HITECH Lays the Foundation for More Ambitious Outcomes-Based Reimbursement

John Glaser, PhD
Published: Wednesday, Mar 02, 2011
The US healthcare system has decades of research and anecdotal evidence suggesting the potential transformational power of healthcare information technology (HIT). Yet the widespread use of electronic health records (EHRs) in the United States has not materialized, depriving the country of EHR-enabled quality, efficiency, and safety gains.

It is estimated that optimizing the use of labor, reducing the number of adverse drug events and duplicate tests, and instituting revenue cycle management through investments in HIT systems can help typical hospitals generate savings of some $25,000 to $44,000 per bed per year. On an industrywide basis in the United States, that translates into $30 billion to $40 billion annually.1

In 2009, the Obama administration provided the healthcare industry with an incentive-oriented opportunity to break down the barriers to HIT adoption and achieve true progress via the meaningful use of EHRs. Through the Health Information Technology for Economic and Clinical Health (HITECH) Act, the federal government is making up to $27 billion available in incentive payments, followed by penalties, over 10 years for eligible professionals and hospitals.

In response to the release of the final "meaningful use" criteria on July 13, 2010, several industry associations and organizations quickly issued position statements. Although many positions were supportive, noting the significant cost and quality problems of US healthcare, a few organizations expressed concern that the requirements may be out of reach for many hospitals.

For example, the American Hospital Association took issue with the potential impact on rural hospitals and the immediate use of computerized provider order entry (CPOE), among other aspects of the rule, asserting that notable barriers continue to stand in the way of achieving widespread HIT adoption by our nation's hospitals and physicians.2

Arguments aside on whether the stage 1 meaningful use bar was set too high, I believe all healthcare stakeholders--providers and vendors alike--can agree that meaningful use is a very potent idea. It says that if our goal is care improvement, adoption is only relevant if the technology is used well. In effect, HITECH has permanently shifted our focus from adoption of HIT to its use. Moreover, it is important that the federal government's goals remain aspirational, outlining a vision of care in this country that is "transformed." This will require a delicate balance between acknowledging the urgency of mass adoption and recognizing the myriad challenges that adoption of meaningful use imposes on each provider.

In this commentary, I examine the interrelationship between HITECH and payment reform, both of which require a sophisticated nationwide HIT infrastructure to support changing reimbursement models. Against this backdrop of reform, I also will look at the key implications for HIT as the healthcare market evolves.

We've Only Just Begun

Now that the rules have been finalized, providers and their vendor partners will spend the next several months defining and implementing their near-term game plans. For instance, the eligible hospital meaningful use objective for CPOE changed from having 10% of all orders entered to 30% of all medication orders entered. Additionally, any licensed healthcare professional can enter orders into the medical record per state, local, and professional guidelines. Although this is a positive step toward reducing preventable medication errors, it raised the bar for providers who are implementing CPOE.

To successfully roll out CPOE and achieve adoption by physicians and other caregivers, it is essential that the work flow of these providers is efficient. In the inpatient setting, separation of medication ordering from nonmedication ordering breaks the work flow for both physicians and nurses, creating an unreliable and potentially unsafe process. Therefore, the industry's best practice is to roll out an integrated approach to entering orders. Thus, this change to 30% of medication orders entered in effect raised the bar to 30% of all orders for hospitals.

Numerous variations of this scenario are playing out across the healthcare landscape as providers and their EHR vendors take a step back to recalibrate implementation plans and product release schedules. Meanwhile, others who took little or no early action to prepare may be coming to the realization that procrastination was not a sound strategy.

Additionally, 2 near-term significant HITECH implementation issues must be considered by the government.

First, the vendor community and our customers already are under tight schedules to meet stage 1 deadlines for EHR adoption. Based on the initial schedule to next release stage 2 regulations by the summer of 2012, we might find we have even less lead time to clear this bar. Through the proposed and finalized meaningful use rules and the recommendations of the Health Information Technology Policy Committee, there should be early "signaling" as to the content and timetable of the next stage(s). Although there is a need to preserve flexibility in defining the next stages, there is utility to the clarity of a multistage meaningful use path. This clarity supports the certification processes and assists vendors and providers in developing their HIT strategies and budgets.


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