It might be the biggest thing ever to happen to health information technology: billions of federal dollars to fund adoption and use of interoperable electronic health records (EHRs). But will health IT reduce errors, cut costs, save jobs, allow interoperability among disparate clinical systems, and transform healthcare? Could the greatest cost be the quality of medicine physicians practice?
“The federal government investment in health IT completely changes the landscape,” Markle Foundation Managing Director Carol Diamond, MD, MPH, said in February testimony before the National Council on Vital and Health Statistics (NCVHS). Markle, a New York-based, not-for-profit that advocates IT for improvement of healthcare and population health, believes that the economic stimulus legislation that President Obama signed on Feb. 17 effectively doubles the size of the health IT industry.
The $787 billion stimulus, formally known as the American Recovery and Reinvestment Act of 2009 (ARRA), allocates a whopping $19.2 billion to health IT. Of that, $17.2 billion will be funneled through the Medicare and Medicaid programs to help providers adopt EHRs and another $2 billion goes to the Office of the National Coordinator for Health Information Technology (ONC).
Additionally, the Healthcare Information and Management Systems Society (HIMSS) has identified $10.4 billion in health IT-related spending through other federal programs and agencies. These include the National Telecommunications and Information Administration’s Broadband Technology Opportunities Program, a telemedicine program in the Department of Agriculture, the Indian Health Service and the Social Security Administration.
The HIMSS count incorporates a $1.1 billion appropriation for comparative effectiveness research, via the Agency for Healthcare Research and Quality (AHRQ). Although AHRQ has run comparative effectiveness studies for several years, the $1.1 billion is three times the agency’s entire operating budget for fiscal year 2008. This has led to some consternation among conservatives, who fear that the Department of Health and Human Services (HHS) could use the results to dictate how doctors should care for patients.
But clearly the attention is on the EHR provisions.
| The Legal Side of Patient Records |
A major component of the healthcare IT portion of the economic stimulus law tightens many of the provisions in the HIPAA privacy and security rules. While Congress leaves the details to be worked out by HHS, this much is clear:
Electronic medical records generally do have electronic auditing capabilities. “The issue is, how much time will it take?” Smith says. “Will we get more requests now with this new law?” |
The Plan
Office-based physicians can earn $44,000 in Medicare bonus payments over a five-year period if they demonstrate “meaningful use” of EHRs starting in 2011. Those who do not have EHRs by 2015 will see their Medicare Part B reimbursements cut by 1 percent. The penalty rises to 2 percent in 2016 and 3 percent in 2017 and beyond, although HHS may bump up the deduction to 5 percent in 2018 if adoption is below 75 percent.
A similar program for physicians with substantial Medicaid populations pays up to $63,750 over six years, but physicians cannot participate in both plans.
For hospitals, there is a baseline annual incentive of $2 million starting in fiscal year 2011, with an extra $200 paid per discharge for the 1,150th through 23,000th discharge each year. HHS will adjust the total according to levels of charity care and Medicare population.
To qualify, health systems will have to include clinical decision support, computerized physician order entry, capture of quality data and the ability to exchange of clinical data with other organizations. HHS still must develop rules, including the definition of “meaningful use” and new standards for privacy and security because the law broadens HIPAA (see sidebar at left), before the end of 2009. States also will have a role to play because much of the money will flow through Medicaid.
Rod Piechowski, senior associate director for policy at the American Hospital Association (AHA), says the stimulus plan addresses the perennial top two barriers to HIT implementation, namely acquisition costs and ongoing costs.
The AHA has sent out two advisories to its member hospitals, one a general notice about passage of the stimulus and another that goes into greater detail about how Medicare payments will be made. The association supplied members with a calculation tool so they can get rough estimates of how much money they are in line for. “The missing piece is how to determine the charity piece,” says Piechowski.
The law specifies a basic formula to compensate meaningful use. “That needs to be very much fleshed out,” according to Piechowski. He says the “meaningful use” definition will determine to what extent hospital IT systems must support health information exchange (HIE). Also uncertain is how HHS will determine which EHRs will qualify.
OHC already is soliciting nominations for a standards committee and a policy committee. The latter may or may not include the recently chartered National eHealth Collaborative, the successor organization to the American Health Information Community that advised Bush-era HHS Secretary Mike Leavitt.
The National Institute of Standards and Technology is to manage the certification and testing process, which may or may not include the current Certification Commission for Healthcare Information Technology (CCHIT). “Given the timeframe, it would be an extreme challenge to start a new certification process,” Piechowski says.
“There are many, many unanswered questions,” he adds.
And this is a critical juncture in healthcare reform. All the billions of dollars are meant to improve the quality of care and remove many of the inefficiencies that have plagued the U.S. health system, so this program has to be done right.
Claudia Williams, director of health policy and public affairs for the Markle Foundation, says the objective for this huge investment should be to provide better decision-making tools to clinicians and patients alike to improve health. “At the end of the day, the American public is going to want to see some results from this spending,” Williams says.
“Our goal for health IT must be to achieve real health improvements, create jobs and reduce unnecessary costs,” Markle’s Diamond said in her NCVHS testimony. “The right measure of success is not how many physicians use ‘certified’ health information technology; it’s whether outcomes are better. And this measure of success can only be achieved if physicians and other caregivers are using the right health IT that enables them to improve outcomes.”
“You don’t just dump computers in doctor’s offices and expect to fix healthcare,” agrees David Brailer, MD, PhD, former national coordinator for health IT, and now CEO of Health Evolution Partners, a San Francisco-based investment firm.
Brailer identifies two market failures in health IT so far, one with EHRs because there isn’t much of a business case for providers, and one in HIE. “We don’t know how to value health information,” he says. To Brailer, there seems to be a priority of institutional adoption over long-term interoperability. This is more a result of circumstances than any sort of conspiracy. “The market [for HIE] is about a decade behind the EHR market,” he says.
HIMSS CEO H. Stephen Lieber says interoperability is a prerequisite to cost-containment policies, such as an insurer refusing to pay for duplicative testing. “If you don’t have interoperable IT, you can’t institute those kinds of restrictions,” he explains.
But then there is the conundrum of time. “The goal [of the stimulus] is to get the money moving as quickly as possible,” notes Williams.
Even though the program’s rules won’t be known for months, Lieber cautions against complacency. He says those that delay purchasing EHRs and other health IT are going to get shunted to the back of the line when it comes to vendors serving them. “Were I sitting in a CIO’s seat, I would be working on this now,” Lieber says.
“If you put it off too long, you won’t have meaningful use in the time prescribed,” he says. “If you aren’t there at the beginning of the process, you lose.” Literally. The first-year Medicare physician subsidies are $18,000 for those achieving meaningful use in 2011 or 2012, but the initial payment drops to $15,000 in 2013 and $12,000 in 2014 with the same sunset dates of 2016, lowering the maximum subsidy to $39,000 and $24,000, respectively, for latecomers.
Hospitals risk losing a third of the annual subsidy if they haven’t met the HHS standard by fiscal year 2015, two-thirds for waiting until 2016 and the entire thing if they still are paper-based in October 2016. That’s millions of dollars they will never see.
Lieber says the slow economy should not stop hospitals from dipping into their “rainy day” funds this year to do the prep work toward earning an IT subsidy. “If this isn’t the time you use reserves, when would you use it?” he wonders. “It’s storming out there.”
| Interoperability: Building Standards for the Health Information Exchange |
| With all the money designated for health IT in the economic stimulus, Congress and taxpayers want to make sure the huge investment truly results in interoperable EHRs. The American Recovery and Reinvestment Act of 2009 requires the Department of Health and Human Services (HHS) to establish a grant program to help states facilitate movement of electronic health information. The law also calls on the HIT Policy Committee, a new body that HHS designated, to recommend shortcomings in current standards, implementation specifications and software certification that are holding back wider health information exchange (HIE). “The sooner organizations see a reason to share information, the sooner they’re likely to embrace standards that make the exchange of data easier,” Markle Foundation Managing Director Carol Diamond, MD, MPH, told the National Committee on Vital and Health Statistics in February. “Let us create the reason to share by setting out clear health improvement goals for the use of health IT and focus on good enough standards to transport the information initially so that rapid adoption and innovation cycles can take place in this new marketplace.” Markle’s Director of Health Policy Claudia Williams says there are many pieces of “low-hanging fruit” already available in electronic form and suitable for sharing, including laboratory results, medication history and patient vitals. “This information needs to be available to caregivers other than physicians,” Williams says. Although HIE struggles to escape the nascent stage, there have been some successes that do clearly demonstrate the clinical benefits of information sharing. The MA-SHARE RHIO in Massachusetts has been exchanging information since 1999—now including medication histories and clinical summaries in the standardized Continuity of Care Document format—and is self-sustaining, with regular operating surpluses, says CEO John Halamka, MD. The affiliated New England Health Electronic Data Interchange Network (NEHEN), which Halamka chairs, handles 100 million HIPAA transactions a year. “We’re focused on lab, clinical summaries and e-prescribing, and that works great,” Halamka says of MA-SHARE. He is now working on how to ensure that electronic patient summaries, already in the EMR, get to the next caregiver to assure smooth handoffs when patients are referred, transferred or discharged. “So much of what we do is workflow,” Halamka explains. Out west, the California RHIO (CalRHIO) announced plans to launch HIE this July at 23 Orange County emergency departments for 360,000 enrollees in the CalOptima health plan for Medicare, MediCal and the state’s Healthy Kids insurance program. CalOptima will provide medical history and lab and pharmacy data from claims and, where available, clinical records. The system will supplement information in the Medical Services Initiative Program, an Orange County safety net. Significantly, says CalRHIO Chief Operating Officer Debbie Rieger, “We actually have a solid business model that’s sustainable,” Rieger says, pointing out the Achilles’ heel of the failed Santa Barbara County Care Data Exchange in California. CalRHIO will add commercial health plans as sponsors early next year and also expand to Los Angeles and Sacramento counties, she adds. |
Neil Versel joined TriMed in 2015 as the digital editor of Clinical Innovation + Technology, after 11 years as a freelancer specializing in health IT, healthcare quality, hospital/physician practice management and healthcare finance.