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10/31/2003
07:38 PM
Chris Murphy
Chris Murphy
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IT Confidential: Deciding How To Work With Competitors

How's your relationship with your competitors? When it comes to business-technology adoption, it's an essential question to ask. Look at two events happening within a week of each other.

Two competitors in health-care insurance, Blue Cross Blue Shield of Massachusetts and Tufts Health Plan, are teaming to make health care safer--and perhaps more profitable. The effort is about getting docs to stop writing dangerously illegible prescriptions with pen and paper and start using a more-accurate electronic system. It's not one of those vague "increase awareness" campaigns--it's $3 million to put 3,400 BlackBerry or Pocket PC devices in the hands of Massachusetts physicians and equip them with Zix's PocketScript E-prescription software and service. Why? Because leaders at both companies know in their guts this will work--and that waiting will cost lives and money. Dr. Robert Mandel, Blue Cross Blue Shield's VP of provider enrollment and services, approached Tufts about cooperating to get E-prescriptions adopted more widely. Tufts had tested the system in 2001. The results: 30% fewer calls between doctors and pharmacists, and 35% of physicians reporting they could check accuracy and drug interactions more easily. Pharmacists saved almost an hour of time per pharmacist per day.

Where's the payoff for Tufts and Blue Cross? Maybe lower drug costs--half of doctors in the test changed a patient's drug therapies to a Tufts plan-preferred drug; this could lower pharmaceutical costs 2% or more. Or the savings could come from better health care if the handheld platform improves the information doctors have about patients. But it's mostly a leap of faith. "I don't think there's a substantial business case for a health plan to do this yet," says Dr. Joseph Raduazzo, Tufts' medical director of pharmacy programs. "We're doing it because it's the right thing to do." Health care lacks a giant company that can force business-technology adoption along a supply chain. That's one reason technology adoption can be painfully--even dangerously--slow. At this stage, it makes sense for these competitors to work together to speed up that pace and improve their industry.

At the other extreme are the meetings slated for this week in Bentonville, Ark. Perhaps no company today has as much power as Wal-Mart to force technology adoption along a supply chain. Supply-chain and business-technology wizards from about 100 of Wal-Mart's top suppliers will shape the future of radio-frequency identification and electronic product codes during meetings where the retailer sets more-detailed specifications to its January 2005 deadline for using RFID. The exploration of RFID has been fueled by a nonprofit cooperative, the Auto-ID Center, that rivals funded and worked in together. Will that spirit of cooperation wither as deadline compliance starts looking like a competitive edge? Perhaps it will. And perhaps it should.

John Soat returns next week. Welcome him back with an industry tip sent to jsoat@cmp.com or phone 516-562-5326. Or write me at cjmurphy@cmp.com.

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