SAN FRANCISCO – Two keynote speakers at the fourth annual Health 2.0 Conference yesterday – a futurist and the "godfather” of Web 2.0 – disagreed over whether innovation was happening in the healthcare industry.

While Jeff Goldsmith, author, futurist and president of Health Futures, said the industry is experiencing an innovation “drought,” O’Reilly Media founder Tim O’Reilley said innovation is coming from outside of the formal healthcare industry.

Goldsmith attributed the dearth of creativity on “management menopause" – wrong-business-model, risk-averse management that used to be run by scientists and engineers but is now overseen by lawyers and marketing people – and slow decision making. “This doesn’t get you to innovation,” he said.

He questioned whether public companies can successfully create new knowledge, saying it was easier for large firms to buy than to grow new intellectual property. The drought is most prominent in the medical imaging, medical device and enterprise clinical IT markets.

“Health IT has degraded clinical care,” he said. The industry is suffering from “core measure mania, and the solution is to tame the “documentation monster,” he said.

Interfaces today are too hard to use and can’t be connected, Goldsmith said. The health IT community must help people find the information they need effortlessly, accommodate the diversity of people and their lifestyles, and equip families with tools to manage their healthcare.

“The goal is to get to human connection,” he said.

At the same time, said O'Reilly, medicine needs to be turned into a science. The data exists, but it just needs to be used effectively to understand the customer.

Analysis is not sufficient, he said. Healthcare needs an information nervous system that reacts in real time. “The power of the real-time enterprise is absolutely critical."

Sensors, data monitoring, collective intelligence and predictive analysis are everywhere. “Healthcare must be a part of that,” O’Reilley said.

“We focus our energy on the wrong things,” he added. “We need to work on stuff that matters. We need to work on the hard problems.”

We know the right treatment in 98 percent of medicine, said O'Reilly. The two percent is art and we need systems to do the right thing. “That’s the end state of IT."