The American Recovery and Reinvestment Act of 2009 (ARRA), sometimes called the Stimulus Act, was an $831 billion economic stimulus package enacted by the 111th Congress in February 2009 and signed into law on February 17, 2009 by the President.
It included $22 billion as incentives to encourage adoption of certified electronic medical records in hospitals and medical practices. The rationale behind the policy directive was clear: system-wide implementation of electronic medical records enables improvement in diagnostics and treatment coordination, fewer errors, and better coordination of patient care by teams of providers.
Almost immediately, the medical community cried foul.
Their primary beef: the cost to implement these new systems would not be recovered by the incentives.
Similarly, physicians pushed back on the conversion of the U.S. coding system from ICD-9 to ICD-10. They did not question the need for the upgrade: the increase from 19,000 to 68,000 codes is necessary to more accurately capture all relevant clinical aspects of a patient’s condition and align our data gathering with 20 other developed systems of the world where ICD-10 is already used.
That health insurers, medical groups, hospitals and others must use the same coding system that reflects advances in how we diagnose and treat seems a no brainer. But some physicians pushed back due to costs and disruption in their practices.
Last week, physicians won a battle: the Centers for Medicaid and Medicare Services (CMS) announced it was delaying the deadline for implementation of ICD-10 for a year, to October 1, 2015.
The American Medical Association commended CMS; the American Hospital Association, BlueCross BlueShield Association, Advanced Medical Technology Association were caught by surprise and disappointed since the delay will cost up to $6 billion (American Health Information Management Association estimate) and the majority were well on their way to making the transition by October 1, 2014.
But many physicians were lagging in its implementation while also playing catch-up with meaningful use, so CMS conceded to their request.
No stakeholder in the U.S. system likes mandates. Doctors don’t like rules made by others outside of their profession, especially expensive IT requirements that aren’t offset by higher revenues or more favorable reimbursement.
Hospitals face eroding operating margins from aggressive insurers and declining reimbursement from Medicare and Medicaid: the cost for implementing meaningful use and ICD-10 means other investments must wait.
And for insurers, expanded coding using a new system means higher administrative costs at a time when premiu increases are more tightly regulated and their margins cut by the new excise tax and cost of compliance with the Affordable Care Act. The fact remains that the federal policy in the U.S. health system is to connect the system using modern clinical and administrative information systems.
That government cost-cutting in the past five years has not raided the $22 billion meaningful use fund for other purposes speaks volumes.
It is worth it? Here’s my take:
HIT is a necessary investment; it is a means to the end of better care. The rationale for HIT is not improved efficiency or higher revenues. It is better care. Improved accuracy in diagnosis, increased efficacy and effectiveness in treatment coordination, fewer errors, improved safety and enhanced patient adherence.
It is necessary overhead—the cost of being in business.
The biggest HIT challenge is not the systems we buy, but the way we manage our people and processes. Spending up to $20 million to implement the ICD-10 transition and $80,000 per clinician for a certified electronic health record is a waste if unaccompanied by changes in the way care is organized, accountability assigned, performance monitored, and payments disbursed.
The major barriers most organizations face are people issues: the cost of a poor hire, failure to extrapolate data from HIT into process improvements and strategy, and or delusional thinking that HIT is a nightmare that might go away. Paralysis in organizations facing HIT decisions is not an app that needs fixing or a security breach; it’s about failure to effectively integrate technologies into strategy that defines the organization’s path to sustainability and growth.
There’s no going back. The Gen X and Millennial generations are tech-savvy. They demand access to their own medical record, seamless navigation of their treatment options and the associated costs, specifics about the performance of their providers—safety, outcomes, user experiences, easy access to coverage and denial deliberations by their health plan, and inclusion of alternative providers and retail health options rarely presented by their plan or provider.
And they see HIT as the means to those ends. And at a macro level, the health system’s role in a global marketplace for its goods and services requires it use 21st century information technologies.
I am not a tech head. I cringe when dealing with online, laptop and mobile device issues, and lean on my tech-savvy son Josh when I hit technology walls. But I know this: these technologies are permanently changing how our society operates with some good and some disappointing consequences.
Physicians have a legitimate concern: HIT is costly. And the majority of physicians are genuine in their passion to serve their patients interests first and above all. Their disconnect is this: to serve their patients best, information technologies that enhance the accuracy, quality and efficiency of the services provided is what patients want.
And the notion that physicians would require payment to use a tool that enables them to do their job better is disconcerting to many. Clearly, the market—patients, employers, and health insurers—expect compliance and associate improved care with these information technologies.
Health information technologies are integral to the future of the U.S. health system. They’re expensive, especially if mismanaged or ineffectively integrated with strategies and operating changes. Physicians and all stakeholders know it, but it’s sometimes hard to accept.
Paul Keckley, PhD (@paulkeckley) is an independent health care industry analyst, policy expert and entrepreneur. Keckley most recently served as Executive Director of the Deloitte Center for Health Solutions and currently serves on the boards of the Ohio State University Medical Center, Healthcare Financial Management Leadership Council, and Lipscomb University College of Pharmacy. He is member of the Health Executive Network and advisor to the Bipartisan Policy Center in Washington DC. Keckley writes a weekly health reform newsletter, The Keckley Report, where an earlier version of this post appeared.