Meeting halfway

Those of us focused on health IT are spending a lot of time and energy on bringing the technology to where the patients are. Interoperability is crucial because patients get care in so many different places, and through Regional Extension Centers and other programs we're trying to get EHRs into the hands of small and independent practices at the far reaches of the health care delivery system, again, because that's where the patients are. Something like 80% of practices are small practices, and 90% of outpatient encounters are in those small practices.

I've been wondering recently about whether we're going through a Copernican revolution where the patients come to the IT rather than having us bring the IT to the patients. My own personal experience started my thinking on this. I used to get my care from a small practice primary care physician in Wellesley MA -- great guy, good doctor, gives 110% every day. But he didn't have an EHR (still doesn't) and it was basically my responsibility to get specialist records back to him to make sure that he had the whole picture of my care. I switched to Harvard Vanguard not only because they have an excellent EHR but because they are multi-specialty as well. When I need a specialist I no longer scour all of Boston for the best specialist -- I only look within the Harvard Vanguard system because I want to make sure that my records are kept on the same EHR. What I might be sacrificing on the quality of an individual specialist I'm more than gaining back in having all of my physicians reading from the same page (literally).

Since my Wellesley doctor couldn't solve the interoperability issue, I solved it myself by eliminating it. My wife gets her care at the Brigham, and I've increasingly seen her focus her decision-making in the same way -- she has eliminated the need for interoperability by limiting her choice of specialists to those who are on the Brigham's EHR.

Maybe this is just a family thing. But I started thinking otherwise after I heard a very interesting story yesterday on NPR and Kaiser Health News on consolidation of the health care delivery market, and in particular, the increasing share of outpatient physicians employed by hospitals. As the story reports, almost 20% of physicians work for hospitals today, but 50% of new physicians are taking jobs with hospitals. The looming prospect of Accountable Care Organizations' becoming the operational unit of health care delivery will put increasing pressure on hospitals and physicians to keep patients within their care delivery network. Changes in health plans that limit patient choice will also drive patients to stay in closed networks. All of these trends will increasingly funnel patients into health care delivery networks that also happen to be connected on IT networks.

There could certainly be many bad affects from such consolidation, such as higher oligopolistic prices, less customer choice, the demise of solo practices that are an iconic part of the American fabric, etc etc. But from a health information exchange perspective, it's only to the good if we can get more patients to meet us halfway on the road to interoperability.

MAeHC launches subsidiary

Today we're announcing the launching of MAeHC Professional Services Corporation (PSC), a for-profit, wholly owned subsidiary of the Massachusetts eHealth Collaborative. Our press release is here. PSC will provide a broad range of fee-based consulting services related to EHR deployment, health information exchange, and quality data warehousing. PSC will provide these services—including strategic planning, project management, and project execution services—to both nonprofit and for-profit clients throughout the United States who are involved in a variety of health IT activities.

Today's Boston Globe gave our launch some nice coverage (New eHealth subsidiary will fund expansion), and we greatly appreciate their interest in the story. One thing from the story that I'd like to clear up is that it suggests that we don't work with so-called "web-based" applications such as athenahealth. In fact, both MAeHC and MAeHC-PSC are vendor- and platform-agnostic, and we ourselves have deployed both web-based and client/server-based applications. And, of course, we're happy to work with athenahealth.....

Message to Congress: It takes a village to implement an EHR

Well, the health IT legislation is starting to take shape, and it's a little more sobering than the initial speculations of tens of billions of HIT dollars being unleashed on state governments in the next few months. In many ways the recent turn of events is an about-face from the early speculations. The House Appropriations and House Ways & Means Committees approaches have the following policy underpinnings:

1. Separates HIT spending from the economic stimulus
2. Focuses first on creating a framework for how to handle billions of dollars of HIT funding
3. Drives the vast majority of money (90%) through Medicare/Medicaid reimbursement channels
4. Focuses the role of state governments on areas that require local coordination, tailoring, and governance
5. Moves ONC beyond "coordinator" to actual owner of administrative infrastructure, with all of the programmatic and fiduciary responsibilities that such functions imply
6. Makes the Federal government the decision-maker on issues such as technical standards, with input from advisory committees on policy and HIT

I'll admit that I was among those who was getting a little dreamy and even woozy at the thought of billions of dollars flowing into health IT over the next year. Compared to that somewhat heady vision, the House language is surely a disappointment. Yet, like most compromises, it represents progress in certain key areas.

Things I like about the approach are:

• Balance of state-led and federally-led approaches. I like the idea of a network of regional HIT Extension Centers that work directly with ONC rather than through states. State governments have a role as well, but mostly in the areas of coordination, galvanizing health information exchange, promoting quality improvement and public health, and making sure that under-served communities don't get left behind. I like this approach because EHR adoption is not nearly as state- or local-specific as is HIE, which really does need to be tailored to local markets and conditions. Thus, it makes sense to let the Feds drive EHR adoption through regional organizations, and have states focus on state- and local-level HIE concerns.
• Incentives for doing stuff, not just for buying stuff. Focus on incentives that require participants to use the technology, rather than just having systems that are "certified". I like that the incentives are tied to quality reporting and health information exchange because I don't believe that inter-operability standards are enforceable without having activing monitoring by certified HIEs, public health entities, and quality data aggregation entities.
• Resources and authority to ONC to get on with it. Gives the clear message that the federal government has to take a stand on key policy decisions in order for us to move forward. This is not ideal, particularly for standards in a fast-moving, decentralized technology space, but it's not clear to me that other approaches are obviously better. The Federal government needs to set standards for Medicare and Medicaid, so that much makes sense regardless of how standards get determined generally.

Things that I think would improve the House language are:

• Develop a programmatic overlay to the EHR implementations. Inter-operability and robust reporting don't just happen, they get done. And they won't get done if there isn't an implementation program behind the effort, because the systems are too complicated for individual physicians to do this on their own. There's also too much coordination required with other entities, which can only be coordinated by a formalized program. Therefore, we should cement the link between EHR incentives and the HIT Extension Centers. EHR implementations should be executed through or certified by the HIT Extension Centers, otherwise we'll end up with a lot of really bad retail implementations, just like we have today, because we'll only find out about them ex post (ie, after they've failed and can't deliver on their quality and HIE requirements).
• More HIT funding should be made available before 2011. Not necessarily the whole $18B, but there are some parts of the country that are ready to meet the new requirements right away, and we should make funds available to them to build on their momentum while the overall program catches up.
• We should try to go "wholesale" rather than "retail". The current approach to the incentives is to go "retail", meaning physician-by-physician, but there's much more value to be had by going "wholesale", meaning market-by-market. Retail implementations will only mimic, or worse, amplify, the existing entropy of care delivery. Putting a programmatic overlay to "communities" or "markets", such as New York and Massachusetts are doing, creates more effective and efficient vehicles for getting providers to work together, which they do too little of today, and ease the path for them to focus on how to best use technology to improve care across the system, not just in their individual offices.

So, concrete ways to accomplish these goals might be:

• Designate a couple of HIT Extension Centers right away
• Formalize the role of HIT Extension Centers so we get more proactive interventions in government-funded EHR implementations to get better assurance that they get done right the first time, rather than trying to rescue them after they've failed
• Provide additional funding to these HIT Extension Centers for them to provide implementation services to physicians up-front
• Accelerate Medicare and Medicaid incentives to the markets that these HIT Extension Centers cover
• Allow aggregation of incentives by community according to a formula that allows providers who share the same patients to implement in a coordinated way, and perhaps provide a "sweetener" to those who organize themselves this way

One thing we should recognize is that by putting most of this into Medicare/Medicaid incentives, and by delaying most of the money until 2011, HIT could be on a collision course with health care reform. In some ways that's good, because we shouldn't be using technology to try to solve the intractable problems of the current system, we should use technology to enable and enhance a better system. Yet, the reality is that we could get to a point where we push off the 2011 date to align it with health care reform. That would get us even further away from the President-elect's goal of ubiquitious EHRs by 2014.

Ready for prime-time

The New Year’s Day issue of the Boston Globe had an article discussing some objections by people concerned that HIT systems aren’t ready for the large-scale investments being advanced as part of the economic stimulus package (“Letter highlights hurdles in digitizing health records”). The critics advocate investing at a slower pace and focusing investments not on purchasing current technologies but on creating new technologies to fix perceived shortcomings in current systems.

I understand the concerns – after all, we’re talking about spending billions of hard-earned taxpayer dollars, and as a citizen and former federal government employee, I see that as a sacred trust. From what I’ve seen though, these concerns are either misplaced or readily addressable and therefore don’t warrant delaying large-scale investment.

It is certainly true that current EHR systems are complicated, cumbersome, and barely inter-operable. They are that way for a reason: US health care delivery is complicated, cumbersome, and barely inter-operable.

The supply-side of health care is unbelievably fragmented. According to the AMA, there are about 670K practicing physicians in the US. Roughly 150K of them are hospital-based and practice in 7500 hospitals, two-thirds of which are community hospitals. The other 520K physicians work on the ambulatory side and, according to the CDC, they are spread across 170K office-based practices nationwide, 80% of which are solo or 2-physician practices. This is a cottage industry where the individual businesses face little market pressure to standardize around anything except billing codes. Not surprisingly, when they purchase technology, they don’t demand standardization either, and indeed, they demand the opposite, namely, that the technology be able to adapt to their non-standardized and idiosyncratic workflows and clinical decision-making processes.

This fragmentation among so many small and independent providers has three negative effects on health care delivery that federal HIT funding can help resolve. First, care is difficult to coordinate. Second, basic reporting for public health and performance measurement does not exist. And third, clinical documentation and data standards are impossible to promulgate and enforce. Federal HIT funding can help overcome these obstacles by giving all users the tools to document and communicate key information according to national standards, and requiring that they do so as a standard of care.

Getting back to the main point then, the critics have it all wrong. We shouldn’t be waiting for better technology, because technology is an ever-moving target driven by technical and scientific improvement and user demand. If we had insisted that Tim Berners-Lee anticipate live streaming of HD video from the likes of YouTube and Netflix, we’d still be waiting for the World Wide Web. Nor should we be spending a lot on “innovation” or “simpler, easier” technologies, because we’ll almost assuredly get that wrong. Governmentally-directed innovation spending would never have come up with Google, Twitter, Facebook, YouTube, Hulu, Yelp, Sermo, and craigslist, and we’d be much worse off for it.

So, government funding is needed, but spent the wrong way it can stifle innovation and just plain waste a lot of money. What we need to do is first recognize that this will take a long time to get right, it’s wrong to try to architect it perfectly in advance, and it will only become mature when more users engage in using technology to accomplish real business needs. With such a decentralized user base, fast-moving technology, and a dynamic, complicated field such as medicine, we should specify as little as we can get away with technologically but create a flexible architecture that can efficiently accommodate changes into the future. New York is working on just such a model.

EHR technology has gotten as far as it can in a thin market – what’s needed now is more bottom-up pressure from more users, and more top-down pressure from policy-makers and businesses to align these users. Federal dollars can facilitate this by creating a large user base and imposing a policy and programmatic overlay to what would otherwise be a funding free-for-all.

My personal recommendations for an economic stimulus funding program would be:

• Establish goals focused not on technology, but on what we want people to do with technology, such as coordination of care, adherance to guidelines, reduction of medical errors, and improvement of population health
• Each state should designate an HIE entity (or entities) to broker and enforce statewide health data exchange, and make Medicare and Medicaid data available to authorized users through this HIE infrastructure
• Require that all clinical entities use the state-designated HIEs to provide patient-specific post-visit reports to each other
• Require that all clinical entities use the state-designated HIEs to regularly report public health and quality/safety data to state-designated public health and quality data entities
• Require that all clinical entities use the state-designated HIEs to populate patient health records (PHRs)
• 90% of funding be earmarked for EHRs, and 10% for state-designated HIEs, quality data warehouses, and public health reporting infrastructure
• Require that state-designated HIE, public health, and quality data entities monitor and enforce health data exchange according to existing HITSP standards for data exchange and existing quality and safety measurement standards established by AQA, NQF, HITSP, and others, and penalize states that don’t do this

Is it scary to spend so much taxpayer money so fast? You betcha. But that’s true for every part of the economic stimulus package, not just health care. The need is great, however, so we need to roll up our sleeves and put in place the right vision, leadership, and management. The health IT infrastructure and experience base is perfectly poised to make excellent use of such funds to accomplish the goals of immediate economic stimulus and improvement in health care. By outfitting physicians with modern tools, and requiring that they use them to achieve societal goals, our federal stimulus dollars will provide returns to the country for years to come.

Coming Up for Air

Well, it’s been a long time since I’ve been able to write. As the MAeHC pilot projects enter a transition phase, so too does the MAeHC organization itself. I’ll give a brief summary below of our main areas of activity and, in the coming weeks, I’ll provide more details on some of these activity areas.

We have been focused on three areas over the past few months.

First, and foremost, continuing the work in our pilot projects in Brockton, Newburyport, and North Adams. Almost all of the 500+ clinicians participating in the pilot project are now live on their electronic health records. We’ve brought them live on four systems (in descending order of number of clinicians): eClinicalWorks, Allscripts Touchworks, NextGen, and GE Centricity. Two communities – North Adams and Newburyport – are now live on their health information exchanges as well. Patient participation in the HIEs has been quite high in both communities so far, with over 90% of patients “opting-in” to the data-sharing networks. Finally, the MAeHC Quality Data Center is now in live testing as well. The QDC – which was created with technical assistance from the Massachusetts Health Quality Partners and CSC Corporation – extracts clinical data from the HIEs and calculates physician-level performance measures which are shared back with the participating physicians via a private website.

The second area that MAeHC has become increasingly active in is fee-based activities. The MAeHC Board of Directors has approved creating a subsidiary to provide fee-based professional services, and we are now in the process of hammering out the details of this new company. We have been engaged by a variety of customers already, consistent with our non-profit mission, but as the scale and scope of these activities expands, we believe that they will be best housed in a separate company dedicated to commercial clients. Among the clients that we are honored to already be serving are Beth Israel Deaconness Medical Center, the New York eHealth Collaborative, and the Massachusetts Coalition for Primary Care Reform.

Our third area of focus has been on preparing for the statewide HIT program that became law in August 2008 with passage the Health Care Cost Control Act (also known as Chapter 305). The state has allocated $25M to an HIT fund that will be administered by the newly created Massachusetts eHealth Institute. We hope to be among the organizations chosen to implement the statewide program once the state has defined the program and finalized its plans for allocating the funds.

As I mentioned earlier, in the coming weeks I will describe in greater detail our pilot project activities and fee-based service plans. I wish there was more detail to report on the Chapter 305 program, but we are among the many other organizations in the Commonwealth waiting for the state to unveil details of its plan for the program.

Thank You, Boston Globe

Today's Boston Globe had an editorial about MAeHC. Among the many things the article says is:

The state budget agreement reached this week includes $25 million to advance the creation of these systems. The budget doesn't specify who should get the money, but based on its success so far, the eHealth Collaborative deserves state support to identify other communities that would be willing to implement a health records system.

We greatly appreciate the Globe's recognition of the efforts of the many many people involved in the MAeHC pilot projects!

The article also had a couple of points that need clarification. First, the article states that we are "just starting" our Brockton pilot project, and it also states that "there will still be much work to be done in the three communities" once the pilot funding ends at the end of this year.

In fact, all three pilot projects began at the same time and Brockton is just taking longer because it is much bigger than the other two communities. Even so, all of the roughly 300 physicians in the Brockton project have their EHRs in place, and we have already started hooking them together, which should be completed well before the end of the summer.

At that point, all three communities will have reached a significant milestone that no other communities in the country will have achieved: they will be wired for healthcare. All of the physicians in the community will have EHRs, and all will be connected in a health information exchange that allows patients to enable medical record sharing among their providers. North Adams and Newburyport are already the only communities in the country that can boast such capability, and by the end of the summer Brockton will have achieved this elite status as well.

Don't get me wrong, there will still be more work to do in these three communities, but where is that not true?. In 1942 Joseph Schumpeter made popular the term creative destruction, which accurately describes every part of our economy except health care delivery. And even though information technology was embraced by other parts of economy many years ago, they're still discovering ways in which IT can improve the quality and efficiency of the products and services that they provide.

When the US military launched the first Global Positioning Satellite in 1978, it's goals were limited and clear: Improve the ability of the military to coordinate the movement of weapons, troops, equipment, and supplies. Now, thirty years later, GPS is being used in military and commercial ways that it's designers could never have imagined, and each year seems to bring even more uses. Similarly, when the first commercial cellular telephone was launched in Japan in 1978, they probably had only the smallest inkling of the kinds of innovation that would still be taking place thirty years later. If anything, even after three decades of use, the pace of change wrought by these technologies is not slowing, it's getting ever-faster. In 1978, the year that GPS and commercial cellphones were born, Microsoft was 3 years old and had 2 now famous employees, and the founders of Google and Yahoo were barely in elementary school.

Like GPS and cell phones thirty years ago, connecting up an entire health care community is a clear, discrete, "step-up" that provides tools that didn't exist before to change the way things are done. And like those technologies, providing the tools is only the first step, because they're only tools -- the creative energies of the people who use those tools will spur innovations in these three communities over the next 10, 20, and 30 years that we can't even hope to understand through the foggy lenses of today. That type of "creative destruction" isn't something that any of us can or should want to architect in a year or two or three.

The vision for a state funded program should be to get all communities in Massachusetts to the place that Brockton, Newburyport, and North Adams will be by the end of this summer. The goal should be to use state funds judiciously to do just enough to get this important part of our economy over the technological hurdle that is absolutely stifling innovation in health care delivery today. After that, step aside as fast as possible and let the market harness technology and human creativity in ways that only the market can do.

I can guarentee that thirty years from now the patients and medical professionals in Brockton, Newburyport, and North Adams will still be improving on the systems that were put in place by MAeHC in 2008. But they'll be able to look back and say that 2008 was when they got the tools to think about health care delivery in ways that they couldn't before. If you ask me, that will be the true measure of our success......

News flash: Higher Quality Care May Actually Cost More Money

There was a Dutch study published last week showing that providing better quality care, in this case to smokers and obese patients, raises the cost of health care because it prolongs the lives of patients (here's the Boston Globe article and here's the actual study). Prolonging lives means they need care for longer periods of time and they die of diseases that are more expensive to treat -- unlike lung cancer, for example, for which there is no treatment, which makes it a relatively cost-effective way to die; better still, using this calculus, would be getting hit by a Mack truck. But I digress....

Anyway, the study has been actively blogged on the WSJ health blog already, but one angle I haven't seen discussed is the impact of this on health insurance dynamics. A not uncommon refrain among commercial health insurers is that their investments in quality improvement are reaped mostly by Medicare, because the benefits of healthier enrollees don't really pay off until those enrollees are older and mostly off commercial insurance. The Dutch study suggests that for certain conditions the opposite is true -- higher quality care may increase costs to Medicare (and Social Security) by increasing the fraction of people who live to draw on Medicare (and Social Security) benefits.

States like Pennsylvania and Vermont have adopted the chronic care model as state policy, not only to promote better quality lives for their citizens, but also on the assumption that there are cost savings down the road. The National Quality Measures Clearinghouse has literally thousands of quality measures, and the drumbeat of quality improvement is beating louder and louder every day. Yet, the Dutch study and work by the Partnership for Prevention suggest that the economics for universally applied quality improvement just aren't there.

A real moral dilemma for our society could come with the realization that the Dutch findings may be more generally true -- it may actually cost more to get higher quality care. David Cutler has argued that we should spend more on health care because the marginal returns are so high, and measured in lives saved and pain avoided, that is certainly true. But we live in a reimbursement system where costs are vigorously monetized but benefits aren't, and literally no one has an incentive to put in more money for anything. Funding longer lives and less pain for all will be much easier said than done.

"Strap on the feed bag"

In the constant battle to control health care costs, there has been lots of experimentation with controlling the supply-side (eg, certificates of need, cutting back reimbursement levels to providers, etc) and the demand-side (eg, coverage limits, tiering, co-pays, co-insurance, etc). Health care costs continue to rise rapidly, but that doesn't mean that these methods have failed -- we don't know what cost growth would have been like without them.

There's been a lot of emphasis recently on digging further into the nature of demand -- rather than just cutting back patient choice, why not cut back on patient need by getting patients to be healthier in the first place. Employers pressure health insurers to curb cost growth, but the insurers argue that employers don't do enough to get employees to be healthy in the first place. Physicians and hospitals, pressured to improve quality and efficiency, complain that patient adherance is a large barrier to improved care -- if patients don't take simple measures to be healthy, and/or refuse to follow prescribed treatments, what is a provider to do?

This seems like a win-win-win; people shouldn't need that much encouragement to become healthier, and the results will be beneficial to all. Well, a large employer that is also a very savvy health care business has been experimenting with direct patient incentives to encourage healthier lifestyles, and they're finding that it's not quite as easy as it sounds (see Employers experiment with tough get-healthy regimes).

Clarian Health Partners of Indianapolis is an integrated delivery network that employees 13,000 people. They tried to segment their employee risk pool by setting higher premiums for employees who don't attempt to improve their health in certain ways, such as smoking, obesity, and high cholestorol. We as a society already allow this type of risk segmentation in other areas of insurance, and indeed, it's the very basis of preventing moral hazard incentives that undermine the efficiency gains of insurance to begin with! For example, bad drivers, and those assumed to be bad drivers (like teenagers), pay a lot more for insurance. Seems like a slam dunk, right?

Clarian ran into a buzz-saw and never rolled out the program. Some critics saw it as an intrusion of privacy -- an employer shouldn't be allowed to dictate what employees do outside of work. Others saw it as discrimination -- an employer shouldn't be able to single out certain groups of people based on health history or habits.

One bizarre quote in the article points out how weird this conversation can get. Commenting on why his company doesn't raise premiums for overweight employees, an auto-parts supplier stated that:

"We're a little bit reluctant to go down that path. It's not really the fear of litigation as much as the lack of evidence that it works," he said. "I look at my own reaction and if I were going to be penalized for my weight I'd say, 'If for an extra $15 a month I can strap the feed bag on I'm going to do that and I'm going to make sure I get my money's worth.'"

I can't think of a better summary of the depth of the problems that we face.

P4P may finally be growing up

I've heard anecdotally that health plans are retrenching on so-called pay-for-performance (P4P) reiumbursement programs because they're not getting the return that they hoped to get. There seems to be some evidence of this in the data as well -- projections from 18 months ago suggested gushing growth (see The state of P4P programs), but the trend more recently seems to be on refinement rather than expansion (see It's everywhere but measuring effectiveness of P4P is challenging). There seems to be a trend out there away from pure P4P and toward mixed reimbursement models that blend in capitation with performance-based payment, exemplified by two new approaches.

First is the so-called "medical home" idea, which has been articulated and promoted by a variety of medical specialty socieities (for example, see Medical home could rescusitate primary care and Joint Principles of a Patient-Centered Medical Home Released by Organizations Representing More Than 300,000 Physicians). While a lot of the focus of the medical professionals has been on bolstering primary care, the business community has recently jumped on the bandwagon because of the financial benefits of the approach. Bridges to Excellence estimates that the medical home approach yields savings of $250-$300 per patient per year by reducing unnecessary specialist and emergency room visits and preventing acute medical episodes that result from poor preventative care (see Group Offers Doctors Bonuses for Better Care). Since the average primary care physician cares for roughly 2000 patients, this can add up to real money real fast.

The second approach is in the creation of alternative payment models such as that announced by Blue Cross Blue Shield of Massachusetts earlier this year (see A New and Different Way to Pay for Care). This approach has had some early bumps, but it's still early (see Blue Cross faces uphill climb over flat-sum payments).

The best description I've seen of the benefits of moving back toward some type of capitation model is in Benjamin Brewer's column in yesterday's Wall Street Journal (Finding a Medical Home May Be Just What the Doctor Ordered). Dr. Brewer gives an excellent ground-level view of what it means to pay physicians to manage patients instead of acute episodes, and why such an approach might really offer benefits to patients and physicians alike.

MA Health Policy Forum

The Massachusetts Health Policy Forum has written a pretty comprehensive brief on the various health IT activities going on in Massachusetts. It was written to support an upcoming conference. To download the brief, go to the link at the bottom of the page.

Wal-Mart's epiphany

So Wal-Mart is expanding health coverage to more of it's employees -- at least according to a story in today's New York Times. What caught my attention was the description of how they've shifted their view on health benefits -- what were once seen as pure costs are now seen as investments in the work force to improve "presenteeism" and absenteeism and thereby increase overall productivity.

Personally, I'd like to see us get rid of employer-sponsored health insurance, but I recognize that one positive aspect of it is that employers can instill market principles into health care delivery by acting as "smart buyers" of health care services on behalf of their employees. The fact that it's taken Wal-Mart, of all companies, this long to come to the realization that investing in one of their key factors of production just might improve productivity suggests that this "smart buyer" role may not be as compelling as we'd like to think. Maybe Wal-Mart's epiphany will accelerate this type of thinking among other employers.

Now, if we could just get Wal-Mart to invest in technology upgrades for their health care delivery supply chain, we might make better progress on the health IT front.....

Yet another plug I should have made.....

OK, so I'm still catching up. There's another shout-out that I keep meaning to make. The Partnership for Healthcare Excellence launched their website a couple of weeks ago. If you live in Massachusetts and haven't heard of them yet, you will soon.

Every Health Economics 101 class begins with a description of the basic tenets of competitive markets (many suppliers and demanders, homogeneity of products and services, full information, yada yada yada). The class then goes on to show how the health care delivery sector violates every tenet.

Health care markets deviate from the theoretical definition in a few ways. For example, consumers don't have enough incentive to worry about value-for-money (because insurance shields them from transaction prices), and they depend on their suppliers (ie, medical professionals) to tell them what services they need. Some of this deviation is structural -- the health care market is never going to operate like the auto or cereal industries because the stakes are too high and the services are too complex.

There is now a push for more tranparency in health care, which is edging the entire industry toward performance measurement and public reporting. The Massachusetts Health Quality Partners is one of the country's leading efforts in this area, the Massachusetts Quality and Cost Council is gearing up for more public reporting, and a bunch of states are already publishing reports on quality measures, hospital infection rates, costs, and medical errors (among them are Vermont, Pennsylvania, Florida, Missouri, Indiana, New Hampshire, and Massachusetts).

The real question, though, is whether consumers will make use of this information. Some believe that consumers will never act on such information, so it's a waste of time and effort. Others agree that consumers will never act on such information, but if their medical professionals will or their employers will, it's still worthwhile. Regardless, the hope is that public reporting will affect consumers in some way, whether directly or indirectly.

Employers can act as smart purchasers on behalf of patients to a certain extent, by locking in financial incentives to behave in certain ways and by demanding more from their health insurers or providers. The Group Insurance Commission tiers physicians and hospitals, for example, and structures financial incentives accordingly. Putting boundaries around what patients can demand will only get us so far, however.

What we'd all like to see is patients individually acting both as better consumers of their health care dollars AND better users of the health care system. Yet, it's hard for them to do this on their own -- our health care delivery system is too complex, and they've already become accustomed to playing a certain role in the physician-patient relationship. Actionable education is the key to bringing about this change, and that's where the Partnership for Healthcare Excellence comes in. Check out their site -- you might just learn something.....

Congratulations to our local health plans!

The votes are in and once again Massachusetts health plans are the best in the nation, capturing three of the top four slots in the national "America's Best Health Plans" rankings (see Harvard Pilgrim ranked top health plan in nation). Harvard Pilgrim, Tufts Health Plan, and Blue Cross Blue Shield of Massachusetts were rated top performers in clinical performance and customer satisfaction by the National Committee for Quality Assurance (NCQA).

We often hear about how blessed we are to live in a state with such world-class medical institutions -- and it's true, we are. What gets less attention, however, is that we in the Commonwealth have such terrific health plans -- non-profit, well-managed, focused on our state, and community-minded.

Health insurers get a lot of criticism -- and not all of it undeserved (my parents are physicians -- believe me, I've heard it all). Yet, in our overly complicated "non-system" that we call a health care system, health insurers are for many patients -- and especially the sickest ones -- the glue that holds the whole thing together. So, let's give some credit where credit's due and praise our local health plans who have shown themselves to be world-class in their own right.

Okay, I'm finished with today's blog and now it's time to get back to running the business.....Next year's premiums are going up by how much?!

Looking at EHR adoption growth from the supply-side

One of MAeHC's EHR vendors, eClinicalWorks, has made Inc. magazine's Top 500 Fastest Growing Private Companies in America. eCW has won plenty of accolades in health industry rankings, but this is the first time that I've seen an EHR company rank highly in national comparisons across all industrial sectors; with over 2500% growth, they ranked #34 overall, #4 among all software companies, and #1 among Massachusetts companies. Congratulations to Girish Kumar, Mahesh Navani, Dr. Rajesh Dharampuria, and the entire eCW team.

It made me wonder how much of this is a market phenomenon vs an individual company story. If EHR use is substantially growing, supply would have to be increasing through some combination of new entrants and substantial growth for existing companies. Since the EHR market is very fragmented with many more private companies than public (CCHIT certified more than 90 vendors last year), I would expect to see a lot of EHR companies on the Inc list. Well, they may be there, but I couldn't find them. My non-scientific, non-exhaustive searching of the Inc. website found only one other CCHIT-certifed vendor: Greenway, at #1570 with 227% growth. I also found a practice management vendor (AdvancedMD), which came in at #465.

Of course, the larger players such as Allscripts, NextGen, GE, wouldn't appear on the Inc list because they're publicly traded. According to their SEC filings, they've shown healthy -- but not spectacular -- growth (15-20%) over the past year.

In 2004, President Bush set a goal to have the majority of Americans on an "interoperable EHR" by 2014. Robert Kolodner recently projected that the US would reach this objective. Outside of eCW's huge growth, there doesn't seem to be much obvious evidence that the EHR market is on the steep part of the "hockey stick" growth path that would be required to take us from the current situation -- where probably 10% of Americans' records are on an "interoperable EHR" -- to the goal of having 51% seven years from now.

Portland suffers from the tyranny of the status quo

The Health Data Exchange Group of Portland, Oregon is apparently on the verge of collapse, according to the Portland Tribune ("Record-sharing stalls"). The Tribune article is a very penetrating look at the difficulties of launching and maintaining an HIE.

Founded by the Oregon Business Council, the group seemed to have a lot going for it -- funding, staff, tech-savvy population, and broad-based board. According to the Tribune:

[A] year after the group began its work, the project has stalled — a victim of technological issues, and also of some overbearing financial disincentives: Some of the entities being asked to pay for the system can make a lot more money when the system isn’t in place.

On the face of it, the project seems to have violated a core principle -- make sure the first step has a business case, however small. The first project was for a "Results and Reports Viewing and Retrieval System" that would "make already-computerized information from laboratories, hospitals and imaging centers available for viewing and retrieval by all of a patient’s providers."

The project plan called for them to do this in 12 months -- wildly ambitious for a project of this scope. It took many years to get a more limited results delivery system up and running in Indianapolis, if you count the hard work done in value proposition development and business planning -- and Indiana already had an unparalleled base of technology and expertise to build on.

A second more fascinating aspect of the story is the reluctance of the hospitals to participate in the project, reportedly because a main value driver -- reduction of duplicate tests -- was going to cost them $10M in lost revenue.

In my experience, it's rare to hear someone publicly admit that they're benefiting from waste in the system, and then go on to defend it. Yet, that's what Dick Gibson, CIO of one of the hospital systems, did. He even spun the argument to defend even more economic inefficiency, arguing that redundant tests shouldn't be cut because the revenues are used to cross-subsidize free care. I'm sure that's partly true, but that's a very inefficient way to fund free care. And besides, if redundant tests weren't driving up the cost of care, maybe we'd need less free care to begin with!

I would think that the hospital boards would step in at some point and exercise the strategic judgement that I once heard from a senior executive at a large lab company: Building your business on waste in the system is not a sound long-term strategy, particularly when that waste has been exposed. In Indianapolis and Cincinnati, the hospitals pay a large share of the costs of the HIEs because there's a clear ROI for them in results delivery. The hospital leaders leading those HIEs have made the strategic decision to compete on quality, efficiency, and patient satisfaction, not on who can extract more waste from the system.

Perhaps the biggest surprise here is that those with the greatest interest in wringing out the cost of redundant tests -- namely the health plans, employers, the state of Oregon, and patients -- are standing on the sidelines and allowing the hospitals to block the project. I find it hard to believe that they'll be silent for long......

Medicare takes the plunge

Medicare will soon stop paying hospitals for the cost of treating "preventable errors, injuries, and infections that occur in hospitals" according to a front-page story in yesterday's New York Times. I'm not an expert in this area, but my naive observation is that this single policy change will mark the beginning of dramatic changes in health care reimbursement -- and perhaps health care delivery -- in the coming years. (Plenty of experts have weighed in on this -- Paul Levy has some links to them).

Commerical plans have been slowly but surely moving into the so-called P4P era of reimbursement, and Medicare is making its way there as well (David Harlow last week posted an excellent summary of Medicare's programs -- CMS forges ahead with pay-for-performance (P4P) initiatives). Up til now, the P4P conversation hasn't focused much on safety. There's been plenty of attention given to voluntary efforts and reporting on safety at the state and national levels (e.g., in Pennsylvania, Massachusetts, Indiana, and IHI's various campaigns). And, of course, there's Beth Israel Deaconness Medical Center which, under the leadership of Paul Levy, has been taking the lead in this type of reporting. But this focus on reporting and prevention had not really penetrated the conversation on payment and incentives. Until now.

On the face of it, the issue seems pretty straightforward. I pay you to do something, and if you screw up along the way, you should pay to fix the screw-up that you created. In practice, of course, it's much more complicated. A couple of issues that come to mind are:

Measurement. Are there clear ways to distinguish preventable from non-preventable errors? The issue is both with respect to categories (e.g., central line infections but not other types of infections) and threshholds (e.g., zero tolerance vs deviations from a baseline). If it's like most measurement, the majority of cases will be relatively easy to categorize, but some won't, and this minority of cases will constitute 90% of the measurement effort and 100% of the pushback.

Payment. Who's going to pay for the treatment of preventable errors? While we'd like to think of these as potentially zero-incident events, we live in a messy world, and statistically it's never going to be zero. So, let's say I suffer a "preventable error" in the hospital, and my insurance carrier tells the hospital that they're not paying for my treatment. Well, who does pay at that point? Supposedly the Medicare rules are going to say that the hospitals can't pass this cost to the patient. Is the hospital on the hook for the payment? What if the error was caused by a physician who isn't a hospital employee -- is s/he responsible for the payment? Will hospitals and physicians have to take out more or a different type of insurance to cover such payments? Will their malpractice liability exposure go up if Medicare determines that a particular patient suffered from a preventable error? Will their malpractice insurance premiums be affected if Medicare determines that they caused preventable errors, even if no litigation arises from the incident?

I don't think these complexities are show-stoppers -- after all, health care reimbursement addresses very complex issues every day (the new 2008 rules on inpatient prospective payments are over 2000 pages long -- and that's just this year's changes). I think this is a watershed moment in health care financing because it constitutes a real step away from the current "cost-plus" paradigm of reimbursement. I don't count current P4P efforts as real change because there's much more smoke there than fire owing to weak measures, dubious connections between those measures and actual quality, and correspondingly, shallow financial incentives.

Not paying for preventable errors seems different than current P4P efforts because it's something that patients/consumers (and the media) understand, it deals with reimbursement at the individual case level rather than the patient panel level and, finally, there's real money on the table. The fact that Medicare is taking this step is perhaps the biggest news of all. Medicare is the biggest player in the health care market, and commercial plans are generally loathe to make fundamental changes in reimbursement approaches without Medicare's participation because they don't want to "go it alone" against physicians and hospitals, and because their efforts are ineffectual anyway if they are diluted or contradicted by Medicare policies. Medicare's making these changes gives commercial plans the cover and the incentive to make more far-reaching changes in their own reimbursement approaches than they've been willing or able to make for a very long-time.

Breaking it to the American public

Sunday's New York Times had an excellent editorial: "World's Best Medical Care?" The article begins as follows:

Many Americans are under the delusion that we have “the best health care system in the world,” as President Bush sees it, or provide the “best medical care in the world,” as Rudolph Giuliani declared last week. That may be true at many top medical centers. But the disturbing truth is that this country lags well behind other advanced nations in delivering timely and effective care.

Most health care professionals already know this to be true. It's also true that we lag behind most of those same countries in the use of health IT. The connection between health IT and quality is pure correlation at this point -- no one has proven causation. Health IT won't be a panacea anyway -- most "wired" physicians I've worked with point out that the technology has only revealed for them how much the technology can't fix and how deep our problems really are.

Looking across countries, I'll bet that greater IT use is not a cause of greater quality, but rather, it's an indicator of a better health care system. Those systems have aligned incentives in a way that encourages not only IT tools but a whole host of processes and behaviors and tools to improve quality, safety, and efficiency -- exactly the opposite of the incentives in the U.S. system. Doesn't mean that adding health IT won't improve the U.S. -- I think it will. But we shouldn't kid ourselves about the fact that we're sub-optimizing -- until we have a health care system that is fundamentally oriented toward improving the quality, safety, and efficiency of care, we'll continue to be outperformed by our peers, regardless of how much technology we put in place.

David Brailer Returns

Today's New York Times reported the launching of Health Evolution Partners, a private equity fund led by Dr. David Brailer. Everyone in the area of health IT will remember David, the first National Coordinator for Health IT (ONC) and architect of the Strategic Framework for Health IT.

Brailer's idea is to apply private equity (he has $700M from CalPers to start) to a new type of niche: products and services that can exploit new developments in health information exchange to reduce fragmentation of care and improve quality, safety, and efficiency of health care delivery. This hasn't been an area that has typically drawn much private capital for a few reasons.

First, there are barriers to entry in becoming a domain expert. Health care delivery is so darned complicated that there are fewer people with both deep domain knowledge and investors' acumen than there are in other market sectors.

Second, investments in health care delivery don't typically meet the hurdle rates that typical venture capitalists apply to their investment decisions. The health care delivery value chain is convoluted, at best, as are the distribution of costs and benefits across the value chain. In addition, while the costs are crystal clear, the benefits aren't; benefits such as reductions in ED visits due to better preventive care, for example, take a long time to get realized and are hard to measure.

Finally, a lot of investors just think that health care delivery isn't really a market, and thus, they don't want to invest in a sector where they don't know the rules or how the rules are made. I used to work in the Pentagon and found a similar attitude among many investors toward the defense industry.

Yet, there's opportunity in health care delivery for those who can thread their way through the thicket. It requires some patient capital (perhaps VERY patient capital) and a unique combination of expertise in the nitty-gritty of health care delivery, business/economics, and technology. Health Evolution Partners seems like it's got the perfect combination of these assets -- I wish them well.

IT Writer, Familiarize Thyself

Yesterday's New York Times had an op-ed on EHRs by Thomas Goetz, an editor of Wired magazine ("Physician, Upgrade Thyself"). Goetz believes that he's found the silver bullet on EHR adoption -- it's open-source software, namely, WorldVistA. I guess I was hoping for something more compelling from an IT expert, so forgive me for being underwhelmed.

The crux of his argument is that physicians have huge desire for EHRs, but this demand is stifled by the high cost of the software. WorldVistA, the ambulatory version of the VA's VistA system, is his answer -- it's open source, which to Goetz means that it's low-cost and good enough. He notes that WorldVistA may not be as good as its competitors -- it's user interface is clunky, and it's practice management functions are primitive -- but, he says, these are "Cadillac" features that most physicians needn't worry about.

I don't want to dismiss WorldVistA out-of-hand; my mother spent her entire career as a VA physician, and I myself was a Pentagon civil servant for a number of years, so I'm heartened to see the VA finally get recognized for it's great work with VistA and for the entrepreneurial spirit that has taken it to market. I'm also glad to see that Wired magazine is excited about WorldVistA -- they gave it a 2007 Rave Award. I think it's important not to confuse our hopes with our expectations, however. WorldVistA could find a place in the market, but that's a far cry from becoming the magic solution to the "EHR gap".

If physicians have huge desire for EHRs, they must be hiding it really, really well, because EHR penetration is shockingly low and it's not growing very fast. Clearly, there's more than just cost that's holding them back. Health care delivery is the most fragmented sector of our economy, both on the supply-side and on the demand-side, which has created an unbelievably dense thicket of contractual relationships among purchasers, insurers, providers, and patients. The amazing thing is that almost every aspect of this tangled mess militates against higher EHR adoption. It's thus highly unlikely that one single change, such as a lower cost EHR, can tip the scales on EHR adoption.

I'm not convinced that WorldVistA is that much lower cost anyway. Yes, it's license fees are lower, but license fees are only one small part of the total cost of ownership of an EHR. A practice still has to pay for hardware, networking, installation, implementation, training, upgrades, and maintenance, and it's not clear that WorldVistA would have any cost advantage over its competitors in these areas. The fact that it's open-source doesn't solve these problems either. An EHR will never have the dense base of expert contributors that continue to drive Firefox and Linux -- physician offices don't have programmers with expertise and capacity to develop open-source code, and EHR software is too specialized to attract a large base of student and/or corporate developers.

Finally, while Goetz pooh-poohs the deficiencies in WorldVistA's user interface and navigation, as well as it's back-office functionality, I don't think these issues can be so easily dismissed. Back-office functionality affects the revenue-side, and most practices have some type of electronic billing already. Lack of integration with back-office systems is a show-stopper for most practices because billing for health care is so complicated. Yet, creating such functionality is real work -- it takes considerable effort to develop and support a robust PMS application, and it's not the type of project that lends itself to ad hoc contributions from an open-source community.

It is perhaps ironic, but nevertheless true, that only the most sophisticated computer users make use of open-source software. Yet, physician offices represent the least sophisticated stratum of computer users. It's hard for me to see how WorldVistA will be able to change that equation.

Clarifying a recent Information Week article

This week's Information Week had a few interesting articles on EHRs and PHRs. The lead article ("Why Progress Toward Electronic Health Records is Worse Than You Think") hits on some of the more well-known cautionary notes, like the demise of the Santa Barbara Care Data Exchange, and the widely-reported issues faced by Kaiser Permanente in it's Epic installation. The article also describes what may be a deeper and more insidious challenge to significant progress, namely, the lack of urgency among the vast majority of physicians to get moving on EHRs and HIE.

The articles also quote me and describe the work of the MAeHC, and while I'm fine with most of the reporting on us, I want to clarify some false impressions that the articles could create about us and our work.

First, I'm not nearly as arrogant as I sound in the article (not nearly!). When asked if I felt that there was a lot of pressure on us to deliver, I responded that we certainly feel that there is a spotlight on us. That got turned into a quote that has me suggesting that THE national spotlight is on us, as if there aren't other important activities going on around the country. There are over 150 HIE efforts around the country according to the last eHealth Initiative Annual Survey, and concrete, replicable successes among any of them will be important guideposts for the rest of us and for the national effort at large.

A second clarification I need to make regards a sidebar article on PHRs ("Doctors Debate Giving Patients' Online Access To Health Data"). The article suggests that an MAeHC-funded practice won't give patients access to records because "patients aren't ready and doctors aren't ready." This does not accurately reflect either MAeHC's PHR plans or our views on the "readiness" of physicians or patients for this technology.

MAeHC expects to launch patient portals in all three of our communities, including the one referred to in the article. These portals will have the benefit of being "untethered" from any specific provider, so that patients will be able to access summarized clinical data from all of their community providers, not just any one provider. Not only do we believe that physicians and patients are ready for such technology, we believe that such patient-centered applications should be one of the principal goals of community EHR/HIE programs.

We're honored to have Information Week devote space to describing our project, and I think that their reporting on the lack of urgency for EHRs and PHRs among physicians and patients is spot on. I look forward to following their future coverage of these important issues.