By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.

Irresponsible

Provoking and demonizing health plans might have had populist appeal and political value in 2009, but in 2012 it’s an unnecessary attack on a constituency that has potential to be one of the administration’s best allies in advancing accountable care.

Prior to ACA reform legislation, health plans had the wrong economic incentives — the rules of the game were not consistent with good public policy:

• Health plans had incentives to AVOID risk, not manage risk. They were economically incentivized to avoid high risk patients (with preexisting conditions) and to get rid of patients that became sick
• Health plans had minimal incentives to CONTROL systemic costs — they could pass them on in the form of premium increases.

ACA changed incentives and disrupted the payer business model:

•  Health plans will longer be allowed to avoid high risk patients; they must accept all comers
•  Health plans must MANAGE, not avoid costs. Health plans are abandoning their old business models.

What are we seeing in the marketplace? Almost all health plans are embracing the vision of accountable care and need to shift the system from Volume to Value. Health plans could be administration’s biggest friend in revamping the health care delivery non-system.

Naive (more…)

Yet, for my lifetime, I have been incredibly frustrated by medicine’s cultural and practical lack of acknowledgement of this law.

FINALLY, the American College of Physicians (ACP) got it. Kaiser Health News describes the revelation:

The American College of Physicians hit a nerve when it released an updated ethics manual calling for doctors to provide “parsimonious care” – in other words, “to practice effective and efficient health care and to use health care resources responsibly.”

This recommendation, included in the Jan. 3 Annals of Internal Medicine special supplement, drew immediate reaction – and not just because of its use of the infrequently heard “parsimonious.” It’s been viewed as a definitive statement of medical ethics directed at the organization’s 132,000 members – physicians who practice internal medicine and its related specialties, among them cardiology and oncology, that often involve expensive procedures. And, the guidance comes at a time when health care costs are central to the national policy debate.

My personal reactions to this are very mixed. (more…)

Tracey Moorhead, President and CEO of the Care Continuum Alliance, writes today’s inaugural post. She persuasively notes the increasing importance of the full continuum of population health interventions – wellness, prevention and other approaches to improving health, reducing disease risk and raising productivity.

Bob Laszewski’s essay on today’s THCB resonated with me: 2012: A Year of Huge Uncertainty in Health Care Policy. In my 30 years in health care, I have never seen more uncertain and fluid times.

Yet in times of uncertainty and confusion, it’s important to focus on what IS certain and predictable. The need for population health approaches is one of those certainties. While care providers are recognizing the need to develop and invest in strong care management abilities, health plans are redoubling their efforts to develop these capabilities in-house.

Tracey’s first post includes a link to the CCA’s new white paper: Key Issues in Population Health Management: Key Industry Issues for 2012.  Check it out.

a unicorn — a fantastic creature that is vested with mythical powers. But no one has actually seen one.

a camel — a horse designed by a committee, one that already has its nose in the tent

With this background, you can begin to appreciate the difficulty of conducting an accurate census of ACO animals in the wilderness.  Yet, this is exactly the task undertaken in the excellent Leavitt Partners report measuring ACO activity in the US.

As I will explain, the Leavitt report has the potential both to overestimate and underestimate ACO and accountable care-like activities. In my judgment, however, it’s far more likely to be understating just how much accountable care activity actually is going on.

Findings in the Leavitt Report

The Leavitt researchers “identified ACOs from news releases, media reports, trade groups, collaborations and interviews through the beginning of September 2011. Also included were entities that either self-identified as being an ACOs or specifically adopted the tenets of accountable care.”

The report counts 164 ACOs — 99 that are primarily sponsored by hospital systems, 38 by physician groups, and 27 by insurers.

Here’s how Leavitt summarized their results: (more…)

IMHO, the recent acquisition by Highmark Blue Cross Blue Shield of West Penn Allegheny Health System (WPAHS) for $475 M is unique to local market conditions. It was done as a last resort and should not be taken as a signal that health plans are starting a hospital buying binge.

Why are hospitals unattractive investments for health plans:

(more…)

Ironically — at the same time — commercial payers are awakening to ACO opportunities.

Please read further.

(more…)

Major U.S. health insurers, including Aetna Inc., Humana Inc. and WellPoint Inc., are retooling to become more than just health plans, in the wake of the federal health-care overhaul that is changing the rules for the industry’s core business.

Diversification plans, touted in meetings with investors this year, include stepped up acquisitions and partnerships that will allow the companies to employ doctors directly, deliver health-information technologies, and participate in new hospital-doctor groups known as accountable-care organizations.

Wall Street Journal; May 12, 2011

Does this make sense? Absolutely!

(more…)

Reprinted courtesy of MCOL.

Perspectives on a Selected Key Topic |     April 2011/May 2011     |   Volume Three Issue Two

Will a material number of hospitals and their core medical staffs, that are relatively independent, evolve into highly integrated delivery systems during this decade, and why?

William J DeMarco MA, CMC

President and CEO, Pendulum HealthCare Development Corporation

The great momentum brought about by government and private payers demand for more accountability is unstoppable. Rapid consolidation of hospitals and consolidation of physicians by physician groups, hospitals and now insurers will shift referral patterns and consumer preference. 1 out of 4 hospitals will fall short of providing value and close or be absorbed within 10 years.

Physicians will be offered higher prices to sell out to insurers and investors who value the short supply of PCPs and will try to control care demand by retooling the care system building ASC and small scale short stay hospital.

True clinical integration will follow for the survivors. The ability to prospectively develop clinical budgets and bundles of services will connect regional tertiary and quaternary care facilities to local hospitals so integration can be regionalized across larger populations and payer segments.

Once these delivery systems realize they need a product recognizable to individual consumers they will seek alliance with select insurers or create their own insurance company thereby achieving the true definition of integration which is to integrate financing and delivery of care.

This offers the shared savings with themselves and stabilizes patient flow and overhead to achieve value to purchasers and users of care.

We think these opportunities will be at a tipping point on a market by market basis over the next 5 years and will be a national definition of success within 8 years. We believe this will happen because already the bond rating companies are looking at physician alignment and payer alignment as factors in establishing credit worthiness of hospitals for expansion and mergers.

Benjamin Isgur

Director, PricewaterhouseCoopers LLP’s Health Research Institute

Integration is certainly on the rise. The notion of independent physicians may be a myth because so-called independent physicians are becoming increasingly financially tethered to hospitals. In fact fifty-six percent of physicians PwC surveyed want to more closely align with a hospital in order to increase their income. The new health reform law focuses on population health and adopts a Medicare compensation model that penalizes poor quality and rewards cost savings and electronic information sharing. Some commercial payers are also pushing this business model. (more…)

On March 31, CMS released the long-awaited “Medicare Shared Savings Program: Accountable Care Organizations” document (ACO Rule). Read the details here (strong suggestion: unless you’re working on your PhD in ACOs, start with the fact sheets).

There are many surprises. Here are eight first impressions on this 429 page tome:

1. The bar has been set high…very high.  Tire kickers need not apply.
2. Don’t expect to see many or any small ACOs.
3. Patients will be confused by ACOs.
4. Concerns over maintaining competition and avoiding antitrust are being taken seriously.
5. CMS scores points for coordinating the ACO Rule across Federal agencies.
6. CMS loses points for micromanagement and a controlling mindset.
7. Possible losers — hospitals, ACO vendors.
8. Possible winners — physicians, health plans.

The details follow.

(more…)

On Friday April 1st, 2011 (yes, ‘April Fools day’) at 4 PM Eastern and 1 PM Pacific

ACO Watch: A Mid Week Review will host a special roundtable series on the ‘hot of the press’ Notice of Proposed Rules’ pertaining to the implementation of Accountable Care Organizations. For the published rule, click here.

The roundtable team will consist of Mark Browne, MD, PYA, aka @consultdoc, Vince Kuraitis, e-Care Management blog, aka @VinceKuraitis, and David Harlow, the Harlow Group, LLC,  aka @healthblawg, with Gregg Masters, aka @2healthguru, as moderator and host.

To listen live, or via archived replay, click here. During the broadcast you may also listen in via (619) 393-2836, and even participate in the chatroom.

ACO Fact sheet from HHS

Medicare Fact Sheet: What Providers Need to Know

HHS press release

Don Berwick’s article on ACOs in the NEJM

ACO Quality Performance Standards Summary

FTC/DOJ Joint Antitrust Statement on ACOs

TheHill article “Leaked memo reveals Dem strategy for defending healthcare reg”

The leaked memo

Having been a debater in high school and then trained as a lawyer, my default mode of thinking is to be critical:

“Hey, Vince, how ya doin’? Great day isn’t it?”

“Well, …err…maybe, maybe not…actually, here’s 14 reasons why not.”

My wife and friends kindly tell me that this personal quality can be insufferable, and if you’ve ever met a lawyer you know what I’m talking about. My internal defense mechanism against my inner-critical brain is simply to turn it off — just go along for the ride and live in the moment.

To the extent that you can connect with what I’m saying, I suggest that before reading this report that you turn off the critical part of your brain.

If you’re a regular reader, chances are you’ve read individual white papers on these topics:

• PCMH — the Patient Centered Medical Home
• Care Coordination
• Access to care for the un and underinsured
• HIT — health information technology and the HITECH Act
• Payment reform, especially as it’s been discussed around ACOs (accountable care organizations).

“Better to Best” transcends all these topics — it weaves them together, displays the interrelationships, and describes specific components of what a truly integrated health system could look like. (more…)

Health care lobbyists and advocates are bracing for six pages of the health care reform law to explode into more than 1,000 pages of federal regulations when the Department of Health and Human Services releases its long-delayed accountable care organization rules this week. Politico

What should you be looking for as you snuggle by the fireplace this weekend reading the draft ACO regs?

Rob Lazerow writes a helpful article listing 5 Things to Watch in the Medicare Shared Savings Program Proposed Rule. His list of five key design issues includes:

1. How will patients be assigned to ACOs?
2. To what cost benchmark will ACOs be compared?
3. How will bonuses be calculated and paid?
4. For which quality metrics will ACOs be responsible?
5. What is the application process?

I’d like to add a sixth  item — which actually would be #1 on my list.

As I’ve previously written, IMHO the central issue around ACOs is:

Are (hospitals and doctors) viewing ACOs as a way to truly develop patient centric, collaborative care or as a means toward consolidating market power against payers? We really don’t know.

So here’s item #6:

(more…)

The whitepaper is a great overview of accountable care and ACOs (Accountable Care Organizations). It’s a quick and easily digestible read.

However, there is one key point articulated in the paper that I’d like to emphasize here:

accountable care is not synonymous with ACOs.

(more…)

Keith Wright and Gregory Drutchas’ incisive article Economic Credentialing: A Prescription To Secure Shared Savings Under Accountable Care provides useful history and context about economic credentialing:

For many years, the use of economic factors by hospitals in making medical staff credentialing decisions has been the subject of much discussion and debate among physicians, groups such as the American Medical Association (AMA), healthcare providers, payors, and attorneys….the implementation of healthcare reform is likely to bring the debate over economic credentialing to the forefront once again.

While economic credentialing has been talked about a lot, it’s rarely been used.

The controversy over economic credentialing arises again with ACO’s…and this time the answer might be different — and opportunistic for primary care.

Economic Credentialing from the Hospital POV— The Big Red Button

From my personal experiences, the threat of a hospital imposing any type of economic credentialing on their medical staff has been a big red button  issue — akin to a hospital declaring war on some physicians, with the risk of alienating nearly all physicians.

Management guru Peter Drucker wrote that the two most difficult organizations to “manage” were hospitals and the military. Most hospitals work hard to integrate physicians in decision making and they share a great deal of information about clinical and business issues. (more…)

The reviews are filtering in and I’m seeing two major themes: 

1. The vision is on target:  “extraordinary”, “breathtakingly innovative”.
2. These guys didn’t do all their technical homework. The range varies, but the message is consistent. 

Here are some early critiques of the PCAST report. Let the debate continue! (more…)

If you went to their Twitter feed today, here’s what you’d see:

This struck me as a great pictorial representation of the broader challenges the CMS Innovation Center faces:

• They’ve kinda sorta figured out there’s a conversation going on out there — they’ve joined Twitter
• They haven’t figured out that they need to listen:  Following = 0
• They haven’t figured out they they need to talk:  Tweets = 0

I remain hopeful, but the CMS Innovation Center has a long way to go.  Dr. Berwick, opening up this closed organization is going to be the challenge of your lifetime.

In many communities, hospitals (delivery systems) will be the “natural” organization to lead an ACO. Hospitals bring management expertise, IT, capital, and community relationships to the table as important assets.

Questions about Hospital-Led ACOs

I’ll try to keep an open mind, but I question whether hospitals are best positioned to lead ACOs:
(more…)

Accountable Care Organizations (ACOs) are today’s cure-du-jour for reforming the health care delivery system. Bob Berensen, MD of the Urban Institute strongly questions whether the shared savings model under current legislation provides enough economic incentive for hospitals to disrupt their existing core business of acute, inpatient care.

The dialogue took place at HSC’s 15th Annual Wall Street Comes to Washington Conference. Here’s the conversation from the transcript — I actually went back to dig this out of my trash:

Paul Ginsburg: Actually, let me just pose a devil’s advocate question. You know, I could see why ACOs might be attractive to a large —- an IPA because there’s this opportunity to reduce hospital use and be rewarded for it. But what’s the motivation for a hospital because the rewards from the ACO are likely to not measure up to the loss of volume from more efficient delivery. Is there any response to that? (more…)

OK, let me be the first to admit that today’s “just-the-facts-ma’am” post might be a little dry…but trust me, its really important stuff to know in understanding the process of how the Health IT Policy Committee (HITPC) and its workgroups are approaching formulating recommendations for HITECH Stages 2 and 3.

At this point at least two different workgroups are involved in developing recommendations for HITECH Stages 2 and 3.

• A newly formed Quality Measures Workgroup. This group will “produce initial recommendations on quality measure prioritization and the quality measure convergence process pertaining to measure gaps and opportunities for Stage 2 Meaningful Use”. The group is chaired by Dr. David Blumenthal and held its first meeting on September 10.
• The Meaningful Use (MU) Workgroup. Most recently, the MU Workgroup solicited expert testimony on Care Coordination (August 5) and Population Health (July 29).

Important recent HITPC and Workgroup activities are summarized below.

(more…)

We’ve spent the past year creating the MU (meaningful use) requirements for Stage 1 of the HITECH act.  As shown by the diagram above, Stage 1 focuses on Data Capture and Sharing. Now it’s time to begin to focus on Stage 2 (Advanced Clinical Processes) and Stage 3 (Improved Outcomes).

The current generation of EMRs (electronic medical records) were designed primarily to assist care providers with clinical documentation, billing, and maximizing revenues. They were not designed to enable care coordination and optimize population health.  

This essay is the first in a new, ongoing series that will highlight:

• Design and metrics for Stages 2 and 3 of the HITECH act
• Companies and care providers developing and using applications targeting Stage 2 and 3 MU objectives

This first essay will provide an overview of what we’ve seen in Stage 1 and what we might expect in Stages 2 and 3. (more…)

The Medicare MAPCP (Multi-Payer Advanced Primary Care Practice) demo promised to be Medicare’s Biggest Change in 40 Years…

…but the emerging reality isn’t living up to the promise.

In this post, we’ll discuss:

1. The Promise
2. An Overview of the MAPCP Demo
3. Our Main Takeaway: Emerging Reality Suggests Medicare Will Be a “Difficult” Partner
4. Conclusion: Think Twice Before Signing Up

1) The Promise

The sandbox metaphor was first used by the National Academy for State Health Policy:

For the 10 or more states that are active stakeholders in multi-payer medical home initiatives, the promise of Medicare getting in the sandbox with them and playing (a.k.a. paying) is an exciting proposition. The addition of Medicare as payer to some of these state initiatives may be the critical tipping point that results in widespread primary care delivery system reform in states by involving more practices, payers and patients. (more…)

(click on the graphic to download the document)

Depending on the nature of the payment changes which are made, physicians may need to enhance their capabilities in some or all of the following sixteen areas:

1. Achieving sufficient patient volume to support a new or improved service.
2. Having sufficient upfront capital to design and implement a new or improved service.
3. Having the skills/experience to efficiently/effectively implement a new/improved service.
4. Having the ability to obtain and analyze data on the quality of services.
5. Having the skills/experience to improve the quality of services.
6. Having adequate resources to support high-quality service delivery.
7. Gaining access to external resources to support patient adherence and health improvement.
8. Obtaining and analyzing data on the variation in services per episode or per patient.

(more…)

Pop quiz: Among early-stage companies that are successful, what percentage are successful with the initial business model with which they started (Plan A) vs. a secondary business model (Plan B)?

Harvard Business School Professor Clay Christensen studied this issue.  He found that among successful companies, only 7% succeeded with their initial business model, while 93% evolved into a different business model.

So let’s take this finding and reexamine our human nature. In light of these statistics, what makes more sense:

• Defending Plan A to your dying breath?
• Assuming Plan A is probably flawed, and anticipating the need for Plan B without getting defensive?

We question many of the assumptions underlying HITECH Plan A. We also want to talk about the need and content for Plan B in a constructive way.

In this essay we’ll discuss:

1) The Need for HITECH Plan B

2) Questioning Assumptions — Issues to Reconsider in Plan B

a) Rewarding Incremental Progress
b) Addressing Root Causes for Non-adoption of EHR Technology
c) Questioning Health Information Exchanges (HIEs) as Building Blocks for the Nationwide Health Information Network (NHIN)
d) Catalyzing Movement Toward Modular EHR Technology
e) Focusing Incentives on High Leverage Physicians
f) Recalibrating Expectations for EHR Technology Adoption
g) Getting Bang-for-the-Buck in Achieving Meaningful Use Objectives
h) Comprehensively Revamping Privacy/Security Laws vs. Tweaking HIPAA
i) Maximizing Sync Between HITECH and PPACA
j) Leveraging Potential for Patient-Driven Disruptive Innovation
k) Promoting EHR Adoption Beyond Hospitals and Physicians, e.g., long-term care, home health, behavioral health, etc.
l) Dumping Certification

3) Summing Up

(more…)

.

….or to be more specific, HITECH is synergistic with payment reform that could come from the recently passed national health care reform legislation — the Patient Protection and Affordable Care Act (PPACA).

We’ll keep this post fairly short and try to avoid many of the more divisive aspects of this topic. The need for healthcare payment reform is well understood on both sides of the aisle:

Realizing the full potential of health IT depends in no small measure on changing the health care system’s overall payment incentives so that providers benefit from improving the quality and efficiency of the services they provide. Only then will they be motivated to take full advantage of the power of electronic health records. Dr. David Blumenthal,  New England Journal of Medicine, April 9, 2009

(more…)

by Dave deBronkart (e-PatientDave), Vince Kuraitis, and David C. Kibbe

So far this series has looked at HITECH participation by hospitals (grumbling but in the game) and physicians (wary, on the sidelines), kudos for ONC’s three major policy points, and how HITECH is already moving the needle on the vendor side. Today we’re going to look at the reason the whole system exists: patients.

It’s possible to look at the patients issue from a moral or ethical perspective, or from a business planner’s ecosystem perspective. In this post we’ll simply look at it pragmatically: is our approach going to work? It’s our thesis that although you won’t see it written anywhere, the stage is being set for a kind of disruption that’s in no healthcare book: patient-driven disruptive innovation.

We’ll assert that in all our good thinking, we’ve shined the flashlight at the wrong place. Sure, we all read the book (or parts), and we talk about disruption – within a dysfunctional system.

If you believe a complex system’s actual built-in goals are revealed by its actual behavior, then it’s clear the consumer’s not at the core of healthcare’s feedback loops. What if they were?

We assert that to disrupt within a non-working system is to bark up a pointless tree: even if you win, you haven’t altered what matters. Business planners and policy people who do this will miss the mark. Here’s what we see when we step back and look anew from the consumer’s view:

1. We’ve been disrupting on the wrong channel.
2. It’s about the consumer’s appetite.
3. Patient as platform:
   • Doc Searls was right
   • Lean says data should travel with the “job.”
   • “Nothing about me without me.”
4. Raw Data Now: Give us the information and the game changes.
5. HITECH begins to enable patient-driven disruptive innovation.
6. Let’s see patient-driven disruption. Our data will be the fuel.

(more…)

Most of the press coverage and attention to HITECH has been to the “buy” side of the market:  The central question here has been: “Will doctors and hospitals buy and use EHR technology?”

Meanwhile — and much more quietly — the sell (vendor) side of the EHR market is already dramatically different than it was a year ago. We observe change occurring at at least three levels:

1. HITECH as Policy Change
2. HITECH as Mindset Change
3. HITECH as Technology/Business Model Change

(more…)

While this might sound like a criticism of the way HITECH has been implemented, it’s not intended that way — it’s a commentary on 1) the complexity and scope of change that will be required to make HITECH successful, and 2) the level of protective entrenchment existing American health care today.

Rather, we believe that the Office of the National Coordinator (ONC) for Health IT – Dr. David Blumenthal and his staff — have done a superb job in interpreting and defining key aspects of HITECH legislation. We’re big fans.

For those of you who have been following our writings over the past 18 months, think of this post as a summary and status report on the extensive incumbent (cat) vs. innovator (dog) dialogue:

1. A Recap  — The Stagnant Electronic Medical Record (EMR) Market Before 2009
2. ONC Gets It Right In Three Major Interpretations and Definitions of HITECH

a) Meaningful Use (MU) Emphasizes “Meaningful”, Not “Use”

b) Vendors Get a Level Playing Field With Certification

c) Lightweight, Open Standards Promote EHR Interoperability and Modularity

(more…)

First, the good news: There are a lot of pilot and demonstration projects potentially involving the Patient Centered Medical Home (PCMH) in newly enacted Federal health care reform legislation – the Patient Protection and Affordable Care Act (PPACA).

Then, the bad news: There are a lot of pilot and demonstration projects potentially involving the PCMH in the PPACA.

…so many that the PCMH risks being drowned in an ocean of opportunity.

I’d like to make a few simple points in this essay:

1. The number of authorized pilots and demos in the PPACA is staggering
2. This creates both opportunities and challenges
3. PCMH focus will be required to navigate the ocean

(more…)

by Vince Kuraitis JD, MBA and David C. Kibbe MD, MBA 

The rationale for hospitals having to play in the HITECH game is straightforward: the financial carrots through 2015 are helpful, and the financial sticks after 2015 will be very painful.

We’ll discuss:

• Financial Impacts on Hospitals
• Survey Data Showing Hospitals Will Play
• Why Success is Not Guaranteed

Financial Impacts on Hospitals

Even prior to HITECH, most hospital executives already had passed the threshold decision and concluded that they need to implement EHR technology. Thus, the issue for most hospitals isn’t “whether” to implement EHR technology, but “when”, “at what cost”, and “how”. (more…)

by Vince Kuraitis JD, MBA and David C. Kibbe MD, MBA

If you’re like many folks we talk with, you understand the importance of the HITECH Act legislation — yet feel overwhelmed by the complexity and details.

This series of blog posts is for you. We address the question “Is HITECH working?” with seven straightforward observations. We’ve worked hard to boil down the complexity and make it understandable to the casual industry observer.

Is HITECH Working? Summarizing the Seven Observations

Our 7 Observations are:

(more…)

Answer:

• “demonstration” — 312 mentions
• “pilot” — 80 mentions

This weekend I’ve been trying to wrap my head around the question “Just what are these demos and pilots in the PPACA all about?” I have been boggled by the sheer number and complexity, and thought I’d share some findings from my first dive.

Why are These Pilots and Demonstrations Important?

(more…)

Gawande retorts: “Is that a bad thing?”

…and he answers his own question by describing the value of pilot programs contained in both the Senate and House versions of health reform legislation.

Is Gawande correct?  Yes and no….

(more…)

• Keep it simple; think big, but start small; recommend standards as minimal as possible to support the business goal and then build as you go
• Don’t let “perfect” be the enemy of “good enough”; go for the 80% that everyone can agree on; get everyone to send the basics (medications, problem list, allergies, labs) before focusing on the more obscure
• Keep the implementation cost as low as possible; eliminate any royalties or other expenses associated with the use of standards
• Design for the little guy so that all participants can adopt the standard and not just the best resourced
• Do not try to create a one size fits all standard, it will be too heavy for the simple use cases
• Separate content standards from transmission standards; i.e., if CCD is the html, what is the https?
• Create publicly available controlled vocabularies & code sets that are easily accessible / downloadable
• Leverage the web for transport whenever possible to decrease complexity & the implementers’ learning curve (“health internet”)
• Position quality measures so that they will encourage adoption of standards
• Create Implementation Guides that are human readable, have working examples, and include testing tools

Commentary:  These new guidelines are the right answer…let’s hope they are Dr. Halamka’s “final” answer.

Feedback from the community has been mixed:

(more…)

In that post I touched briefly on the potential for MAPCI to create effective networks at multiple levels — contracting networks, health IT networks, social and collaborative care networks.  I’d like to expand a bit today…

So, why is Medicare’s participation in MAPCI  and other regional collaboratives such a big deal? Here’s my hypothesis:

Medicare’s non-participation (to-date) in regional payer/provider collaboratives has been a rate limiting factor in the potential to achieve high levels of network effects that drive adoption.

(more…)

Dear Dr. Blumenthal,

I was honored to receive a personal email from you today. However, after reading it, I conclude that you must have intended to send this email to Judith Faulkner, CEO of Epic Systems.

I really liked what you said about working toward interoperability:

The HITECH Act calls for the “development of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information and that…promotes a more effective marketplace, greater competition…[and] increased consumer choice” among other goals.  (Section 3001(b))  This means we cannot support arrangements that restrict the secure, private exchange of information required for patient care across provider or network boundaries.  Some of these arrangements may improve care for those inside their walls.  But ultimately, they have the potential to carve the nation up into disconnected silos of information, and thus, to undermine the vision of a secure, interoperable, nationwide health information infrastructure, which the law requires us to establish.  Consumers, patients and their caretakers should never feel locked into a single health system or exchange arrangement because it does not permit or encourage the sharing of information.

So you will probably just need to resend your email…

Vince

Why aren’t primary care physicians expressing similar laments about  the shelving of the MMHD (Medicare Medical Home Demonstration) in favor of the MAPCI (Multi-Payer Advanced Primary Care Initiative).

My colleague Jaan Sidorov, MD and I pick up on no signs of discontent.  Read our essay “Three Years of Medical Home Demonstration Preparation Down the Drain?” on Dr. Sidorov’s blog.

Dr. John Halamka — Vice Chair of the HIT Standards Committee of the ONC and one of the most vocal and influential figures in health IT — writes a blog post this morning entitled “The Genius of AND”. Halamka reasonably summarizes the essence of the debate about standards and interoperability as being between “the healthcare informatics crowd” (cats) and the “Internet crowd” (dogs):

He notes that the debate shouldn’t be about one or the other POV prevailing (“either/or”), but about integrating both points of view (“and”):

..we need to embrace both approaches – the right tool for the right job depending on what you want to achieve.

For provider to provider communication which requires the exchange of documents with non-repudiation as the medico-legal record for direct clinical care, the CDA/CCD has great metadata and the ability to support structured data as well as free text discharge summaries/operative notes/history&physicals.

For a summary record that represents a snapshot in time of problems, medications, and labs for transmission between EHRs and PHRs, the CCR and other formats such as Google’s CCRg or PDF can do the job.

I’m absolutely stunned…and speechless.

(more…)

Today’s blog post will tackle:

• Medicare’s biggest change in 40 years?
• The rise of MAPCI
• The fall of MMHD
• Implications/discussion

Medicare’s Biggest Change in 40 Years?

(more…)

The letter is directed at 10 EMR (electronic medical record) vendors, and asks very pointed questions about whether the vendors have been negligent in not addressing patient safety issues in their technologies.

Senator Grassley, you have the scent and you’re on the trail.  There are several other questions you should be asking these vendors: (more…)

ACOs of various types are being proposed in national health reform legislation. For all you ever wanted to know about ACOs, read How to Create Accountable Care Organizations from the Center for Healthcare Quality and Payment Reform.   I spent an hour and a half poring over the details of this excellent report written by Harold Miller.

My mistaken impression has been to focus on the organizational form of ACOs, rather than their objectives.  Organizational form is relevant in understanding ACOs, but primarily as a means toward creating accountability, not the end in itself.  Thus, expect to see many varying types of ACOs emerging based on local needs and characteristics.

I initially approached reading the report with a number of top-of-mind tactical and programmatic questions about ACOs:

• What kinds of organizations can serve as ACOs?
• What do primary care practices need to do differently to become ACOs?
• What’s the difference between a medical home and an ACO?
• Can small primary care practices become an ACO?
• Should all physicians in a geographic area be included in a single ACO?
• What is the role of specialists in an ACO?
• Should hospitals be part of an ACO?
• Are integrated delivery systems the ideal model?
• How many payers need to support an ACO?
• Accountability for all or some costs?

The answers to these questions are important, but primarily because they go to how an ACO can achieve accountability…

… and the short answer to every one of these questions is “It depends”. 

Depends on what?

To the maximum extent possible, an organization’s ability to serve as an Accountable Care Organization should be determined by its success in improving outcomes – controlling costs, improving quality, and providing a good experience for patients – not on its organizational structure or even the specific care processes it uses. 

Let me try to explain the big idea of accountability from a couple of other angles.

(more…)

Two issues have rightfully surfaced front and center in the public’s understanding of HITECH Act implementation:

• ” definition of “Meaningful Use” of EHRs, and
• ” definition of “certification” process for EHRs

…and we applaud the progress of the workgroups and the HIT Policy Committee in addressing these issues constructively.

However…a THIRD issue lurks – “Data harmonization at the expense of data liquidity“, or put another way – “misplaced pursuit of one (and only one) language at the expense of practical communication.”

On August 20, the HIT Standards Committee approved recommendations to bring forward to the HIT Policy Committee meeting later this September. 

In this post, we will:

1. Summarize aspects of the HIT Standards Committee’s recommendations that are problematic
2. Develop an analogy to illustrate how the recommendations will limit innovation and increase barriers to communication.  Our analogy:

The Standards Committee recommendations are like mandating that everyone in the U.S. be required to speak Latin by 2013.

Dr. Blumenthal has wisely anticipated that there could be a situation where in his role as national coordinator that he should not follow a Committee’s advice:

“This committee does provide advice to the national coordinator, but it does not make policy,” Blumenthal said, with a noticeable emphasis on “not.” [iHealth Beat; August 18, 2009]

Dr. Blumenthal, this is exactly the situation you have anticipated. (more…)

Many of us have enjoyed a few good minutes of fun having our fortunes told by soothsayers who claim they can predict our future based on patterns of tea leaves in a cup or the playing cards we’ve pulled from a deck.

We pay a few dollars for the entertainment and if the fortune teller is skilled, we are temporarily impressed by his “insight.” But once we leave the carnival, we come back to our senses. Fortune-tellers can’t predict the future.

With its latest announcement, the Certification Commission for Healthcare Information Technology (CCHIT) appears to have entered the fortune telling business.

And if information provided on blogs published by its founders is to be believed, some EHR vendors plan to have their fortunes told by the former EHR certification monopolist.

Background

In June, ONC’s HIT Policy Committee released a Meaningful Use Matrix and proposed that it should serve as the basis for EHR certification as mandated by ARRA, the economic stimulus program signed into law last winter.

The Matrix consisted of five “Health Outcomes Policy Priorities” and associated Care Goals, Objectives and Measures. The Committee anticipated that the latter would be transformed into EHR certification criteria. (more…)

The Federation of American Hospitals (FAH) sent a letter to Dr. David Blumenthal (National Coordinator for Health IT) arguing that “Meaningful Use” funding should not be tied to achievement of quality measures.  The FAH is the trade association for for-profit hospitals; the letter is dated August 26 and a copy is available on the HealthHombre website, with a deserved hat tip.

First, let me concede that they make a reasonable point on p. 3 when they say “Under it’s framework, the Policy Committee has recommended that HHS should adopt a measure for 2013 requiring a 10 percent reduction in preventable admissions from 2012 to qualify as a meaningful EHR user.”  This measure deserves discussion.

Here’s the implicit threat of a lawsuit — the nuclear bomb: (more…)

This post is a foundational overview of characteristics of network industries.  Much of the terminology will deserve deeper discussion, but we have to start somewhere.

In his book The Economics of Network Industries, Professor Oz Shy lists four characteristics of network industries.

The main characteristics of these markets which distinguish them from the market for grain, dairy products, apples, and treasury bonds are:

1. Complementarity, compatibility and standards
2. Consumption externalities [network effects]
3. Switching costs and lock-in
4. Significant economies of scale in production

In this essay, I’ll quote from Dr. Shy in explaining each of these characteristics.  I’ll also offer a few thoughts as to how these characteristics apply to healthcare. More specifically, I’ll discuss physician adoption of EHRs (electronic health records) and patient adoption of PHRSs (personal health record systems).  

Why a PHRS instead of a plain old PHR?  Think of a PHRS as a PHR data repository platform bundled with multiple high-value applications. For a more detailed explanation, read here.   

Let’s look at the characteristics of network industries one at a time.

(more…)

There’s a double meaning to the title of this new series: Healthcare Crosses the Chasm to the Network Economy

At the level of technology, it’s a reference to Geoffrey Moore’s bestselling business/technology book — “Crossing the Chasm”. The Chasm here is the huge gap between early adopters of technology and mainstream users. The book describes the process of bringing specific technologies into mainstream usage.

At the level of clinical care, its a reference to the landmark 2001 report by the Institute of Medicine — “Crossing the Chasm”.  Here, the Chasm is a reference to the quality/safety gap existing in American healthcare, with major systemic recommendations for how to cross the chasm toward clinical improvement.

In this series, the “Crossing the Chasm” is a reference to both technology and clinical care — and to the interdependence between them. I believe we’re entering a new era in healthcare, marked by passage of the HITECH Act Federal stimulus legislation, but of which HITECH is only the beginning . While to a casual observer HITECH Act might seem focused on electronic health records (EHRs), it goes far beyond that.   

Over the past several years, I’ve had the privilege to work with many leading-edge clients who understand that health IT interoperability, networks, and platform/application technologies and business models will reshape health care over the coming years.  This has given me a chance to do a deep dive into understanding companies, business models and literature from outside health care, and then thinking through implications for health care companies (much blogging and book forthcoming).

This series will pull on concepts, terminology and lessons from two disciplines:

(more…)

Between the initial recommendations in July and the adopted recommendations in August, one critical word was added to the definition of “certification”.  That one word is “minimum” — and this one word expresses the correct approach and philosophy for the government’s role in the certification process for EHRs.

In this post I’ll address why a “minimum” approach toward certification makes sense: 

• Why “Minimum” Certification is Right: More Like UL
• Why Current CCHIT Certification Based on Functionality Risks Irrelevance or Lock-in to Outdated Technology

Why “Minimum” Certification is Right: More Like Underwriters Laboratories

(more…)

Over the past several years, many diverse initiatives have arisen offering partial solutions to systemic problems in the U.S. health care non-system. 

We see Meaningful Use Criteria recommended by the HIT Policy Committee as a unifying force for these previously disparate initiatives. These initiatives have included:

• Patient Centered Medical Homes (PCMHs)
• Regional Health Information Organizations (RHIOs)/Health Information Exchanges (HIEs)
• Payer Disease/Care Management Programs
• Personal Health Record Platforms — Google Health, Microsoft HealthVault, Dossia, health banks, more to come
• State/Regional Chronic Care Programs (e.g., Colorado, Pennsylvania, Improving Performance in Practice)
• Accountable Care Organizations — the newest model being proposed as part of national reform efforts

Today

While there are some commonalities and overlap, to-date these initiatives have mostly arisen in isolation and are highly fragmented — they’re all over the map. Here’s a graphic representation of the fragmentation that exists today:

Tomorrow

The HIT Policy Committee recently recommended highly detailed Meaningful Use criteria for certified EHRs.  Doctors and hospitals who hope to receive HITECH Act stimulus funds will have to demonstrate that they are meeting these criteria; the criteria are not yet finalized.

The Committee website describes the central role of the Meaningful Use criteria:

The focus on meaningful use is a recognition that better health care does not come solely from the adoption of technology itself, but through the exchange and use of health information to best inform clinical decisions at the point of care.

The HIT Policy Committee also is recognizing that there are multiple routes to achieving Meaningful Use beyond the traditional EMR 1.0, e.g., modular Clinical Groupware software.

While some might view the Meaningful Use criteria as limited to the world of health IT — something happening “over there” — we see much more going on. We believe the Meaningful Use criteria are becoming a powerful unifying force across the health system, with potential to converge previously disparate initiatives.  Here’s our conceptual representation:

(more…)

• As a political matter, the MMHD must save money
• As currently structured, the MMHD cannot save money

Please read my guest post

The Medicare Medical Home Demonstration (MMHD): Between a Rock and a Hard Place

over at Pharos Innovations new blog: The Collaborative Forum.

Is there a way out from between the rock and the hard place?  In Part II of this series, Dr. Randy Williams will discuss options.

Disclosure: Pharos Innovations is a client of Better Health Technologies, LLC.

The last article in this series — Time for EHRs to Become Plug-and-Play — used words to describe a major industry shift underway in health IT.

Sometimes pictures help to make a point. Here are several diagrams that you can also download as PowerPoint slides.

 Computer Industry 1983 to 2002

  Source: Venkatraman, N. Winning in a Network Centric Era, 2006

Blueprint for Health IT Shift

From EMR 1.0 — 2008…

…to Clinical Groupware/EHR 2.0 — 2012 (more…)

by Scott Shreeve, MD

We are entering an unprecedented season of change for the United States health care system. Americans are united by their desire to fundamentally reform our current system into one that delivers on the promise of freedom, equity, and best outcomes for best value. In this season of reform, we will see all kinds of ideas presented from all across the political spectrum. Many of these ideas will be prescriptive, and don’t harness the power of innovation to create the dramatic breakthroughs required to create a next generation health system.

We believe there is a better way.

This belief is founded in the idea that aligned incentives can be a powerful way to spur innovation and seek breakthrough ideas from the most unlikely sources. Many of the reform ideas being put forward may not include some of the best thinking, the collective experience, and the most meaningful ways to truly implement change. To address this issue, the X PRIZE Foundation, along with WellPoint Inc and WellPoint Foundation as sponsor, has introduced a $10MM prize for health care innovators to implement a new model of health. The focus of the prize is to increase health care value by 50% in a 10,000 person community over a three year period.

The Healthcare X PRIZE team has released an Initial Prize Design and is actively seeking public comment. We are hoping, and encouraging everyone at every opportunity, to engage in this effort to help design a system of care that can produce dramatic breakthroughs at both an individual vitality and community health level.

Here is your opportunity to contribute: (more…)

The remarkable report, “Initial Lessons From the First National Demonstration Project on Practice Transformation to a Patient-Centered Medical Home,” published in the May/June issue of Annals of Family Medicine, the Nutting Report, makes this point about the state of primary care IT offerings:

Technology needed in a PCMH is not “plug and play.” The hodge-podge of information technology marketed to primary care practices resembles more a pile of jigsaw pieces than components of an integrated and interoperable system.

Surprise!  Well, actually, no surprise.  We all recognize that health IT implementation in family practices, even under the best conditions and with the best of planning, is difficult and can be an ongoing challenge.   

What is surprising to us, however, is that Dr. Nutting and co-authors make this comment in their recommendations section:

…[I]t is possible and sometimes preferable to implement e-prescribing, local hospital system connections, evidence at the point of care, disease registries, and interactive patient Web portals without an EMR. (more…)

What if the health care payer were re-imagined as a service to the primary care doctor – supplying the tools, information and funding primary care physicians needed to meet the call to reform health delivery?

The structure of physician payment is considered one of the most problematic aspects of our health care system.  Driven by volume instead of coordinated, proactive care and favoring procedures over cognitive work, the payment system has driven primary care into decline and stifled improvements in quality and efficiency.  Indeed, primary care physicians are overstressed and demoralized by demands, coming from every direction, that drive them only to see more patients, as quickly as possible.   In this state, primary care cannot attract new physicians at a time when an expansion of the primary care workforce is desperately needed.  Without new primary care doctors, how will medicine meet the future volume demands of the aging “baby boomers”, much less deliver the kind of comprehensive approach to patient health needed to correct the defects in today’s care?  Despite these growing concerns, little in the way of innovation is arising from payers.

So, what if the payer model was re-imagined?  What would such a payer look like?  At ESSENCE Healthcare, we have developed the Collaborative Payer Model (CPM), which takes the first steps at answering these questions. 

The CPM brings a new approach to address what is missing in much of health care reform, including: (more…)

The forthcoming definition of the “meaningful use” of health information technology will set the direction of the Obama administration’s strategy for health IT adoption, said David Blumenthal, the new national coordinator for health IT. Government HealthIT, April 28, 2009

…but not everyone sees eye-to-eye on the definitions of “meaningful use” and “certification”.  [See the first post in this series for a refresher on the dog (disruptive innovator) and cat (incumbent EHR vendor) points of view.]

Markle Foundation –  Best Articulation of the Dog (Disruptive Innovator) POV 

Achieving the Health IT Objectives of the American Recovery and Reinvestment Act
A Framework for ‘Meaningful Use’ and ‘Certified or Qualified’ EHR
Markle Foundation; April 30, 2009

HIMSS and EHRA — Best Articulation of the Cat (Incumbent EHR Vendor) POV 

HIMSS Publishes Its Definitions of ‘Meaningful Use’
HIMSS News; April 27, 2009

HIMSS Electronic Health Record Association Executives Testify at NCVHS Hearings on ‘Meaningful Use’ Criteria
RedOrbit; April 28, 2009

Many Others Weigh In…. (more…)

by Deven McGraw JD, MPH, Center for Democracy & Technology

Introduction

There has been considerable discussion lately about whether or not the stimulus legislation (ARRA) extends HIPAA coverage to commercial vendors of personal health records (PHRs) any time they contract with entities already covered by HIPAA like hospitals, health plans or physicians groups.  (For those of you who don’t know, HIPAA is the Health Insurance Portability and Accountability Act of 1996.  The HIPAA privacy and security regulations form our national health privacy and security rules.)

The provision in question (Section 13408) states that “each vendor that contracts with a covered entity to allow that covered entity to offer a personal health record to patients as part of its electronic health record” is required to enter into a business associate agreement with the covered entity.   Under ARRA, business associates must comply with key provisions of the HIPAA privacy and security regulations. 

In this post, I argue that PHR vendors should be covered under HIPAA only under certain circumstances.  PHRs should be governed by a comprehensive framework of privacy and security protections, but HIPAA would provide inadequate privacy protection for people using these tools (at least as the HIPAA rules are currently structured).  As a result, I argue that this provision in ARRA should not be read to require the automatic application of HIPAA to PHR vendors any time they contract with covered entities to offer a PHR.   Instead, I suggest that HIPAA should cover a PHR vendor’s activities when the nature of the relationship between the vendor and the covered entity (hospital, health plan, physician office) primarily concerns the vendor performing a service for the covered entity. 

However, where the contractual relationship is primarily about improving the value of the PHR to the consumer, HIPAA should not apply.  (I know, not an easy line to draw – but I do suggest some factors that should influence the decision.) 

Finally, I urge the prompt adoption of separate, targeted privacy provisions to protect consumers using PHRs so that the choice is not HIPAA or limited protections under other federal laws. 

Why Not HIPAA – Isn’t it Better Than Nothing? (more…)

Modifications to HIPAA Privacy Laws: Impact on Microsoft HealthVault, Google Health, and other PHRs. 

We’ll explore how recent changes in privacy provisions of  ARRA/HITECH Federal stimulus legislation affect personal health information (PHI) platform companies (e.g., HealthVault, Google Health,  Dossia) and personal health record (PHR) companies.

Health IT expert and journalist Neil Versel described the issue in the April 7 issue of BNET Healthcare:

Although Google and Microsoft have gotten plenty of attention for their Web-based personal health records, both companies have long maintained that they’re not bound by the privacy protections of a 1996 federal law known as HIPAA. And despite a recent HIPAA change — one intended to extend its privacy provisions to services like Google Health and Microsoft’s HealthVault — both companies still insist they’re not bound by the law.

…“Our understanding is that HITECH, which is the jargon for [the health IT] part of the legislation, did not change the definition for a covered entity or a business associate, so our service is offered directly to the consumer,” Google Health Product Manager Roni Zeiger told Modern Healthcare last month. “[O]ur understanding is that we are neither a covered entity nor a business associate,” he continued. “We’re providing a service directly to the consumer or a patient.”

Microsoft offered a similar assessment at the annual Healthcare Information and Management Systems Society conference in Chicago. “We’re still outside [of HIPAA],” said David Cerino, general manager of Microsoft’s Health Solutions Group.

Not everybody agrees with Microsoft and Google. Versel commented in his own blog:

Excuse me? I’ve been struck since Day 1 with the arrogance Google seems to be exhibiting with its entry into healthcare …  it seems to me Zeiger is intimating that the law doesn’t apply to Google.

In the BNET article, Versel also quotes David Brailer, the first head of the Office of the National Coordinator for Health Information Technology at HHS: (more…)

One of the potential dangers of limiting $17 B HITECH federal stimulus funds to electronic health records (EHRs) is the risk of locking-in outdated technologies. Let’s consider what this might mean.

If you think of today’s EHR technology as EHR 1.0, what might EHR 2.0 look like? This post presents a number of innovative ways to conceptualize EHR 2.0:

• EHR as Platform + Applications
• EHR as Clinical Groupware
• EHR Integrated with PHR
• EHR as Software-as-a-Service (SaaS)
• EHR as a “Publish-Discover” Search Engine
• EHR + Disease Management Services = Care Coordination
• DRT-Enabled EHR

My point here is not to provide an exhausting listing of what’s possible, but simply to get you to begin to think about what’s outside the existing EHR box. These concepts are not mutually exclusive and you’ll see there’s overlap.

Let’s look at each of these innovative approaches. (more…)

On March 24, Stand for Quality — a new group representing 165 diverse health care organizations — called for a new era of quality in health care. Their white paper is titled Building a Foundation for High Quality, Affordable Health Care: Linking Performance Measurement to Health Reform .

The perspectives of Stand for Quality are a remarkable break from the past and have significant implications for future investment in health information technology. The Stand for Quality document unequivocally supports the dog  (disruptive innovator) POV — that providers should be paid for improvements in quality and outcomes. It rejects the cat (incumbent EHR vendors and supporters) POV — that providers should be reimbursed for simply acquiring health IT , with the expectation that quality will naturally follow.  (For a refresher on definitions of the dog/cat POV, see the first post of this series .)

Stand for Quality is a who’s who list that includes substantial representation from the physician, hospital, and health plan communities, as well as many others.  A listing of initial supporters is provided at the bottom of this posting.

The key recommendations of the white paper are:

• We must improve quality in health care and make it more affordable.
• Performance measurement is a core building block to provide high quality affordable care
• Public investments are needed to support the performance measurement, reporting and improvement enterprise.
• We should build upon the existing public-private performance measurement, reporting and improvement enterprise.
• Investment in health information technology should be linked to improving care (emphasis added).
• Performance measurement must be dramatically expanded, but measurement alone is not enough.

From having barely been on the radar screen six months ago, is the dog (disruptive innovator) POV rapidly becoming the majority perspective? Here’s the text from the 5^th recommendation:

(more…)

Even though I am a self-admitted dog person, Hoover is my buddy.

Hoover got a new shoebox as a Christmas present.  While most cats are very tied to their existing surroundings and don’t like things to change, Hoover is not your average cat.

The following photos were taken over about a two week period. Hoover hopes you enjoy them! (more…)

Sometimes laws are passed and the statute itself represents 95% of the work — there aren’t many details to figure out or loose ends to tidy up.

That isn’t the case with HITECH. The HITECH statute is just the beginning.

Whether you’re a cat or a dog, you’ll have hopes and fears about aspects of HITECH that are unclear or yet to-be-determined (TBD).

These include:

(more…)

What do cats (incumbent EHR vendors and their supporters) have to smile about over HITECH?

A lot.

…and it’s not very complicated.  HITECH directs $17 B to the cat community, and leaves scraps for the dogs.

(As a refresher, the cat POV is that HITECH stimulus funds should simply pay directly for electronic health record (EHR) technology — that providers will figure out how to use the technology to improve quality and outcomes; the dog POV is that HITECH should pay for improved quality and outcomes — change incentives and IT will naturally follow. See the first post in this series for more detailed explanations.)

There are three aspects of HITECH that are particularly favorable to cats: (more…)

In the first post of this series, I suggested that HITECH favors cats by about 60/40 and noted that the single most cat-like feature of HITECH is providing incentives for physicians and hospitals to acquire and implement EHRs  — but only EHRs. Reader “Mark” commented:

“How does this work out to 60/40? Looks to me like 100% cats.”

Let’s look a bit deeper to see how HITECH creates opportunities for disruptive innovation . (As a refresher, the cat POV is that HITECH stimulus funds should simply pay directly for EHR technology — that providers will figure out how to use the technology to improve quality and outcomes; the dog POV is that HITECH should pay for improved quality and outcomes — change incentives and IT will naturally follow. See the first post for more detailed explanations.)

The next three posts in this series will examine various aspects of HITECH from differing points-of-view:

• What’s dog-like (innovative)?  — today’s post.
• What’s cat-like (protecting incumbents)?
• What’s yet to-be-determined (TBD) or unclear?

The Need for Innovation

Lack of innovation is the heart of the problem in today’s health IT marketplace. Writing specifically about the market for hospital EHRs, my colleague David Kibbe and I have previously characterized the prevalent HIT business model:

• Proprietary, non-interoperable software
• Low volume, high margin sales (there are only about 5,000 hospitals in the country)
• Customers (hospitals) have high needs for installation support and customization. Customization for individual customers further challenges opportunities for creating interfaces and achieving interoperability.
• High costs of purchase and installation result in high switching costs and customer lock-in.

We questioned whether interoperability was in the economic interests of current health IT vendors:

• Interoperability will tend to commoditize data and reduce opportunities for high margin pricing
• Interoperability will reduce customer needs for software customization
• Interoperability will reduce switching costs and potential for lock-in
• Although it might seem contradictory…hospital customers aren’t asking for it

The market for physician EHRs is very similar.

What’s needed are technology and business models that will create disruptive innovation  in today’s HIT marketplace.

How Does HITECH Create Potential for Disruptive Innovation?

Here are five aspects of HITECH that lay groundwork for future innovation in health care: (more…)

It’s a mixed bag — HITECH legislation  is both dog-like (innovative) and catlike (protecting incumbents).  I’ll refresh your memory below on more specific definitions of cats and dogs.

Among many other reasons, HITECH is dog-like primarily because it has ended the question of WHETHER the U.S. is really serious about health IT reform.  HITECH spells out clear policy goals working toward interoperable health IT and dedicates an initial $19B in federal stimulus funds to begin the work. HITECH begins to create an environment for innovation in health care reform.

There are many open questions as to HOW best to go about this — how to spend the federal stimulus funds in ways that encourage innovation.

HOWEVER,

On balance, HITECH favors cats by about 60/40.

Why?

(more…)

They all relate to care coordination.  As shown in the diagram below from the Kansas Health Policy Authority (KHPA), there’s a lot of overlap.

A larger copy of the slide is available in this March 2 PowerPoint presentation by Marcia Neilsen , Executive Director, KHPA.

What are some of the implications?

(more…)

Warrantee

War`ran*tee"\, noun. A written assurance that some product or service will be provided or will meet certain specifications.

Today when we buy practically any consumer item we expect a warrantee.

What’s the “warrantee” after you are discharged from a hospital?

Last September I wrote a post posing the question “What’s the Best Way to Get Hospitals Involved in Care Coordination? ” The short answer was:  Pay them to do it, take money away when they don’t — make hospitals accountable for their role in avoiding unnecessary readmissions.

President Obama’s FY 2010 Budget begins to project savings from avoiding unnecessary hospital readmissions. “Jumpstarting the Economy and Investing for the Future ”  lays the groundwork for hospitals being required to “warrantee” their services:

Improving Care after Hospitalizations and Reduce Hospital Readmission Rates. Nearly 18 percent of hospitalization of Medicare beneficiaries resulted in the readmission of patients who had been discharged in the hospital within the last 30 days. Sometimes the readmission could not have been prevented, but many of these readmissions are avoidable. To improve this situation, hospitals will receive bundled payments that cover not just the hospitalization, but care from certain post-acute providers the 30 days after the hospitalization, and hospitals with high rates of readmission will be paid less if patients are re-admitted to the hospital within the same 30-day period. This combination of incentives and penalties should lead to better care after a hospital stay and result in fewer readmissions—saving roughly $26 billion of wasted money over 10 years. The money saved will also be contributed to the reserve fund for health care reform. [p.28]

Will this be politically challenging? Not likely…this is a continuation of reforms started under President Bush.

The changes will be profound. (more…)

“Where’s the single best place to get up to speed on how the Feds should  spend $20 billion to advance health information technology (HIT)?”

A colleague asked me this question a couple of days ago, and at first I hesitated.  Then it struck me — Matthew Holt’s The Health Care Blog has become the focal point for discussion of this critical topic.

Matthew’s very recent article — Cats & dogs: Can we find unity on health care IT change? — summarizes the two schools of thought that have emerged over the past two months.

His article is important and notable for a number of reasons:

• He crystallizes the two emerging schools of thought — the dog vs. cat POV (see below)
• He summarizes and links to many other key writings on the HIT spending topic
• He suggests that the dog and cat POV can be reconciled — that there’s a middle road
• He suggests several initial options to reconcile the differing schools of thought.  This discussion should continue.

If you’re interested in disease/care management, this is a topic you should be following closely. While the first decade of DM focused on a services based, call center model — the handwriting is on the wall that the next decade will focus much more on a technology based model.

Companies and organizations involved in disease/care management should be positioning themselves to take direct and indirect advantage of the Federal injection of funds.

Here’s Matthew Holt’s summary of the dog vs. cat perspectives: (more…)

Like the Institute of Medicine’s (IOM) 2001 counterpart report, "Crossing the Quality Chasm," a new report from the National Research Council of the National Academies is complex, full of new ideas assembled from multiple disciplines, and is likely to have seminal importance in framing public policy from now on . "Computational Technology for Effective Health Care:  Immediate Steps and Strategic Directions " was released last Friday, January 9, 2009 in draft, but there is so much to comment on that I think it’s wise to begin with a quote from the committee that sums up the central conclusion:

In short, the nation faces a health care IT chasm that is analogous to the quality chasm highlighted by the IOM over the past decade. In the quality domain, various improvement efforts have failed to improve health care outcomes, and sometimes even done more harm than good. Similarly, based on an examination of the multiple sources of evidence described above and viewing them through the lens of the committee’s judgment, the committee believes that the nation faces the same risk with health care IT—that current efforts aimed at the nationwide deployment of health care IT will not be sufficient to achieve the vision of 21st century health care, and may even set back the cause if these efforts continue wholly without change from their present course. Success in this regard will require greater emphasis on the goal of improving health care by providing cognitive support for health care providers and even for patients and family caregivers on the part of computer science and health/biomedical informatics researchers. Vendors, health care organizations, and government, too, will also have to pay greater attention to cognitive support. This point is the central conclusion articulated in this report.  (emphasis added)

It would be difficult to find a more sober indictment of US health care IT policy and implementation over the past decade than what is contained here. The report is the result of many meetings and site visits beginning in April 2007. It was written by a committee chaired by William W. Stead, MD, Director of the prestigious Informatics Center at Vanderbilt University Medical Center, and includes not only some of the nation’s top academic computer scientists and health IT engineers, but representatives from the private sector (Google and Intel) as well. (more…)

Being big fans of Clay Christensen and his theory of disruptive innovation (DI), we have been awaiting his just-released book The Innovator’s Prescription: A Disruptive Solution for Healthcare .  The book is co-authored by Dr. Jerome Grossman and Dr. Jason Hwang.

We have mixed reactions.

The book is mistitled. It should have been titled "The Innovator’s Diagnosis". The book does a fantastic job at diagnosis (Dx) of problems in the U.S. health care system. It presents many new, innovative analytical frameworks and lenses through which to view the U.S. health system.

However, it’s weak on prescription (Rx): many of the proposed solutions are speculative, ungrounded, and/or defy political reality.

We understand that the very nature of disruptive innovation implies inevitable resistance from organizations that benefit economically from the status quo. But at some point a proposed solution becomes so disruptive that you have to suspend reality to believe that it could be adopted or implemented — and many proposed solutions in this book enter that realm.

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by Vince Kuraitis and David C. Kibbe MD, MBA

Have you ever heard anyone tell a happy story of how easy it is to get a copy of their paper medical records?

Departing Health and Human Services Secretary Mike Leavitt is laying the groundwork for this same story to apply to access to YOUR electronic personal health information.

Here’s an overview to what evolved into a long posting:

1. Analysis: The Leavitt Framework Uses the HIPAA Privacy Rule as a Baseline for Electronic Access to Personal Health Information
2. Implication: Extending the HIPAA Privacy Rule Could Restrict Your Electronic Access to Your Personal Health Information
   • A.The HIPAA Privacy Rule Should Not Be the Baseline for Governing Access to Your Personal Health Information
   • B. Examples: Extending the HIPAA Privacy Rule Creates Barriers and Confusion
3. Implication: Extending the HIPAA Privacy Rule Protects Incumbents at the Expense of Innovators Like Microsoft and Google
4. Conclusion: The Leavitt Framework Creates Bad Public Policy (more…)

It seems likely that the Obama administration and Congress will spend a significant amount on health IT by attaching it as a first-order priority to the fiscal stimulus package. We take the President-elect at his word when he recently said:

"…we must also ensure that our hospitals are connected to each other through the Internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year." (December, 6, 2008)

Whether the health IT money is well spent will depend on how it is distributed and what it buys. Most observers suppose that federal health IT investment dollars will be used to help doctors’ offices and hospitals acquire and implement electronic health record systems (EHRs or EMRs). These are commercial software suites for entering, storing and managing patient health data within a practice or health organization.

We agree that some of the federal health IT money should go to purchase EHRs, especially to doctors and hospitals in rural and under-served areas, which otherwise could not afford them.

The Easy, Wrong Solution

The easy solution would be to spend most of the health IT funds on EHRs. The EHR industry has made it easy by establishing a mechanism to "certify" EHR products if they incorporate certain features and functions.

But the easy solution would not be the right one. (more…)

Bob Laszewski describes it eloquently in his blog posting: Senate Votes 69-30 To Rescind Medicare Physician Fee Cuts and Cut Medicare Advantage to Pay For It .

Is healthcare more like schools, fire departments, and roads or is it more like TV sets, shampoo, and movies?

I do think of myself as a strong free market advocate. But, I’ve learned about how isolated, deficient, and expensive the U.S. approach to healthcare is compared to virtually every other developed country in the world.

I interpret this vote as both sides of the aisle agreeing we’ve seen the boundaries of what free market anything goes healthcare can and can’t do. Today is the day the tide started shifting.

The Internet and digital technologies have transformed many aspects of our lives over the past twenty years.  We can get cash at ATMs all over the world; we can book our own airline reservations; we can shop and get best prices over the Internet.

Why hasn’t this happened in health care?  Something is missing.

Recently, major global information and communication companies have announced their intention to bring their technologies and business models to health care.  While the creation of Google Health (GH), Microsoft HealthVault (HV), and Dossia (sponsors include Intel, Wal-Mart, AT&T) are important news items by themselves, what’s more important is what they represent collectively — a new Personal Health Information Network (PHIN). The PHIN and applications developed around the PHIN will fill in many missing pieces and bring health care into the Information Age.

For example, suppose you just found out you have high blood pressure – that’s not uncommon.  Suppose you could easily submit information about your condition using the Google Health platform to receive a service that does the following:

• informs you whether there are clues in your medical history that point to a cause for your high blood pressure
• explains why being overweight can be a contributing factor
• tells you in easy-to understand language what the top number and the bottom number mean (“140 over 90″)
• explains which laboratory tests are necessary
• alerts you to the possibility that one of your prescription or over the counter  drugs could be making your high blood pressure worse
• advises you about the usefulness of using non-drug approaches to treatment
• tells you which treatment drugs have the greatest efficacy and safety for your specific circumstances
• tells you if any of those generics high blood pressure drugs are available at Walgreens for $4 a month
• offers to provide you a map with several Walgreens stores in your city that carry those $4 a month medications

…and many more possibilities we have not yet begun to imagine!

This essay:

• Is the first in a series of articles we’ll be writing to describe the PHIN and why it’s important — expect about a dozen follow-up posts.
• Is an overview of the basic idea — think executive summary or long abstract
• Introduces some new concepts, which we’ll try to simplify and define.  We understand that some of this is not easy reading. ….so we suggest you refill your cup of coffee and settle in. (more…)

A report released this week raises strong doubts. The study — Creating Sustainable Local Health Information Exchanges: Can Barriers to Stakeholder Participation be Overcome? — was  funded by the U.S. Agency for Healthcare Research and Quality (AHRQ) and conducted by the Center for Studying Health System Change (CSHSC). The term HIE is often used interchangeably with RHIO (Regional Health Information Exchange).

What’s different about this study? The CSHSC report goes a step further than other recent reports documenting minimal progress by most HIEs and questioning whether HIEs have a business model. Through interviews with HIE participants — hospitals, physicians, health plans, employers — it brings evidence from the horse’s mouth suggesting

1. the rationale TO share data is WEAK, and
2. the rationale NOT TO share data and to preserve the status quo is STRONG. 

The next question becomes “Is it time to get off the dead horse?” Does it make sense to put more time and energy into a flawed model model and further delay national efforts to create interoperable electronic health records?  Are HIEs doing more damage than good?

Here are some of the key conclusions:

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