The trend toward value based payment for healthcare services is gaining momentum. For better or for worse, we have paid for health care in the U.S. on a fee-for-service basis – from the perspective of providers (doctors, hospitals, etc.), that means that the more you do, the more you make. Except for efforts around managed care, where a fixed capitated (per-member-per-month) fee is paid to risk-taking organizations for a defined population of patients (the HMO model), fee-for-service has been at the core of how we do business in healthcare.
Traditional Medicare, based on a fee-for-service model, has experienced cost escalation year-over-year. One way of mitigating this faster-than-inflation escalation of Medicare costs was the Sustainable Growth Rate (SGR) formula, which ratchets down the dollars-per-unit of service to partly offset the growth in units of service that are billed by healthcare providers. That would have meant that each year, Medicare payment rates would have been lowered – with the adverse outcome that more doctors would refuse to participate in Medicare, and access to enrollees would be more limited.
Each year, Congress has come up with last-minute postponements in SGR, with the results that the SGR formula is seen by many as a fundamentally broken process.
Against this backdrop, the recent news that both houses of Congress are intending to work together to scrap the broken SGR formula, and replace it with a more permanent solution is very significant. Notable among the key points on the SGR discussion is to “improve the physician payment system to reward value over volume, ensuring beneficiaries and taxpayers receive value for the money spent.”
Value based pay for performance
Simultaneous to this shift in federal circles toward a more value-centered method of paying for health care, similar shifts are being seen in the managed care market. In California, HMO care has mainly been deployed through large, sophisticated risk-taking medical groups and IPAs (the “delegated model”), where these groups receive fixed payments from HMO insurers and assume responsibility for rendering quality healthcare. Since 2001, the Integrated Healthcare Association (IHA) – a consortium of HMO insurers, hospital systems and medical groups – has set criteria for evaluating and measuring performance, and has facilitated a Pay For Performance (P4P) method where good-performing groups get paid a bonus by health plans over-and-above their base capitation rates. This is a business model for quality.
Since the inception of P4P, the focus has been mainly of measuring and improving quality. However, for a number of reasons, this has not bent the cost-escalation curve. Now, the IHA is moving toward a new methodology, referred to as Value Based P4P, where the rewards are not just based on quality and other measures, but also on the total cost of care (hospital, outpatient, ancillary and pharmacy costs). Medical groups that participate in the IHA are looking at how to re-tool themselves to take on this new challenge.
What kinds of health IT do we need?
Clearly, these two examples of major system changes (there are other examples, to be sure) illustrate the growing momentum toward a healthcare delivery system that needs to measure and be accountable for quality, while keeping track of the total cost of healthcare delivered. It is a fundamental paradigm shift that runs underneath the headlines.
So what kinds of health IT tools will be needed for this new direction of healthcare delivery?
We have come a long way in moving healthcare documentation from paper to electronic platforms in the past several years. In 2007 somewhere around 7% of ambulatory doctors’ offices used Electronic Health Records (EHRs), and most of them were closely associated with institutions and medical centers that provided them. In 2013, over 50% of doctors in the U.S. were using certified EHR systems.
Moving from paper to EHRs has been a significant step forward. However, health data remains largely siloed, residing within the institutions that created them. There has certainly been consolidation – linking hospitals with community physicians (mostly through local community health information exchange mechanisms), and creating “enterprise charts” for patients within unified delivery systems. But we still have a long way to go.
The two main areas where modern health IT will be needed for the changes toward value-based reimbursement might be thought of as these:
(1) Tools to measure the health status of populations. This is a combination of Clinical Quality Measures (CQMs), which are population-based measures showing how different providers are faring with respect to managing their patients’ conditions, and Clinical Decision Support (CDS), which are patient-specific prompts letting the provider know what recommended things are due at the time of service. These tools need to measure cost as well as quality.
(2) Tools that facilitate care collaboration. As healthcare delivery becomes more accountable, it must become more collaborative. There need to be tools that support real-time communication between healthcare providers, allowing conversations to take place that have access to shared, universal patient data. Further, patients need to be able to participate in these conversations, and give proper consent for access to their data .
To elaborate a bit more on the second point: a collaboration platform is more than just a shared patient record (though, certainly, a shared patient record is part of it). A universal PHR (Personal Health Record), though a step in the right direction, is still currently a library that one needs to go to in order to pull data that is in there (and whose usefulness is a function of the number of subscribing inputs).
Collaboration is more real-time, more dynamic. It needs to be a mobile-first technology, more than a web-first one. It needs to be able to capture bits of conversation back and forth between care team members (including the patient), sharing cumulative patient data. That data is populated by the conversation content as it accumulates, in addition to EHR data pulled from each participating provider.
How we pay for healthcare is changing. The fee-for-service approach, a hallmark of U.S. healthcare traditionally, is being phased into a system that pays for value over volume. We see this in some major trends – the discussion at the federal level of replacing the broken SGR formula with something more value-oriented, and the shift in managed care toward Value Based P4P.
The technology needs for this new paradigm will be different. Of course, we need health data to be on electronic platforms. These platforms will evolve to serve the institutions that deploy them, and will contain CQM and CDS capabilities, as well as cost-visualization capabilities that include all areas where cost is generated (hospital, outpatient, pharmacy and ancillary) – such systems will show you “what you have done”, somewhat retrospectively.
Just as important (arguably, even more important) are technologies that facilitate care collaboration. This is patient-oriented, provider-driven, cross-institutional, mobile-first, nimble, and data-centered. Such systems will show you “what you are doing”, not in retrospect, but in real-time and going-forward. Needless to say, this is where my current interest is focused.
The Office of the National Coordinator for Health IT (ONC) recently released guidelines to address the question of consent when it comes to electronic health information exchange (eHIE) – “meaningful consent.” This is a helpful effort, and underscores the difficulty of obtaining, documenting, and implementing consent in the modern ever-more-complex world of electronic health information. …Continue Reading
We have come a long way, in the past several years, in our efforts to bring health care data into the modern era of electronic connectivity. Yet, the entirety of one’s health story is still fragmented into a variety of data silos that are largely organization-centric. Through the efforts of many very talented people, spurred …Continue Reading
The effort to build health IT products that are patient-facing, and able to pull together all the health information about oneself into one unified dashboard, is well underway. It is the inevitable next step in the evolution of health care data – putting patients at the center of their own data, and having them be …Continue Reading
“Patient engagement” has certainly become a buzz-word in the realm of modern health IT. Medical practitioners as well as hospitals hope to encourage patients to interact with them using on-line tools, and Stage 2 Meaningful Use criteria (which go into effect beginning in 2014) require that at least 5% of a clinical practice’s patients actually …Continue Reading
Health Information Technology is on the threshold of a significant step forward. Up until now, most of the emphasis in health IT was encouraging physicians and other ambulatory providers, as well as hospitals, to move off paper and onto an electronic platform. EHR adoption has increased significantly from 2008, where only about 4% of physicians …Continue Reading
For clinicians participating in the federal EHR Incentive Program (Meaningful Use), Stage 2 of Meaningful Use (MU2) is right around the corner (2014). No one yet has EHR software that is certified for MU2, given that vendors are just becoming certified this year. So, from a clinician perspective, it is hard to imagine how using …Continue Reading
Newly released federal data has allowed analysis of the EHR Incentive Program (Meaningful Use) based on two years of data. First-year users, both from 2011 and 2012, as well as second-year users (who started in 2011) can now be studied. A new comprehensive analysis is now available, and can be downloaded for review. This document …Continue Reading
New data from CMS allows comparison of EHRs used for Meaningful Use. Shifts in market footprint by EHR vendors from 2011 to 2012 can now be analyzed.
Next-generation Personal Health Records (PHRs) are starting to emerge. We review the evolution of these and look at different ways to build PHR adoption.
Electronic Health Records (EHR) systems come with the vision of eliminating paper in a medical practice. “No more paper” is the rallying cry of many an EHR company. But is this the case? As it turns out, not really. Stacks of legible, computer-generated paper still pile up on a medical practitioner’s desk, despite having an …Continue Reading
The term “population management” has become one of the buzzwords of modern health care. Medical practices as well as larger delivery organizations, such as medical groups, IPAs, ACOs, and PCMHs, are being asked to report on their performance around managing the health of assigned populations. Performance-based compensation, in fact, hinges on measuring and comparing groups …Continue Reading
With the beginning of 2013, health IT is facing a new set of challenges. Electronic Health Record (EHR) vendors are gearing up for Stage 2 Meaningful Use certification, which includes more emphasis on interoperability – the sharing of health data about a patient across different health settings – and on patient engagement. Health care is …Continue Reading
Medication Reconciliation, keeping track of all a patient’s medications from all soruces, is a big challenge. Universal PHRs can be very significant here.
In the upcoming year, Electronic Health Record companies will be challenged to enhance their products in anticipation of Stage 2 Meaningful Use. Stage 2 is right around the corner, and will begin in 2014 for those who have already started their EHR usage in 2011 or 2012 (for those who start Meaningful Use later, Stage …Continue Reading
Health technology tools are rapidly emerging, a swirling rising tide of products (web and mobile applications) addressing countless niche issues in the very complex healthcare ecosystem. Two countervailing sources of such efforts characterize the modern landscape – products that come from the consumer Internet side, and products that come from the healthcare provider (and payer) …Continue Reading
“Patient engagement” is one of the buzzwords in health policy these days, and substantial data exist to show that when patients are actively engaged with the health care system, particularly if they have a chronic medical condition, their resulting health outcomes are better. Clearly, it’s a good thing for people to be involved in their …Continue Reading
Health Information Exchanges (HIEs) are hubs where different parts of the healthcare system can exchange information with each other. Doctors can communicate with other doctors, with hospitals, with labs, etc. Funding that encouraged the creation and maturation of HIEs were part of the 2009 American Reinvestment and Recovery Act (ARRA), just like Meaningful Use was …Continue Reading
Patient-facing health IT has come a long way, but is also poised to make another significant leap forward. Last week, the final rules for Stage 2 Meaningful Use were released, and even though these rules address what physicians and hospitals must do to receive incentive payments for demonstrating “meaningful use of certified healthcare technology,” some …Continue Reading
Health care is changing. It is doing so in a profound, organizational way. I’m not talking about the advent of new technologies – diagnostics, therapeutics and information technology – I’m talking about how doctors and hospitals are organized. The tradition in this country is that health care has been delivered mainly by individual, self-employed physicians …Continue Reading
The federal EHR Incentive Program (Meaningful Use) is based on the presumption that once a medical practitioner has adopted an Electronic Health Record (EHR) system, that system will remain in use for subsequent years. More specifically, the presumption is that once a clinician attests to Meaningful Use (the first year of attestation only needs a …Continue Reading
The mid-year data on the Electronic Health Record (EHR) Incentive Program (Meaningful Use) has been released, allowing further insight into adoption of EHRs. The current year-to-date Meaningful Use attestation figures can be compared to 2011 data, and can illustrate vendor-specific trends in adoption. A few points about Meaningful Use need to be made here. All …Continue Reading
Health Information Technology (health IT) has been a burgeoning space in the past several years. Partly spurred by federal incentives to clinicians to adopt Electronic Health Records (EHR), investment in companies in this field has flourished. In addition to EHR companies, which are numerous, and which will very likely experience significant shake-out over the next …Continue Reading
Accountable Care Organizations (ACOs) are gaining momentum. These efforts, part of the 2010 Affordable Care Act (recently upheld by the Supreme Court), aim at building voluntary groups of doctors, hospitals and other healthcare providers in order to improve the quality and reduce the cost of health care (at least, to Medicare fee-for-service beneficiaries). In December, …Continue Reading
We are at a time of dramatic change in health care. Not only is the question of health care finance on the table as a hot area of debate, but also the issue of health care delivery is (perhaps more quietly) undergoing big change. And the kinds of health Information Technology needed by the delivery …Continue Reading
The number of vendors of Electronic Health Records products seems unsustainable. Stimulated by federal Meaningful Use incentives, plus the irresistible tide of pressures and encouragement from all sides (specialty societies, peers, licensing boards, insurance payers), the uptake of EHRs has been steadily increasing. As a result, large established EHR companies, some of whom have been …Continue Reading
In response to requests for a thorough analysis of the Electronic Health Record industry, I have spent some time putting together a comprehensive EHR market analysis reference document, based on actual Meaningful Use experience in 2011. This document is now available for purchase and download in a newly-created bookstore. This document is designed to be …Continue Reading
The promise of using “Big Data” from health care has been the focus of many in the health IT community, particularly from academia, as witnessed in the recent Health IT Connect conference. As we move from a paper legacy for healthcare data to a new electronic one, huge amounts of clinical data are being amassed …Continue Reading
Who has benefitted from the federal EHR Incentive Program (Meaningful Use) so far? Has it been simply a reward to those clinics and medical practices who already had an EHR (as some have argued), or has the system actually encouraged new users who never had an EHR before to adopt? Prior to the beginning of …Continue Reading
EHR Usability is a very important aspect influencing the utility of, and adoption of, Electronic Health Records (EHR). The use of EHR systems is moving out of the “early adopters” phase, and is reaching the tipping point where it is becoming mainstream. More often than not, some form of Health IT is being used in medical offices …Continue Reading
The question of “usability” of Electronic Health Records (EHR) systems continues to be a topic of discussion. A recent report in iHealthBeat gathers comments from a number of influential expert opinions on the topic. There are many aspects to the issue of EHR “usability” – not the least of which is a consensus on what …Continue Reading