Saving Health Care, Saving America

By BRIAN KLEPPER, DAVID C. KIBBE, ROBERT LASZEWSKI and ALAIN ENTHOVEN

So far, Congress' response to the health care crisis has been alarmingly disappointing in three ways. First, by willingly accepting enormous sums from health care special interests, our representatives have obligated themselves to their benefactors' interests rather than to those of the American people. More than 3,330 health care lobbyists - six for every member of Congress - contributed more than one-quarter of a billion dollars in the first and second quarters of 2009. A nearly equal amount has been contributed on this issue from non-health care organizations. This exchange of money prompted a Public Citizen lobbyist to comment, "A person can reach no other conclusion than this is a quid pro quo [this for that] activity."

Second, by carefully avoiding reforms of the practices that drive health care's enormous cost growth, Congress pretends to make meaningful change where little is contemplated. For example, current proposals would not rebuild our failing primary care capabilities, which other developed nations depend upon to maintain healthy people at half the cost of our specialist-dominated approach. They fail to advance the easy availability and understandability of information about care quality and costs, so purchasers still cannot identify which professionals and organizations are high or low performers, essential to allowing health care to finally work as a market. They do little to simplify the onerous burden associated with the administration of billing and collections. The proposals continue to favor fee-for-service reimbursement, which rewards the delivery of more products and services, independent of their appropriateness, rather than rewarding results. Policy makers overlook the importance of bipartisan proposals like the Wyden-Bennett Healthy Americans Act that uses the tax system to incentivize consumers to make wiser insurance purchases. And they all but ignore our unpredictable medical malpractice system, which nearly all doctors and hospital executives tell us unjustly encourages them to practice defensively.

Most distressing, the processes affecting health care reflect all policy-making. By allowing special interests to shape critically important policies, Congress no longer is able to address any of our most important national problems in the common interest - e.g., energy, the environment, education, poverty, productivity.

Over the last four years, a growing percentage of individual and corporate purchasers has become unable to afford coverage, and enrollment in commercial health plans has eroded substantially. Fewer enrollees mean fewer premium dollars available to buy health care products and services.

With diminished revenues, the industry is unilaterally advocating for universal coverage. This would provide robust new revenues. But they are opposing changes to the medical profiteering practices that result in excessive costs, and which often are the foundation of their current business models. And these two elements form the troublesome core of the current proposals.

Each proposal so far contemplates additional cost. But we shouldn’t have to spend more to fix health care. Within the industry's professional community, most experts agree that as much as one-third of all health care spending is wasted, meaning that a portion of at least $800 billion a year could be recovered. There is no mystery about where the most blatant waste is throughout the system, or how to restructure health care business practices to significantly reduce that waste.

Make no mistake. A failure to immediately address the deep drivers of the crisis will force the nation to pay a high price and then revisit the same issues in the near future. It is critical to restructure health care now, without delay, but in ways that serve the interests of the nation, not a particular industry.

Congress ultimately must be accountable to the American people. The American people must prevail on Congress to revise the current proposals, build on the lessons gleaned throughout the industry over the last 25 years, and directly address the structural flaws in our current system. True, most health industry groups will resist these efforts over the short term, but the result would be a more stable and sustainable health system, health care economy and national economy, outcomes that would benefit America's people, its businesses and even its health care sector.

Finally, the American people should demand that Congress revisit and revise the conflicted lobbying practices that have so corroded policymaking on virtually every important issue. Doing so would revitalize the American people's confidence in Congress, and would re-empower it to create thoughtful, innovative solutions to our national problems.

Brian Klepper is a health care analyst and industry advisor. David C. Kibbe is a family physician and a technology consultant to the industry. Robert Laszewski is a former senior health insurance executive and a health policy analyst. Alain Enthoven is Professor of Management (Emeritus) at the Stanford University Graduate School of Business.

A Message to America's Physicians: Purchasing EHR Technology: A Shaky State of Affairs

October 28, 2009

By DAVID C. KIBBE AND BRIAN KLEPPER

Much of the conversation and debate about physician EHR adoption has centered on the single issue of the (high) cost of purchase. However, we'd like to suggest that the situation is much more complex and involves several more subtle variables.

Consider, for example, uncertainty about the future. In a recent speech, Lawrence Summers, Director of the White House's National Economic Council for President Barack Obama, related the following analysis about decision-making under conditions of uncertainty in the marketplace, which he had first heard from Ben Bernanke, current Chairman of the Federal Reserve, in a speech Mr. Bernanke gave over 30 years ago: "If you as a business were considering buying a new boiler, and if you knew the price of energy was going to be high, you would buy one kind of boiler. If you knew the price of energy was going to be low, you'd buy another kind of boiler. If you didn't know what the price of energy was going to be, but you thought you would know a year from now, you wouldn't buy any boiler at all. And in exactly that way, it is illustrated that the reduction of uncertainty, through the resolution of disputes, is, I would suggest, all important, if we are to maintain confidence."

Let us paraphrase both of these eminent economists, while applying the same set of ideas to the purchase of electronic health records: If you as a physician were considering buying a new EHR technology, and if you knew the reimbursement rates for your practice were going to be high, you would buy one kind of EHR. If you knew the rates of reimbursement were going to be low, you'd buy another kind of EHR. If you didn't know what the reimbursement rates were going to be, but you thought you would know a year from now, you wouldn't buy any EHR at all.

We've substituted "reimbursement rates" for the "cost of energy" here because, especially for physicians in small practices with under ten clinicians, the amounts they are paid per encounter by health plans, Medicare, and Medicaid are what determines how much money net of expenses will be available for significant investments such as EHRs at any given period of time.

And there is enormous economic uncertainty for physicians now. A 21 per cent cut in fees from Medicare is looming overhead, set to go into effect January 1, 2010. An arcane system known as the SGR determines annual Medicare payment rates by using a formula that aligns actual spending rates with specified targets. Medicare rates are crucial as they are the benchmark rates by which private sector health plans set their payment schedules. In the past several years, spending has exceeded targeted rates, triggering steep reductions in physician payment rates, which have been averted only by last minute Congressional intervention. What's worse is that recently the so-called "Medicare-fix" of the SGR has become a political football, with a Democrat-led effort to revamp the system as part of the health reform legislative package failing to reach the Senate floor for a vote on October 14, 2009. This only adds to the uncertainty regarding what physicians will earn in 2010 and beyond. No cut? A 5 per cent cut? A 21 per cent cut? The prudent physician or practice administrator, like the prudent business, would be wise to delay major purchases like an EHR until knowing if there will be capital available to pay for them.

Enter the ARRA/HITECH incentive payments of as much as $44,000 for "meaningful use of certified EHR technology" over a 5 year period starting in 2011, intended to stimulate physician and hospital adoption of EHR technology, uptake of which has been anemic at best. Currently, only somewhere between 15-20 per cent of physicians are using EHRs, and the number among small and medium size practices is even lower. Clearly, Congress and HHS believe that a stimulus of approximately $10,000 per doctor per year should be enough to induce a significant number of America's doctors to change their minds and acquire and use EHR technologies in their practices by 2015.

But only if the doctors can make a reasonable calculation as to the net costs of such a purchase, and right now there is too much uncertainty to make such a calculation. Not only do they not know the federal government's definition of a "certified EHR technology" -- which will determine which products currently on the market, or on the market sometime during 2010-2011, will qualify their practices for incentives, if purchased. They do not know yet which particular "meaningful uses" of such technology will be rewarded, if such a "certified" technology is purchased. They also don't know how to apply for the incentive payments, when to make such application, or in what time period to expect a reply. (To be fair to ONC and HHS, the regulations sorting all this out are expected to be released in December, 2009. However, as we understand the process, final versions are unlikely to be read into the Federal Register until mid-2010 or beyond.)

Furthermore, many physicians with whom we've spoken believe that the $44,000 being offered by the ARRA/HITECH incentives would cover only a quarter to a third of the actual total costs of ownership during those five years, leaving them with expenses of roughly an additional $100,000 per physician that must come out-of-pocket in order to implement one of these software programs. This may be why one hospital recently offered to add an additional $40,000 per physician, over and above the ARRA/HITECH payments, as incentive to get their system's doctors to utilize one of the more popular EHR products. ("Popular" may be a stretch. When only 15 per cent of doctors have chosen to acquire an EHR from any vendor, none of them can really be considered the people's choice.)

Thus, there exists a significant "uncertainty gap" between what Medicare or Medicaid is willing to pay a physician to adopt an EHR technology, and what the actual costs to each physician will be. Physicians buying now must either a) accept the possibility of a significant out-of-pocket expense, or b) have confidence that health care payment reform will provide significant additional payments beyond those of ARRA/HITECH to doctors will make up the difference. However, confidence among physicians in incentive payment programs from HHS and CMS is probably at an all time low. Many thousands of physicians who complied with the Physician Quality Reporting Initiative, or PQRI, by sending CMS quality and performance data from 2007 to 2009, have yet to receive a penny for their efforts. Some report they haven't even gotten responses from CMS as to the nature of the problems! The bonus payments are just 1.5-2.0 per cent of Medicare billings, or between $1,000 and $2,000 for the average family physician or general internist. But according to many physicians, the work that has to be done in order to qualify for these payments routinely uses nearly as much office staff and IT consulting work as the bonus is worth. The many snags encountered by physicians who have tried to participate in PQRI have added insult to injury, significantly tarnishing the reputation of CMS and putting into question, in the minds of many physicians at least, the government's ability to operate the ARRA/HITECH incentives, without question a much more complex endeavor than has been PQRI.

Finally, physicians lack confidence in broad payment reform of the kind that would actually create a return on investment for health IT used to improve quality and monitor costs of care. Beyond the issue of Medicare incentive payments for EHR technology not yet specified, to be used in ways that haven't yet been defined, doctors are manifestly not confident about the longer term issue of whether short-term incentive payments will be converted to sustainable economic returns, as through pay-for-performance, after 2015. This concern is perhaps more relevant to the reduction of uncertainty and the build-up of confidence than the narrow issue of ARRA/HITECH incentive payments, which are, after all is said and done, a faux business model for investments in EHR technology that comes to an end in 2015.

So, what should America's doctors do? Well, we're not in the business of advising people about how to spend their hard earned money. But we do believe that it's human nature to be conservative and to withhold investing when uncertainty about income, expenses, and returns on investments is high, and doubly so when confidence in the people and organizations making the decisions that effect those variables is low. That this is precisely the situation in which most doctors in America who work in small and medium size medical practices now find themselves may be more determinative about the future of the EHR market place and adoption of EHR products and services than any advice we could offer. This interplay of uncertainty, confidence, and money for health IT investments may also create challenges and give direction for Dr. Blumenthal and his staff at ONC as they operationalize the policy and regulations mandated by ARRA/HITECH. For one thing, as Ben Bernanke so wisely pointed out many years ago, resolving disputes will be key to ending uncertainty and returning confidence to this shaky state of affairs. But we're not sure that even Congress has the will to resolve the disputes that would set our health care system on a reasonable course and reduce the uncertainties we've discussed here.

David C. Kibbe MD MBA is a physician and Senior Advisor to the American Academy of Family Physicians. Brian Klepper, PhD is a health care analyst based in Atlantic Beach.

Why Standards Matter 2: Health IT Enters a New Era of Regulatory Control

By DAVID C. KIBBE AND BRIAN KLEPPER

The recent history of electronic medical records in ambulatory care, or what we now call EHR (electronic health record) technology, can be divided roughly into three phases. Phase I, which lasted approximately 20 years, from about 1980 to the early 2000's, was an era of exploration and early adaptation of computers to outpatient medicine. It coincided with the availability of PCs that were cheap enough to be owned by many doctors, and with the increased capacity of off-the-shelf software programs, mainly spreadsheet and database management systems such as Lotus, Excel, Access, and Microsoft's SQL, to lend themselves to computerized capture of health data and information.

Phase II coincided roughly with the American Academy of Family Physician's (AAFP's) commitment to health IT as a core competency of the organization, and with its support/promotion of the early commercial vendors in the Partners for Patients program, a national educational campaign inaugurated in 2002 which involved joint venturing with vendors that included Practice Partners, MedicaLogic, eClinicalWorks, and eMDs, among others. Several other physician membership organizations joined this effort to popularize EMRs, or crafted their own education programs for their members based on the AAFP's model. The most popular Phase II products were, and still are for the most part, client-server software applications that run on local networks and PCs within the four walls of a practice, and tend to use very similar programming development tools, back-end databases, and support for peripherals such as printers. The industry grew, albeit sluggishly, from roughly 2002-present in an unregulated environment, with increasing support from quasi-official industry groups like HIMSS and CCHIT, and with the blessing of many professional organizations, including the AAFP, ACP, AOA, and the AAP. Best estimates are that the numbers of physicians using EHR technology from a commercial vendor roughly tripled during this period, from about 5% of physicians to about 15%. The Bush administration gave moral support to the industry, but did not provide funding or payment incentives, and mostly left the industry to itself to sort out the rules, including certification. The industry is now entering a new phase, one we predict will significantly depart from the previous two eras.

Phase III will be a time of government regulation of EHR technologies during which Congressional mandates -- sometimes quite vague -- will be interpreted by policy bodies within the government, which in turn will lead to federal rule-making and regulation as a means of carrying out policy goals and objectives. This will require significant interpretive work within the agencies delegated, mainly ONC and HHS, along with NIST and possibly the FDA and CDC, the results of which will have the potential to fundamentally alter the market for EHR technology and the products within that market, for many years to come.

Because there is a great deal of money at stake, Phase III will also be a period of intense competition, new and aggressive lobbying activity, and perhaps not just a few legal challenges, as winners emerge and losers fall by the wayside.

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Why the revolutionary efforts to exert regulatory control over the market for EHR technologies in the US, and why now?

As we have listened to and participated in the meetings of the HIT Policy Committee and ONC staff, we have been struck by several things. First, the leadership are people who believe in principle in regulatory policy as a means of managing and improving upon the market. Secondly, they and their colleagues believe that the market for EHR technology has failed in several important respects, most notably by failing to create widespread adoption among physicians, medical practices and hospitals of even the most basic health IT tools, and by failing to institute interoperability of health data exchange, despite certifications that claim the opposite. And third, they have faith that regulations and rule-making are the means by which our nation's providers can be incentivized, and punished if necessary, into adopting the EHR technologies and associated standards that will set the stage for long term health care reforms in the payment system. In other words, they are committed to using the regulatory tools available to them to change the course and to move the curves of IT adoption in as short a time as possible.

Anyone present or listening by teleconference to the HIT Policy Committee meeting of July 14, which was devoted to the issue of EHR certification, had to have been impressed by both the directness and the force of the attack on the Commission for Certification of HIT, or CCHIT. It was relentless, and came from all quarters: from academic informaticists, from federal standards officials, from hospital CIOs, physicians in private practice, doctor membership organizations, and health care economics analysts. And, at the end of the day, CCHIT was stripped of its previously unchallenged prerogative to set certification criteria; removed of its monopoly for certification of EHRs; and left with large questions about even the validity of its role as advisor to ONC on the processes of certification.

The HIT Policy Committee recommended, and ONC has accepted its recommendations, that EHR technology certification criteria are henceforward to be decided not by CCHIT, an industry body with ties to the incumbent vendors, but by HHS and ONC directly. The term "HHS Certification" was coined and is now in use to indicate this change. Certification as a process will focus no longer on a long list of features and functions, but target Meaningful Use, interoperability, and security only. And, in the final insult to the industry and to CCHIT, ONC declared its intent to offer contracts to several entities to do the certification once criteria are set in early 2010, on a competitive bidding basis.

Thus, by the end of 2009, the industry that makes and sells EHR technology and into which will flow upwards of $30 billion in subsidies between 2010 and 2015, will receive a set of regulations that will specify the rules they must play by. There will be regulations defining Meaningful Use, others that regulate the process of HHS Certification of EHR technologies, and still others setting out the requirements physicians must fulfill to validate that they are meaningful users of certified products. Finally, the regulations will set the standards and protocols all parties must utilize in order to meet these definitions and processes, and especially with regards to computable (interoperable) data exchanges and the security of health data while in transit or stored in databases. This will be a complex new set of regulations unlike anything that the health IT industry has faced before -- although, of course, there are many other industries where regulatory control has played an important role in shaping major issues in the market, such as competition, pricing, and innovation.

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What should we expect, and how might these new regulations alter the EHR technology landscape?

In his most recent book, Supercapitalism, Robert Reich provides rich detail to support his contention that regulations rarely result in the public good being achieved, the claims of politicians and agency officials notwithstanding. Instead, the regulatory environment typically becomes the battleground upon which competing firms in a sector of the economy struggle to advantage themselves and disadvantage their competitors, whenever and however possible, most often through lobbying and influence peddling aimed at Congressmen and Senators, as well as at the regulators themselves. Regulations create regulatory disputes among competitors, each side claiming the moral high ground in whatever argument is in play, and often spending enormous sums on advertising, marketing, and lobbying firms, or on lawsuits intended to increase the value of their stock or to injure the reputation of their rivals.

These battles are well known and can be fierce, but they are new to health IT as an industry sector. A regulatory tussle that is current and attracting a lot of attention is the "Internet neutrality" debate. Discussions in Congress, at the FCC, and in the blogosphere revolve around the degree to which Internet Service Providers, ISPs, should be allowed to charge, or be prohibited from charging, different payment rates based on the content and origins of material presented in Web browsers attached to the Internet. The idea could be posed this way: Should local book stores be as easily accessible on the Internet, at the same speed of downloading, as large companies like Barnes and Nobles and Amazon.com? Or, should ISPs be permitted to charge large corporations higher fees to make their content arrive faster to customers' desktops and laptop computers?

Proponents of Internet neutrality argue that the federal government ought to regulate the industry to instill competition and protect the smaller companies, who may not be able to afford the higher prices easily affordable to Amazon.com, and in order to allow customers the greatest freedom of choice. But the larger companies argue that, by offering their bigger customers the opportunity to offer their own customers better service, the public interest is better served. They argue that to withhold the market's determination of how rates are set is inherently anti-competitive and against the long term interests of the consuming public, which they argue wants fast access to the most popular websites. Of course, they fail to mention that setting higher rates might also boost their own profits and increase the value to their own shareholders.

Vonage is an example of a company with a disruptive technology / business model that has actively engaged with the regulatory process in an effort to protect its business plan, while also being shaped by the regulatory framework. Initially, they weren't regulated like a phone company at all, and won a landmark case against the state of Minnesota, in which the FCC said Minnesota couldn't regulate them as a state telecommunications company, because their service -- voice over Internet protocol, or VoIP -- is inherently interstate in nature. At the same time, initially in response to consumer and legislative outrage that Vonage didn't provide 911 emergency service, the FCC has extended many telco regulations - including 911 regulations - to VoIP providers to ensure that Vonage and others can't circumvent many telco obligations and thereby gain a competitive advantage over traditional telcos. VoIP is now subject to 911 rules, Universal Service Fund obligations, many reporting requirements. So, in this case the regulatory framework initially favored competition and innovation, but was then changed to favor the incumbents. Many hundreds of millions of dollars have been spent by both sides in this long dispute.

Regardless of whose side you take in these kinds of debates, there are always going to be "winners" and "losers" when state or federal regulatory control is put into operation. And though we may like to think that the debates themselves are objective, free of undue influence by either side, in fact this is almost never the case. Large corporations have the money and other resources to lobby both Congress and regulatory bodies like the FCC, whereas consumers' interests or those of smaller and less well-heeled constituents are often unable to match the larger players' coffers. This is not to say that the side with the most money always wins. But as economist Robert Reich reminds us, the incumbents most often have and keep the upper hand.

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Although it is still early in the game, with the first issuance of regulations expected as a Notice of Proposed Rule Making (NPRM) in late December 2009, followed by a 60-day public comment period, the broad outlines of battles to come are now discernible. The incumbent health IT firms, mostly those such as Cerner and Epic whose growth and financial successes have been tied to large enterprise implementations, largely in hospital systems and large group medical practices, have vigorously put forward and defended a set of legacy standards that are complex, referential to other complex standards, not-well-suited to inter-organizational or personal data exchanges, and expensive to put into operation. They benefit from the promulgation and extension of these standards as regulatory mandates because, they say, this is the way to create stability in the industry. However, they fail to mention that these standards also advantage the older companies, as new entrants will have to expend significant time, energy, and money to acquire the expertise that these enterprise-friendly standards and protocols require, but which the incumbent vendors already possess.

But new entrants in the health IT economy, some very large and powerful, including both Microsoft and Google, along with a host of medium and small companies that gravitate around them like satellites circling large planets, have started to fight back. For example, Google's CEO, Eric Schmidt, has publicly criticized the Obama administration's current plans for subsidizing health IT and EHR technology use among physicians and hospitals. As a member of the prestigious President's Council on Science and Technology, he was quoted as warning that the ONC's plans threaten to lock the nation's health care system into the technological past, rather than launch it into the future. Google is not alone in wanting to see more of the nation's health IT infrastructure -- including physicians' practices and hospital systems -- move to Web services and so-called "cloud computing," in part because this is Google's strength as a company and where it hopes to make its profits in the coming years.

It's important that we end this piece on a positive note. The Blumenthal team at ONC, along with IT specialists at the White House and HHS, are in a listening mode, and the regulations are not yet finalized. Aneesh Chopra, White House CTO, has taken steps to open the discussion to include testimony for innovators, and to make innovation an explicit goal over at the HIT Standards Committee, of which he is a member. He and Todd Park, CIO for HHS, have recently announced that the direction of the Health Internet (formerly the NHIN) and its massive CONNECT gateway project will be re-focused to make secure access to and transfer of health data easier and under greater consumer control, using off-the-shelf standards and protocols wherever possible. When asked recently if these plans were endorsed by David Blumenthal, the response was an emphatic "yes," that the team in charge of health IT within the administration was working collaboratively under Dr. Blumenthal's express supervision. Perhaps even more importantly, these two and others are signaling that they want input from the experts, from the public, and from those who will be affected by the ARRA/HITECH programs. If you have an opinion about EHRs, PHRs, standards for health IT, or any other aspect of this new regulatory framework, now is the time to stand up and speak your mind.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians. Brian Klepper PhD is a health care analyst.

Will Republicans Be Spoilers or Problems Solvers in Health Care Reform?

Will Republicans Be Spoilers Or Problem Solvers on Health Care Reform?

BRIAN KLEPPER and DAVID C. KIBBE

In theory Congress' return from recess next week could offer a new beginning to the health care reform process, giving everyone a chance to take a deep breath and recalibrate the components of change.

Nine months into the wrangling around a new Administration, the talk-show right has seemingly hijacked the discussion on health care, Democrats' signature issue, with the standard tools that demagogues have always used: leveraging popular prejudices with oversimplification, hyperbole, and distortion. The die-hard GOP faithful's leaders - Gingrich, Palin and others (see this off-the-deep-end speech by Rep. Mike Rogers (R-Mich)) - are of course playing spoilers, independent of the cost. They hope to goad centrist voters into abandoning the Democrats so they can retake power. Witness South Carolina Republican Jim DeMint's comment, "If we're able to defeat Obama on this, it will be his Waterloo. It will break him."

The problem with this approach is that we're still early on in our national discussion about change and about health care. An increasing number of Americans may be frustrated with Democrats, but after 10 years of Republican rule, few Americans see them as a party of fresh ideas or having an interest in helping anyone but the wealthy and powerful. Americans may have short memories, but they likely still recall that Republicans were just thrown out for a multitude of significant sins. So if everyone you know sends around Obama-as-Hitler arguments, heckling and hoping the Dems will quickly self-destruct may seem like a reasonable strategy. It is doubtful, however, that the other 75 percent of us buy into that thinking.

Of course, the Democrats' health care reform offerings haven't particularly helped. As we recently pointed out, now that they're in power the Democrats have taken enormous contributions from the industry, and their health care proposals show it, dramatically expanding entitlements but conspicuously doing little to drive out waste and cost.

This has alarmed some influential groups that otherwise might be supportive. For example, the non-partisan Committee for Economic Development, a business collaboration focused on social issues, issued this July 20th press release excoriating the bills:

"The House of Representatives and the Senate HELP Committee proposals are unacceptable. They would expand coverage without controlling costs, leaving future generations with a system even worse than what we have today. We cannot afford the government and the health-care system we have now, much less this bloated alternative. Lawmakers have bowed to political pressure at the expense of sensible policy. The business and policy community cannot stand behind these bills," said W. Bowman Cutter, Managing Director, Warburg Pincus.

And the Mayo Clinic, often cited by President Obama as a national model for higher quality, more efficient care, issued this strongly-worded response to the House Tri-Committee Bill:

Although there are some positive provisions in the current House Tri-Committee bill – including insurance for all and payment reform demonstration projects – the proposed legislation misses the opportunity to help create higher-quality, more affordable health care for patients. In fact, it will do the opposite.

In general, the proposals under discussion are not patient focused or results oriented. Lawmakers have failed to use a fundamental lever – a change in Medicare payment policy – to help drive necessary improvements in American health care. Unless legislators create payment systems that pay for good patient results at reasonable costs, the promise of transformation in American health care will wither. The real losers will be the citizens of the United States.

Over the weekend, Senator Mike Enzi (R-Wyoming), a staunch conservative and a member of the Senate's "Gang of Six" working on a health care bill, joined this chorus. He claimed that the Democrats' proposals "will actually make our nation's finances sicker without saving you money," would "raid Medicare" and intrude "in the relationship between a doctor and a patient."

It is important to distinguish this criticism from most of what we've previously heard from the right. Unlike many of his colleagues, and certainly contrary to conservative talking heads, Sen. Enzi's comments here are not so political as factual. They reflect the legitimate concerns of reasoning, mainstream conservatives who worry about simply throwing more money at health care without fixing anything.

Which constitutes the real health care reform opportunity for Republicans. The time could be right for centrist Republicans to pragmatically wrap their heads around this issue. After all, the approaches that are known to drive down costs and improve quality can easily be embraced by true conservatives who clamor for market-based solutions. Now, out of power and longing to demonstrate that they can produce substantive answers to our problems, the challenge will be to turn against their traditional industry benefactors and act on behalf of the American people.

On August 24th, Bob Laszewski posted an important column, There Will Not Be Health Care Reform in 2009 Without Republican Leadership, that listed four major areas of health care change that should come easily to centrist Republicans.

• Bulletproof Health Care Security. This is the idea that everyone would have significantly improved access to care, that the employer-sponsored system would remain available for those who like it, and that Congress would be required to use the same system that they pass for the rest of us.
• Medical Malpractice Reform. The Republicans have the Democrats where they want them on this one. There is no good reason why our current Med Mal system, as capricious and ineffectual as it has been, has not been revised with expert systems, except that the trial lawyers, in exchange for hefty financial support, have received protection from the Democrats. It's time to fix this problem that pervades our health care provider community.
• Paying for It. This is acknowledging that subsidies will be required for those who can't afford health care at its current cost level, and that there are ways to structure the new cost that are more sensible. As Bob points out, the nearly forgotten Wyden-Bennett bill would be cost neutral in its second year.
• Tough Cost Containment. As we said above, this has been the Congressional Democrats' proposals' most glaring and conflicted flaw. It is an area that, with a focus on primary care, paying for results instead of piecework, and cost/quality transparency, could dramatically drive down cost while improving quality, rightsizing our health system and going a long way toward ameliorating the most pernicious drag on our larger economy. Bob tackles cost control most effectively in his Health Care Affordability Model, a plan that would use tax incentives to encourage the industry to focus on driving out waste.

Collaborating with Democrats or, failing that, taking the lead to demand well-understood cost control mechanisms, would send a clear message that some Republicans are actually interested in problem-solving, not simply nay-saying.

It is possible that the health care reform issue has hardly begun, that the conventional back-room deals and horse-trading needed to be sorted through before the real work could begin. It is a profound truth that, town hall protests and nonsensical boasts about American health care notwithstanding, the middle class is terrified that their access to health care is slipping away. Both Democrats and Republicans have a large stake in visibly resolving this crisis. And, as Rahm Emanuel said, a crisis is a terrible thing to waste.

The shame and danger of the health care reform proposals so far is that they would likely do little to actually address the crisis. The question now is whether lawmakers in either or both parties can put aside their partisanship, their petty grievances, and their special interest conflicts to do the people's work. Pursuing the structural solutions described here would get America's health care system headed in a new, far more positive direction.

The American people are desperate for meaningful health care change, and are watching this process very closely. Whoever takes the high road and achieves real reforms will win. The opposite is also true.

Brian Klepper, PhD and David Kibbe MD MBA write together and consult on health care market dynamics, reform issues, and health IT. Their collected writings can be seen here.

Advice For State REC Planners

By DAVID C. KIBBE & BRIAN KLEPPER

On August 20th, HHS Secretary Kathleen Sebelius and ONC head David Blumenthal announced $598 million in grants to set up about 70 "regional extension centers" (RECs) that will help physicians select and implement EHR technologies. Another $564 million will be dedicated to developing a nationwide system of health information networks.

The RECs are based on the example of agricultural extension offices, established over 100 years ago by Congress, which offered rural outreach and educational services across the country. These extension services made America's agricultural revolution possible, dramatically increasing farm productivity. By analogy, the Administration hopes that on-the-ground health IT trainers and implementation experts can facilitate small medical practices' adoption of EHR technologies, especially in rural and under-served areas, enhancing care quality and efficiency around the US.

The comparison between RECs and agricultural extension offices is probably a good one, and we applaud this effort. But there are some striking differences between agriculture and health IT. For one thing, many best farming practices were well known by the early days of agricultural extension services. The road map under ARRA/HITECH for successful small medical practice health IT acquisition and use is still under development, and remains full of tough questions and unknowns.

In fact, under Dr. Blumenthal's leadership, the government is now crafting specifications for Meaningful Use, HHS Certification, security, and interoperability. It's not yet clear what "meaningful use of certified EHR technology" means. So we could be in a cart-before-the-horse situation. It might be a little premature to set up technical assistance programs if we can't provide specific guidance on how to assist. Even fully CCHIT-certified comprehensive EHRs can't meet the Meaningful Use criteria today, so the REC's geek squads will have their work cut out for them.

However, a body of knowledge and experience already exists about successful health IT system implementation in small primary care and specialty practices. For several years, one of us (DCK) worked under the auspices of the American Academy of Family Physicians (AAFP), helping family physicians' practices prepare, select, implement, and maintain information technology offered by EMR and EHR vendors. The AAFP's current Center for HIT staff has expanded this effort, assembling an impressive body of resources and tools. It was augmented as well by the work of the Quality Improvement Organizations (QIOs) that participated in the Doctors Office Quality-Information Technology (DOQ-IT) programs between 2006-2008.

Some of this knowledge is anecdotal, and should certainly be revised in light of the definitions and specifications that the ONC will issue later this year and likely finalize by spring of 2010, according to Dr. Blumenthal. But the AAFP's and QIO's hard-won lessons may be useful to those who are planning the new effort.

Here's some broad guidance for state planners who are applying for these grants and who hope to set up their RECs by early 2010.

1. Keep your advisory services simple and targeted on solving actual problems. Hire people with hands-on medical practice experience, who will carefully listen to what physicians and practice managers want the EHR technology to do for them and their patients. Physicians in small practices generally will use EHRs in caring for patients and for managing office accounts. Overwhelming change won't be welcomed. Instead, focus on incremental implementations that try to solve information management problems without interrupting work flows.
   
   Start with one system or workflow area, gaining success and then moving on to another. For example, some practices may be ready to implement ePrescribing, but are not ready to replace paper records with an electronic documentation system. Many practices have found that Web portals facilitating patient communications are a good EHR starting point, because they let doctors and patients exchange information online and asynchronously, easing telephone line congestion.
   

2. One size does not fit all. General IT skills are useful. New rules will soon specify how physicians and hospitals can qualify for the HITECH incentive payments and which products will be certified. Even so, there may be many different routes to successful EHR use. A flexible perspective is paramount. Favor advisers with generalized health IT system knowledge, rather than expertise with a particular vendor's product.
   
   Some medical practices will choose a single-vendor EHR with all the added features, but others will mix and match modular applications that together create can minimum system capability needed for HITECH meaningful user status and incentive payments.
   
   Similarly, some practices will prefer to locate data servers inside their practices or at the community hospital. Others will opt for Clinical Groupware, web-based and remote services EHR technologies that offer less hassle and expense for maintenance and security. Recognizing and differentiating between EHR technology offerings is going to be a major challenge for REC personnel in the near future.

3. Skate to where the puck will be. The old paradigm of health data management tried to collect a patient's complete data in a single database application, owned, maintained and controlled by a particular organization. However, throughout other disciplines, information management has become Web-centric and based on meta-data searches augmented by real-time communications and shared group activities. Think Wikipedia, Google docs, Microsoft Sharepoint, the Apple iPhone, and, yes, even Facebook, as representative of where health IT is migrating over the next few years.
   
   Eric Schmidt, CEO of Google, and a member of the President's Council on Science and Technology, PCAST, recently urged President Obama and David Blumenthal to consider Web-based technologies as the basis of the national health information network. He warned that "the current national health IT system planned by the administration will result in hospitals and doctors using an outdated system of databases in what is becoming an increasingly Web-focused world. The approach will stifle innovation." Mr. Schmidt's advice, and similar advice from Craig Mundie of Microsoft, is coming from within the Administration, not from outside it. In other words, it's much more likely to be heeded than if were it coming from the opposition.
   
   We hope that ONC's specifications, issued as guidance to the RECs by mid-2010, reflect market-driven innovations that can reduce the cost and complexity of EHR technology acquisition and use. Otherwise we're in for a national exercise in chaos.

4. Don't waste time re-inventing the wheel. Every REC should network with every other REC, regardless of location or stage of development, to share lessons and experience, and to avoid wasted effort. In the past, for example, regional helper organizations - some QIOs and medical societies - independently formed exclusive contracts with one or two EHRs vendors, hoping these arrangements would simplify choices and implementation. These proprietary relationships were invariably unsuccessful for the helper organization and for the practices.
   
   Physicians and their organizations want to make health IT selections based on their own situations and needs. But almost always, they will seek the same kinds of IT support during implementation: e.g. networking, set up, Internet connectivity, security, and basic computer skills training for staff and physicians alike.
   
   RECs should collaborate on tools and instruction kits where ever possible: each REC doesn't need to develop its own HIPAA privacy and security guide book, for instance. Remember that peripheral devices, such as printers, fax machines, and modems, are part of every office's set up, and that these items can be troublesome to set up and use.

5. Come to the task understanding that successful HIT implementation requires fundamental process re-design. We've learned this the hard way. Unless health IT helps re-design practice work and information flow processes so they can be more efficient and quality-promoting, then the IT is simply an expensive appliance. Process re-design also can determine whether the EHR technology deployment produces a return on investment (ROI). For example, re-designing the documentation process to reduce or eliminate dictation transcription services, relying instead on EHR data entry by office staff and the physicians themselves, can save money and lead to an ROI within 12-24 months. We have seen this occur frequently. On the other hand, practices that continue dictation at the old levels are simply adding new data capture expense, making it harder to justify the investment.

States are hurrying to get access to this stimulus money. Many organizations aspiring to be RECs are focused on the rapid grant/award cycles. But its critical for planners to focus on what it will take to get the job done, and setting the groundwork for effective regional centers that can offer thousands of practices the help they need.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on healthcare professional and consumer technologies. Brian Klepper PhD is a health care market analyst.