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Siemens Medical Solutions

Within the many geographies and landscapes of health care, it is incumbent upon companiesto work together to adopt a common vision, to share goals and objectives, and to achieve concurrenceon expected outcomes with specific criteria to validate measurable attainment.

Provider and Payer Collaboration

To some, this might sound like an oxymoron. To others, this might sound like an inescapable conclusion. To others, maybe it sounds like a rocky road of failed initiatives and broken promises. To others, this might seem like a new beginning of aligned incentives and behaviors that shows more promise and potential every day. I must admit that they are all somewhat correct, based on one’s experience and point of view. I imagine we could all come up with examples of each of the above. For the purpose of this paper, I will assume the view of the optimist who sees the potential ahead and the promise of repeatable and sustained results.

Shared Goals

In general terms, collaboration is a natural outcome of shared goals. Three clear shared goals of both payers and providers are: reduced administrative costs, delivery of the most cost-effective medically appropriate care, and simplified regulatory compliant operations. As payers and providers each examine their business processes to seek quality and efficiency improvements, the specific points where their businesses intersect will define the specific areas where process improvement collaboration will be most evident and beneficial.

We see health care providers, payers, patients, and other stakeholders in the health care world beginning to work together to drive efficiency, enable better health, distribute knowledge, and deliver positive results. We see many initiatives at work throughout the industry today, and more coming as each month passes. Let’s discuss some obvious questions that arise as we look at these initiatives.

What Are the Typical Areas Of Collaboration?

• Improved payment processing from eligibility, pre-certification, utilization review, claims and payment processing;
• Improved access to clinical information via electronic medical records that are connected to the multiplicity of providers and stakeholders in a geography;
• Clinical research to facilitate faster deployment of improved therapeutic agents and techniques; and
• Home monitoring and patient self-management to ensure optimal health through consistent and appropriate two-way patient and provider information and communication.

Why Is This Happening Now?

The lack of care coordination is evident all around us and the unnecessary burden this creates has reached the tipping point. We see clear evidence of the need for change. This evidence includes:

• The number of uninsured;
• Rising state deficits;
• Excessive administrative costs;
• The plethora of duplicative tests;
• Avoidable hospital admissions;
• Rising premiums;
• Rising out-of-pocket expenditures; and
• Rising and resurgence of information exchanges based on data standards.

What Is Different This Time?

In a word, proof. There are many examples of proof cases where payers and providers are now collaborating across the industry to take these issues head-on. And they are getting demonstrable results both in the health of the patients and the health of the financial arrangements.

What Are the Critical Success Factors?

Maintaining a clear and shared focus on the care professionals and their patients, as they know best what needs to be done to improve both the processes and the outcomes. As an industry, we must learn to listen better to those who are faced with the frustrating snarl of our systems. We must also seek advice from across all industries to see what lessons we can learn from those who have gone before us. We should not try to tackle too much too fast. In this complicated environment, a good start will be a great accomplishment. We should learn to share our lessons better across settings and across geographies to create more momentum and more consistency for more benefit sooner.

What Should We Avoid the Most?

In three words, self-serving special interests. With the high degree of fragmentation in our industry, it is easy to focus on a few interests and miss the opportunity to make real progress. Further, we should avoid grandiose visions and schemes to fix it all at once. Small victories that show sustained value should serve as the basis for defining targets and celebrating accomplishments. When many different parties use the same processes to achieve similar beneficial results, a positive trend and a good practice will be established. The path forward will be paved with many small replicable innovations.

The Need for a Viable Operational Infrastructure

So, within the many geographies and landscapes of health care, it is incumbent upon each of us to work together to adopt a common vision, to share goals and objectives, and to achieve concurrence on expected outcomes with specific criteria to validate measurable attainment. This will help us have a significant impact on the quality and safety of care delivered to patients. To do this, a viable operational infrastructure for information exchange is a key requirement. As we look to the future, we might expect to see a model such as the one in Figure 1.

(Please open the PDF for finer details of this image).

To get there from here, each step forward requires a solid technical and business plan. This plan must be aligned with the local infrastructure and the economic incentives inherent in that specific trading area. Let’s examine some of the key driving forces and some of the key groups in the United States who are focused on making or enabling progressive and lasting change.

Legislation as an Industry Driver

Laws such as HIPAA and the Medicare Modernization Act (MMA) are having a dramatic impact on our health care industry. We have gone through the first wave of implementation of HIPAA with limited success, some significant failures, and many lessons learned. The next phases are upon us and collaborative testing has been and will continue to be a linchpin of success. With MMA, Congress and the Administration have worked together to modernize Medicare to bring people with Medicare more choices in health care coverage and better health care benefits. The significance of this new law is that our largest payer is now restructuring its financing approach to drive improved access to therapy. Further, inherent in this bill are pay-for-performance incentives for reporting quality data. In addition, the bill also attempts to align technology and patient safety with reduced administrative burden though the use of e-prescribing. Each of these is an indicator of system improvements meant to add value to patients, providers, and payers.

Agency Actions as an Industry Driver

Federal agencies with health-related missions are finding new ways to share health data and drive collaboration and innovation.

Agencies are agreeing to adopt the same data standards and transmission methods. An example is the Consolidated Health Informatics (CHI), an initiative to develop and mandate the use of new standards for health information in the United States where none exist today, and to adopt a set of existing health information standards to enable all agencies in the federal health enterprise to “speak the same language.” The goal of the CHI initiative is to enable the sharing of health information in a secure environment to improve health, and to adopt a portfolio of existing health information interoperability, enabling all agencies in the federal health enterprise to communicate based on common enterprisewide business and information technology architectures.

Economics as an Industry Driver

Our demographic changes are continuing to fuel the demands upon and the growth of the health care industry. The graph in Figure 2 from the Centers for Medicare and Medicaid Services shows present and projected national health care spending as a share of the GDP. Health care expenditures are predicted to continue to rise – from now through 2010, health care spending is projected to make up 15 to 17 percent of the GDP; that’s over $2.5 trillion spent nationally on health care each year. While this might be viewed as a positive aspect for some, it is actually damaging overall. At these rates of health expense and premium growth, employers are finding it increasingly difficult to make investments for new innovations that are the engine of real growth for our economic development. The same is true for the states. This increasing burden forces states to reduce service in other areas or continue to rack up debt or to increase the tax burden, thus creating a less attractive business climate for growth. This is a vicious cycle that we must find a means to interrupt. Payer and provider collaboration can make a difference.

Science as an Industry Driver

A much better grasp of the biological sciences and a massive increase in computing power will equip the industry with the tools necessary to rise to the challenge of a new age in health care. In the pharmaceutical industry, for example, drug discovery and development will be underpinned with an understanding of how different diseases function at both a molecular level and as part of a biological system. According to IBM Business Consulting Services, by 2010, pharmaceutical companies will be able to develop products and therapeutic packages that demonstrably surpass drugs that are already on the market.

Impacts and Reactions

Many of the industry’s professional societies are active in promoting new and better ways for their members to improve their business processes and how they interact with the public and their team members in health care. Clear evidence can be found in the missions, visions, and initiatives of these associations, including:

• The American Association of Health Plans – Health Insurance Association of America – the national trade association of companies providing health insurance coverage to more than 200 million Americans. Their goal is to provide a unified voice for the health care financing industry, to expand access to high quality, cost-effective health care, and to ensure Americans’ financial security through robust insurance markets, product flexibility and innovation, and an abundance of consumer choice.
• The American Hospital Association (AHA) – the national organization that represents all types of hospitals, health care networks, and their patients and communities. The mission of AHA is to advance the health of individuals and communities.
• Academic Medical Centers – an association that represents medical groups, advocating for the multi-specialty group practice model of health care delivery through innovation and information sharing, benchmarking, and continuous striving to improve patient care.
• The Medical Group Management Association – the nation’s principal voice for medical group practices. Their mission is to improve the effectiveness of medical group practices and the knowledge and skills of the individuals who manage/lead them.
• The American Academy of Family Physicians – one of the largest national medical organizations, representing family physicians, family practice residents, and medical students nationwide. Its mission is to preserve and promote the science and art of family medicine and to ensure high quality, cost-effective health care for patients of all ages.
• The Continuity of Care Record Initiative – promotes a new standard that will provide a summary of personal health information that clinicians can send when a patient is referred and that patients can carry with them to improve the continuity, quality, and safety of care.
• The Leapfrog Group – created to help reduce preventable medical mistakes by mobilizing employer purchasing power to initiate breakthrough improvements in the safety of health care and by giving consumers information to make more informed hospital choices.

Common Themes

Based on the information above, we see common themes from the perspectives of both the payer and provider organizations around the concepts of better support for patients, physicians, and their practices. This broad support suggests that there will be political alignment driven by both economics and the moral imperatives of good patient care. However, none of these organizations can provide the answers unto themselves. Crosssegment and cross-industry collaborations and coordination are required to drive an aligned focus and a set of specific actions to achieve the goals they seek. To foster lasting collaboration, we are seeing groups emerge that are helping to drive alignment and improve focus to achieve our common goals. These organizations are leading the collaboration in an effort to align, focus, and close the gaps.

• eHealth Initiative – striving to drive improvement in the quality, safety, and efficiency of health care through information and information technology;
• The WEDI Foundation – formed exclusively for charitable, scientific, and educational purposes to foster the improvement of health care by conducting research, providing information, and funding educational projects. They seek to implement electronic commerce and EDI in the administration, standardization, and delivery of health care information and services;
• National Alliance for Health Information Technology – a diverse partnership of leaders from all health care sectors working to leverage technology to achieve measurable improvements in patient safety, quality, and efficiency;
• HIMSS – the health care industry’s membership organization exclusively focused on providing leadership for the optimal use of health care information technology and management systems for the betterment of human health;
• Agency for Healthcare Research and Quality – sponsors and conducts research that provides evidence-based information on health care outcomes; quality; and cost, use, and access. They strive to help health care decision makers make more informed decisions and improve the quality of health care services; and
• Health Resources and Services Administration – seeking to assure the availability of quality health care to low income, uninsured, isolated, vulnerable, and special needs populations and meets their unique health care needs.

Leading the Way

Some individual institutions are already taking a very proactive role in exploring and exploiting new capabilities to achieve the shared goals of improved clinical outcomes with a better operational cost structure. Here are a few examples:

Methodist Hospital Methodist

Hospital Division, a member of Thomas Jefferson University Hospital System in Philadelphia, Pa., has implemented a telemedicine solution platform for comprehensive disease management and tele-ophthalmology. Methodist uses this platform in its diabetes center to offer ophthalmic services, designed specifically for the needs of diabetic patients and patients with glaucoma conditions. Accessible via the Internet, this solution optimizes workflow and improves communication by electronically linking physicians and their medical devices with experts at any location. Patients’ medical findings are gathered and documented online, together with physician comments, recommendations, and messages. This information is then distributed electronically to the appropriate care providers. Patients can receive quality evaluation services more quickly and accurately than before, while Methodist benefits from improved workflow and significant cost savings. Clearly, these solutions are critical to the future of health care and help providers deliver better care through optimal coordination and oversight, with information that is accessible anywhere, anytime.

Baptist Trinity Home Care

Baptist Trinity Home care in Memphis, Tenn., conducted a study surrounding the home monitoring of patients with congestive heart failure. They found that they could realize significant cost savings for their affiliated hospitals and other involved parties such as government and insurance companies, as well as quality of care improvement through the use of effective home monitoring for these patients. Baptist Trinity Home Care then worked with their largest insurance payer to form an arrangement that would support and promote the use of home monitoring with selected groups of chronically ill patients. The payer agreed to assume the cost of the home monitoring system, and Baptist Trinity Home Care committed to monitor and educate the patients so they could self-manage effectively their care at home versus frequent visits to the hospital. This results in a win-win situation for all parties: The patient becomes proactive in their care, the payer avoids the costly consequences of patient noncompliance, and the home health agency receives a steady stream of referrals.

The North Carolina Healthcare Information And Communications Alliance, Inc.

NCHICA is a nonprofit consortium of over 250 organizations dedicated to improving health care through information technology and secure communications. NCHICA members include hospitals and clinics; medical and dental practices; professional societies and nonprofit associations; national, state, and local health agencies; health plans; law firms; health care and IT consulting vendors; health education and training providers; and pharmaceutical and research organizations – all working together to optimize the use of health care resources in their area.

Collaboration to Bring Change

We can see that this industry is filled with activity based on a set of common themes. These themes are shared by payers and providers alike. It is very clear that our current operations as an industry are unsustainable and unacceptable; thus the drive for change. The required change is not merely for the sake of change itself. There are aligning forces at work. The economics of health care and an aging population are the most pressing drivers. This is driving the political forces on both the payers and the providers to demand a different method of operation. This causes processes to be examined and extra cost or friction points to be identified. This is essentially the state of the industry today. In preparation for an improved health commerce infrastructure, public and private partnerships are driving data standards to facilitate the adoption and deployment of a new wave of information technology that enables stakeholder workflows to become seamlessly connected. The deployment and use of this new infrastructure will evolve over the next few years and its success or failure will largely depend on the nature of the collaboration among the parties, notably the collaboration between the payers and the providers.

Collaboration is indisputably under way. The industry has clear momentum and clear direction. Coordinating the local and national progressive initiatives is both a challenge and an imperative. For the collaborations to last and for the benefits to accrue, inclusiveness, compromise, and unrelenting focus on achieving desired results will determine success or failure. Now that the economics are clear, the politics are aligned; it will be up to the process re-engineering efforts and the subsequent technological infrastructure to create the new value of the completely connected health system of tomorrow. It’s up to us. Let’s go.