The Employer Perspective: Can Health Information Technology Help

The Employer Perspective: Can Health Information Technology Help

The Employer Perspective: Can Health Information Technology Help Control Cost and Enhance Quality? Robert S. Galvin, MD The HIT Symposium July 17, 2006 The Answer Enhance Quality?. . . . . . .You Bet Control Costs? . . . . . . . . .It All Depends Follow The Funding Information, Incentives and IT Value of

Health Expenditures High Incentives and Rewards Transparency Performanc e Comparison s for Hospitals, MDs & Tx Market Sensitivity to Hospital/ MD Quality

& Cost Enabled by IT Clinical Reengineering by MDs, Hospitals Higher Quality Lower Cost & Suppliers Low 200 0 Key Evolutionary

Steps 201 0 September/October 2005 RAND Health Information Technology Project Comprehensive Review of Literature Multiple Site Visits to Confirm Data 4 Robert S. Galvin, MD HIT Symposium

July 17, 2006 Better Value From Todays Treatments Type of Effect Reduce errors Reduce inappropriate variance Improve prevention and disease management Examples 2-3M avoidable ADEs/yr Overuse of antibiotics

~$6B/yr ~$5B/yr Reduce chronic care ~$60B/ costs 10% yr 5 Robert S. Galvin, MD HIT Symposium July 17, 2006 Big Savings From Efficiency Total ~$90B/yr Oth Outpatient er

Inpatient Outpatient $15B/yr Transcription Chart Handling Lab Tests Drug Utilization Radiology Inpatient $62B/yr Nursing Time Lab Test Drug Utilization LOS ED Admissions 6 Robert S. Galvin, MD HIT Symposium July 17, 2006

The Delivery System Has Been Resistant to Adopt IT Whats Taking So Long? If It Aint Broke, Dont Fix Digitizing is Tough Stuff Providers Pay, Payers Save Inter-Operability What If I Choose Beta Max 7 Robert S. Galvin, MD HIT Symposium July 17, 2006 Proposed Solution Funding: Stark and Anti-Kickback Safe Harbors The Big Hitter Pay for Performance (Focus on IT)

Others Inter-Operability: Government: CCHIT, etc. Private Vendors: EHRCA Looking for Funding in All the Wrong Places? PRO CON Promotes Integration Between Hospitals and Physicians Enables Consolidation of Hospitals and Physicians Accelerates Physician Adoption Cost is the #1 Barrier

Doesnt Help Physician Adoption: Free is Not Cheap Enough Helps Inter-Operability: Make It a Condition of the Safe Harbor Hurts Inter-Operability: Vendors Inadvertently Incentivized to Protect Proprietary Systems Savings From IT Significantly Decreased Due to Loss of Effective Competition Savings From IT Realized Sooner Competition Drives Improvement

Spine, Back and Neck Procedures Quality Index 3.00 1.00 (1.00) 3.00 1.00 Price Index (1.00) Require Inter-Operability As Part of Safe Harbor? You Can . . . But It Is a Very Complicated Issue It Will Take Years to Complete

The Process Is Easy to Game and Delay Health Information Technology Is a Fundamental Change, But It Doesnt Change the Fundamentals. Funding Matters: Competition Around Service Quality and Efficiency Drives Value Consolidation Is Easier Than Integration Cost Savings Is Hard: One Persons Cost Is Another Persons Savings . . . And Resistance to Change Is a Given

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