By , PhD
Finally, we have a Final Rule on the Medicare and Medicaid EHR incentive programs. The rules and criteria are simpler and more flexible, and the measures easier to compute. But they are still an “all or nothing” proposition for physicians, who will have to meet all of the objectives and measures to receive any incentive payment. Doctors who get three-quarters of the way there won’t receive a dime. And a lot of uncertainty remains about dependent processes that CMS and ONC must quickly put in place, like accreditation of “testing and certifying bodies,” and the testing schemas for certification. All in all, we expect most physicians in small practices to sit on the sidelines until the dust settles, likely in 2012 or 2013.
Nevertheless, while it is good to get Meaningful Use behind us, it may be better still seeing beyond it. After all, the incentive payments for becoming a “meaningful user of certified EHR technology” are merely a small down payment on the savings that could be realized if health care supply, delivery and payment are affected by the changing policy and market environments over the next 5 years. The EHR incentive programs are meant to prime the pump by putting approximately $25 billion, give or take a few billion, into the hands of physicians and hospitals who adopt EHR technology during the 5 years between 2011 and 2016.
During that same time, by comparison, reductions in waste, duplication, and unnecessary procedures might mean savings of $100 billion to Medicare alone,# depending on whose estimate you believe and how effective you think the reforms will be in replacing payment for volume with payment for value. It might be a lot more. Conservative estimates are that 30% of our total national health care expenditure of $2.5 trillion, or over $800 million, is unnecessary and could be eliminated through real reforms. Some authoritative estimates argue that half or more of care costs are unnecessary, so the target jumps to $1.25 trillion a year.
Put another way, the REAL money in is savings from reform, not health IT, though IT is a core tool to identify savings opportunities and to manage care appropriately. Some of it will go to doctors and hospitals that figure out how to achieve cost savings and are given the opportunity to share in those savings, thereby earning amounts that could easily be 10-20 times the value of EHR incentive payments. There is economic opportunity in health care reform for providers who figure out how to address the fragmentation of care, offer care that is coordinated and continuous, deploy the information technology required to capture and analyze fugitive health data, and then serve it up as shared clinical intelligence at the point of care to guide decisions toward safety, quality, and cost-effectiveness.
With these care management cost savings in mind, we consider patient care data and clinical IT systems and components over the next five years likely to be “beyond meaningful use.” Of course, aspects of the EHR Meaningful Use incentive are themselves part of the trends, most notably the standards and protocols which EHR technology vendors must adhere to to obtain ONC/HHS certification. Here are the most important trends to watch, roughly in order of importance:
- The expanding uses of structured health data using XML. EHR vendors, HIE companies, consultants, and other middlemen are used to making fortunes on one-off health data interfaces between an EHR and sites of care (e.g., hospital) or service (e.g., lab). The CCR standard, and the CDA CCD, based on the CCR, are now federally approved health data summary standards in XML, the lingua franca for data on the Web and used in e-commerce. There will be other standards that employ XML to make the exchange of health data more standardized and cheaper to put in place. Removing the costs and hassles of fax machines will be the lowest hanging fruit on this vine. But eventually, health data will be Internet-accessible to services that will focus on new applications of the data, like helping doctors and patients identify the best “next steps” for prevention or treatment, or providing warnings that a patient at home is de-stabilizing.
- Point-to-point sharing of health data, securely, over the Internet. Local and regional health information exchanges are proliferating, but they still face the problem of communicating beyond their own boundaries. Private networks are a kind of prison. The NHIN Direct Project (soon to be renamed, perhaps as HealthNetwork Direct) is developing policies, standards, and specifications that could open the health data floodgates by using proven, trusted Internet protocols and methods, like SMTP and DNS, to create a secure channel for point-to-point transport of even the most sensitive health information. Anyone with a valid NHIN Direct address will be able to “push” information to anyone else with an NHIN Direct address, regardless of the security moats around private networks, just the same way that individuals using different client applications for email can today communicate. More secure than email in the clear? Certainly. Bound to an enterprise or a particular vendor? No. The country’s doctors and patients don’t have to wait for massive state or regional HIE infrastructures to be built and deployed in order to start making health data more liquid.
- Platforms+modular apps+network services. Almost everyone is familiar with this model: it’s the iPhone app store and the Android Market. It’s the use of the Internet without as much dependence on the web browser, with multiple mobile devices for platforms, and with the emphasis on replaceable apps and re-useable technology that offers up data from many sources simultaneously. Why should health care professionals and patients be locked out of the kinds of beneficial experiences we’re all getting used to with Facebook, Twitter, Amazon and Google? In fact, we think a very good argument can be made that social networking software is a key ingredient to care coordination and better teamwork in health care. But first, the older technological gridlock of client-server and walled enterprise HIS — in which the health care professional is too often a data enterer and too seldom a data user — has to be cleared from the path. CIOs in hospitals and large groups will eventually see how important connectivity and communications are to reducing overhead and improving productivity, and come to value the clinical groupware world view in which more apps, selectable apps, replaceable apps, are key to making the underlying data really useful. As this occurs, we’re likely to see some health care organizations leapfrog over legacy EHR technology and going straight to network-accessible – that is, cloud – computing solutions.
It will probably take another 5 years for these trends involving applications in personal health and clinical IT to become mainstream. There are possible accelerators and some potential decelerators to this process. Right now, for example, the federal government is clearing the way for innovation with its encouragement of modular EHR technology and incentives for meaningful use of IT rather than simply its purchase.
However, this is a long term process and the relentless lobbying power of legacy vendors threatened by being displaced could still win. If that happens, a retreat from the progress we’ve described, as well as an increasingly bureaucratic apparatus within ONC/CMS, might eventually work against innovation.
David C. Kibbe MD, MBA, is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on healthcare professional and consumer technologies. Brian Klepper, PhD, is a health care market analyst and a Founding Principal of Health 2.0 Advisors, Inc.
Categories: Uncategorized
There are a number of interesting thoughts in this blog. Yes, there are many potential effeciencies to be realized through the application of HIT, but to whom do the benefits of these effeciencies acrue? The other question is who is burdened with the costs to realize the effeciencies?
The health care “system” will see a huge savings, but there really is no “system.” The health care industry is a fragmented collection of disparate organizations, the small provider, the specialist, the hospitals, the labs, the patients, the payers, etc. Each one is focused on optimizing their own piece of the system.
Years ago, system analysts recognized that optimization of sub processes can only acheive minimal effeciencies, where as optimization of the system as a whole can realize huge savings. Health Care needs to have alignment between the parties to share the costs and benefits achieved across the system.
Asking the doctors to carry the burden of the cost of HIT, is exactly what is going to prevent rapid adoption. I agree that most doctors will sit on the side lines. The incentives are not enough to cover their costs to meet MU. In addition, I see few discussions regarding just how many doctors will meet the volume of medicare and medicaid volume requirements.
The technology, (XML, CDA, CCD) exists today, but don’t look to the vendors to solve the problem, they are not incentivized to make their systems interoperable. They need to have market demands changing their product strategies.
Adoption of interoperable HIT is less a technical challenge, but more a financial challange. The Government alone cannot finance the conversion of the health care system from a 19th century paper based operation, to a 21st century knowledge-derived-from-data industry.
If there was a business proposition in all of this, venture capital would be flowing in faster than the dot-com era. The reality is that those who stand to gain the most, are already making money hand over fist, and have no incentive to invest their profits to increase their profits. Especially if there is a risk that they will have to share their gains with others in the “system.”
So, I agree, this cannot happen without health care reform….done right!
Breaking News:
We now have to pay for scribes because the EHR devices are dangerously flawed:
http://www.latimes.com/health/la-he-medical-scribes-20100906,0,2694959.story
“Scribes are doctors’ tech support”
Harris Meyer, LA Times
September 6
The workers, often young pre-med students, enter information into computers as physicians examine patients. Complex electronic medical record systems are mastered, and doctors are able to focus…
Until the need for practicing defensive medicine is obviated, I fail to see how these savings will materialize.
pcp, thanks. I stand corrected.
“Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.”
That is totally bullshit. Unless the pt is gonna pay retail out of pocket.
“Health Affairs” 28, no. 4 (2009):
Evidence-based medicine sometimes must take a back seat. First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat. One e-mail correspondent asked me, “Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.” On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase “a fully informed patient.”
@pcp-
Linky, perhaps? I don’t think you can document that. Maybe I’m wrong, but I’d like to see objective evidence that he said precisely that.
But Dr. Berwick says any patient who wants an MRI is entitled to get one. Doesn’t that mean that we’re no longer interested in controlling costs?
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Gents – your post got me to thinking about the role EHRs play (our could play, going forward) in improving health care – cost, quality, and other aspects of health reform. Blogged on it this morning: http://www.ehrbloggers.com/2010/09/do-emrs-improve-health-care.html
That is indeed a great vision of what HIT, and particularly health care related data exchange, can accomplish. Other than the need for much more user friendly technology, I see two major road blocks that must be removed.
1) The “cloud” will not become a viable option as long as it is viewed by those who supply its infrastructure as a cash cow for collecting marketable business assets, which may or may not have anything to do with improving health care.
2) The alignment of interests between national objectives of reducing costs and physicians objectives of increasing reimbursement is all but absent, particularly for small private practices.
From my experience, the much advertised efficiency gains and ROI on HIT is inversely proportional to the size of the practice.
Even if we assume for a moment that interoperable HIT in its best incarnation can indeed reduce health care costs, and I believe it can, the benefits will not be accruing directly to the users of those systems. I think it is fair to ask physicians to use HIT to benefit the nation, but I do not think it is fair to also ask them to pay for the tool & die.
I wonder what the “adoption” rates would be if we supplied all docs with a free EHR (including support and maintenance), like the VA does…..
If the projected savings and benefits are so large, wouldn’t this be a wise investment?
Beyond the viewpoints of Health Reform and its issues (I’m not a policy person), is the real issue of data exchange and interoperability that can have direct impact on savings for healthcare.
Opportunities to improve inefficiencies in the workflow abound.
For example, the ability to connect and transmit data securely from patient care devices to the EMR has been estimated to save facilities somewhere in the range of $250,000 per year. That’s not chump change – its real savings from elimination of workflow inefficiencies, improvements to data availability and accuracy of patient records.
Furthermore, there are conversations about “The Medical Home” that appear interesting as a way to reduce healthcare costs by remote monitoring and care delivered in the patient’s home.
Nuvon is a vendor who plays in this space of direct patient care device integration with electronic records. If interested, you can read more on their site at http://www.nuvon.com
There won’t be real reform until the trial lawyers get their comeuppance.
The doctors’ pens and clickers control all medical expenditures.
Get rid of the perverted policies promulgated by Congress and HHS over the past 3 decades, provide appropriate incentives to the docs to practice as they really want to practice, cost effectively.
Paying them less per unit of work (eg 25 cents on the 1992 dollar) and of course, the volume will go up, and the speed will bring down the quality.
Throw HIT devices in to the mix, devices for which there is not any evidence (just dreams and exuberance) that they improve outcomes or reduce costs, and further deterioration will occur. Medical diseases are not cars on the assembly line.
I notice one key phrase and quote it here:
“Conservative estimates are that 30% of our total national health care expenditure of $2.5 trillion, or over $800 million, is unnecessary and could be eliminated through real reforms.”
I suggest to you all that “real” reform will never happen as long as it is in the hands of politicians, whose only concern is power and re-election to maintain that power.
Well said Dr Simon. I have been practicing very efficient patient centered care with state of the art billing and documentation systems in place for several years. The net effect is that my office is as busy as ever, totally swmaped most days, but but my overhead is rising and my revenue is shrinking. We talk in circles about evolving health care practices but at the end of the day the future never happens.
This is sooooo much more informative than talking about Dr Lamberts hat, by the way.
“this is a long term process and the relentless lobbying power of legacy vendors threatened by being displaced could still win.”
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The Republicans have made no secret of their desire and intent to step on the air hose of health care reform. The HITECH piece could be an easy target should they regain control of Congress in November. There are many special interests who would be quite content to continue to thrive amid a suboptimal, silo’d health system, even if it risks bankrupting the nation down the line.
You guys, too, are seduced by the dreams of HIT. This has failed in the UK with one insurance provider, the NHS. What makes you think that even 5% of what you suggest will work in the US?
I am waiting to be paid for praticing cost effectively now? My hand is out. Where is the cash?
Going forward, no doctor will share in the savings, either because there will not be any (just an enticement) or the government will not pay it out (just as it did not do with the practices that were in a project to meet CMS disease management guidleines, nigh on to one year ago).