. 
• mPKI software/services to manage SSL certificates.
• A UDDI (Universal Description Discovery and Integration) services registry to look up who is participating and the services they support, is maintained by NHIN. 
• Conformance and interoperability testing environments: The NHIN provides a platforms and scripts to test participant software, to ensure their gateway conforms to specifications and can run through basic business use cases.
• In addition the Data Use Reciprocal Support Agreement (DURSA) will become part of “the chain of trust,” Nick said, and will provide a legal framework for NHIN participation, confidentiality, performance and data use.

Download Nick's presentation from here.

Link to additional info from the conference here.

Leading Economists, Thinkers and Outsourcing – Part 5: Thomas Friedman

If you’ve been following the previous posts in my economics of outsourcing series, I hope you agree that the thinking of Williamson, Solow, Nash and their colleagues have much to teach us about improving outcomes for today’s underperforming IT Outsourcing relationships. 

Recently, outsourcing has been popularized, debated and indeed lionized in the mainstream press by Thomas Friedman.  His major bestseller, The World is Flat: A Brief History of the Twenty-First Century (first released in 2005 and updated twice since then) stresses the importance of technology and outsourcing as major elements of modern global economic structure.

Freidman’s book identifies 10 “flatteners” that have leveled the global playing field. The rise of outsourcing and related activities such as off-shoring and supply chain networks figures prominently on that list.  Freidman says outsourcing has allowed companies to split service and manufacturing activities into components that are subcontracted and performed efficiently on a global scale. In addition, the ease of offshoring today means that a company can locate manufacturing, call center, help desk, application maintenance, and other processes to a foreign locale to take advantage of less-costly labor and operations.

The emergence of sophisticated tools and the role of technology is another flattener, according to Friedman, because companies can now use the Internet, sophisticated software – including workflow and open source software – to coordinate and streamline items such as sales, distribution, shipping and risk management in real time.  Workflow software protocols in particular have become so prevalent in our business lives that they are helping to create the foundation of a new global platform for collaboration, Friedman says. 

While Friedman did a great job of explaining the potential for a globalized IT delivery capability, we all know the reality is much less successful and more complicated. Incremental progress is being made with the use of certification standards, better project and program management and more sophisticated management and reporting tools. 

But while all of these things are improving the situation, we believe outsourcing in general and offshoring in particular, continues to significantly underperform – for both the customer and the service provider.

Vested IT provides the tools and methodology to create, deliver and maintain a highly performing outsourcing relationship. It is founded in research and has been field-tested in some of the largest companies in the world. Vested IT will deliver the promise of outsourcing by unlocking and fostering innovation within the context of a collaborative, outcomes-based outsourced relationship.

Leading Economists, Thinkers and Outsourcing – Part 4: Steven D. Levitt and Stephen J. Dubner

Next in my mini-series on the seminal economic thinkers that have bearing on outsourcing I’d like to look at the more current and less theoretical side of the economics of outsourcing. There’s no better place to start than with Freakonomics and the follow-up mega-bestseller, SuperFreakonomics.

Steven D. Levitt and his sidekick and co-writer Stephen J. Dubner, a journalist, offer a less academic, but no less important, view on economic behavior – what they call “the hidden side of everything.”

Levitt points out, “One of the most powerful laws of the universe is the law of unintended consequences.”  I think this law also greatly affects outsourcing deals. 

Conventional outsourcing typically found customers and their service providers developed basic transaction-based outsourcing arrangements supported by an overabundance of service level metrics and measurements.  The result was a focus on the minutia, not the true business outcomes that should have formed the foundation of the outsourcing relationship.  Another typical unintended consequence was the proscriptive fashion in which specific tasks were required and how those tasks were to be completed restrict the service providers ability to bring innovation to improve how the work is done, or to eliminate tasks that fail to add value.

Levitt has not won a Nobel Prize as yet, but he does have two New York Times best sellers and his lessons are well worth reading — and also much more reader-friendly for the most part than the Nobel winners I have written about previously.

In outsourcing, it’s important to heed Levitt’s advice: “Morality is what people should do. Economics is what people do.” 

If you want more from your outsourcing than to simply fill a seat to fulfill a task at the lowest possible cost – with all the unintended consequences that surely will result from that approach – consider an outsourcing business model that pays outsource providers for their brainpower and expertise, which will add real value and solve real problems while helping to achieve desired outcomes.

Leading Economists, Thinkers and Outsourcing – Part 3: Robert M. Solow

More than 50 years ago Robert M. Solow, a professor at MIT and the next in my mini-series of the seminal economic thinkers that have impacted modern outsourcing, showed us that technology is the driving factor behind economic growth.

Solow’s growth model was first presented in a 1956 article, A Contribution to the Theory of Economic Growth. His premise was that without “technological progress” growth rates for capital, labor and total production would all remain about the same.

In fact, he found that about four-fifths of the growth in U.S. output per worker was attributable directly to technological progress.

His work included a mathematical model that showed “technological change” would be the motor for economic growth over the long haul. Solow’s growth model presented a framework that formed the basis of modern macroeconomic theory.

Solow won the Nobel Prize Economic Sciences for his work in 1987 in recognition of its groundbreaking significance. In his precise and often aphoristic prize lecture, he said:  “Insiders are sometimes the slaves of silly ideas,” which to me is an early take on the value of thinking outside the box.  “You never know if you have gone as far as you can until you try to go further,” he continued.

For today’s outsourcing firms, what I frequently observe is that most outsourcing agreements are transaction-based, meaning that a service provider gets paid for each activity, whether it’s the number of held desk calls, applying patches to 1200 hundred servers, or a body in a seat providing xx hours of rote application maintenance.

If economic growth is achieved through “technical change” it follows that companies that outsource should focus their efforts on paying suppliers for their brainpower, their technological expertise and not their brawn, or simply to perform an outsourced activity. My point is that if companies outsource because they believe that another company can do the work better, faster or cheaper, why are today’s deals so focused on simply doing activities?

Even more problematic is something called The Outsourcing Paradox, an ailment described in Vested Outsourcing, where a company that decides to outsource can’t really let go and feels it has to define requirements and control work scope so rigidly that the outsource provider ends up executing the same old inefficient, transaction-based processes. In other words, ‘Do my mess for less.’

That’s really a perversion of what vested, collaborative and mutually beneficial outsourcing is all about.

And that’s not progress, technological or economic. 

Leading Economists, Thinkers and Outsourcing – Part 2: John Nash

Next in this mini-series about the leading economic thought leaders who were seminal in the development and success of modern outsourcing is the mathematician John F. Nash, who took economists a major step beyond Adam Smith with his ideas on Game Theory and Behavioral Economics.

Nash’s inspiration was that Adam Smith’s principle that the “best result comes from everyone in a group doing what’s best for themselves” was incomplete and needed revision: The best result comes from everyone in a group doing what’s best for themselves and the group.

Whether or not Nash’s inspiration really occurred in the famous bar scene in the movie A Beautiful Mind, Nash introduced the distinction between cooperative games, in which binding agreements can be made, and non-cooperative games, where binding agreements are not always feasible. He developed an equilibrium concept for non-cooperative game scenarios that is called the Nash Equilibrium.

Simply stated, he proved that companies that work together will discover that the sum of the parts can be better when combined effectively than if they work at cross-purposes. This is a key foundation of Vested Outsourcing and the Vested IT outsourcing contract relationship: Cooperate for mutually beneficial outcomes over the long haul to get to the win-win for all the players. In other words, get beyond total self-interest and contract gamesmanship by vesting in each other’s success for the good of the enterprise.

Nash won the Nobel Prize in 1994 for his work and the related work of two others who shared the prize with him that year, John C. Harsanyi and Reinhard Selten. Their work advanced an entire branch of economics that’s now known as Game Theory, or Behavioral Economics.

Game theorists have been studying the economics of playing non-zero sum – or win-win – games for more than 50 years demonstrating that playing nice is indeed good for you, your enterprise and the contracts you negotiate. Since Nash’s Nobel Prize – there have been seven more Nobel Prizes awarded to Game Theorists.

Nash’s breakthrough was vital because he showed the value of reaching equilibrium, or win-win solutions and outcomes in difficult and complex scenarios, as the way to achieve successful business and outsourcing partnerships.