As the Office of the National Coordinator for Health Information Technology finalizes its draft nationwide Interoperability Roadmap, the Federal Trade Commission has advised ONC “to consider taking steps to ensure that coordinated governance by market participants does not unduly distort competition.”

In a letter to National Coordinator for Health IT Karen DeSalvo, M.D., the FTC’s Office of Policy Planning, Bureau of Economics, Bureau of Competition and Bureau of Consumer Protection jointly submitted comments on ONC’s 10-year plan to create an interoperable HIT ecosystem. FTC staff asked ONC to specifically consider how the economic interests of providers and vendors align with the benefits of interoperability.

Also See: Industry Comments on Interoperability Roadmap Run the Gamut

“Increased interoperability, accomplished through standardization, has benefited competition in many industries,” states FTC. “We respectfully suggest that ONC consider how best to promote competition and innovation when taking steps to speed the adoption of interoperability standards in the marketplace.” However, at the same time, the agency warned that although “interoperability may foster innovation and competition in both health IT and healthcare” there are currently fragmented market and business forces that may hinder adoption of interoperable technologies.

To help address these challenges, FTC recommended that ONC “align economic incentives to create greater provider demand for interoperable health IT” as well as motivate providers to “overcome short-term costs in order to realize the long-term benefits of interoperability,” thereby incentivizing vendors to “compete on the basis of interoperability.”  

FTC points out that development and adoption of interoperability standards can benefit competition in an industry such as healthcare. Nonetheless, the agency cautions that the effects of standardization on competition are complicated and may have unintended consequences. For instance, “when standards are collaboratively set by private parties, market-based competition between technologies vying for adoption is replaced by the collective action of market participants themselves,” the agency notes. This “creates a risk that the standard setting process may be used by firms to prevent entry by new products or competitors” and that “competition is replaced by agreement among competitors about which standard is best suited for them.”

In addition to affecting competition between technologies for inclusion in a standard, FTC argues that standardization also impacts the adoption of new technologies once a standard is set. “Once a standard is adopted and implemented, an industry may become locked into its use, and the costs of adopting alternatives may be much higher than before standardization,” states FTC. “This can harm both competition and consumers.”

For instance, ONC intends to release an annual list of best available standards, to be used by technology developers and to inform coordinated governance efforts, and already has issued a draft of the first version—the 2015 Interoperability Standards Advisory.

While “publishing a list of endorsed standards may be necessary to promote the adoption of standards, especially in light of countervailing market forces that otherwise might prevent or hinder the adoption of standards-based interoperable technologies,” FTC warned ONC to consider the “significant impact” that government endorsement of standards can have on the marketplace. “If ONC decides to select standards, FTC staff encourages ONC to establish a sound process to identify and endorse them,” states the letter to DeSalvo.

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