(Back Row) Phillip E. Roemer, Ralph P. Fargnoli, Jr., Kathleen Becker (Front) William O’Byrne, Fawn Lopez, William Spooner
Through provisions in the American Recovery and Reinvestment Act of 2009, also known as the stimulus law, healthcare providers can reap federal investment subsidies if they install an electronic medical record (EMR). To qualify for the subsidies, however, providers must not only share electronic patient data internally but also externally via health information exchange (HIE). Given the importance of HIE, Modern Healthcare and Beacon Partners hosted a roundtable discussion on the topic on April 7, 2010 at Modern Healthcare's Chicago headquarters. Fawn Lopez, vice president and publisher of Modern Healthcare, was the moderator.
Q: To begin this conversation, will each of you tell us about the status of your HIE initiative?
William Spooner
Senior Vice
President and CIO
Sharp HealthCare
Spooner: In California, we've been going through an extensive fast-track planning process ever since the stimulus act was signed into law last year. The newly formed Cal eConnect was announced just recently as the governance entity to promote and lead HIE adoption. California was awarded $38.4 million in HITECH (Health Information Technology for Economic and Clinical Health—part of the stimulus law) funds from the federal government to begin these efforts. There are a lot of estimates in terms of what it would really cost—everything from $300 million to $2 billion—to fully roll out HIE across the state. In San Diego, we have had periodic conversations about developing HIE capabilities, but there has never been a business case or use case. We are a heavily penetrated managed-care environment, and most patients are closely aligned with their provider. At Sharp, we are evaluating the option of creating our own network with HIE capability, believing that we can get that up and running a lot more rapidly than a community effort. As long as we keep open with national standards, we should be able to communicate with our neighbors. We are close to selecting a vendor strategy for our HIE approach.
Kathleen Becker
CEO
SLUCare (medical group
of Saint Louis University)
Becker: In Missouri, there are several layers of HIE development. The state has received a grant from the federal government of $13.7 million. Missouri now is navigating between the organic networks that have been developed around the state and the idea of a state-led network. The state is looking for a middle path in which a state board would administer the HIE but not lead or direct it. Direction would come from a collaborative effort. At the micro level, SLUCare, which is the faculty practice for Saint Louis University, participates in a group of providers in the St. Louis area that share the same vendor. That group meets regularly and is working on developing—whether it is a vendor-specific link or not—a way for those institutions to communicate with one another.
Roemer: Illinois was awarded $18.8 million from the federal government. On the local level, our hospital partner, Northwestern Memorial Hospital, is driving our HIE plans. Its efforts have been primarily to connect with the more than 1,000 physicians on the hospital's medical staff. My particular group, which is the full-time faculty practice for Northwestern's Feinberg School of Medicine, has been using an electronic health record for more than 10 years. We've been almost fully implemented with our EHR for the last three years. There also are some practice groups affiliated with Northwestern that are still on paper but want to be part of our campus HIE.
O'Byrne: New Jersey received $11.4 million in HITECH funds. We have selected four regional HIEs in the last year to receive this funding. They are in South Jersey; Camden, New Jersey; Central/Northwestern New Jersey; and the fourth is in Northeastern New Jersey. The last HIE is in the densely populated area where the vast majority of our Medicaid population lives. We started a project there last summer called, “Health-e-Citi-NJ.” We are already sending electronic medical records acquired in claims from New Jersey Medicaid to hospitals in the Newark area, which combine the Medicaid data with their electronic medical records and then push that information out to the nine FQHCs (federally qualified health centers) in that area. This is the first time we have achieved a vertical penetration from a state level down to the point of care. With HITECH funding, New Jersey Medicaid is also building a statewide record locator service and master client index for the three million people that it serves.
Q: Over the years, there has been discussion in Modern Healthcare and elsewhere about how difficult it is to develop a business case for HIE. With the advent of the stimulus money, are we now able to make a business case?
Spooner: With the passage of the stimulus law, there is very clearly a business case. In my organization, we estimate that we can earn $25 million in incentives, but we have to have HIE, so the business case is a no-brainer. We are in the process of thinking through what we call a physician society—a network for those doctors who admit at Sharp but aren't members of a medical group. We are considering offering them such services as purchasing and HIE.
William O’Byrne
New Jersey Coordinator
for Electronic Health
Information Technology
O'Byrne: The state of New Jersey would not be doing this if it did not believe there was a return on investment. It is important to remember that the decision to implement electronic health technology is really an economic decision for any state because states pay for a great deal of medical care. In fact, all payers, including states, get very interested in health IT when you show the leadership the potential for savings. For instance, in 2007, New Jersey and New York City exchanged electronic health immunization records in a test of interoperability of our health information systems. We picked a small data set of people who were 18 years old from certain zip codes in the metropolitan area. By comparing the group, we were able to identify 3,723 people who got their immunization shots in New York City but lived in New Jersey. We also identified 5,594 people who lived in New York City but got shots in New Jersey. However, these shots were not getting reflected in the electronic immunization records of the appropriate state where the people reside. We estimated that if all of those people got the same shots again, it would cost about $500,000. By updating the correct electronic shot record, we potentially saved this amount of money. We also looked at four diagnostic tests that were conducted in 2006 and 2007 in New Jersey: a lab test, an X-ray, an EKG and a gastroenterology test. The total cost was $291 million. The federal government estimates that about 9% of all tests performed in the United States are unnecessary or redundant. That is money that comes right out of the state's treasury. Even if you cut the amount of money saved in half, you are still talking about $15 million or $16 million a year in savings for four diagnostic tests that may not have to be repeated because they have been done already.
Ralph P. Fargnoli, Jr.
President and CEO
Beacon Partners
Fargnoli: I get concerned about projects that balloon in scope. It started off as an EMR project and now it is an HIE project. Given the limited resources that the industry has right now and the limited dollars, we set ourselves up for failure if our business plans or business cases get too large. We see this many times. Instead, let's start off with getting an EMR going. After that is successful, let's figure out how we can make it even more attractive with connectivity to our overall community.
Q: Is there a return on investment for providers? If it isn't financial, is it something else?
Becker: From the physician perspective, with the stimulus payment, you are going to spend less money. Setting this up is not the most expensive part. The day after it starts, you still have to pay people to run it and upgrade it. You still have to pay for the software and hardware. There is a huge ongoing investment, while the stimulus payment is a one-time thing. You can hire a lot of people to copy and file paper for less than it costs to hire one IT person. What you are really talking about is a continuity-of-care process. Is it better for the patient and the physician if you know what the patient's history and previous care have been? From my perspective, that is why we are doing it.
Phillip E. Roemer, MD
Interim CIO
Northwestern Medical
Faculty Foundation
Roemer: It is certainly about patient care. It is also definitely about efficiency. It is about improving healthcare quality and outcomes, including a reduction in medical errors and duplicative services. It is about making sure you have access to information from other places—the emergency room is the most obvious one. In Chicago, if somebody is in the emergency room at midnight, we have a difficult time getting information about that patient from other providers. The HIE will enhance the coordination of care among different providers on the same campus, in the same city, or even on the national level. There is also the research potential from the aggregated data. There are great opportunities at the regional and national levels to bring together a huge amount of information for the purposes of research.
Spooner: We have left the patient out of the equation. At some point, patient demand is going to push this—just like consumers today expect everyone to have a website. Sooner or later, if you don't have an EMR and share data with other providers, patients are going to say, “You are not the practice I want to visit.”
Roemer: We have had a patient portal for four or five years and the patient satisfaction rate is 99%. The major complaints are: Why can't we see more? Why can't we do more with it?
Spooner: We rolled out the first portion of our patient portal two months ago. More than 20,00O patients have registered for it in just two months. They love it.
Roemer: There are some concrete savings from an EMR. For example, we were able to convert 4,600 square feet of medical records space into clinical space. That is something that is quantifiable. We also were able to reduce health information staffing from 16 FTEs to 8 FTEs. The fuzzy area is efficiency for the clinician. I have been using electronic health records since 1996. I am able to document more efficiently than I did five or 10 years ago because of the charting tools that are now available for these systems. As a result, better documentation will, in many cases, support a higher level of service. I say the ROI is fuzzy because I'm not sure how you best measure the extent of an EHR's impact on efficiency.
Q: How do you determine with whom to align and connect with through HIE?
O'Byrne: On the state level, we need to engage the patients/consumers, hospital associations, medical societies, trade associations, community colleges, every social-improvement group, employers—particularly the large companies that are self-insured—and all those that pay for healthcare. This should include the traditional healthcare payers: Medicare, Medicaid, state and local governments, ERISA (Employee Retirement Income Security Act) plans, property and casualty insurers, clearinghouses, third party billers, and third party administrators. All of these entities have a stake in high quality, more efficient and less costly healthcare. We have meetings scheduled in May with all of these stakeholders to kick off what we hope will be a statewide community effort.
Spooner: From the provider's perspective, it is based on self-interest. How do we create the best referral arrangements?
Becker: You need to ask yourself: Who are you? Who do you have existing relationships with? Do you want to go beyond those existing relationships?
Q: What about federal anti-kickback laws, such as the Stark law? Do they impede your efforts to develop HIEs?
Becker: We have Stark. We also have an exception to that law. The exception allows hospitals to contribute to the cost of electronic medical record systems in doctor's offices as long as physicians put in 15% of the total cost. But sometimes community physicians don't even have the money for the 15%. We now have a situation in the stimulus law in which the federal government says you have to install something, and it is going to penalize you if you don't do it.
O'Byrne: Federal officials know what they want the health IT world to look like, but they need the states and local stakeholders to get there. They have turned to the states and said, “We will give you a lot of money; you go make it look like what we want.” I personally think this is the right approach; it will be successful. For the most part, healthcare is local. We need to build the solutions that are consistent with federal standards and also will work in our own backyard.
Q: What is the perspective of solo and small physician practices?
Becker: They ask themselves, “Am I going to spend this money on hiring one more person to handle my insurance claims or to buy an electronic medical record?” Physicians generate additional revenue by expending additional time caring for patients, and time is a finite resource. They can't work 24 hours a day to generate sufficient revenue to cover the additional costs.
Spooner: They are being forced to become totally meaningfully useful in a period of a few years. The reporting requirements for an individual physician are as rigorous as they are for a large, integrated health system. I think that is a frightening concept to many physicians.
Roemer: The doctors realize it is going to take time to implement an EHR, to understand the new workflows, and to maintain it. Even the best-designed systems will require a three- to six-month ramp up time after you go live. Fortunately, most physicians—at least the ones I've talked to—don't want to go back to paper. There are enough benefits to their efficiency and their responsiveness to their patients.
Q: As a payer, the federal government is putting up money for HIE. What about the commercial carriers?
Becker: That's who has the business case. From the hospital and physician perspective, we are not making money by putting in HIE. It is a cost of doing business. It is not a revenue generator. From the payer's perspective, there are financial benefits to HIE, such as eliminating redundant tests. But so far, the commercial payers have successfully avoided putting any effort into this whatsoever.
Spooner: You can say that EMR and HIE will cut down on unnecessary tests, but that might not benefit providers. There is somebody out there whose livelihood depends on those tests. It might be part of a physician's business model to perform X number of lab tests. It is just so complex. You have to think through the incentives for everyone to make HIE happen.
O'Byrne: Some of the disincentives are in the wrong place. This is the same thing we did in 2003 with the HIPAA (Health Insurance Portability and Accountability Act) Transaction and Code Sets (TCSs). Back then, if a provider was not able to send in a HIPAA-compliant TCS form to a payer for payment, the provider didn't get paid. In that case, only the provider suffered when his/her claim was not paid. No direct penalties were imposed on the payers. All the disincentives were applied to the provider. Now, the providers are again being penalized if they don't become meaningful users. What penalties are being applied to the payers? The non-government payers have a great deal of protected health information from claims data. They also have significant IT resources that could be used to complement the meaningful user work of the providers. Why shouldn't the payers be required to assist the providers in the quest to become meaningful users, especially when it appears that payers will benefit from a reduction in unnecessary or redundant tests and treatments?
Q: Why haven't they come to table?
O'Byrne: Some of the payers have been partners in this work; however, I do believe that they could do more. There are ERISA plans that invoke the exemption from state regulation. There are state-based health payers that are regulated by states, but some states can be protective of their domiciled insurers—they are cautious about imposing costly burdens. There are self-insured employers that work through third party administrators. There also are the traditional health insurers, and they have different concerns. Essentially, payers do not speak as one group and no one government entity regulates all of the payers. Consequently, each payer group is concerned with its own business interests. However, I remain optimistic. My message to payers is this: Society needs your help. Health IT development in New Jersey needs help immediately. We have the $11.4 million in federal funds, but this is only a start. It is now time for everyone that benefits from health IT to step forward, share in the costs, and work together.
Q: How do you deal with the security and privacy issues associated with sharing patient information among organizations?
Becker: Every single institution with or without electronic medical records grapples with what they are doing with privacy and security. The biggest thing you can do is education of the humans. There is a huge educational component, and that is something that is going on every day. On the security side, technology is not always going to work. There isn't a giant lock that you can put on every single thing that goes into a computer anywhere on the planet. You build firewalls and password protections and store things on servers.
Spooner: You almost have to overprotect to give patients confidence. My concern is that if patients believe that our security is lax, they will refuse to have their data shared. We have to somehow find a way to make the public see that we are protecting their records carefully. We don't need more laws, but we need to enforce the laws we have more rigorously.
Roemer: I think this conversation highlights how immature we may be as an industry with respect to security policies. The conversation always includes a discussion about which is more dangerous: electronic information or paper? I think paper is. Even if it has electronic records, the average medical practice is still going to have patient information sitting in a mailbox or coming across the fax machine. Paper records are out there containing personal health information.
O'Byrne: If I take a paper medical record and I fax it to somebody, how do you know if someone has stolen it? If it were an electronic record, you'd know if information was stolen because there would be a record of everything.
Fargnoli: I think we should handle the issue this way: Patients are automatically opted into the HIE. If they don't want to be there, they choose to opt out. Otherwise, you will never get HIE started.
Q: Let's talk about the governance issue as far as HIE. Who is the source of authority and power here?
O'Byrne: We are working on a governance model for a statewide HIE right now. New Jersey's health IT law requires that we conduct a careful assessment of various governing/financing models and report our findings and recommendations to the governor and Legislature this June. Whatever structure is finally approved, it will be totally self-supporting. It will be operated for the public good and be private and secure pursuant to federal and state law. All stakeholders will be represented. The governing structure we choose will be required to demonstrate success in the improvement of healthcare and the reduction of costs.
Spooner: California is adopting a similar model. When you look at a state authority, it is still influenced by the legislators, who are influenced by everybody. It is a delicate political balancing act.
Fargnoli: I agree. We see discussions happening all the time. What happens is a lot of projects don't move forward because the stakeholders can't make a decision. If there is a player or member with more money and more resources, they want more control. The ones without look to the ones that have and say, “Well, they just want to control me and control my data.” I am concerned that a lot of providers aren't going to get some of this stimulus money because they can't make decisions.
Q: In addition to the politics involved in making a decision, what other barriers have you confronted in your efforts to build HIE capabilities?
Fargnoli: There is a lack of education about the vision behind HIE. If a champion in an organization could articulate what the end vision is and get the project started, he or she could bring people on board and educate them along the way. When EMR came out, we spent a great deal of time educating physicians about what the technology meant to them. I think we need to take that step here and explain what HIE means to them and their practices.
Becker: Money is a problem, too. There isn't this huge pile of money just sitting here and waiting for somebody say, “Let's put that money into technology.” The money has to be allocated from something else. That is a huge issue.
Roemer: Another big barrier is the idea of a master patient index. You have to have a common patient identifier; it is hard to get out of the gate without that.
Spooner: That was part of the CHIME (College of Healthcare Information Management Executives) comments on the proposed regulations for meaningful use in the stimulus law. CHIME recommended a national patient identifier. If you want to guarantee that the patient information is combined and accurate, you have to be able to identify the patient. We are spending a lot of money on creative record locators to get around this.
Roemer: Another option is to put the patient information on something like a credit card, and that is how you explain it to patients. You say, “Protect this because it has your private information on it. Don't let it out of your wallet or your purse.” The difference between now and 17 years ago when the Clinton administration was working on this is that people are more accepting today of this notion of having their information in an electronic format.
O'Byrne: I don't think that we can take our eyes off of the ball. My personal belief is that we should never stop moving forward with the creation and implementation of electronic health information exchanges. Some people think that we need to have answers to all foreseeable problems before we commit to action. I think that many of the problems we currently perceive are solvable as we move forward. We should never miss an opportunity to privately and securely exchange health information.
Ready to dive into HIE? Follow these steps:
Implement an electronic medical record before you develop plans for HIE.
Determine where the money will come from because federal funds from the stimulus law won't cover all of the costs associated with building and maintaining the HIE.
Don't get bogged down in the political process of reaching a consensus among all of the stakeholders. Make a decision.
Education is time-consuming but important. Physicians and patients need to understand how they will benefit from HIE.
Get insurers and employers on board. From an economic perspective, they have the most incentive to see HIEs succeed.
To learn more about HIE, visit Beacon Partners' website at www.beaconpartners.com or www.spotlightonhealthcare.com. To secure a free 2-hour consultation session on this topic, call Beacon Partners at 781-982-8400, ext. 7431.
The views expressed in "A Conversation with Beacon Partners" are not necessarily the views of Modern Healthcare or Crain Communications Inc.
