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SAP's CEO Has Big Plans for Fixing Health Care With Software

His recovery from a traumatic injury has the software executive thinking big about improving the patient experience.


The CEO of the German software giant SAP, whose software is used to run the day-to-day operations of many of the world’s largest companies, has a new industry he’d like to tackle: Health care.

Speaking at a meeting with financial analysts in New York Thursday, SAP CEO Bill McDermott described the complex problems facing health care providers, insurance companies and drug makers as one for which SAP’s capabilities are uniquely suited.

“Today if you look at the health care industry, and you can talk to anybody, there isn’t a single person who thinks it works,” he said. “The electronic medical record is a disaster. It was designed to create a billing event and a compliance event,” and not to improve the quality of medical care.

It’s clear that McDermott, who is in his second year as the first American CEO of the German company, is motivated in part by his own experience as a patient. Last summer he lost an eye in a freak accident at the home of relatives in Pennsylvania. Since returning to work he has taken to wearing dark glasses.

As a patient he got an up-close look at the inevitable bureaucratic friction that so often vexes the 21st century health care process. Yet as the CEO of a company that specializes in solving complex industrial problems, he’s clearly intrigued.

“Context-aware data-driven machine-learning applications are the future of the enterprise and in no industry is this more relevant than health care,” he said. “Most of the information that moves from first responders, nurses and doctors is voice and text. In other words unstructured data, and we’re going to have to have a database that is a column-stored in-memory database to manage not just the structured stuff, but also the unstructured stuff.”

By the “structured and unstructured stuff,” McDermott was referring to two kinds of data. Structured data is information that lines up neatly in the rows and columns of a conventional database, and is thus easy for a computer to organize: A measurement taken at a regular interval like blood pressure or the cost per dose of a drug. Unstructured data is more free-flowing, difficult to categorize and a little more complex. It might be the transcript of a speech or a phone call, or the rambling spoken recordings of a doctor examining a patient. SAP’s HANA S/4 database, which it launched a year ago today, is intended to handle both.

All that data, McDermott said, would lie “at the heart” of the revamped health care system. “We see a world where a Social Security card can be connected to a file in a highly secure cloud” that would contain a patient’s medical information. “This can fundamentally change the health care experience for the patient.”

McDermott said that SAP plans to “be at the epicenter” of rethinking the health care industry and that the company will assign a senior executive to oversee its efforts in that space on a global basis.

“This can fundamentally change the health care experience for the patient, ” he said. “Not only do you get tortured in the medical system but when you go to renew your insurance policy they want you to fill out forms with a list of every doctor you’ve seen and every prescription drug you’ve taken. And if you don’t remember it and don’t get it right, they’ll challenge your claim when you file one someday.” That sounds like the voice of experience.

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