the role of it in the american healthcare delivery system murer consultants, inc. 58 n. chicago...

The Role of IT in the American Healthcare Delivery System

MURER CONSULTANTS, INC.58 N. Chicago StreetJoliet, Illinois 60432

Telephone (815) 727-3355Telefax (815) 727-3360

Web Site: http://www.murer.com

October 20, 2010

Presented By

Cherilyn G. Murer, J.D., CRAPresident/CEO

http://www.murer.com/

Murer Consultants, Inc. is a legal based healthcare management consulting firm founded by Cherilyn G. Murer, J.D., C.R.A. in 1985.

Murer Consultants is comprised of consultants who share a similar background in law, with contributions based on various areas of clinical, financial and managerial expertise.

The mission of Murer Consultants Inc. is to promote problem solving in the healthcare industry based on sound pragmatic reasoning with development of realistic recommendations which can be implemented within a given timeframe.

Murer Consultants Inc.

© Murer Consultants, Inc. 2/09© Murer Consultants Inc. October 2010All rights reserved. No reproduction without express written consent.

© Murer Consultants Inc.

Celebrating 25 years in the healthcare industry

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Murer Consultants, Inc.

Understanding that healthcare is a complex integration of medical, social,

economic, legal, and government issues, Murer Consultants, Inc. brings

a unique combination of expertise skilled in both the macro- and micro-

aspects of planning, organization, development, finance and law. This

unique organizational matrix produces the most informed,

comprehensive and result-oriented service available in healthcare today.




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Murer Consultants, Inc. has been recognized as an expert in healthcare strategic planning, regulatory oversight, and implementation management with more than 25 years of experience working with more than 500 hospitals and health systems throughout the United States.

Murer Consultants, Inc.




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Principles of Murer ConsultantsMurer Consultants was founded on an axle of:

Finance

Medicine

Law




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Murer Consultants believes there is now a fourth dimension in the axle integration of ……..

Finance

Medicine

Law

Technology

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Principles of Murer Consultants

© Murer Consultants Inc. October 2010All rights reserved. No reproduction without express written consent.



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•Introduction

•HITECH Act Incentives

•Reducing Clinical Cost with EHR

•Accountable Care Organizations

•Performance Management




Today’s Topics of Discussion

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Just having fun or getting ready for a career in medicine?

•In a survey of 200 medical students* nearly all of them were open to some form of digital medical school curriculum.

•The “millennial generation” can’t get enough technology.

Raised on the InternetSpend hours on Facebook or other networking sitesDaily texting rates in the triple digits.

•Most are open to more technologically enhanced education; particularly for gaining skills in doctor-patient communication.




*Survey conducted by researchers at the University of Michigan at Ann Arbor and the University of Wisconsin at Madison.

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HITECH Act Incentives

What is the Act?What are the physician incentives?




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•Hospitals and physicians can benefit financially from the American Recovery and Reinvestment Act (ARRA).

•The ARRA has allocated $20 billion to promote the usage of electronic health records (EHR).

•Two sections in the Act specifically discuss Health Information Technology. The first, Title XIII of Section A, details the Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”).

•The second, Title IV of Section B, details the Medicare and Medicaid Incentives to be paid to both hospitals and individual physician practices to encourage the implementation of the HITECH Act. Hospitals are eligible for both Medicare and Medicaid incentives.




HITECH Act Background

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Hospitals that participate in the Medicare program and are meaningful users of certified Electronic Health Record (EHR) technology qualify for Medicare incentive payments under the HITECH Act.

The bill provides a complicated methodology for determining the amount of incentive payments made to participating hospitals.

The calculation includes a base amount of $2 million plus $200 per discharge.

The $200 per discharge amount is only calculated for each discharge the hospital has between 1,500 through 23,000 discharges (the first 1,149 discharges and any discharges over 23,000 are not included in the calculation).

This amount is then multiplied by the hospital’s Medicare Share and a transition factor that ranges from 1 in the first year to 1/4 in the fourth year.

The hospital’s Medicare Share is determined by calculating the number of Medicare inpatient patient days divided by the hospital’s total number of inpatient days multiplied by the total number of hospital charges (not including charity care charges).

Computations for Critical Access Hospitals are adjusted slightly, including allowing the Medicare Share percentage to increase by 20 percentage points (not to exceed 100%).

Medicare Incentives for Hospitals




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Meaningful User Defined

In order to be considered a meaningful EHR user, the eligible physician or hospital will need to meet the following three requirements:

1.CERTIFIED TECHNOLOGY Demonstrate that the physician or hospital is using certified EHR technology in a meaningful manner, which shall include the use of electronic prescribing

2. INTEROPERABILITY Demonstrate that the certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care in accordance with the standards and criteria adopted under the Act

3. QUALITY MEASURESSubmit information on clinical quality measures and other measures in a form and manner that will later be specified by the HHS Secretary




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The Office of National Coordination for HIT (ONC) and National Institute of Standards & Technology (NIST) issued an Interim Final Rule on December 30, 2009 which establishes standards, certification criteria, and implementation specifications with respect to Stage 1 of the meaningful use incentive program.

There are currently twenty-three meaningful use criteria for hospitals and twenty-five criteria for eligible professionals.

Although subject to modification per the final requirements, the Stage 1 EHR meaningful use criteria include the following:

•Use Computerized Physician Order Entry (CPOE) (80% of orders for EPs, 10% of orders for hospitals)•Implementation of drug-drug, drug-allergy, drug-formulary checks •Maintain active medication and allergy lists•Record demographics and vital signs•Implement 5 clinical decision support rules•Send reminders to patients for appointments and follow-up care•Provide patients with an electronic copy of their health records•Provide summary care record for each transition of care and referral •Protect EHR technology through the implementation of appropriate capabilities




Interim Final Rule

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These requirements become effective in 2011, at which point eligible physicians and hospitals will begin receiving incentive payments.

For the first year of the program, hospitals and physicians need only demonstrate meaningful use of their EHR for a 90-day period to qualify for an incentive payment in the 2011 payment year. Additionally, that period may be any 90 consecutive days beginning on October 1, 2010, the first day of the federal fiscal year.

Beginning in 2012, and continuing through the duration of the program, hospitals and physicians must demonstrate meaningful use for the entire year. Though not yet finalized, Stage 2 and Stage 3 requirements will take effect in 2013 and 2015 respectively. The economic incentives phase out over time, and become penalties beginning in 2015 for eligible hospitals that are not “meaningful users.”

Additionally, hospitals will have to comply with certain reporting and demonstration requirements that are further detailed in the bill and will be specified by the Secretary of Health and Human Services. HHS will also post a list of the names of those hospitals that are meaningful EHR users on the CMS website.




Final Rule

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Requirements for Funding

•Need to be considered a:

“MEANINGFUL EHR USER”

Here’s the Catch

© Murer Consultants, Inc. 2/09

Impact o

f Technology on Health

care

Presented by:

Cherilyn G. M

urer

Founder and CEO of M

urer Consultants, In

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February 24, 2009




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Certified EHR TechnologyIt’s About Time




To provide assurance to eligible physicians, eligible hospitals and critical access hospitals that the EHR technology they adopt will assist their achievement of meaningful use, HHS issued a final rule. HOWEVER….

First addressed by CMS February 17, 2009.Not until June 18, 2010 (approximately 16 months later) did HHS issue

final rules to define “meaningful use.”

It is expected that the first EHRs will be certified and listed on the ONC web site in the fall 2010.

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Physicians who receive Medicare reimbursement payments are eligible for this incentive program. The law excludes from the definition of eligible providers, physicians that are hospital-based such as anesthesiologists, pathologists, and emergency room physicians.

HHS will determine who is a hospital-based physician based on whether a physician furnishes substantially all of his/her services in an inpatient or emergency setting using hospital facilities and equipment. These determinations will not be based on employment or billing agreements.

The incentive payments for physicians under Medicare are equal to 75% of the Medicare allowed charges per physician capped as follows:

Medicare Incentives for Physicians




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HITECH Act: Medicare Physician Reimbursement PlanAdopt 2011 Adopt 2012 Adopt 2013 Adopt 2014 Adopt

2015+

Year $ $ $ $ $2011 18,000 0 0 0 02012 12,000 18,000 0 0 02013 8,000 12,000 15,000 0 02014 4,000 8,000 12,000 15,000 02015 2,000 4,000 8,000 12,000 02016 0 2,000 4,000 8,000 0TOTAL 44,000 44,000 39,000 35,000 0Health Prof. Shortage Area

48,400 48,400 42,900 38,500 0




Medicare Incentives for Physicians

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The HITECH Act is clear that “hospital-based” physicians cannot qualify for the incentives available to “eligible professionals.”

The Act references pathologists, anesthesiologists and emergency physicians as examples of physicians who will most likely be excluded.

Although the initial definition of “hospital-based” appeared to include both inpatient and outpatient professionals, the signing of HR4851 on April 15th clarified that the definition only applies to professionals who furnish substantially all of his or her services in a hospital inpatient or emergency room setting.

Provider Based Clinics and HITECH Act




Date Milestone2009 Coordinate with ONC to develop policies such as the definition of meaningful use

Develop proposed rules to allow public input to the incentive program policies Plan systems and other requirements needed to support the incentives programs Plan national outreach program

2010 Conduct outreach to eligible professionals and providers and to State Medicaid Agencies

Develop systems to support the payment of incentives Develop final rules to establish policies needed to pay incentives Develop systems to monitor and evaluate incentive payments

No sooner than October 2010

Start to pay hospital incentives for Medicare and monitor payments

No sooner than January 2011

Start to pay eligible professionals for Medicare and monitor payments Begin and monitor Medicaid incentive payments to eligible professionals and

hospitals 2011 - 2016 Continue paying hospital incentives for Medicare and monitor payments

2011 - 2016 Continue paying eligible professionals incentives for Medicare and monitor payments

2011 - 2021 Continue paying Medicaid incentives to eligible professionals and hospitals and monitor payments

2015 and thereafter Initiate payment reductions to Medicare hospitals and eligible professionals that fail to adopt EHRs

Until CMS issues the final rule for the EHR Incentive Programs, there will be some uncertainty regarding registration and implementation of systems.

CMS Implementation Timeframe for Incentives




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Reducing Clinical Costs with an EHR

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Benefits from EHR Use

Although the financial incentives of the ARRA have captured the attention of hospital executives the potential financial benefits of EHR use are much greater than the incentives healthcare organization could gain from government incentives.

Documented case studies indicate that an EHR can help control hospital costs.

Most benefits are associated with :• Reductions in hospital length of stay• Drug utilization




Estimated EHR Benefits at a Typical 300 Bed Hospital*

Benefit Category Annual Benefit Amount Net Financial Impact(dollars in thousands)

Reduction in hospital LOS 5%-10% average LOS reduction $1,300 to $6,800

Increased medication safety 344-481 adverse drug events prevented

$182 to $1,900

Nursing time savings 28-36 minutes saved per shift $11 -$33

Order turnaround time reductions 1 hour turnaround time saved Not quantified

Increased use of preventive care 99% vaccination compliance Not quantified

Reduced use of lab tests 15% test volume reduction $46 to $122

Drug utilization reductions 15% utilization reduction $437 to $1,165

TOTAL $1,976 to $10,020

A 300 bed hospital with a 50% Medicare & Medicaid population would be paid a maximum meaningful use incentive of $8 million over four years, while the same hospital would realize $8 million to $40 million in EHR-related financial benefits (about $2 million to $10 million annually) over the same period.




*Footnote: Based on information provided in Healthcare Financial Management, October 2010 “Reducing Clinical Cost with an EHR”.

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EHRs Used to Reduce Clinical Costs

•EHRs can be likened to “shop floor automation” for the care process.

•Decision support functions guide the actions of workers (the clinicians).

•Its workflow elements support greater efficiency and safety.

•Improve clinical and financial outcomes.




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EHRs - Used to Reduce Clinical Costs

•EHR prompts nurse to screen a patient for the risk of falling.

•Reduces the cost of caring for patient with fall-related injuries

•EHR may prompt physician to consider lower cost or more effective medications when he/she enters an order for medication.

•Automated clinical documentation tools in an EHR may collect coded data to drive decision support, improve the legibility and completeness of clinical documentation and deliver that information to clinicians anywhere and at anytime, saving time and helping to prevent medical errors.




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Accountable Care OrganizationsThe Financial Vehicle for Implementing Health Reform

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Recognizing that the success of health care reform depends on providers changing the current method by which patient care is delivered, incentives have been included in the Patient Protection and Affordable Care Act (PPACA) portion of reform to motivate providers to pull resources and share costs with other providers in a new form of integrated health care delivery system …

An Accountable Care Organization (ACO).

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In its simplest form, the ACO is an organization of health care providers who voluntarily agree to be accountable for the quality, cost and overall care of a population of at least 5000 Medicare beneficiaries who are assigned to it and who are enrolled in the traditional fee-for-service program.

For ACO purposes, assigned means those beneficiaries for who the professionals in the ACO provide the bulk of primary care services.

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•Promote better care coordination, quality, and efficiency.

•IT gives ACO’s a chance at succeeding.

•EHRs must support documentation of patient’s problems.

•Health information exchanges must enable the transfer of discharge summaries & procedure reports between providers.

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•ACO’s encourage patients to take a more active role in their own care.

•Records need to provide patients with access to their data and work with a range of care management, telehealth and health information tools.

•Patients may engage in disease and wellness management programs by tracking vital signs and test results, electronic communication with care givers, accessing health information on treatment options and managing follow-up appointments.

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Soaring healthcare costs and improving information technology are driving care to shift from high cost to lower costs venues. For example:

Nursing homes to assisted living environmentsOffice-based care to home care

Baby boomers are aging and will be needing more services.

With technology, more things can be done in a less intrusive manner.

An ACO, by the way it will be structured, should offer the framework to achieve improved patient outcomes while reducing cost.

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•In 2013, CMS plans to roll out a value-based purchasing initiative for Medicare

•Providers will have to provide data on patient satisfaction and clinical quality measures in order to receive full payment.

•Having databases to provide this information will be more important because there is a lot riding on it.

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Google Foresees a Big Future – Personal Health Record Platform

According to Modern Healthcare, October 2010:

• Google foresees a big future for both stationary wireless and mobile wireless healthcare.

• In early October Google came up with a major overhaul of its Google Health personal health-record platform.

• Google believes wireless and mobile applications will play an increasing role in helping Google health attract a broader audience including “wellness consumers.”

• Personal Health Records (PHRs) help all parties store and share patient information.

• This platform will continue to function as a repository of medical data from provider organization, but that’s not all.

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PERFORMANCE MANAGEMENT with the EHR

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EHR – Performance Management

•Analytic software that collects & aggregates data from many other information systems and locations.

•Transforms data into usable information in a format that enables enhanced decision making & greater efficiency.

•Provides hospitals the ability to more easily identify root cause of problems.

•Executive dashboards with varying degrees of ability to drill down into the data.




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EHR – Performance Management

Investments in performance management are essential to realize the full benefits of EHR implementation which can

Reduce Costs for Hospitals

Improve Quality of Care

Without such investments, the best data in the world is likely to be ineffective in changing behavior and performance of hospitals and physicians.




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Conclusion

Will the electronic health record transform the delivery of healthcare?

Only time will tell, but we’re headed in the right direction with technological interface.




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