Posts Tagged ‘P4P’

There have been a number of research studies published that question the value of Electronic Health Records (EHRs), particularly as it pertains to improving quality of care and ultimately outcomes. Chilmark has always viewed these reports with a certain amount of skepticism. Simple logic leads us to conclude that a properly installed (including attention to workflow and thorough training) of an enterprise software system such as an EHR will lead to a certain level of standardization in overall process flow, contribute to efficiencies and quality in care delivery and ultimately lead to better outcomes. But to date, there has been a dearth of evidence to support this logic, that is until this week.

Yesterday evening the New England Journal of Medicine published the research paper: Electronic Health Records and Quality of Diabetes Care, which provides clear evidence, albeit a little fuzzy around the edges, that physician use of an EHR significantly improves quality metrics over physicians who rely on paper-based medical record keeping processes.

The research effort took place in Cleveland as part of Better Health Greater Cleveland from July 2009 till June 2010 and included 46 practices representing some 569 providers and over 27K adults with diabetes who visited their physician at least twice during the study period. Several common quality and outcome measures were used to assess and compare EHR-based care to paper-based. On composite standards of quality, EHR-based practices performed a whooping 35% better than their paper-based counterparts. On outcome measures, which are arguably more difficult for physicians as patients’ actions or lack thereof are more integral to final outcomes, EHR-based practices still outperformed their paper-based peers by some 15%. The Table below gives a more detailed breakout.

While the authors claim that insurance coverage has little bearing on the final analysis (i.e., Medicare, commercial and Medicaid patient metrics are similar) there is a surprisingly high percentage of patients in paper-based practices who do not have any insurance which makes one wonder: Will future Health Insurance Exchanges (HIX) and the individual mandate, should it survive the Supreme Court, have some bearing on what physician a patient may chose in the future? Will patients migrate to those doctors that use more advanced technologies (EHRs)? Also, there was an abnormally high percentage of patients in paper-based practices that were “Nonwhite” which raises another question: Could those practices that still rely on paper-based processes be in more disadvantaged neighborhoods? If that is indeed the case, will HITECH and its incentives trickle down to this strata of the healthcare sector? All in all though, these are relatively minor points in relation to the broader implications of this paper.

This research paper could become a seminal piece in support of the current administration’s efforts to reform the healthcare sector as it not only supports efforts to digitize the healthcare sector via EHR adoption, but may also provide an added incentive that goes beyond HITECH Act incentive payments.

Throughout the healthcare sector reimbursement models are changing from fee for service to value-based contracts. Such value-based contracts, be they ACOs, PCMHs, P4P, or whatever other acronym you want to throw at it, are accelerating coming not only from the government but also commercial payers. A key component of these value-based contracts is achieving certain quality metrics and moving from episodic care to continuous care models. This research paper is one of the first and most comprehensive that has come across our desks here at Chilmark Research that clearly shows the use of an EHR has a significant impact on key quality measures, in this case diabetes care. While virtually all hospitals are on the HITECH bandwagon, it is less clear just how many private physician practices are jumping in and adopting EHRs for their practices. For many such practices, the HITECH incentive payments may not be enough of a reward for the numerous Meaningful Use hurdles that a physician needs to jump through. But if you hit these physicians directly in their wallet with value-based contracts and they see that EHRs provided demonstrably better quality care metrics, then we may see broader EHR adoption in the ambulatory sector. Bit of a crystal ball forecast, but the logic is there.

Ultimately, what we are seeing happen in the healthcare sector is not dissimilar to what we saw occur in the manufacturing sector. In manufacturing the lag between adoption of enterprise software systems and subsequent increases in productivity has a special term: the “Productivity Paradox,” wherein it was some ten years after wide spread adoption and deployment of these enterprise systems that improvements in productivity metrics could be measured.

Might the healthcare sector have its own paradox? We think so and from this point forward will refer to it as the Quality Paradox.

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If you have read previous posts this week, you know that I was attending MIT’s EmTech conference. Event is a focused on technology and innovation of all stripes bringing together some pretty big names to discuss where we are today and where we are headed. For the first day, I had one continuous and long post, which in retrospect, I am not fond of – just too much to wade through to get to what may be important to you, dear reader.

The second day, I put up two separate posts, one on Craig Mundie’s keynote and the other on the Personal Genomics session. This approach came across clearer, and more focused.

So with that in mind, I am reposting the EMR session notes from day one. This will not be a verbatim repost as reflection on what I learned as well as comments by HealthVault’s Chief Architect, Sean Nolan, to the first post necessitated some revisions.

Recap of EMR Session:

Panel includes John Halamka (Beth Israel’s CIO), Karen Bell (HHS), Craig Feied, (Chief Strategy Officer, Microsoft Health Solutions, he developed Azzyxi at MedStar) and Girish Kumar Navani, (Founder & President, eClinicalWorks). Decent size audience, easily a third of the total attendees at EmTech (there are currently 3 concurrent sessions).

Karen started off basically setting the stage giving a broad overview of the challenges in healthcare and subsequently HIT, for the audience with the HIT Hierarchy of Needs slide (pyramid, privacy at the base up to public good at the pinnacle). For us in the HIT space, nothing new here, but for those in the audience, most of whom who do not work in healthcare, Karen’s presentation provided a good backdrop for follow-on discussions.

Halamka followed with the common statement regarding lack of EMR adoption. Halamka claims that EMR systems today are still too expensive. With an average cost of $40-60K per practice and the common drop in productivity of 25% for first 6 months after deployment, few physicians will shoulder this cost.

Despite this apparently prohibitive cost, Beth Israel is requiring all affiliated physicians to adopt and use an EMR. Beth Israel will subsidize adoption of EMR by offering a hosted eClinicalWorks solution for these affiliated practices at a big discount to encourage adoption. The plan is that through adoption of EMR, BI and affiliated practices will be able to better track and report quality and performance metrics that will result in higher payments, via P4P payouts, from CMS and other payers. This will augment the cost of hosting the EMR.

Halamka also talked of consumer’s abilty to move PHR data from BI’s PatientSite to either Google Health or HealthVault. Today, the only thing you can move into either repository from BI’s PatientSite is data pertaining to medications and allergies. Not much value there for the consumer, though this is the low hanging fruit of what physicians would want to see in a PHR, particularly in an emergency situation.

Kumar was next. eClinicalWorks is now in over 20k physician offices. Kumar talked in broad terms, not terribly specific. Does believe that “patient-centered healthcare” is the next major change in healthcare that will be a forcing function for EMR adoption. Not to surprising to hear from an EMR vendor.

The highlight of Kumar’s remarks was him stating that he does not like the term of EMR. For him, EMR is a static term that does not fully capture th purpose of an EMR, helping physicians deliver better, more informed care to their customers. Hmm, like this statement – he is absolutely right, EMR is a dead term, we need something new.

They just did a quick survey of audience, Managing Personal Health Information: 14% would trust lab or pharmacy, 32% would trust a company such as Google or Microsoft and 54% would trust only themselves or a doctor. Pretty liberal crowd here in that nearly 50% would trust a third party, beyond their doctor with the personal health information.

Craig talked about the development of Azzyxi and how what all he wanted to do was try to provide the most information possible at the point of care, in this case the ER. Believe that errors/failures in medicine are not about Execution, but in Planning. Unfortunately, he claims all the effort now is on Execution (meds, wrong patient, wrong procedure, etc.), rather than upfront Planning. Talked of the “Spectrum of Wellness” as core to MS’s health sector strategy – a rethinking of what healthcare is and how it is delivered, not only when you are sick, but when you are well. Good speaker, a bit heavy on the sales pitch though he does seem genuinely sincere.

Q&A Session: What’s the value to a primary care physician in adopting EMR. Halamka claims that P4P and quality reporting is becoming an ever bigger issue for physicians and that these systems can actually help doctors ultimately earn more and earn it easier (HIT can greatly facilitate all sorts of transactional processes). Kumar followed up stating that it will help physicians better understand what they are doing as well as help doctors prepare more effectively for patient visits. Supported Halamka’s view that quality and P4P will also push adoption going forward. These programs start to really put some cost justification behind EMR adoption. Craig thought that it is up to software vendors to create sufficient value in their solutions that will lead to adoption.

Status oF PHRs: Halamka – we have 40K users of PatientSite and believe in patient control, thus opening up to Google Health and HealthVault. Karen, still informative stages but right now pretty wide open as the apps are simple today and maybe not what consumer will use tomorrow.

Addendum to EMR Session – picked-up through conversations after formal session:

  • According to recent HHS calculations, there is over $700M in incentives, via payers, through various P4P and quality improvement programs that can be used to subsidize EMR adoption by practicing physicians. Clearly, there is money to be had, though I am not sure that most physicians know how to capitalize on it. Unfortunately, few, if any EMR vendors today are helping physicians understand that there is an opportunity to augment the cost of EMR adoption. Truly, a missed opportunity.
  • Today, Beth Israel is allowing their customer to export their PatientSite PHR data to either Google Health or HealthVault. Problem is, a BI customer can only export medications (includes immunizations) and allergies. I asked Halamka why they are not exporting the full record and he told me that neither Google nor Microsoft’s offerings can handle anymore than that and used the example of imaging data, stating that the data models for both Google and HealthVault just aren’t there yet. There may have been some misunderstanding as Sean Nolan quickly commented on the previous post that HealthVault was capable of accepting numerous data types, (e.g., labs, clinical notes, etc.) with the exception of images. Sean went on to check with Halamka who states that he was just referring to images when I initially spoke to him. But that just brings me back to my original question to Halamka: Why are you not allowing customers to export as much of their record as a service like HealthVault can accept? Will need to follow-up on this one.
  • eClinicalWorks is seeing no issue with reluctance in market to adopt EMR solutions. Kumar told me they have plenty of business and are still on a very rapid growth path. Early problems precipitated by a couple of huge orders (e.g., NYC) are behind them now and they are meeting target implementation and delivery dates. Also, despite all the rumors of eClinicalWorks relying heavily on offshore developers, over 80% of all employees are based right here in the US. Kumar does use resources in India, but on a flex model to address pressing, unexpected customer needs, which are not an every day occurrence.

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Last year I attended the Healthcare Quality and P4P (Pay for Performance) conference put on by the World Health Congress. This was my first healthcare conference and it provided me a great opportunity to gain a better understanding of the healthcare market and critical issues therein.

Well, its been a year now and once again I had the opportunity to attend this event. Unlike last year, I knew a lot more about the industry and market trends, thus did not get as much out of the event. But having been to more conferences than I could ever count one thing I have learned is that conferences are much like panning for gold – you have to sort through a lot of fool’s gold before you come across a nugget of the good stuff.

Following are gold nuggets I walk away with from this event.

P4P is out, gainsharing is in

Presenters, particularly payers discussed how they were using gainsharing (share the savings across all stakeholders contributing to quality improvements). A presentation by Howard Beckman of the Univ of Rochester was particularly insightful as he outlined three key terms of quality (underuse, overuse, and misuse) that were used when conversing, in a non-judgmental fashion, with physicians. By using these terms, backed with metrics from internal studies, they were able to gain much quicker buy-in among physicians into their quality improvement initiatives.

Another “hot” term was Value-based measurements – this may become the new P4P mantra for the coming year.

Future will see multiple forms of tiering

All payers are looking much more closely at stratifying populations for risks and becoming much more like disease and care management companies than just straight ahead insurers. This has been occurring for some time but the change here will be bringing in quality metrics to the equation and stratifying providers and payment schemes as well. During the medical home session, John Tooker of the American College of Physicians talked about a future where payment will be divided into three distinct categories (tiers): payment for procedure/service, another for care coordination and the third for meeting quality metrics/objectives.

There will be losers

Spoke to Dana Gleb Safran of BCBS-MA about the P4P initiative at BIDMC and asked what about radiology at BIDMC that saw a drop in business as a result of that program – will there be any gainsharing with them. She replied simply: No, we will not pay for unnecessary services, period.

Clearly there will be winners and losers as quality initiatives permeate the healthcare sector, but with numerous powerful and entrenched interests therein, even payers will struggle to get complete buy-in. One of the big problems they will face is defining what quality metrics to use, how to balance these measurements against such mitigating factors as population served and more broadly, coordination across multiple entities (local, state and federal government, internal operating procedures, employer-driven initiatives, specialists’ guidelines, etc.).  It’s still a rat’s nest and it may take a while to untangle.

CMS moves at a snail’s pace

CMS presented their plans for a trial quality initiative to manage chronic care cases in a number of communities across the country. Plan is to provide an additional monthly payment to physicians providing care management with ongoing evaluation across a number of categories (e.g., value add, quality improvement, patient satisfaction, physician satisfaction, savings, etc. All good but it won’t be until sometime in 2010 that they actually begin the demonstration. That seems like an awfully longtime for just a demo. Are we in academia?

Another odd thing about that CMS demo is the requirement that the physician use IT to manage the care but there was no definition as to what that technology may be.  Completely open-ended which makes me wonder how valid their results will be at the end of this demonstration as I have no idea how they will account for that variable.

Other Tidbits:

  • Group Health doc told me that PHR adoption at Group Health is now about 50%!  That’s the highest percentage I have ever heard quoted. Hat’s off to them! He told me he loves it, his patients love it and that he has been doing email communications with his patients while sitting in on the various sessions.  Hmmm, I hope those were just simple consultations and appointment reshedulings.
  • United Health executive told me that they have signed an agreement with Google Health and another will be signed with HealthVault any day now that will allow members to export their records into these personal health systems (PHS).  As UHG is the second largest insurer in the country, this is some pretty big news and could give a substantial boost to these nascent platform plays.
  • Despite the success that BIDMC and BCBS-MA have seen with the deployment of SafeMed and subsequent savings, John Fallon, SVP at BCBS-MA told me they have no plans to replicate this success anywhere else.  They are now focusing all their attention on the MA eHealth Collaborative program.  Talk about odd!  Not that I am against such programs as the MAeHC, but with literally millions of dollars saved per year at BIDMC coupled with the well-known issue of run-away imaging costs one would think that they would want to see that program replicated.  Oh, how those political winds do blow…
  • Everyone talks about the patient, almost no one spoke about the consumer, nor did they take a consumer’s perspective on what all this means to them.  In many respects presentations came across as distant and disconnected from the reality of the consumer.  Many at this event are in for a very rude awakening.

Another good event by the World Congress Group.  I am always impressed with the level and quality of speakers and attendees they attract.  I may not always agree with what is being said, but I always find a few sizable nuggets of gold.  This event was no exception, which is more than I can say for quite a number of other events I have attended

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There is a bit of a Catch-22 going on with regards to the future of PHR adoption by consumers, which I have discussed before. Simply, without broader adoption of EMR solutions by physicians, PHR adoption will go nowhere. And the number one reason doctors have been reluctant to adopt EMRs is quite simple, most EMR solutions are more trouble (and more expensive) than they are worth. The ROI/value proposition for the physician is just not there.

There are some changes taking place, however, that may start showing physicians the money and encourage EMR adoption.

First is the move to electronic prescriptions (eRx). I’m still not sure what value an eRx is to a small physician practice versus a standard paper script. Maybe some savings in workflow, certainly some time savings in eligibility checking, but nothing substantial, particularly for a small physician practice. Where physicians may benefit is when insurers, such as CMS start demanding eRx, or at least provide some type of incentive that encourages its use. CMS was heading down that road by proposing the elimination of prescription faxes in 2009, but after an uproar, has pulled back from that position. In time, eRx will have a modest impact on HIT adoption. (Note: The recent proposal by the DEA to allow the use of eRx for controlled substances removes one of the major obstacles that many physicians have often complained about regarding eRx.  New England Journal of Medicine just published an article today on eRx and that adoption is accelerating, which was covered by The Star-Ledger in NJ)

Secondly, is the pay for performance (P4P) push. In the recent post on the SafeMed deployment at Beth Israel, clearly there was an incentive for physicians in that network to use the SafeMed solution for radiology selection as BCBS of MA was providing significant P4P end of year payments if goals were met. This is but one unique story out there in the P4P realm and I am sure there are numerous others. Sure, one can say that P4P does not require an EMR, but my bet is that increasingly, EMR systems, due to their ability to accurately record data that can later be readily sorted, sifted and analyzed, will lead to P4P programs built around such EMR reporting capabilities. Depending on the incentives, be they carrots or sticks, P4P initiatives will have a significant impact on HIT adoption.

The third is reimbursement for e-Consultations, typically done via secure email communication. Companies such as RelayHealth and Medem have been leaders in this market providing physicians a platform to communicate with their customers. Some EMR vendors also provide this capability within their patient portal solutions, Epic’s My Chart is a good example. If done right, for the right audience (consumer segment) there is a lot of potential here to drive EMR adoption as e-Consults put money directly in the physician’s pocket.

The only problem with e-Consults is that until quite recently, it was rare that physicians were reimbursed. This is changing rapidly:

  1. In early 2008, Aetna and Cigna jumped in stating that they would begin reimbursing physicians for e-Consults.
  2. In late June, as part of its formal launch, American Well announced it had signed on BCBS of Hawaii as its first major customer. (Note, American Well is a start-up looking to create a “healthcare marketplace” where one can go online and receive direct medical consultations with certified physicians that are a part of the marketplace). Physicians are paid for providing these e-Consults.
  3. In early July, the Center for Medicare and Medicaid Services (CMS) announced its proposed rule changes for 2009. Within these rule changes, CMS is proposing new codes that will reimburse for follow-up inpatient consultations done via telehealth. As CMS is the single largest payer in the industry what they do reverberates across the industry. Thus, it will not be surprising to see most other payers begin reimbursing physicians for e-Consults.

eRX, P4P and e-Consults, combined will accelerate the adoption of EMR as there are clearly opportunities here among these three for a physician to either save money (eRx) or make money (P4P & e-Consults). Not all physicians nationwide may necessarily benefit, but the vast majority will, if they are thoughtful in their EMR selection and implementation strategy.

For an example of a not so wise adoption of HIT, turn to this story that appeared yesterday in the WSJ blog.

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Matthew Holt provides some interesting, and spot-on commentary regarding last weekend’s article in the New York Times on the misuse of technology. The technology in this case is the use of 64 slice CT scans for cardiology, a technology that is widely used, but rarely needed.

Very serendipitous timing of the article as just last week I had the pleasure to meet with Dr. Richard Parker, the medical director for Beth Israel Deaconess Physician Organization (BIDPO). It is BIDPO who works directly with the 1,500 or so physicians that are affiliated with BIDMC throughout eastern Massachusetts. The purpose of the visit was to follow-up on a conversation I had in late May with SafeMed’s CEO, Richard Noffsinger, regarding their partnership with Google Health.

While Noffsinger related to me many of the unique attributes and features of SafeMed during our call, I wanted to hear first-hand from one of their customers as to their experiences with the SafeMed platform. A few weeks later I was sitting in Dr. Parker’s offices.

Background on SafeMed:

  • Physician founded (Ahmed Ghouri) in 2000 as a clinical decision support (CDS) platform. But like many a technologist founded company, big on technology and addressing needs, but short on go to market strategy.
  • July 2007 saw Hicks Equity Partners make a significant investment. Time to ramp up that go to market strategy and Richard Noffsinger was recruited.
  • Core to their CDS platform is the Rules Engine. Platform also provides a comprehensive thesaurus and is optimized for extremely fast processing speeds. I’m quite sure that Google Health was intrigued by all three of these features, which are a very nice fit for their PHR platform.

Leveraging SafeMed at Beth Israel:

BIDPO was approached several years ago by BCBS of Massachusetts to consider using SafeMed as part of a Pay for Performance (P4P) program targeting imaging. BCBS/MA offered to sponsor initial deployment and outlined for BIDPO that there could potentially be several million dollars in P4P payments if deployment went according to plan and P4P targets were met.

The problem BCBS/MA was having was that as imaging technologies were proliferating, physicians were often prescribing tests that had not shown efficacy. This resulted in significant cost overruns, similar to what the NYT article alluded to. BIDPO physicians, for example, had over 2,000 different radiological studies at their disposal which they could potentially order. Unfortunately, this plethora of choices led physicians to not always choose the most appropriate tests for a given condition and patient profile.

The physicians had a few headaches of their own as well. In an effort to crack-down on run-away imaging costs, insurers were requiring pre-authorizations. This was, and continues to be with some insurers, a time consuming and subsequently frustrating process.

To address these problems, BCBS/MA introduced BIDPO to SafeMed sponsored deployment of the solution, which is now fully integrated with BIDMC’s homegrown EMR. Today, BIDPO is in its third year of using the solution with all imaging orders for BCBS/MA members processed through the SafeMed CDS. Dr. Parker was kind enough to give me a live demo of the SafeMed solution at BIDPO and it was impressive.

First was the ease of use. In looking to perform a radiological test on a patient, the physician enters the type of condition being tested for (one can even use layman terms), say severe headache and the SafeMed thesaurus automatically guides the physician to which tests may be most appropriate based on the patient’s profile (takes into consideration medications, allergies, weight, age, and numerous other parameters).

A selection of radiological options sorted in ranking order by evidence of efficacy. Cost information is also provided as well as alerts (in red) of any technologies that show risk based on patient profile. When a physician clicks on a given test, a brief informative summary of the test is provided including where it is most appropriately used and why. Upon selecting a test for the patient based on this information, approval is virtually instantaneous. (Remember, this is for BCBS/MA members only, for other plans, BIDPO physicians must still go through a lengthy pre-authorization process that takes on average 15 minutes/transaction.)

Throughout the demo, the SafeMed CDS was blazingly fast in delivering results. Note, nothing in this demo was scripted – Dr. Parker did demos on anything I asked him to, in real-time.

As with any technology deployment, there was initial resistance by some physicians and there were bugs in the system that took about six months to work out. Now, Dr. Parker claims, they have 100% adoption and use by physicians of the system who are all benefiting from those P4P bonuses from BCBS/MA.

Benefits Seen to Date:

When asked what kind of benefits has BIDPO seen from the use of SafeMed, he broke it down into the following:

  • Physicians are getting instant approvals to their radiological requests, making life easier (Note, in addition to being integrated to the BIDMC EMR, SafeMed platform is also a part of their CPOE.)
  • Physicians are also getting a nice little P4P payment at the end of the year. Since deployment, the system has met P4P targets each year.
  • Patients are safer as physicians are making better decisions regarding which tests to use for a given condition and patient profile. Within BIDPO, 50% of all radiological orders are placed by internists and general practioners who typically do not have as much experience as specialists in various applications and best practices radiological tests.
  • Approximately 1,000 radiological transactions/month are run through the SafeMed CDS. Typical time to get a pre-authorization the industry standard way is 15 minutes. With SafeMed, pre-authorization is immediate. This quickly adds up to 1.6 FTE (full time employee), who can be better deployed doing something more valuable like attending to a patient.

The Big Loser:

As with anything, where someone gains, another loses and with P4P initiatives such as this, it is no different, which gets back to that NYT article:

In the case of BIDPO’s use of SafeMed, the radiological department at BIDMC has seen a measurable drop-off in revenue creating some internal friction. Dr. Parker readily acknowledged this and in thoughtful reflection stated that many changes are occurring in healthcare, this just being one example with many more on the horizon. One can not sit back and await these changes to come to them. Rather, one must take initiative, as to wait puts the entire organization at a competitive disadvantage and subsequently at risk.

Now, how does this all relate to consumer-facing healthcare IT?

SafeMed is now “running under the hood” at Google Health, driving the medication checking algorithms for potential adverse effects of multiple medications. SafeMed joins quite a few other applications and services that provide similar capabilities such as A.D.A.M., Drugs.com (using Cerner), Drug Digest, and DoubleCheckMD. What is attractive about the Google Health-SafeMed partnership is that Google has signed agreements with a large number of pharmacy companies and pharmacy benefits management firms (PBMs) allowing the consumer to automatically load their medications into their Google Health account where they can readily check their meds for any adverse interactions.

Matthew Holt, co-organizer of the Health 2.0 conference did test drive of Google Health, including the SafeMed platform in Google Health and found the current solution lacking, particularly the UI and how information was presented. More than likely, the problem lies in SafeMed not fully completing the drug interaction platform prior to launch. This is a common issue with Beta or early releases and will in all likelihood be resolved over the next few months. What will be more interesting longer-term is to observe how SafeMed may expand beyond medication checking into other critical areas that may be useful for consumers. Not sure exactly what those might be, but SafeMed does have a powerful rules engine that is very fast making it attractive for Web-based apps. Being agnostic, SafeMed could become a key ingredient in other personal health applications (PHAs), becoming not just a CDS, in the clinical sense, but also a CDS in the consumer sense.

But this gets back to one of the features in the BIDPO deployment that I found so intriguing and also raises challenges for SaferMed. The BIDPO team that led that deployment spent many hours building out the meta-data and decision support capabilities for their SafeMed radiology solution. SafeMed will be challenged to find partners with a similar willingness to do such heavy lifting in other markets such as the consumer market. Not sure Google is up to the task. Hopefully, SafeMed has a few other partners who are.

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Yesterday, Medicare released its 104 page proposal for moving to a partial pay for performance (P4P) model.  The Wall Street Journal Health Blog has a direct link to the proposal in their posting.  As the WSJ points out, what is unique here is that Medicare is proposing to withhold a certain percentage of reimbursement across the board then reward those who perform well with a rebate of sorts.  Sounds good in theory but with most hospitals getting a significant portion of funding from Medicare in the first place and secondly most are operating on razor thin margins, it’s difficult to see how this will actually pass Congressional review.

But what is most disturbing is that this proposal from Medicare does not look to really change how healthcare is delivered.  Rather, this proposal more or less maintains the status quo delivery model, one that is notably flawed  and inefficient.  Would not it be a wiser choice by Medicare to propose trials of new care delivery models with potential for broad roll-out once their efficacy was demonstrated.  As mentioned previously on this site, telehealth is one such delivery model that has enormous potential for dramatically reducing costs of care while concurrently contributing to better outcomes.

So, instead of creating a 100-plus, page proposals such as this for Congress on something that may never see the light of day, why not focus energies in areas where there is some real potential for change?

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Earlier this summer, the New York Attorney General took on the major healthcare insurers, Aetna, Cigna, United Health and WellPoint’s Empire BC/BS by putting them on notice that the Attorney General’s office was investigating how these companies were rating healthcare providers. Apparently, while these insurers were out their promoting cost and quality transparency, the foundation of Pay for Performance (P4P) initiatives, it appears that they were not being all that transparent themselves in divulging how they themselves were rating providers.

Yesterday, the Attorney General’s office and Cigna announced that they have reached an agreement whereby Cigna will fully disclosed its Doctors’ rating system to both consumers and providers and allow an independent third party monitor its reporting system. This agreement appears to be quite extensive and if other insurers agree to similar arrangements (they are still in negotiation with the other insurers), it could quite possibly become a national standard.

Some doctors may not like the whole P4P push seeing it as only another attempt by insurers to squeeze them, but with costs continuing to spiral upward and consumers being asked to take on greater responsibility for their healthcare, such rating systems will become more the norm than the exception. It is time to accept P4P as a course of doing business and providers will need to begin getting their internal systems in order to insure that their quality and cost of care does not compromise them in such rankings.

And providers do have some time. Jeffrey Kang, Cigna’s CMO stated this this new ranking system will not be deployed until late 2008 when they perform their annual physician reviews.

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Down in Washington DC for the next couple of days attending the Agency for Healthcare Research and Quality (AHRQ) conference. This is their first major conference bringing together a multitude of researchers, all having received funding from AHRQ. Conference, which was free, was completely booked about a month prior to the event. Estimate about 500 attendees. An interesting event, but puzzling as well.

First some of the interesting tidbits I picked up on the first day:

  • Large healthcare groups/providers are really struggling with defining Quality metrics. Such metrics are being put forth by state and federal agencies (CMS, et. al.), insurers, employers, academics, etc., leading to a plethora of various metrics, some working at cross purposes to one another. Apparently, there is no central organization that is stepping up to the plate and saying these are the quality/performance metrics that must be tracked to satisfy all of these stakeholders thereby streamlining the reporting process. Without such a national set of standards, it is difficult for providers and their chosen software vendors to build the reporting tools into the software.
  • Think through how one can optimize workflow before a major HIT project. Expected efficiency gains will not materialize if you hardwire existing workflow into a new HIT system.
  • One large provider organization, Trinity, saw CPOE adoption vary from less than 25% at one facility to more than 85% at another. Poor implementation of the CPOE led to physician rejection of the system at the facility with low adoption, something this large provider has still not been able to recover from.
  • Trinity found CPOE adoption highest in Emergency Depts.
  • Providing a computer kiosk to allow parents to enter detailed information about child’s medical condition and history is as accurate as that taken by an admitting nurse and statistically more accurate than that of a physician.
  • Physicians rarely trust a tethered PHR as they are often not up to date.

And some of the more puzzling aspects of this event:

  • Where are all the major stakeholders? Little representation from payers, patient advocacy groups, HIT consultants, HIT vendors. Without their active participation, this event seems detached from reality.
  • Some AHRQ funded research projects and their methodologies just do not make any sense. One provider tried showing whether or not quality increased after HIT go-live, but most metrics tracked were ones that already had high adherence/quality rankings, so viola, little improvement shown.
  • One researcher will be conducting a study on Medication Therapy Management (MTM) and whether or not a PHR can contribute to better MTM in older populations. Problem here is that this researcher knows next to nothing about PHRs and was actually thinking of having someone on her staff create a PHR for this study. (I talked with her later and strongly encouraged her to adopt an existing PHR for her research. Could be a good opportunity for a PHR vendor who may be targeting older population.)
  • Most presentations on quality and HIT were inconclusive, i.e., the use of HIT in a care setting rarely showed any statistically significant improvements in quality of care provided. Is this a problem with the metrics being measured, the lack of change in workflow, poor research methodology, poor implementation and use of HIT I don’t know, but I do find it disturbing.
  • Many of the sessions and their presentations did not have any cohesiveness meandering aimlessly across the research on quality landscape.

But hey, this conference is free, so who am I to complain.

I do commend AHRQ in pulling this conference together as it does provide a great opportunity to see over the course of a couple of days the wide variety of research on quality that is being funded by this Agency. But moving ahead, this Agency could provide a far greater service to this sector if it focused more on some of the underlying business issues that drive decision making in a healthcare setting, take a leadership role in creating a set of national quality metrics, and look at how HIT and the data contained therein can be better leveraged across the healthcare continuum, rather than focusing its precious resources on what are largely academic, applied research projects that oft-times have little relation to reality.

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athenahealth Makes a Splash

On Sept 20th, athenahealth (ATHN) went public on the NASDAQ becoming the most successful IPO to date in 2007. Coming out at $18/share, the share price soared to over $38/share, a 115% gain. Since then, the price has settled down (probably some profit taking by early purchasers) and is now trading at ~$33/share. Still a hefty increase over that entry IPO price.

While some claim that founder and CEO Jonathan Bush, being a cousin of Pres. Bush has a lot to do with the success of the IPO, I find this a rather simplistic view.

So why is the market excited about athenahealth? Here is my quick take:

  • Delivering a service that the market truly needs. Most physician practices are struggling to keep up with the myriad of rules to effectively and efficiently collect from payer. athenahealth provides a Web-based service that addresses this need.
  • Model is in some respects similar to Salesforce.com, a darling on the street, thus athenahealth gets some added value there.
  • Breaking from the tradition of most vendors in this market – it is a disruptor and better yet, a disruptor that users are readily adopting. With renewal rates close to 100% it’s hard to argue that this model will not work.
  • As a subscription service, it has an excellent and dependable annuity revenue model that provides assurances for the future.
  • Pricing model is also attractive to physicians as it is typically based on a small percentage cut of the revenue that their service is able to capture from payers on behalf of physicians.
  • Very healthy high double digit growth rate that appears to be accelerating.

While it remains to be seen just how scalable their model is, there is a lot to like about this company. My hope is that such success will spawn others to likewise go counter to traditional wisdom in this market as it may be the only way that we’ll see real change and subsequently better health, better outcomes and greater adoption of HIT in the broader market.

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