Technology Investments Can Help Providers, Plans Focus on Core Competencies

Ingenix Innovations recently sat down with Barry Riegelhaupt, vice president and HIE practice leader, Reden & Anders, an Ingenix company, and Kepa Zubeldia, senior vice president of interoperability technologies for Ingenix, to discuss what health plans and providers should be considering as they address technology purchases and innovations in 2008, and what barriers exist that can hinder the adoption of technology.

Innovations:
What are the major changes taking place in the health care industry that will drive changes in technology?

Kepa Zubeldia:
Bipartisan IT proposals to improve the quality of care for patients and reduce errors are the biggest drivers of technology right now. Giving physicians the tools to create clinical records electronically is a priority as well.

There have to be mindset changes so providers will say I want to buy technology because it’s going to improve my practice. Studies are currently are underway to demonstrate improvement. But until then, technology adoption will continue to be driven by regulatory requirements and meeting quality improvement reporting requirements.

Barry Riegelhaupt:
I agree. We are long past the days where people are buying technology just because it’s the newest thing. CIOs don’t get to make big buying decisions all by themselves – it’s a CEO and CFO decision. If it doesn’t have business value with demonstrable return in quality or dollars, it won’t happen. Whether it’s $1 million or $100 million – no one is spending money on technology unless you can demonstrate return on investment.

On the provider side, it’s even more sensitive, because even a small investment can seem like a whole lot of money for a physician’s office.

Innovations:
Can you provide an example of an important technology health plans and/or providers should adopt in the next three years?

Zubeldia:
One example is the electronic medical record. Does it improve the quality of care? Does it save money? Or is it just a tool for better public heath reporting? Those are the questions that providers have struggled with. For a very large provider site or a multi-specialty clinic with numerous providers that need to access the same patient records, the electronic medical record is clearly a productivity and care enhancement.

Riegelhaupt:
An electronic medical record allows physicians to provide increased quality of care and increased capacity, but there’s a business paradigm issue at play. The way doctors get reimbursed is by doing things. If a doctor doesn’t have to run a test on me because he knows from viewing my electronic record that I already had the test, then he actually generates less revenue.  Regardless, electronic medical records really trump all the other technology on the provider side.

On the payer side, there are many different technologies that make economic sense. Any technology tool that allows a health plan to better manage the care of their members’ health is a good thing for all parties.

Innovations:
Can you cite some examples of those payer tools?

Riegelhaupt:
Ingenix has decision support tools that can aggregate claims data and pharmacy data to identify and help a health plan better manage chronic conditions, like diabetes and asthma, which are high-cost areas for health plans – and also improve care.

The technology to improve health care is, for the most part, there. The industry needs to do a better job of integrating all of the disparate data into one place so we can use it intelligently to serve consumers.

Innovations:
What role does legislation play?

Riegelhaupt:
So much of reimbursement is tied to legislation. It starts with Medicare, then Medicaid follows, and then commercial markets fall in after that. Years ago when I used to work in emergency rooms, if the ER didn’t have radiologist on staff at 2 a.m., it could send the image electronically and the doctor could do the read from home. But she didn’t get paid that way, so she drove to the hospital, did the read and a few minutes later went home, because that was the only way she could bill for it.

Zubeldia:
That is a situation where technology clearly can help, but it is not being used because of reimbursement policies, which are barriers.

Sometimes the use of technology is driven by other factors. For example, filing electronic claims helps the payer – not the provider – reduce costs. Right now, all but the smallest provider groups have to file electronic claims with Medicare because it saves Medicare money.  

Innovations:
Are there other primary roadblocks that hinder the implementation of technology?

Zubeldia:
I think the whole reimbursement problem is the biggest reason for non-adoption of technology in health care.

Riegelhaupt:
I would agree. I’m an organizational psychologist and have spent most of my career around behavioral change initiatives. Getting people to do things differently is hard – but if there is no incentive or motivation, then people just don’t change. And a big barrier in health care is reimbursement. Even though everyone is interested in quality and access, it’s the bottom line that helps to drive change, and reimbursement has a big effect on that bottom line and behavior.

Innovations:
It seems like the primary goals of technology and innovation in health care are to improve or simplify data exchange, reimbursement and compliance. Do these goals compete with each other?

Zubeldia:
Certainly they compete with each other for dollars. There is only a limited dollar pool and you have to choose how you are going to use it. Are you going to use it for IT, or are you going to get a new medical device for your practice? Unless a technology is proven to produce more revenue, lower expenses or improve the quality of care, it’s quickly taken off the radar screen.

Innovations:
The future of health care technology seems to be shifting from building data systems to building relationships between plans, providers and patients. How can plans and providers move their operations from tactical to strategic?

Riegelhaupt:
It’s tough to convince big health plans, which may have to meet Wall Street expectations, to invest strategically for the long term. In any industry you have smart strategic players and tactical players, and in the end, the former always win, because they are willing to make investments in the future.

Innovations:
How would you suggest CIOs or other IT thought leaders make the case for more technology funding?

Riegelhaupt:
It takes a certain kind of organization to view IT as an asset or investment as opposed to a cost. It’s incumbent on the CIO to be able to make that argument. Those are conversations that Ingenix can help with. We can develop solution sets for people that help them do strategic assessments on the front end. We can develop road maps for technology and the ROI and the compelling business case for these technologies, to help get them implemented.

Innovations:
What do health plans and providers need to do to best determine whether to buy or build these different technologies?

Zubeldia:
First they need to identify their needs and what technologies can fulfill them. Do they need to reduce costs, improve quality of care, reduce errors or generate more revenue?  They then need to balance the investment in the technology to satisfy that need. Funding for a new MRI machine could come from reduced maintenance expenses on an existing MRI machine or providing more technology services to increase reach and revenue.

Riegelhaupt:
The buy or build question is a little different when you talk about technology that supports clinical outcomes as opposed to administrative outcomes. But again, it comes down to this: What is your core competency? For things that aren’t your core competency, it may be unwise to invest.  

On the provider side, it makes sense to spend your money building the portion of your business that supports the delivery of care. But when it comes to administrative and claims systems, I would not advise a hospital to build its own. I know a health plan CIO who says that he will always partner before he buys, and always buy before he builds.

This goes back to the core competency question. If I look at a health plan, its core competencies are managing diseases, managing care and building and managing provider networks. When it comes to things like paying claims, why would you spend the dollars to build your own system? I’m not even sure why you would want to install your own system, because doing so is not a core competency, it’s not a differentiator and it’s not how a health plan is going to improve care and make money.

Zubeldia:
That’s a very important point. Providers in general are not interested in technology per se – they are interested in taking care of their patients. If technology helps reduce costs that’s good. If technology helps provide more service to a patient, that’s much better.

Innovations:
What are some of the positive benefits of outsourcing?

Zubeldia:
You should outsource what is beyond your core competency, just as you outsource specialty work to specialists.

Riegelhaupt:
A hospital generally can get higher quality at lower cost by having someone else do the tasks that fall outside of care delivery. If you consider that all departments are fighting it out for resources, you must recognize that when you outsource, you can focus your resources on actions that support your core competencies.

At Ingenix, we are not in the patient care business, but we can provide a full set of business intelligence tools and support around those activities. And we can probably do it better, faster and cheaper than a health plan or provider can do alone.

Innovations:
Steps providers and plans take now will help to pave the road toward a future goal: the Health Information Exchange. Why is the HIE so important?

Zubeldia:
HIE shifts the focus on technology because it is a government mandate. Its infrastructure, if done right, will allow providers to send electronic records more easily from one health care provider to another.

The message that we’re sending with HIE is this: Let’s leverage what you have to do, so you can actually do what you want to do, which is exchange health care and administrative information so your patients receive better care.

Riegelhaupt:
It is the $4 trillion question: Why do we care about HIE? I used to have no idea what the doctor charged or how he got paid because I didn’t really have anything at stake. But it costs me more and more out of pocket each year, so now I care.

Transparency and quality data can help me out – I am a paralyzed consumer without those. Although I can get that data for almost every product and service in this country, I can’t do it in health care, because there are silos of data all over the place.

Zubeldia:
That’s an excellent point. If you go to a restaurant where there are no prices on the menu – it’s a little troubling. Health care is in this situation. Providers don’t know what they are going to do, you don’t know what they are going to do, and you have no idea of what it’s going to cost.

Riegelhaupt:
The interesting difference in health care is that I have no idea what it costs, but I also have no idea of what I’m getting. I may have expectations, but I have no way of knowing if Dr. X is better than Dr. Y.  Today, even if someone gave us the data that hospitals or health plans use to evaluate providers, how could the average American possibly interpret and use that information? The future HIE will bring information together so we can compare the facts and make an informed decision.

Innovations:
What advantages do Ingenix EDI Solutions provide to help providers and plans navigate this new environment?

Riegelhaupt:
In the past, people either bought best-in-class products or were drawn to several different pieces and had to integrate or stitch them together with other products or modules. Ingenix has the components and can put them together for health care entities, so it’s one-stop shopping. Why would you work with 14 different vendors when you can go to one? At the moment, there are very few pieces that we don’t have.

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