Published on May 12, 2009
Democratic Presidential Candidate Senator Barack Obama’s Health Policy – An Opportunity for Change Blackford Middleton, MD, MPH, MSc, FACP, FACMI, FHIMSS Chairman, Center for Information Technology Leadership Corporate Director, Clinical Informatics Research & Development Partners Healthcare System Harvard Medical School
Overview • Introduction • The Problems with US Health Care • Three perspectives: Provider, Purchaser, Consumer • The Opportunity with HIT • The Obama HealthCare Plan • Conclusion
The Provider’s Dilemma • Unexplained variation, disparities in access and utilization, medical error, patient safety, and quality issues vex US Healthcare – 18% of medical errors are estimated to be due to inadequate availability of patient information. – Patient data unavailable in 81% of cases in one clinic, with an average of 4 missing items per case. – Medical error the 8th leading cause of death – 1 in 4 prescriptions taken by a patient are not known to the treating physician – 1 in 5 lab and x-ray tests ordered because originals can not be found – 40% of outpatient prescriptions unnecessary – Patients receive only 54.9% of recommended care
Unwarranted Variation in Care
60% Variation In Medicare Resource Use Intensity For Equivalent Populations SOURCE: Wennberg et. al. Annals Of Internal Medicine 2/18/03
Little Impact Of Spending On Quality
Paper-based Medicine • Prone to error • Lots of information but no data • Limited decision support, or measurement • Does not integrate with eHealthcare… • Will not transform healthcare
Why? • “Instead of teaching doctors to be intelligent map readers, we have tried to teach every one to be a cartographer.” • “We practice healthcare as if we never wrote anything down. It is a spectacle of fragmented intention.” - L. Weed, M.D.
quot;By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care.quot; President George W. Bush State of the Union Address January 20, 2004
How Does HIT Save Money? • EHR Effects – Completeness, correctness, decision support, formulary, brand to generic, duplicate/redundant meds and tests, charge display – Workflow support, messaging (pt/provider), referral, A/R, team • CPOE Effects – Reduction in hospitalization/LOS due to ADEs, clinical decision support • HIEI Effects – Reduction in unnecessary and redundant tests and procedures – Labor cost savings • Telehealth Effects – Reduction in patient transport, utilization of hospitals, and physician office visits • PHR Effects – Administrative time savings – Reduction in hospitalizations and physician visit utilization – Improved medication safety – Reduction in redundant laboratory tests www.citl.org
CITL HIT Value Assessments • Net US could save $150B with HIT adoption, or approximately 7.5% or US Healthcare Expenditure – The Value of Ambulatory Computerized Order Entry (ACPOE) • $44B US nationally; $29K per provider, per year – The Value of HealthCare Information Exchange and Interoperability (HIEI) • $78B/yr – The Value of IT-enabled Chronic Diabetes Management (ITDM) • $8.3B Disease Registries; Advanced EHR $17B – The Value of Physician-Physician Tele-healthcare • >$20B* – The Value of Personal Health Records • Approx. $20B www.citl.org
VA’s Success with Healthcare Information Technology Data Source: Thomson TG, Brailer DJ. The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care. Washington, DC: US Department of Health and Human Services; 2004.
Rates of Positive Survey Responses on the Effect of Adoption of EMRs, 2008 4% of physicians use fully functional electronic health records 13% use some form of basic electronic records DesRoches CM et al. N Engl J Med 2008;359:50-60
Barriers to HIT Adoption Source: The Commonwealth Fund National Survey of Physicians and Quality of Care.
National HIT Cost Savings to Providers and Other Healthcare Stakeholders Net, 89% of the benefit of HIT goes to others, and HIT produces a significant public good – need for a Third Hand Middleton B Health Aff 2005;24(5):1269-72
Bones… Captain – I’m sick and tired of it and I’m not going to take it anymore!! Dr. “Bones” McCoy (apologies to Albert Finney – Network News)
The Purchaser’s Dilemma • US healthcare is $1.7T, 16% GDP – 5% in 1963; Industrialized societies average less than 10% – Costs rising 7-9%/yr, expected to double in 10yr – 25% of premium is for administrative overhead (limited value) • Public expenditure on healthcare now 43% of total (up 10% in past decade) • GM healthcare costs now $1500/automobile, most expensive component • Where will additional value be found in, or costs taken out of, the system?
Determinants of Health and Their Contribution to Premature Death • Purchasers are paying into a disease system rather than a wellness system • 4% of health care dollar is spent on prevention and public health Schroeder S. N Engl J Med 2007;357:1221-1228
Health Care Costs Concentrated in Sick Few Distribution of Health Expenditures for the U.S. Expenditure Population, By Magnitude of Expenditure, 1997 Threshold 1% (1997 Dollars) 5% 10% 27% $27,914 50% 55% $7,995 69% $4,115 97% $351 www.cmwf.org Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.
Cost Sharing Reduces Both Appropriate and Inappropriate Hospital Admissions Percent reduction in number of hospital admissions per 1000 person-years *Based on Appropriateness Evaluation Protocol (AEP) instrument developed by Boston University researchers in consultation with Massachusetts physicians www.cmwf.org Source: A.L. Siu et al., “Inappropriate Use of Hospitals in a Randomized Trial of Health Insurance Plans,” New England Journal of Medicine 315, no. 20 (1986): 1259–1266.
Americans Spend More Out-of-Pocket on Health Care Expenses, 2004 Total health care spending per capita United States France Canada a Germany Australiab Netherlands OECD Median a Japan New Zealand Out-of-pocket spending per capita a2003 b2003 Total Health Care Spending, 2002 OOP Spending Source: The Commonwealth Fund, calculated from OECD Health Data 2006.
The Consumer’s Dilemma • Average American consumers $6240/yr of healthcare, or $12,200 for the ave. family – Health premiums rising 4x faster than salary over past 6 yrs – 50% of personal bankruptcy due to healthcare costs – 42% of the public have experienced medical error themselves or in their family (24% with serious consequences) • 45M Americans lack Healthcare insurance – 80M lack at some time during each year • A fractured and ‘unwired’ healthcare system – Medicare beneficiaries see 1.3 – 13.8 unique providers annually, On average 6.4 different providers/yr – 90% of healthcare transactions in the US every year are conducted via mail, fax, or phone • Increasing exposure to tiered pharmacy plans, consumer directed care, define contribution plans… without transparency – Absent reliable quality data – No value-based choices
Majority of Americans Say Health Care System Needs Fundamental Change or Complete Rebuilding Only minor Fundamental Rebuild changes needed changes needed completely Percent reporting: 16 50 32 Total Annual income <$35,000 11 51 38 $35,000–$49,999 13 50 36 $50,000–$74,999 16 51 31 $75,000 or more 19 52 28 Insurance status Insured all year 18 52 29 Uninsured during year 10 44 45 U.S. region Northeast 13 51 35 North Central 16 50 32 South 15 51 33 West 21 48 29 Source: Commonwealth Fund Survey of Public Views of the U.S. Health Care System, 2008.
Nine of 10 Americans Support Well-Coordinated Care Percent 96 94 93 92 Source: Commonwealth Fund Survey of Public Views of the U.S. Health Care System, 2006.
Health Policy Priorities for Congress, According to Health Care Opinion Leaders “How important do you think the following health care issues are for Congress to address in the next five years?” Top 10 Issues: Percent responding “absolutely essential” or “very important” Note: Based on a list of 17 issues. Source: The Commonwealth Fund Health Care Opinion Leaders Survey, Jan. 2007.
Obama’s Health Plan: Foundations • All Americans should have access to quality, affordable health care – Moral and economic issue • Modernize healthcare system so that it improves health, lowers spending, and makes medical practice more effective and rewarding – Lowest cost, highest value • We need a public health system that works with the medical system to maintain wellness, prevent disease and improve population health
Barak Obama’s Health Plan 1. Universal Health Care - Health Care Exchange with private and public payers 2. Health Care Reform - Affordability, cost control, improved quality, efficiency - Help patients receive better care: Investment in coordination of care, disease management, and quality measurement and reporting initiatives - Help providers delivery better care: expanding research, including comparative effectiveness research, to understand what works - Reform our reimbursement systems, to align financial reward with quality and not quantity of services, with good health outcomes, keeping Americans healthy, and reducing disparities. 3. Promote prevention and strengthen public health - Promote healthy lifestyles at home, school, and work places - Improve public health infrastructure for community health and wellness, and disaster preparedness Health IT is the lynchpin to success for each part of his health platform
Cost of the Obama Health Plan • Net best estimate is $50-65B per year when fully phased in – Investments in information technology • $10B investment for 5 years • Funded by three means: – Restoring the top two personal income tax brackets and rates on dividends – Restoring capital gains tax to Clinton era levels – Retaining the estate tax with a $7 million exemption rather than repealing it
Benefit of the Obama Health Plan for Healthcare System • Investments in information technology – HIT Savings $78B (RAND) - $150B (net CITL) • Reduced insurance industry overhead – Commonwealth Fund est. $32-46B/yr savings – Reduce uncompensated care (1% of private premiums) • Improved disease management, care coordination, clinical effectiveness research, and payment for excellence – Enable comparative effectiveness, value-based purchasing – RAND est. disease management could lead to an additional $81 billion of savings • Net potential savings $120-200 Billion
Impact of Obama Health Plan for Americans • Insurance costs decline by $2500 for a typical family – Reduce private insurance premiums by 5% • 10,000,000 more people with employer-based coverage • 98-99% of all Americans will have healthcare coverage • More rewarding practice environment for providers and patients… less administrative hassle and expense
“I conclude that though the individual physician is not perfectible, the system of care is, and that Where are we? the computer will play a major part in the perfection of future care systems.” Clem McDonald, MD NEJM 1976 Thank you! Blackford Middleton, MD firstname.lastname@example.org
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