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HIT for Health Plans 101: HIT for Health Plans 101: What Changes Mean for What Changes Mean for YouYou

A Blue Cross and Blue Shield Association Presentation

Office of Clinical AffairsOffice of Clinical Affairs

The Health Information Technology SummitThe Health Information Technology SummitOctober 22, 2004October 22, 2004Washington, DCWashington, DC

Allan M. Allan M. KornKorn, MD FACP, MD FACPSenior Vice President & Chief Medical OfficerSenior Vice President & Chief Medical Officer

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HIT for Health Plans 101HIT for Health Plans 101

Dysfunctional systemDysfunctional system

“Interoperable” “Interoperable” EHRsEHRs

Call to actionCall to action

Questions/Answers/FollowQuestions/Answers/Follow--UpUp

AgendaAgendaAgenda

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•• Practice variationPractice variation

•• Patient safetyPatient safety

•• Adverse drug eventsAdverse drug events

•• Fragmented care deliveryFragmented care delivery

The only thing worse than a dysfunctional The only thing worse than a dysfunctional system is system is automatingautomating a dysfunctional systema dysfunctional system

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Government

PatientPatientPatient

DoctorDoctorDoctorLimited information on appropriate treatment

Reimbursements based on volume

Little informed decision making

Government

Health Plan

MRIMRIMRI X-RayXX--RayRay

Fragmented care delivery presents significant challenges to improving quality and efficiency


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•• Member dissatisfactionMember dissatisfaction

•• Physician frustrationPhysician frustration

•• Cost management pressure Cost management pressure from employer purchasersfrom employer purchasers

The dysfunctional system is negatively The dysfunctional system is negatively impacting key stakeholdersimpacting key stakeholders

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Poor quality and efficiency are two of the drivers of the trend in increasing health expenditures…

$5,808

$4,670

$1,067

$2,738

$4,670$5,021

$6,167

1980 1990 2000 2001 2002 2003 E 2004 E

National Health Expenditures Per Capita

Healthcare Cost TrendsHealthcare Cost Trends

Source: Centers for Medicare and Medicaid Services, 2004

= 10-year interval

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0.8%

5.3%8.2%

10.9%12.9%

15.0%13.9%11.8%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005


…and consequently contribute to the rise in premiums

Note: Data on premium increases reflect the cost of health insurance premiums for a family of four

Source: Kaiser Family Foundation, 2003

Health Insurance Premium Increases

(Est.)

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Evolving needs have led to the development of new “consumer-directed healthcare products” (CDHP)

•• HEALTH REIMBURSEMENT ACCOUNTS (HRA):HEALTH REIMBURSEMENT ACCOUNTS (HRA): HRAs are personal medical HRAs are personal medical funds, funded by an employer and usually coupled with a highfunds, funded by an employer and usually coupled with a high--deductible health plan.deductible health plan.

•• HEALTH SAVINGS ACCOUNTS (HSA):HEALTH SAVINGS ACCOUNTS (HSA): HSAs are personal medical funds, funded HSAs are personal medical funds, funded by an employer and usually coupled with a highby an employer and usually coupled with a high--deductible health plan. HSAs are deductible health plan. HSAs are different from the HRAs because they are portable from one emplodifferent from the HRAs because they are portable from one employer to another.yer to another.

•• MEDICAL SAVINGS ACCOUNTS (MSA):MEDICAL SAVINGS ACCOUNTS (MSA): MSAs are savings account coupled with MSAs are savings account coupled with a higha high--deductible health plan that are typically targeted at individualdeductible health plan that are typically targeted at individuals and small s and small businesses. MSAs may be funded by either the employer or employbusinesses. MSAs may be funded by either the employer or employee.ee.

•• TIERED PROVIDER NETWORKSTIERED PROVIDER NETWORKS: : A tiered provider networks product classifies A tiered provider networks product classifies hospital and/or physician networks into tiers based on cost, spehospital and/or physician networks into tiers based on cost, specialized care, or quality cialized care, or quality measures.measures.

•• CUSTOMIZED PRODUCTSCUSTOMIZED PRODUCTS: : These are products in which employees can modify These are products in which employees can modify several variables at the point of enrollment, such as coseveral variables at the point of enrollment, such as co--pays, coinsurance, network and pays, coinsurance, network and drug benefits, in order to select benefits that are customized drug benefits, in order to select benefits that are customized to their specific needs.to their specific needs.

•• LOW COSTLOW COST:: These areThese are products that offer basic coverage at low cost.products that offer basic coverage at low cost.


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AgendaAgendaAgenda

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Automated connectivity with providers is already in place to process claims…

Submit claimsSubmit claims111

Remittance with Remittance with approve to payapprove to pay

333

ProviderProviderProvider

222

PayerPayerPayer

MemberMember

444 EOBEOBEOB

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•• Health statusHealth status

•• OutcomesOutcomes

•• Contraindications for Contraindications for prescription drugsprescription drugs

…but, the systems do not capture all the information that is needed to improve efficiency and quality of care.

Electronic health records would provide efficient access to this information

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•• “They are the problem”“They are the problem”

•• “We are the solution”“We are the solution”

Bad assumptions underlie the dysfunctional system

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•• Efforts of all stakeholders and end Efforts of all stakeholders and end users of users of EHRsEHRs

•• Appropriate/timely information Appropriate/timely information exchangeexchange

•• Incentives to encourage adoption Incentives to encourage adoption and useand use


Repairing, then automating, the dysfunctional system requires alignment of:

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•• All stakeholders must participateAll stakeholders must participate

•• No HIPAA No HIPAA reduxredux

•• Roadmap needed to do “smart”Roadmap needed to do “smart”

•• Cost/benefit and pilot testing a Cost/benefit and pilot testing a mustmust


All stakeholders and users need to work together to design standards/systems that meet their requirements

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•• Provider commitment to Provider commitment to EHRsEHRs

•• Consensus on roadmapConsensus on roadmap

•• Standards development/implementationStandards development/implementation

•• FundingFunding

How do we get there?How do we get there?How do we get there?

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•• Those who see them as the next windfall sales Those who see them as the next windfall sales opportunityopportunity

•• Those who know that it will be an enormous financial Those who know that it will be an enormous financial liabilityliability

•• Those who see it as a perpetual source of angst but Those who see it as a perpetual source of angst but who must use and rely on itwho must use and rely on it

Why Doctors?

There are three kinds of people re: EHRs

Why Doctors? Why Doctors?

There are three kinds of people re: There are three kinds of people re: EHRsEHRs

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•• EvidenceEvidence--based clinical practicebased clinical practice

•• Reduction in redundant and/or Reduction in redundant and/or ineffective careineffective care

•• Adjunct health plan care Adjunct health plan care management servicesmanagement services

•• Pay for performance & other Pay for performance & other rewards rewards


Appropriate and timely information supports:

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•• Pay for performancePay for performance

•• Reduced burdenReduced burden

•• Special recognitionSpecial recognition

•• Professional recertificationProfessional recertification


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AgendaAgendaAgenda

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•• Phase I Phase I –– Roadmap/DesignRoadmap/Design

•• Phase II Phase II –– Build/TestBuild/Test

•• Phase III Phase III –– Go LiveGo Live

The path toward EHR’s interoperability is a three-phase process


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•• First, repair the dysfunctional systemFirst, repair the dysfunctional system

•• Develop roadmapDevelop roadmap

•• Then automateThen automate

•• BuyBuy--in/participation a mustin/participation a must

•• This is a call to actionThis is a call to action

Key take home points


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AgendaAgendaAgenda

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Questions?Questions?Questions?


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ContactContact

Allan M. Korn, MD, FACPAllan M. Korn, MD, FACPSenior Vice President, Clinical Affairs and Chief Medical OfficeSenior Vice President, Clinical Affairs and Chief Medical Officerr

312.297.6840312.297.6840

[email protected]@bcbsa.com

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