By: Joseph Conn / HITS staff writer Modern Healthcare Online

The American Health Information Community on Tuesday sent back for revision a list of recommendations by its work group on electronic health records aimed at boosting EHR adoption, including a controversial incentive proposal that would reward doctors who have EHRs and penalize those who do not.

David Brailer, co-chairman of the AHIC, a public-private policy healthcare information technology policy advisory panel created by HHS Secretary Mike Leavitt in 2005, asked fellow AHIC member and EHR work group co-leader Lillee Smith Gelinas to take the recommendations and tweak their language and have them checked by lawyers.

Finally, Brailer advised Gelinas, vice president of clinical performance at group purchasing organization VHA, that the EHR work group should “have some forum with an open hearing so we can have more debate” on the proposals.

The six proposals were:

• Leverage federal purchasing power by having the government, through its contracts with health plans and other payers, support widespread adoption of IT standards and “foster the use of pay-for-performance programs for physicians that include structural measures to incent the adoption and effective utilization of certified EHRs.”
• The pay-for-performance schemes should use “reliable, standardized and validated tools which are currently available to assess structural measures as defined by the Medicare Payment Advisory Commission, such as the NCQA’s Physician Practice Connections or the CMS’ publicly available Office System Survey.”
• HHS should continue to support the physician IT training programs now under way called Doctor’s Office Quality-Information Technology University, or DOQ-IT U.
• HHS should work with the federally funded Certification Commission for Healthcare Information Technology, which tests and certifies EHR systems, “to obtain medico-legal counsel to assure that its functional criteria include documentation, security and other approaches that will mitigate malpractice risk.”
• “Similarly, HHS should meet with medical malpractice insurers “to encourage premium reductions for those physicians who have adopted certified EHRs.”
• “HHS should develop a schedule for implementing differential reimbursement to Medicare physicians for use or nonuse of EHRs. While we would defer to departmental expertise, we note that this might be achieved by paying full Medicare rates and marketbasket updates (and possibly an EHR premium) to physicians using certified EHRs, while physicians using paper-based records are paid at discounted rates achieved by nonqualification for full marketbasket updates or other measures.”

Full article here: http://www.modernhealthcare.com

BY Brian Robinson, Published on Feb. 19, 2007 GovernmentHealth IT

Does measuring medical performance lead to better patient health?

The short answer is yes — and just about everyone understands that, at some point, information technology will be vital to the widespread use of performance measures.

But the measures need to be smartly focused. A study published in the Journal of the American Medical Association in December, for example, found that measures used in a performance measurement project run by the Centers for Medicare and Medicaid Services (CMS) were specific but not meaningfully linked to patient outcomes.

Heart attack treatments, for instance, were rated on whether someone administers aspirin and beta blockers when a patient arrived and whether someone to tried  persuade the patient to stop smoking, the study states, adding that those are not strong precursors of quality differences.

The relative performance of hospitals, clinics and physicians in delivering care to patients has been an ongoing health care question for years. But as it broadens into a national debate and the concerns become more focused, the conversation has centered on how to measure health care performance.

Many commercial and public interest groups are now attacking the problem. The American Medical Association (AMA), for example, is leading a project to develop standard performance measures that  health providers and insurance plans nationwide can use, including the Medicare program. The project has already produced more than 140 measures.

At the same time, Congress is trying to push the envelope with enticements for physicians to use performance measures.   President Bush signed bipartisan omnibus legislation in December that would provide physicians with a 1.5 percent bonus to their regular Medicare payments if they reported data to CMS based on measures that the AMA initiative is trying to develop.

The legislation, introduced by Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.), requires a quality reporting system for eligible physicians to begin using measures July 1 that CMS has already adopted to July 1. The law would initially last until Dec. 31, though Congress could extend it.

IT is essential
IT will be vital to the widespread use of performance measures. More local programs, such as the statewide pay-for-performance program in California, created by the Integrated Healthcare Association, make the use of health IT part of their measures.

Although health IT vendors are starting to look at the ramifiactions of performance measures, most are reluctant to do much work until a consensus on nationally applicable measures is clearer.

“Vendors have been putting most of their time into developing the functionality of [health IT] systems, such as being able to write and send prescriptions, rather than the tools needed to do” this kind of performance-related reporting, said Charlene Underwood, chairwoman of the Healthcare Information and Management Systems Society’s Electronic Health Record Vendors’ Association.

The problem is not a lack of experience with programs that use such measures. There are scores of pay-for-performance programs nationwide, Underwood said. Estimates reveal that more than 100 such initiatives are operating, but most of them are local.

Furthermore, many of them are programs run by single hospitals or regional provider plans. Other than California, only Hawaii and Massachusetts have statewide programs. And they depend on performance measures that are specific to their programs.

“Vendors just can’t afford to spend a lot of money in producing tools to capture the data needed for all these programs,” said Underwood, who is also director of government and industry affairs at Siemens Medical Solutions. “It’s the focus on [the national consensus on measures] that will drive things in this area.”

Good or bad?
The AMA-led Physician Consortium for Performance Improvement is addressing at least part of that first mandate. The group has been working for the past few years to develop a consensus on what national performance measures should contain and what goals they should target.

It has not been easy. The health profession has not yet decided whether performance measures overall are good or bad.

“If they act as proxies for the quality [of health care], then yes, it supports them,” said Dr. Nancy Nielsen, speaker of the AMA House of Delegates and the organization’s leader on quality issues. “If a patient has a heart attack and the performance measures say they should be given aspirin and beta blockers, then most physicians would say the measures are a good thing.”

However, doctors are wary that the measures will be used more as proxies for the cost of care, and that causes many medical professionals to balk at the notion of performance measures.

“True efficiency should be linked with value and whether patients are getting the same level of care for a lower cost,” Nielsen said. “The suspicion is that health plans will use performance measures simply to lower cost.”

REad full article here: www.govhealthit.com

Predicts Tipping Point for HSAs, Pressure on Pharmaceutical Pricing and More State Action

NEW YORK, Nov. 30 /PRNewswire/ — The year ahead will be a watershed for the health industries, according to PricewaterhouseCoopers LLP, as health savings accounts reach a tipping point, states act where the federal government hasn’t and pressure on pricing amid demand for transparency forces pharmaceutical companies, hospitals and health plans to rethink their strategies. These are among the top issues identified by PricewaterhouseCoopers’ Health Research Institute, which today released its report, “The Top Seven Health Industry Trends of ‘07.”The report also includes findings of a nationwide survey of 1,000 Americans about their perceptions of the U.S. healthcare system. The survey identified significant differences between what the public and industry believe to be key issues, including:

• Nine out of ten Americans (90 percent) believe that greed is a major reason that U.S. healthcare costs are rising, a greater number than those citing drug prices, care for the uninsured, business inefficiencies or malpractice costs.
• Nearly one-quarter (24 percent) of Americans don’t yet believe that having an electronic health record will improve the quality of healthcare, and four in ten consumers (42 percent) are unsure.
• Only one in six (17 percent) agrees that a very important way to reduce the cost of healthcare in the United States is for consumers to share more of the cost, which is the strategy behind high-deductible health plans with Health Savings Accounts. More than half of those surveyed(51 percent) believe that better, more advanced medical technology and diagnostics is the answer.

“Every health organization across the health industries is responding to pressure to reduce costs, meet growing demand and do more, better and faster with less,” said David Chin, MD, partner and leader of PricewaterhouseCoopers’ Health Research Institute. “Our survey, however, found a disconnect between what the American people, policy makers and industry think is wrong with our nation’s health system and how to fix it. It appears that consumers may not appreciate the complexity of healthcare as a business, and therefore the industry’s messages about itself and the challenges it faces are failing to resonate in the court of public opinion. This disconnect must be addressed before real progress can occur.”

PricewaterhouseCoopers has identified the following as the top seven trends in the health industries for 2007, based on its work with leading employers, policymakers, associations, advocacy groups and organizations across the health industries, including hospitals, health systems, physician groups, government and commercial health insurers, pharmaceutical companies and life sciences firms:

1. States Take the Initiative: In the presence of federal gridlock, states are taking the lead on divisive issues such as stem cell research, health insurance coverage for the uninsured and oversight of advertising and promotion by pharmaceutical companies. Responding to local social and fiscal concerns, states are developing innovative insurance programs, forming public-private partnerships to spur innovation and passing legislation to drive greater accountability and transparency from hospitals, physicians and pharmaceutical manufacturers. According to PwC, such state-led initiatives will likely expand in 2007, but the risk is a patchwork quilt of local programs and regulations.
2. 2. Transparency Could be Revealing: The demand for transparency around pricing, quality measures, safety standards and community benefit is being driven by and is supportive of consumer-directed healthcare and pay-for-performance. In 2007, the health industries will focus on becoming more transparent, but government, insurers and employers need to educate consumers about the availability and use of such information. Providers will need to dedicate more resources to reporting, a strategic issue that can no longer be delegated down in the organization.
3. Time to Walk the Talk on Technology: Developing a digital backbone to support electronic health records, interoperability and transparency is a national priority, but the public mandate is unclear and the industry is struggling with the cost and return on the investment. According to PwC’s research, nearly one-quarter (24 percent) of Americans don’t yet believe that having an electronic health record will improve the quality of healthcare, and four in ten consumers (42 percent) are unsure. Progress will take an investment of resources from the government and/or the private sector.
4. Consumers Take the Wheel: The shift toward consumer-driven healthcare as a way to control costs will continue, but the year ahead will be the tipping point for HDHPs and HSAs. Insurers, employers, and to some extent the government have been proceeding in favor of consumer- directed health plans in the absence of strong support from the consumers themselves and from strong data on the results of such changes in benefits. PwC’s consumer research found that only one in seven Americans (17 percent) surveyed by PwC thinks that increased cost-sharing is a “very important” way to reduce healthcare costs. With a critical mass of people now enrolled in these plans, 2007 will be the year to see whether they really have results to offer, and for consumers to weigh in on what they think of them.
5. Price Check for Pharmaceuticals: Forty-two blockbuster drugs will lose their patents in 2007, opening the door to generic equivalents and potentially creating an enormous loss of revenue for brand name pharmaceutical manufacturers. PwC’s consumer survey indicates that the public is quite aware of and sensitive to drug prices, perhaps due to relatively high cost sharing and price transparency of pharmaceuticals, relative to other health services. Nearly three quarters (72 percent) of consumers surveyed said they would be willing to take a generic versus brand–name prescription drug. According to PwC, drug pricing will come under continued pressure from generics, and pharmaceutical companies will have to develop innovative pricing strategies to compete.
6. Obesity is the New Smoking: First smoking, now weight. There is a culture shift around healthy eating sweeping the United States, as evidenced by the number of fast food chains cutting out transfats and U.S. companies introducing health and wellness programs. Two-thirds of U.S. adults are overweight, and obesity’s impact on chronic health problems is stirring healthcare organizations and employers to aggressively promote weight loss. Public attitudes have yet to catch up: While three in five Americans (61 percent) believe health insurance should cost more for smokers, only 40 percent believe it should cost more for those who are overweight because of poor lifestyle habits. In 2007, expect public health campaigns to push the envelope on obesity through wellness programs and financial incentives to lead healthier lifestyles.
7. Small is Big: The competitive landscape will change as healthcare gets smaller, more focused and patient friendly under consumer-directed healthcare. Physicians and hospitals are now competing with retailers, several of whom have announced plans to open mini-health clinics within their walls. Consumers like the idea: Four in ten people surveyed by PwC (42 percent) said they would seek non-emergency care from a retail health clinic. In addition, large general hospitals are seeing competition from increasing numbers of smaller, specialty hospitals, surgery centers and outpatient clinics, the result of regulatory action overturning the specialty hospital ban. There already are 130 specialty hospitals in operation and more under construction, predominantly in the South and West.

“Though there is disagreement about priorities, most everyone agrees that our current health system is ailing and isn’t sustainable without major changes,” said Sandy Lutz, director of PricewaterhouseCoopers’ Health Research Institute. “There are a myriad of issues facing health organizations and opportunities for executives to address them, but they need to also focus on closing the gap between how consumers view the industry and how the industry views itself. Healthcare is a people business and must become more consumer- centric. To be sustainable, health organizations must communicate and connect with their customers through innovative approaches and fresh perspectives – beginning in 2007.”

A copy of The Top Seven Health Industry Trends of ‘07 is available at www.pwc.com/healthcare under “Publication/Thought Leadership.”

BY Nancy Ferris
Published on Nov. 13, 2006

The California HealthCare Foundation is considering turning the software developed for the Santa Barbara County Care Data Exchange into an open-source software product that other regional health information organizations (RHIOs) could use.

Foundation officials revealed their tentative plan at a Washington, D.C., forum where people from many organizations discussed the potential of open-source software for health information exchanges. A Forrester Research executive said at the forum that the use of open-source software could result in a 20 percent increase in nationwide RHIO expansion by 2014.

Forrester Vice President Eric Brown said open-source software would not solve all the problems that RHIOs are encountering as they try to establish information exchanges. But he said a survey Forrester undertook for the foundation suggested that if open-source systems were available, 60 percent of the country might have access to a RHIO by 2014, compared with 48 percent without open-source software.

President Bush set 2014 as a target for all Americans to have e-health records. Health care providers could share those records via RHIOs.

In Santa Barbara, the foundation and other organizations spent nearly $20 million on the software that underlies one of the country’s first RHIOs. To increase the return on that investment, the foundation might submit the software to a consortium or other nonprofit that could license it to other users, said Sam Karp, the foundation’s vice president of programs. As a result, RHIOs could acquire less expensive software and easily modify or enhance the system to meet their needs, forum speakers said.

The Forrester study suggested that the software from Santa Barbara could be converted to an open-source product for about $695,000. Even if less than 10 percent of RHIOs used it, Brown said, its existence in the marketplace would influence other software vendors, holding prices down and tending to make products more open and standards-compliant, he said.

Lori Hack, director of government relations and policy at California RHIO, endorsed open-source software for health information exchanges.

“We have to find a sustainable model,” she said, “and what’s out there today just isn’t working.”

With open-source software, users can see the source code and modify it to meet their needs. They are expected to share enhancements with other users. As is the case with the open-source Linux operating system, for-profit companies can make money on open-source software by providing custom implementations and support.

About 75 people attended the forum, and many expressed interest in joining an open-source community for clinical systems. The foundation will hold a similar meeting in California this week.

Article: Government Health IT – http://www.govhealthit.com/article96800-11-13-06-Web

By John W. Rowe, MD  Full story

Value-based purchasing, or pay-for-performance, is a major emerging theme in U.S. health care. Forces enhancing adoption of pay-for-performance programs include continued increases in medical costs beyond overall economic growth, a body of evidence that the quality of health care provided to patients is not directly related to the volume of services received, increasing evidence to serve as a basis for the development of standards against which to measure clinical performance, and increasing acceptance by physician organizations and individual practitioners of the rationale underlying these efforts. In this context, employers, government payers, and health plans are establishing a wide variety of pay-for-performance programs. This article reviews the critical design features of such efforts, describes the current types of programs on offer, and comments on the implications of this emerging movement for the future of health care in the United States.

Design of Value-Based Purchasing Initiatives

The design considerations in developing pay-for-performance programs include the clinical setting; the patient population; the specific incentives; the targets of the reward and the amount of the reward; and, particularly, the standards of performance (8). In addition, reliable data are central to the success of pay-for-performance. From this perspective, progress depends on widespread adoption.

Clinical Practice

The greater the proportion of the practice that is influenced by the payer (for example, health plan, Medicare, or Medicaid) implementing a pay-for-performance initiative, the more incentive physicians have to respond to the initiative (9). The prevalent mode of payment in the practice is also critical. If the quality improvement target requires additional physician actions (for example, tests, prescriptions, or reports), the likelihood of effectiveness in a practice setting in which these services are paid for individually will be greater than in a capitated practice. Conversely, capitated practices with salaried physicians would more easily adapt approaches aimed at reducing overuse of services. The patient population could affect the likelihood of success. Access to health care varies depending on race and ethnicity. Disparities in access might influence the effectiveness of pay-for-performance initiatives in groups with limited access (10).

Target of the Incentive

Incentive programs often pay only for superior performance. This approach runs the risk of merely redistributing funds from lower-performing physicians to superior performers without changing performance. Improving the overall quality of care in the community requires approaches that reward improvements even though the resulting performance may not be superior. Rosenthal and colleagues (11) described a health plan initiative that generously rewarded the highest-performing groups even though their performance did not change from its pre-incentive level. Lower-performing groups that improved received very modest payments. This type of experience can quickly erode support for pay-for-performance efforts. Programs should reward the level of performance and sustained improvement (12).

Form of the Incentive

Incentives come in different forms. Selection of the most effective incentive is influenced by many factors, including the magnitude of change that the pay-for-performance initiative requires to qualify for the reward. For instance, if the requirement for change is modest, a noncash incentive, such as lessening administrative burdens, may be effective. Channeling patients to preferred providers provides financial benefit to physicians but does not increase the unit cost to the payer. Reputational incentives include making providers’ process or outcome results available to patients. To date, public release of information has not significantly affected patient decision making about choosing a physician or health plan (8, 13).

Cash Incentives

An important issue for cash incentives, whether increased fees or bonuses, is the target of the payment. Payments are generally directed toward physicians, disease management entities, hospitals, or clinics. Because many initiatives relate to the performance of interdisciplinary clinical teams, especially for high-quality care for patients with chronic disease or those receiving complex treatment regimens, fair allocation of rewards across team members is important. Payers can reward patients for going to the best providers by lowering the amount they have to pay out-of-pocket.

How much should be paid? In a review of the U.S. experience, where most incentives are modest, the Agency for Healthcare Research and Quality failed to identify a consistent relationship “between the magnitude of the incentive and the response” (3). Most health plan efforts include financial incentives of less than 10% of physician income. The British National Health Service (NHS) has implemented a very substantial incentive for general practitioners, through which physicians can receive up to 25% of their income from quality-of-care–based incentives, a far greater commitment to performance-based payment than seen to date in the United States. Early results from this effort are discussed later in this article.

Development of Standards of Performance

To be acceptable to physicians, quality measures that will determine their rewards must be evidence-based; based on reliable, aggregated, observable performance information; transparent; and clinically important (14, 15). Many advocate a graded approach, starting by paying for merely reporting data rather than for specific levels of performance. In more advanced approaches, quality metrics include patient satisfaction, health care processes, adoption of computerized physician order entry in hospitals, and health outcomes, either alone or in combination.

Should metrics be simple or complex? Most current standards are simple. They state a basic clinical service that all patients with a certain condition should receive, such as prescription of ß-blockers after myocardial infarction. Approximately 5% of patients are responsible for 50% of health care costs. They are typically complex. Therefore, we need standards to evaluate management of patients with chronic disease and multiple comorbid conditions. To achieve this goal, we will need a much richer evidence base than is currently available. In addition, although most current standards are developed to evaluate primary care, specialty care accounts for a disproportionate share of health care costs. Standards must extend to specialty care and to complex patients with multisystem problems (15).

 Full story