This much was plain to me: I needed to better comprehend this new technology platform, and its potential to influence America’s cultural, sociological, financial, and political landscape well into the future, or else I would be limiting my own. That became my priority upon enrolling at the Kennedy School of Government at Harvard University for a two-year program starting in the fall of 1995. Twice, at Harvard, I benefited from a little providence. First, I spotted a job posting for a course assistant for a new class, Internet Policy, Business Strategy and the Law, a unique offering that drew students and faculty from three of Harvard’s most prestigious graduate institutions. After landing the position, I got to observe the presentations and debates, and got a sampling of perspectives and predictions about where this new technology was taking us. Even better, I got to tinker with that technology, while developing, coding, and updating the course website.
Second, I boarded the right bus. When not biking to campus, I would sometimes cross the Charles River aboard the M2 shuttle, which was frequently transporting an accomplished innovator and practicing emergency room physician named Dr. John Halamka who, at the time, was also a graduate student in the Harvard-MIT program in Health Sciences and Technology. One day, Halamka shared the story of CareWeb, his latest side project.
Beth Israel Hospital and New England Deaconess Hospital, like many hospitals around the country, had recently agreed to merge in order to more effectively compete. In theory, the merger made sense, since the hospitals were across the street in Boston’s famed Longwood Medical Area, and the resulting entity could lower costs by consolidating staffs and pooling purchases, allowing it to support service lines that would be unprofitable to support individually. In practice, it was quite a mess. The hospitals’ medical records systems could not speak to each other, meaning that physicians at one hospital could not access the thousands of records trapped in legacy databases at the other. Conventional wisdom in such cases had argued for the construction of a giant centralized, monolithic system capable of performing all the applications one would need. Yet, the estimated expense of that undertaking, somewhere north of $50 million, would have blown all the projected cost savings of the merger.
Halamka proposed an alternative, one the executive team enthusiastically authorized him to pursue. Rather than replace the uncommunicative legacy systems, why not keep them functioning in the background, but use new Internet-based technologies to publish the data in the form of a web page at the point of care, when doctors and patients needed it? At a price tag of roughly $50,000, CareWeb was, in Halamka’s words, a “quick, dirty and cheap” solution that delivered “probably 80 percent” of what a centralized, monolithic system might have produced, at about 0.1 percent of the likely corresponding cost. Most important, as he knew from his own experience as a physician, the solution would satisfy most medical professionals: If you are an emergency room physician or nurse, and you can pull up a patient’s problem, medication, and allergy lists, as well as any relevant testing, “that’s already pretty much enough to get you started,” Halamka observed.
For getting the database fix done, he was made Chief Information Officer of the newly merged Beth Israel Deaconess Medical Center, and would later add the title of CIO for Harvard Medical School. Later, he would assume a public role as an appointed leader on health IT standards committees under Presidents George W. Bush and Barack Obama. His influence upon me was immeasurable. His success, in leveraging technology to find a frugal solution, shed light on a new path.
My backgrounds in banking and policy would have led me to examine the hospitals’ problem in a completely different way. Both would start with the premise that the merger needed the centralized data system and that might cost close to $50 million. A banker might try to find the least costly equity or debt financing from the private sector. A policy maker might try to sell it as a “public good” project, in an attempt to offset some of the costs through government assistance, perhaps justified by arguing there would be savings in programs like Medicaid as a result of the investment.
Nothing in my experience had taught me to think like Halamka, to reimagine the project entirely, and consider substitutable approaches that might reach the objective at dramatically less cost. If Halamka could invent a $50,000 workaround, the traditional battles over whether or not to subsidize it, or to socialize the costs through higher private sector insurance premiums, might be moot.
Halamka’s innovation mindset reminded me of my father’s stories about Sam Pitroda. During my two years in Boston, I had encountered a higher concentration of South Asian students than in previous stops, which allowed me the opportunity to reconnect with my heritage. As the cofounder of the Boston chapter of the Network of South Asian Professionals, I was on the steering committee of the national organization’s Tryst with Destiny conference (named after the famous line in Prime Minister Jawaharlal Nehru’s inaugural speech as Prime Minister in 1947), to celebrate India’s 50th anniversary of independence. We unanimously chose Pitroda as the keynote speaker, agreeing that his ingenuity and passion would inspire the audience.6
Plus, I just wanted to hear from him in person. By the time he took the stage in August 1997, I had moved to the next stage of my life, working for the Advisory Board Company, a Washington, D.C.–based global technology and research firm that, at the time, served hospitals, financial institutions, and corporate executives. As his silver mane whipped around, Pitroda passionately took me, and the other attendees, back in time. He transfixed the audience with his telecommunications tale and, after he finished, the applause started and didn’t stop for more than a minute.
“You could feel in that room so much potential,” Pitroda recalled during a conversation more than 15 years later. “I got a chance to speak for almost an hour, and the audience inspired me. I knew a lot of Indian-American kids were coming of age, bright young kids, second-generation Americans, full of energy, enthusiasm, great education, great support from their parents, comfortable with themselves. I thought my message would be good for these kids, to do things for America and for the world, since the world by then had changed. This is the future of the world, not just America or India. These kids are going to create the world for everybody. Look what they can do.”
While I had heard the story years earlier from my father, Pitroda’s presentation seemed new to me, not just because it was firsthand, but because I was looking at it through a fresher, more sophisticated lens, one shaped not only by my Kennedy School education but my interaction with Halamka. At the Kennedy School, initiatives like the one Pitroda undertook would have been framed through the traditional battle lines of “big” versus “small” government, which would lead to spirited debates about how much money to allocate for the project and how to efficiently spend those funds. That, in turn, might lead to further disagreement about whether the service should be delivered by the government itself, or contracted out to a private firm.
What was typically missing from such a debate would be consideration of a smarter approach, one that focused on inventing a way to solve this problem for less cost and, perhaps, with less burdensome regulation. That approach required a problem solver taking advantage of the latest technologies. For Pitroda, working with the government in India in the early 1980s, that was the evolution from analog to digital telecommunications. For Halamka, working with two hospitals in Boston more than a decade later, the enabler was the evolution from point-to-point interfaces to Internet-based platforms.
What would it be for me, and my generation? There was no way to know at that moment, but over the course of my private and public careers, I would immerse myself in new technologies, using them to uncover more innovative approaches to solving problems.
Early in my nine-year tenure at the Advisory Board Company, I wrote a research study assessing the impact of Internet-based technologies on hospital and health systems. The study, written to aid hospital executives, afforded me the opport
unity to revisit Halamka and profile his latest project: the New England Healthcare EDI Network (NEHEN). Halamka had been troubled by the waste inherent in the billing and payment transactions between hospitals and health care plans. Providers could burn five to 10 percent of their financial intake on endless reams of paperwork, much of it unrelated to the improvement of patient care, such as the appealing of denied claims or assembling seemingly endless documentation. Health plans, too, wasted resources in responding to those appeals.
Halamka convinced the health plans and the larger health systems that they would benefit from removing the friction from their dialogue, and that they could do so by joining an Internet-based network. That network would connect through simple open-source software in low-cost servers at the data centers of each participating institution. The result was a less expensive approach to automate a number of activities that had been performed by hand, if at all, such as checking the patient’s insurance eligibility, managing provider referrals, and collecting payment. With minimal up-front investment, the members achieved dramatic savings in billing expenses, from the previous cost of roughly $5 a transaction to as low as 35 cents net of fees. Today, NEHEN processes more than eight million transactions a month.
By 1999, the booming Internet economy grabbed the attention of the Advisory Board Company’s founder, David Bradley. He chose me to lead a new startup accelerator called Advisory Board Ventures. In that role, I would introduce him to promising technology companies for possible investment, while providing counsel to the existing portfolio. Our first partnership was with my close friend Reggie Aggarwal, founder of an events industry software startup, Cvent. Eventually, he would graduate from our incubator space to manage 750,000 events in 50 countries, employ over 1,000 people worldwide, and attract over $136 million in venture capital. And, by August 2013, he would raise $100 million in an initial public offering, valuing the company at more than $1 billion.
In addition to my Advisory Board Company work, I explored investment possibilities in the technology industry through Avatar Capital, an investment club that I cofounded with my cousin, Dr. Roger Sawhney. The club selected 17 deals in which to invest a collective $11 million in the initial funding rounds, including $100,000 in a company founded by Chet Kanojia to personalize the television experience; within the decade, Kanojia sold it to Microsoft for upwards of $200 million.
In the spring of 2000, the dot-com bubble burst. I left my Advisory Board Ventures role to focus on growing a new division within the firm as it prepared for its own initial public offering. The Advisory Board Company went public in 2001 and, over the next five years, I would move up the ladder, eventually serving as Managing Director and helping to grow our software analytics business. Ultimately, the proceeds of my stock options would dwarf my professional salary. Yet those financial rewards hardly represented the ultimate endgame. Nor did achieving some private sector success steer me away from my true passion of public service. While working at the Advisory Board Company, I was a gubernatorial appointee to volunteer positions on three separate committees: the Board of Medical Assistance Services (overseeing Medicaid), the Southern Technology Council, and the Electronic Health Records Task Force.
I still was the kid on the chair, telling a Congressman about the tracks. I still took inspiration from Sam Pitroda’s story of sacrifice and success. I still wanted to see what I could do for my country, which appeared on the verge of transformational change thanks to revolutionary advances in technology. In the years to come, I would gather plenty of proof of what was possible in so many settings, when people stopped looking with puzzlement, helplessness, and anger at every seemingly unsolvable problem, and instead channeled their energy, harnessed technology, and focused on what they could do. Just look at what we did in Virginia.
Chapter 3
The Virginia Model
Back in 1999, the Virginia legislature was seeking to make someone accountable for nurturing entirely new industries throughout the state, while making sure the government’s internal use of information technology was effective and efficient. Virginia became the first state in the nation to create a cabinet position for a Secretary of Technology. Three men would fill that role over the next six years, and their work over that time contributed to Governing magazine’s 2005 selection of Virginia as the “Best Managed State.”
In 2006, Tim Kaine, the successor to outgoing Governor Mark Warner, chose me to be the fourth Secretary of Technology. He had a different spin on the position, one in tune with the times. By 2006, the Internet had transformed the way consumers accessed information and conducted commerce. Yet, though it had improved some services such as e-filing tax returns and renewing professional licenses, it had not meaningfully transformed the relationship between citizens and their government. Kaine assigned me to prioritize the improvement of that interface. I realized that one of the most important things government can do is remove restrictions that exist for really no good reason. On a visit to Google, for example, I learned two things: one, most people get to government websites through search engines, not by typing in their URLs or bookmarking them; and second, government, perhaps unintentionally, made it difficult for search engines to index information that the public had the right to know. Within 90 days, we initiated a no-cost collaboration to simplify and standardize the interface between search engines and government websites, making it easier for the public to find what they need. We formed a coalition of four states, two led by Republican governors (Utah, California) and two by Democratic ones (Arizona, Virginia), whereby Google, Yahoo, and Ask.com agreed on a standard sitemap protocol that the states agreed to adopt.1 Those states then assigned their webmasters to implement the new protocol, a task that took about an hour per site. By the launch in April 2007, Virginia had tagged about 80,000 of our own web pages (URLs) for addition to the participating search engines. In the first year of the initiative, we observed a 40 percent spike in site visitors, at no cost other than the modest incremental staff effort.
One of the promising aspects of that initiative was its bipartisan backing. Before my term even started, and as it progressed, I made a point to reach out to members of the Republican-led legislature. Through those conversations, I became convinced that many in both parties viewed technology, data, and innovation initiatives from a more pragmatic prism, beyond the usual, inflexible left-right division. That was evident when those Republicans invited me, a Democrat, to partner as a nonvoting participant on the Joint Committee of Technology and Science (JCOTS), which organized small working groups that included members from the executive and legislative branches, as well as concerned citizens. More than a dozen bills endorsed by JCOTS passed through the legislature with overwhelming bipartisan support and were signed into law by Governor Kaine, including Republican-sponsored legislation to expand rural broadband access, adopt health IT standards, and permit school boards to purchase open source education resources.2
Democrats, while a minority in the legislature, also attempted to put their signature on the smarter government movement, with the endorsement of the executive branch. Consider the way that Business One Stop came together. Governor Kaine, wanting to buoy the state’s reputation as business friendly, sought to offer every Virginia entrepreneur a single destination to complete all the forms required to start a new enterprise—a task that otherwise might involve as many as seven state agencies, such as the State Corporation Commission, the Virginia Department of Taxation, and the Virginia Employment Commission. Governor Kaine, inspired by South Carolina’s presentation at a National Governors Association meeting, gave me the assignment of creating something similar.
Upon digging in, our team estimated that implementing the South Carolina model—which not only improved the user experience but also connected the existing systems within each impacted agency—would require an investment of roughly $7 million. That estimate far exceeded our available funds. So I improvised, borrowing a page from the playboo
ks of Pitroda and Halamka. Each reimagined seemingly insurmountable problems, abandoned the conventional costly stabs at solutions, and used the latest technologies in an effort to get most of the way, if not all of the way, there. Pitroda didn’t get a phone into every house in India, but he got one into every village. Halamka didn’t consolidate all of the records from the newly merged health systems in Boston, but he created a web page that appeared fully integrated to the clinician.
In the same vein, Virginia wouldn’t attempt to fully integrate all of the records at agencies that interacted with businesses, but it could still make the experience less aggravating for entrepreneurs. After we agreed upon this more modest enterprise, we realized that we had sufficient resources to launch the service and pilot it for the first couple of years. That economical approach helped a Democratic Delegate, Brian Moran, make a successful case for codifying Business One Stop into law. Its bipartisan passage gave us a mandate to launch the initiative as quickly as possible—and, for that, we turned to an emerging technology called software as a service, which offered remote access to software applications that were already developed and running over the Internet, without needing to rebuild them within our government data centers. Such “on demand” software, part of a new generation of services that would be known as cloud computing, had been made possible by the declining cost of information processing, and the increasing speed and capacity of information transmission.3 On account of procurement hassles, it took us longer to select one of those firms, Salesforce.com, to support our Business One Stop application then it would take for our small team to build the newer, smarter forms on its service.
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