Propsects and Challenges of Integrated Electonic Health Records for Managed Care Organizations

PROPSECTS AND CHALLENGES OF INTEGRATED ELECTONIC HEALTH RECORDS FOR MANAGED CARE ORGANIZATIONS by Peter Oluseyi Okebukola MPH/MBA Intended audience This is a public policy memo directed to the Office of the National Coordinator of Health Information Technology (ONCHIT) within the Department of Health and Human Services (DHHS).

CONTENTS      Executive Summary Background Definitions stakeholders Options and implications for managed care          Individual practice association (IPA) or network model HMOs Staff or group model HMOs Point of service (POS) plans Medicare/ Medicaid Medical tourism

Potential Problems Possible Resolution and its Possible Effects Conclusion and Potential Areas for Further Study Recommendations

Executive Summary Healthcare Information Technology (HIT) has been shown to improve organizational efficiency and has the potential to transform healthcare and the managed care industry in the near future. The potential impact of HIT on cost savings and quality improvement has led Congress to enact the American Recovery and Re-investment Act of 2009 (ARRA) which encourages the use of information technology to achieve fully integrated electronic health records system in the United States. This law has a lot of implications for the managed care industry which is responsible for the healthcare of a large percentage of Americans. There are many models of managed care and there are also many models of Electronic Health Records (EHRs) which suit each of these different models. However, what is good for one model of HMO may not be good for the other and I hypothesize that this may create many independent, self-sufficient health information systems that may not allow the over-arching goal of the ARRA Act of interconnectivity and interoperability to be met. I propose that a generic model of health information system be developed by the ONCHIT which would have as its backbone, the Centre for Medicare and Medicaid (CMS). This system will be anchored around the Medicare and Medicaid programs and the managed care organizations would design their own systems in such a way as to be interconnected with this system, as opposed to having their own standalone systems. There are many teething problems within this developing area and my proposition may cause some more, but if the ONCHIT ensures that the innovative MCOs who have already installed their own systems are not penalized but encouraged and the spirit of competition is not dampened among vendors, the expected benefits of EHRs may soon be reaped by all, especially the enrollees of the various managed care organizations in the United States.

Background Despite the widespread use of information technology in many industries in the general US economy, the health sector in general and managed care organizations in particular have yet to put its potential power to good use. The benefits of the value of information technology and its potential for cost saving and improved quality and reduced costs in the long run are well documented (Hillestad 2005, Chen 2009). Despite this however, about 17% of U.S doctor‘s offices and 10% of hospitals have only basic electronic health records, which are by no means integrated and interoperable (Blumenthal 2009). These conditions necessitate that the manner of recording patients‘ clinical information in most care settings is in paper form, which means that the process of reimbursement and payment of claims by managed care organizations is in paper format without any way of truly monitoring care across the different variants of the managed care organization systems. This has many implications for quality control and measurement in the managed care settings of both public and private payment systems including Medicare and Medicaid (Hudson-Scholle 2010). In a bid to remedy the situation, the US government enacted the American Recovery and Re-investment Act of 2009 (ARRA) which contains legislation on the use of information technology to achieve a universal inter-operable and fully integrated electronic health records system in the United States. This legislation, called HITECH, provides up to $30 billion in financial incentives intended to get doctors and hospitals to adopt and use EHRs all contingent on demonstrating the ‗meaningful use‘. (Blumenthal 2009,Weiner 2010b). This legislation has many laudable objectives and in the context of managed care, it would be appropriate to discuss the various definitions and implications for the heterogeneous managed care industry and more importantly, the patients, who are the beneficiaries of all these efforts.

Definitions There is a need to define the taxonomy to be used in this paper. This has been culled from the lectures by Professor Jonathan Weiner. Health information technology (HIT) thus refers to the ―application of electronic health records (EHR) and other digital technologies to the delivery and management of health care‖ and is sometimes used interchangeably with the term ‗e-health‘ which refers to ―health and healthcare practices supported by electronic processes and communication‖, while health informatics (HI) refers to ―the systematic application of information and computer sciences and technology to health care practice, research and learning‖ (Weiner 2010b) Managed care is defined as an integrated system that manages health services for an enrolled population rather than simply paying or providing for them (Weiner 2010a). This definition incorporates the fact that managed care organizations need to monitor the health of their enrollees and there is no better way to do so than with the use of health information technology.

Stakeholders There are many stakeholders in this drive to achieve interoperable electronic health records systems. The most important stakeholders are the managed care organizations and their enrollee base, doctors and hospitals. However, there are a few more important players in this emerging sector. When the ARRA Act was passed, it mandated the creation of the Office of the National Coordinator of Health Information Technology (ONCHIT) within the Department of Health and Human Services (DHHS). ―ONCHIT currently exists under executive authority, but the HITECH provision enshrines it in statute and greatly expands its resources. One responsibility of the ONCHIT will be to create a strategic plan for a nationwide interoperable health information system, a plan that must be updated annually. Two statutory committees will advise the coordinator: a Health Information Policy Committee and a Health Information Standards Committee‖ (Blumenthal 2009). The purpose of this office is to guide the deployment of

Information Technology to make sure that they meet standards and the unique demands of the healthcare system and in particular, the managed care organizations, which are responsible for financing a large proportion of healthcare in the United States. While there were industry appointed watch dogs that served as a self-regulatory body, such as Health Level Seven International (HL7), the ONCHIT would now play a wider role which would be more than the HL7‘s of developing standards and providing a comprehensive framework for the exchange, integration, sharing, and retrieval of electronic health information that supports clinical practice and the management of health services (HL7, 2010). The practical implications of this become apparent when we note that of the 85% of insured Americans, the financing mechanisms which include public (Medicare and Medicaid) and private, managed care organizations are responsible for the care of most insured Americans. The various roles which health information technology can play in the various managed care systems are discussed below.

Options and Implications for Managed Care The characteristics of managed care make it an ideal candidate for the implementation and use of EHRs. The functions of managed care are to organize the tripod of care management or disease management, coordination of providers and financial monitoring or regulation (Weiner 2101a). These functions can be carried out more effectively by the use of information technology as the case of the Kaiser Permanente HMO (Chen 2009) and the Johns Hopkins Healthcare LLC (Dunbar 2010) has shown. Traditional health insurance models can be roughly divided into the traditional fee-for-service indemnity model, ―managed care‖ indemnity plan, preferred provider organizations (PPO) which make up about 45% of insured Americans, and the health maintenance organization (HMO) which covers about 35% of insured Americans (Weiner 2010a). The HMOs are often referred to as point of service or POS plans. I would like to posit that the role of health information technology in these different organizations varies and that even though it might be tempting to have different frameworks of health information technology

for each of these plans, a generic, interoperable system would be the best, given the peculiarities of the American system. The effects on individual practice association or network model HMOs: These are health insurance plans that contract with existing groups and solo private practitioners to care for patients either on capitated or risk-sharing FFS basis (Weiner 2010a) They are usually disjointed and with the diversity in practice and sheer number of vendors, it may be indeed difficult for the same electronic health system to be shared by all. This complexity however makes the system more inefficient as connectivity between all the individual practices in the network may be costly and in an event where people are trying to implement it, the difficulty involved may make the stakeholders feel that it is not worth it. However in the Johns Hopkins Healthcare LLC, the health information systems have improved productivity and contributed to the bottom line giving hope that these can indeed be replicated throughout the country with patience, creativity and ability to factor in the concerns of all stakeholders (Dunbar 2010). The effect on the staff or group model HMOs: this model involves physicians hired either directly by the HMO or by a separate physician group formed exclusively to serve that HMO‘s patients. This is the model of the Kaiser Permanente and health information systems have been successfully installed and have proved very efficient as discussed by Chen et al (2009). However, from a macro-economic stand-point, these stand-alone information systems for various group model HMOs may not fully help meet the goals set by congress that promulgated the ARRA Act. This is because for the administrators of these systems, the architecture is established in such a way as to encourage interconnectivity within the network and the more the system can be kept free from external influences, the better. This naturally discourages the openness and interconnectivity that the proponents of the ARRA act envisioned. The question is that will interconnectivity breed lack of innovation and stifle competition? This question is answered by David Blumenthal who posits that with a well regulated environment, interconnectivity can be assured while maintaining the standards of interoperability required by all forms of health information systems, regardless of the model of HMO or managed care. This means that the standards that are set have to be

fair and not punish the innovative ones who have begun to implement the system before others or those who push the frontiers of innovation in specific features of the various systems. Use to point of service (POS) plans: this is a type of plan where the enrollee can decide at the ―point of service‖ whether they want to stay within the HMO network or get service covered at less generous levels from providers ―outside‖ the network (Weiner 2010a). The modalities for health information technology are slightly different for this type of model. This is because the onus is on the consumer to choose where he/she would rather have care. The implications are that the type of electronic health system implemented would be different from that used in the network model HMO. This type of EHR would be heavily dependent on the personal health record (PHR) which would have to be taken to the new provider or made available to the doctor via the internet. It puts the power in the hands of the consumer to make use of the personal health records which will be developed to improve its functionality and act as a ―mobile‖ or virtual health record, which can be called up by any physician the patient decides to see at that particular time. The care given would be documented and the patient has it on record so that the doctor who treats her next would see the interventions done and then follow up. Also, it makes billings and financial management easier on the part of the administrators of the HMO for monitoring of reimbursement of funds to be providers in different locations. Effect on Medicare/ Medicaid: these large programs potentially have the most to gain from the establishment of interoperable health information systems as they have a large number of enrollees and are federal in nature. These programs would benefit from a central modulated system so as to ensure the ease of use across the different states and multiple stakeholders. When these systems are interoperable, it makes it easier to avoid costs of interconnectivity. However, because they have an increasingly larger part made up of managed care, it is important that the office of the ONCHIT ensures that stand-alone systems are discouraged and that most of these systems are interoperable with the electronic health systems used by the CMS. This is important as the system

used by Medicare and Medicaid for administrative and clinical monitoring covers so many patients and it is necessary for the various HMOs that have roles in the various programs e.g. Part D and Medicare Advantage programs to be able to connect seamlessly to the system used by Medicare and Medicaid to avoid unnecessary delays and inefficiency. Effect on “medical tourism”: The advent of tele-medicine which got its start in remote settings with few providers has led to a possible change in the way managed care organizations can organize care. Indeed the cost of healthcare can be markedly reduced with the ability of doctors to offer advice even thought they are not physically present. They can review the patient‘s status online and communicate with the patients virtually. According to Weiner, this is likely to lead to a type of ‗digital medical tourism‘ or more correctly, ‗tele-health without borders‖ (Weiner 2010b).

Potential Problems Despite government‘s interest and sector-wide initiatives, not so much progress has been made. There have been many teething problems associated with HITECH including a policy and political stalemate in which players could not agree on particular standards and procedures (Diamond 2008). On the demand side, many barriers still exist, including high costs, lack of certification and standardization, concerns about privacy, and a disconnect between who pays for EMR systems and who profits from them (Hillestad 2005). Other concerns include the perceived lack of financial returns from investing in them, the technical and logistic challenges involved in installing, maintaining, and updating them, and consumers‘ and physicians‘ concerns (Blumenthal 2009). For managed care organizations that have already put in place their own custom-built systems, there might be inertia to remodel their systems in such a way as to ensure interoperability. The onus is however on Medicare and Medicaid through the CMS, to demonstrate the use of EHRs for their patients and most managed care organizations will follow suit, making systems that are interoperable the CMS as the standard or focal point. Other challenges

include the ethics of the EHRs which patient safety and confidentiality (Diamond 2008), sales of vital information using the principles of ethics of managed care: beneficence, non-maleficence, respect for autonomy, justice. These tenets apply to the implementation of EHRs too (Taylor 2010).

Possible Resolution and its Possible Effects Even though health absorbs more than $1.7 trillion per year,—twice the Organization for Economic Cooperation and Development (OECD) average—premature mortality in the United States is much higher than OECD averages (Hillestad 2005). This underscores the need for the rapid initiation of electronic health records, if the tide of increasing costs is to be stemmed. This is however not limited to the United States as large scale initiatives put in place by the World Bank and WHO have also tried to stimulate the implementation of HER on a global scale (Fraser 2005, Mars 2010). There is reason for optimism as organizations who have implemented fully functional electronic health records system have success stories. An example is the Kaiser HMO which has seen marked improvement in operational efficiency and has seen costs reduce markedly (Chen 2009). The government‘s action promises to improve the efficiency of managed care organizations. While it is obvious that clinical practice will no longer be limited to paper-based records that will be limited to the facility, the emergence of EHR will encourage resource sharing and will be a veritable tool for comparing health plans, HMOs, hospitals and physicians when it comes to issues of quality measurement, as advocated by the National Committee for Quality Assurance, NCQA (Hudson-Scholle 2010). On the part of the Office of the National Coordinator of Health Information Technology (ONCHIT) within the Department of Health and Human Services (DHHS), it is saddled with the responsibility to monitor the fledgling industry and ensure a standard playing field for all stakeholders. According to Jha et al, this is easier said than done as this move may further deepen the inequity in the system. They posit that ―as the nation moves toward greater use of EHRs, it is important to determine whether or not there are

gaps in adoption rates between hospitals that disproportionately care for the poor and those that do not. There seem to be modest differences in quality of care between hospitals that disproportionately care for the poor and those that do not‖ (Jha 2009). These concerns are real and need to be addressed. Also, the ONCHIT has realized that the incentives have to be structured in such a way as to ensure that providers benefit from improving the quality and efficiency of the services they provide. Only then will they be motivated to take full advantage of the power of EHRs (Blumenthal 2009). The real winners may be the technology companies who stand to gain a lot from the expansion of their business and the relatively untapped market. It is however important not to fall into the trap identified by Diamond, who identified the problem of over-regulation and setting unachievable standards. They identified another approach which should ―focus on a minimal set of standards at first and would make utility for the user to improve health outcomes, rather than agreement of the vendor on the key criteria. Finally, it would require clear policy statements that will guide the design of technology. All of these issues are inextricably connected, and they should be pursued together‖. This is important if the government is not to stifle creativity (Diamond 2009). Above all, the customers and not managed care organizations alone are to be the beneficiaries as they should be assured that their information will not be used for any other purposes they have not consented to. Steinbrook muses that because legal protections have not kept pace with technological advances, Congress may wish to amend HIPAA or enact new legislation to safeguard personally controlled electronic health data. If concerns about privacy, security, and commercial exploitation can be allayed, this nascent enterprise should have a smoother birth. (Steinbrook 2010).

Conclusion and potential areas for further study There are many areas that need further studies as highlighted by the Congressional Budget Office (CBO) report which the highlighted the dearth of adequate data on the benefits of health information technology

for providers and hospitals that are not part of integrated systems which include the individual practice associations (IPA) and point of service plans (POS) (Orszag 2008). A thorough study of this area will bring to the fore, concerns of stand-alone hospitals and providers and the potential benefits of interoperability. Recommendations I have posited that indeed Electronic Health Records are necessary for the improvement in managed care in the US and the government has set up many initiatives and policies to ensure that this is fast-tracked including setting up of financial incentives for hospitals and doctors to implement EHR. However, there are various types of EHRs which are applicable to the various HMO or managed care models and there is a risk of creating many fully functional and totally interoperable systems. I suggest that the office of the ONCHIT should, with wide consultation, encourage managed care organizations and care givers to have a basic template for the architecture of their systems and have as the focal point, the Centre for Medicare and Medicaid, which should develop its own system that can be inter-connected to the various variants used by the various HMOs. While the ONCHIT has a lot to do in this regard, the obstacle to overcome are significant, but can only be overcome by continuous deliberation and dialogue among all the stakeholders. Indeed it may be a laudable endeavor, but it is not yet ‗uhuru‘ as there are many obstacles on the path to the promised land of fully functional, inter-connected and inter-operable, user friendly electronic health records which are used nationwide and are used as a template for quality improvement performance measures for managed care organizations.

References Blumenthal, D. Stimulating the Adoption of Health Information Technology. New England Journal of Medicine Volume 360, Number 15. April 9, 2009

Chen, C., Garrido T., Chock, D., Okawa, G., Liang L. The Kaiser Permanente Electronic Health Record: Transforming and Streamlining Modalities of Care. Health Affairs Volume 28, Number 2323, 2009. DOI 10.1377/hlthaff.28.2.323

Diamond, C., Shirky, C. Health Information Technology: A Few Years of Magical Thinking? Health Affairs 27, no. 5 (2008): w383–w390 (published online 19 August 2008;10.1377/hlthaff.27.5.w383)]

Dunbar L., Care Management in Network Plans; Lecture given on February 2nd, 2010 in Johns Hopkins School of Public Health Managed Care and Health Insurance class.

Fonkych K., Taylor R., The State and Pattern of Health Information Technology Adoption SantaMonica, Calif.: RAND, 2005).

Fraser H., Biondich P, Moodley D. Implementing Electronic Medical Record Systems In Developing Countries. Informatics in Primary Care 2005; Volume 13: 83–95 Hillestad, R., Bigelow J., Bower, A., Girosi, F., Meili R., Scoville R., Taylor R. Can Electronic Medical Record Systems Transform HealthCare? Potential Health Benefits, Savings, and Costs. Health Affairs Volume 24, Number 51103, 2005. DOI 10.1377/hlthaff.24.5.1103

HL7, 2009. Health Level 7, Retrieved fromhttp://www.hl7.org/about/index.cfm HL7 on February 20, 2010

Hudson-Scholle S. Measuring Quality, Driving Value. Text of lecture delivered in Managed Care and Health Insurance Class, Johns Hopkins Bloomberg School of Public Health, February 22 2010.

Jha A., DesRoches C., Shields A., Miralles P., Zheng J., Rosenbaum S., Campbell E. Evidence Of An Emerging Digital Divide Among Hospitals That C\are For The Poor. Health Affairs Volume 28 No 6, 2009 DOI 10.1377/hlthaff.28.6.w1160

Mars M., Scott, R. Global E-Health Policy: A Work In Progress. Health Affairs Volume 29 Number 2, 2010: 239-245. DOI 10.1377/hlthaff.2009.0945

Orszag, R. Congressional Budget Office, ―Evidence on the Costs and Benefits of Health Information Technology,‖ Testimony before the House on Ways and Means Subcommittee on Health, 24 July 2008. http://www.cbo.gov/ftpdocs/95xx/doc9572/07-24-HealthIT.pdf (Retrieved on February 20 2010).

Steinbrook, R. Personally Controlled Online Health Data —The Next Big Thing in Medical Care? New England Journal of Medicine; Volume 358 Number 16. Retrieved from www.nejm.org. on February 19, 2010. Taylor H., Introduction to Ethical Issues in Managed Care. Lecture given on March 8th, 2010 in Johns Hopkins School of Public Health Managed Care and Health Insurance class.

Weiner J., The Developing Health IT/ Electronic Health Record (EHR) Infrastructure: Implications for Population-based Managed Care. Lecture given on March 3rd, 2010 in Johns Hopkins School of Public Health Managed Care and Health Insurance class.

References: Blumenthal, D. Stimulating the Adoption of Health Information Technology. New England Journal of Medicine Volume 360, Number 15. April 9, 2009 Chen, C., Garrido T., Chock, D., Okawa, G., Liang L Fonkych K., Taylor R., The State and Pattern of Health Information Technology Adoption SantaMonica, Calif.: RAND, 2005). Jha A., DesRoches C., Shields A., Miralles P., Zheng J., Rosenbaum S., Campbell E. Evidence Of An Emerging Digital Divide Among Hospitals That Care For The Poor. Health Affairs Volume 28 No 6, 2009 DOI 10.1377/hlthaff.28.6.w1160 Mars M., Scott, R Weiner J., The Developing Health IT/ Electronic Health Record (EHR) Infrastructure: Implications for Population-based Managed Care. Lecture given on March 3rd, 2010 in Johns Hopkins School of Public Health Managed Care and Health Insurance class.