The Pivotal Role of Government in Transforming U.S. Healthcare
Like the other 60 percent of the U.S. healthcare system, Medicare and Medicaid are at a critical crossroads. Budget pressures are escalating as costs far outpace state and federal revenues, with the National Association of State Budget Officers predicting Medicaid cost increases will exceed 12 percent a year compared to annual revenue growth among the states of 5 to 7 percent. Moreover, government health programs as well as providers across the country are facing growing scrutiny over quality, safety and access to care.
As a result, momentum is rapidly building within the public and private sector to embrace information technology as a component of the means for healing healthcare. In particular, the U.S. Department of Health and Human Services is leading an ambitious public-private sector effort to map out plans to build a U.S. healthcare IT network.
This network offers a singular opportunity to reach a new level of high performance that could change the practice of medicine in America. At this point, though, the United States is playing catch-up with some other nations. The United Kingdom, Australia, Canada, France, Spain and Germany already have moved aggressively to develop interoperable EHR systems.
As plans are being laid, state and federal government health programs could seize the opportunity to use their enormous clout as massive payers and purchasers of American healthcare to ensure the creation and widespread use of such a vital network. This opportunity is not a case of HIPAA, Part II. Rather than looking to Congress to pilot programs, fund initiatives and legislate how a healthcare IT network would work, government programs can assert their leadership by taking steps to establish de facto standards that encourage the pervasive adoption and use both of electronic health records (EHRs) and a national health IT network. In the process, they would dramatically lay the groundwork and infrastructure to improve the cost outlook, efficiency and quality of U.S. healthcare.
Improving Care While Cutting Costs
A nationwide electronic health network would greatly ameliorate one of healthcares most costly problems: the lack of timely access to critical patient information.With the vast majority of patient health information kept in paper records that are scattered among doctors offices, hospitals and other providers, crucial information often is not available at the point of need, especially in emergencies.
A national healthcare IT network would enable the electronic exchange of health data among patients and clinicians as well as with the public health sector and life sciences industry. Having accurate electronic patient records rapidly available would significantly reduce medical errors, lower the cost of care, reduce redundant healthcare procedures and improve the quality of healthcare delivery.With the ability to aggregate and sort data, a national network also would facilitate medical research and the handling of public health issues and potential outbreaks of disease.
Although the potential benefits are far greater, if a national health IT network only reduces redundant and unnecessary treatment, it would more than pay for itself. A recent study by the Center for Evaluative Clinical Sciences found that close to one-third of the U.S. health spending goes to care that is duplicative, fails to improve patient health or may even make it worse. Thats the equivalent of $3.1 trillion wasted each year, with the public sector paying 46 percent of the total waste and the private sector accounting for the balance.
Electronic information sharing could eliminate a huge portion of that waste. Health and Human Services estimates that standardized healthcare data exchange would deliver national savings of $86.8 billion annually after full implementation. Significant direct financial benefits would accrue to providers, payers, companies with employee health plans and patients, who are shouldering an increasing share of their healthcare costs.
Structuring the Network
A monolithic system with central control of patient data would prove unwieldy, rigid, costly and inefficient. Rather, a distributed data and services model composed of hundreds, or perhaps thousands, of smaller networks, offers the best structure for building a robust and flexible IT network that is:
- Patient-centric;
- Standards-based;
- Secure and private;
- Focused on supplying accurate and timely information that improves clinical outcomes;
- Large enough to ensure patient coverage and assure an appropriate return on investment;
- Built to complement and integrate with existing IT investments; and
- Designed to allow incremental improvements.
Because care is delivered locally, regional health information organizations (RHIOs) are the ideal patient-centric building blocks of a national network. With an RHIO, diverse healthcare stakeholders voluntarily band together, usually within a specific geographic area such as those in Santa Barbara County, Calif., and regions of Tennessee or Massachusetts. RHIOs would maintain critical clinical information for each patient, representing a subset of the patients full EHR. The RHIOs would provide instant access to data across the interoperable national network.
This approach would enable providers to aggregate and retrieve clinical data faster and more reliably than in a noncentralized system where data is stored in individual doctors offices. Regionalized systems also could more easily accommodate clinical decision support queries, which facilitate the use of best practices, also known as evidence-based medicine, and thus reduce errors. At the same time, RHIOs would keep governance, organization, deployment and interaction, including the control over access to patient data and physician involvement, at the local level.
This information could also be the basis of information sharing that could support regional disease management initiatives. Clearly the access to more complete and timely information for a patient, during a time of illness, will help to integrate care and allow for care to be more effectively managed. This will benefit the patient and the provider of care, while at the same time decreasing the overall cost of care.
The Role of Government
State Medicaid programs are extremely well-positioned to create RHIOs and ensure use. As single payers covering large, diverse populations, Medicaid programs could make part of their reimbursements contingent on using an EHR and, when appropriate, a regional health IT network, for instance. Of course, there are times when multiple states may need to come together to support regions of the country (e.g., cities and communities which are near state borders). Also Medicare could stimulate demand for EHRs and RHIOs, and thus help create a de facto standard along with Medicaid, by tying reimbursements to their use.
So far though, Medicaid programs have been conspicuously absent from almost all of the more than dozen RHIOs in various stages of development and implementation. Tennessee is an exception. With estimates showing its Medicaid program would absorb 91 percent of all new revenues coming into the state by 2008, Tennessee teamed up with the Vanderbilt Center for Better Health and Accenture to plan a statewide infrastructure for sharing clinical data among all healthcare users, including hospitals, payers, commercial labs and doctors offices.With a $5 million grant from the Agency for Healthcare Research and Quality, Tennessee will pilot its Volunteer eHealth Initiative in a three-county region that includes Memphis. But even in Tennessee, the Medicaid program itself is not driving the initiative, although they are heavily involved.
Besides using the might of Medicare, the federal government can offer carrots to drive development of a national network. While the U.S. governments fiscal situation precludes it from financing the entire network, it has a crucial role to play in funding at three levels providers, RHIOs and national. Funding is necessary for the development of these RHIOs as well as the ongoing cost of operations.
Funding could include:
- Grant funding from public and private entities. This has even been seen from certain Blue Cross plans in a number of states that have made grant funding available to support RHIO-type initiatives (e.g., Massachusetts);
- Tax incentives and low-interest loans for participating in the formation of the national network;
- Grants for developing RHIOs, possibly requiring matching funds from other sources; and
- Contracts awarded to third parties for providing national network services to RHIOs such as patient identification, access and security management, authentication and patient consent management services.
While federal and state funding is needed to overcome the initial financial barriers associated with creating the national healthcare IT network and having clinicians use it, the national network should become self-sustaining after a start-up phase of three to five years.
Ongoing funding has to come from operating sources. Examples of this may come from a tax-like cost associated with claims processing that does not support the sharing of clinical information with an RHIO in that region, or from participants in the region of the RHIO that benefit from the shared information (e.g., payers).
Conclusion
As we move forward with implementing the EHR and look at the role of government, we need to be mindful of the design, implementation and adoption of innovative EHR systems for Australia, the United Kingdom, France, Spain and even Tennessee and California in the United States. While the U.S. is unique in its healthcare structure compared to the rest of the world, there are also many of the same issues facing the U.S. health system as it moves toward RHIOs and interoperable EHRs.
It will take considerable resolve and creativity to settle all the issues facing a national health IT network and develop compelling value propositions for all stakeholders, but these challenges are dwarfed by the enormous opportunity.
A national healthcare IT network that links the efforts of RHIOs and facilitates the electronic exchange of patient data will serve as the much-needed catalyst for attaining new standards in effectiveness, quality, safety, access and costs. The government, both at the state and federal levels, can be a strong force for fostering and implementing required change.
