Advancing a Short Circuit to Avoid

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Advancing a Short Circuit to Avoid Health IT
Investment Backlash Stephen T. Parente,
Ph.D. Associate Dean and Professor, Finance,
University of Minnesota Director, Medical
Industry Leadership Institute (MILI) Governing
Chair, Health Care Cost Institute Principal, HSI
Network LLC The Morning Consult LLC December
2, 2014
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Agenda

• The Road to the Current Health IT initiative
• Favorite Movies to support Health IT
• The Fable of the Trojan Rabbit EMR
• Parallel Universes Flux Capacitors
• Cheaper than Bribery Retool current
  infrastructure
• How Real Time Health IT may affect care
  insurance
• Short List of Pragmatic Health IT Policy
  Prescriptions

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The Road to ARRA Funded Health IT - 1

• 1991 HHS Secretary Sullivan proposes Health IT
  infrastructure improvements.
• 1993 Health Security Act includes provisions for
  modernized Health IT infrastructure TBD
• 1996 HIPAA Kennedy-Kassenbaum mandates health
  insurance standard and advocates for electronic
  medical record standard by next decade
• 1998 David Brailer, PhD, MD starts Care Science,
  Inc. and proposes health IT data
  interoperability between medical practices
  using financial services firms as paradigm.

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The Road to ARRA Funded Health IT - 2

• 1999 IOMs Too Err is Human makes Patient
  Health Safety the policy reason for Health IT
  advancement
• One 747-400 crashes full with no survivors for
  225 days.
• 2001 IOMs Crossing the Quality Chasm Health
  IT is required for structural change.
• 2004 Office of National Coordinator formed.
  David Brailer chosen as first Coordinator. 50
  million committed
• 2007 First AHRQ Health IT Economics R01 funded
• 2008 First Health IT Economics RWJ study funded
• 2009 HITECH and 34billion committed.

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Six Movie for Touchstones for Health IT
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What if No One Wants a Trojan Rabbit?

• Sir Bedivere the Wise Now once we have gotten
  all the physicians to buy a ARRA-financed Dell
  computers from Wal Mart for an EMR/EHR install,
  we can distribute the software to them to place
  more data entry onto their existing workflow and
  then pay them less when we use the Meaningful Use
  criteria to tell them they are under-performing
  in their new medical home or Accountable Care
  Organization CMS Pilot.

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Spinal Tap - This Goes to 11
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Some Napkin Calculations

• Assume 34 billion ARRA HIT funds distributed
  only to doctors
• 68,000 per physician
• Buy hardware software
• Offset training and indirect cost learning
  expense
• Compared to cost of malpractice premiums
• In 2002 in Dade County, FL (granted higher then
  ave.)
• 56,153 (internal medicine)
• 174,268 (general surgery)
• 201,376 (OB/GYN)
• Bonus from HIT!!! EMR produces terabytes of
  discoverable data for medical malpractice.

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Lets Rev Up the Flux CapacitorWhen the
Medicare Debt Hits 88 trillion youre going to
see some seriousdebt reduction commissions
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Parallel Universe Number One

• Veteran Administration (VistA) System
• Started 25 years ago
• Has received 8 billion
• Links 153 hospitals
• Links 768 outpatient clinics pharmacy
• (near) real-time access
• Add-ins Indian Health Service, DOD military
  hospitals

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Parallel Universe Number Two

• Financial Services industry
• Started 25 years ago too
• ATM transfers was key
• Electronic credit cards were rife with fraud by
  early 1990s
• Created fraud scoring technologies data to flag
  suspicious transactions in real-time
• Data was siloed like HIT
• Led to FOUR near-time repositories of all
  financial services data.

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Applying Financials Services Lessons to Stop
Health Care Fraud Before Payment

• Need to identify fraud and abuse and stop
  payment. This is the only way to get the savings
  from fraud abuse prevention activities at an
  industrial scale with verifiable outcomes.
• Can plug in intervention before or after payment
  by an insurer / Medicare / Medicaid. Ideally,
  you want to not pay a fraudulent claim.

• TerraMedica fraud and abuse identification and
  prevention solutions can be plugged into
  virtually any point in the healthcare value chain

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Such Technology Could Yield Dartmouth Atlas of
Medicare Fraud
Except this graph would be updated in real-time
and not sit static in top-tier journal with
living trend revealed info
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Todays World
What 30 billion better build
Congress
Main Street
Medical Technology
Federal Government
lt90 Income
Big Business
91-99 Income
Physicians
Insurers/Banks
99 Income
Courts
Hospitals
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A Few Good Men Do You Want the Truth?
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A Slow Waltz of Fear and Loathing to ACO Failure
(at national scale)

• Providers (Hospitals Docs)

• Insurers (Public Private)

• We hate FFS claims because it puts us on the
  factory floor. Just pay us for performing .
• With the ACO/medical home/EMR software you got
  us.
• What?_at_?! That is more work and you will pay
  less.
• We havent done that since the Depression, then
  you came in.
• Great. Whats that?
• Argh!! (repeat)

• We need Fee for Service (FFS) claims to make our
  systems work.
• How will we measure performing exactly?
• OK. Great. Give us that and the FFS data and we
  are good.
• Guess so. You always have an another way. Cash
  practices.
• OK. Then well pay old school.
• Fee for service

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Whats Wrong With Todays Health IT Picture? TOO
MANY SILOES!
10 of Care
25 of Care
15 of Care
15 of Care
35 of Care
Data Available to the Average Medical Provider
About a Patients Care
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Ghostbusters Cross the streams
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Short Circuit - Defined

• short circuit
• noun
• (Electronics) a faulty or accidental connection
  between two points of different potential in an
  electric circuit, bypassing the load and
  establishing a path of low resistance through
  which an excessive current can flow. It can cause
  damage to the components if the circuit is not
  protected by a fuse
• verb short-circuit
• 1. (Electronics) to develop or cause to develop a
  short circuit
• 2. (tr) to bypass (a procedure, regulation, etc.)
• 3. (tr) to hinder or frustrate (plans, etc.)
  Sometimes (for senses 1, 2) shortened to short

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Instead of Meaningful Use Bribery Tap Existing
Technology and Infrastructure for Health Reform

• 1) Get actuarially certified risk profiles for
  all insured based on existing data.
• Let people get them like a they would a credit
  report.
• Equifax and Experian are standing by and waiting
  for the go-switch.
• 2) Government and private federal exchanges
  portals.
• Take risk profiles from (1) and provide a lock
  in by Internet click.
• Target the younger population not buying coverage
  today through the web. Have brokers handle the
  rest. Gives brokers time to get a Plan B.
• 3) Where the market fails from (2), auction off
  the high risk
• Given (1) and (2), who are the vulnerable and why
• Target resources to fill the insurance gaps using
  federal and state resources.
• 4) Let the Employer-sponsored market evolve its
  not broken.

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Instead of Bribery Tap Existing Technology and
Infrastructure

• Providers

• Insurers

• Attach clinical data to billing records in return
  for prompt (lt3 day to seconds) pay for ambulatory
  care.
• Stop customizing and get your data on an ICD10
  compliant cloud.
• Walk away from ACO mutually assured destruction

• Let your systems be the conduits and record
  locators of clinical data.
• Sell/spin off or lease too data marts and sell
  retail insurance services in exchanges.
• Use coming ANSI X12 standard with ICD10 to
  harmonize all platforms

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How might this Real Time HIT operate in the ideal
world?

• Consider Anna a consumer with a diabetes.
• On January 1, 2014, she begins health coverage in
  a new health plan with Real Time HIT technology,
  an Integrated Health Card (IHC).
• The IHC web site provides a list of
  endocrinologists accepting patients in her area
  and quality scores for providers as well as those
  accepting IHC.
• Prior to the visit, the Anna logs onto a secure
  IHC web site from the health plan to verify her
  eligibility and requests her previous pharmacy
  history from a different health plan.
• When she visits the endocrinologist, the
  physicians assistant swipes the health card
  using a USB swipe card machine connected to the
  Internet.
• The physician sees on the IHC web site that the
  patient has already authorized the provider to
  review her past history. The physician reviews
  all prior drug history and proceeds to conduct an
  initial evaluation with some sense of patient
  compliance with medications for a chronic illness
  as well as prior dosing.
• During the visit, the physician orders tests for
  Glycolsolated Hemoglobin, blood sugar, and
  creatitine - records blood pressure, weight and
  height.

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Annas Story - 2

• The physicians assistant bills for an initial
  evaluation on the IHC web site which requests
  standard claims data as well as the patients
  height, weight and blood pressure
• Since the patients eligibility information is
  already known the allowed amount for the initial
  consultation is transferred directly to the
  physicians practice business account.
• The patient sees the endocrinologist four more
  times during the year and keeps recording stable
  or improving lab values.
• At the end of year, the health plan invites the
  patient to comment on quality of care she has
  received since her HbA1c scores improved. If she
  comments, she will receive either a reduction in
  her co-insurance rate or a credit to her health
  savings/reimbursement account if she is enrolled
  in a consumer directed health plan.
• Anna decides to shop for a new health plan using
  her IHC data with clinical information,
  preferences and comments, and lab values. She
  finds she can get a 15 discount from another
  plan because of her healthy habits as a diabetic
  patient. She decides to take the new plan and
  keeps her IHC.
• The only changes are the designation of her
  health plan and eligibility criteria as well as
  the plans provider panel.

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Pragmatic Health IT Policy Prescriptions - 1

• Use Medicare Fee for Service IT Platform as Proof
  of Concept of the Value of Attaching Specific and
  Limited Medical Data to Claim Transaction
• New and emboldened CMS leadership changes terms
  on claims processing contracts to require the
  following for payment
• Lab Values
• Hosting vendor and secure URL for images
• Height, weight, blood pressure, temperature (when
  available)

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Pragmatic Health IT Policy Prescriptions - 2

• Are you on Crack Professor? Scotch Maybe, But
  Consider
• Original 1966 Medicare statute wont let you CMS
  manage medical care.
• But Program Integrity (aka Waste Fraud and
  Abuse) is required to minimize inappropriate
  payments
• And the current fraud prediction analytics would
  greatly benefit from more signal from clinical
  data.
• And if clinical data crossed with administrative
  data makes you more secure for payment, you can
  enable real time transactions for payment
• Once you have real time transactions for payment,
  you have short-circuited your way to clinical
  data available on a real time basis
• And once CMS has the data this way, meaningful
  use carrots and sticks forcing providers to
  participate in the Health IT no longer become
  barriers for full health IT implementation.

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How Health Reform Fits In

• Individual mandate insurance coverage enforced by
  federal government.
• New national health identity number introduced
  and used from womb to tomb.
• National provider number from medical school to
  retirement.
• Minimum benefit standard with two flavors and
  fixed payment per person. Both have free
  prevention and coverage of generic medications
  for chronic illnesses.
• High deductible health insurance to be
  discouraged and used only as last resort
• Preferred design is similar to federal health
  employee plans
• Employers have options to provide insurance or
  pay a fine if they dont to subsidize private
  plans.
• Individuals pay community rated (region)
  premiums.
• Large federal subsidies for insurance (coming in
  2014) that will need IT to keep cost projections
  low.