The role of health plans, payers and insurers in the 10-year drive toward nationwide interoperability is enormous, and not yet fully defined.
On the one hand, the national health information network (NHIN) could be the answer to physicians’ prayers. On the other hand, it could be another major step down the circuitous path to even greater government control of personal information. In the months and years to come, the debate over the federal government’s proposal to create the NHIN will undoubtedly heat up.
The role of health plans, payers and insurers in the 10-year drive toward nationwide interoperability is enormous, and not yet fully defined.
At first glance, the concept looks simple: build a nationwide network—similar to the Internet—over which patient data on every American can be shared by each healthcare provider who treats that patient, the health plans that cover that patient and the patient himself. But like many broad-based initiatives, the kind of health information network being proposed by President George Bush, Health and Human Services Secretary Mike Leavitt and Dr. David Brailer, the national coordinator for health information technology, could be much more complicated and expensive to roll out than originally thought.
One way to simplify the process and keep startup costs down is to take advantage of databases that already exist, a strategy being pushed by many health plan executives and those whose companies provide payers with software solutions and/or services. Convincing the White House and members of Congress that this is a more effective and efficient plan will be a major hurdle. Another challenge will be to ensure that everyone involved in the creation, transfer and utilization of health information will find a common ground on which to build this massive infrastructure.
Defining Parameters
Finding a common ground needs to start with common definitions, says David St.Clair, founder and CEO of Wayne, Pa.-based MEDecision Inc. “We need to start using the same basic language to describe the same things.”
A prime example is the tendency, even within the industry, to use the term electronic medical record (EMR) and electronic health record (EHR) interchangeably, he says. While the EMR is under the purview of the physician and is a system that contains all the clinical data on a patient, the EHR is all-encompassing. “The EHR is the sum of all information you, your doctor and insurance company know about you. It is the record of truth on the patient,” he explains. “We would argue that what the President wants is an EHR for every American.” But because an EMR facilitates the collection and distribution of clinical data, it is seen as a vital part of the NHIN infrastructure. However, its adoption by physicians has been slow. “Less than 18 percent of doctors use an EMR,” St.Clair states.
Reasons given by physicians for not using an EMR often include the complexity of a computer-based system compared to paper charts and the expense. On the technology side, Dave Engert, CEO of Phoenix, Ariz.-based QCSI (Quality Care Solutions Inc.), says: “Technology is an enabler. The goal is to enable users to do things quicker, more accurately and efficiently. If it slows them up, that’s not what I call an enabler. That’s a challenge. If it’s too cumbersome, it won’t be adopted. As problematic as handwriting and paper is to the system, it still functions. However, with the adoption of electronic alternatives in the market, and by getting rid of the paper, that’s going to do wonders for capturing, storing and automating the processing of data.”
Getting Physicians on Board
Justifying the costs associated with implementing an EMR has been another challenge, but health plans can play a significant role, says St.Clair. “For the most part, we have payers who will agree to pay for EMRs based on performance.” In explaining how this would work, St.Clair says the performance factor could be tied to specific guidelines, such as, “If 85 percent of your diabetic patients have their blood sugar under control, we will pay for part of your EMR.”
This deal-making, however, is not without a caveat. “If we don’t get all the payers involved, including Medicare and Medicaid, it will be a challenge for the doctors,” he says.
The strategy also raises other questions as well. Jeff Margolis, CEO of Newport Beach, Calif.-based The TriZetto Group Inc., questions the effect on providers.
“Payers have more money in the system than providers, so the notion of payers providing incentives to providers is fine. But that just adds another level of technology projects on the provider side, which takes time.”
Another strategy, according to St.Clair, might be to exclude reluctant physicians from certain provider networks. But he stresses that full-hearted acceptance is better achieved by using the carrot rather than the stick. The importance of an EMR in a digital world is undeniable. But it will be the EHR that will ultimately serve as the backbone of the NHIN. Health plans can play a major role in the design and implementation of this network.
The Power of Payers
“Payers are mobilizing,” says St.Clair. “They are driving this in their own markets and at their own cost. We could have an EHR for every insured person in a matter of months, not years.” This is not just boastful optimism. The fact that charge codes offer payers a comprehensive view of a patient’s medical history makes it possible to convert this data into the kind of EHR needed for the NHIN. “Ninety percent of data resides in insurance electronic records,” St.Clair notes. “We’re mobilizing and validating data that already exists and that can be transferred to doctors over the Internet.”
Margolis adds, “Payers have the opportunity to create the system from the top down.”
While a hospital EMR provides “depth” of data, Margolis says payers can supply the “breadth” of data. Hospitals need deep electronic medical records, and the initiative to move from paper charts to an EMR as a way to create those records in hospitals and doctors’ offices is good. “But this is not the most efficient pathway to a national healthcare infrastructure,” he says. “It’s the payers who have the aggregated data, the road map to accessing the deeper level systems. Doctors are there to treat patients,” he continues. “Health plans are there to run systems and to put into place the economic overlay.”
But the role of health plans has been changing, he says. Traditionally, they were focused mainly on the economics of healthcare, enrolling as many eligible people as they could and contracting to keep costs in line. Now, a major emphasis is on enhancing the quality of the healthcare experience for the consumer. By focusing on both the economics and the quality of healthcare, “Health plans can continue to be the leaders that organize systems of care in this country,” Margolis says, adding, “Consumers need to count on the expertise health plans have in putting together an accessible provider network.”
The expanded role of health plans has resulted in a wealth of data. But making all this data—both clinical and financial—usable often requires the technology provided by companies like MEDecision, QCSI and The TriZetto Group. “Think of all the data in claims files and pharmacy records,” says St.Clair. “We take that raw data, roll it up, clinically validate it to make sense of it, then we supply it on the payers’ behalf to the doctors and back to the payers. For the first time, care managers at health plans can see the same data as seen by the docs.”
The Logical Choice
There’s no question that the technology to make this work on a grand scale already exists, says Engert. However, the adoption is slower than desired, he adds. “We’re already seeing the beginning of real-time adjudications and real-time payments at the point of service. There is no doubt that the goal to establish and deploy the electronic medical record is a great goal, but it will take an extraordinary amount of time and cost more than expected.”
—Jeffrey Margolis
The TriZetto Group
He continues: “I believe there is tremendous opportunity for a shorter term, higher impact return on our nation’s healthcare dollar by focusing on better medical management for the 10 percent of the sickest people in our population that accounts for 80 to 90 percent of the total healthcare delivery costs. Payers already have the data to know who are the sickest and most expensive members, and I believe that further investment in the information infrastructure to enable payers and all of their constituents to more effectively lower the cost of care while improving the outcomes of those sickest members today is perhaps the best opportunity for improving our health system.”
Not only do payers already have all this information, but they serve the majority of Americans who ultimately would benefit from a national information infrastructure. “Payers are the national aggregators,” says Margolis. The top 20 payers have about 70 percent of all insured members in the country.”
But is everyone on board? Medicare hasn’t bought into this plan yet, says St.Clair. Other payers appear to be unaware of their own strategic power, says Margolis. “While payers applaud the initiative, there is still a general lack of understanding of their role.” Those in Washington also don’t understand how important payers will be, but that’s beginning to change, he says. “As I go around to meet with congressional leaders, the light bulb is going on. Most people can fathom doctors’ offices and hospitals, but how many people really know what goes on in the back rooms of health plans, where the system of healthcare is organized?”
One problem that remains, however, is that if health plans do take the lead in this initiative, their membership represents only the insured in America. Accounting for the approximately 40 million U.S. citizens who don’t have health insurance requires a different strategy, while employees of self-insured companies are generally in organized systems.
“Companies that are self-insured have a health plan ASO (administrative services only) or a third party administrator behind them to help organize the system, so these people are similar to health plan members,” says Margolis. “The uninsured population is a challenge, no question. Most of the government’s interaction with the population that is uninsured is a reimbursement arrangement to the treating professional and facility. What I’d like to see the government say is, ‘those receiving Medicare or Medicaid must begin a personal health record (PHR) at first encounter.'”
—Dave Engert
QCSI
This would work even if an uninsured individual seeks medical care in an emergency room or walk-in clinic, he adds. But since these records would not be maintained by a payer in today’s world, Margolis asks, “What type of entity would be the trusted source for holding that PHR?” One way to address this particular challenge would be for “payers to start reaching out to the uninsured,” he says.
Engert also views the establishment of personal health records as a vital part of the information infrastructure. But he adds that the infrastructure’s success also will hinge on the “maturing of our healthcare model to engage consumers in the decisions and financial responsibilities of managing their own healthcare. Focused health programs and financial incentives will develop to positively influence the spending and behavior habits and eventually the outcomes of those patients.”
Needed: New Models
Health plans, employers and even the President have stepped up efforts to get consumers to shoulder more of the responsibility for their own healthcare and the costs associated with that care. As a result, “PHRs will be a needed source of information to support the consumer in reaching decisions with their physicians to help in their own healthcare management,” Engert says.
“The financial model of today is broken, and without dramatic change, it will keep getting worse,” he adds. “The government’s initiative is a step in the right direction, but it alone is not enough. It is going to be very expensive, take a long time and I believe won’t have enough of a short-term impact to avoid the imminent financial ramifications facing our financial model.”
Engert says the need for healthcare will drastically increase over the next few decades, putting a never-before-seen stress on the national healthcare system. “Starting in 2009, we’re going to see a 30-year demographic tsunami as the baby boomers retire,” he predicts. “And this is going to be a huge expense for the government.”
There already is a nationwide shortage of nurses and soon there may even be a shortage of physicians. “Thirty-five percent of all primary care physicians in the U.S. are over 55, and prospects for the necessary number of replacements are few,” Engert notes.
The rising cost of healthcare has already forced many employers to cut back on their contributions to health plans. Some have even dropped coverage altogether. The logical next step is to engage consumers in choosing their own care and being responsible for the cost of that care, whether they are covered by a health plan or uninsured, he says. “A large number of the uninsured do work, but are not offered health care by their employers,” Engert says. “Therefore, many individuals can very well afford some level of their own healthcare insurance by putting pre-tax payroll dollars into a health savings account (HSA),” he says. “And their ability to begin to manage their own health information would be reflected in their ability to access their PHRs, such as via the NHIN.”
With a renewed emphasis on consumer-directed healthcare and giving consumers the ability and the responsibility to access their own records, health plans have begun to refocus some of their strategies. “TriZetto has already enabled personal health records for more than 6 million members of health plans,” Margolis says.
Developing Local Links
One of the hottest topics in healthcare IT circles now is regional health information organizations (RHIOs) and their potential role in developing an NHIN. Logically and ideally, each member of a RHIO—from provider to payer—would be linked, thereby being able to share common databases. In turn, every RHIO would be linked into a nationwide network. Some successes have already been achieved in the organization of RHIOs and in the exchange of data among member organizations, and this bodes well for the inclusion of RHIOs into the NHIN. “The value will be produced on the regional networks with a focus on individual communities,” says St.Clair.
Engert agrees. “It’s a good step in coming up with quality standards,” he says. “RHIOs will help make things more transparent and encourage responsible interaction between all constituents.”
Margolis, however, believes that the jury is still out on the overall effectiveness of RHIOs and their potential for being linked together. He also raises questions concerning their underlying organization and operation. “Who’s in charge from a governance perspective?” he asks, “The biggest hospital in town? There are going to be regions in this country where cooperation like that can happen, and other regions where there is a polarity,” he says. Even if a RHIO were under the auspices of a state-based association, there could still be organizational problems, he says, in how that association operates and is operated. Plus, he notes, “In a lot of cases, what RHIOs are trying to accomplish, the health plans can already do.”
A Common Ground
One problem that has plagued RHIOs and threatens to derail the NHIN is interoperability, the ability of different systems and software applications to communicate with each other and to exchange data in a timely and efficient manner. Problems associated with disparate systems are common even on a personal level, as any Mac user knows when he tries to share files with someone using a Windows-based PC. Put that on a regional or national scale where crucial healthcare data is involved, and life-threatening chaos could be the result.
Even when a single hospital upgrades one of its information systems, odds are that interfaces will have to be written and updated to other systems so that data can be shared across the enterprise. But this is part of the evolutionary process of technology, says Margolis. “The technology at the hospital level will always be changing and evolving.” While the exchange of data between providers and payers is crucial, there are two separate mindsets at work. “Many doctors are trained empirically and don’t think about data like systems people do,” he says. “They’re thinking, ‘Is the data I’m looking at right? Is it complete?’ That’s because they have to make serious treatment decisions.
“The payer systems person thinks, ‘What are all the data interrelationships among attributes of the healthcare consumer, their benefits, their health history, the treating professional, the treatment facility and the economic responsibilities of these parties?'”
In most cases, achieving interoperability between systems is up to the systems vendors and middleware vendors, he says. Even if the NHIN is rolled out within the next 10 years, “You’re still going to have multiple vendors with different products who need to differentiate by capturing information their competitors don’t.”
Supplier Side Consolidation
That has been a major problem in the adoption of EMRs, according to St.Clair. Unless vendors begin to focus on the kind of interoperability needed for a national health information network, their ranks will be greatly diminished.
“The close to 500 that exist today will be down to about 100 three years from now,” he predicts. Setting nationwide standards for interoperability definitely has become a challenge, even though St.Clair says his company sets the standards for its partners.
—David St.Clair
MEDecision
Yet, to ensure that these standards, or any agreed-upon set of standards, will work with every payer and provider across the country may mean that the federal government will have to create these interoperability standards, he says. In at least one case, the federal government already has shown that interoperability and a nationwide network can work. The Department of Veterans Affairs has developed its own EMR, which is used in every VA hospital and clinic.
Patients who are issued a bar-coded ID card can go to any facility in the country where the provider has ready access to the patient’s complete medical history.
However, this type of arrangement would not be feasible for the kind of NHIN being planned, says St.Clair. “The VA is being used as an example, but it’s not transferable. They have command and control over everything that goes on in their system.”
Engert agrees and adds, “The VA can say, ‘Here’s the system we’re going to use,’ and every hospital is therefore required to follow the guidelines and use the same system. It is not as easy to establish a similar standard in the commercial sector and, therefore, interoperability between a multitude of systems and technologies will be necessary.”
Margolis also sheds important light on the VA model by acknowledging, “The VA has a single payer for that one particular group of patients.”
To build a workable NHIN, it needs to be “an open system with interoperability,” says St.Clair. Engert adds that the role of health plans is to embrace the interoperability of an electronic medical record. “Payers can play a big role in getting the information and storing the information. They are already a hub for most of the information in the extended network and can take a leadership role. But they will not be the only hub. All constituents in the system need to participate in the capturing, storing and managing of electronic medical information at the consumer level.”
It will take time, maybe the 10 years predicted by President Bush and maybe the next two decades, as predicted recently by industry pundits. Eventually, a nationwide network of payers, providers and patients will be built. “There is no such thing as an overnight solution,” says St.Clair. “Let’s stop talking about it and do it. That’s the message resonating with most big payers.”
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Richard R. Rogoski is a free-lance writer and contributing editor to HMT. Contact him at [email protected].
