Three Ways Health-Care Reform Will Impact Government IT Systems

With mandated adoption deadlines looming, governments have no choice but to seek health IT support in areas such as electronic health records (EHRs) and medical coding standards.

by / April 1, 2010

For years, the health-care IT sector had been America's economic outcast when it came to investments. With many health-care providers hesitant to pour money into new products and programs, IT staffs were stuck with ailing systems and no support.

According to Forrester Research, health-care enterprises in North America spend just 22 percent of their IT budgets on new IT initiatives, compared with 28 percent for businesses in other sectors, the Financial Times reports.

But in the past year, health IT has gained more prominence. The IT sector is reaping huge financial rewards from the American Reinvestment and Recovery Act of 2009 (ARRA) and activity is poised to grow even more with the sweeping health-care reform overhaul President Barack Obama signed into law in March.

Now, with mandated adoption deadlines looming, governments have no choice but to seek health IT support in areas such as electronic health records (EHRs) and medical coding standards. As states try to get a handle on a massive health-care makeover projected to provide insurance coverage to an additional 32 million Americans, here are three ways health-care reform will impact IT systems.

1. Expanding Medicaid/Medicare

Starting Thursday, April 1, states could start moving on the massive expansion of insurance coverage, which is the flagship of the health care overhaul.

The new law expands Medicaid programs to cover low-income Americans who earn up to 133 percent of the poverty level (or $14,404 for an individual and $29,326 for a family of four). Expansion is not required for all states until 2014, but states can apply for federal funding now.

"Many of them are starting from the very beginning," said Cindy Hielscher, an Accenture senior executive and leader of the firm's North American public health practice. "They're anxious to hear what the rules are going to be and what the funding is going to look like. They can't put this off for too long."

But across the country, budget shortfalls threaten to put more financial stress on states, such as California, that have the largest uninsured populations. A Kaiser Health News article points out that this vast increase could bring 15 million more people into the safety-net program nationwide, according to the Congressional Budget Office.

With so many patients added to the programs, states will have to figure out how to give more people health coverage while maintaining quality systems.

"Eligibility is many times done in silos and this [health care reform] is trying to bring it together," Hielscher said. "We'll need to have some sort of portal to identify patients more holistically."

The expansion of Medicaid will force states to examine the roles of various agencies, she said. But Medicare, under the new law, also will help drive costs down through value-based purchasing, quality reporting and a national pilot program to establish a bundled payment for specific services.

"Now there are incentives to change technology to focus on populations," said Steven E. Waldren, a physician and director of the Center for Health Information Technology (CHiT) with the American Academy of Family Physicians. "We can figure out how to deliver on quality, how to reach out to patients who don't come to see me."

2. Building health insurance exchange networks

By 2014, every state will be required to establish an online marketplace to make it easier for residents and small businesses to compare and purchase affordable health insurance coverage.

Cash-strapped states may partner to build regional networks, or they may choose to use a template that will be developed by the U.S. Department of Health and Human Services. In any case, the purpose of these Web portals is to collect data from individuals in an interactive system that ties together treatments, outcomes and payments.

"How do you engage the consumer in that process and allow them to

request appointments online, do secure messaging, self-management, have glucometer and blood pressure machines record and submit data?" Waldren said. "That's how the Web portals start to be of higher importance and greater value."

But the four-year deadline for building an insurance exchange won't be hard to meet in Massachusetts; the commonwealth is three years ahead of the curve. In 2007, as part of the state's own health care overhaul, Massachusetts officials established the Health Connector, an independent public authority, to regulate the state's insurance exchange through a Web-based marketplace.

The project costs about $600,000 a year to run, said Bob Nevins, CIO of the Health Connector. Under Obama's plan, however, the Health Connector will have to make minor changes to its system. For instance, the new law makes more people eligible for subsidized insurance and adds provisions to provide tax credits for small businesses. But overall, Massachusetts stands as the go-to source for states that want to know how to build an insurance exchange Web portal that works.

The Health Connector's Web portal contains pathways for two insurance programs: subsidized, which is managed by the state's Medicaid agency, and unsubsidized, which provides commercial health insurance plans. In the unsubsidized shopping area, customers provide a date of birth and zip code, and the system grabs coverage details and rates from six health carriers. From there, customers can compare programs, enroll online and make an e-payment to begin coverage in the program they choose.

The Health Connector chose to buy the portal, Nevins said, rather than build its own. But, he added, IT staff still had to make contracts with health carriers, figure out hosting and Web strategies, and take into account what matters most to customers shopping for health insurance: premiums, deductibles, doctors available in various plans, etc.

"That's where we really had to apply a lot of creativity and do research, to figure out to how to present a shopping experience in an easy-to-use interface," Nevins said. "If you overload customers with too much information, they just get lost."

3. Adopting electronic health records

With a federal goal for Americans to have electronic health records (EHRs) by 2014, the U.S. government wants to implement an interoperable nationwide network, where health records -- test results from labs and radiology, disease and symptom records, CT scans, etc. -- can be accessed online from anywhere.

The Recovery Act upped the ante for hospitals adopting EHRs, setting aside $19 billion in incentives for systems that meet specific criteria. But, for hospitals, health-care reform's massive expansion of coverage might be incentive enough.

"With 30 million new records to enter, even skeptical physicians may decide that it makes sense to jump on the EHR bandwagon now in order to better manage new patients," said Jon Oltsik, a senior analyst at Enterprise Strategy Group, an integrated, full-service IT analyst and business strategy firm.

The new law, Oltsik added, might also motivate health care firms to form partnerships to extend networks for "more data sharing and IT services over a greater pool of health care providers."

But skeptics say it's way too soon for governments to use EHRs to hedge their bets. A national health-care project in the UK using experimental health IT as a pillar for reform has been disastrous, according to Scot M. Silverstein of Drexel University, a physician and health IT expert.

To support his stance that EHRs have been "overhyped," Silverstein cites numerous studies concerning health IT cost overruns and failed systems. He also points to Jeffrey Shuren, director of FDA's Center for Devices and Radiological Health. At a health IT safety meeting in February, Shuren stated that "in the past two years, we have received 260 reports of HIT-related malfunctions with the potential for patient harm -- including 44 reported injuries and 6 reported deaths." In terms of health IT-related problems, he added, these incidents may represent only the "tip of the iceberg."

"It's mystifying why they think this technology is ready to plug-and-play," Silverstein said. "It really isn't ready for prime time. While health-care reform is a great idea, if you depend on health IT as one of its pillars, you end up with project failure, lack of acceptance, information systems that are impossible to use and you end up killing people."


Russell Nichols Staff Writer
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