Health Information Technology: Reducing Costs and Increasing Quality

1
Health Information Technology Reducing Costs and
Increasing Quality?

• Kristin Wolgemuth Fitzgerald
• Principal
• Fitzgerald Consulting, Inc.

2
History of HIT

• IOM Report Seminal report in 1999 outlined need
  for greater quality in health care delivery.
• High Level Leadership In May of 2004, President
  Bush outlined a Health Information Technology
  Plan to assure that most Americans will have
  electronic health records within ten years.
• Broad Bipartisan Support in Congress Both the
  Senate and House have passed HIT legislation.

3
Who Cares and Why

• Health Care Industry HIT promises increased
  medical quality and efficiency as well as
  potential cost savings.
• Employers/Payers HIT is an opportunity to get
  better value for their health dollar in
  addition, it speeds the way toward quality
  reporting transparency initiatives.
• Congress HIT offers an alluring promise of
  better quality and lower costs -- irresistible.
• Federal Government HIT adoption will result in
  significant savings in the federal Medicare and
  Medicare program. Potential public health
  disasters and the threat of bioterrorism provide
  additional motivation from a public health
  standpoint.

4
Promise of HIT Quality

• Medical Errors
• One university hospital that uses bedside bar
  code technology cut medication errors by 89,
  improved ER documentation accuracy by 85 and
  reduced overall discrepancies in details by 71.
• Another Indiana hospital that built a paperless
  facility reduced medication errors by 85.

5
Promise of HIT Cost

• Cost of Medical Errors
• HHS projects that medication errors alone cost
  the healthcare system 76 billion per year
  (Yasnoff). The most common error in the
  medication use history is omitting a medication
  that is taken at home a computerized physician
  order entry system cannot detect such an error
  without linkage to a community pharmacy database.
• William Yasnoff, former Senior Advisor on the
  National Health Information Infrastructure for
  HHS posits that 20 percent of all laboratory
  tests and radiology studies are performed because
  the information is not available at the point of
  care. HHS estimates that national savings can
  reach more than 400 billion through the
  implementation of a NHIN.

6
Promise of HIT Cost

• Cost of Unnecessary and Redundant Care
• HIT will decrease unnecessary utilization of
  medical services. Three studies at Regenstrief
  Institute provided additional information to
  physicians in the process of ordering diagnostic
  tests. In all three cases, the EHR-based
  intervention decreased the number of diagnostic
  tests ordered by physicians.
• A study by Kaiser Permanente also reported
  decreases in redundant health care services. In
  the study, age adjusted rates of radiology test
  utilization decreased by 4 percent after EHR
  implementation, while national rates increased.

7
Recent Activity

• Legislative
• Administrative
• Health Care Industry
• Private Sector

8
Legislative

• The House of Representatives approved the Health
  Information Technology Promotion Act on July 27,
  2006. The legislation included safe harbors for
  Stark and Anti-Kickback laws, grant funding for
  HIT, and a study of state privacy laws.
• The House and Senate Labor-HHS-Education
  Appropriations Subcommittees reported bills for
  FY 2007 providing 148 and 113.2 million for
  HIT. FY 2007 funding levels will be determined
  this week when Congress approves a CR for FY
  2007.
• In November of 2005, the Senate approved S. 1418,
  the Wired for Health Quality Act, providing
  substantial grant funding for HIT.

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Comparison of HIT Legislation
10
Administrative

• In August, President Bush signed an Executive
  Order requiring federal agencies and contractors
  to use HIT systems and products that meet
  recognized interoperability standards.
• Also in August, HHS announced the formation of a
  fifth American Health Information Community
  (AHIC) subgroup to address issues of privacy and
  security relating to HIT.
• ONCHIT recently awarded a contract to the
  National Governors Association for the creation
  of a "State Alliance for e-Health" to examine
  questions about privacy, interoperability,
  governance, and sustainability of electronic
  information exchanges. The State Alliance will
  serve as a forum in which state-level
  consensus-based solutions can be developed to
  address key challenges to interoperable health
  information technology.

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Health Care Industry

• Many hospitals and other medical providers have
  already implemented or begun the process of
  developing HIT capabilities.
• A recent Lewin Study estimates that
  implementation of HIT is at the midpoint of a 50
  year adoption curve.

12
Private Sector

• For several years employer health care "payers"
  have worked to use their market power to push for
  improvements in quality.
• In 2000, the Business Round Table, a national
  coalition of large employers, launched the
  Leapfrog Group, an initiative founded to mobilize
  employer purchasing power to reward improvements
  in health care safety, quality and customer
  value.
• In December of 2006, several large employers
  founded the Dossia network to assist employees in
  developing lifelong PHRs.

13
Challenges/Hurdles

• Funding Thus far, implementation of HIT by the
  health industry has been slow, based on available
  funding. It does not appear that federal
  legislation will provide large-scale funding to
  assist in this effort.
• Legal Laws prevent private organizations from
  donating the hardware and software to speed
  adoption.
• Privacy State by state privacy laws create
  serious impediments to sharing or sending
  information, particularly across state lines.

14
Funding

• With a 200 Billion budget deficit, large-scale
  federal grant programs to facilitate HIT adoption
  are unlikely.
• Despite evidence that HIT lowers costs and
  increases quality, Congressional Budget Office
  analysts do not attribute savings to HIT
  adoption, further complicating potential federal
  funding efforts.

15
Legal

• Private parties are willing to invest capital to
  assist physicians and other smaller providers in
  acquiring HIT, however, federal laws prevent such
  efforts.
• Recently released HHS regulations that create new
  exceptions and safe harbors from Stark and AKB
  laws do not provide enough certainty for
  hospitals and others to move forward.

16
Privacy

• Lack of uniformity between state and federal laws
  creates confusion and provides a disincentive for
  providers in establishing a nationwide
  interoperable network.
• Privacy advocates are seeking changes to broaden
  HIPAAs scope and add a private right of action
  for privacy breaches.
• Questions about who controls medical information
  are defining many of the recent discussions on
  HIT.

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Spotlight HIPAA

• The HIPAA privacy rule was promulgated due to
  Congressional concerns about the impact on
  privacy of electronic transactions in the
  delivery of health care.
• The rule covers all individually identifiable
  health information in electronic as well as paper
  or orally transmitted format.
• Covered entities (health plans, providers and
  clearing houses) may only use and disclose
  protected health information necessary for
  treatment, payment and health care operations
  activities, as well as for public interest and
  benefit activities.
• Federal HIPAA standards are only a privacy
  "floor." Covered entities must also comply with
  other state laws.

18
Spotlight HIPAA

• Concerns have been raised that HIT necessitates
  additional privacy protections.
• Covered Entities
• Patient Control
• Penalties Private Right of Action

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Actions to Address Barriers

• In August of 2006, HHS Secretary Mike Leavitt
  announced federal regulations creating new
  exceptions to the Stark and Anti-kickback laws,
  intended to support physician adoption of
  electronic prescribing and electronic health
  records.
• Several Administration projects are working with
  states and others to address issues of
  interoperability, privacy and security and to
  develop best practices.

20
Outlook Legislative

• Widespread agreement on the importance of HIT
  suggests that progress on HIT initiatives will
  continue in 2007.
• Incoming Senate HELP Committee Chairman Ted
  Kennedy (D-MA) included HIT as one of the top
  priorities for the HELP Committee in 2007.
• Both House Senate hope to move HIT legislation,
  including potential additional privacy
  requirements.

21
Outlook Legislative

• New Ideas on the Scene
• Health Records Banking Sen. Sam Brownback
  (R-KS) and Rep. Dennis Moore (D-KS) among many
  advocating for personal health records stored in
  records banks.
• PHRs Rep. Patrick Kennedy (D-RI) has sponsored
  legislation establishing personal health records
  for consumers.

22
Outlook Administrative

• The American Health Information Community (AHIC)
  will continue to provide input and
  recommendations to HHS on how to make health
  records digital and interoperable, and assure
  that the privacy and security of those records
  are protected.
• Recent AHIC recommendations state that relevant
  AHIC Subcommittees should develop principles and
  identify best practices for privacy policies for
  consumers' PHR data that are interoperable. AHIC
  states that these recommendations should apply to
  all individuals and entities, regardless of
  whether they are covered by HIPAA.
• The National Committee on Vital and Health
  Statistics (NCVHS) is also tasked with providing
  recommendations to the Secretary on a variety of
  issues related to HIT and interoperability.
  NCVHS issued a series of recommendations in June
  of 2006 and continues to hold hearings on a
  variety of topics.

23
Outlook Health Care Industry

• The health care industry will continue adopting
  HIT as resources allow.
• Progress would be aided significantly by federal
  funding for technology acquisition and the
  industry will likely seek such funding.

24
Outlook Private Sector Payers

• Private payers will continue their efforts to
  seek quality and transparency in health care
  delivery with HIT a key factor.
• Dossia is still in the process of securing
  founders and developing the network of personal
  health records.

25
Conclusion

• HIT has already proven that it is an issue with
  prolific attention and interest.
• Regardless of federal intervention, progress to
  adopt IT in other industries suggests that HIT
  adoption will proceed in time.
• Federal legislative and administrative efforts
  will help to determine the timetable for HIT
  adoption, either speeding or slowing progress.