Medical Device Link.

Originally Published MX July/August 2005

INDUSTRY ASSOCIATIONS

To bring about widespread adoption of health information technologies, significant financial and regulatory barriers will have to be overcome.

Thomas N. McCausland

Thomas N. McCausland is president and CEO of Siemens Medical Solutions USA (Malvern, PA) and chair of the Health Information Technology Sector for industry association AdvaMed (Washington, DC).

In virtually all sectors of the healthcare industry, experts agree that the adoption of health information technology (HIT) is a key to improving the quality and efficiency of the world's healthcare systems. In the United States, as products and applications expand throughout vital sectors of the healthcare delivery system, HIT has already demonstrated its potential for significantly reducing medical errors, improving the quality of care, speeding paperwork, and reducing administrative costs.

Last year, recognizing the power of HIT to bring about dramatic improvements in healthcare, AdvaMed established a new Health Information Technology Sector (HITS). As the first chair of the sector, it has been my task to guide committee members in their early exploration of the public policy issues that relate to this growing field.

At the beginning of June, HITS released an early fruit of its considerations in the form of a white paper titled Health Information Technology: Improving Patient Safety and Quality of Care. This article summarizes some of the key findings and policy recommendations included in the white paper, which will provide a framework for involving the medical technology industry in further policy discussions in the future.

The Scope of HIT

Last year, President Bush put into place mechanisms to support the development of a universal electronic health record (EHR) system for all Americans within the next decade. An interoperable EHR system can make dramatic improvements in cost reduction and quality, with savings estimated to be as much as $140 billion a year. The U.S. Department of Health and Human Services (HHS) cites two studies that estimate $78 billion to $112 billion in savings for EHRs alone.^1,2

Such a system will enable information to be captured and analyzed as healthcare providers move toward a pay-for-performance model. However, there are significant challenges that will need to be addressed in order to realize the full potential for the 21st-century healthcare delivery system. It is critical that the electronic health record meet standards for interoperability, so that it can follow the patient wherever he or she goes. Although the universal health record can lead to dramatic quality improvements and long-term savings, many providers lack the financial wherewithal for the up-front investment necessary to adopt such a system. Financial incentives are needed to stimulate adoption.

It is important to note that the scope of HIT extends well beyond EHR systems. HIT encompasses a host of technologies that monitor, manage, and document a patient's condition. HIT is being used in clinical operations, decision support, devices, equipment, distribution, administrative tasks, and the interface with payers. Smart technologies are assisting clinicians with decision support and outcomes studies and helping to manage drug and supply inventories. Examples of these technologies include:

• Infusion pumps that help prevent medication errors by alerting healthcare providers before an error occurs.
• Remote monitoring technologies that are eliminating trips to the doctor and extending patient care into the home and beyond.
• Computer-assisted physician order entry (CPOE) systems that help to avoid medical mistakes and are improving efficiency by enabling physicians to enter prescriptions directly into a computer.
• Telemetry and telemedicine that extend the reach of quality healthcare to both rural and urban populations.

Such technologies are making a significant impact, helping to improve patient safety, quality of care, and clinical efficiency. Near the end of its second year, for example, a CPOE system at Children's Hospital of Pittsburgh had helped cut harmful medication errors by 75%.³ Smart infusion pumps in use at St. Joseph's/Candler Health System (Savannah, GA) helped to prevent 598 potentially serious medication errors during nine months of use.⁴ And at Nebraska Heart Institute Heart Hospital (Lincoln, NE), a combination of integrated software, hardware, and networking technologies helped cut the projected length of stay from 4.3 days to 2.5 days and boosted the hospital's discharge totals from the original projection for 2003 of 766 patients to 1321—72% higher than the expected productivity.⁵

Despite the promising results of these technologies, significant barriers are hindering their widespread adoption. Because many of the technologies often integrate with EHR systems, they also need to be considered when creating health policy that affects medical records and patient safety. Funding, legal barriers, and interoperability standards are among the greatest obstacles.

Financial Incentives

HIT requires a significant initial financial investment by the provider or the health system in order to purchase and maintain systems and to train users. Despite the costs to providers, private insurers and public payers fail to reimburse for many health information technologies. Because many providers lack the financial ability or consistency of commitment required to make the up-front investment needed to install and operate an advanced HIT system, start-up capital and ongoing commitment to maintaining equipment are major challenges.

Payers, including the federal government, should provide financial incentives sufficient to spur widespread, rapid adoption of HIT throughout the healthcare system, including advanced medical technologies and the universal adoption of EHR systems. These incentives may take the form of direct reimbursement, capital financing, tax incentives, or rewards to physicians or hospitals that adopt HIT. Funding for HIT may come from a combination of government and private-sector sources, including hospitals, manufacturers, venture capitalists, and payers. Furthermore, reimbursement systems should reward new modes of providing services that result in quality improvement or cost reduction for patient care—for example, remote patient monitoring, computer-assisted surgery, imaging, telemedicine, and virtual physician visits.

Legal Barriers

To create a system in which physicians and hospitals can operate on the same computerized network, physicians will need hardware and software, education, training, and technical support. Because smaller group practices in particular may not have start-up and ongoing capital resources or the ability to maintain equipment and standards, they would greatly benefit from outside assistance. However, both the federal healthcare program antikickback statute and federal physician self-referral law (commonly called the Stark law) may prohibit many smaller physician groups from receiving such assistance. To foster the dissemination of financial and technological resources, it will be necessary to modify both of these laws.

Provisions of the antikickback statute prohibit the offer or acceptance of anything of value—money, hardware, software, and so on—in return for the referral of a patient or an item or service that is covered by a federal healthcare program such as Medicare.⁶ This statute applies to hospitals, manufacturers, and physicians alike. If a manufacturer provides a physician with financial resources and the physician in turn prescribes that manufacturer's products for his or her patients, a potential violation of the antikickback statute may exist if the requisite intent to violate the statute is present and no safe harbor protects the arrangement. The same is true if a hospital provides assistance to a physician and the physician favors that hospital with patient referrals. However, a safe harbor does exist for employment arrangements. For example, if the physician is a bona fide employee of the hospital, the hospital may provide resources so long as the provision of such resources does not vary with the volume or value of the physician's referrals, and other safeguards are included.

Likewise, the Stark law prohibits a hospital from billing for items or services provided by physicians who have financial relationships with that hospital, unless an exception is met.⁷ The Stark law applies only to physicians, physician practices, and providers such as hospitals that provide designated health services such as inpatient, outpatient, or clinical lab services. As in the case of the antikickback statute, an employment exception to the Stark law permits the provision of financial or technological resources to an employed physician, so long as the physician is a bona fide employee, the provision of such assistance does not vary with the volume or value of referrals made by the employed physician, and other safeguards are set up so that the relationship cannot be abused. The Kaiser Permanente system offers a good example of an employed-physician relationship.

Overall, these two laws represent obstacles that could have significant chilling effects on any efforts, no matter how broad, well financed, or well intentioned, to champion the use of health information technology. Currently there are no safe harbors to the antikickback statute that specifically safeguard the provision of information technology resources to physicians.

Fortunately, the Centers for Medicare and Medicaid Services (CMS) recognized this barrier and, in March 2004, issued an exception to the Stark law for communitywide health information systems.⁸ However, the exception is not well defined or understood, and a much broader, clearer exception is needed to eliminate the obstacles presented by the Stark law. For example, an exception exists for communitywide health information systems, but it is unclear whether the term communitywide means virtual, geographical, or something else entirely. Therefore, clearer language in the Stark law and a parallel safe harbor in the antikickback statute will be necessary to address these barriers and spur adoption of health information technology.

Adoption

Perhaps the most important building block that will need to be in place to create a seamless EHR system is a standard for information exchange among systems, or interoperability standards. Without a common language that enables multiple EHRs to talk to one another and share patient information, the benefits of having electronic health records will be lost. Without uniform interoperability standards, information exchange among healthcare providers will remain limited and patient care potentially compromised.

In addition to interoperability standards, all new technologies require user buy-in. For example, infusion pumps and intravenous-drug libraries typically require a change in clinical practice that is often challenging to implement. Some technologies may not save time initially and therefore may need to be reinforced continually in order to achieve nurse and physician compliance. Pay-for-performance (P4P)—that is, reimbursing providers for the quality of care they provide—may be used as an ongoing financial incentive to help stimulate the adoption of new technology. Adoption of the electronic health record itself should be considered a performance standard.

All performance measures should be based on improved quality and safety. Recognizing that not all providers start from the same performance level or have the same resources to implement rapid change, P4P measures should reward progress toward or beyond a quality goal, as well as achievement of an accepted standard.

Conclusion

HIT promises to transform the healthcare delivery system, making patient care safer and better while also reducing costs. In order to realize the full benefits of these advanced technologies, significant financial and regulatory barriers must be overcome. Accordingly, legislative initiatives should:

• Create financial incentives and provide rewards for new technologies and services that improve quality or reduce the cost of patient care.
• Establish safe harbors for both the federal antikickback and physician self-referral laws to enable hospitals and physicians to team up in advancing the use of HIT.
• Ensure standards and interoperability for EHRs and other health information technologies.
• Ensure that EHR data are available for studies to improve patient safety and quality of care, with proper privacy protections such as those required by the Health Insurance Portability and Accountability Act of 1996.⁹

Such initiatives will foster widespread adoption of HIT and save thousands of lives that might have been lost through medical errors. Patients will benefit from significant improvements in the quality of their care and reap the benefits of an efficient and effective American healthcare system.

References

1. D Johnston et al., The Value of Computerized Provider Order Entry in Ambulatory Settings (Wellesley, MA: Center      for IT Leadership, 2003).
2. E Pan et al., The Value of Healthcare Information Exchange and Interoperability (Wellesley, MA: Center for IT      Leadership, in press).
3. "Champions for Children," in Cerner Corp. Home Page [online] (Kansas City, MO: Cerner Corp., 2005); available      from Internet: www.cerner.com/public/AboutCerner_2a.asp?id=18925.
4. RR Maddox, "Using IV Medication Safety System Logs—A New Tool for Identifying Averted Harm," in Addressing      Harm with High-Risk Drug Administration (proceedings of the Third Infusion Safety Conference), [online] (San      Diego: The Alaris Center for Medical Safety and Clinical Improvement, 2004), 34–36; available from Internet:      www.alarismed.com/alariscenter/pdf/1454BAddressingHarm.pdf.
5. A Case Study from Siemens: The Nebraska Heart Institute Heart Hospital (Malvern, PA: Siemens Medical Solutions,      2004); available from Internet: www.worldcongress.com/pdf/nebraska_heart_case_study_siemens.pdf.
6. Federal Healthcare Anti-Kickback Act, U.S. Code, vol. 42, sect. 1320 (2000).
7. Federal Physician Self-Referral Act, U.S. Code, vol. 42, sect. 1395nn (1994).
8. "42 CFR Parts 411 and 424: Medicare Program; Physicians' Referrals to Health Care Entities with Which They Have      Financial Relationships; Interim Final Rule," Federal Register, 69 FR:16053–16146 (March 26, 2004).
9. Health Insurance Portability and Accountability Act of 1996, P.L. 104-191 (August 21, 1996).

Copyright ©2005 MX