A key ingredient to health care reform is becoming reality with little fanfare and a lot of federal stimulus money.
The U.S. Department of Health and Human Resources estimates that $48.8 billion in recovery funds will be spent on health care information technology.
Those dollars include grants to deploy regional health information networks, money to providers so they might tie into them, as well as funds to ensure — in the bureaucracy’s words — that meaningful use is made of the data.
Physicians are in line for stimulus money, too — $44,000 each to reimburse them for turning their patients’ paper charts into electronic medical records. Prescribing drugs electronically will net them a bonus. Tying into a network that other providers, and ultimately the patient, can access may net them more.
Those are the carrots.
The stick for providers who don’t make the leap is reductions in payment for treatments under the government’s Medicare insurance program for senior citizens.
The new urgency follows by five years the announcement of an ambitious plan to create the East Tennessee Health Information Network to allow hospital systems and ultimately other health care providers to share information through a centralized data bank, thereby improving patient care, increasing efficiency and cutting costs.
Knoxville’s hospital systems put $480,000 into the project, and its first effort was to enable images to be electronically exchanged between hospitals.
And then the project stalled.
Attempts to secure venture capital dried up when talk of health care reform started and questions were left unanswered about how to sustain such networks.
Leaders of that effort are now working with a new nonprofit organization created by the state, the Health Information Partnership for Tennessee, to secure funding to get the network working on a broader scale.
Creating the local network will cost $2.5 million to $3 million, and another $3 million over the next three years. Annual operating costs are estimated at between $300,000 to $400,000, said Mike Ward, chief information officer of Covenant Health and board member of the regional network, since redubbed the Innovation Valley Health Information Network.
East Tennessee’s budget request is being forwarded to the state, which “will roll up its request to the federal level by the end of September, and we are hoping we might get stimulus money by the end of the year, although it could be middle of next year before the money is released,” Ward said.
Employers are going to be asked to chip in, too, having been identified as beneficiaries of such a system and the likely sources for the matching dollars needed to garner government grants to get the network up and running.
“We are laying a plan to approach the employer community,” Ward said. “We expect to have to come up with $750,000 to $800,000 to get in the game.”
Who benefits, who pays?
What stalled the network initially were the unanswered questions: Who benefits? Who should pay?
Measuring how much the initiative would reduce costs — particularly savings to those contributing to its upkeep — proved to be a stumbling point.
They’re still tough questions.
“That’s always been the elusive problem — Who should pay for this paradigm shift? There’s a lot of theories, but not a lot of people want to fund theories,” said Dennis Corley, chief executive officer of Digital Crossing, the data center in downtown Knoxville that was chosen to house the initial network.
There’s no question that the effort improves patient care — and that in turn may save individuals money in the short term and society money in the long term — but no one expects donors to see a quick, measurable return on their investment.
The hope is that what’s learned by studying the data — the meaningful use — will ultimately yield savings. Electronic records that can be easily shared among providers — and accessed by patients themselves — will produce less testing, better management of drug use and less duplication of care, proponents argue.
“There is so much variation in the community that no one individual or institution can see the benefit, but after we have been at meaningful use for two or three years, we’ll see it’s great to have this connectivity,” Ward said.
Employers, particularly, will have better access to data on whether employees are managing their health and the ability to develop appropriate rewards and punishments based on that behavior. Many employers are already adjusting employees’ insurance premiums, for example, for participating in medical screenings and signing up with third-party consultants to discuss the results.
“Smokers are going to have to pay more because they are costing everyone more … but we have to get to the data exchange first, improved outcomes second, and what I am talking about is five to seven years away where we can look at preventive maintenance and health management,” Ward said.
“If there’s no money, there’s no mission. We will have to get to the point that we’re saving dollars and improving the quality of care.”
Tom Tarver, president of LBMC’s eHealth Solutions, doesn’t expect electronic medical records to save physicians money or allow them to see significantly more patients each day. But the technology should improve patient care.
“There’s a lot of qualitative reasons for doing it,” he says. “It’s kind of like religion — you just have to have faith.”
Mark Field, a vice president of the Knoxville Chamber and former insurance company executive, has been involved with the local network since its inception.
He says there’s an economic development component to the effort — being able to tout Knoxville as a community that’s addressing health care costs and quality “could be another feather in our cap” as the region competes for new jobs.
Rocky road to travel
Regardless of the benefits or savings, migrating data from paper to the computer is a boon to information technology companies, as well as consultants in an array of fields.
“We are being extremely proactive because health care is a large piece of our business in each of our companies,” said Stacy Schuettler, president of LBMC Technologies, whose sister companies focus on a range of financial services and human resources.
The promise of stimulus money is trickling down from health care providers to companies providing computer hardware and software, training, data analysis, work flow advice and what it means to garner “meaningful use” from the technology so they can be assured of a federal reimbursement for their investment.
“It’s really a paradigm shift on so many different levels, and it’s being thrown at them like you drink water through a fire hydrant,” said.
Unlike other sectors — distribution, manufacturing and retail — health care has been a slow adopter of technology, except for clinical use.
And the required capital investment comes at a time when hospitals and physicians are feeling the pinch of a recession, with an increasing number of patients unable to pay medical bills and even more postponing treatments they view as elective.
Schuettler said her company is pitching shared-service software, an increasingly popular business solution that doesn’t require the purchase of expensive servers — just an Internet portal.
Ron Jenkins, chief operating officer of Saratoga Technologies, said his firm is looking at offering a lease package to physicians wary of making a huge investment.
“We offer the solution and the hardware and are partnering with a company that does the EMR software and the training,” he says. “We will do the ongoing support.”
He worries, however, that many physicians are moving too slowly.
“This product has to be in use and fully operational or they won’t get their money,” Jenkins said. “If we don’t start installing some of these now, you won’t have enough trainers to train people.”
Maryville group ahead of the innovation curve
East Tennessee Medical Group, a Maryville-based multi-specialty organization with 45 health care providers, began converting charts to electronic medical records three years ago.
“The majority of our physicians are on electronic medical records, but some of them are in different stages,” said Ron German, the physician group’s CEO. “We just don’t have the IT staff to implement this all at one time.”
German extolls the virtues of the system — not having to file paper charts, not having them misplaced — and says patients see the benefit as X-rays and other diagnostic tests that can easily be accessed, with no wait, to primary-care physicians and specialists within the group. If drugs or medical devices have been recalled, it’s much easier to identify patients who may be using them. Monitoring when patients need to return for laboratory work or other procedures is also simplified.
The practice has begun using the data, as well, to study treatments and outcomes for diabetic patients and those with heart disease.
He estimates the group has spent about $30,000 per physician.
The group, however, will have to chuck its software because it’s neither certified under the new standards nor does it offer the means to prescribe drugs electronically.
As a larger group by East Tennessee standards, East Tennessee Medical Group is still farther down the road than many of its peers.
Dr. Mark Browne, a physician and principal with the consulting firm Pershing, Yoakley and Associates, said some of the reticence among providers is that converting paper charts to electronic records represents more than simply typing them into a computer.
“Frequently it takes a period of time to work out all the kinks,” Browne says. “And in the meantime there’s a combination of a decrease in volume and increased length in accounts receivable that has a significant impact on the practice’s cash flow.”
Browne and Tarver both use automobile analogies to describe the shift.
Tarver says the ramp-up is much like the creation of the interstate system — it was expensive, messy and inconvenient during construction, but the results were worth it.
Browne compares the change to seat belt use — if seat belts were only mandated for Buicks, for example, the impact would be negligible. But mandating seat belts in every vehicle, and that drivers and passengers use them, has a significant impact.
Amy Nolan is editor of the Greater Knoxville Business Journal.
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