Mark Frisse's Policy Blog

SureScripts-RxHub

2008-06-28T14:24:00.006-05:00

On July 1, the public was informed that SureScripts and RxHub merged into a single entity called, for the present, SureScripts-RxHub.

This is exciting news for health care and for me personally. As an Express Scripts VP, I had the good fortune to be present through the planning for the formation of RxHub and, until the formation of the new company, was more recently a member of the SureScripts Board. So I've been a direct witness to the great efforts of both organizations. I add as well that the only facts in this posting are publicly available and that any conjecture on my part is simply that; I have not speculated in areas that I may have formally discussed with either entity.

History
RxHub was originally formed in 2001 by three pharmacy benefits managers (PBMs) - Advance/PCS (not yet acquired by CareMark), Express Scripts, and MedCo. With various acquisitions, the current owners of RxHub are Caremark, Express Scripts, and Medco. Other PBMs are planning participation. RxHub was formed primarily to simplify the task of e-prescribing for vendors. Since this organization (and SureScripts as well) were formed before standards were promulgated at a national level, these organizations were de facto standard setting bodies. RxHub derives its revenue from formulary eligibility checks and its costs are offset primarily by PBMs. Medication histories are based on medical claims. The first CEO of RxHub was Jim Bradley, now the Chairman of the Board of Prematics.

SureScripts was also established in 2001 by NACDS (National Association of Chain Drug Stores) and NCPA ( National Community Pharmacists Association) - the leading retail pharmacy associations. SureScripts derives its revenue from true e-prescribing messages (new scripts or refills) but not from fax messages; these costs are payed by pharmacies and additional funding is through various debt mechanisms. Medication histories and messaging is primarily through NCPDP SCRIPT. The founding CEO of SureScripts was Kevin Hutchinson, who now serves as CEO of Prematics under Jim Bradly.

Hence, over the past few years the charismatics founders of both RxHub and SureScripts are now working on the vendor end and hence working through the very organizations they created. Small, small, world.

From the outset, these two organizations both competed in some sectors and demonstrated remarkable collaboration in others. In principle, a direct connection between e-prescribing systems and PBMs through RxHub presented the theoretical opportunity to promote diversion of prescriptions from retail phramcies to PBM mail order pharmacies. An effort by the retail pharmacies to promote direct connectivity would mitigate this risk. Similarly, a direct connection with pharmacies without the presentation of formularly options would not simplify the process of PBM-based drug trend management. Both RxHub and SureScripts, no doubt, saw the need to simplify the process of e-prescribing. Both were committed absolutely to establishing national standards to simplify medication management and both actively participated in standards bodies long before the establishment of the HITSP structure created by the HHS Office of the Network Coordinator.

Standards were the easy part. Progress in medication management has been slow in coming. E-prescribing is a complex "dance" among the prescriber and staff, the pharmacy and staff, and the consumer. Each must re-think their activities and deviate from the norms set by fax-based or paper-based prescribing. In many areas, adoption of e-prescribing has been much slower than many of us would have expected. We underestimated the complexity of the system and the comprehensive effort required to provide incentives sufficient to change the behavior of prescriber, dispensing pharmacist, and consumer.

But recent progress is heartening. Where PBM coverage is high, medication histories are increasingly available through RxHub and eligibility checks are growing in frequency. Particularly where chain drugs stores are dominant, true e-prescribing (digital communications, not fax) is growing and fax is disappearing. Still less than 5% of prescriptions are at present sent in digital format.

The New Organization
The new organization will be governed 50:50 by the organizations that founded RxHub and SureScripts. Board composition will be 3 members from the PBM industry and 3 from the retail pharmacy. Management will be under to interim co-CEOs, J.P. Little and Rick Ratliff, who formerly were acting CEOs of RxHub and SureScripts, respectively.

The joint organization will maintain its prohibition of commercial messaging. Given the numerous tensions and differing business models, one can also reasonably assume that secondary sale or distribution of data will not be practiced (although each source PBM or pharmacy, one would assume, will continue whatever their current business practices are). In my personal view, the combined organization presents no new threat to the public through commercial intrusion or misuse of personal health information.

SureScripts-RxHub can be expected to emphasize the following practices in a more consistent and uniform way:

Prescription routing. One imagines that the SureScripts' capabilites will be enhanced to expedite digital messaging between prescribers and pharmacies to simplify the ordering, dispensing, refill requests, and medication fill status. Perhaps the PBM mail order pharmacies will be added to the SureScripts network.
Payor transactions. The RxHub eligibility checks will presumably continue to be developed to simplify coverage notification and formularies. (Suggestion to the PBM industry; a few hundred - or thousand fewer formulary and nuanced prior authorization rules would simply things immeasurably). Both SureScripts and RxHub supported various repositories of formulary and eligibility information; presumably there is some redundancy here and simplification will be a benefit to vendors and clinicians.
Rx history. This is perhaps the most exciting and uninished piece of work that can be addressed by the joint entity. Currently, historical data - if it is present at all - comes via the RxHub claims database or from SureScripts NCPDP script messages. But the RxHub database is claims-based and may suffer both from latency and incompleteness (if low cost-drugs are not entered into the claims database or if the individual is either self-pay or enrolled in a plan not currently connected to RxHub). Although virtually every chain drug store and the majority of independent pharmacies can communicate through e-presribing standards, many SureScripts member pharmacies have not completed medication history service agreements nationwide, but such agreements are anticipated in the next few months. Much work will have to be done. My guess (often wrong) is that prescribers will demand such a service at no cost as a quid pro quo for e-prescribing. Consumers will demand audit logs and various forms of authentication to ensure their medication histories are only accessed for appropriate reasons. As I have argued repeatedly, echoing the Commission for Systemic Interoperability Report of 2005. One of the major national health information technology priorities should be the creation of services that provide complete, reliable, and confidential prescription medication histories for every American. Sadly, although NHIN, ONC, HHS, and others have endorsed standards (often those emphasized by RxHub and SureScripts), follow-through has been disappointing and, to the best of my knowledge, the merger of these two entities is the result of a private-sector business need in the public interest, not the result of top-down regulatory pressure from the government. Fortunately members from both organizations have worked to simplify and advance the currently somewhat complex ONC medication management use case.
Pharmacy interoperability and care support. One can expect the combined entity to continue its enhancement of patient health information messaging among providers and dispensers to ensure better coordination and safer medication use.
Network support. The at times conflicting interests of the retail, chain, and PBM organizations (as well as the comepition within each sector) will necessitate contiuation of the tradition of neutrality, transparency, and efficiency currently critical to the success of each organizations. Again, the very tensions among the stake holders act, in my view, in the public interest here.

Implications
The announcement is great news for American consumers, health care organizations, intermediaries, and the health information management industries. Pressure for mandatory e-prescribing is mounting. The DEA has been under considerable congressional pressure to allow controlled-substances to be prescribed through digital devices and has issued a Notice of Proposed Rule Making (Federal Register June 27, 2008, volume 73, number 125).

At present, e-prescribing is still an incompletely practiced new form of coordination among prescriber, dispensing pharmacist, and the consumer. It is a system where everyone has to see benefit and change their behavior in some ways. There are many benefits in an ideal world, but in many instances, a lot of work must be done. Change is not easy.

The timing could not be better. Clinicians (both prescribers and dispensers), the staff working within clinical organizations, vendors, and the public are facing a complex array of challenges. In most instances, successful implementation of e-prescribing solutions for communities is the product of de facto collaboration among SureScripts, RxHub, pharmacies, payers, intermediaries, clinicians, and the public. Anything that simplifies the overall process should be applauded.

We are fortunate that the two organizations forming this new entity have complementary missions and have demonstrated a track-record of collaboration. Formalizing this relationship comes at a critical juncture. It is a unique and positive story.

Let us all wish them the best of luck.

The Markle Foundations Connecting for Health Common Framework for Networked Personal Health Information

2008-06-19T11:19:00.007-05:00

On Wednesday, June 25, the Markle Foundation's Connecting for Health Initiative will release a series of materials collectively entitled a "Common Framework for Networked Personal Health Information."

This work will be a follow-on to a much less detailed brief written in the context of the Connecting for Health Framework for Networked Personal Health Information. In this earlier phase, the attention was directed at providers and the means by which one assured trust was through contracts.

This very detailed and comprehensive set of documents will be based on a small set of common expectations; rules and protocols applicable to all exchange; the value of overcoming barriers to information sharing; and the improvement of the public trust. Without such an approach, many fear the policies will be monolithic and not sensitive to the variety of contexts in which health information is used. In lieu of a clear approach, piecmeal efforts may slow progress and innovation; implementation efforts may be disconnected from policies; and these approaches may place excessive reliance on consumer consent. Add to that, some approaches may simply not be practical.

What we are facing, many believe, is a "privacy gridlock" where too many parties are seeking the impossible perfect. The alternative is to show that extreme rhetoric is not necessary and that most efforts can rely on the enormous efforts that already have addressed some of the fundamental issues.

Three common expectations often articulated are:

Core privacy principles
Sound network design
Oversight and accountability

These are based on the broader set of guiding principles articulated in the Markle Comprehensive Framework. The three expectations have recently been discussed in Deven McGraw's June 4 testimony to the House Energey and Commerce Subcommittee, Health subcommittee.

The framework could be used as a set of guiding principles for a loose form of "certification" that defines attributes organizations, systems, or products must have to be included in federal health care initiatives, e-prescribing initiatives, health information exchanges, product development, consumer group activities, and other endeavors in which trusted use of health care information is necessary.

The new documents are impressive in scope. They are heavily-referenced and reflect the best thinking of some of the Nation's leaders. These are sound and comprehensive recommendations, but they are not necessarily prescriptive. They allow individuals and organizations to internalize and interpret recommendations in ways that seem most appropriate for their needs.

The Markle Connecting For Health Subcommittee on Quality and Cost Effectiveness

2008-06-19T10:59:00.004-05:00

On June 19, 2008, the Markle Foundation Connecting for Health Steering Group met to discuss means of disseminating the Common Framework for Networked Personal Health Information and to discuss ongoing population health activities.

Now in its fifth year, the Markle Foundation has made remarkable contributions. Established in early 2004, the first public briefing on the Markle Agenda was held at the National Press Club on June 25, 2003.

Zoe Baird led the meeting discussing a meeting held last week by the Senate Finance Committee. Much was said about a universal health care financing vehicle and great attention was paid to costs. Although comprehensive legislation is not expected, incremental steps will be taken and information technology - wisely used - will enable better health care.

Some have lamented the lack of agreement that would allow the Government to use its market power as a payer for care. There is enough focus now with Congresional engagement and presidential campaigns that investments could be anticipated. One must make sure that the right kind of open markets are realized and, for this reason, both a consumer framework and a population health approach will be essential to the debate. There was significant discussion about the CBO report (2976) that pointed out where CBO believed additional congressional support could improve adoption and health.

Response to the CBO Report

Dr. Blackford Middleton noted the report gave a "reasonable review and summary of the literature on HIT value." Some CITL report aspects "were not represented well." These include:

A fundamentally different purpose for the report - the impact of funding
Value of un-standardized (level 3) vs standardized (level 4) interoperability.
They failed to note how CITL accounted for the current HIT context; CBO factored in existing provider-payer data exchanges, and existing lab and pharmacy integration
CBO treated costs of providers information systems but inadequately treated the internal benefits; their notion of data exchange was relatively restricted.
CITL differed with CBO on lab administration costs; phone call rates - but these were not key determinants of overall value
CBO's critique did not discuss some of the limitations of HIEI model limitations. The CITL model was more expansive and included realizing savings through quality improvements and the potential clinical benefit.

In the same discussion Zoe Baird noted that it isn't so much the report as how it is depicted to the public. Initial reports were rather unitarian in the view declaring that benefits are not there. CBO - recruiting a broad and talented array of health care economists - has emphasized a broader and more constructive mesage.

Subcommittee on Quality and Cost Effectiveness

One member of the committee expressed extreme frustration. After years of measurement, we haven't been able to "move the needle even one millimeter." People are "tired of it" and "it's time to move on." We need to measure something that counts and quite measuring for the sake of measuring. We do have measures that work - hospital infections, falls, and adverse events. There are very good programs on this focused primarily in hospitals - and this is done without "micro measurement" and by exploring different ways of including things into the processes.

To make an analogy, it is as if one measures the outcome of the Indianapolis 500 by measuring the piston characteristics, fuel injection performance, and, after adjusting for severity, develop an outcome metric!

It's time to re-think and move past the self-interest.

A second member empahsized the need to focus on a few simple things rather than continuing to expend energy as has been done over the past five years. Examples were providing a medication history for every American and better access to laboratory data.

One physician pointed out that "it isn't funny anymore" and spoke of an ongoing event concerning a relative where his personal presence was critical to pull together the various parties involved in the care of his hospitalized relative. Many providers stated "they really didn't have all the details" and depicted a number of clear outcomes that were the result of failures in the system. (The story rivalled that Regina Herzlinger tells in her recent book, "Who Killed Health Care.")

Five Potential High Impact Ideas

The Subcommittee currently is exploring five simple "high impact ideas"
for discusion as a sub-set of a more extensive list. They are:

Measures that matter. Set big goals, like reducing cardiovascular events in the US over the next Y years by X%. Currently some measure for reporting rather than measure for improving. Measurement of "surrogate outcomes" should be abandon as "futile."

Eliminate nosocomial blood stream infections in the US. This requires widespread adoption of evidence-based work flows involving every provider.

Implement a national device registry. A simple correlation between surgeons and selected devices (e.g., hip prostheses, stents) would reveal variation.

Make formularies on-line. (This writer would like to see no more than 50 formularies in the united states rather than thousands. In other words, "formularies that matter" not automating the thousand-plus variants of dubious value)

Share a visit summary. Trials of interchange of CCR and CCD docments have been successful and hold great promise.

The overall approach is not to create another silo but rather to bridge with focus the gap between the many quality initiatives and the principles in policy and technology that are required to realize these objectives and improve them over time. The emphasis is on simplicity and evolution. Measures that matter, nosocomial infections, and visit summaries can be simplified by the maxim: "quit killing people" by focusing on a few systemic issues.

Some correctly point out that goals like elimination of nosocomial infections will result in part from the CMS regulations that prohibit payment for complications.

One strategy is to try to minimize rules that don't help. An example is the requirement for tamper-resistant prescriptions that require special paper and run counter to the technology imperatives expressed by this same government.

Rather than focus on delivery organizations, one should want to identify the four or five top diseases and measure what is required across the continuum of care. Instead, we get the "where do I fit in?" syndrome where roles are emphasized over results (e.g. "measures for anatomic pathologists").

These notes do not express the opinions of the Markle Foundation and may not accurately reflect the ongoing debate and discussions, but hopefully provide yet additional emphasis on why this vital organization's agenda should be supported.

Two New e-Prescribing Reports

2008-06-12T13:24:00.003-05:00

The Summer of 2008 will not be a time of rest for the e-prescribing and medication management industry. As part of what may be only an initial new round of industry and organizational activity, two reports have been released within the past week.

The Center for Health Transformation has released a report entitled "Electronic Prescribing: Building, Deploying and Using E-prescribing to Save Lives and Save Money"
The eHealth Initiative and the Center for Improving Medication Management have released a report entitled "Electronic Prescribing: Becoming Mainstream Practice"

The CHT report provides an optimistic review with a highlight of many of the activities taking place across the country. The Southeast Michigan initiative, in particular, is worth note. The report emphasizes the value realized when medication management changes are implemented in a systematic and thoughtful way.

The eHI / CIMM report has a more thoughtful, cautionary tone.

The report identifies six issues that require additional work; none of these issues prohibits effective use, but each issue must be considered carefully as policy evolves:

Financial cost
Workflow change
Change management
Ban on transmitting prescriptions for controlled substances
Hardware and software selection
Pharmacy, payer/PBM, and mail order connectivity
Remaining standards require approval: prior authorization, structured and codified SIG, and RxNorm.
Unresolved challenges in medication reconciliation

The steering group also made five very important recommendations. Summarized, they are:

The federal government must address the DEA prohibition on e-prescribing of controlled substances.
Payers, employers, health plans, health systems, and federal and state governments should consider replicating and expanding successful incentive programs.
Care providers across every setting of health care should adopt and effectively use e-prescribing.
Create a public-private multi-stakeholder advisory body to monitor, assess, and make recommendations to accelerate the effective use of e-prescribing.
All stakeholders should advance the e-prescribing infrastructure.The federal government and the private sector should continue, and accelerate, the development of standards for e-prescribing.

These are good reports, well worth the read before the rhetoric increases to an even greater extent.

NPI: Challenges Remain

2008-06-02T12:09:00.003-05:00

In a May 29 Modern Healthcare Posting entitled "Claims processors see
rejections spike with NPI," Joseph Conn mentions the impact of NPI on claim rejection rates. Implemented around a holiday weekend, early "grim reports" suggest a massive increase in claims rejection rates. The lead paragraphs summarizes the posting:

"Healthcare industry claims processors and claims-flow watchers report at least fourfold increases in rejected Medicare claims, similar or even higher rejection rate spikes for Medicaid claims, and a doubling of rejection rates for claims processed by Blues plans on May 23, the first day a federally mandated National Provider Identifier was required."

A senior VP at Emdeon states “We’re seeing a rejection rate of 24%,” ......By Emdeon’s analysis, this individual reports, this represents "$25.8 million in claims that were turned down, which compares with an average rejection rate of 6% or $10.6 million before May 23." Medicaid rates published by Emdeon are similarly high. The rejection rate is 26% compared to a normal rate of 4%. Blue Cross claims however, saw less of a spike according to this authority, jumping from 3% to 6%.

For Medicaid claims processed by Emdeon, the rejection rate on May 23 was 26% compared with a normal rate of 4%; and for Blues claims, 6% were rejected that day compared with a norm of 3%. An industry trade group spokesperson mentioned a 42- physician practice group in which only 12 of the 42 physicians could submit claims without them being rejected. Another spokesperson mentioned a "state Medicaid official who said claims flow had fallen from a normal 100,000 a day to less than 20,000."

What does this mean for our preparedness for health IT? Time and again, there seems to be a disconnect between federal thinking and results on the ground. This disconnect seems to happen even even when the thinking is very sound and accepted by the majority of stakeholders.

What does this mean for e-prescribing? Presumably, problems with a mandate - even with plenty of lead time - might be of a similar magnitude. These possible problems should not deter our industry from pursuing these goals, but it should reinforce our commitment to ensure that transitions are effective. Rejected claims mean money and when money is to be had, people find solutions. Problems with e-prescribing may mean at least a temporary access to medications for those who take these medications to prevent far more serious illness.

These "frightening" reports on NPI should stimulate the medication management industry to ensure that authentication is reliable, authorization is valid, and that the entire process among prescriber/refiller, dispenser, and consumer runs smoothly. We can ill afford stories on e-prescribing similar to the NPI anecdotes provided by Modern Healthcare

The May, 2008 CBO Report: Evidence on the Costs and Benefits of Health Information Technology (Publication number 2976).

2008-05-29T09:11:00.004-05:00

Follow this link to the CBO report.

The recently published report by the Congressional Budget Office summarizes well the dilemma faced by those who argue for adoption of health information technology based on formal analyses:

No aspect of health IT entails as much uncertainty as the magnitude of its potential benefits. Some analysts believe that the adoption of such systems could provide substantial savings by lowering the cost of providing health care, eliminating unnecessary health care services (such as duplicate diagnostic tests), and improving the quality of care in ways that might reduce costs (by diminishing the likelihood of adverse drug events, for example). Other analysts expect little effect on costs but some improve-No aspect of health IT entails as much uncertainty as the magnitude of its potential benefits. Some analysts believe that the adoption of such systems could provide substantial savings by lowering the cost of providing health care, eliminating unnecessary health care services (such as duplicate diagnostic tests), and improving the quality of care in ways that might reduce costs (by diminishing the likelihood of adverse drug events, for example). Other analysts expect little effect on costs but some improvement in the quality of care. Another school of thought holds that health IT could bolster the quality of care but also increase expenditures on health care services— because improvements in quality would stimulate demand for additional services.

Rand
CBO's critique of the RAND report is in part due to the difference in mission. RAND more or less measures an idealistic potential outcome. CBO must focus on the likely outcome and the true impact of Congressional intervention. Take gravity as an example. RAND would claim that the impact of a falling rock will depend on mass, resistance, and gravitational pull. CBO would claim that little Congress can do will impact the mass, the velocity, or the resistance. (CBO would perhaps explore the cost of measures mandating attaching a parachute to the rock and the resulting effect on impact.)The RAND research focused primarily on savings that the use of health IT could generate by reducing costs in physicians’ practices and hospitals and hence had a different scope. RAND also ignored neutral or negative reports. CBO questions their rationale for doing this.

The RAND analysis itself notes that its estimate is of health IT’s potential savings and costs depends on an optimal - but perhaps not likely - state : "We use the word potential to mean ‘assuming that interconnected and interoperable EMR systems are adopted widely and used effectively.’ Thus, our estimates of potential savings are not predictions of what will happen but of what could happen with HIT and appropriate changes in health care.”

RAND assumed a constant rate of adoption. CBO would assume the increasing rate of adoption currently observed. Since CBO's savings estimates are based in part on the extent to which legislation encourages adoption, savings due to adoption alone will be exaggerated by the RAND report relative to the CBO report.

RAND assumes that internal hospital costs are reduced to an extent proportional to hospital stay. That is, if the length of stay is reduced by 10%, so will the costs. Although this may be true for fixed costs (beds, personnel) as currently measured, the variable costs are unlikely to change significantly since in many respects throughput efficiencies are realized by performing the same tests and providing the same intensity of services as would have been provided anyway. If a patient is improving, variable costs of care decrease closer to discharge. If the patient is failing and subject to increasingly intense interventions in a effort to save a life, variable costs can be expected to increase until either death or clinical improvement ensues.

Savings incurred by replacing paper medical records with electronic health records exhibit the same dependency on fixed and variable costs. If an organization is large, changes in variable costs can translate to lower labor costs. If an organization is small - a solo practice, for example - personnel costs are essentially fixed and financial benefits are only realized if volume is increased and revenues are therefore enhanced using the same labor pool.

One criticism of the RAND study seems questionable to this reviewer. Using a traditional microeconomic argument, CBO assumes that lower costs will lead to lower prices and, consistent with economic theory, lower prices mean higher demand. This demand would offset some savings. It would be welcome news to see this theory play out where prescription drug adherence is concerned. Many reports suggest that individuals do not take beneficial cholesterol-lowering or other disease-prevention drugs in part because of the relative costs of these drugs; in general, rather than taking such medications monthly for a sometimes indefinite period, individuals take such drugs intermittently or cease taking them after several months. Here, lowered prices through greater efficiency may lead to greater adherence programs - particularly if other means of reminding and encouraging patients can be identified. But translating this to broader interventions is perhaps questionable.

CITL

The CITL study limited its scope to savings from achieving full interoperability of health IT, explicitly excluding potential improvements in efficiency within practices and hospitals. It essentially measured the long-term (15 year) savings when migrating from a theoretical state of complete paper to an equally theoretical state of idealized comprehensive use; it compares the potential savings from a bygone era with a Nirvana which may never be realized.

CBO echoes criticisms already made on unrealistically high estimates for laboratory administrative expenditures. It made equally generous assumptions about high degree of redundant test elimination. CITL, for example, assumed virtually all telephone costs would be eliminated from e-prescribing transactions

General Methodology

CBO helpfully distinguishes between the dynamic of savings incurred "internally" from those that are "externalities". They state:

Internal savings are those that can be captured by the provider or hospital that purchases the system; they are most likely to be in the form of reductions in the cost of providing health care—that is, improvements in the efficiency with which providers and hospitals deliver care.
External savings are those that the provider or hospital that purchases the system cannot realize but that accrue to another such provider or perhaps the relevant health insurance plan or even the patient. Such savings might arise, for example, from the newfound ability of participants in the health care sector to exchange information more efficiently.

CBO points out the relative maturity of internal cost savings examples within highly integrated delivery systems like Kaiser but emphasize the relative immaturity of knowledge where more disparate settings are incurred. They recognize that where health information exchanges are concerned, it is early in the game. They state "estimating the impact of some potential sources of savings, especially those arising from greater exchange of information among providers, insurers, and patients, is especially difficult because health IT networks are in an early stage of development."

Yet CBO does mention the positive effects. Their argument is one of degree. Among the areas in which savings may be realized are:

Eliminating paper records. Savings are less if practices are small (i.e. high fixed personnel costs) or if systems are not used effectively.
Reducing transcription services
Avoidance of duplicate tests. Here the issues are those of actual availability of previous test results; awareness of the test results; and avoidance of revenues if providers have an incentive to repeat the tests. Most estimates of redundant tests are small. These may be larger if test results from a broader range of sites are available
Reduction of radiology services. CBO suggests that most evidence supports the actual type of test ordered but little in the way of test reduction. (Our experience in Memphis suggests that some high-cost tests are reduced using a regional exchange).
Prescription drug costs. Although CBO mentions lack of incentives, their most compelling argument is that because of "strong incentives," health plans and PBMs "may already be capturing a substantial portion of those savings."
Improved productivity. Most studies are restricted to isolate roles and not to overall system productivity. Demonstrations of productivity are more compelling in some hospital environments than in ambulatory environments. Transcription costs can be reduced significantly.
Reduction in hospital length of stay. CBO points out that slight reductions in length-of-stay are not commensurate with cost reductions. They also emphasize correctly that the current financial incentives for LOS reduction are sufficient to accelerate more effective adoption independent of legislative imperative. Adoption just makes good business sense.
Quality. The connection between quality and EHR use remains conjectural but presents many long-term opportunities. One cannot improve what one does not measure so the extent to which one measures the right thing affords promise. CBO discounts the potential savings primarily because they are conferred upon patients and intermediaries rather than those who make the initial investment.
Adverse drug events. CBO reviews the conflicting data on in-patient settings and the dearth of data on ambulatory settings. CBO recognizes that "avoiding even a fraction of the errors that now occur in inpatient and outpatient settings could yield significant savings" but claims that some of these errors may be addressed by current systems. One could argue, however, that although drug-drug interactions are common in pharmacy systems and there are multiple fail-safe mechanisms, comprehensive drug-disease, drug-allergy, and drug-lab interactions are in a relatively primitive state because of lack of standards (e.g., for allergies), lack of uniform clinical decision support mechanisms, and lack of widespread incorporation of these data in uniform ways.

Although lowering of administrative costs are mentioned in a systemic sense, CBO does not mention revenue cycle acceleration and coding accuracy - one of the principle drivers for some practitioners.

CBO brings into light the theoretical value of incorporating clinical decision support and evidence-practice into systems in a effort to improve quality on a systematic basis. Although results again are conflicting at this early stage, the potential seems intuitive.

The CBO report also emphasizes research and comparative effectiveness. The report states: "And some potential areas of research and analysis remain largely unexamined. They include the ways in which the delivery of health care services might change in response to the efficiencies that health IT offers and how the large amounts of clinical data available through EHRs could contribute to analyses of the comparative effectiveness and cost-effectiveness of different treatments." Similarly, public health reporting and disease surveillance are in their early stages; the potential is there but the jury is out.

Costs
CBO report also includes a good summary of costs incurred to incorporate health care technology into ambulatory practice. Total initial costs are said to range from $25 - $45 per physician; ongoing costs range from 12-20%. New subscription based systems may eliminate much of the up-front costs and lower annual operating costs. Smaller practices incur higher per practitioner costs. (Even ASP models will not lower the per-clinician training costs and the considerable practice transformation opportunity costs).

Explaining Low Rates of Adoption
The CBO Report poses many explanations. These include the significant investments in choosing and implementing systems, the lack of identifying measurable financial returns. Although the authors are skeptical of adoption based only on quality or revenue improvements, they suggest that physicians "might change their thinking if they knew that they would be directly compensated for implementing a health IT system or if they could report data on the quality of care that they provided—data for which they were being compensated— only by using such a system."

The CBO report mentions the "free rider" effect of support through intermediaries. Because technology should help practitioners provide care for al of their patients, once a technology is adopted, all intermediaries will benefit whether such intermediaries made an initial investment or not. Only uniform means of enforcing certain outcomes or performance measures would seem to provide an incentive for all intermediaries to participate. This degree of coordination should not be expected and may, in the eyes of some, be viewed as collusion."

CBO identifies two major roles played by the federal government. The first is as a payer; federal contributions to Medicare and Medicaid account for approximately 25% of the total American health car spend. The second role is as a market-maker. Health care may be a public good that cannot be optimally conferred without a federal-government that eliminates the "free-rider problem. Combined, federal roles provide a network effect that, properly managed, could create new opportunities for lower costs and higher clinical values. The returns - one could argue - are to society as a whole.

But the government is not neutral in all of this. By virtue of the CBO charge to examine the marginal benefit of federal intervention to accelerate a trend that is already underway, one has difficulty identifying those who really change their behavior on the basis of a federal incentive from those who would change their benefit anyway. If one wishes to subsidize motive rather than results, one must end with the treacherous logic that favors punishment over incentive. Indeed, the only way to make sure one is not providing a causative reward for uniquely good behavior is to avoid all rewards for good behavior and instead focus on punishing for undesired behavior. But this response is also flawed. One could argue that some who do not adopt technology do so for good reasons but all would be punished without respect to motive.

The CBO report provides an excellent summary of the current challenges in identifying the unique value of health information technology. Left with this conundrum, it is easy to fall into the trap of accelerating mandates and punitive schemes rather than accelerating the need to address the many unanswered questions raised by the current state of technology in health care. The CBO report plainly demonstrates that we do not yet understand how a federal effort can be ideally structured because we do not clearly understand the cause and effect of the various interventions. But the CBO does not refute an obvious conclusion: making this system work and moving from clearly confusing and possibly dangerous paper-based approaches is both essential and inevitable.

This is a report worth reading carefully. The CBO is to be congratulated for their public contribution.

In a talk delivered to the Markle Foundation Connecting for Health Steering Group on June 19, Dr. Blackford Middle noted the report gave a "reasonable review and summary of the literature on HIT value." Some CITL report aspects "were not represented well." These include:

A fundamentally different purpose for the report - the impact of funding
Value of un-standardized (level 3) vs standardized (level 4) interoperability
They failed to note how CITL accounted for the current HIT context; CBO factored in existing provider-payer data exchanges, and existing lab and pharmacy integration
CBO treated costs of providers information systems but inadequately treated the internal benefits; their notion of data exchange was relatively restricted.
CITL differed with CBO on lab administration costs; phone call rates - but these were not key determinants of overall value
CBO's critique did not discuss some of the limitations of HIEI model limiations. The CITL model was more expansive and included realizing savings through quality improvements and the potential clinical benefit.

Puerto Rico

2008-05-25T12:43:00.004-05:00

Because of the close contest between two Democratic presidential candidates, something unusual is happening. For a few brief days, the eyes of the Nation will be turned on the Commonwealth of Puerto Rico. To some, Puerto Rico is an ancestral home; to others, it is a tourist destination; to those who help forge policy, it is a potential laboratory for health care reform.

Among the diverse states and territories constituting the United States, Puerto Rico is unique. Puerto Rico was ceded from Spain to the United States through the Treaty of Paris in 1898; it has governed through a formal civilian structure since the passage of the Foraker Act in 1900. Since the passage in 1917of the Jones-Shafroth Act the United States Congress has characterized the Commonwealth as an “organized but unincorporated” territory of the United States. Under this Act, residents were granted U.S. citizenship by statute and since that time have served in the United States military service. This Act affirmed a primary responsibility of the United States in maintaining control over economic, defense, and other basic governmental affairs and reiterates the United States Congress’s authority to overrule actions taken by the Commonwealth Legislature.

In 1947, the U.S. Congress approved a law allowing the election of the governor by the people of Puerto Rico. On July 3, 1950, the U.S. Congress passed the Puerto Rican Federal Relations Act. This law gave Puerto Rico the right to establish a government and a constitution for the internal administration of the Puerto Rico government and “on matters of purely local concern.

In 1993 most of the government’s health care facilities and services were sold and their management turned over to non-government entities generally under managed care arrangements. This far more decentralized system radically changed the Department of Public Health’s influence and authority in provisioning care services.

Although the impact on efficiency and quality is controversial there is some consensus on the unintended consequences of these moves. As is the case in the 50 states, the health care delivery could benefit from less fragmentation; it would provide more good if organizations providing preventive services, health promotion, and health maintenance were better coordinated; its diverse regions and communities require a better fit of health care services; it needs a stronger infrastructure for monitoring quality, financing health care services, improving outcomes, and providing consumers with greater empowerment and choices. It is, in a nutshell, facing the same challenges as those of the 50 states and other territories - but one can argue that its situation is even more acute.

Puerto Rico’s ability to combine local and federal financing for health care programs is hobbled by its unique relationship with the Federal government. In contrast to “incorporated territories” that may petition for statehood, the “unincorporated territory” of Puerto Rico is not subject to the Constitution’s Tax Uniformity Clause on all Federal duties, imposts, and excise. Although Puerto Ricans do pay import/export taxes, commodity taxes, and payroll taxes (Medicare, Social Security) most are not required to pay Federal income tax.

Although Puerto Ricans do not pay federal income tax, few would have a significant tax burden: the median household income in Puerto Rico is only 34% of the U.S median household income (2000 census) and less than half of that of citizens in the State of Mississippi.

While many health indicators in Puerto Rico are more ominous even than those published for Mississippi, in 2006 the latter state received 78.6% in federal support for every Medicaid dollar spent (the FMAP or federal matching assistance percentage), while Federal spending caps first initiated in 1968 have limited Puerto Rico’s matching percentage to an effective rate of 18%.

The 50 states can receive up to 90% reimbursement through Medicaid for critical health information technologies; Puerto Rico is not eligible for these supplements. According to 2005 Congressional testimony by Governor Anibal Acevedo-Vila, had FMAP been allowed to operate without the cap instead of the 18% effective rate of the previous year, the Commonwealth would have received $1.7 billion dollars in federal Medicaid support instead of the $219 million received. Translated to monthly amounts, federal Medicaid support in the states approximated $330 per month per participant; the amount in Puerto Rico was about $20 per month.

Funding and health care status are only a part of the obstacles Puerto Rico faces. Its health care delivery system, health care resources, and health care financing mechanisms have been said to have been in a state of decline since the introduction of managed care programs in the early 1990s. The hospital beds per capita in the Commonwealth are less than 2/3 the average across the 50 states; salaries for health care professionals of all types are lower and emigration to the 50 states is common. As vital care resources emigrate from the Commonwealth, some believe that a growing number of Puerto Rican residents needing chronic or long-term care will emigrate as well, shifting the financial burden for care to these same states.

It is within this context of controversy, internal dispute, and at times acrimonious dialogue with the Congress and Federal Executive Branch that Puerto Rico must navigate a course to health care reform. The creation, financing, and administration of such reforms very much depends on the perception – in Washington, among the Congress, and within the Commonwealth – on the rights and responsibilities of all parties within this historically unique and volatile relationship.

Puerto Rico's voice - and their subsequent actions - may say a lot about how other parts of the Nation can address similar urgent health care financing and delivery concerns.

Readings:

Incentives for e-Prescribing

2008-05-17T11:09:00.002-05:00

Recently, and around the time of a hastily-called meeting by the Brookings Institution on e-prescribing, I was asked about incentives.

I have been following this only peripherally, so I made a lot of calls and sent a lot of emails. I drew some conclusions that may be my own bias filtered through what I want to hear, but I present them nonetheless.

The Southeast Michigan e-prescribing initiative is one of the most impressive success stories. Incentives to prescribers were $500 - $1000 with recurring incentives with P4P. Some up-front funds were used for infrastructure.

This writer believes the most important determinant of success was the involvement of every significant organization involved in the effort. Rather than just focusing on the prescriber, this project was initiated by employers (the auto makers) and involved actively retail pharmacies, plans, PBMs, SureScripts/RxHub, vendors, and prescribers. I believe it was the strength of this guiding community coalition that made this project an ongoing success.

Details can be found through a Powerpoint Presentation or through a search engine.

A similar experience was found in Horizon BCBS of New Jersey – one of the groups involved in the CMS e-prescribing trials last year. In this case, a commitment had been made over time.

One could therefore argue that a similar, broad-based cultural shift had taken place by the time the trials were initiated.

There are many examples in which plans provided significant financial incentives to practitioners but where results were wanting. In most of these efforts, physicians were provided with some combination of hardware, eRx software, mobile phones, telecommunications subsidies, and P4P approaches. In one effort, the program increase total reimbursement 1% (not just eRx-associated) if one met certain simple adoption milestones. Practitioners received another 1% if used a more extensive EMR system. Additional funding of another 5% or more could be attained if one met other P4P milestones. Interest in the program was low. The incentives (particularly the 1% of total increase in plan payments, did not seem to foster change. No pharmacy participation was mentioned.

Prematics seems to have a different approach. This vendor focuses on the high prescribers. Payment is through plans or other intermediaries to the vendor, and not to the practitioner. Payments are based on transaction fees in the range of $1-2. These fees are correlated with the estimated savings of $55 for every brand-to-generic shift. This model assumes and works towards linkages with pharmacies and other involved stakeholders. It focuses “incentives” to the prescriber on ease of use, flexibility, and convenience. These payer-to-vendor models do not preclude additional provider compensation for pay-for-performance, outcomes, or more effective and efficient medication management programs. Such incentives just aren't used to capitalized the infrastructure (and one wonders what happens to the self-pay patients; are they "free riders"?)

In my view, the e-prescribing pilots suggest the following:

Adoption is low but increasing rapidly as critical masses are achieved in communities.
It is a system-level issue involving pharmacies, providers, intermediaries and other critical programs.
Training and expertise may come from national or state-level expertise, but the real change happens locally.
Systematic, community-based approaches like SE Michigan take the most effort, but the guiding coalition and the critical mass focusing on the cultural and organizational issues suggests a far higher likelihood of success.
Incentives for a single provider have to be significant (at a minimum of 5% increase), but the Prematics model suggests that simply providing better systems more responsive to workflow might foster adoption. (Were I in practice, I am not sure I'd want to have my infrastructure costs assumed by a payer or intermediary, since, this is money that could be paid directly to providers for services.)

From the intermediary or employer side, brand-to-generic shifts so offset many of the costs; the question is: can the same shifts be assured without e-prescribing? I think perhaps so; certainly PBMs push drug trend before eRX (through tiered co-payments), and the differential profits realized by retail pharmacists influenced a lot of pharmacy generic shift behavior.

This brief posting is not particularly comprehensive or rigorous. But the simple question is:

To what extent does X incentive to one party in a transaction lead to Y results independent of the incentives to other parties in the transaction? (i.e. can you just give money to physicians and expect results if the system in which they practice is not ready for change?)
To what extent - and how - do system-wide or community-based initiatives involving more parties influence adoption and use? what are the overall costs and benefits of these?

To me, community-based approaches involving pharmacy, prescribers, intermediaries, employers, and government are the best way to go.

For-Profit Health Information Exchanges

2008-05-13T14:20:00.005-05:00

In a May 8, 2008 Government Health IT article written by Nancy Ferris entitled "For-profit HIEs are the answer, entrepreneur says," Dr. Elliott Menschik, president of HxTechnologies, is quoted extensively from a recent Capitol Hill Steering Committee on Telehealth and Healthcare Informatics. (All quotes are taken from Ms. Ferris' article and not from primary sources.)

Follow this link to the Government Health IT article

Dr. Menschik's company "began with grant funding from the National Institutes of Health, but that funding ran out last year. Now Menschik is in discussions with two large insurers in the Philadelphia area, Independence Blue Cross and Aetna, about sponsoring the project." "Working with radiologists, his company is developing a for-profit HIE that will deliver radiology images to doctors in Philadelphia....In New Jersey, HxTechnologies is building the New Jersey Health Information Exchange for a client, the AmeriHealth subsidiary of Independence Blue Cross."

According to Ms. Ferris, Menschik's claims that the current push for “altruism-driven” HIE is not getting results because “the lowest common denominator approach paralyzes participants.” Ferris states that the "need to achieve consensus on every issue slows the process to a crawl, and fear of antagonizing anyone means that the actions with the greatest potential impact are avoided. The projects are dependent on grants that eventually end, leaving the HIE without enough funds."

His model focuses on health plan funded-radiolology information exchanges. (Think of it as a pharmacy benefits manager for radiology.) Indeed, many pharmacy data aggregators, laboratory information providers, and other data services also are for-profit in structure. (But not not necessarily profitable at this juncture.)

If the coverage is reflective of Dr. Menschik's views, his concerns on the lowest-common-denominator have been justified by the glacial pace of the NHIN as broadly constituted. But the alleged slow pace of a broadly constituted NHIN in no way should lead one to conclude that the only alternative is to embrace models such as Dr. Menschik's as the only alternative. We need both.

According to Ms. Ferris, Dr. Menschik suggests that "for-profit, businesslike HIEs are the way to go in the current environment, according to a company president who says the free enterprise model can deliver results better, faster and cheaper. "

Are these claims true?

Better? For whom? For patients? providers? plans? all of the above?
Faster – if mobilizing capital is important, perhaps. But to what end?
Cheaper? How will we know since we won’t know the true price buried within the cost structures of health plans and intermediaries nor will we have any comparisons if transparency efforts do not advance.

A Flawed Argument
The argument placing for-profit models in opposition to non-for-profit models is flawed. The claim that one model provides a solution to one problem does not refute the validity of a claim that is not the logical opposite but rather a complement directed at different tasks. Specifically, a radiology exchange funded by health care plans does not in and of itself refute the value of a broader, community-based health information exchange, particuilarly since these exchanges in some way serve as an imperfect proxy for a consumer-focused health care information system. Furthermore, the "for-profit" vs. "non-profit" argument is secondary if not irrelevant. A more important argument is over the rising role of heavily-funded and economically "disruptive" personal health care records offered by Microsoft, Google, Intuit, Dossia, and many others.

The issue is raising capital. Health plans - for-profit or non-profit - get much of their capital simply because they get our money first and essentially distribute it, whereas new models for innovation - be they new technologies, new drugs, or new approaches to information management - can only thrive if they obtain new capital (via IPO or angel funding) or by trying to demonstrate value to the health plans and other intermediaries who already have our health care dollars.

Dr. Menschik's company sounds like a good idea. If the numbers work, it will bring immediate value to payers. Like a PBM, this approach is almost certain to garner the attention of intermediaries with fiscal responsibilities. Like other initiatives to constrain costs, it almost certainly will demonstrate cost savings and will incur the wrath of some who lose revenue (e.g., Dr. Menschik's radiology colleagues). Like other initiatives, the costs of the infrastructure may be high.

In the final line of the article, Ms. Ferris states that "substantial amounts of federal funding for HIEs would be a good alternative to the business-driven efforts he [Menschik] is advocating. But that kind of financial support does not seem likely to be forthcoming...."

This is the point. The real struggle is among the advocates of a purely driven health care system and the advocates of a system dominated by intermediaries. As Menschik's model would suggest, there may be room for both. But the success of one model devoted to certain purposes and markets does not necessarily support the claim that other models will fail either financially or from the perspective of the public interest. And purely for-profit endeavors are to be found in both.

The article begins with the following assertion: "Public-private partnerships to develop health information exchanges? Forget about it. "

I would suggest that the consumer public will not "forget," nor will the next generation remain totally reliant on information whose access is withheld and decisions made by invisible intermediaries. Consumers will want a growing seat at the decision-making table and a rising interest in how their health dollars are spent. Whether this is through for-profits or non-profits, independent companies or community partnerships, is yet to be determined. One size may not fit all.

Memphis Health Information Exchange Beginning 3rd Year of Clinical Operations

2008-05-08T11:34:00.004-05:00

On May 3, 2008, our Memphis-based health information exchange has been in operation for two years. Funded by AHRQ, the State of Tennesse, and Vanderbilt and governed by the non-profit MidSouth eHealth Alliance, the Exchange has come a long way

TheExchange currently has 356 people using the system for clinical care.

Physician / Provider roles - 199
Nurse roles - 109
Registrars and unit clerk functions - 48

These numbers will change as the last major system goes "near real time" in the next few weeks and as more ambulatory care providers are introduced to the program. The number of clinicians will increase and the number of registrars and unit clerks will decrease dramatically.

Data are accessed by authorized personnel in 30 sites, including 11 emergency rooms, 15 primary care clinics, and 4 hospitalist groups. Expansion to other emergency department settings is taking place in May and June of 2008. Access is only through two-factor authentication and secure Web browsers in restricted settings. 100% of access transactions undergo some form of audit. Use is restricted to clinical settings. No aggregate data or metrics are kept. Patients may "opt out" at the institutional level.

The Exchange grants secure access to almost 3 million patient encounters.

Total number of unique individuals - 1,050,000
Total number of unique individuals with clinical data (not
just claims) - 809,000

Our latest inventory of data elements from the two-years of operation counts:

Over 64 million laboratory tests (growing at an average of 88,000 test results a day).
1.3 million radiology reports (growing at almost 2,000 per day)
Over 16 thousand dictated discharge summaries
Over 218 thousand anatomic pathology reports
Approximately 40 thousand other clinical notes

(Follow this link to compare with our February 2008 update)

More data and implications will soon be found at our Regional Informatics Site

Coordinating Less; Accomplishing More

2008-04-29T13:37:00.002-05:00

On April 28, Government Health IT published an op-ed piece with my consent and participation. It was based on a longer and more spontaneous blog entry at this site. It had its roots in my wish to see more focus and immediate wins in areas that will raise the larger questions.

Follow this link to the Government Health IT op-ed piece

In this op-ed piece, I said:

"One hopes a smaller set of high-priority items will emerge that can be adopted across the health care sector. I believe about 12 of the core services are must-do high priorities, and many others could be set aside for future consideration."

I was commenting on the bewildering array of features and functionalities described in the Gartner NHIN I report. These features are actually more bewildering because each use case in turn added features and desiderata that may or may not be congruent with the larger NHIN list. The simple fact: there are a lot of things that would be nice to have, but the list of things we must have in a "Version 1.0" world may be fewer in number and complexity.

Follow this link to a draft document of the 12 core services I have proposed.

For each, I the pdf document linked above cross-references the relevant NHIN reports. Summarizing in a few words, the 12 core services are:

Data delivery
Look-up
Matching
Summary patient records
Integrity
Choice
Audits
Identity
Authentication
Management
Security
De-authorization

These may be the wrong items, and there may be differing priorities, but this writer at least believes starting with some of the NHIN terms - using these terms and supporting their evolution over time through thoughtful study - seems like one approach.

Russell Ackoff and Mission Statements

2008-04-28T10:20:00.003-05:00

Participating in the AHIC 2.0 discussions, I am repeatedly reminded of an influential talk and paper delivered by Russ Ackoff several years ago. His advice should be heeded when one is talking of ambitious, sincere, and inclusive "public private partnerships."

I have located a copy of this paper attributed to him on Charles Warner's Web Site. It seems to be the paper I read long ago. I reprint in full. Emphases in bold or italics are mine.

MISSION STATEMENTS
by
Russell Ackoff

Most corporate mission statements are worthless. They consist largely of pious platitudes such as: "We will hold ourselves to the highest standards of professionalism and ethical behavior." They often formulate necessities as objectives; for example, "to achieve sufficient profit." This is like a person saying his mission is to breathe sufficiently.

A mission statement should not commit a firm to what it must do to survive but to what it chooses to do in order to thrive. Nor should it be filled with operationally meaningless superlatives such as biggest, best, optimum, and maximum; for example, one company says it wants to "maximize its growth potential," another "to provide products of the highest quality." How in the world can a company determine whether it has attained growth potential or highest quality?

To test for the appropriateness of an assertion in a mission statement, determine whether it can be disagreed with reasonably. If not, it should be excluded. Can you imagine any company disagreeing with the objective "to provide the best value for the money." If you can't, it's not worth saying.

What characteristics should a mission statement have?

First it should contain a formulation of the firm's objectives that enables progress toward them to be measured. To state objectives that cannot be used to evaluate performance is hypocrisy. Unless the adoption of a mission statement changes the behavior of the firm that makes it, it has no value. The behavior of a Mexican firm was profoundly affected by the following passage from its mission statement:
To create a wholesome, varied, pluralistic, multi-class recreational area incorporating tourist facilities and permanent residences, and to produce locally as much of the goods and services required by the area as possible, so as to improve the standard of living and quality of life of its inhabitants.

Second, a company's mission statement should differentiate it from other companies. It should establish the individuality, if not the uniqueness of the firm. A company that wants only what most other companies want--for example, "to manufacture products in an efficient manner, at costs that help yield adequate profits"--wastes its time in formulating a mission statement. Individuality can be attained in many ways, including that in which a company's business is defined.

Third, a mission statement should define the business that the company wants to be in, not necessarily is in. However diverse its current business, it should try to find a unifying concept that enlarges its view of itself and brings it into focus; for example, a company that produces beverages, snacks, and baked good and operates a variety of dining, recreational, and entertainment facilities identified its business as "increasing the satisfaction people derive from use of their discretionary time." This suggested completely new directions for its diversification and growth. The same was true of a company that said it was in the "sticking" business, enabling objects and materials to stick together.

Fourth, a mission statement should be relevant to all the firm's stakeholders. These include its customers, suppliers, the public, shareholders, and employees. The mission should state how the company intends to serve each of them; for example, one company committed itself "to providing all its employees with adequate and fair compensation, safe working conditions, stable employment, challenging work, opportunities for personal development, and a satisfying quality of work life." It also wanted "to provide those who supply the material used in the business with continuing, if not expanding, sources of business, and with incentives to improve their products and services and their use through research and development."
Most mission statements address only shareholders and managers. Their most serious deficiency is their failure to motivate non-managerial employees. Without their commitment, a company's mission has little chance of being fulfilled, whatever its managers and shareholders do.

Finally, and of greatest importance, a mission statement should be exciting and inspiring. It should motivate all those whose participation in its pursuit is sought; for example, one Latin American company committed itself to being "an active force for economic and social development, fostering economic integration of Latin America and, within each country, collaboration between government, industry, labor and the public." A mission should play the same role in a company that the Holy Grail did in the Crusades. It does not have to appear to be feasible; it only has to be desirable.

"man has been able to grow enthusiastic over his vision of ... unconvincing enterprises. He has put himself to work for the sake of an idea, seeking by magnificent exertions to arrive at the incredible. And in the end he has arrived there. Beyond all doubt it is one of the vital sources of man's power, to be thus able to kindle enthusiasm from the mere glimmer of something improbable, difficult, remote."

If your firm has a mission statement, test it against these five criteria. If it fails to meet any of them, it should be redone.

"The Billing System We Use Is Insane"

2008-04-25T09:50:00.008-05:00

These are not my words. According to Government Health IT's coverage of the World Healthcare Congress, these are the words of Secretary Michael Leavitt, a man who understands that the bureaucracy for which he is responsible is to a significant degree responsible for this sad state. (The transcript of the Secretary's talk as of April 25 "has been removed to update and will be posted again later this week.") But this remark seems to be less an indictment on those who try to navigate the complex health care financing landscape and more a global indictment that we - as citizens - have allowed for the evolution of such a complex and absolutely inscrutable array of details that increasingly takes valuable health care dollars away from the quality of care and into the myriad organizations who are scrambling to administer and maintain compliance with the regs. It is almost as if one says "spend more money on complexity and compliance at the expense of better health care, or go to prison for fraud."

The real thrust of the Secretary's remarks seems to be focused on the importance of his "Four Cornerstones" and his urgent plea for the health care industry and the public to understand that change is critical, it takes time and it requires both vigilance and persistence. According to News-Medical.net's coverage, the Secretary said "Better information about quality and cost will not appear all at once, nor will the benefits of its use," adding, "It will happen gradually over the next decade, but we will get benefits at every step in our progress. ... So it is with every social and economic transformation." He added, "My hope is we will see a foundation that others can build on."

The Secretary was speaking to the World Healthcare Congress - an audience that is both part of the solution and part of the problem. If one looks at the speakers, it arguably is, as the banner add quoting the CEO of Wal-Mart says: "This is the largest gathering of health care providers, thinkers and experts anywhere in this world…." (Of course, a convocation of these professionals in a hotel may not lead to any more action than if they happened to find themselves in Reagan Airport at the same time.)

This writer views the World Healthcare Congress with a slightly jaded eye. To some extent it is a positive "group think" on the pulse of the health care industry that provides participants wiht a broad overview of current opinion, in another sense it is the quintessential "defensive meeting" where everyone goes to see what their competitors are up to. It would be interesting to view the average gross income of the speakers; by and large, these are powerful people who profit a great deal from the status quo. It is very much these people who must be convinced - through argument or legislative coercion - to accelerate their efforts to improve the collective health of the public even if at slight expense to their own short-term financial gain. Without such improvements, a far more adverse public response is a matter of months or years, may be inevitable.

Let's revisit Secretary Leavitt's Four Cornestones and understand why they are important and why their intent - if not the means of implementation - should transcend any changes in the Executive or Congress. The Four Cornerstones are:

Interoperable Health Information Technology (Health IT Standards)
Measured and Published Quality Information (Quality Standards)
Measured and Published Price Information (Price Standards)
Incentives: Promotion of Quality and Efficiency of Care (Incentives)

Her is my brief take on where we are and where we should be on a few of these cornerstones:

Interoperable Health Information Technology (Health IT Standards)

Adoption of standards by a committee is not the rate-limiting step, it is adoption of standardized products in the marketplace. Indeed, one can be "certified" as a vendor but offer older versions of software products that do not meet certification criteria. Furthermore, there is an issue of granularity. Some standards (e.g., NCPDP SCRIPT) are fairly non-controversial. Others (ICD-10) actually reinforce the very complexity that this writer believes to be at times a threat to innovation and consumer value.
The Secretary is promoting e-Prescribing (disclosure: this writer is a member of the SureScripts Board - an organization that shares this enthusiasm). E-prescribing, or more broadly, medication management, is a critical requirement, but the degree of social change required is underestimated by many enthusiasts. There are issues of authentication, authorization, pharmacy workflow, prescriber back-office work changes, and incentives (e.g., pay the prescribers and pharmacists - not third party disease management companies - t0 foster compliance among the people they care for). Additionally, some of the e-prescribing standards were not sufficiently evaluated in the rushed CMS pilot and need more work - notably RxFill, RxNorm, and prior authorization. Here the issue again is not the standards but the very complexity of process. What is needed is not more high-level technology standards groups but a systematic, grass-roots, community-based program to work through the technical and cultural issues pharmacy-by-pharmacy, clinic-by-clinic and consumer-by-consumer. Much is being done here by consumer advocates, pharmacy groups, and clinicians; all see the benefit of a safe and effective medication management infrastructure. The Federal government should telegraph its commitment to push society into a digital world, but it should be respectful of the complexities often ignored when enthusiasts, full of excitement, promulgate before federal groups in Washington.
ACTION: Keep it simple. Work on a safe and effective, national program for medication management - a win-win for all - and get that right. This activity will bring up most of the other issues that are critical to Health IT adoption. Add to the mix clinical laboratories, and clinicians will have great incentives to adopt.

Measured and Published Quality Information (Quality Standards)

How can one argue with this? But as has been stated, quality is an elusive thing and is to some a "multi-agent, multi-attribute utility model problem." That means that different people have different view of what quality is and that different attributes contribute to our overall perception.
Our problem? The lingua franca of quality metrics are claims data. These data are designed for accommodating the ever-evolving complex reimbursement schemes. Why should one assume that an increasingly complex claims infrastructure will necessarily be optimal for quality measurement? And if we are increasingly and justifiably moving to a transparent, price-oriented, consumer-driven health savings account structure, shouldn't quality be defined in terms we understand and not in terms of complex claims? Fortunately, many federal agencies and organizations focusing on quality are doing just that.
ACTION: Promote quality metrics that mean something to the individual and that foster long-term well-being. These metrics should complement internal, delivery-focused quality metrics that should arise naturally if providers - particularly hospitals and other large delivery organizations - are paid for doing the right thing and not necessarily just "doing more."

Measured and Published Price Information (Price Standards)

This is ideal, but problematic. Again one would benefit from trying the simplest thing first. But aside from immunizations and commercial, over-the-counter offerings, what should be the first issue? I'd argue for clear and understandable prescription drug prices. The problem? No one I know is quite sure what a prescription drug really costs various suppliers, pharmacists, and consumers. I tried to summarize what little I knew of this in a blog entry about a year ago - pricing of prescription drugs. I will update this soon.
ACTION: We should continue to look to the large pharmacies to push prices for common drugs. We should assume that price pressure for specialty drugs and other offerings will continue but that the true costs and rebates will remain controversial. Two things must be distinguished when looking at specialty drugs: the high cost of these miraculous drugs and the hidden profits. Unfortunately, even great journalism from organizations like the New York Times sometimes confuse the two issues. (See Milt Freudenheim's insightful but somewhat flawed piece in the April 19, 2008 issue.) Ironic that in an era where drugs literally save lives (including those of people I love), the cost of these are not compared more rationally to the costs of other interventions or, something more acute - simple things like gasoline and other failed policies.

Incentives: Promotion of Quality and Efficiency of Care (Incentives)

The vision is a good one. If one has price information, quality information, and rational decision-makers, one will get good results. The challenges are several. First, most long-term wins in health come at the expense of short-term sacrifice (remember this principle the next time you grab for a cookie!). Second, our very human sense of denial comes into play. I'm not going to get sick, it's going to be the other guy. How else can one explain well-educated professionals in their 20s going without health care coverage? Third, we have competing priorities. When one is paying off one's credit cards and yearning for a plasma TV, emphasis on deferred gratification and long-term tax benefits just don't have much influence.
This writer agrees that, by and large, health professionals, like other small business people, should pay for their own information technology, but where health care providers are concerned, the infrastructure and connectivity simply are not there. So imposing electronic health records before they can communicate and individual's information to wherever it is needed is a bit like mandating telephone purchases before the telephone switches and other communication allow one to use the telephone to talk with others. One example: providing e-prescribing incentives to providers in rural communities when rural pharmacies do not have the capabilities to received e-prescriptions! In some instances, a Hill-Burton type capital infrastructure approach seems relevant. But the approach could be revenue bonds or some other debt instrument and not outright grants. If we achieve the equitable system many envision, cash flow should offset expenditures across all sectors required to make an investment. But until we get the pump primed, we won't see this laudable effect take place in a systematic way.
ACTION: Once again, pick a few things and achieve evolutionary progress. The overall emphasis on smoking cessation and exercise are two examples of success in some enlightened employer-sponsored programs. But these efforts do little for the unemployed and isolated. As someone observed in a recent conference in Puerto Rico, virtually everything in our environment - from sidewalks to staircases - can be designed and promoted as ways of improving health. But often they are not.
ACTION: In addition to creating a social climate for better health, one can continue a trend that is growing in popularity: focusing on prescription drug adherence, find a suitably priced effective drug (often a generic) and create incentives that actually cost a consumer less if they take medications regularly rather than intermittently. Or, a more controversial pick, provide all pregnant women with a financial reward for behaviors that reduce low birthweight infants (e.g., nutrition, vitamins, smoking cessation). Don't think of it as welfare; think of it as cost-avoidance resulting from fewer premature infants. Think of it as an investment in the next generation to ensure they start off in healthier shape.

This writer doesn't know very much, but it's hard to argue with the passion and principles espoused by Secretary Leavitt. Although partisanship always dominates the Washington debate, there is nothing partisan in the principles espoused; they are a great start and an essential prerequisite for effective decision-making. There are clear philosophical differences about priorities and execution among various groups both within and among various political parties, but every candidate and white paper has some points worth pondering.

The real question? What will the organizations represented by the speakers and audience at the World Healthcare Congress do to advance these aims? They represent enlightened and knowledgeable groups with focus, finances, and the wisdom to change on their own behalf before change is imposed from without. But what will these organizations do? And what will it mean to those of us (all of us), whose lives and well-being are at risk?

Tectonic Shifts in the Health Information Economy

2008-04-16T09:10:00.008-05:00

In the April 17, 2008 edition of the New England Journal of Medicine, Kenneth Mandl and Isaac Kohane provide an insightful overview of personally controlled health records (PCHR) and their implications on health care delivery. Their article emphasizes in particular the impact PHCRs will have on the biomedical research enterprise. The authors discuss how the shift to consumer control will impact the very way researchers and the public view the process of studying health information. It is very similar in spirit to the disruptive potential of sites like PatientsLikeMe.com.

Every successful prototype throws more cold water on those who have not yet faced the obvious - information is not solely the property of the care delivery organization or payer intermediary - aside for certain stewardship and limited fiduciary purposes, personal health information should be under the management of the individual patient. The rules of the game are changing.

Mandl and Kohane have already authored significant works on public health infrastructure (JAMIA) and authentication (JAMIA, reference 37, PKI that "rings"). Kohane and Altmann have also published a wonderful article on the "health-information altruist" to be found in the New England Journal of Medicine ( 2005:53:2074-7).

What is new in the article released today? A few summary points:

There are two very signficant new constituents focusing on consumer empowerment and technologies to realize this empowerment. The first are the employers who are seeking efficiencies, improved health, and cost savings. The second are strong technology entrants like Google and Microsoft - each with comprehensive offerings capable of creating a more "seamless" digital relationship between an individual identity personal health information. (These two firms are attracting the most attention. WebMD, Intuit, and many other pioneers also have exciting offerings with great potential.)

What differs these new entrants from the established health IT vendors is their primary emphasis on the individual consumer. They aren't encumbered with a large provider-centric infrastructure model like those large firms who have made great technical and financial strides servicing hospitals, clinics, pharmacies, and health plans. Simply put, provider-centric reflexes and financial growth imperatives focus established vendors to refine offerings along established lines. As Clayton Christensen would put it, becoming a "disruptive" force is difficult when your earnings depend more on expanding your current strategic trajectory. Hence, many of these vendors are of necessity trying to build a better steam locomotive while hybrid autos and highways are appearing everywhere around the railroad tracks.

Mandl and Kohane emphasis that the shift in the locus of control of health information from provider to beneficiary will most directly impact daily care delivery, but their article focuses this general argument on the "threat" such technologies will have to academic medical centers and clinical research.

In their scenario, several challenging technical problems are raised.

First their individual must become authenticated and authorize subscriptions from providers and sources of clinical data (e.g., clinical labs, pharmacies, plans).
Second, they would authorize access views or even copies of records to providers, health care proxies, and possibly intelligent software agents that seek goods and services of value to the individual (e.g., disease management programs).

They describe PCHRs as a preview into a new era of "data liquidity" that will in turn updend traditional information information hegemony practices while fostering new markets for health care services. These new markets will open both to large new entrants like Microsoft and Google as well as to smaller and more regional innovators. The PCHR vision emphasizes a subscription model. Through its "hub and spoke" approach to personal consent and control, this model avoids many of the combinatoric complexities of inter-institutional data-sharing agreements and may legitimately circumvent some barriers imposed by differences among state privacy laws.

Although the basic architecture and principles behind a PCHR are relatively straightforward, some of the policies and complexities of course remain unsolved. The illustration in the Mandl and Kohane article describing the relationships among sources of health information and a centrally-controlled health record platform allows PCHR vendors to aggregate data across individuals and, barring policies and practices limiting use, provides the technical capability for these vendors to use group data against the intent of some who would retain their personal information in such systems. Explicit policies and rights along the lines of the Markle Foundation's Connecting for Health work will become essential to maintain public trust. Along the same lines, the authors note both use of de-identified data both in the HIPAA sense (which often really isn't de-identified the way you or I would like) as well as in the more mathematically sound way espoused by Sweeny, Malin, and others cited within the article.

No matter how you slice it, significant growth in PCHRs will significantly disrupt the traditional vision of exclusive institutional control often held by academic medical centers, health plans, and many other care delivery organizations. Business as usual, is over.

If one believes these new sources will provide valuable insights (and again, PatientsLikeMe.com is one possible test of this hypothesis), then the authors of this article are prescient when they say that "an entire generation of clinical researchers in training will find themselves with second-class or no access to the best research resources." Add to this problem the necessary growing reliance of academic medical centers on commercial health information systems that at times make clinical research technology modifications expensive. In response, the research community could take more more proactive approach to PCHR and for open-source systems devoted to clinical research and patient care.

The authors' treatment of certification and regulation is necessarily ambiguous. As an apocryphal quote goes: "it is difficult to make predictions, especially about the future." Mandl and Kohane rightly emphasize the importance of "guideposts such as a certification or a seal of approval with regard to services, software, and projects from a trusted authority."

This writer's problem: It is not clear those in charge of such certification efforts are certifying the right things. Emphasis should be first on clarifying CLIA and employer-individual privacy relationships. Some statement on data use limitations must be made since PCHR organizations are not HIPAA-covered entities. But does anyone think HIPAA is going to be fixed in the year before or after a national election such as this?

The authors identify a framework that in this writer's mind is very similar to the conundrum of the Treasury department looking at financial regulation. They speak of a "balance between patient control and a paternalistic protection against coercion and false claims made across the multiple channels of communication that are possible between these new...entities and...consumers." The speak of the urgent need for "creative and effective on-line consent processes."

They identify five hurdles:

Standards
Commitment of health care delivery organizations and others to publish to PCHRs
CLIA revision
Incorporation of information now only in paper form
New approaches to identifying identity and trust

One conclusion is inescapable: the horse is out of the barn. Gradually, these many efforts will coalesce not into a standard "certified product" but perhaps at least a consensus on what is really important policy-making and what is a distraction. With this knowledge in hand, one can address the critical issues surrounding confidentiality, safety, and integrity.

The article is an inspiration. Give it a read!

Privacy and e-Prescribing

2008-04-15T09:28:00.006-05:00

On April 14, 2008, a broad coalition of organizations sent a letter to Senator John Kerry and Representative Allyson Schwartz expressing strong support of their proposed electronic prescribing legislation - the Medicare Electronic Medication and Safety Protection (E-MEDS) Act of 2007.

One suggestion bears particular note. Mindful of the broad public concern over privacy and confidentiality (and the appeals of a small group of privacy advocates that arguably excessively dominate Congressional hearings), the group argues for a systematic evaluation by GAO of prescription data use practices as a necessary part of any legislation.

Rather than focus on a particular technology, the organizations lending support seem to be pointing to a more extensive set of data sale and use practices already in place and often not included in the public debate.

This emphasis places needed attention not only on the future implications of a more comprehensive digital medication management framework but also on the current array of data use practices. Before one argues for more policy and legislation, this writer believes it would indeed be valuable for GAO to conduct this study - even if the E-MEDS bill does not advance.

Quoting from the letter to Senator Kerry and Representative Schwartz:

We believe that efforts to realize the safety and savings benefits of comprehensive health information technology (HIT) must move forward within a framework of privacy and security protections. For example, many consumers have concerns about the data mining of prescription drug information, and the success of efforts to promote widespread adoption of HIT ultimately will depend on the willingness of consumers to accept the technology.

In the absence of a national privacy and security framework for the exchange of health data, we feel strongly that obtaining more definitive information about how prescription data are currently being used is a key step to addressing privacy concerns. Thus, we strongly support including in any e-prescribing legislation a requirement that the General Accounting Office (GAO) investigate the prescription data mining industry and publish a report to Congress. The report should define clearly from whom data miners are getting data, whether it is fully de-identified, how easy it is to re-identify, what the policies/procedures are for ensuring that it is de-identified (or not re-identified), and to whom they are selling data.

[Selective use of bold font added for emphasis in this posting ]

The coalition includes:

AARP
AFL-CIO
American Federation of State, County, and Municipal Employees
Center for Medical Consumers
Childbirth Connection
Consumers Union
Health Care For All
National Consumers League
National Family Caregivers Association
National Partnership for Women & Families
SEIU

Read other related letters: