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TECH: The VA and Health IT A Model that Works By Maggie Mahar

VetsDid it ever occur to you that your dog might have better health records than you do? While veterinarians routinely keep computerized records of their four-footed patients’ medications and vaccinations, human health care still relies heavily on pen, paper, phone and those little yellow Post-it notes that all too often come fluttering out of a patient’s file.

While most U.S. industries make superb use of information technology to collect, manage and distribute information, when it comes to healthcare, we lag far behind.  In 2000, 90 percent of physicians in Sweden, 88 percent in the Netherlands, 62 percent in Denmark, 58 percent in the UK, 56 percent in Finland and 48 percent in Germany were using electronic medical records. Six years later, roughly 80 percent of U.S. physicians are still shuffling through manila folders.

Meanwhile only 15 to 20 percent of U.S. hospitals use electronic records–although nearly everyone agrees that computerized medicine is the key to sparing patients the risks and expense of missing records, redundant tests and medication errors.

In “Money-Driven Medicine: The Real Reason Health Care Costs So Much (HarperCollins, May 2006),  I describe, in detail, how healthcare IT could lift quality and, over the long run, help contain costs. Just one example:  if physicians used computers to order medication, we could eliminate two million “adverse drug events” that range from allergic reactions to death.

Concerned about privacy, some patients might opt out. Certainly, legislation will be needed to assure that records will be safe from prying eyes.

But experience shows that where IT is available, most patients like knowing that if they wind up unconscious in an ER, a doctor can open his laptop and find a complete and detailed medical history that includes a list of what drugs they’re taking, pre-exiting conditions, test results, x-rays, prior hospitalizations, notes from various specialists who have examined them.

Dr. David Brailer, the man President Bush appointed as his Health IT czar in 2004, was supposed to usher in an IT revolution in the U.S. But last month Brailer left Washington. Explaining that Brailer was departing for family reasons, the administration  stressed that, despite his brief tenure, he had made “significant progress” toward the president’s goal of giving most Americans electronic records by 2015.

The facts suggest otherwise. Despite much rhetoric, funding Health IT is not among the administration’s priorities.  In 2005 a panel that included Brailer estimated that developing electronic medical records that gather a patient’s history, X-rays, lab results and prescriptions into a single database would require $165 billion in start-up capital –plus $48 billion in annual operating costs.

For fiscal 2007, the White House budget allocated a paltry $169 million to healthcare IT.  By contrast, the UK is spending $11 billion to wire a much smaller system.

The administration hopes the private sector will foot the bill. But hospitals are strapped for cash, and pediatricians earning an average of $150,000 a year are reluctant to spend $44,000 per physician to wire a group practice. Even for a cardiologist earning $500,000, the business case for IT is slim: the financial rewards for avoiding duplicate tests will go to the insurer, not to the doctor. 

Nevertheless, Washington insists that the private sector foot the bill—which brings us to the second hurdle: persuading competing players in a market-driven system to agree on complementary standards. Hospitals and doctors  need electronic records that can talk to each other.

In an interview published in Health Affairs last fall, Brailer acknowledged that “divergent stakeholders’ interests” create “a significant barrier to agreement. . . . It’s the same problem as VHS versus Betamax [videotape], although I think there’s more at stake with health care than with videotapes,” he remarked.

Yet, since Brailer shares the administration’s faith in market-based solutions he  remained committed to trying to coax rival hospitals, doctors, health plans and IT vendors to reach a consensus–even while admitting the real danger that we will wind up with a wired maze of health care providers who still cannot communicate with each other. (Remember when competing U.S. wireless telephone carriers refused to agree on protocols, and we all paid roaming fees?)

As J.D. Kleinke, executive director of Omnidex Institute, a nonprofit health care research and information  technology development organization,   pointed out in a 2005 Health Affairs article titled “Dot-Gov:Market Failure and the Creation of a National Health Information Technology System”:

“The market has refused to coalesce around health care IT standards on its own. The time has come for rational, orderly design, one that will allow us to get on with the real work of improving the health care system with an IT infrastructure that other industries take for granted.”

In April, an article in Modern Healthcare seconded Kleinke’s concern, noting that:

” One of the problems with the administration’s market-based approach is that the market isn’t entirely sold on the idea of a single set of standards for certification of IT systems. The main vendor organization announced its own road map for a national IT system and then grumbled about the government’s pass-fail system for electronic medical records certification, saying letter grades for degrees of success ought to be handed out.”

What is ironic is that the administration’s insistence that the best solutions always spring from market competition ignores one of the most efficient corners of American healthcare: the government’s own fully-wired Veterans’ healthcare system –a system that Fortune magazine recently called “the most cost- effective health system in the land.”  (May 15, 2006)

The VA’s IT revolution began in 1994, when a new leader, Dr, Kenneth Kizer, ordered a gut-renovation.  When I visited a Veteran’s hospital in Vermont last spring, I was impressed by the results.

When a physician prescribes a new medicine, he calls up the patient’s chart on his laptop and taps in the order; the computer then checks the drug against others the patient is taking, and warns if there might be an adverse reaction.

IT helps co-ordinate care. At many hospitals, if five specialists are called in to consult on a patient, they may not consult with each other. At the VA, they are each making notes on the same electronic chart, creating what is, in effect, an ongoing dialogue.

When Hurricane Katrina forced the relocation from New Orleans to Houston of hundreds of Veterans Affairs hospital patients, electronic medical records enabled doctors and nurses to treat the sick and injured “without skipping a beat” according to the Washington Post .

The VA also uses its database of how thousands of patients have responded to various treatments to make the head-to-head comparisons of risks and benefits that drug-makers loathe. Relying on that data, the VA , like the Mayo Clinic and Kaisier Pemanentne (which also has an impressive IT system),  curtailed its use of Vioxx two years before  Merck took the drug off the market.

How could the VA afford IT?  The answer is simple: VA hospitals aren’t competing with anyone. When allocating resources, Kizer was making medical decisions, not marketing decisions. By contrast, in the fiercely competitive private sector, even not-for-profit hospitals must ask themselves: Which is more likely to bring in well-insured customers, a new heart pavilion with a waterfall, or IT that won’t pay off for years? Thus, many communities have more heart centers than they need—all overflowing with paper.

The VA has not achieved medical Utopia. Lapses at individual hospitals still set television cameras whirring, and those stories can overshadow the larger tale of systemic reform.

But the VA’s triumphs in “Creating a Culture of Quality” have grabbed headlines in medical journals where studies show the VA matching private-sector health care both in term so quality and costs. (See The New England Journal of Medicine ("Effect of the Transformation of the Veterans Affarirs Health Care System on the Quality of Care, May 29, 2003)The Annals of Internal Medicine ("Diabetes Care Quality in the Veterans Affairs Health Care System and Commercial Managed Care: The TRIAD Study," August 17, 2004) and the American Journal of Managed Care ("The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care," 2004,10; part2). Mainstream media have also recognized the VA’s achievements (see Washington Monthly ("The Best Care Anywhere," January/February 2005) The Washington Post ("Revamped Veterans Health Care Now a Model," August 22, 2005).

The VA has been doing more with less. By 2005 the number of patients the VA was treating had doubled in ten years. Meanwhile a more efficient system had cut costs by half.

Washington’s reaction to the VA’s success?  Starve the beast.

As Bloomberg News has  pointed out , (August 18, 2005) as the Veterans system improved, it has  attracted more and more veterans who wanted care. “Greater-than-expected demand for services from soldiers returning from Iraq and Afghanistan" also added to demand  But, Congress have refused to fund the VA system "to keep pace with health care inflation and rising enrollments."

In 2005, Bloomberg reported out that "in the seven years after the Veterans Healthcare Reform Act was enacted in 1996, enrollment grew 141 percent to 7 million while funding increased 60 percent.  The VA’s healthcare system may be more efficient than the  private sector–but it can’t be that much more efficient. It needs funding.

Since 2005, the VA has gotten some additional funds– but not enough. Too often, Vets face long waits for care. And as of 2003, the VA no longer offers healthcare to all vets. Only those who earn less than $25,000 a year, and/or those whose condition is related to their medical service qualify,  leaving roughly 1.7 million Vets uninsured. Many served in Vietnam, the Gulf War, Afghanistan or Iraq. Most are employed, but in many cases, either their employer doesn’t offer health insurance or they can’t afford it. (With annual  premiums averaging  $4000 for an individual, and well over $10,000 for a family, it’s easy to see how a Vet earning $25,000—before taxes—has a hard time paying for health insurance.,.)

Perhaps Washington needs to re-think its agenda.  Fund the one part of our health care system that works, and look to the VA as a model to ensure that medical priorities— rather than the market’s priorities—dictate how to bring U.S. healthcare into the 21st century.

How can other healthcare providers follow the VA model?

Ken Kizer might have a solution. The man who transformed the VA is now CEO of Medsphere Systems, a company that is adapting the VA’s software (VisTa) for other doctors and hospitals.  The software itself is free— anyone can download it online. But you still need to install VisTa, adapt it, and learn how to use it. Medsphere offers those services plus 24-hour support to customers like Midland Memorial Hospital in Texas.  Because Midland didn’t have to pay licensing fees for the software, it says it is spending only $7.1 million– less than half the total cost of commercial software.

The key is that, in contrast to the proprietary software that many companies sell, the VA software is “open source” which means that it’s available at no or minimal cost, and allows different IT systems to operate compatibly.  Because anyone can download it, the software is not controlled by Medsphere or any single company. Instead, a community of users can work to improve the code simultaneously, sharing ideas, and speeding development.

Cynics suggest that corporate lobbyists who hope to turn a neat profit on proprietary software will block open source Health IT.  And money is still an obstacle: hospitals and doctors will need subsidies.

But if Congress has the will, the VA has shown the way.

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16 replies »

  1. i visit your site n i got more information then other visited last month
    was good enough then last what i had gone throught

    online degree

  2. Hmmmmmm!
    As a doctor – now health economist – who did some training in the VA System, my overall impression was not a favorable one. Ditto for any related internship or residency training.
    So, you might wish to take a look at this new link and decide for yourself.
    http://healthcarefinancials.wordpress.com/2007/11/23/a-real-american-hero-2/#comments
    And, although this credentialing issue was well known to most of us, the public might be very surprised. But, it is not a new problem!
    Of course, the idea that docs are technophobic is probably a correct one. That’s one reason I edited a series of three dictionaries – my favorite – “The Dictionary of Health Information Technology and Security.”
    More at: http://www.HealthDictionarySeries.com
    or http://www.HealthCareFinancials.wordpress.com
    Best.
    Dr. Dave
    http://www.HealthcareFinancials.com

  3. I see where the HHS has “announced a five-year demonstration project that will encourage small to medium-sized physician practices to adopt electronic health records (EHRs)”.
    Personally, I don’t see the need for such a system involving the everyday patient. I am a transplant recipient. If any sector of the public would benefit from such a program, it would be folks like myself. BUT, it must remain optional. I for one would not participate in such a program due to security of my personal info.
    http://www.disabilityhelpsite.com

  4. web-based systems, where the computer is owned by the service provider are often linked to billing services. Web based systems offers cost effectiveness and are suited for smaller practices where the cost of having a dedicated system turns to put off these practices from the costlier versions, but then these come at a price as accessability tend to limit the number of patients that can be seen during a day.

  5. The way that E H R is going to make an impact on a broad basis is by making it affordable, simple and secure for the small practices. These physicians would love to move to E H R but it is too costly for them, and too complicated or leaves them exposed as far as security. My company looked at this and has made some strides in help the smaller practices. http://www.medlinkus.com

  6. Will you please truncate this post and do “read more”? It’s way too long for the gateway.

  7. Will you please truncate this post and do “read more”? It’s way too long for the gateway.

  8. Excellent piece!
    Actually, Maggie, I believe that eClinical Works, which recently won a competition with AllScripts and GE in the Boston area by getting 170 of 180 votes by participating practices, charges $10K for the first physician and $5K for additional physicians within a practce.
    Most of your points are very well taken. However, this is not to say that all practice manage software is equal. I think we need to hear from some practice managers who have reviewed or worked with a range of systems to provide feedback on their utility and ease-of-use.
    Brian Klepper

  9. The VA CPRS, along with a host of other EMRs, are important tools for collecting and reporting patient data, and for offering a little bit of decision support. Anything that helps improve care quality, after all, has value.
    But we ought not be complacent with even the best HIT available today because there is still a huge HIT gap to be bridged, and clinical decision support is still in its infancy (see A Roadmap for National Action on Clinical Decision Support).

  10. Not “risk avoidance software” — just “risk avoidance” as a business result. That this risk avoidance may be gained during a software implementation project doesn’t matter. Mainly it is the improved business processes that software systems force upon organizations that produce the results: not the software itself. They could get most of the benefits without buying software at all.
    I am not convinced at all that the big players get a payoff any sooner because of their size per se. They may get it sooner because they attract more talented managers. So I think it is a matter of vision and skill, not “luck”. If the players in any other industry can’t keep up with a changing environment, they fold up. I don’t see a reason to exempt healthcare. If the minimum efficient scale of hospitals and physician practices is increasing, then they’ll just have to figure out how to deal with it. Even so, the government props-up the tiny, often rural, hospitals with extra payments under the “Critical Access Hospital Program”.
    I did not think you pulled the $44K figure out of the air: I thought you got it from someone quoting the worst figures he could without actually lying in order to make the case that the poor little community hospital or physician practice needs more money from the government or the evil insurance companies because nobody could reasonably expect poor little them to make an actual investment in their own businesses. You have confirmed this. I’m not buying it.
    t

  11. Tom —
    I agree that open-source vendors should try to sell risk-avoiance software.
    But as to why Kaiser permanente, the Mayo Clinc, and 20% of phyisians and hopstials can afford software–they’re not “special”–they just have deeper pockets than most healthcare providers.
    Kaiser Permpanente, like the VA, enjoys ecoomies of scale– becaue of their enromous size, they can reap the savings from heatlhcare IT far sooner than a stand-alone hopital or a practice of 6 physicians.
    Very large group practices in affluent areas also are in a much better position to afford healthcare IT.
    And the Mayo Clinc, like a a small group of other(deservedly) elite hopsitals (Sloane Kettering Cancer Center comes to mind) also have deep pockets.
    As for the $44,000 figure–really, I don’t pull these numbers out of the air. This one comes from the Commonwealth Fund, based ona study publihsed in Health Affiars, Sept/Oct 2005.
    Posted by: Maggie Mahar at Jun 16, 2006 7:39:14 PM

  12. > Cynics suggest that corporate lobbyists who
    > hope to turn a neat profit on proprietary
    > software will block open source Health IT.
    They may try to spread FUD (Fear, Uncertainty, and Doubt) among health system CIOs. Hospital CIOs do not care (usually) about the details of their IT. They want to avoid risk. If the Open Source vendors come to realize this and sell “risk avoidance” they might be able to push reasonably interoperable EMR and patient accounting systems into hospitals. But this won’t address all the ancillaries. Vista is in some respects a little old-fashioned, but you could do a lot worse.
    A story — I think the government has torn a page from WalMart’s play book with respect to standardization and interoperability.
    My wife works for a small food distributor, and has for a long time. Back in the day, they had maybe 25 employees. One year the Salesman-in-Chief and President made his trek to Bentonville to sell his wares. On the wall in the waiting room, where WalMart keeps its vendors waiting, there was a sign on the wall.
    It had a huge picture of the now-ubiquitous UPC barcode on the wall, with the text “The Wave of the Future”. There was literature helpfully provided by WalMart about how you could get your own vendor id set up, various software systems, and so-forth. The sign was there the next year as well.
    Then the sign had changed: now it said “If You Don’t Have This, Don’t Waste Our Time”. Fortunately for my wife’s little 25 person firm, the boss had gotten the hint two years before. And WalMart did not subsidize them.
    The sign in the waiting room now says “RFID — The Wave of the Future”. Or something like that. This roll-out is taking longer than UPC, but everyone gets the point.
    The HIPAA “Efficiency Standards” are the government’s version of this. Its taking some time, but its happening. The next step is to begin requiring the kind of reporting that comes reasonably only from an EHR. Its the Wave of the Future.
    > And money is still an obstacle: hospitals
    > and doctors will need subsidies.
    So how come it hasn’t been an obstacle at the Mayo Clinic and Kaisier Pemanentne and at 20% of physicians and hosptials? Are they special? This is a matter of vision and priorities. So yes, they’re special in that way. But funding isn’t the problem.
    > But hospitals are strapped for cash, and
    > pediatricians earning an average of $150,000
    > a year are reluctant to spend $44,000 per
    > physician to wire a group practice.
    They are probably reluctant to pay their building rent, MedMal premiums and billing services too, but they do it. I don’t know where your $44K figure comes from, but I am sure you can spend this much if you want to. There are, however, reasonable PM/EHR solutions available for small-scale practices on the order of $500/physician/month. These will be web-based systems where the computer is owned by the service provider. These things are often linked to billing services.
    I do not see a need for the “IT Carve-Out”. Other businesses manage to get what they need, and so far it seems that 20% of physicians and hospitals have as well.
    t

  13. Thanks very much–and you’re completely right.
    Kizer didn’t invest the VA software–nor did he hire someone who invented it.
    Like the Web itself, it was invented by people who did not believe that ideas are “proprietary” and for sale. They thought of ideas as something that we share. This is how the greatest minds (Einstein, et. al.) have thought of their ideas.
    That said, what Kizer did was a “revolution” only in that he brought this software into one the largest healthcare systems in the country. As you suggest, very few people at the highest levels of our government would have the intelligence and the integrity to do this.
    And while his private-sector company now wants to sell its services to help people implement and use that software, as far as I can tell, he’s not trying to profit from the software itself. And implementing and using it really does require a 24-hour helpline.

  14. First, bravo for an article showing how VistA has positively impacted the VA healthcare system. I learned some things that I did not know about the current political issues with the VA. However you have some things wrong. In fact not merely wrong but backwards.
    For instance “The VA’s IT revolution began in 1994, when a new leader, Dr, Kenneth Kizer, ordered a gut-renovation.” Wrong. Not just a little wrong. Completely wrong. Kizer was a a very smart administrator, who finally took advantage of VistA, he took a risk in doing so and deserves credit for it. But you are ignoring the people who gambled their jobs on VistA and sometimes lost. You are also ignoring the most important aspects of why VistA is as good as it is, which is how it was made.
    VistA is “free software” (as in free speech, not free beer. That means you have the freedom to change it the way you want to. It was also developed in an open distributed manner. It was open source before there was a term for open source. This development effort called the Underground Railroad predates Kizers influence by two decades.
    This is the story of how hackers fought against an insane bureaucracy for over two decades. Your “revolution” that started in the 90’s was actually a rebellion that the hackers finally started winning in the 90s.
    The second is “How can VA afford IT”? You actually answer the question in your summary (which is excellent BTW). The VistA hackers have never had funding and had to produce results anyway. In order to do that they collaborated openly, everyone contributed good ideas and eventually they added up. Those innovations are now accessible under the Freedom of Information Act, and as result are public domain. Frankly it is a shame that it was released in the public domain instead of under the GPL. The GPL implies that any future user of VistA would have to continue in the spirit of the underground railroad. I hold that medical software that is incompatible with that spirit, namely proprietary software, is unethical. You can read more about those strong opinions at GPLMedicine.org
    These are important issues, but I still want to applaud your efforts, this is a great article!
    -FT

  15. Congress is set to vote on HR 4157 next week: the Health Information Technology Promotion Act of 2005. This act seeks to codify the Office of the National Coordinator of Health Information Technology and amend the Social Security Act to promote health informatrion exchange. This is to result in the NHIN that will contain computerized electronic medical records of Americans. There are many counterpoints to the idea that health IT is the complete saviour of health care.
    First, the VA system can not even keep the medical records and information of its members private and secure: it recently had a breach of 26.5 million members records exposed through an employee taking home records on his laptop. Now how are we going to secure the record of 295 million Americans. Since when did it become the federal government’s business to mandate that a patient’s medical records be computerized so they may be tracked and accessed by others?
    Lost in all of the talk about Health IT is this issue. No one asks the patient whether he or she wants electronic medical records that can be shared and acessed by physicians, employers, health insurers, pharmaceutical companies in the proposed National Health Information Network. No one has proposed that one will be able to control and segregate what would be in electronic medical records of the NHIN and by whom they can be accessed.
    We all have seen what Blue Cross of California does when its individual health plan members become expensive with a significant health condition: it cancels their coverage on false grounds that they did not reveal a pre-existing condition that they had when they applied for individual coverage. Now what will happen when insurance companies can go fishing through a person’s entire medical history. Since you did not mention that case of bronchitis six years ago on your application, you falsifed your medical records, so now your health insurance company is cancelling your coverage because you require arthroscopic knee surgery.
    Also what happens when EMRs contain inaccurate information or computer systems loose data? This will increase medical costs. The actual cost of one practice adopting electronic health records is $35,000, and the total cost of the NHIN is $187 billion.
    In emergenices, EMRs might prove to be helpful, but the issue remains by whom will one’s medical records be able to be viewed and will this sort of system center around the patient’s ability to segregate his or her medical records and control whom has acess to them.
    If we destroy the Hippocratic oath and do not respect patient privacy and confidentiality, then the following will happen. If medical records are not confidential and private, research shows those needing care including substance abusers, mental illness, and cancer patients will not seek help. The person will either not be honest when undergoing a medical visit with a physician, or they may simply withdraw from seeking care altogether.
    Health IT could be useful in reducing medical errors and having more complete health profiles, but this can not be at the expense of patient privacy and confidentiality. I strongly urge readers of this site to view the following web site of pateintprivacyrights.org
    http://www.patientprivacyrights.org/site/PageServer?pagename=0615MarkupPressRelease

  16. The VA IT system is good. You may want to ask the DOD why it spent over $3bil on a monster called AHLTA (the DOD IT system) that is bloated, slow and cumbersome rather than adapting the VA IT system for free!!! Can one say fraud waste and abuse!

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