Governments Role in Promoting Adoption

1
Governments Role in Promoting Adoption
Effective Use of Health IT in the U.S.

• Adora Holstein, Patrick Litzinger,
• John Dunn, and Robert Faulkner,
• Robert Morris University

2
Study Objectives

• Review empirical studies to quantify benefits and
  costs, and identify barriers to adoption and
  effective implementation.
• Based on literature review,
• Identify market failures that justify government
  intervention in health IT.
• Evaluate appropriateness of forms of govt
  intervention implied by the Health IT provisions
  of the 2009 stimulus bill.

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3 Levels of Health IT Applications

• I. Basic electronic medical record (EMR)
  electronic data storage facility replacing
  the traditional patients file designed for
  physicians practice groups
• II. Enterprise-wide, comprehensive electronic
  health record (EHR) system - allows multiple
  healthcare providers access to patients
  electronic health information for the purpose of
  coordination of care, and collection of data for
  cost control designed for integrated network of
  HMO/PPO, VA, Medicare hospitals and providers

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3 Levels of Health IT Applications

• The most comprehensive EHR system (level 2)
• could include
• Computerized Physician Order Entry (CPOE) for
  e-prescribing, orders for diagnostic tests,
  reminders for corollary orders and diagnostic
  tests
• Picture Archiving Communication System (PACs) for
  storage and transfer of radiology tests results
• Computerized Decision Support Systems (CDSS) for
  evidence-based, best practice diagnosis
  /treatment databases that physicians can access
  to arrive at prompt, reliable, and optimal
  diagnoses/treatment options.

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3 Levels of Health IT Applications

• III. National health IT infrastructure
• EMR and EHR systems that can
• communicate with each other (interoperable)
• integrated into IT systems of public health
  agencies (Center for Disease Control and Homeland
  Security), private health plans, and Federal
  health programs

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Potential Benefits of Health IT

• Interconnected EMRs and EHR systems
• can improve health care quality by
• Allowing information exchange for rapid and
  geographically targeted response
• to public health threats
• Supporting physicians diagnosis/treatment
  decisions
• Generating quality measures needed
• to support Pay-for-Performance incentives

7
Potential Benefits of Health IT

• Health IT can lower health care costs by
  reducing
• billing and medication errors
• preventable hospitalizations/
  rehospitalizations
• duplication of health care services

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Cost-Benefit Estimates National Level

• Costs (OECD estimate)
• gt Acquisition cost 156 billion over 5 yrs.
  
• gt Operating cost 48 billion per year
  
  
• Benefit Reduction in HC cost
• gt 200300 billion per year (ONCHIT, 2008 est.)
  
  
• Yet unquantified improvements in
• patient safety, improved HC Quality

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BENEFIT-COST ESTIMATESHospital Industry

• One-time acquisition installation cost
• 75-100 billion
• 15 of capital spending
• Operating cost
• 1.7 billion /year
• 2 of operating cost
• (Source American Hospital Association
  survey
• 
  cited in 2009 NIH/NCRR study)

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Goal Progress to Date

• 2014 Each person in the U.S.
• will have an electronic health
  record.
• 2005 Office of National Coordinator of Health
  IT established to formulate a strategic plan
  and solicit inputs from
• health care providers
• software vendors
• health plans

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Progress to Date

• Sept. 2005 Certification Commission for Health
  IT (private org) formed/funded
• to develop national standards for
• software functionality
• interoperability, and
• data security patients privacy
• 2006 to 2008 over a hundred certified EHRs
• VistA and WorldVistA, Epic Systems,
  NextGen,
• NOVO, AssistMed and ITelagen

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Progress to Date Low Adoption Rates

• EXTENT OF ADOPTION
• 4 of Physicians fully functional EHR
• (July 2008 estimate of adoption - NEJM
  article)
• 25-35 of Hospitals using or in process
• of rolling out EHR and CPOE systems
• (David Brailer, ONCHIT Director,
  2004-2006)

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2009 Continuing Push for Health IT

• Obama administrations stimulus bill appropriated
  19 billion to
• provide loans to purchase IT software
• technical assistance to implement
• financial incentives for effective use
• of health IT system

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Benefit-Cost Evidence
Early Adopters

• Veterans Administration (Hill, 2007)
• Exceeded QL standards in 14 out of 15
• hospital assurance areas due to adoption
  of VISTA system.
• VA hospitals in other cities/states retrieved
  health records for nearly 40,000 Katrina
  vets/refugees when VA Medical Center in Gulfport,
  MS was destroyed

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Cost-Benefit Evidence

• Net benefit of full EMR implementation
• gt86,400/provider in 2003
• 15 increased reimbursements
• through full documentation
• of in-office procedures

• Cost Reductions
• 33 drug costs
• 17 radiology use
• 15 billing errors
• 28 chart pulling/
• refiling
• (Wang et al, 2003)

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Benefit-Cost Evidence

• Prompts (alerts) generated by Computerized
  Decision Support System (CDSS) resulted in
• 5.8 increase in Pap tests
• 18.3 increase in flu vaccinations
• improvement in drug dosing,
• preventive care, diagnosis
• reported by 2 of 3 adopters
• studied (Simon et al, 2005)

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Benefit-Cost Evidence

• Combination of CDSS and CPOE (Computerized
  Physician Order Entry)
• reduced medication errors
• improved adherence to medication
• ordering guidelines
• in 9 of 12 studies
• (Simon et al, 2005)

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Use of HIT for P4P Program

• Med-Vantage successfully completed its Outcomes
  Exchange Program at BCBSMA in 2008 to capture
  electronic outcomes data directly.
• High utilization More than 500 PCPs
  completed electronic submissions, 60 gtexpected
• Low abandonment rate Less than 3
  gave up
• BCBSMA will use Outcomes Exchange program for all
  PCPs in their Primary Care Physician Incentive
  Program (PCPIP), a pay-for-performance program.

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IMPLEMENTATION PROBLEMS

• Success stories are encouraging, but
• they fall far shortin the aggregate,
• of what is needed to support
• the IOMs vision of quality health care
• Source Jan09 Report of committee of academic
  and industry experts to National Research
  Council Report

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Reasons for Low Adoption Diffusion Rates of
Health IT

• I. Market Failures Market Power, Economies of
  scale, Positive Externalities, Network Effects
• II. Implementation Problems
• Inadequate supply of health care
• providers with HIT knowhow
• or experience
• Disruption of work-flow
• Privacy concerns among patients

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Market Failures Market Power

• (2) Low Incentive to Cut Costs
• or Improve Quality
• rural hospitals (lack of competition)
• high reimbursement rates
• high share of Medicare patients
• PPO hospitals
• non-pediatric hospitals
• reimbursement not based on quality/
• performance

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Market Failures

• (1) Economies of Scale
• Cost of software, installation and implementation
  gtbenefits for
• small practices (1-4 physicians)
• smaller, independent (non-network)
• hospitals
• (2) Physicians do not internalize all the
  benefits (cost reductions accrue to health plan
  physicians not paid based on performance or
  quality of services)

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Market Failures Externality Network Effects

• Positive Externality Social gt Private Benefit
• Positive Network Effects the more health care
  providers are integrated into National Health IT
  infrastructure the greater the social benefits
• Improved surveillance of bioterrorism, food
  poisoning, epidemics
• Collecting/sharing of evidence-based data on
  Best Treatment Practices
• Use of HIT for Pay-for-Performance reimbursement
  scheme in Medicare, Medicaid, SCHIP will health
  care premium and tax burden
• regional

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External Benefit of More Affordable Health
Insurance

• Reduction in the countrys health care cost can
  potentially make health insurance more affordable
• The more people are insured the less is the
  Adverse Selection Problem
• high of uninsured ? high preventable
  hospitalizations? hospitals raise charges to
  recoup costs of uninsured ? increase in premium
  /cost share for the insured? low-risk people
  drop out ? average risk increases ? premium/cost
  share increases ? more uninsured? upward spiral

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IMPLEMENTATION PROBLEMS

• Sharing data across platforms-interoperability
• Upgrading/Integrating new features
• Short on adoption of CDSS that would integrate
  lab tests, radiology results, patients EMR into
  a database and create a virtual patient to help
  guide treatment decisions.
• Used mainly to comply with regulations
• or defend against lawsuits
• Valuable time and energy is spent managing data
  as opposed to understanding the patient
• Jan09 Report to
  National Research Council

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GOVERNMENTS ROLE

• 2009 STIMULUS BILL 19 billion over 5-years
• 2B ONCHIT review Federal HIT Policy, Strategic
  Plan, Certification Standards, RD, acquisition
  of technology for national HIT infrastructure
• Policy for HIT adoption and use
• Mandatory for Federal health programs
• (Medicare, Medicaid, SCHIP VA user)
• Voluntary for Private Sector

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Grants to States and Indian Tribes

• 1) Plan and implement statewide EHR diffusion
• Required Match by States
• 10 or more of Fed grant in 2011
• 1/7 or more in 2012
• 1/3 or more in 2013
• 2) Loans to HC providers to buy/ improve HIT
• Must agree to submit reports on HC QL measures
• Must submit plan on how to fund operating costs

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State Grants

• 3) Incentives for Early Adoption
• Effective Use by Hospitals
• Physicians under Federal Health
• Programs (FHPs)
• Effective Use e-prescribing, billing with
  standardized DRG codes, submitting reports on
  AHRQ quality indicators, evidence of coordinating
  care with other providers, etc.

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3) contd. Incentive Payments

• FHP hospitals
• base of 2M
• 200 per discharge
• X FHP share of patients
• Incentives only
• until 2015
• Penalties on nonusers from 2016

• FHP Physicians
• 2011 15,000
• 2012 12,000
• 2013 8,000
• 2014 4,000
• 2015 2,000
• Since 1/ 1/09 2 Medicare reimbursement
• for e-prescribing

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State Grants

• 4) Increase supply of HIT-Health Care
  Professionals 50 State subsidy to academic
  institutions for integrating multidisciplinary
  health IT courses into Med/Nursing Schools,
  Allied Health curricula
• 5) Technical Assistance through Regional
  Extension Centers (nonprofits with 50 State
  subsidy) Selection of certified software
• Dissemination of best practices for
  implementation, upgrade, ongoing maintenance, and
  effective use of HIT

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Observations/Issues

• Financial Incentives not differentiated as to
  provide higher amount to
• providers in rural locations
• independent hospital or non- members of
  hospital system
• Providers in rural locations, small practices
  independent hospitals could lease state-owned HIT
  facility and share technical support staff

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Policy Considerations

• 1. Mandate Public Reporting by all hospitals of
  health performance quality indicators by chronic
  disease and age group
• 2. Include capability to collect and report
  health performance quality indicators in
  certification standards for hospital health IT

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Policy Considerations, contd.

• 3. Mandate participation by all providers
  in reporting predetermined symptoms
  to CDC and Homeland Security
• 4. Mandate use of Pay for Performance and public
  reporting of annual health care cost per
  beneficiary by all providers under Federal Health
  Programs to track national health cost
  reductions over time

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Policy Considerations, contd.

• 5. Data Security and Privacy Concerns-
• In the absence of a single-payer system in
  this country or a law that prevents private
  health plans from denying insurance coverage due
  to pre-existing condition or genetic
  susceptibility, concern about the privacy of
  medical records is understandable.
• Clear definition of who can access different
  types of patients health information remains to
  be addressed

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Conclusions

• Efficient use of taxpayers money requires
  focusing on the goal of developing a national
  network of interoperable health IT systems that
  can generate data for three target goals
• reducing public health threats
• public reporting of standardized quality measures
  of health care services
• creation of a database of evidence-based best
  practice health care services

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Conclusions

• Loans for acquisition and installation, and
  financial incentives for effective use
  of health IT must be limited only to
  those who would not otherwise find it worthwhile
  to do so (e.g. small physician practices,
  independent hospitals, providers in rural
  locations)