iht2 health it summit in seattle 2012 – opening keynote “state of the health care it union”

State of the Health Care IT Union

Addressing Current and Future Industry Imperatives

Health Care IT Suite

©2012 THE ADVISORY BOARD COMPANY • ADVISORY.COM

IHT2 Health IT Summit

August 22, 2012 • Seattle, WA

Contributing Analysts

Jim Adams

Ernie Hood

Mike Davis

Ken Kleinberg

Peter Kilbridge, MD

Robin Raiford


Design Consultant

Hillary Tisdale

Senior Advisor

Dave Garets

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State of the

Health Care IT Union

Addressing Current and Future Industry Imperatives

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Road Map

2

3

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6

State of the Industry

Where We’re Headed

Drivers of Change in Health Care IT

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The Reform Paradox

7

Giving More Care to More People, and Paying Less for It


How do we

maximize

access to

care?

How do we

afford

expanded

access?

Raise taxes?

Reallocate spending?

Cut benefits?

Cut reimbursement?

Delivery system change?

Source: Advisory Board analysis.

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Beginning of a Fundamental Transformation

8

Legislation Only One Part of Health Care Reform



1) Sustainable growth rate.

Delivery System Reform Timeline

SGR1

ICD-10

Conversion

2014

Never

Events

Campaigns

Acute Care

Episode

Demonstration

2010

Physician Group

Practice

Demonstration

2005

Core

Measures

Coverage

Expansion

2010-2014

Shared

Savings

Program

2012

Bundled

Payment

Program

2013

Readmissions

Program - 2012

1997 2016

Meaningful

Use

2011-2015

HAC Medicaid

reimbursement

stops - 2012

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Toward Accountable Care

9

New Incentives, Greater Risk Characterize Industry Transformation



Strategic and Operating Imperatives

Management

Imperative

Fee for

Service

Accountable

Care

AccountabilityOptimize performance within the

facility

Optimize performance across settings

and time

Utilization Maximize acute-care utilizationRedirect acute-care utilization to lower

acuity settings

Physician

Partnerships

Align economically to drive

acute-care volumes

Align economically to manage shared

risk

Technology

Investments

Win clinical technology “arms

race”

Wire the health system for

coordination and collaboration

Facility StrategyCentralize and co-locate acute-

care services

Widely distribute primary care and

preventive services

Care CoordinationInvest in only as an “avoidable

losses” strategy

Develop high-performance partner

network across continuum

Expense ManagementManage inpatient cost trend

below revenue growth trendDrive care to lowest-cost setting

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Road Map

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3

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10




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Second of Three Increasingly Complex Stages

11

Source: HITPC Meaningful Use Workgroup, Stage 3 Subgroups; Medicare and Medicaid

Programs; Electronic Health Record Incentive Program-- Stage 2 Proposed Rule at

http://www.ofr.gov/OFRUpload/OFRData/2012-04443_PI.pdf; IT Strategy Council analysis.

• Increase implementation and

adoption of electronic health

record (EHR) systems

• Capture structured data

• Drive use of real-time data at the

point of care

• Use outcomes-focused clinical

quality measures

• Utilize clinical decision support

for prevention, disease

management, and safety

• Increase exchange of health

information

• Demonstrate care coordination

across sites of care

• Empower patients with health

information

Stage 1 Stage 3Stage 2

Data Capture and Sharing Advanced Clinical Processes Improved Outcomes

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Stages of EMR Adoption

12

HIMSS Analytics EMR Adoption Model, Q1 2012

State of the Industry – Acute Care EMR Adoption

Stage Description

Percent of

Hospitals At

Stage

Q3

2009

Q2

2012

7Complete EMR; CCD transactions to share data; Data warehousing; Data

continuity with Emergency Dept, ambulatory, Outpatient venues0.5% 1.7%

6Physician documentation (structured templates) on one inpatient unit, full clinical

decision support (variance and compliance), full radiology PACS1.2% 6.5%

5 Closed loop medication administration fully implemented on one inpatient unit 4.8% 11.5%

4 CPOE and clinical decision support implemented in at least one inpatient unit 4.1% 13.3%

3Nursing/clinical documentation (flow sheets) on one inpatient unit, clinical decision

support (error checking in pharmacy), image access outside radiology dept.40.4% 42.4%

2Clinical data repository, controlled medical vocabulary, clinical decision support

capability, may have document imaging; HIE capability 29.8% 11.7%

1 All three ancillary systems installed 7.1% 5.1%

0 Not all ancillary systems (lab, radiology, pharmacy) installed 12.1% 7.9%

Source: HIMSS Analytics™

http://www.ofr.gov/OFRUpload/OFRData/2012-04443_PI.pdf



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Towards Higher Levels of Interoperability

13State of the Industry – Health Information Exchange

Definition of Interoperability

“In health care, interoperability is the ability of different information technology

systems and software applications to communicate, to exchange data accurately,

effectively and consistently, and to use the information that has been exchanged.”

NAHIT, 2005

Source: NAHIT, 2005 and Advisory Board research and analysis.

”

Increased Usefulness of Interoperability

Syntactic

• Based on agreement on how to parse the content exchanged

• Generally sufficient for human use of the exchanged content

• Computer use requires a mapping between the terminologies used by the

participants – this acknowledges the (very real) possibility of different meanings

associated with mapped terms (semantic ambiguity)

Process

• Assumes Semantic

interoperability

• Includes shared process

definitions and inter-participant

workflow orchestration

Semantic

• Assumes Syntactic interoperability

• Requires participants to use the

same reference terminologies

• Requires mapping to a reference

information model

Degre

e o

f D

ifficulty

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HIE Market: Everyone Wants to Get into the Act!

14

Source: Advisory Board research and analysis.

State of the Industry – Health Information Exchange

CategoryRepresentative

ExamplesStrengths Challenges

Acute EMR

Vendors

Epic, Allscripts,

Cerner, GE…

Established client base of IDSs,

some experience with ambulatory,

lab and payer integration

Competing EMR vendors

will not play in the

“sandbox”

HIE Vendors

CareFx, Covisint,

dbMotion, ICA,

Intersystems,

MobileMD, Orion,

RelayHealth

Built for HIEs, have connectors and

adapters to most ambulatory and

lab systems, support for

centralized and federated models

Often reliant on grants

and government-based

non-sustainable funding

sources

Carriers Verizon, AT&TKnows networking and

communications

Lack of clinical HIE

experience

Specialty Surescripts, Emdeon

Existing extensive national

backbone connectivity with

providers, payers

Fee structures not

popular for HIE

PayersUnited Health/Axolotl,

Aetna/Medicity

Experienced with transaction

networks/clearinghouses – now

extending into provider space

Payer “parents” not

trusted by providers

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Direct Project – Information Sharing

15State of the Industry – Health Information Exchange

Incremental Improvements

Direct Project Announcement

from ONC

“The Direct Project specifies a simple,

secure, scalable, standards-based way

for participants to send authenticated,

encrypted health information directly to

known, trusted recipients over the

Internet.”

The Direct Project Overview,

11 October 2010

Today’s Technology –

FAX

Direct Project -

E-mail Attachments

Connect Project –

XDS Documents

”

Source: Advisory Board research and analysis.

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More Than Just Incentives At Stake

16

Redspin’s 2011 Report on Breaches

385 breaches of protected health information (PHI)

19,016,894 patient health records affected

49,396 average # of patient records per breach in 2011,

an 80% increase over 2010

59% of all breaches involved a business associate

39% occurred on a laptop or other portable device

25% occurred on a desktop PC or server

60% resulted from malicious intent (theft, hacking)

97% increase in total records breached, 2010-2011

76% increase in records breached involving a business

associate, 2010-2011

525% growth in records breached due to loss 2010-2011

Quintuple Whammy from a Breach

$1.5 MMaximum annual penalty

from HHS due to HIPAA

violations

$20,663Cost to solve single case

of medical identity theft*

Daily Disclosures of Breaches are Becoming Alarming – It’s “When,” not “If”

Some of the latest include Stanford Hospital and Clinics (20,000 patients’ data posted to the

web; sued for $20M), Tricare (SAIC – 4.9M patients’ data lost; sued for $4.9B), Fairview Health

Services and North Memorial Health System (Accretive Health – 16,800 total patients data

stolen), Nemours (1.6M total individuals’ data lost); UCLA Health System (16,288 total patients'

data stolen).

”

State of the Industry – Protected Health Information Breaches

$??? M $1,000 per patient seems to

be the metric for lawsuits

$??? MPotential loss of Meaningful

Use money due to HIPAA

violation

Redspin Breach Report 2011, Protected Health Information,

www.redspin.com (accessed 17 February 2012

*Miliard, M, “Medical Identity Theft on the Rise,” Healthcare IT News,

March 15, 2011, available at:

http://www.healthcareitnews.com/news/medical-identity-theft-rise

(accessed March 30. 2011)

Breaches Are Costly and Destroy Trust

$??? M Cost to your reputation

http://www.redspin.com/

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ICD-10 versus ICD-9

17State of the Industry – ICD-10

Explosion of Granularity

Diagnosis

14,300

69,000

12,500

ICD-9-CM ICD-10-CM ICD-10 (WHO)

Procedure

3,800

72,000

0

ICD-9-PCS ICD-10-PCS ICD-10 (WHO)

ICD-10 CFO Survey respondents who expect to lose revenue

through transition:

• 28 % predict revenue loss between 6% and 10%1

• 23 % anticipate revenue losses to last one to two years1

”

1) Shaw, HealthLeaders Media, 7/26/11.

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Mobility-Enabled Business Process Management

18

Source: Care Advisory Board interviews and analysis.

Who is waiting on what from who?

Pharmacist

What shall we do about

this medication conflict?

Transport

When can I wheel this

cranky old man to the

pick-up area?

Physician

When will I get

those lab results?

Patients and

Families

When can we pick up Mother?Nurse

When will I get that order

from the physician to give

this pain medication? Medication reconciliation

Medication administration

Discharge processing

Bed management

Billing

Administration

When can we

get this bill out?

State of the Industry – Use of Mobile Technologies

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Business Intelligence Framework

19State of the Industry – Electronic Data Warehousing

Beware the

False Summits!

Degree of Competitive Advantage

Analyze the Past

• Reports and graphs

• Dashboards

• Drill down/around

Analyze the Future

• Statistical models

• Correlation Analysis

• Forecasting

• Simulations

Predictive:

What might happen? Analyze the Actions

• Mathematic Models

• Linear Programming

• Constraint Programming

Prescriptive:

What should we do?

Three levels of BI maturity with

each level more difficult and

more advantageous than the last.

Descriptive:

What happened?

1

De

gre

e o

f Diffic

ulty

2

3

Business Intelligence is key to developing a

thoughtful system of care out of the organic,

ad hoc processes that we have today.

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State of the Enterprise Vendors

20

You Win Some, You Lose Some…

Source: HIMSS Analytics Database.

State of the Industry – Movement in the Market

Number of Hospitals Gained/Lost, 2005–2011

56 57

458 204160

1541

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Spending Up, But Return Down

22

Where We’re Headed—IT Budgets Going UP

Source: Moody’s Preliminary Medians for Not-for-Profit Hospitals,

April 2010; Advisory Board analysis.

Where We’re Headed – IT Budgets Going UP

IT as a Percentage of Total

Capital Spending

Moody’s-Rated Hospital,

In Thousands

Breakdown of Capital Spending

In Thousands

2008 2009

Return on Invested Capital

$34,824

$33,249

12%

40%

Liquidating

the asset

8%6.6%

2008 2009

Total IT D&A Expenses

• Remote computing

• Edge solutions

• Image storage

• Outsourcing

Costs

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Toward Accountable Payments

23

Building Accountability Through Experiments in Payment

Source: Health Care Advisory Board interviews and analysis.

Where We’re Headed - The Great Risk Shift

Degree of

Shared Risk

Care Continuum

Pay-for-

Performance

Hospital-Physician

Bundling

Episodic Bundling

Capitation/Shared-Savings Models

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Emphasis on Change Management Is Essential

24Where We’re Headed – It’s All About Change

Under-Adoption, Under-Utilization, Sabotage Not Desirable Options

It’s Always About People

• Only 1/3 of change initiatives achieve success. Users determine success or failure of project.

• Change is messy. People start where they are, not where we want them to be. Get to hearts and minds to develop willingness and ability.

Technology Adoption

Claire McCarthy

The application of human Change

Management principles to technical

projects, such as Electronic Medical

Records or ICD-10 implementation.

”

EMR

+Human

Change

Management

+

Process

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The Intelligent Enterprise

25Where We’re Headed

Operational

Data Store

Tra

nsaction

Pro

cessin

g-O

riente

d

Opera

tiona

l Syste

ms

Exte

rnal

Syste

ms

Fact and

Dimension

Tables

Detailed data

Staging Area

Fact and

Dimension

Tables

Detailed data

Active Archive

Extract

Snapshot

Cleaned Standardized, Consistent

Summarized

Information

Metadata

Fact and

Dimension

Tables

Detailed

data

Data Warehouse

Exploration,

visualization,

and analysis tools

Data Marts

Real-

Tim

e U

pd

ate

Predictive

Models

Prescriptive

Models

Rules Engine

Predictive

Models

RCM

EMR

HIE

CMS

CIN

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iht2 health it summit in seattle 2012 – opening keynote “state of the health care it union”

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