Health IT: Cornerstone of Health-care Reform

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When, today, you go to see suites of hospitals and systems, they have got a grand strategy for what they want to execute in the next 10 years. It’s not an exaggeration to say the whole thing depends on IT. Without IT, it’s not going to change. How different from past reform attempts this will be is due to the power and capability of IT,” James Field says. Field is general manager of syndicated research and an executive director at The Advisory Board Company (Washington, DC), a research and consulting company that covers health care. He spoke on January 21 during a webinar hosted by the Healthcare Information and Management Systems Society. Whereas earlier attempts at health reform—including the early movement toward capitation and the effort by the Clinton administration to overhaul delivery—made little headway, Field says, this time, the situation is different. This time, health reform will take place. It must, Field says, “because the nation is broke. We’re at the endgame, in terms of affordability. State governments are in dire straits, employers are broke, and there are 50 million noninsured. That’s why the system will change; the question is how it will change,” Field says. For the most part, he adds, the health-reform focus has been on the forest—breadth of coverage, cost of financing, and impact on the federal deficit. The real impact of the Patient Protection and Affordable Care Act, however, is in the trees, where important, beneficial, and progressive steps have been taken to change the delivery of health care radically, Field says. Value Creation Value creation, throughout the health-care enterprise and in the delivery system, will be the buzzword, going forward, Field says—and IT will be in the forefront. Fee-for-service and volume-based reimbursements will give way to bundled payments, episodic bundling, and shared savings, all organized as accountable care organizations (ACOs) and team-driven care entities put together around the concept of a medical home.
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Figure. Building the necessary foundation for taking/managing risk; image courtesy of The Advisory Board Company (Washington, DC).
“To be honest,” Field says, “if you go into the corporate offices in the major systems, a lot of folks that run these large enterprises think the system will stop with global capitation. A lot of system folks think that will probably be the end state.” Emphasis on the Patient Patients have always been central to health care, but certain classes of patients will attract a more strongly patient-centered focus. This applies especially to the chronically ill, who are the 20% of patients who use 80% of the health-care dollar. The management of chronically ill patients will require efforts to curtail readmissions to hospitals, Field says. That will mean that hospitals will need to focus on care delivered both before and after acute care. “Half the readmissions will not be paid for within a few years,” Field says. “If you have to reduce them by 50%, what are the implications? You’re going to have to go into postacute-care settings, you will have to track patients, and you will have to direct patients and collect data on patients. That, in itself, is a huge hurdle because the hospitals have got to extend themselves outside their walls into a different setting, and you’re going to have to have the data to track that.” Furthermore, for hospitals to become more efficient and build evidence-based protocols, information on chronically ill patients will need to be placed in registries. These will have to be organized and tracked, and the data from them will need to be analyzed, Field emphasizes. As evidence-based care advances, decision-support tools will come more and more into use, and these will also need to be integrated into other information systems, Field says. Beyond that, both chronically ill and healthy patients will be encouraged—perhaps required—to assume greater involvement in their own care, Field says. Personal health records must be integrated with the electronic medical records of the health-care enterprise. Patient-response systems, via email or some other digital mechanism, will need to be wired into the care network, Field adds. Actions such as taking medications might have to be documented that way, Field suggests. “Patients are going to be wired into the system in such a way that they can’t escape, and that way, they will become part of the ACO, and the utilization of services will be controlled,” Field says. “It’s that whole network of interaction with the active patient that’s going to make this thing work, and it will be a completely different economy. One of the most fascinating pieces is how the patient engages the system through IT.” The Reign of Data All of the information systems on the care/treatment side will need to be integrated on the payment side, where the overarching motif will be “doing less to patients,” Field says. Huge amounts of IT investment (and the enterprise knowledge necessary to make it all work) will call for the management talents and capital-raising capacities of hospitals and physician-group networks, pushing these entities further into the forefront, Field adds. IT expertise will be needed to do more than construct and connect systems; the huge amounts of data that will be generated will give rise to a new class of data analysts, Field says. IT will no longer be a background function, but will move to the foreground. CIOs will reign over fiefdoms of data. Analysis of the data will push the whole system forward on both the treatment and the financial sides. Vendors of analytical tools might become key players. Field identifies five core competencies that will be required of IT: network interconnection, clinical knowledge management, patient activation, financial operations, and population risk management. Guess wrong in building and deploying an information network and an enterprise could be held back for years. He says that he tells hospital systems that if they stick to the basic block and tackle, they are not going to be wrong. Nonetheless, this is no time for IT to be complacent, Field advises. “At some point, it will switch. The world will turn upside down, going from volume-based medicine to being rewarded for utilization management and shared savings,” Field says. “How do you take a big organization to that new world? We don’t know; it’s the art of management—but IT will empower the system to allow it to do that.” Private payors and providers are scrambling to prepare for the coming changes, Field says. On the government side, where Medicare will set the payment paradigms of the future, he concludes, “The government train has left the station.”