THE HONORABLE ROBERT C. CRESANTI

**UNDER SECRETARY FOR TECHNOLOGY**

**U.S. DEPARTMENT OF COMMERCE**

**"A NATIONAL SUMMIT: MOVING TOWARD INTEROPERABILITY---AFFORDABLE,
ACCESSIBLE HEALTHCARE WORKSHOP"**

**CO-SPONSORED BY THE**

**TECHNOLOGY ADMINISTRATION,**

**NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY (NIST), AND THE CENTER
FOR AGING SERVICES TECHNOLOGIES (CAST)**

**AT NIST**

**GAITHERSBURG, MARYLAND**

**PANEL 1: MARKET DRIVERS AND SOCIETAL ISSUES**

**OCTOBER 18, 2006**

# Introduction

Thanks for inviting me here today.

Almost 20 years ago, I came to Washington with the idea of working on
really big, important problems facing our nation; and problems generally
do not get any bigger than this.

The official topic of our panel today is interoperability, but really,
we are talking about a much bigger challenge.

# The Challenge

What is that challenge? In a phrase: the Baby Boom. The first "boomer"
will turn 65 in four years ... and 76 million of her friends and peers
will follow suit shortly thereafter.

With people living longer, this demographic tidal wave will swell the
ranks of the elderly in America from 12.5 percent of the population
today to 18.8 percent in 2025 -- a 50 percent increase. By 2050, there
will be 1 million Americans over the age of 100.

I am not a doctor or a health policy expert, but I know this much: This
will be a major challenge. We can hope that these senior Americans will
be healthier than those seniors of previous generations. But the reality
is, older people have more chronic conditions, they get sick more, and
taking care of them is both more time-consuming and more expensive.

What will make this harder is that we do not have a ready-made system
for taking care of our sick seniors in any kind of setting other than an
institutional one. At-home care is not a strong suit of our medical
system, to put it mildly.

We are real good at building round-the-clock healthcare settings like
nursing homes and hospitals, but not very good at making our homes
better suited for the kind of lives our parents and grandparents will
want to live in the coming decades.

Not only is that shortsighted financially, but it's probably not a very
good way to care for seniors. But it is not my intent to throw rocks at
those who serve on the front lines of our nation's most challenging
problems; the opposite is true.

# The Opportunity

Fortunately, this is one of those classic good news/bad news situations.
The bad news is that we have 76 million Baby Boomers entering their
golden years. The good news is that we have 76 million Baby Boomers
entering their golden years.

I say that because I see this so-called "crisis" as a tremendous
"opportunity" -- an opportunity to unleash the creative potential of
America's entrepreneurial class, to reduce costs and improve the lives
of seniors through applied innovation and new technology.

I'm not talking about the Jetson's here: I'm talking about simple
technologies that let seniors "age at home," as the saying goes,
independently and with dignity. I'm talking about sensors that detect
falls and alert caregivers if there is a problem; stoves that turn off
if they are left on accidentally; or cell phones that detect voice
tremors, an early sign of Parkinson's.

Many of these technologies are available today, and more are being
created every day. Eric[^1] and Wes[^2] will flesh out these ideas for
you in a few minutes, and paint a picture of what this "next generation"
of technology can and will look like.

# 

# Why Is This Time Different?

Of course, we've been hearing about this next generation of healthcare
tools for some time.

We have had some experience getting heath information technology
integrated into the hospital setting -- and I think we can all agree
that the results have been mixed. Yes, we have the ability to monitor
drug dosage from pharmacy to I.V. line, but for many reasons -- some
cultural, some financial, some technical -- we have not implemented this
technology as well, or as fast, as we should. But we're beginning to get
there.

However, the focus of this panel is not on that setting, but the at-home
setting, where frankly, the opportunities are even greater.

The brightest minds of the Boomer generation will push good technologies
out of the lab and into everyday life in a major way. The Baby Boom
generation is unlike any generation we have seen before.

Raised in a time of tremendous positive changes in our economy,
unequaled upward mobility and a lifestyle marked by constant change,
Boomers are accustomed to more mobility, more freedom and more activity
than any generation in history. As they age, they will want new
technologies that help them maintain their freedom and retain their
quality of life.

They are also used to technology. This is the group that embraced jet
travel, the Internet, the PC, the cell phone, the ATM ... and the list
goes on.

Baby Boomers are not naturally gifted at adapting to technological
change -- no more so than their children or grandchildren, certainly.
And no matter what generation is doing the adapting, consumer uptake of
technological change has a pattern that is quite discernible over time
-- especially in the United States. When a technology begins to become
accepted by consumers, its usage tends to grow exponentially.

But one thing is certain: Baby Boomers are not afraid of technology, and
one can assume that their willingness to adapt to new forms of
technology will not diminish as they grow old. In fact, it may well
increase. I routinely seek out my father for help on my home computer.

After all, they will embrace technologies that help them stay
independent. This is a generation that will demand more than a longer
life; they will demand a better quality of life.

# The Role of Government and the Technology Administration

With all of these positive factors, you might wonder: why are we here?
Why don't we just sit back and let the power of the free market economy
do its thing?

The Bush Administration takes a strong view that private markets are the
best way to solve complex problems. Entrepreneurs develop solutions that
governments cannot anticipate and should not direct.

And yet, while we understand the limits of government, we also
understand the role we have to play in fostering innovation. In the
healthcare arena in particular, government can be both a force for
innovation and an impediment to change.

That is where we come in -- sometimes, impediments to the functioning of
the free market already exist and the market needs help that only the
government can provide -- at this point I am resisting the use of the
worn laugh line, "I'm from the government and I'm here to help." Helping
to build highways and other important infrastructure is an essential
function of government and that is how we can best lend our aid to
fostering progress in this important aspect of eldercare, but we must
proceed carefully.

For example, four out of every ten dollars spent in health care comes
from the federal government. Changes in Medicare reimbursement policies
can singlehandedly create or destroy an entire sub-industry in health
care. The FDA's regulatory and safety oversight is a massive factor in
the creation of potentially life-saving drugs and devices.

I can't authoritatively speak to those areas of federal government
influence -- and if you ask me any specifics in those areas, I will have
to plead ignorance.

But one of my key responsibilities is to help *you* speak to those
areas. We believe that policy development should be informed by those
working on the front lines; that the people who are most affected by
federal rules and purchasing practices should have a voice in shaping
those policies. One of the key roles of the Technology Administration is
to serve as an analytical forum for the technology community and the
government. Gathering, analyzing and making suggestions for action based
on our research. So please, if you have concerns ... or should I say,
*when* you have concerns ... the doors of the Technology Administration
are still open.

More broadly, my agency tries to shape a policy environment that helps
bring new products to market -- that makes sure that our best ideas
don't sit idle in someone's lab. We try to help America get the most out
of its innovative spirit -- through fostering an environment that
welcomes entrepreneurship, transferring knowledge out of federally
funded labs and universities, ensuring the funding of basic research and
the next generation of researchers and innovators, shaping government
procurement policies, and many other policy matters.

# 

# The Challenge Overseas

So what do we need to do first? Let's look at the competitive landscape.
We are already seeing other countries pull ahead in the market for
technologies that help seniors in the home care environment. That is
particularly true of "grayer" countries like Japan and Sweden, where
these technologies are seen as a burgeoning industry that offers them
worldwide market advantage.

I see that development as a competitive threat to the United States and
it must be answered -- after all, other countries are developing a
specialty in serving aging consumers, while we are just getting going.
At the same time, I see activity overseas as a validation of the power
of the market -- it shows that, as a population ages, the demand for
these products does grow. We need U.S. industry to serve these overseas
markets, to test their ideas, products, services, and ensure their
competitiveness when U.S. market opportunities become ripe. Unlike so
many other problems we face in these unsure times, this is one that we
cannot claim has come upon us by surprise.

So, while we cannot sit idly by while other nations build a leadership
position in these industries, we must recognize that the market power of
the Baby Boomer generation will present a compelling case for massive
innovation and investment in exactly the kinds of tools, systems, and
components we will need.

As someone who cares deeply about accelerating the transition of
technology from the conceptual stage to actual production and marketing
and into the hands consumers who can benefit from it, I can tell you
that, from a corporate perspective, it is very nice to have a path
cleared by either competitors or by market opportunity. In this case, we
have both.

# The Challenge At Home

Importantly, we know what challenges we must overcome to speed the path
of age-related technologies to market. There are reimbursement issues,
privacy concerns, regulation, and, of course, what we've come to focus
on today: the issue of interoperability.

Let me draw on what may be a familiar analogy: In the early days of the
railroad era, America had several different track gauges. Railcars would
pull into a station and all the cargo and passengers would have to
switch trains before it could continue its journey. It was hugely
inefficient.

The same is true in so many areas of health care technology, especially
in technology focused on seniors. We have at our disposal many of the
root ideas for such promising technologies -- but we lack ways to make
sure those technologies can relate to each other. If you can produce a
tool that will monitor the at-home vital signs of a senior, but there is
no way for that information to be shared with a piece of technology that
could adjust that senior's medication levels, the power of that
technology is diminished.

Fortunately, we have seen this kind of problem before, and we have
solved it. Let me explain.

**Past Examples: RFID and AHIC**

For years, people talked about how low-cost RFID radio tags would
revolutionize the business world, streamlining product delivery and
giving manufacturers and retailers more control over the flow and safety
of inventory. And for years, this "RFID revolution" was right around the
corner.

In the end, however, it took the better part of a decade of concentrated
attention for this "next big thing" to become a reality. The reason was
that every start-up RFID producer was pushing its own variation of the
same idea, and none of them worked together. Companies became unwilling
to invest in any of the systems; they were afraid they'd buy the
equivalent of the Betamax. Globally, there were at least 120 different
standards operating in 2005.

Industry began to solve the problem last year through a number of
standard harmonization approaches, including one led by EPCglobal, the
group that manages standards for UPC bar codes. Slowly, we're moving
toward an environment where RFID tagging systems are better able to
interoperate with one another and often able to be read by multiple
technologies.

Throughout the process, the Technology Administration has been an
advocate for the value of these technologies within government, and has
worked to bring together parties with divergent interests to ensure the
promise of RFID technology is met.

In that vein, my participation in the American Health Information
Community, or AHIC, is geared to help establish interoperability
standards that will allow us to meet the President's goal of having an
electronic health record for every American by 2014. It is a huge
challenge given the complexities of the U.S. healthcare system, with its
multiple payors and complicated billing systems. But by convening the
industry's and government's most thoughtful leaders on a regular basis,
we are making real progress.

**Our Focus Over The Next Two Years**

In the case of technology for the at-home environment, we understand the
challenge is not merely technological -- and so it is not just
technology firms that have a role to play.

Architects and homebuilders will need to design buildings that take into
account the needs of seniors ... home renovation supply stores like Home
Depot will have to stock and sell more age-enabling products ... cell
phone companies will have to create "smarter" smart phones that remind
seniors to lock their doors at night and take their pills on schedule
... computer companies like Intel will have to create new chips that
will allow disease management programs to work seamlessly with other
health care information technologies.

Our role at the Technology Administration is to help facilitate that
growth, and to help overcome interoperability challenges ...

-   By sponsoring meetings like this to identify the core issues
    surrounding the interoperability of technologies for the growing
    aging market.

-   By identifying at these meetings the market barriers that prevent us
    from overcoming those hurdles.

-   By working together with key stakeholders in both the private and
    public sectors to move past those hurdles -- with each major sector
    doing what it does best. In my view, the private sector innovates
    best, and the public sector is very good at convening and bringing
    about consensus.

-   By creating the "demand pull" that comes when the federal
    government, which is a huge purchaser of health care products and
    services, better understands the transformative power of these
    technologies.

-   By building a broader environment so that technology can move to
    market rapidly.

-   And finally, by working actively to ensure the next generation of
    research is seeded so as not to lose momentum.

**Conclusion:**

I will grant that the heavy lifting will be done by people like my
panelists and many of you in the audience. (However, when the hard work
is finally done... you can count on the fact that someone from the
government... like me... will be here... arms opened wide... and ready
to claim all of the credit!)

There is a real danger that if we don't get the policy issues
surrounding interoperability right, all the amazing lab work in the
world would amount to very little -- mere vaporware. My role is to push,
prod, pull, and do anything else I can do to get smart scientists and
companies to work on these important issues; to help get those good
ideas out of the lab and onto store shelves and the homes of seniors who
will need those technologies to stay healthy, mobile, and safe.

We have all had a chance to watch a video by Eric's CAST group on the
future of aging technology. The piece does a great job showing how
relatively simple technologies have helped one family deal with the
challenges of aging. It makes a much better future for our seniors seem
very much within reach -- the challenge to us is not to imagine such a
future, it's to design it and deliver it.

With that, I'll turn it over to Eric and Wes, who will explain exactly
what that future is going to look like -- if we all work hard enough to
get there.

\# \# \#

[^1]: Co-panelists:

    ^?^ Eric Dishman, General Manager & Global Director, Intel Health
    Research & Innovation Group, Principal Research Scientist, Intel
    Corporation, Chairman, Center for Aging Services Technologies

[^2]: Wes Rishel, Managing Vice President, Gartner, Inc.