Health Outcomes Metrics and the Role of Financial Derivative Instruments in the Health Care Industry

Despite a culture of innovation, the U.S. health care system has been markedly deficient in its implementation of information technology (IT). Although recent initiatives have endeavored to remedy this shortcoming, fragmentation, high costs, information asymmetries, and evolving regulatory guidance have delayed meaningful adoption of health IT. At the same time, health IT has been heralded as a panacea that will help stakeholders attain the aspirational goals of reducing health care costs and improving health outcomes. While the extent to which existing platforms achieve these goals is debatable, there is little doubt that health IT will play an indispensible role for stakeholders throughout the health care industry. In line with the symposium theme of envisioning the next quarter century of health care law, this Essay explores emerging issues in health IT with a focus on health outcomes metrics and the role of financial derivative instruments in the health care industry. I begin by examining how aggregated patient data can be utilized to create outcomes-based measures such as health outcomes indices (HOIs). HOIs integrate multiple sources of real-world patient data to create metrics that timely and accurately measure the burden of disease, track health status, or evaluate health system performance. By accurately capturing and measuring patient outcomes over time, HOIs endeavor to provide stakeholders with a valuable tool with which to measure, assess, and predict health outcomes at the population level. Independent validation of HOIs as accurate barometers of patient outcomes will permit use of the metrics for a variety of purposes related to health economics, public health policy, and health care management. One promising avenue relates to HOI-based financial derivative instruments. HOI-based derivatives aim to provide public and private stakeholders with a dynamic opportunity with which to manage investments, capture value movements of assets, prioritize expenditures, and hedge risk