Directing Heath IT Investment to
Promote Value in Health Care:
Recommendations for the Obama
Administration and 111th Congress

The first weeks of President Obama’s term have been exciting times for the health care industry. Amidst the country’s worst economic crisis in 80 years, an $825 billion economic stimulus bill is in play, with the potential to designate $7 billion for investment in health information technology (HIT.) President Obama has our nation focused on investments that will both stimulate our economy and build long-term value to our society.

Now more than ever, it’s important to set priorities for tackling the modernization of our nation’s health care system. Ingenix shares the belief that innovative investments in HIT can yield significant, immediate results by improving the efficiency of health care. HIT can also support long-term health system reform, by creating an intelligent national health network that facilitates quality measurement, clinical improvement and administrative simplification. However, it’s a lot easier to waste money on HIT than to invest in it wisely.

Unlocking the Value of Health IT

Let’s start with what we know about technology. By itself, it doesn’t solve problems. Properly designed and applied, it enables problems to be solved. For example, the availability of electronic medical records (EMRs) doesn’t inherently improve the quality of care. But when technology is paired with the right cultural conditions, incentives and organizational focus on quality and safety for patients, it can help spur rapid progress. In those communities where EMRs have shown value, the investment in training  both in time and dollars  has been notable, with the technology itself being less important.

Indeed, to date, HIT investment has yielded limited benefits. First, the cost of investing in large-scale, disparate “client-server” systems is prohibitive for all but the largest physician offices. The business case has not supported widespread HIT adoption. Second, HIT applications alone do not improve health care or cut costs. Unlocking the value of HIT requires investment in technology, connectivity, high-quality information and analytics. Technology is the platform. Shared information, such as comprehensive, de-identified encounter data, makes technology valuable. Analytics, in turn, make the information valuable, letting providers and patients use this data to make the best evidence-based decisions.

These learnings should guide our nation’s investment in health IT: minimal technology investment; substantial investments in information, analytics and connectivity; and an appreciation for the training and cultural dimensions necessary to make IT effective.

Today, cost-effective technology is available that would give every US physician access to EMRs. At the same time, greater investment in connectivity, information and analytics could produce large, immediate pay-offs within the existing HIT infrastructure. Combined, these actions have the potential to shift the value equation around HIT, to promote ongoing adoption and to generate cost savings and quality improvement.

Recommendations for Action

Three goals can be targeted with HIT investment:

1. Address the overuse, under use and misuse of medicine
2. Reduce unnecessary administrative expenses
3. Create the infrastructure needed for value-based purchasing reform

With those three goals and a realistic understanding of what IT can accomplish, here are four recommendations for the country’s health care community to consider:

1. Promote EMR adoption by all physicians through cost-effective, web-based technologies with low barriers to implementation. Continued use of stand-alone and disconnected client-server based EMRs is a barrier to widespread adoption and to the realization of benefits. Scaleable, web-based EMRs, on the other hand, provide the connectivity and ease of use that encourage broad adoption, while enabling critical functions such as patient safety, physician order entry and e-prescribing. (To find out more about Ingenix EMR solutions, click here.) Spending stimulus funding on the deployment of scaleable, web-based EMRs will be a meaningful step toward a highly-connected, information and analytics-infused infrastructure. We estimate the cost of extending a web-based EMR to every physician practice at $4-6 billion. This is a fraction of the cost estimated for client-server systems and frees up resources that can be devoted to critical components such as automation, connectivity and analytics. Grants, subsidies, tax incentives and revolving loans would promote the use of smart, cost-effective, web-based technologies and produce results in the short term.



2. Promote a common measurement system for performance evaluation that sets the stage for payment reform. Quality improvement requires a means to collect, compare and report valid, aggregated measures that gauge providers’ performance. Some providers and health systems have been quite effective in HIT-enabled performance improvement, increasing adherence to primary prevention and treating chronic diseases according to evidence-based best practices. Yet, the lack of widespread access to standardized and de-identified physician-level data, uniform episodes of care and standard, risk-adjusted performance reports severely hampers any communitywide or nationwide effort to compare and improve performance. Common performance measurement is a prerequisite to putting in place value-based purchasing and pay-for-performance systems. The government should take actions that will move the industry towards the adoption of a standardized measurement system for episodes of care and outcomes. Congress should direct the Centers for Medicare & Medicaid Services (CMS) to adopt performance measurement standards, and use these standards in value-based purchasing initiatives for the Medicaid and Medicare programs. Using funding from the stimulus bill, Congress could provide a down payment on initiatives to implement a common measurement system.



3. Expand capacity for evidence-based medicine by promoting access to physician-level information. The use of evidence-based medicine (EBM) has significantly improved the cost-effectiveness of health care. Today, however, EBM only constitutes a small fraction of the care that is delivered. The reason is not so much that we lack research, but that existing evidence from clinical trials and retrospective analyses has not been made accessible to practitioners. We can greatly increase the cost-effectiveness of health care by expanding evidence on the most appropriate practice patterns, providing that evidence to physicians at the point of care and using it as a basis for evaluating care. Priority should be placed on investing in means for sharing de-identified, physician-level data among CMS, commercial health plans, pharmacy benefit managers, labs and patient registries for use in comparative effectiveness research and for quality and cost measurement. With funding from the stimulus bill, Congress should direct support for the development of data repositories, applications that facilitate data synthesis and tools that provide evidence at the point of care to inform health care decisions.



4. Modernize health care transactions with state-of-the-art analytics to dramatically reduce administrative costs. Our investments can modernize the way health care transactions are conducted, assuring that payments are accurate and efficient. Today, it is estimated that billions of dollars are wasted on inaccurate or inappropriate billings due to coding errors, inappropriate treatments, abusive practices and outright fraud. Administrative cost savings are win-win propositions, benefiting all stakeholders. State-of-the-art predictive modeling technologies can identify and stop inaccurate payments, turning wasted costs into savings. Based on our extensive experience, Ingenix estimates the Medicare and Medicaid programs could save one percent of health care costs - approximately $7 billion annually - by using predictive payment accuracy technologies, enabling correct and appropriate payments to be made to providers on a timely basis. The government could lead the way for adoption by requiring or providing incentives for the use of predictive analytics in Medicare and Medicaid transactions.

Rallying around these priorities is essential to taking cost out of our health care system while we improve outcomes. Let’s seize the opportunity presented by the economic stimulus package in the right way, right now.

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