American Health Information Community

EHR Workgroup Meeting #10

October 13, 2006

**Disclaimer**

*The views expressed in written conference materials or publications and
by speakers and moderators at DHHS-sponsored conferences do not
necessarily reflect the official policies of the DHHS; nor does mention
of trade names, commercial practices, or organizations imply endorsement
by the U.S. Government.*

**[\>\>]{.underline}**

We\'ll have presentations slides once we get going.

**[\>\>]{.underline}**

Okay.

**[\>\>]{.underline}**

Lillee, you can go ahead.

**[\>\> Lillee Gelinas:]{.underline}**

Good afternoon, everybody, good morning to those in the West Coast, and
those of you on the East Coast, good afternoon. And welcome to today\'s
Electronic Health Records Workgroup conference call. Today is Friday,
October 13. And this is an Electronic Health Record Workgroup meeting. I
would also like to welcome members of the public and invite your public
comments at the end of this call so that we can get a reflection of your
thoughts, which are so very important to this work.

I\'d like to also thank my Co-chair, Dr. Jonathan Perlin, for joining.
And I will \-- we\'re going to split our responsibilities during this
call so everyone is clear. I will take the front end here, and Dr.
Perlin will take over the end of the call, including the public comment
segment.

We have a lot to accomplish today. A number of presentations. But before
we begin, Matt, could we get an introduction of all the participants,
please.

**[\>\> Matt McCoy]{.underline}**

Sure. On the call today, we have Robert Smith, who is representing
Veterans\' Administration today. Our Co-chairs are both on. Dr. Perlin,
and Lillee Gelinas. We have Ken Waldbillig, Blackford Middleton, from
Partners Health Care. Howard Isenstein from the Federation of American
Hospitals. Jason DuBois from American Clinical Laboratory Association.
Connie from the College of Physicians. And Harriet Walsh, you\'re here
representing CMS, is that correct?

**[\>\> Jim Sorace]{.underline}**

This is Jim Sorace, I\'m representing Dr. Barry Straube. I\'m calling
from Harriet\'s office as well.

**[\>\>]{.underline}**

Okay, is there Workgroup members whose name I didn\'t read off?

**[\>\> Mike Kappel:]{.underline}**

This is Mike Kappel, I\'m representing Pam Pure.

**[\>\> John Houston:]{.underline}**

This is John Houston for the UPMC.

**[\>\> Matt McCoy:]{.underline}**

I believe that\'s it. So quick note for Workgroup members. Please keep
your phones muted when you\'re speaking so we can cut down on the
background noise on the call. And when you do say something, please say
your name first so the members of the public listening via the Web or
their phones can know who is speaking.

**[\>\>]{.underline}**

Matt, thank you so much. And Dr. Jonathan Perlin, did you want to say
hello?

**[\>\> Jonathan Perlin:]{.underline}**

I will say a very rapid hello to people, and maybe I\'ll take the
liberty of introducing and welcoming Dr. Robert Smith from the San Diego
Veterans Health Administration Medical Center, and Rob Smith is in the
tradition of Rob Kolodner, not only of Rob but a clinician and terrific
leader and very much appreciate his willingness to join the group.

I\'m going to stop there, Lillee, because I know we have a very full
agenda today.

**[\>\>]{.underline}**

Thank you. And following your agenda, if we can review and accept the
minutes from our September 19, 2006, Workgroup meeting, that was our
ninth Web conference of the Workgroup. So I would ask the Workgroup
means members, do you have any additions or corrections for the minutes?
Then hearing none, I\'ll declare consensus and we can move on.

I\'d also like to note that we will be exquisite timekeepers because we
have a tremendous amount to accomplish during this meeting. There are
three primary goals for this particular call, and they include
understanding the business case of EHR, particularly as it relates to
physician practices. For the members of the public, and I think I know a
couple that may be joining us on this call, we are not talking about
hospital EHRs at this point. We are talking about physician practice.
And we will be talking about hospital EHR in a later session. We also
will continue our session on a visioning exercise and we also need to
continue our consensus building process around state-of-the-art
technology, prioritizations and recommendations.

So with that, I ask our colleagues in the Mary Switzer building, have I
missed anything before we begin our testimonies?

**[\>\>]{.underline}**

No.

**[\>\>]{.underline}**

Okay. Well, it\'s my pleasure to introduce Richard Baron. He is a
physician and President of Greenhouse Internists who has graciously
consented to give us a sense of some of the very important issues we
need to be considering.

So Dr. Baron, are you on?

**[\>\> Richard Baron:]{.underline}**

Yes, I am.

**[\>\>]{.underline}**

Please begin.

**[\>\> Richard Baron:]{.underline}**

Thank you very much for the opportunity to talk to this group, and
congratulations on doing it in a way that allows even a practicing
doctor to fit it in between patient care. Thank you very much.

This is a report from one small practice, and I think that \-- I hope
you will see it as an example to think about as you think about
understanding the business case in small practices. It\'s remarkable how
much convergence there is between what I\'m going to say and the next
two speakers are going to say. Next slide.

Just describing our practice, it\'s a four-physician independent
community-based practice of general internal medicine. We have a higher
percentage of capitated revenue than other practices but we also have a
substantial Medicare participation both through fee for service and
managed care. And we do some Medicaid and have a lot of commercial
payers. Racially, economically integrated urban setting. Again stress it
is independent. According to NCVHS data, 68 percent of all encounters in
the U.S. occur in groups between patients and doctors in groups of five
or less.

So in a sense, at least the scale in which we did this is very relevant
to the conversation. And none of the doctors had any special computer
skills. People used computers for e-mail, and that was about it.

The next slide. The decision that we made to adopt was \-- can we get
that next slide? Was based on a couple of things. One, we had a one-time
opportunity that was created by a cash windfall. I\'m not seeing the
next slide.

**[\>\>]{.underline}**

It looks like \-- hang on one second.

**[\>\> Richard Baron:]{.underline}**

That\'s fine. We\'re in a situation where our malpractice carrier forced
us out of a current policy which is very expensive but give you
comprehensive coverage into a claims made policy which is much less
expensive in the first two years but leaves you with a tail when you
leave practice. That created a one-time cash windfall for the first
couple of years and we elected to put that into an electronic medical
record.

I have to say that we were dubious about whether we would get a
financial return. We did not expect we would, and I think I can probably
say, as you\'ll see later on, I don\'t think we really did. Mostly, we
thought we could take better care of our patients and in a variety of
ways. And we were frustrated by failure.

One of the kinds of things that I would say to my staff at staff
meetings, is no wonder patients are mad at us. They can call on Tuesday
afternoon, and order a green sweater from Sarah and on Wednesday they
can call back and speak to, say they want the blue one and Emily knows
everything to change the sweater from green to blue. But if you call our
physician practice and speak to me and call back on Wednesday and speak
to my partner, the chances that we know what the other one knew are
close to zero and we were frustrated by that. I think in a way patients
are angry all the time at us in ways we didn\'t even recognize because
their experience with technology and everything else they did was so
much higher than it was in our office.

And then the other piece that was important was that I personally had
had a fair amount of managed care leadership experience. I had been
chief medical officer of Medicaid HMO almost ten years and that was
important for two reasons. One, that I think I had a better
understanding of the population health implications of using electronic
health records to do practice, a lot of what I was doing in the managed
care side was some of that using their physician, their technology to do
that. But the other piece that I would also stress is that I had used
technology at work. So that I\'d had the experience of finding a
document that I couldn\'t find and you know, for a presentation or
something we were working on. And I think I\'ve used it more than
casually for that. And that gave me more sense than I think many people
in practice who have never experienced the technology in work have.

Next slide. The \-- I\'m going to go over our cost of adoption which
again this is sort of one deal, one small practice, and by the way I
plan to leave significant time for you guys to ask questions because
what you want to ask me is more important than what I might want to tell
you.

And I think our costs are in line with the published costs. It cost us
35,000 dollars a doctor to get in. And in the second year there were a
bunch of enhancements we really thought we absolutely had to have,
probably should have had the first time. And cost us another 12,000
dollars a doctor for maintenance and support, hardware and software
both. And an important thing that was very real was that in the year in
which we implemented and we implemented in July of 2004, which
experienced a 1.6 percent revenue decrease. And you should understand in
a primary care practice, at least 60 percent of your expenses are
overhead-related, and at best 40 percent of your expenses are going to
be \-- or of your revenue will be physician salary and many practices
it\'s more like 35/65 and even 30/70. In the \-- a 1.65 percent decrease
is a 5 percent income decrease to the doctors. And so revenue decrease
is a pretty serious business. And that\'s if the expenses didn\'t go up,
and of course payroll goes up and insurance goes up and all that.

The second year we caught up some of that. But the bottom line is we
have had previously healthier growth than that.

The other costs of adoption, I\'ll call it disruption but every one of
these have economic consequences. Something that I\'ve described as
global incompetence. The day that we implemented, people came to work
and didn\'t know how to do their jobs. That things that you do all the
time in a primary care office, you refill a prescription, issue a
referral, bring in a patient, you know, weigh, them, measure them. We
needed to do those things differently, everybody needed to do them
differently, even though we phased in pieces of the adoption, there was
just \-- it was miserable to be at work. Absolutely miserable to be at
work. Staff had a lot of trouble. The doctors had a lot of trouble.
Everybody felt bad, and productivity, as I showed you, at the higher
levels suffered. Reflected with patient unhappiness. A lot of complaints
about how slow things were and how long the waits were and all that
stuff. We needed to have parallel workflows so that still most of the
information that we needed was only going to be available on paper. And
we had to be creating workflows that would work when what we were doing
didn\'t need paper, create what workflows that would work when we did
need paper. So it wasn\'t just parallel, it was two different workflows
and both were different than when we were in a paper world. We needed to
imagine what it would be like in an electronic world to work towards
those things but most of the things we were doing we couldn\'t do in an
electronic world.

And I personally believe, a lot of people say why didn\'t you phase it
in, why didn\'t you do one piece and then another piece and then another
piece. And maybe we should have done that, and I know large
implementations do that. But our goal was to migrate as quickly as we
possibly could to an electronic platform so that we would know where to
find information that we needed and so that we could do what we needed
to do within that electronic environment and that we wouldn\'t have to
be going back and forth between charts and computers and frankly we had
tablet PCs that were the wireless and just a physical act of hanging on
to a chart and a tablet and talking to a patient was more than most of
us could handle.

Another major disruption, and this someone also significant, financial
disruption, are the preload issues. That the data conversion issues were
substantial. And that in effect what happened was every patient, every
patient we saw was a new patient. And when you would see patients with
two-inch thick charts and three-inch, and two-volume, even patients
you\'ve taken care of for years. You have to go through the chart and
abstract it and decide what part to bring in and what part not. On one
hand we had pretty accurate medication and problem list and we could
probably have delegated more than we did at additional cost, but
there\'s a significant amount of professional expertise that comes into
play when you try to decide what of the three volumes really needs to
move into the next chart, what you\'re really going to need. And that\'s
pretty hard to delegate and you just have to go through it. And you only
have to do it once but you have to do it ask it adds time for every
patient and since the most complicated multi-system disease patients
were seen on sort of a 90-day cycle typically, that first 90 days was
just the worst time in our whole practice life.

And then the last piece is cost adoption, we had to structure new
relationships with vendors and that was everybody from who was going to
provide the hardware support and try to figure out how to create that
relationship and find somebody who would do it well, to
telecommunication support, those were not vendors that we had to have in
the past, and then we had to set those up.

And okay, the next slide, please. We\'ll show you our annual savings and
there, we figured that the biggest savings, we were dictating our notes
before this was happening, which may or may not be typical of practices,
and that was a 50,000-dollars-a-year expense in a four-doctor practice.
Being able to eliminate that, we knew we were going to save at least
that much every year. On the other hand, of course, now the doctors are
typing, but I\'ll talk about that in a minute.

We eliminated over a one- to two-year period, not day one, but two and a
half FTEs, including an RN, whose job was to be a clinical person to
deal with administrative requirements of insurance companies and home
health agencies. And we could have a much less trained person support
that once the technology presented information in a way that anybody
could get it. And we freed up our chart room and I don\'t know if that
counts as a savings but I put it there. We reduced office supplies. I
sat down with the accountant and said if you look at expenses only, what
you eliminated and what you put out specifically for the record, nothing
in the opportunity costs, nothing in the revenue issues, that would be a
three-year ROI, which by the way looks to be about the time we\'re
probably going to have to upgrade our technology and so I\'m not really
sure what the ROI is. Next slide.

Next slide. Commenting on support, financial and otherwise, I wish we
had had. One that is sort of simple and since you guys are talking about
financial barriers, I thought I\'d put this out there for you to
consider. Many insurance coding schemes, fee for service will pay a
doctor more for a, quote, new patient, unquote, and the process of
converting data of converting patient files adds time, takes work, is
significant professional expertise. And coming up with some way to pay
people for that and guarantee they\'re going to get compensated for that
time would be, I think, very helpful.

I wish we had a much more generous budget for support and training. That
being said, I want to say that we were already paying way more than we
could afford to get this, and various colleagues that I\'ve spoken to, I
wouldn\'t count on vendors to support the cost of a fully supported
implementation because no one will sign up. And because it\'s just \--
it becomes hugely insupportable.

Then the other thing I wish we had had, which I heard articulated by
Sarah, a colleague at the ACP, is working interfaces at the time of
implementation. I wish I\'d heard that from her before. We had to wait
three months to get a laboratory interface, and during that time we were
doing an enormous amount of manual data entry, and I think that if we
had had a product that when we switched it on had more interfaces going
for us, that would have made things better.

Next slide, please. Where we are now, 2.25 years in, and I could
probably tell you the number of days, we have a full featured remotely
accessible EHR, we practice entirely electronic environment. We can do
it remotely. Everything we need in the way of clinical data is in our
record. There\'s an in-office messaging system so we can communicate
with each other when we\'re out of the office to get other people to do
stuff and the team capacity of the primary care office is substantially
enhanced.

We can also use some decision support tools and I put down screening for
not only aortic aneurysm because to me that was not only one of the
impressive things that we could do the current screening recommendations
from the U.S. preventive services task force are to screen men, not
women, between the ages of 65 and 75 only if they have a prior history
of smoking. Which I would say in a paper office has about a zero chance
of being complied with since where you would document former smoking and
how you would put those three things together is pretty difficult. But
we do that and patients get a registration thing when they come in that
has services due and that\'s one.

We\'ve also been able to look at mammography rate, and look at some
other population health-related stuff and do reminders. We added an
integrated e-mail capacity, another 4,500 bucks a doctor. We\'re
thinking about a portal, another 4,000 dollars a doctor. Neither has any
revenue associated with it at all.

And we\'re not sure about the portal at this point.

None of us would go back and patients love the e-mail, the kinds of
comments we get about how quickly we turn stuff around and how
accessible. They love it. It\'s a HIPAA-compliant e-mail and clunky to
use.

Next slide. What we like the most is the easy availability of
information to everybody, you can get a call from an emergency, you
don\'t have to leave the room, and answer questions. Staff can do a lot
more than they used to be able to do. Prescription refills, the people
who came in and asked for seven prescriptions with a 90-day supply to
mail away and a 30-day supply to the drugstore is nice. And insurance
pre-op, we took some of the nasty awful forms that the insurance
companies make us fill out, and we turn them into a letter-type format
that our product supports and basically fax those to them and we don\'t
sit on hold. We can work from anywhere and very importantly for us, and
I think most clinicians would appreciate this, present information in a
context so we get a sense of what things used to be, and other kinds of
information around it, which is really helpful for us.

And patients seem to like it at this point.

Next slide. What we like least. The absence of interoperable systems is
a huge issue. If we want to use our EHR to support our ability to AQA
measures, it means we need to manually input a whole variety of data
that don\'t come in structured format. We get lab results from our major
lab in structured format but don\'t get mammograms and colonoscopy in
structured. I counted for something on writing about this, it\'s one
mouse click to sign a mammogram report, and you\'re done with it. You
have taken responsibility for it. It\'s 12 more mouse clicks to put it
into a flow sheet you could generate a report. We have zero increased
revenue associated with the system. Decreased overhead as I talked
about. And maybe we\'re more productive, but I\'m not sure. And we have
the occasional down time and wireless systems. They are frustrating and
disruptive when they happen. There is a workshop to the doctors, typing,
not the only thing. Doctors used to not interact much with pharmacy
refills. Now it\'s faster to do it but the doctor interacts more so
we\'re constantly redesigning our workflows to sport doctors doing this
stuff. Offload from the docs and give to other people. That complicates
the financial return because in some ways we\'re doing some of the
menial stuff, but a friend observed that lots of people in business had
found the same thing when you have technology implementations, you know,
you don\'t have secretaries and the boss does more.

It makes it harder for us to figure out the financial returns.

And next slide. I guess I should mention also the technology escalator
that we believe we\'re going to wind up having to start paying again for
new technology just at the time we\'re getting out from this one. Making
the financial return even less certain.

I don\'t think I could say it more clearly than. This, the business case
is not there. Very few people will do this in the current environment.
The risks are high, we had a successful implementation, but everybody
knows there are people who don\'t. And you really go through a lot and
you get very little back right now. I would strongly encourage you, and
I think Mark Jacobs\' model looks very much right on target for this,
how can you get others to contribute financial material support to
solutions? I think ideas that somehow pool resources and deliver closer
to turnkey products, especially to small practices, may make more sense
than just trying to put money on the table to them. Because they won\'t
know necessarily how to turn that money into a functioning information
system. But we need a new kind of capacity to be able to do that.

And I would say two things to leave with you. If it doesn\'t work in
small primary care offices, it doesn\'t work at all. With 68 percent of
the encounters happening, there I think it\'s difficult to imagine a
credible vision of a national health IT infrastructure if the places
where patients go for care, two-thirds of the time, people are not
supported of the working informs technology.

The converse is I don\'t see primary care has much of a future without
this and there are plenty of efforts going on within the profession to
reinvent primary care around this and I think that the issue that you
are focusing on, the financial barriers, is the number one obstacle to
making that happen. And if we don\'t figure this out, I think there
won\'t be any primary care and we won\'t have to worry about whether it
will work in small primary care offices. I think they are strangling
under the burden of administrative tasks that can be automated with
technology in our office, are automated with technology, but they\'re
not going to get there. Let me stop and take questions.

**[\>\>]{.underline}**

Thank you, Dr. Baron. Are there questions?

**[\>\> Ken Waldbillig:]{.underline}**

This is Ken W. from EMC Corporation. Thank you very much for your
testimony today. I wanted to ask specifically about the technology
you\'ve deployed in your practice. Relative to information capture, you
said you had a mix of interfaces as well as some separate workflows
surrounding the documentation paper and forms, et cetera. What types of
things did you do to streamline the capture of information?

**[\>\> Richard Baron:]{.underline}**

The only things we did that would fit in that description was to work
aggressively to get a working interface with a clinical lab, which was a
national clinical lab, and we had a national records system and why the
national records system didn\'t come with an existing interface for the
national clinical lab is beyond me to this day. But it didn\'t.

We do not have such interfaces with the hospital lab, hospital radio,
any specialist, and so we acquired a document image and managing system,
and stuff is scanned as documents and it\'s basically retrievable, but
what\'s in the record is just the URL of the document, not any of the
contents of the document.

The e-mail was the other thing that we worked on, which we used to
exchange information with patients. We have not found in our community a
single specialist who is willing to accept clinical information by
e-mail. They\'re not used to looking at e-mail for clinical information.
Nobody else is sending it that way. So I think the answer to your
question is basically coming up with using a document imaging management
system for all the things that come in, not in structured format. And we
tried to work with our local hospital, it was a very low priority
project for them to connect one primary care practice with whatever
vendor we had.

**[\>\>]{.underline}**

Thank you, doctor.

**[\>\> Jason DuBois:]{.underline}**

Dr. Baron, this is Jason DuBois with the American Clinical Lab
Association. I have to ask the question. If you could go back to where
this all started and kind of balancing business case and you haven\'t
had a return on investment despite the enormous outlay you guys have had
and balance that versus all the added benefits and the fact the patients
really love it and the doctors do, too, would you do it over again?

**[\>\> Richard Baron:]{.underline}**

Would we do it over again is a hard question. Like asking a woman who
just delivered a baby if she wants to have another one. We\'re close
enough to it that we\'re getting far enough from it the pain is less
present. None of us would go back. None of us would be happy leaving the
environment that we\'re in for a paper environment. And I think that
became clear, not within the first three months. I think within the
first three months I was the only one who felt like we should keep doing
this.

I think my partners were prepared to throw their tablets against the
wall. At this point I think it\'s fair to say we wouldn\'t \-- I guess
we would go through it again is the answer to your question, if we had
to, because we think we\'re in a much better place than we were before.
I\'m not sure we\'d still in business if we hadn\'t done this.

**[\>\> Jonathan Perlin:]{.underline}**

This is Jon Perlin. Thank you for a terrific, very cogent presentation,
really appreciate the way you laid out the issues. Let me ask you a
question. As the environment for practitioners changes, I myself am an
internist and we have responsibilities in terms of maintenance and
certification. And as the environment changes, there\'s
pay-for-performance. Have you yet found or do you anticipate that the
electronic environment that you\'ve created will better support your
success with respect to those two activities?

**[\>\> Richard Baron:]{.underline}**

I hope for it every day. Let me \-- the internal medicine \-- the
recertification question I\'ll take first. I\'m actually a director on
the American Board of Internal Medicine, very familiar with that
program. And pushing the board to look at linking that program for
specifically to information technology products. And I think the
Board\'s interested in that and how. I think it will help with that.

I did go through my maintenance certification process using the part
that information technology ought to help last fall, and it didn\'t
help. It made it a little quicker for me to retrieve (indiscernible)
manually transcribe and retrieved into the Board interface, and I wish
that more of the vendors were up to speed and interested in, give than
primary care docs are \-- the primary care boards are 60 percent of all
docs in the U.S., it would be helpful if more product supported an
interface with board maintenance and certification programs and I think
that would be very help.

The other question about the pay-for-performance, you know, there\'s two
ways we can imagine that might happen. One is that somebody might come
along and actually put money on the table for practices like ours that
have a functioning EMR. We have not seen that in our environment. The
other way would be we would perform better than we did because we had
the EMR. I have to tell you, we undertook a project which I\'m trying to
write up now to improve our mammography rate. And you know, the EHR
could tell us our mammography rate in five seconds. It said our
mammography rate was 51 percent. But it turned out that our mammography
rate was actually 15 percent higher than that, about two-thirds of those
being people who had mammograms in the chart where the doctor didn\'t do
the extra 12 clicks, it didn\'t come to us as structured data, so that
the EMR didn\'t really tell us, now we\'re doing it that way but it
didn\'t tell us initially. And the others were people who had mammograms
done someplace else we didn\'t know about. So I think before you\'re
going to see much of a return for the pay-for-performance side, you \--
we\'re going to need to solve some of the interoperability problems
because a lot of the information you need to succeed in
pay-for-performance programs, winds up entering the chart with some
pain.

That\'s not true for laboratory data but for a lot of the other data.
But I am hopeful that we\'ll see more money on that. Without the EMR,
the paper environment, we did pretty well and the quality measures being
done.

**[\>\>]{.underline}**

Great. Thank you. I think we\'re right on Tom. And Dr. Baron, I agree
with Jon Perlin, that was a tremendous piece of testimony that helps
forward our thinking on this very tough area. On behalf of all of this,
on the AHIC, Electronic Health Records group, we thank you, and want to
make sure you have time to get back to your patients.

**[\>\> Richard Baron:]{.underline}**

Thank you very much. It\'s my privilege to do this. I\'m grateful to be
given the opportunity and I think you guys are doing the most important
work in healthcare today. So good luck, and if this testimony
contributes to progress, I will feel like it was time well spent.

**[\>\>]{.underline}**

May we continue to call upon you?

**[\>\> Richard Baron:]{.underline}**

Oh, sure, absolutely. You know how to find me.

**[\>\>]{.underline}**

Thank you.

**[\>\> Richard Baron:]{.underline}**

Bye.

**[\>\> Lillee Gelinas:]{.underline}**

Our next speaker is Blackford Middleton who has done a tremendous amount
of work in this whole area of clinical informatics research and
development. And has been so very helpful to our efforts.

Blackford, are you on and ready to present?

**[\>\> Blackford Middleton:]{.underline}**

Yes, I am.

**[\>\> Lillee Gelinas:]{.underline}**

Take it away.

**[\>\> Blackford Middleton:]{.underline}**

Thank you, Lillee. It\'s my pleasure to speak to you, the committee, and
to interested parties listening in, about the barriers to adoption of
HIT as I see them. I did submit to the committee and for anyone\'s
interest, some of the papers we\'ve done researching this topic from a
variety of different perspectives. And I\'ll just point out a couple of
them, perhaps. American Medical Information Association had an article
in 2005 February summarizing a conference of the American College of
Medical Informatics fellows on how to accelerate EHR adoption, at least
perspectives from that timeframe. And I\'d point people toward that. I
will refer to some of that in this testimony today.

And then another perspective piece I did for *Health Affairs,* did for
the volume 24 I forget the date of that exactly but last year, it was,
September, October 2005.

And in this I tried to pay attention to some of the policy issues as I
see them. So these are two sources perhaps for people interested in more
about my line of thought.

But next slide, please. Slide number 2. What I\'d like to do now is
really highlight the three key points as I see them, for discussion sake
and perhaps illuminating why it\'s been so difficult to adopt HIT in the
small office, physician office environment in this country. I think Dr.
Baron\'s testimony couldn\'t have been more spot-on. He is living and
breathing this problem. I also live and breathe use of EMR, have done so
for almost 15 years in academic and private practice settings. I think
Richard\'s comments outlining the difficulties with cost,
implementation, use and deriving value from EMR, are all really spot-on
again. But I might ask the question, why? I think the reasons why the
value is so hard to demonstrate is that we fundamentally in this country
have an asymmetry of risk and reward with respect to HIT. That is, the
\-- those who are paying are not always those who are benefiting. I\'ll
go into that in a bit more detail. I think fundamentally, this problem
sets up a market failure for healthcare information technology, while we
have a rich robust industry, if you will, of approximately 25, 30
billion dollars expenditure in healthcare in the, per year in the EHR,
it\'s much less than that. And we\'ve only seen approximately 22, 24
percent in the small office environment with EMR of any kind and
hospital settings of course penetration of CPOE, and other types of
decision support and documentation technologies for physician. Even
less.

The third point, though, I think to point out is we really are in an
early market for HIT. And early market effects have an impact on how
well value can be obtained from these investments, both individually
then and I think collectively as a society.

Next slide. As I mentioned, the problem with the asymmetry and risk and
reward is simply that while Dr. Baron is asked to make the considerable
investment of time and money, I\'d suggest in fact the investment of
time overwhelms or swamps the investment of money as he\'s outlined it,
while he is making that investment, largely others in the healthcare
delivery system are reaping the lion\'s share of benefit. I\'ll go into
a study of benefit that highlights that finding.

I think there are also well-known disincentives for long-term care
management in this country, still. While we are interested in disease
management, in my healthcare delivery system \[indiscernible\] teaching
hospitals and whatnot, the way disease management or long-term care
management proceeds is often times I would suggest the insurance
companies making a fair bet that they will not reap the benefit from
long-term care management improvement because patients will switch from
one plan to another in short order compared to those long-term benefits.

Lastly, I\'d suggest that the fundamental problem that Dr. Baron also
addressed about whether or not users of EMR, once they\'ve even adopted
them, can derive secondary benefit from improved healthcare information
exchange has yet to be attained. And there are two or several
fundamental issues there. One, the technologies simply do not have
really, I would suggest, mature interface technologies or interface
standards widely available, widely applied, and in a uniform and common
manner that makes development of these interfaces really much more
simple than it is today.

Today, interfaces are a hand-tuned process, using the messaging
standards from HL7, which are very useful but nevertheless we don\'t
attain the full semantic and syntactic interoperability that allows
information to flow from one system to another in a seamless manner. And
I\'ll come back to this as well.

From a financial perspective, though, there really are two issues. From
inhibiting the information exchange, I would suggest. One is there
really is no contribution to margin as my CEO here at Partners
HealthCare likes to say, Jim Mongan, there\'s no contribution to margin
when we ship a patient from the Beth Israel or Brigham & Women\'s
Hospital across the street. There is no payment for that information
transfer should it occur and more often the patient carries the paper
jacket from one hospital to another which has a sophisticated hospital
information system.

Secondly, there are well-known financial disincentives to shipping that
information because even beyond the fact there\'s no contribution to
margin, there\'s a financial disincentive because lab tests, procedures,
radiology, examinations and whatnot that might have been performed at
one institution do not flow to the next, so the next institution may
choose simply to redo those kinds of procedures.

Next slide. When we look at the value of EMR, the Center for IT
Leadership did a large, detailed information of all the evidence,
synthesized the evidence into a large cost-benefit model, reviewed the
model with expert technologists and clinicians from around the country.
We found a couple of interesting things. We do believe in fact that if
carefully done and well documented, that there is a considerable savings
potential both for the individual implementer or clinic using EMR, but
also in the aggregate for the country. Even without this
interoperability issue.

We looked at specifically at the value of ambulatory CPOE, one of the
most important functions I would suggest in an EMR system in an
outpatient practice environment, and characterized three different
levels. Basic, intermediate and advanced. And I won\'t go through these
details here but they basically characterize the sophistication of
decision support and information management within that EMR. And then
characterized a high they can full-time ambulatory provider and
characterized the number of expenses that \-- charges that provider
might be generating based upon national ambulatory medical care survey
data which you can see there.

Next slide. Using that model, we actually found that an individual
provider should have a positive ROI if all things go well with
implementation of this system and this model. This is a hypothetical
case. In a two- to three-year timeframe. We also found, though, that
there might be considerably greater than that if it were possible to
consider the net gains that were accruing to all participants in the
healthcare delivery system, if you will, all stakeholders.

When we looked at who benefits from the savings that arise with the
appropriate application of ACPOE, and decision support and whatnot, that
the providers under an assumption of 11 percent capitation in a 2002
timeframe analysis. We\'re only experiencing about 11 percent of the net
possible benefit and other stakeholders, the payers principally among
them had the potential to experience the best lion\'s share, 89 percent
of benefit of using these technologies.

Now, why is that? In simple terms, when a doctor avoids an adverse drug
event or doesn\'t write a prescription that might interact with another
medicine the patient is taking due to decision support in the EMR, and a
hospitalization is avoided or other adverse sequelae are avoided,
certainly the doctor isn\'t pocketing the savings or whatnot, unless
there\'s \-- he\'s 100 percent capitated or at risk at some level. That
potential savings is across the stakeholders. Payers experiencing more
than the provider.

Next slide. With respect to the market failure, I think what we see now
is that there are very good technologies available, we know they have
positive impact in both academic and commercial, or (indiscernible\_
practice settings. But as Dr. Baron has already said and we actually
didn\'t prepare our slides together, absent an effective business case,
the adoption of HIT in the small office environment has certainly been
very, very slow. We\'ve seen slow development of standards, I would
suggest, as well compared to other industries, where standards really
developed very rapidly to support widespread adoption of Internet or
World Wide Web or other kinds of technologies. This business case
problem has made the maturation of our industry, I think, be very
protracted.

There\'s been difficulty with a broadly accepted EMR functional
definition, Institute of Med send work in this area and the HL7 work, of
course, has helped remediate some of the functional definition
disparities across products and services, but that has been a problem
for a long time. And the issue of healthcare information exchange
interoperability Dr. Baron already discussed, as I have as well, there
really is not yet a robust set of standards that we can all hang our
hats on for coordinating the messaging information model control
terminology aspects of a fully compatible interoperable syntactic and
semantically interoperable messaging framework. I think the HITSP work
is being led by Dr. Halamka and the great work there will help us reduce
the standards space to a more coherent set but I think there\'s a lot of
work to be done there.

The last thing is the \-- Dr. Baron alluded to this but I\'d like to
point out explicitly, we find that the \-- there are extraordinary
hidden costs of knowledge management when adopting the systems. What I
mean by the knowledge management? Typically the small office environment
is given a EMR package, perhaps given some consulting and support
services to install the EMR, train the physicians and nurses and
whatnot, but in essence they\'re really being given a shell, which they
then have to go forth and populate with whatever the rules, alerts,
guidelines, templates, documentation tools, and whatnot that they wish
to use in their practice in the manner in which they\'re accustomed to
doing their own practice. This hidden cost of knowledge management,
coming up with all those rules, defining the common templates, defining
the common reports or measures of impact, if you will, are an additional
cost not often characterized in ROI analyses for sure. And one of the
analyses we did for the California HealthCare Foundation, we estimated
that this was an extraordinary burden that was being replicated, this
process was being replicated with each and every EMR installation across
the country. That is, doctor after doctor, clinic after clinic had to
come up with essentially a common set of rules, perhaps the U.S.
Preventive Services Task Force maintenance and rule set implemented into
their EMR, or more sophisticated rules based upon their clinical
practice style or what guidelines they wish to use and follow.

The analysis sis we did for California HealthCare Foundation we
estimated this was another 30 billion dollars cost on the HIT adoption
that hasn\'t been well recognized to date.

The second CITL analysis we, did I\'d like to discuss with you briefly
and share with you. The value of healthcare information exchange
interoperability. In this analysis we, as before, did an evidence
synthesis, convene an expert panel, built a large cost-benefit
simulation model, and really tried to answer the question, well, what
happens if we assume every doctor, every clinic, has an EMR in place and
that EMR can exchange information seamlessly with the laboratory, with
the pharmacy, with the other hospital, with another provider EMR, and
with public health and reporting agencies, as appropriate, in a secure
and confidential but importantly a seamless manner, if you will.

When you do this, we find that the value of health care information
exchange actually surpasses the value of that decision support benefit
of ACPOE, and \[indiscernible\] in office practices. I neglected to
mention the big figure when you roll up the ACPOE impact for an estimate
of savings across the critical with EMR, and ACPOE, it was 44 billion
savings in one year. Potential. And in this case the value of
information exchange when you roll up the figure for the entire country
with all EMRs implemented and interfaced to all other sites of care or
information exchange sites, if you will, it\'s a 78 billion dollars
figure. On top of the 44 billion dollars figure. So information exchange
actually potentially has more value than decision support.

Now, what\'s the value of information exchange? It\'s very simple. It\'s
reducing the administrative burden, the labor burden, of taking that
mammogram report, as Dr. Baron just outlined and doing the 12 clicks to
introduce it into his or her \-- or the clinic\'s EMR. The manual
distribution of data from one clinic to another or laboratory report via
fax, phone or e-mail, simply a huge labor cost that seamless IT
integration could really knock down to next to nothing. We find benefits
in healthcare information exchange for every stakeholder. In this
conservative analysis, we look at the information exchange from the
hospital, pharmacy, laboratory, radiology centers, and other providers
as I said, including public health.

When you roll up these figures as I said, it was 78 billion, next slide.
78 billion potential for savings at steady state and over a 10-year
conservative implementation analysis, 337 billion over 10 years. So we
conclude from this analysis that there is a business case for
standardized healthcare information exchange and interoperability. But
the problem is as Arnie Millstein said no single person is experiencing
the net cost of this lack of information exchange capability. And the
aggregate, it\'s a huge potential benefit, but in its disaggregated
form, each individual participant doesn\'t experience an extraordinary
burden.

Lastly, the early market effects, I\'ll just touch on briefly. Right
now, I think we are in the midst of an early market due to the problems
as I\'ve described with asymmetry of risk and reward, the market failure
problems. We truly are seeing early adopters adopt healthcare
information technology. We are also seeing adopters in larger clinic
settings. The larger group practices, or integrated delivery networks
where they have the capital wherewithal and capital margin to afford
these considerable investments and seeing the fastest or most aggressive
adoption in the sites where the left hand and the right hand are
integrated, if\' you will, like Kaiser, like the VA, where the financial
benefits can be experienced by the same organization, making the
investment in the HIT.

The same thing is occurring, of course, overseas, and single payer type
countries or provinces where again the left hand and the right hand are
connected and that hand which is spending is joined to the hand which is
reaping the benefit.

We\'ve also seen a fair amount of turmoil in the HIT vendor space.
There\'s been considerable investment, I think, in the HIT vendor space
over the past 15, 20 years. However, I would suggest it\'s not yet a
mature market for the reasons I\'ve already described. Certainly our
first mover disadvantages particularly with respect to interoperability.
In New England, we have EDI network routing transactions per month
across the environment between providers of care and payers for care.
But it was impossible to do this, of course, with any single site or
single plan insurer moving forward alone. It was only when they were
able to come together as a collective and move forward expending
considerable political capital to achieve that \-- the New England
Healthcare EDI Network. There\'s no incentive for one person to do an
interoperability. There\'s no one else with whom to share data. And the
value of a network, of course, as Bob Metcalfe has noted, you know, goes
up with the square of the number of participants in the network.

These network effects are not achievable as we see only sparse adoption
so far, and I\'d suggest lastly that the functionality of product
offerings today is not yet perhaps at the level it needs to be to
achieve the savings that we demonstrated with the advanced ACPOE, in our
analysis. We based our analysis on evidence that comes from some of the
academic environments, including our own here at the Brigham & Women\'s
Hospital and Mass General, where we have more decision support in place
than the typical commercial vendor offering, I would hazard to guess,
still at this point. I hope that doesn\'t stay the case for long. I hope
we can see the same sophistication decision support made available in
products across the country.

The last slide is summarizing the consensus opinion from the ACME
meeting. I want to make sure this is characterized correctly. Not a
consensus statement from ACME, but my authors, co-authors, and I tried
to summarize the sentiment in the room at the ACME meeting. We outlined
four different areas, again a couple years ago now, where policy
maneuvers and other kinds of maneuvers might help to accelerate EHR
adoption. And they are the financial incentives, as a category, standard
setting and acceleration as another category, enabling policy, and then
an educational marketing and other supporting activities. And I won\'t
go through all the details of the sub-bullets here but leave them for
your review. And I\'m happy to say, of course, that several of these,
many of them actually are now in flight. With the standards acceleration
and process under HITSP, the Certification Commission for Healthcare
Information working toward certification processes. Relaxation of Stark
and further other regulatory and legislative efforts to both address
HIPAA and Stark issues as well as provide financial incentives for HIT
adoption. So truly it\'s an exciting time. However, I don\'t think
we\'ve seen \-- we haven\'t crossed the tipping point by any stretch of
the imagination.

Thank you for the opportunity to present.

**[\>\>]{.underline}**

Thank you. Do we have questions or even comments? I think comments from
Workgroup members help us all to process what we just heard.

**[\>\> Howard Isenstein:]{.underline}**

Yeah, this is Howard Isenstein from the Federation.

**[\>\>]{.underline}**

Please.

**[\>\> Howard Isenstein:]{.underline}**

I have two questions. First one, is the \-- do you notice that smaller
practices are consolidating as a result of the pressure to invest in
EHRs and my second question is, to what extent do ASP solutions help
address some of the financial issues you talked about earlier? Is that a
better way for them to go and can you accelerate adoption if they go at
the ASP model?

**[\>\> Blackford Middleton:]{.underline}**

The two questions are great. The first one, there\'s certainly groups
now across the country who are coming together to form essentially
physician purchasing cooperatives, full. The IPA where John Blair is the
CEO, creating med allies for his physicians I think is a great example.
And in fact is an example where he\'s using ASP technologies to try to
lower the costs, but I think the critical issue about ASP, certainly
it\'s a very viable approach and can reduce the cost of implementation.
It raises pressures, though, in\' other ways that perhaps are a little
more subtle. Are you willing to have your information shared in an ASP
setting perhaps with disparate organizational entities, are there
security concerns about the information being held offsite remotely, et
cetera, et cetera. Those and other kinds of things still I don\'t think
have been broadly accepted in the industry as being A-OK, but those are
two ways to lower the costs. Forming a purchasing cooperative, and
lessening the costs of the technology.

**[\>\> Howard Isenstein:]{.underline}**

Thank you.

**[\>\>]{.underline}**

Hi, this is \[indiscernible\] from the American Hospital Association.
Thank you so much for giving this presentation. I was struck by your
discussion of the asymmetrical risk and reward and wondering if you have
done any modeling or if anyone else has done any modeling of what the
impact would be to an individual purchaser to sort of looking at their
claims and thinking about, well, if this system were really wired what
percentage of the redundant test to that payer would result in savings
to them. That\'s one question. And then I wondered if people have
thought about financing mechanisms that could based on that kind of
analysis say, okay, this payer should provide X amount up front to fund
these systems, and there would be some sort of payback later on if the
savings, projected savings weren\'t realized. Sort of trying to put a
number on the savings to an individual purchaser, because as you say,
people float between purchasers. But then also thinking about payment
mechanisms that would sort of guarantee them a little bit of the return
if they put money out in front.

**[\>\> Blackford Middleton:]{.underline}**

Sure. Let me take a crack at that. Two great questions. I guess, you
know, I\'d be interested to hear what Francois has to say later on this
afternoon about this very same question, too. We have not yet done an
analysis from an individual payer perspective on what savings or impact
they see from their covered lives, full, base or their physicians
contracted to provide services using EHR, might experience. Certainly
would be fun to do, just really haven\'t done it yet.

I can tell you in New England, the Blue Cross Blue Shield is of course
one of our major health plans here or delivers the major health plans
and they have gotten this message loud and clear. They anted up 50
million dollars several years ago to be made available for grant
programs for physicians adopting EHR, in Massachusetts communities. And
there\'s three communities particularly that will be under study to
assess the value as they are implemented and rolled out.

The other part of it is, has been mentioned, Richard Baron said he\'s
not seen a pay-for-performance program that actually has made it
worthwhile directly for HIT adoption, I think is the way he said it \--
you know, what we have here, though, is the \-- some of the Bridges to
Excellence programs in our environment, are now actually not only doing
the pay-for-performance bonus payments or return of withhold for
physicians using or demonstrating those benchmarks, but actually have an
established a time-limited capital availability fund for EHR, or EMR
adoption. And I don\'t know all the details of that, I can point you to
the right people but it\'s been a strong incentive. I think most
physicians in our environment feel that this is an inevitability and
they\'re queuing up to adopt the EMR as quickly as they can. And the
added incentive of the bonus for adoption and then payment for retaining
quality benchmarks using EHR, has been a significant factor, I believe.

**[\>\> Jim Sorace:]{.underline}**

This is Jim Sorace from CMS. I was curious. I can understand how the
cost savings that could be attributed to an EHR, but what I\'m curious
about, a lot of the savings actually come from like radiology, and other
services. And in order for them to adopt communicating HIT packages like
tax systems and laboratory information systems that meets a standard,
was there a financial model for that side of the adoption equation?

**[\>\> Blackford Middleton:]{.underline}**

There probably is, and I\'m not aware of it and we haven\'t done one of
kind of the inpatient side or the radiology systems per se. So I can\'t
help you there.

**[\>\> Jim Sorace:]{.underline}**

Because I mean, it\'s sort of a fundamental issue as to whether they can
provide the data. I would say from my understanding of the packs
industry they\'re fairly well standardized currently but I\'m not so
sure about the other providers. But they\'d be the ones who would be
taking the decrease in payment and the loss of revenue from the loss of
redundancy.

**[\>\>]{.underline}**

Yep.

**[\>\> Ken Waldbillig:]{.underline}**

This is Ken W. from EMC. I wanted to ask a question relative to your
comments regarding knowledge management. Specifically, could you review
for us what impact relative to the creation of standardized loader sets
and maybe some of the electronic collaboration tools that you\'ve used
at Partners to establish those standardized order sets. And how do you
maintain all that?

**[\>\> Blackford Middleton:]{.underline}**

Sure, it\'s a great question. When I got here, one of the first things I
did was essentially perform an inventory of the knowledge resident in
all of the systems across the environment. We have 11 hospitals, lots of
docs, disparate systems and some home grown and some commercial from
leading vendors. What we found was there were \-- there are elements of
knowledge, if you will, rules, and alerts, templates, order entry, order
sets, and et cetera, that were in a widely diverse state of control, if
you will, or under very varied knowledge management, or curation if you
use the knowledge management term. For example, some of the rules we
found in our EMR, the longitudinal medical record, had been put in
seven, eight years ago by a physician who thought it was a good idea.
Called up an engineer, got a rule written and then never heard from that
physician again, no one is monitoring the rule, no one knows if it
interacts in an untoward way with other rules or advisory coming out of
the information system.

And this was not an isolated event. There were hundreds and hundreds or
thousands of these kinds of instances of knowledge that weren\'t being
monitored, maintained, and curated in a way that we feel they should be
given the ever-changing fundamental evidence-based or knowledge-based in
medicine. So we\'ve launched a very significant program to do knowledge
management now across all of the partners, healthcare information
systems. We are abstracting and collating all of the knowledge-based
elements from all of the different systems. We\'ve used the
technologies, the document platform to do distributed knowledge
engineering, using that tool to not only categorize and catalog all the
different knowledge, but then to really try to make someone feel
responsible and accountable for keeping it up-to-date and have a
committee structure in place to really provide the right oversight and
guidance for this knowledge management.

We feel it\'s actually already demonstrated benefit because when we\'ve
installed new systems, for example, order entry, one of our hospitals
implementing order entry, another hospital is a Siemens, implementing
Siemens order entry. Commercial systems, obviously, order entry not of
our design. But nevertheless we want to have the same rule, the same
knowledge, firing in those order entry systems as we have in our home
grown order entry systems and the downtown AMCs, because we want the
quality of care to be consistent across the entire Partners HealthCare
delivery system. So people implementing those OE systems have been able
to look up the rules and alerts and whatnot, from our home grown systems
and decide how they want to use them in those systems already. And
that\'s had value.

**[\>\>]{.underline}**

Didn\'t have to redo the knowledge engineering themselves.

**[\>\>]{.underline}**

Thank you very much.

**[\>\>]{.underline}**

I\'m going to have to keep us moving here. If that\'s okay. Blackford,
that was terrific. That is so enormously helpful to our thinking.

So if I might, could we move on to Dr. Mark Jacobs, Matt, if you could
bring up the next presentation.

**[\>\>]{.underline}**

May I say, I do have to run off. I apologize, I can\'t stay on. But if
there are other questions for me to address, don\'t hesitate to drop me
an e-mail.

**[\>\>]{.underline}**

Blackford, the materials that you sent on, I\'m on airplanes a lot and I
did read a great deal and I had no idea of the amount of work that had
already gone on in this space. One of our key challenges, as an EHR
Workgroup, I think, is how do we take what we know and cascade it
appropriately so that work is not reinvented. So thank you very much for
that.

**[\>\>]{.underline}**

Thank you.

**[\>\>]{.underline}**

Dr. Mark Jacob is Chair of the Board of Directors EHR RI, and he\'s
going to give us a sense of EHR adoption in the State of Rhode Island.
You may recall that we had Laura Adams present to the full AHIC about
the Rhode Island experience, and we had asked for a drill-down a little
bit more down into their EHR development. So Dr. Jacobs, are you with
us?

**[\>\> Mark Jacobs:]{.underline}**

I am. Can you hear me?

**[\>\>]{.underline}**

Absolutely. Please begin.

**[\>\> Mark Jacobs:]{.underline}**

Hello, everyone. My name is Mark Jacobs and I\'m a practicing internist
and President and CEO of Coastal Medical Incorporated, which is a
85-provider primary care corporation in Rhode Island. It\'s an honor to
speak to you about the information technology and electronic health
record adoption by physicians in Rhode Island. It\'s also a pleasure to
follow the talks of Dr. Baron and Middleton who have set the stage for
what I\'m about to describe. I would also like to add that I am nearly
three months into my office EMR adoption and I feel Richard Baron\'s
pain.

Next slide, please. I want to take you back to the summer of 2004. When
Laura Adams, the CEO of the Rhode Island Quality Institute co-chaired
with Dr. Andrew Snyder of Children\'s Hospital, the Clinical Information
Technology Leadership Committee. Whose charge was to investigate and
then educate the physician community regarding electronic medical
records. Leadership of the most important physician groups in the State
of Rhode Island attended and participated. At the same time, my company,
Coastal Medical, was engaged in a corporate analysis of our information
technology needs, and we examined and vetted over 15 of the best
electronic health records software products for our own doctors.

Discussions with other members of the steering committee of the CITLC
made us realize that we could agree to narrow the electronic health
record field to a choice of a few products. It wasn\'t long before we
realized that there was an opportunity to obtain value discount from
group purchasing. This was the beginning of an unprecedented
collaboration in our State.

At the same time, Rhode Island, the 50-by-50-mile city-State received an
AHRQ grant to develop a master patient index, later to become a RHIO.

Next slide, please. The vision. Imagine if a majority of the practicing
physicians in a State could agree on one software vendor\'s electronic
health record. A product with all the key functionalities that was easy
to learn, flexible, and user friendly. And one that could be used by all
specialties and practice sizes.

Next slide. And further imagine that the greatest obstacle to adoption
cost could be mitigated by a group purchasing effort that included all
the major physician organizations in the State. Could key stakeholders
understand their return on investment and support this financially?

Next slide. This became the story of a company called Electronic Health
Records of Rhode Island, or EHR Rhode Island. It was founded as a unique
collaboration between historical competitors. There are four major
founders representing a total of five physician organizations. And those
founders are Coastal Medical, with 70 physicians; Lifespan PSO, with
some 800 member physicians; Care New England's two PHOs, Kent and Women
& Infants with a combined 400 members; and Thundermist Health Center
with 35 physicians. This represents over half of the 2,300 practicing
physicians in the State of Rhode Island.

And to further hurdle barriers, despite our differences in size, all
four were able to agree early on to contribute the same startup capital
and have the same number of seats on our governing board of directors.

Next slide, please. Why did we form? First, to bring down the cost
through volume discounting. But also we could participate in the
selection of one product, which simplified interconnectivity, support,
training, and interfaces. We decided to build local service and training
components right in the State of Rhode Island. We felt this could lead
to the development of uniformity of reporting for pay-for-performance
programs, and chronic disease registries and chronic disease management.

But in addition, the very interesting byproduct developed, which is that
we accomplished communication, trust, and working team amongst important
physician groups. And I believe that this will open the way for us to
collaborate on other critically important projects such as quality
improvement, healthcare system redesign, and fair physician
reimbursement.

Next slide, please. This is an excerpt from a press conference from last
fall. Excuse me, from last April. Held in the rotunda of the Rhode
Island State House. And it\'s titled \"EHR is Leading the Way in Rhode
Island." Five prominent physician organizations representing half the
office-based physicians in the State have come together over the last
year with a goal of moving Rhode Island to the forefront of EHR
adoption. The physician groups have founded EHR Rhode Island and
invested 200,000 dollars in seed capital to launch the business.
Founders are leading by example, becoming customers of EHR and on the
same terms as everyone else.

Next slide. Our company operating model. EHR Rhode Island will act as a
value-added reseller of e-clinical works products and software. Offering
a complete integrated electronic health record and practice management
system solution, as well as a stand-alone electronic health record to
office-based physicians in Rhode Island. We will take care of marketing
and conducting sales activities and manage the relationship with the
primary vendor. A key objective is to build up local training and
support resources in Rhode Island.

Next slide. Our goals. EHR Rhode Island will reduce the cost of purchase
by aggregating a critical mass of providers to negotiate lower pricing
from a vendor. And also, by providing an effective funding conduit for
identified stakeholders, who benefit from adoption. For example,
commercial payers, med-mal carriers, hospital systems, large
self-insured,State Medicaid, and Federal Medicare.

We also can increase physician demand by reducing the amount of research
time necessary to find the correct product and decreasing the risk of a
bad decision. This should increase the pace of rollout, and also greatly
simplify interfaces and connectivity on one software platform.

Next slide. EHR Rhode Island benefits multiple stakeholders. And this
will echo what has been said previously. A key reason that EHR adoption
has been slow is that the costs are typically borne by physicians but
benefits are diffused throughout the system. The Center for Information
Technology Leadership estimates that 90 percent of benefits flow to
external stakeholders. EHR Rhode Island offers the opportunity for those
stakeholders to fund some share of the benefit.

Next slide. On this slide are the main arguments I presented to
commercial insurers in Rhode Island regarding EHR Rhode Island and the
key is that EHR Rhode Island provides a robust value proposition for
health plans. It is one entity for the majority of the State\'s
physicians. Able to provide clinical data for pay-for-performance
programs, facilitating the adoption of evidence-based medicine, reducing
unnecessary drug, lab, and radiology utilization, providing data for
creating chronic disease registries and reduced numbers of product
management system interfaces and it allows plans to work with the
founding physician groups and participate in a leading edge initiative

Next slide, please. The information in this slide, taken from a
well-known New England Journal article in 2003, has been referred to by
others, particularly Dr. Middleton, and the key point here is that
payers realize a significant savings when physicians use electronic
health records. In our business argument, to be conservative we assumed
that half of the projected savings that you see might be reasonable
assumption and that we were still able to argue that this resulted in a
major return on investments for health plans.

Next slide. Financial plan. And this is of course a basic summary. The
vast majority of Electronic Health Record of Rhode Island funding and
cash flow continues to be payment from our physician customers.
Nevertheless, there is still a financial gap to be filled to cover the
cost of providing local support while providing attractive discounts to
customers to boost adoption. And our most important concept is the
larger the discount, the higher the rate of adoption, but also the
higher the funding gap. This financial shortfall needs to be bridged by
stakeholders.

Next slide, please. So, where are we today? We began as a for-profit LLC
because it was the easiest and quickest to form. And recently we
converted to a 501(c)3. We have only one stakeholder financial backer,
Blue Cross Blue Shield of Rhode Island. We seek further monetary support
through grants or from other interested parties. We have nine members of
the board of directors that have worked hundreds of hours to put this
company together.

Final slide, please. We recently used seed money to hire a part-time
doctor and project manager. Since officially opening for business in
June of 2006, we have 25 implementations, 90 signed physician contracts,
61 pending contracts, 235 evaluating, 80 planned demos, and 34 leads. We
are considering offering other services such as pre- and
post-implementation assistance, data analysis, and performance
reporting. Thank you very much for your time.

**[\>\>]{.underline}**

Thank you very much. Are there questions? Comments, too. Remember, those
are just as important. I think we were all extremely impressed with the
progress that you\'ve made, and I\'m frankly awed by what you\'ve been
able to accomplish in Rhode Island.

**[\>\> Paula:]{.underline}**

This is Paula. I wanted to find out if there were any antitrust concerns
since you\'re competitors working together and how you addressed those.

**[\>\> Mark Jacobs:]{.underline}**

That\'s an interesting question. Actually, there were some whispers of
concern. We did get a legal opinion on that. We certainly were not
excluding any other products. We were selling this particular product
within the State of Rhode Island. It was felt that since Massachusetts
and Connecticut were so close by, this really would not constitute an
antitrust problem.

**[\>\>]{.underline}**

So the same approach in a bigger State might?

**[\>\> Mark Jacobs:]{.underline}**

I\'m not a lawyer, I can\'t answer that question. But \-- so I don\'t
really know.

**[\>\>]{.underline}**

Okay.

**[\>\>]{.underline}**

Other comments, questions?

**[\>\> Robert Smith:]{.underline}**

This is Rob Smith. A comment and maybe a question as well. Which is
whether you were able to associate a cost with some of the reduction in
utilization. And in particular a reduction in adverse drug events. One
of the things that I think we need to start building a better business
case for, or incorporating it into our business case analyses, is the
safety benefits and the associated cost reductions of EHRs that are
often not part of the initial analysis. Have you done any work around
this area, Dr. Jacobs?

**[\>\> Mark Jacobs:]{.underline}**

I have not. And I claim no expertise in that area.

**[\>\>]{.underline}**

I\'ll just \-- who just spoke up?

**[\>\> Robert Smith:]{.underline}**

This is Rob Smith.

**[\>\>]{.underline}**

Hi, yes. Absolutely. I have to echo that and I thought the same thing.
And Dr. Baron\'s and Dr. Middleton\'s presentations, because it\'s so
much harder to put your arms around the patient safety and clinical
quality component. What is the cost of a life saved or infection avoided
or a misstep or handoff avoided? And so that\'s a very good point that
you raise, and one that we have spoken of in the past. Has in the
Veterans\' Administration, have you been able to establish that since
you do have a very automated environment? Do you have any benchmarks we
could reflect on or use?

**[\>\> Mark Jacobs:]{.underline}**

I may have to think about that a little bit. I\'m hoping to get some
advice from others on how they may have been able to do that. I know
we\'ve been able to show benefits in terms of resource utilization in
holding costs. And there have been some documents suggesting
improvements in reduction in medication error, but I don\'t think that
information has been rolled up. But I\'ll have to find that out.

**[\>\> Karen Bell:]{.underline}**

Mark, this is Karen Bell. I have a question for you as well. And that
has to do with the degree to which your vendor is able to interface with
the multiple hospital systems in the State. Has \-- have you gotten
agreement from all the hospitals to work with EHR Rhode Island so there
can be better connectivity between the inpatient and outpatient?

**[\>\> Mark Jacobs:]{.underline}**

Karen, the question is extremely timely. I would echo what Richard said
about early adopters having to struggle with interfaces. At the current
time there are 20 physicians in Coastal who are now live with this
electronic medical record, and yet to date the only interface we have is
with our own lab. In fact, we just put together a priority list of
interfaces that have to be built, and yes, it includes the other
laboratories in the State as well as the hospital systems, the radiology
groups, and of course other vendors. And this is a difficult problem
because, as Richard pointed out, you have to populate the database by
hand, and unless you have an interface that can really download data,
this is very labor intensive. And of course the formation of a database
from chronic disease registry becomes quite problematic unless you can
build those data interfaces. So it\'s an important priority for us and
hopefully I\'ll be able to report back to you in the near future that
we\'ve completed some of those.

**[\>\> Jonathan Perlin:]{.underline}**

Thank you, Mark. This is Jon Perlin. I\'d like to press further on that.
What has been the tenor of discussions with physicians in terms of the
relationship with the hospitals certainly there would be an efficiency
to their being able to pull up patients. But in fact if there are
multiple pathways or systems or portals, one can imagine it would have
the opposite effect, be a bit of a disincentive. What \-- can you share
with us a little of the thinking from those discussions?

**[\>\> Mark Jacobs:]{.underline}**

Most all of the stakeholders who have heard of this plan embrace it and
are very excited about it because one electronic health record platform
simplifies all of that interconnectivity and bidirectional data
exchange. In fact, leadership of the largest hospital system in Rhode
Island is a very key supporter of this initiative and thinks that it
will do a lot to facilitate that kind of data.

Something more specific in your question?

**[\>\> Jonathan Perlin:]{.underline}**

No, that\'s terrific. Really the providers, the hospital providers, you
sense enthusiasm, and think you can get the interoperability. If you can
achieve that, it would be terrific.

**[\>\> Mark Jacobs:]{.underline}**

Absolutely. And in fact with the RHIO being developed in the State, I
think that that entire infrastructure buildout is particularly excited
about the about the thought that the end users would have one software
platform to interface with and it builds a kind of a nice uniform
picture of how medical information could be exchanged pretty
conveniently in the State.

**[\>\> Jim Sorace]{.underline}**

This is Dr. Sorace from CMS. Could you just fill me in on what your
e-prescription strategy has been like and whether that\'s a component of
that?

**[\>\> Mark Jacobs:]{.underline}**

Yes. You may be aware that Rhode Island was one of the key pioneers in
e-prescribing and one of the essential functionalities that we demanded
from this software was SureScripts license and full e-prescribing
module. And we have that. It\'s a good module. Has a few glitches that
we\'re working on, but I have found, as opposed to the previous way that
electronically prescribed through an Internet-based vendor, now that
I\'m populating my own electronic medical record with a medication list,
I can e-prescribe both new prescriptions and refills very, very easily.

**[\>\>]{.underline}**

Wow.

**[\>\>]{.underline}**

A followup question. There\'s some proposed changes to the Stark laws
that you\'re probably aware of one of the features of them is that they
require some e-prescription functionality. Have you looked at how these
changes would influence your current business plans, and what type of
impact they might have?

**[\>\> Mark Jacobs:]{.underline}**

Yes and no. We\'ve had some discussion about that. You can correct me if
I\'m wrong but I believe that what can be provided to physicians is
software and a few other particular things. I haven\'t recently looked
at all the new allowances, but it\'s one of the things we\'re taking a
look at. The problem is you still have to have someone willing to
provide those services to the physician groups.

**[\>\>]{.underline}**

Being mindful of our time, any other questions? Are there any other
implications for what we need to be exploring as a result of this
presentation going forward? I\'d ask you to just be thinking about that.
Well, thank you.

**[\>\>]{.underline}**

Thank you.

**[\>\>]{.underline}**

Matt, if we could bring up the next presentation, please. And I believe
that will be Dr.\-- I\'m not going to say this name right. Bangasser.

**[\>\> Ronald Bangasser:]{.underline}**

You came very close.

**[\>\>]{.underline}**

Thank you for joining us. I know you're Director of External Affairs for
the Beaver group and Past President of the California Medical
Association. I believe you sent as part of some of our materials the
California HealthCare Foundation white paper on patient safety in the
physician\'s office.

**[\>\> Ronald Bangasser:]{.underline}**

Yes, I did.

**[\>\>]{.underline}**

That\'s part of this. This issue of pay-for-performance is so very
important. In previous meetings we\'ve talked about it probably is no
pay-for-performance rather than pay-for-performance. We\'re very anxious
to hear your comments. So please begin.

**[\>\> Ronald Bangasser:]{.underline}**

Can everybody hear me okay? I guess that\'s okay.

**[\>\>]{.underline}**

Yes.

**[\>\> Ronald Bangasser:]{.underline}**

And hopefully you have the PowerPoint up. Starts with "Can
pay-for-performance and pay-for-performance improvement help overcome
some financial barriers to EHR development?" I\'m Ron Bangasser, a
family practice physician. Take care of patients. I was doing that a
moment ago in my office here in Redlands in Southern California. I chair
the technical committee for hearing California\'s pay-for-performance
program and I\'m going to speak a little bit about that and how this
applies to an electronic health record.

I\'m also Past President of California medical association, and I\'m
happy for that. That\'s a lot of time I was on the road, 200 days when I
was President, from 2003­ to 2004.

I do a lot of work with quality and quality improvement. I work with
Cal-RHIO, Regional Health Information Organization. I work on the
performance measurements for NCQA and work on the AMA consortium,
suspect some of those with weaved into some of this.

The history of California\'s pay-for-performance started in actually
1999, when some of us in medical groups were trying to respond to health
plans\' request for quality information being sent in every different
kind of format imaginable by each of the different health plans. Asking
for more and more information and we just could not respond that even
though we wanted to show how good we were doing with our patient care.

We sat around the table and there were some mighty struggles that went
on with all the stakeholders. This was brought together by the
Integrated Healthcare Association which is a nonprofit 501(c)3 group,
company. That organization brought everybody to the table, including the
business community and consumers. And the business community helped hold
this together. They said with the health plans get over it, you\'re
going to work with these groups and physicians and we\'re going to get
this fixed up. We had a test year in 2002 and our first measurement year
was 2003, with reporting and payment in 2004, we\'re on our fifth
measurement year in 2007 and our fourth reporting and payment year.

I\'ll go through that. What we did was we were able to get all of seven
major health plans in California involved.

Next slide. And physician organizations, there\'s 228 that are involved
in this project. It represents over 40,000 physicians in the State. More
than one-half of the actively practicing full-time physicians. And
payouts were for 6 million HMO commercial patients and with Kaiser
reporting we have public reporting on 12 million patients in California
now.

The amount of money that was paid out this last year to physician
organizations for quality improvement and quality performance was 54
million dollars. All of our results in clinical patient experience \--

Next slide. And in IT, all improved as we first showed physicians the
data. Second got by in that these were good measures. Third were able to
validate those measures and be able to collect the data in a, again,
transparent and \-- with a neutral body doing the collecting of the data
and then shipping that data back to the health plans of medical groups
and for public reporting. The biggest many improvement, because we put
some money behind it, was in IT. Twenty percent of the dollars that were
paid out for pay-for-performance was set aside for IT. Fifty percent was
set aside for clinical measures. Thirty percent for patient experience
measures. That\'s how the money was divided up. But even putting 20
percent aside, that was where the biggest jumps in improvement and
physician organizations getting full credit rose by 11 percent from 2004
to 2005 in one year. And we have seen that jump each year, year over
year, because we\'ve kept that IT component in there. In the component,
what has to happen is rather than say you have to have a full on
electronic health record what it says is you have to be able to respond
as a medical group both up to the health plan electronically, and back
down to the physician in the individual physician office. So that there
are choices but choices like I need to have that hemoglobin A1c when I
see the patient in my office. That\'s one criteria that you could
fulfill with the IT category.

Or, it could be that labs or it\'s that pharmacy is available to the
physicians at the time. And so there\'s choices of things that medical
groups could do to get full credit for this. But what we\'ve seen and
I\'ll show you a slide in a moment that shows the jump in each of those
categories as medical groups ramp up their IT. And I\'ll talk about how
they\'re doing that.

I know that everybody thinks that medical groups, especially organized
medical groups of integrated physicians probably have full-on electronic
medical records. This couldn\'t be farther from the truth. Most of us
have spent lots of time and energy in the last ten years trying to
develop electronic health records, but we\'re still a long, long ways
from having a fully integrated system that is interoperable that can
allow us to gather information in real time and not only be able to
analyze it but to be able to send it out. Every time we have a new
measure that comes in an IHA\'s pay-for-performance, what happens is we
have to reconfigure our system, sometimes more, sometimes less, to be
able to match that measure. That\'s why it was so important to be able
to get this system to work in California. That we had all the health
plans coming together with a common measure set. And a common reporting
mechanism so that we don\'t have to reconfigure it then seven more times
each for the different health plans.

In the clinical measures, we\'re talking about both preventive and
actual chronic disease measures. Heart disease, we\'re talking about
diabetes, asthma, and prevention you\'re talking about cervical cancer
screening, pediatric in many stations. And chlamydia screening. And
mammography. I don\'t know if I mentioned that.

In patient experience there\'s a common survey that goes across the
entire State. All the groups contribute a small amount of money to keep
that sustained. And what that does is it gives us input into the process
of which questions we think make a difference as far as quality. It\'s
not a matter of whether the patient liked the color of my walls, but it
is quality if the question is did my doctor ask me if I quit smoking?
Did my doctor ask me if I knew how to use my asthma inhaler? Those are
the kinds of questions that we all believe make a difference. And
because there\'s been such a large amount of physician involvement,
those are the kind of questions that actually are the ones that get
asked. Coordination of care is also an important aspect of the patient
experience.

You can see, if you look at this slide, the numbers only have gone up
from point five to two point two percent from 2003 to 2004. We
understand that\'s a small number, but also you\'re talking about
numbers which have a very narrow range. So a couple of percentage points
can bring you from average of all the groups of 40 percent up to as much
as 80 percent depending upon the question and depending upon the group
and the situation. So there\'s a narrow range. And it\'s a high number
to start with generally with patient experience, but we\'ve been able to
differentiate that amongst the groups just as well as we have with
clinical and with IT.

Next slide. One of the things that would be intuitively obvious to
everyone, it would seem, is that if you had a better information
technology system that your clinical score would go up. We did have to
show that. In the spread actually widens, it gets up to as much as 14
percent differential for clinical experience score when you have higher
implementation of IT. That doesn\'t \-- that\'s not true with patient
experience scores, and you would again be intuitively obvious, but we
actually had to show that.

Next slide. When you talk about the payouts, I mentioned that the total
amount was 54 million from the different health plans this last year.
And that\'s been going up each year. These are the actual numbers for
the actual health plans. And as I said, we work on the basis of
transparency. So this kind of information is available to all. And some
of this difference that you see across here, is because of difference in
patient volume. Blue Cross has six million lives in California, Blue
Shield has three. Pacific Care and HealthNet have two, Cigna and Aetna
have one and a half to one, and Western Health Advantage has 700,000. So
there is some difference as far as the number of dollars paid out for
the number of patients involved. But some have taken a more aggressive
approach to quality improvement, and quality measures.

We\'ve been responding to stakeholders\' needs with now coming up with
an IT enabled system domain that we\'ve been working on for 2007. One of
the things that we want to try to do is we\'ve been working with NCQA on
some of their models about office efficiency, we\'re working on that for
2007. And we\'ve been working to try and create a systems approach and
efficiency approach that goes well beyond just saying we\'ve got a
registry and that we\'ve got a cost or bed date per thousand measure for
efficiency. We\'ve been expanding those into are we able to make sure
that patients don\'t fall through the cracks and with efficiency can we
make sure that what happens is across a time line for a period
in-patient/outpatient for a disease process, and a multiple disease
process which so many of our patients have.

We also have set up 10 new clinical measures which will make our measure
set 25, which is still pretty small. But we also believe those are good
measures that have been tested and actually ones that make a difference
in patient care. So those will be testing in 2007 for implementation in
2008.

I mentioned we have public reporting, and just so you know, you can go
to the Website, www.opa.ca.gov, which is the Office of the Patient
Advocate for the State of California. We have them involved in this
process very early on, and in fact they had a scorecard before. We used
to complain about how we didn\'t occasion much for how they figured out
their scorecard, so we got them to work with us, and all of the data now
that comes in from 12 million patients goes into that Office of the
Patient Advocate public report card. That\'s available to anyone to look
on the Website.

With Medicare Advantage, we\'ve approved public reporting for our year
2006 using the new clinical measures that we have for seniors, of which
are seven. They\'ve already been tested, we\'re already implementing
those. We just haven\'t finished off a contract agreement with Medicare
to be able to get any payment for that so we\'re still working on that.

We have a transparency report that came out in 2005, we have another one
this 2006 that gives detail about all this information so that it\'s
very clear as to where the information came from, how it\'s audited,
where it goes, and who gets it. There\'s no ownership part of this. And
that\'s really a critical component.

We\'re working with managed care Medi-Cal in California, that\'s
Medicaid. And most other States \-- we always have to be different in
California. But anyway. With Medi-Cal in California, to expand their
Medi-Cal pay-for-performance program.

We expect that this year in 2007 we\'re going to start to test some
measures and crosswalk those measures with Medi-Cal because they\'ve
already had a bit of a program and what we\'re going to do is
incorporate them into this so we can expand that program for the
physicians and for the patients who are involved.

We\'re also developing, as I mentioned, the proposal to CMS to
facilitate the expansion of Medicare Advantage.

Now on the next slide it says it's not the answer. There\'s plenty of
different ways to try and improve quality and to show results. But it\'s
really something that can make a difference. Now, here\'s where we start
talking about how does this connect up with the electronic health
record? And as we start to work with the idea that we\'re trying to
improve IT on an ongoing basis, my medical group is Beaver Medical
Group. So what did Beaver get last year and how did we spend it? In 2005
based on 2004 data, both self-reported and from health plans, our
medical group got 1.2 million dollars in pay-for-performance quality
improvement bonuses. Now, when you say that, and this is a 150
multi-specialty medical group, so it\'s not a huge amount. But it\'s a
big enough amount that we could put the energy into it, get more out of
it as far as the bonus dollars than what we put into it. And you can see
where the money went. Half of it went for IT improvement.

Now, all of it could have been taken home by the physicians. But what
happened was we decided amongst ourselves that half goes for IT. Here\'s
a way to start to put some money into the electronic health record
improvement. And then the other half went to the physicians who did the
work. These were the primary cares internal medicine family practice.
And PBs. The amount that went to each physician varied a little bit.
Between five and ten thousand dollars. But you know, today, five to ten
thousand dollars can get my attention. And it certainly gets the
attention of most physicians that are doing this work and they
appreciate the fact that there\'s something coming back to them for the
extra time. Because there is extra time that\'s required to work on
these projects.

We also note that we left 400,000 dollars on the table, mostly in low
patient satisfaction scores. We have access to care issues in our
medical group and we readily admit to that. We have a lack of physicians
in our area, we\'re trying to attract physicians, we spent a lot of time
on recruiting and we know that we have access problems. Most of us work
early, stay late, and we\'re still always behind. Same-day access is
something we\'re trying to implement. And I can\'t tell you how
difficult it is when you have a huge backlog of patients. But we\'re
trying to improve that so we can pick up some of the 400,000 that was
left on the table last year.

For 2006, we haven\'t got all the money from all the health plans yet
but we expect the number will be somewhere a bit higher, 1.4, maybe, 1.5
by the time we\'re finished. And for monies for bonuses from this 2005
data year paid out in 2006.

\-- eventually what you can do is put in the results. You can actually
come up with a simple spreadsheet that\'s actually transmittable fairly
easily to IPA or a medical group or even a health plan, a way to start
to share that information and get feedback on how you\'re doing compared
to your peers. And that\'s what most physicians want.

As I mentioned, since most patients will be seen within a three-month
period, you can have a very complete list, actually, in 120 days.

Now, repeat this on the next slide. You repeat with the disease
processes pay-for-performance measures and you can start it generate
more money. Not something that you\'re going to start doing every
disease process tomorrow, but you start with one and then gradually
another and another and another. And once you\'ve seen the success of
one of these opportunities, you can start seeing that it\'s worth it for
you to be able to do more.

In these performance measurement sets, if you\'re not getting more money
than the effort and energy and time and money that you\'re putting into
it, physicians won\'t buy in. So there has to be enough money in a
pay-for-performance program and we\'ve shown that in California. That
when you put enough money behind it, even though now it\'s only one and
a half to two percent of the gross dollars spent in California, even
that gets attention. When you talk about bringing that up to five or
even ten percent of the total payout for patient service, you can see
that that number could generate a lot of enthusiasm. And if we\'re
already beating the number at one and a half to two percent, you can see
how five or ten percent could get the ball rolling faster.

Next slide. Specialty cells will have a little easier time. As we\'ve
worked with some of the specialties now. They have a high dollar but low
volume of patient practice. And now, many of the specialties only deal
with a few ICD9 codes compared to a family physician like myself. The
AMA Consortium on Physician Performance Measures has developed now over,
actually that\'s 89 measures, I think, and worked with many of the
national specialty societies and they\'ve got another almost another 100
in the works. This was partly due to a contract arrangement made with
CMS or agreement that was made with CMS last year to create these
measures in specialty areas. And what it does, it gets the national
specialty societies and the physicians involved in creating these
measures and what will happen is that will get the solo specialty
physicians more involved and start to create some of the electronic
health records that will help them with their data collecting and their
data exchange and their patient exchange. In fact, ophthalmology has a
good program and a series of programs in the works, and several of the
other specialty societies have been working very hard to be able to get
their measure sets up so they can participate and help fund their
system.

Other barriers, can I afford it issue. I think physicians are all pretty
much the same. What happens is I want the best system that will do
everything I need, never break down, require no upkeep, cost me less
staff, and bring in money. I won\'t repeat that but that\'s pretty much
the way most people want this system to look. And I think one of the
barriers that we have right now is that the systems don\'t quite look
like that. And so when they start to look into, it even when we looked
at new systems for our medical group, which would cost substantial
amounts of money, and may do a better job, we still end up with those
same desires, but oftentimes the systems don\'t meet those requirements.
There\'s also, I mentioned earlier, about how important it is for
updates and how much hassle that can be and how much expense. And you
also want to have the most flexible system because requirements change.
Rules change. Measures change. They\'re refined. They get better. We
have to respond to that. And how long will this system last? How long
will the company last? When we started to look at our \-- in our medical
group for new systems, several of the companies we started to look at
weren\'t around while we finished our discussion \-- to finish our
discussion as to how much it was going to cost and how much it was going
to be to en corporate. So that\'s a scary thought for physicians.

And when is it time to take the risk and bite the bullet? I think
that\'s one of the major questions that people always ask me. Is it time
now, should I wait for something better? Even if I can afford it, even
if I can borrow money for it, is the right time for me to do it? Then
you start to hear some of the horror stories and even just difficult
stories of implementation that some of the other physicians had. I was
recently in a taxicab in Washington going to the airport from a hotel,
with a physician from eastern Kansas, and he was talking about the
problems that they had in implementing in their four-man primary care
group and EHR. They like it, but they talk about all the difficulties
that they had. And that will turn off a lot of physicians, too.

And then I think one of the biggest things that we try to do to help our
physicians is who do you turn to? Who is the trusted help, who are the
people who can really make a difference and help us be able to make sure
that one, we got the right system. Two, we got the right price. Three,
we\'ve got something we can actually use. And four, if it\'s not doing
what it\'s supposed to, who do we go to?

Next slide. Other sources for physician funding. I\'ve heard some of the
presentations tonight, just came running in and out this morning, had
you on mute in between patients and I know there\'s been discussion
about who is the beneficiary of this. And there\'s plenty of articles
that have been written and you know, they talk about whether it\'s a 11
percent or 10 percent or 15 percent, that are benefits to the physician
for an electronic health record or even if it\'s just budget neutral,
over a period of time. There\'s a question about who is getting the
benefits. There\'s a small chance for savings, I believe, in most of the
physicians' offices. That takes time and in the meantime you\'ve got
expenses going up rather than savings.

Later on, there are some benefits and savings. I certainly don\'t
disagree with that. But most of the benefits and savings will go to the
businesses, the health plans, and the government. And so when you\'re
talking about where is this money going to come from, when you\'ve got
pay-for-performance programs going, if you\'re talking about, and CMS
has been talking about doing this, if there\'s a way to put some money
into that, the beneficiaries have to look at it from their return on
investment. There\'s also part of a discussion I heard about return on
investment, that\'s one of the hardest calculation that is there seems
to be. Is how to calculate what the savings are for the service that\'s
improved for the provider improvement that\'s actually happening. But
there has to be a way to be able to calculate whether it\'s prevention
of admission or whether it\'s something even longer-term than that.

And there\'s opportunity in California with all the health plans
involved because what happens is even if the patient switches from one
health plan to another, the physicians who are taking care of them, and
even if they have to switch physicians, there\'s still that ongoing
common measure set for performance improvement.

Little bit of the benefit in dollars will go to the patients but of
course it will result in safer healthcare. So I also am one who believes
the savings should come from the people who \-- funding should come from
the savings that are from the people who are the beneficiaries.

I wanted to take a moment on the next slide just to clarify that chronic
disease management does make a difference, and I won\'t take time
because of the time frame that we\'re trying to stay in, to go through
these slides, but I put them in just for information, and in our group
we found it does make a difference overall statistics we find it makes a
difference, in California disease management makes a difference, and one
of the must-haves to make disease management systems work is you\'ve got
to have a system. And that\'s the next \-- the third slide back. This is
must-haves in chronic disease management. I\'m flying through these
quickly. But that\'s what has to happen. There has to be a system to be
able to do it.

The next slide is a big red slide that says challenge. Can we do it? And
I say can we afford not to do it? Thank you very much and I put my
e-mail address on this next slide so that you can take a look at it and
I\'d be happy to take any questions that people have. I know I went
through this very quickly, but I tried to cover a lot of material and
connect the dots here a little bit, and I\'m sure people have some
questions. Thank you.

**[\>\> Karen Bell:]{.underline}**

Ron, this is Karen Bell. I was one of the lucky folks that heard your
presentation a year ago when you were in Washington with David Brailer
and a few others. One of the few things I think struck me was your piece
on \-- was relatively unique in that many other pay-for-performance
answer programs only reward or pay for outcomes, whereas you had
developed a model which changed every year, but included a payout
component for IT use.

**[\>\> Ronald Bangasser:]{.underline}**

Yes.

**[\>\> Karen Bell:]{.underline}**

My question to you; to what extent do you think your particular model
has led to what is obviously a very successful outcome?

**[\>\> Ronald Bangasser:]{.underline}**

Well, I think if you \-- if from what we found, and the biggest jumps in
improvement as I mentioned were in IT, from what we found is putting
money behind that, absolutely shockingly speeded up the process of
implementation. That money was set aside for clinical. We got a huge
amount of improvement. Which again if the physicians believe these are
the right measures and you put some money behind it, that\'s where
you\'re going to get the impact.

**[\>\> Jonathan Perlin:]{.underline}**

Jon Perlin. Let me open it up for questions.

**[\>\> Robert Smith:]{.underline}**

This is Robert Smith of the VA. I want to ask whether this was funded
with sort of new money or if you had withholds that were the same size
as \--

**[\>\> Ronald Bangasser:]{.underline}**

No, this is funded with new money. This is money where the business
community said the health plans put this money in and we\'re going to
make the expectation that you\'re going to actually put new money into
the systems. Withholds won\'t work and neither will a carrot and stick
approach in my opinion. Because what you\'ve got to do is find a way to
put something up front. A promise with a withhold is not going to work
for ifs especially if they\'ll put out a lot of money to get started.
That\'s what most of the groups had to do. Some complain the first year
they didn\'t get the full money back, which I told you you won\'t get
back in the first year, but the idea would be that if you keep doing the
good work and keep improving, you\'re going to get it back over time.
With the carrot and stick approach, what we\'re trying to do is not just
pay for performance but pay for performance improvement. We have a
calculate in there that says for performance improvement, you get paid
something, too. And some health plans have paid out last year, one
health plan paid out all their money on just performance improvement.
And some have blended it and some have put a little money into
improvement but mostly paying-for-performance answer. There is a
variation there because of antitrust and the health plans get to make
those decisions at the end. With the carrot and stick approach what we
also talk about is we want to raise all the boats, we want it get
everybody better. It\'s not going to behoove us to have 20 percent of
the physicians trying to see 80 percent of the patients because
they\'re, quote, unquote, the best or have the highest scores. It\'s
really important and we had this discussion very early on, the
Darwinians versus the social democrats, and you can sort of tell where I
probably came down.

But the idea is that what you want to do is you want to improve quality
occasion across the board. So you can\'t have a takeaway on the low end
of the those are the people who need to have help the most.

**[\>\>]{.underline}**

Thank you.

**[\>\>]{.underline}**

Let me ask for any other questions for Dr. Bangasser. Okay, well, let me
thank you for a tremendous presentation. Provocative and complimentary
with the others and we\'re going to turn now from the practice
perspective and physician perspective to a bit of the policy perspective
and my pleasure to introduce Helga Rippen, the Senior Advisor for Health
Informatics and Planning and Evaluation at the Department of Health and
Human Services.

**[\>\>]{.underline}**

Let me just jump with a technical note. We had some people changing the
slide during that last presentation. For all the Workgroup members who
are logged in, you\'ve got a sort of backend portal that allows you to
shift things around in the middle of the presentation. But don\'t touch
any buttons and we\'ll advance the slides for you. Thanks.

**[\>\>]{.underline}**

Thanks for that. I\'ll turn to Dr. Helga Rippen.

**[\>\> Helga Rippen:]{.underline}**

Hello, everyone. I\'m really honored to be here and I want to thanks the
organizers of the Workgroup for the opportunity to speak. I\'m also
pleased to say that feedback here, Kevin and \[indiscernible\] Higgins
are also here so if there\'s questions, they\'re going to be around.

Please excuse my voice, if I talk \[indiscernible\] although may
beginning the EMR age, I am very happy to say that we\'re in the middle
of \[indiscernible\] so I just hope to get better sooner.

A lot of slides are for informational purposes to kind of set the stage
and the context for the discussion and I will \[indiscernible\] fairly
rapidly.

**[\>\> Jonathan Perlin:]{.underline}**

Excuse me, this is Jon Perlin. Could you move closer to the microphone
because I assume it\'s breaking up for most people online. If we could
get you a little closer to the microphone, that would be great.

**[\>\> Helga Rippen:]{.underline}**

Better?

\[poor audio\]

**[\>\>]{.underline}**

It actually, sounds like that speaker phone that you\'re talking into is
broken, the sound is kind of fading in and out. Is there another one in
the room?

**[\>\> Helga Rippen:]{.underline}**

Yeah, how is this one?

**[\>\>]{.underline}**

Sounds better.

**[\>\> Helga Rippen:]{.underline}**

Okay, good. It\'s not \-- unfortunately, that\'s not my cold.
Technology, right? Okay, next slide, please. I\'m going to be touching
several different aspects. First quiet question of EMR adoption in the
physician small practice setting \[indiscernible\].

\[poor audio\]

**[\>\>]{.underline}**

Is that breaking up for anybody else in.

**[\>\> Jonathan Perlin:]{.underline}**

This is Dr. Perlin again. I think that\'s breaking up across the board.
Just gotten a couple of e-mails from group members as well.

**[\>\>]{.underline}**

Is it better now? See, what I think is happening is we\'re listening to
the presentation at the same time so we\'re getting feedback.

**[\>\>]{.underline}**

What you need to do is mute your computer speakers so you\'re not
getting feedback loop between the phones and then what\'s streaming out
of your computer.

**[\>\> Helga Rippen:]{.underline}**

Okay. Is that better now? It\'s \--

**[\>\>]{.underline}**

It\'s still sounding a little bit like it\'s coming in and out. Is this
\-- you\'re over at ONC?

**[\>\> Helga Rippen:]{.underline}**

Yes, I am. I could maybe \[indiscernible\] \-- it sounds like the
microphone on the speaker phone is broken. I don\'t know if you could
switch and call back in on an another phone \-- I\'m going to leave and
go to another office and then I\'ll \-- you know, then I\'ll be \-- I
won\'t \-- the problem then is if I call in, can I hear?

**[\>\>]{.underline}**

Let\'s get Dr. Rippen called back in and while she is finding another
phone, let\'s \-- why don\'t we go to the prioritization list that will
actually be fairly quick. Let\'s plan on Dr. Rippen joining us in four
or five minutes.

**[\>\>]{.underline}**

Karen, does that work with you?

**[\>\> Karen Bell:]{.underline}**

This is Karen Bell. I just turned my mute off and I\'ll join the
conversation for a few moments. But I do have the noisy background. So
please let me know if this isn\'t working. Alicia, are you there as
well?

**[\>\>]{.underline}**

She just stepped away, Karen.

**[\>\>]{.underline}**

Why don\'t we take a pause here and I know we\'ve been going for well
over an hour and three-quarters at this point. So it\'s a good moment
for a pause. What I would ask people to direct their attention to the
prioritization exercise first, which was sent out to the Workgroup
members. Let me remind that this has gone through a couple of
iterations. A number of Workgroup members were asked to provide input in
terms of prioritization of data elements, and then the AHIC as a
committee of the whole received testimony \--

**[\>\>]{.underline}**

Does this work better?

**[\>\>]{.underline}**

Is that Dr. Rippen?

**[\>\>]{.underline}**

We\'ll go back to you.

**[\>\>]{.underline}**

Sorry about that. I assume that we\'re on the agenda slide?

**[\>\>]{.underline}**

We\'re getting \-- we\'re back there now.

**[\>\> Helga Rippen:]{.underline}**

I\'m going to be touching on five different areas really kind of the
backdrop of EMR adoption that many of you are maybe very familiar with.
Then drill down to what the literature shows with regards to the
financial aspects of EMR adoption, then some insights again to some site
visits that were done. And also then the framework for modeling approach
as far as how do you model EMR adoption at the small physician practice.
And not only model it, but model successful implementation. And then a
quick summary.

Next slide, please. We already know about 88 percent of physicians and
small practice settings are not as active in using EMRs than those in
larger. Next slide. And so, about two years ago was very interested in
trying to understand what are the economic and noneconomic factors
relevant to EMR \-- successful EMR adoption in the small physician
office. And we were fortunate enough to have a contract out with Booz
Allen Hamilton to really explore this.

Next slide, please. When you start looking at the literature and you
start thinking about what are the factors that at least have been
reported. You can dice them in a lot of different ways. But one way to
think about it is from a policy perspective, the question of what are
the non-modifiable factors and what are the modifiable factors. And what
you find is that the non-modifiable factors are practice
characteristics, I know there was an earlier question with regards to
our physician office, clumping. And then physician characteristics
sometimes some of us may want to change that, but it\'s harder to do.
And then we also know that these non-modifiable characteristics are
oftentimes associated with kind of the cost benefit construct. And then
when we move to modifiable factors, that goes to then things such as
perception of barriers and benefits, and other things with regards to
expertise and things like that.

Next slide, please. The next few slides are really kind of a summary of
what I think all of you may know with regards to what the literature
says, are relevant with regards to the non-modifiable factors. For
example, statistically significant, the larger the practice, the more
likely there\'s an association with the EMR adoption. If you\'re a
specialist you\'d be more likely than if you were not a specialist. If
you were primary care physician, that if a HMO owned the practice as
opposed to an individual doctor you\'d be more likely to have a
electronic medical record and if you were salaried supposed to
nonsalary, same sort of relationship. It is interesting to know the
Midwest has a high adoption rate.

When you start talking about physician characteristics, a lot of them
were explored and the ones really that had some kind of differential
actually within specialties. Some specialties are more apt to adopt EMRs
so an orthopedic physician, for example, or cardiologist were more
likely to have an EMR as opposed to say, a psychiatrist. The age of
agency, it was all over place, so if you were over it you may not want
to be adopting a EMR.

Next slide. For now we\'ve talked about some of the non-modifiable
factors and there\'s a lot of information with regards to that. What we
wanted to do, then, is explore also kind of the perception that
physicians had and there were a lot of surveys that have been created
and actually implemented to kind of explore kind of what is it about
physicians views, as it relates to EMR adoption. And just for clarity
for at least lumping, we lumped into three general categories.
Financial, technical, and practice. And some people actually within
practice, if you look at how other people are kind of categorizing this,
also had organizational and legal regulatory. That\'s more or less put
into kind of the practice perspective. Because again, the focus here
again is a small physician practice. It\'s about what is it about the
small physician practice and the physicians involved in there that are
actually then making that decision to adopt?

Next slide. So when we start talking about the financial aspects, we
have barriers and benefits. The barriers, and I think you\'ve heard a
lot of them earlier, relate to the whole question of capital investment.
You know there is this incurring cost that there\'s some issues with
regards to the contracts which goes to price and lack of time. And then
there are benefits reported, too. And these are things like improved
charge capture. You\'ve heard some people talk about that they
definitely reduce transcription cost and some of the staff costs and
some cases actually increase revenues. And if you step back and take a
look at and see barriers and benefits, they\'re kind of two sides of a
question. And it\'s kind of an interesting thing as far as the attention
with regard to which become more important and when. And I just put that
out there as you think through some of the questions with regards to how
to move forward on this.

Next slide, please. Now when you talk about technical barriers, everyone
has a favorite issue. A lot actually revolves around the concern a
provider has with regard to the technology and being able to understand
the technology. You know, first the question of how could I even
evaluate or select them, how do \-- do I have enough technical expertise
to really be able to use it and who would I rely on to help me use it.
Because I don\'t know. I don\'t really understand the technology so I
don\'t really trust the vendors because basically I have to rely on
them. The question then of okay, well, I have it, use it, is it going to
really \-- is the market mature enough so that it\'s actually meeting my
needs? For example, will it meet my technical need, my clinical
requirements, and is it usable for me? And then the question of, again,
of the market maturity is the question of you know, the solutions are
fragmented that there are questions as far as uniform standards, we
heard already about the churn rate of the marketplace. About ten years
ago, if you looked at the top three to five vendors they only owned 30
percent of the market and the average life expectancy of vendors is 2
years. If you have a lot of turnover in a market for a product, there\'s
a lot of concern with regards to stability and making that investment.
And so again, then the lack of training. And the creation of a migration
plan.

Next slide, please. And with regard to impact of my practice. Again,
barriers and benefits. Again, you know, the concern of our privacy,
electronic, people can hack in possibly, and then where\'s the value,
the evidence that actually shows, tells me it\'s effective and that
there\'s a business case and I\'m going to lose all this time and it\'s
just such a struggle to deal with. And then just a champion. You know,
when everyone is overworked and you had heard an early presentation the
question of well, I kept them going or we kept op going because I \-- we
had to do it. Becomes important because when you go to the benefit side,
you have now the physician champion, you have someone that\'s actually
going to push and make it go through. And then what people are saying,
wow, I can make informed decisions better of the why? Because I have
information. I have access to information, and I have access to clinical
guidelines. And now I can decrease medical errors and increase volume,
I\'m improving workload, which is actually an interesting thing that
people are saying with regard to benefits. Now I can do things
(indiscernible) automatically like refills and I don\'t have to pull the
chart, especially when I get a call from a patient. And I get improved
customer service. And I have more time with patients. And then I can
have a better quality of life. And again, these are the results of
surveys. So it\'s interesting in the perspective of the \-- again the
tension between the barriers and benefits. And perception versus kind of
experience versus where are you in the continuum and where is the
balance?

Next slide. To the financial aspect. What is the literature talking
about, the actual cost to a small physician practice? While you can see
here, this is a busy slide, why? Because it\'s expensive, right? And it
is complex. It\'s not just okay here it is. Here\'s the line item and
you don\'t have to worry about it. For a small practice, you\'re talking
about okay you have the hardware, the software, you got the training.
Now you've got to think about the workflow, you\'ve got to talk about
what loss you have, productivity, again something that you heard
earlier. Then you need support and if you look across the general range
is between 30 and 50,000. We\'re not talking would an ASP model be
cheaper, longer higher recurring handle cost but this is just in general
what the literature is saying. Now, there\'s also the annual cost.
Again, not only is this clean as one would expect, you have not only the
software maintenance kind of cost that people do remember because
that\'s what they negotiate but then my hardware, you know, I have to
remember that, and there\'s a cycle as far as hardware cost.
Appreciation for small practice and then the health to continue to
maintain that be and help make sure that it can operate.

Next slide, please. Now we talked about the cost. Complex, a lot of
pieces. And when we start talking about financial benefits reported
similar. There are the costs that are accruing outside of the physician
office, so when you think about from the physician\'s perspective, not
really something that they can tally up in had their corner, and those
tend to be more the clinical utilization costs, savings, and patient
safety savings. But what they do actually realize are then the questions
of workflow efficiency, and revenue cycles. Meaning things like workflow
efficiency, I don\'t have pull things, transcriptions and then I don\'t
make as many errors, I can improve the charge capture and actually
because of some other things happening in my office, I have more room in
my office, I can see more patients.

Again, the values.

Next slide, please. So if you try to pull all this data together and
again, how people define an EMR, varies and what the functionality they
pay for varies. To try just get a sense of what is order of magnitude,
it\'s again what we mentioned before was between 33 and maybe 50,000
dollars. And that is significant recurring costs. Again, it varied
between the 18 and 8,000. And there were benefits, though. And again,
the benefits were presented this different ways for different papers.
And so if you try to then do physician that benefit, in the Wang paper
it was about a thousand dollars a year over six-year average. And for
Miller it just clean out was 23,000 dollars a year, but if you wanted to
subtract the implementation cost cycles and things like that, it would
average out to be between 12 and 13,000 dollars a year for the same
6-year average so you can kind of get a sense of how they may compare.
And for other ones they don\'t talk about really how much money they
made back but said it was positive within first year. So what does that
really mean? We don\'t have the details for that.

Next slide, please. And then just so you know, the benefits per year for
the system, again it\'s pretty significant. It\'s even in this case
13,000 dollars a year, which if you looked at least for Wang\'s paper
was a lot smaller for the physician.

Now if point of view, go to the slide that says one report showed more
advanced. The more advanced the EMR, the greater the net benefits.
That\'s to demonstrate how complex this is. Because again, the different
products would have different functionalities, different levels. And we
do know that at least according to Wang, that the more complete and more
advanced the EHR, the greater the financial benefit. The dilemma is to
whom. And we had actually a previous speaker talking about bigger \--
and there\'s varied levels of sophistication and support that would have
a significant impact on cost and benefits. That the degree of
functionality, the more robust the degree of functionality that provided
again would have significant cost of implications and the one thing that
tends not to be discussed is the whole concept of usability, because it
does also have a pretty significant implication for the performance
costs and benefits, too, in the small physician practice. This is an
interesting graph or slide.

If you just look at the table, when you just compare, okay, how big, you
know, by practice, and you look down the list, they look more or less
the same. Small practice, big practice. The only difference is the
bolded ones. Laboratory results, and radiology imaging results. One
could argue why that was. It was alluded to by another presenter and
that was while they had their own system in-house, you\'re big enough
you\'re going to have maybe an x-ray, radiology capability and lab
capability to some degree, it also might be that you\'re big enough to
negotiate an interface because you paid enough money per physician to
negotiate part of your contract.

The other interesting thing, though, and a little disconcerting, if you
start looking at functionality and as you go down you have increasing
functionality at least from the value scale that we saw earlier, is that
less and less people had that. So even though you\'re increasing EMR
functionality going down, you\'re decreasing adoption. Less people are
adopting these things. Which is interesting. This indicates something
with regards to the majority of the products. Or is it also relating to
really the cost. So for example if I build an EMR, it will cost me more
to include a drug draw capability or CPOE capability because I have to
pay a third party for that capability. And then I will be passing it on
to the physician and the physician might be making a decision not to buy
because the cost and they don\'t know if it will give them anything
more.

You also heard some questions with regards to the clinical guidelines
and protocols with regards to increasing costs. A lot of different
approaches to that. Some vendors are actually just giving physicians
tools to create their own, but others are providing it, too, but then
that becomes very expensive because now you have the question of how do
you maintain kind of the currency of your clinical guidelines? So also
very interesting questions with regards to what\'s out there and where
the implications of that from cost benefit perspective.

If we move to the next slide. Now we\'ll change gears and kind of give
insights to site visits. Because they tell us well, literature, you
know, going one way, and general sense of some people, a little
differently.

Next slide, please. Again we went to a few sites, and not all of them
had adopted. Most of them did adopt. And either called or went to the
sites. And again trying to get a smattering of return to rural and kind
of practice just to get a sense. Next slide, please.

Again, this was not to do a detailed comprehensive exhaustive kind of
pulling all the data in their office, because people are busy, but to
get a sense. So what did we find in again, going back to what other
people had said earlier, you really needed the physician, you know,
lead. The person that was really going to say you\'ve got to do it,
let\'s go do it, and kind of get buy-in from the group. And what you do
find out is that you know, even though people were not very happy during
the implementation, or even maybe for the decision that after it was all
kind of running and it was implemented. People were pretty happy with
it. They were very satisfied.

And again, if you then say, well, what was so unique about these
physician leads, well, most had some technical expertise or had
experience with electronic medical records.

Now when you say okay, how did you go about trying to make the decision
and kind of that pre-buy sort of thing, actually did what you would
expect would be good practice, which is they reviewed the literature,
they talked to their peers, you know, went to meetings, and actually
went to visit sites, reference sites to see how it was working. And that
they actually attempted to value multiple vendors before making
selection. The interesting thing going back from the cost-benefit kind
of perspective, is that it does cost money and time \-- hence money, to
actually do all that research. Yet when asked, most of the sites didn\'t
really believe that that was a barrier for them to do that research.
Which was kind of interesting given some of the other discussions we had
and presentations that were provided earlier.

Next slide, please. When you start talking about what kind of
functionality they had, it was kind of the medium intermediate EMR kind
of systems, everything from scheduling to some basic decision support.
And that when you start looking at the prices, the prices again were
compatible, at least the order of magnitude from the literature. The
interesting caveat goes, and again it has some ties to what a previous
speaker said is many of them combined it with their practice management
system. And again, that\'s an interesting thing with regard to some of
the interface issues and so on.

Many really reported that onsite training and implementation was
included in the pricing. I know some of the people were saying don\'t
assume that you\'re going to have that as part of the pricing, it may or
may not have been enough. But it was provided. And then obviously some
of us are better at negotiating prices, like I would send my husband to
do this. Than others. And some that got really good deals, others paid
more of a premium. And again, going back to what others are really
saying and what the literature said, it does take between three to six
months at least to become fully operational.

And that it isn\'t really \-- it\'s kind of along the ugly side during
that process.

Next slide, please. Now, once the magic six months was over, and they
start talking about well, what kind of benefits did you realize, in
general they thought there was an improved workflow efficiencies,
especially as it relates to things like lab and prescription, ordering
and looking at the results. And that the employees and the physicians
were satisfied either through quality of life improvements and just
satisfaction in general, which is always a really important thing in
small practices. And that there were cost savings. Again reflecting what
was found in the literature from not having to have this big chart room,
storage room, to not having to have someone pull the records all the
time. And then the savings relating to transcription costs. Some also
demonstrated improvement in charge capture. Such as increase in coding
and billing rates selection. Though some didn\'t. Their whole thing was
I\'m documenting better, and so that if there is a question, there\'s no
issue because they have a documented. There\'s some really good caveats
and stories that were actually \-- that could be shared later if we have
time.

And again, an interesting thing, and very important to kind of
cost-benefit analysis, that we haven\'t heard, is that some sites are
actually noticing discounts on malpractice insurance rates. Now, if you
remember about ten years ago, or so, maybe not quite that long, there
were malpractice insurance carriers that actually were giving physicians
discounts for using EMRs, but again you didn\'t hear much about it. So
it\'s nice to know that some are negotiating with their malpractice
insurers for reduced rates.

Next slide, please. Now, when you start talking about quality, which is
really a lot more difficult to capture and especially in an interview
process where you\'re not looking at their medical before or after
things. You know, if you ask a physician, did you get any \-- were you
saved from a medical error, they\'re going to say no, of course not.
Now, the question with regards to what did they think. They still
thought there was a significant improvement in the quality of the care
they provide and the most was related to I have the information. I can
make an informed decision about my patient because I had the information
that I needed to do it. I think that becomes really important. I think
key lesson learned from what people were saying is that people that are
going to be implementing really should have reasonable expectations for
adoption of the EMRs. It is not this silver bullet that is going to
solve any and all of their small office issues, but that if they can put
it in the context what have it can help them do, it\'s a better thing.

Next slide. So in general, then, when we kind of compare and contrast
the information that we have from the sites, and the literature, while
we all are influenced by cost and benefits and when we adopt, and that
these benefits and this is really, really important, they are financial
but also non-financial. It\'s interesting when people talk about when
they adopted and more money would help. They wouldn\'t go back. It\'s
kind of \-- it\'s a very important thing. And that, the things that
usually aren\'t included in the costs are things like the cost of doing
research and selection even though we know it wasn\'t a barrier. And if
you have the experience of using a EMR or having expertise with it, it
helps with the implementation because you have an actual kind of leader,
or that you may be reducing some of the uncertainty barriers that we\'ll
be talking about later. They do rely on multiple sources of information
to actually try to get a little bit more knowledgeable in making that
decision process once they decide to move forward and buy one.

Next slide, please. We talked a little about the site visits and I\'m
going to do a brief two-slide summary of kind of a framework for
modeling physician behavior with regards to adoption. And trying to get
onsite. There are two components of the adoption model and it combines
microeconomic models with technology diffusion, with social network
theory.

And if you can move to the next slide. And that means several things.
First of all, we\'re looking at a physician office as the microeconomic
entity that we\'re studying. They\'re making the decision of whether to
adopt or not to adopt. And that small practices are driven by
considerations of costs and benefits associated with the new technology,
including financial and non-financial. That there is a very strong
presence of the question of decision timing and certainty. You heard
that from several speakers. With regards to should I buy now or later,
will it get better now or later. The whole question of the uncertainty
regarding obsolescence. After three years we\'ll have to upgrade
questions. And all of our comfort with risk. The early adopters, late
adopters those that will move forward and is there any question with
regards to difference between providers. And again, the whole question
of the very importance of information in really trying to influence
uncertainty is really critical. What changes that perception because
it\'s part of the mode he will.

Next slide. And so if you want to then pull out then what are some of
the key elements that would have to be included in the model like this,
we would need to include things like physician motivations for adoption,
do they really want to adopt or not. We know that the whole question of
functionality is very intimately tied into the question of cost benefit.
EMR cost benefits itself. Existence of human capital, expertise and
ability to move it forward. The question of uncertainty now or later, or
what\'s going to happen. And critically kind of the importance of
information to inform the decision-making process.

Next slide. And so, now we\'ll go into the summary.

And we can go to the next slide. It\'s clear that there\'s significant
gaps in the surveys and the cost benefit literature. You know, again any
time you have a survey there\'s questions of selection bias, the
questions that you\'re asking, do they actually inform your ability to
tease out kind of some of the factors or are they biasing, the question
of age and size and mix of the practices. And the whole question of to
what level of functionality. And you know, really digging deeply into
questions of costs and benefits and financial characteristics. Because
many of the surveys may not have provided that. And also, there is
really no surveys that we know of that really go then to the question of
what are the factors that are really important to make that decision to
adopt or not to adopt. And what is kind of the tipping point that might
make that change or what would \-- what is it? Is it information, is it
financial? We don\'t know.

Next slide, please. There\'s also significant lack of robust data on
costs and benefits that I mentioned earlier. And if you look at a lot of
the studies, you know, there was really only one that really went down
to the detail of evaluating retrospective way for practices as opposed
to modeling it and making a lot of implications. And so again, this
becomes really important. So there\'s a little thing, high risk of
failure, lower risk of failure and left hand bottom. Supposed to be red
or darker shade if you have black and white. For the highest risk and
lower risk for green. Kind of got turned around in translation. So we do
know there are a lot of significant points of failure or opportunity for
successful implementation. In all settings but we\'re focusing on the
small physician practice. What are the critical components that would
move a non-adopter to actually start now getting the information and
making the decision to move forward. If you had listened with the
previous speakers, there was a windfall. We had limited amount of money
for limited amount of time and we thought this is it. And conversations
we've had, there was a major flood, so they lost all their paper records
and this wasn\'t even, I don\'t think, in the Louisiana.

And so then the question became I should just go and do electronic.
There was a question of starting a new practice. I\'m starting de novo,
I want to open up and have a practice that\'s already electronic. You
may have the inclusion of a new staff who says hey, I want us to go and
they\'ll be the physician lead. So there are a lot of things that
relating to the characteristics, technical, practice, that might then
cause a change to reduce kind of the risk, the failure from the
non-adopters to the researcher, so that now you can try to at least get
information. And then from there, then, to be able to acquire and select
and then implementing and continuing to use. What are the \-- one of the
beautiful things, is that this is a sticky application. And I think
that\'s really critical to know. That\'s a beauty of this. Not all
technical things are sticky. And for the last slide, I\'m just going to
be throwing out some very interesting questions, just for your
consideration. The limited areas that we actually found said that the
financial benefits to the physician practice are greater than the costs.
While if we had captured everything. So why does the literature then
cost cause a primary barrier to adoption. Lack of investment capital or
uncertainty and risk associated with the investment. Is the market
mature enough to really provide you with the benefits that you need and
how significant will be things like training and medical school to as
regards to electronic medical records to moving forward and having a lot
of physician leads in the practice. So with that, I hope that I did it
in time.

**[\>\>]{.underline}**

Helga, that was a terrific presentation. What a great review of the
literature. Let me take the prerogative of the first question. Which is
this has been very revealing about the State of \--

**[\>\>]{.underline}**

\[indiscernible\]

**[\>\>]{.underline}**

Should be here in about 20 minutes. As soon as \[indiscernible\].

**[\>\>]{.underline}**

Someone has an open microphone. Ask you to turn it off. Let me take the
Chair\'s prerogative with the first question. It\'s very interesting and
informative about the small practice or the practice environment. Do you
feel that in general these findings would generalize to the hospital or
health system environment?

**[\>\> Helga Rippen:]{.underline}**

Some of them but some may not. I think you could do similar types of
modeling but move \-- but instead of having the entity that makes the
choice be the physician practice, would be say a hospital. The dilemma
comes \-- becomes for the decision-making, is there one decision-maker
at the hospital level. What would you say?

**[\>\>]{.underline}**

I consider with that and I think there are some aspects that are going
to translate. I think hospitals just like physicians are going to be
caring about costs and benefits and is there \-- can they count on the
benefits once they implement and they may have hiccups along the way
like the physicians. But it might be, in terms of the decision-making
process, much more complicated.

**[\>\> Helga Rippen:]{.underline}**

Yeah, the interesting thing about all of it is many of the physicians
that went into it didn\'t think they would make money. They thought they
would lose money to some degree using the electronic medical record. And
that\'s true for hospital nonprofits. They tended to implement more
because there wasn\'t the pressure to show a rate of return. And they
actually implement it despite that and actually realize more benefits
than I think they might have expected. But again, you know, what that
\-- what the role of that decision with regards to the model is not
predictable. I mean, we don\'t know enough.

**[\>\>]{.underline}**

Let me open it up for any questions from the members of the Workgroup.

**[\>\> Karen Bell:]{.underline}**

This is Karen Bell. I have two things. Number one, thank you so much for
very good summary. But the other question is related to my intrigue with
the comment about malpractice cost decreasing. Do you have more
information that\'s really more objective in terms of how many companies
are doing this? About how much of a decrease in malpractice cost it
would be that we could hear more about later?

**[\>\> Helga Rippen:]{.underline}**

Unfortunately, we don\'t. This was volunteered with regards to some of
the benefits that people showed and I know that about a year or two ago,
I try to find out even malpractice, you know, kind of rebates for
hospitals that had implemented and there are some but it usually was
negotiated but no, I don\'t have that information and that would be good
information to look at and even to see whether or not there\'s a
recurring trend, you know the trend is coming again.

**[\>\>]{.underline}**

Any other questions, comments for Dr. Rippen? Let me just pick up with
one last question. We\'ve heard a theme today about interoperability
between physician practice sites and other settings of health care. In
particular a hospital. And I would imagine Dr. Rippen, many of the study
actually were conducted before one thought of the interoperability frame
that this Electronic Health Records Workgroup and the AHIC are trying to
promote. Were there any insights into physician practice interest and
interfacing with other health sites for interoperability beyond their
offices and how might that have influenced decision-making?

**[\>\> Helga Rippen:]{.underline}**

I think that people were interested in having the ability to exchange
information. I think that I don\'t know if there was an expectation that
\-- or let\'s just say some people were not necessarily informed when
they bought the system they could not automatically do that and for
those that weren\'t as sophisticated. And others that there wasn\'t \--

**[\>\>]{.underline}**

Not from the site visit no, I didn\'t see. And certainly the cost
benefit studies are more focused on not the interoperability benefits
but the site visits I think is there wasn\'t a huge focus on
interoperability. More focused internally on what we can do \--

**[\>\> Helga Rippen:]{.underline}**

I would say the early papers such as those by Wang, were modeling
efforts that were based on an assumption that there could be
interoperability and that these benefits often would accrue to the
primarily to the payers and employers and that or the sort of value
chain. When Miller looked at the 14 small physician offices empirically,
it was interesting, their benefits, which they \-- which he measured, he
didn\'t model. Actually measured them, through empiric data management.
Those benefits were those that accrued within the office, within the
walls of the office. It was the savings around transcription, around
chart pulls, and of course then charge capture. So a different
perspective on how you come to the problem.

**[\>\>]{.underline}**

Just to reiterate, I think that the question of interoperability would
\-- and the ability to have interoperable systems would actually provide
a benefit, a financial benefit to the physician office as yet heard the
other speakers say you didn\'t have to actually then type in the number
of a lab value, it could automatically be uploaded. Is the question with
regard to the market and the ability of common interfaces, so I think
that the work of this working group and the whole interoperability
movement is that we\'ll actually make \-- continue to make it more
cost-benefit.

**[\>\>]{.underline}**

That\'s an optimistic note on which to end this discussion. Let me thank
you and the members of your team for a terrific contribution. It\'s now
my great pleasure to introduce Francois de Brantes who has been a
leading exponent for quality, value and improvement in health care. And
he is the national coordinator for Bridges to Excellence. And we look
forward to your presentation, Francois.

**[\>\> Francois de Brantes:]{.underline}**

Thank you very much. And I will hopefully pick up on a couple of the
themes that have just been talked about. In particular our focus being
mainly in pay for performance the title suggests to attack a little bit
of the issue of financial barriers to adoption and use of health
information technology and to briefly show a few lessons learned along
the way as well as to illustrate through one case study how incentives
have contributed to the adoption of clinical information systems in a
fairly large IPA and what some of the early results are from that
particular effort.

With that, if we can turn to the next slide. So, just to summarize a
little bit about what we\'ve learned and not just us but I think the
collective body of knowledge around \[indiscernible\] data which is not
super thick but the first one is that incentives do work, I don\'t think
there\'s any doubt about that in anyone\'s mind. But I think the issue
really that becomes how do you help the practice, if you do incentives
right and it causes some level of reengineering in that practice and we
saw good examples just a few minutes ago about a series of practices
across the country, how does the reengineering take place and what
we\'ve seen is that the smaller practices need a lot of help. And in
this all of the barriers that were talked about with respect to not just
buying software and hardware, and putting it into the office, but really
reengineering payer processes to maximize the use of the information
that can come out of these information systems, is a lot of work, and
most small practices don\'t have the staff, overhead staff, if you will,
that can lead such an effort so we need to collectively think about not
necessarily how do we help the larger practices who do have staff and
that\'s an example I\'ll show. But the individual practice or the two-
or three-physician practice that doesn\'t have that help. Better quality
we found can in fact cost less, so the same principles that hold true
and I think have held true in industry for hundreds of years, seem to be
also true in health care.

But again, I think like anything else, it is a question of what you
measure and how you measure. And what we\'ve seen is in our area which
is mostly ambulatory care and has a tendency to focus on primary care
and a couple of subspecialties, mainly endocrinology and cardiology,
better quality can cost less if you\'re measuring intermediary outcomes.
Focus on the patient as opposed to the steps to the control,
hypothesizing the control is going to, is going to magically occur, then
in fact we do see a relationship between better quality and lower costs.

Part of, that I think, what we have seen at least comes from a certain
level of self-assessment and the self-assessment you can think of as
self-assessing your performance on population health, looking at certain
biological metrics of patients across multiple conditions, but you can
also think of that self-assessment as a self-assessment around the
"systemness," and I know that\'s not a word, but the systemness and the
practice. If you think about the work that the QIOs are doing around
DOQ-IT and intricate part of that effort is around self-assessment of
the practices and an understanding and recognition of the different
steps they need to take to really system advertise their operations and
to go through that reengineering process. And it\'s going far, far
beyond just an assessment of your IT capabilities. It\'s really about
how you move from reactive to proactive care.

And finally, the last point is critical mass, which of course is not a
new thing, but I think we all recognize that on the private sector we
need plans to coalesce and to focus their purchasing power prompted by
purchasers, employers, on a few things that physicians can pay attention
to so that the cost benefit analysis that was just talked about can
start shifting and that the benefit becomes very clear, whereas today
the cost is pretty clear, but the benefit is uncertain. And there\'s
lots of riskiness associated around the quantification of that benefit
and so most physicians are going to have a tendency to discount
perceived benefits in order to come to some understanding what the real
benefit is. So the more we can make that benefit concrete, the easier it
is for physicians to make that decision.

So if we can move to the next slide, I\'m going to give you some
highlights of roughly thinking about the lessons and a lot of what
we\'ve learned in the past, some of the ingredients that we\'ve tried to
bake into our version of pay for performance. And the first one is I
think consistent with my prior comments using standard performance
measures but really pulling them not just from claims but also from
medical records, and I know people who hear me talk, I sound like a
broken record sometimes, but that be as it may, I can\'t underscore
enough the importance of measuring data from medical records and
practice-based surveys and not just claims, because of the three big
issues around claims data. The second one is \-- and I\'m not going to
go over this again, but it is the ability to clearly quantify costs and
benefits. The third one using independent third parties, I think the
process that the BTE pilots are using is great in the sense that they
are using independent third parties to try to create these score cards
on performance, and that I think is going to help greatly reduce a lot
of what we\'ve seen as noise, probably legitimate noise in pushback from
the physician community on the validity of data that are used to assess
their performance.

The fourth one we talked about. The fifth one is I think central to
today\'s discussion, and that is the need to encourage the adoption of
better systems, not just \-- and not ignoring that aspect of it. So I
know there\'s a tendency to say if he we just focus on a starter set of
measures and the AQA is a good example, the doing well on a lot of
measures will require physicians to adopt systems and the rest is magic.
Unfortunately, the rest is not magic. It\'s a lot of hard work. And so
having a core component of what you create performance standards around
and what you measure performance against, ought to include structural
components so that you end up with a good mix of structurally what do
you need to do in that practice to have a system and then what \-- how
can you demonstrate that system is really working by providing reports
on individual process clinical process measures, and intermediate
outcome measures. It really is a combination that acts as a powerful
motivator and the example I\'m going to go through is hopefully going to
make that point.

So in the next slide I just summarizing one of Bridges program which is
the Office Link and this encourages quote, unquote, systemness. And
practices that want to qualify for rewards under this program have to be
assessed either by the NCQA, or they can be assessed by their local QIO.
And that\'s a process that we\'ve put in place with many of the QIOs
across the country. The practices do need to demonstrate they are either
\-- either they have fully reengineered or they are in the process of
reengineering around really three domains. One is clinical information
systems, but the clinical information system, think of it as a pathway
going from something as simple as registries, to something as
complicated as a fully functioned electronic health record and one of
the prior charts was great in showing the adoption was the greatest low
as the functionality because it\'s complicated to have fully functional
system. And I think part of the pathway going from the lowest to highest
level of functionality is to create a path with incentives that lead you
along the way. The second domain is around patient education and support
and really there the focus is on identifying understanding what the top
chronic conditions and the practice can be.

Obviously that\'s going to vary if you\'re a pediatric practice versus a
practice that focuses on adult medicine or endocrine, et cetera.
Finally, management focused on the \-- on identifying higher-risk
patients. Patients with chronic conditions, acute conditions at fairly
high risk of hospitalizations. And then deploying cure management
protocol for those patients and stabilizing them as much as possible.
What we\'ve done in our intervention markets today, to date, is really
tying the bonuses on a sliding scale to different levels of systemness
and the practice, and graduating those bonuses on a sliding scale, but
the sliding scale doesn\'t stay \-- doesn\'t stay constant. So that over
time if you stand still, you\'re going to get fewer and fewer rewards.
And the focus is really on trying it, continue to reinvest the bonus
dollars you\'ve gotten into the practice to go to \-- from the basic
level of systemness to the advanced level of systemness. And what we
found and we\'re not \-- and when I say we, it\'s collectively for the
organization that participated in the effort to date, is that that
stimulus of improvement over time tied to bonus that is you know you\'re
going to miss unless you continue to progress, works very well. And
there are very, very few practices that in fact stand still, most of
them understand what they need to do to get to the next level. And
really focus their energies during the course of the year to get this.

So let\'s get into the example on the next slide, and what I\'ve tried
to do is to take \-- I think an, or pull an example fairly
representative of practices throughout the country. And community care
physicians upstate New York, the Albany, Schenectady, Amsterdam area,
they have 30 practice sites. Most of them are small practices, two,
three, four family \-- physicians in each practice. It\'s \-- they\'re
independent practices. They have \-- and they have \-- and these
practices had levels of sophistication from nothing, so just normal
paper charts, to some level of advanced registry, and everything in
between. They started really working on getting recognized in the
physician program in 2003, and here\'s the important point which is that
the first recognitions occurred in the second quarter of 2005. So this
gives you a sense of the time lag and the amount of effort required to
systematize a practice, even the ones that already had some systems in
place. It took them roughly a couple years, and the full recognition
process includes reviews, I\'d say from the moment they started focusing
on this to the moment they filed their application, it took them about
18 months, and that\'s fairly systemic of what we see in other areas.
Some areas you can compress it but usually with practices that are
already on that pathway of adoption. There are now a number of practices
that recognize and importantly they\'ve done so mainly because they\'ve
been encouraged by a series of consistent pay for performance programs
in that particular market. One of which was Bridges, another was the
local health plan that had an identical reward program.

The next slide, we\'re going to focus a little bit on what happened in
these practices. And a few things happened. You know, in the first
bullet both encouraging and discouraging. The encouraging part is that
they\'re using data. This is a broad recognition that we all need to
have that without an information system most practices don\'t collect
data on a regular basis and really don\'t have a good understanding of
who their patients are and don\'t do any population health management.
But then they also did the right things because they were motivated to
do and created standards and protocols, they deployed them in systemic
basis, ask in all 30 practices and there was some good consistency in
the way care was delivered in those. Disease management and protocols to
work with those patients to get them under control.

The next slide shows \-- I think an again an interesting thing when you
start measuring and in this particular instance what the practices
realized and I think this ties somewhat to the prior presentation about
charge capture and how there are some other benefits that accrue to the
practice. But here the tie-in not just capturing an office visit in a
slightly better way. What they did is they started looking at what
happens when patients that are being reached out proactively by a
practice, come to the practice on a more regular basis, and what is that
impact and the ability of the physician to then, and the other folks in
the practice, to manage their patient more effectively and what they
started seeing and have seen an is a relationship between the total
number of visits and a level of A1c's of the average of those patients.
So the areas where the practices are \-- the practice that are seeing
their patients and managing more effectively, see more significant
decreases in their A1c's which of course is, if overall in terms of
health outcomes but also in terms of health care cost utilization. And
frankly, from the payer purchaser perspective, an extra office visit is
an insignificant cost at a primary care physician\'s office, if it can
avoid a large number of visits at a specialty practice, or worse yet, a
visit at a hospital.

So we all know good things happen when people have information, and I
think this is what we\'re seeing in the community, where incentives are
targeted in that way.

So on the last slide, is just a brief review of where that practice \--
that IPA is at now. They are in the process of implementing a fully
enlarged system, fully functional. Because it is an organized IPA, they
do have a couple of people on a full-time basis that deploying these
practices to help them through that practice. They have fewer barriers
for adoption clearly because there\'s someone centrally sourcing this,
and negotiating for the rates and creating tool kits, if you will, on
how to go through the introduction of the medical record and the
practice.

Lots of patients receiving care in those more advanced practices, and I
think importantly for employers and this is where the payoff occurs, for
creating the incentive around greater systemness of these practices, is
that the patients are getting much better care. And you know, that was
our hypothesis going in. That creating this systemness, forcing the
systemness, and really not just focusing on \-- and this is important,
not just focusing on adoption of IT but it\'s use and use through the
deployment of care protocols, care management, identification of
patients, the management of those patients, gets you results every time.
Because once the physicians start getting their numbers and they do when
they have an information system, they do act on those.

Then of course they did recognize just like all the other studies show,
savings and reduced staff, transcription. So all of those were crazy for
most of them and I think are now encouraging increased pace of adoption.

So the bottom line, do incentives work? Yes. Can they do what we hope
they would do in a \-- what I would say \-- a fairly typical practice
setting? Yes. Is this an individual physician office? No. However, we
have seen, albeit at a lower pace, we have seen both in upstate New York
as well as in Massachusetts, the adoption of electronic records and the
creation of reengineering efforts in a lot of small individual practices
that aren\'t necessarily tied or aren\'t tied at all to large integrated
groups. And for the most part in those settings what we have done in
just so we have a clear picture, is we\'ve tied very closely those
practices to the DOQ-IT and QIO efforts so the practices don\'t have to
do it on their own. And really can rely on the QIO infrastructure to
help them figure that out. So that\'s it.

**[\>\>]{.underline}**

Francois, let me thank you very much for a terrific presentation and it
really was an excellent capstone to a sequence of presentations and I
think your metaphor of use of technology for creating systemness as the
tool to integrate the elements of frankly the fragmentation of
nonsystemness into coherent outcomes that improve quality and
efficiency, is very compelling.

Let me open it for any questions that people might have.

**[\>\> Jim Sorace:]{.underline}**

This is Jim from CMS. I was curious, what\'s the cost/benefit ratio,
say, between registries and EHRs in your experience in and Bridges to
Excellence thus far? In other words, how much of a benefit do you find
with the registry portion?

**[\>\> Francois de Brantes:]{.underline}**

I do not know the answer because we don\'t have enough data and \-- or
experience to be able to parse out practices that just have registries
versus those that have \-- that have deployed other systems in their
practice. So there are too many confounding variables for us to be able
to isolate the impact of just one tool.

**[\>\>]{.underline}**

Okay. Well, let me thank you, and let me also confirm that I do believe
systemness is a word. At least I hope it is, but actually in some of the
articles I\'ve written about the transformation of VA, and actually the
use of IT, really as one of the central tools to confer systemness and
reduce fragmentation.

**[\>\> Francois de Brantes:]{.underline}**

I always get the squiggly line when I put systemness, but it may be a
word.

**[\>\>]{.underline}**

Try \-- try the hyphen. Let me thank you very much for that great
contribution. And the work that you and Bridges to Excellence are doing.

We are going to change now from the sequence of just stunning and
excellent presentations, each and every one, to some of our own work
within the working group. And first is essentially a ratification of
something that we think \-- we have been kicking around for a number of
meetings and this is the state of technology critical component, the
prioritization recommendations.

**[\>\>]{.underline}**

Inputs received but also the inputs from the American College of
Emergency Physicians, and the testimony they provided in terms of the
critical data elements that one would need in an emergency situation.
Those tee up very well with the third column. So let me ask if there are
any final comments or amendments to the prioritization in the third
column and then let\'s see if we can seek ratification of this going
forward. Any inputs to that last column that summarizes inputs to date?

**[\>\> Karen Bell:]{.underline}**

Jonathan, this is Karen. I\'m just wondering if the Workgroup would also
consider the issue of pharmacy allergy. When we were prioritizing or the
group was prioritizing the list to begin weeks or identifying functional
elements, we didn\'t actually have a lot of discussion on e-prescribing.
And so I\'m wondering if there would be some \-- if there was clarity
around what we actually meant about the pharmacy and allergy piece.

**[\>\>]{.underline}**

Okay, why don\'t we call that as a question. And then in this sense of
what have the American College of Emergency Physicians and others
speaking to emergency preparedness really at the behest of Secretary
Leavitt in terms of trying to identify what were those top data elements
one would want to have? We had united a current list of medications and
a list of known allergies. I think the question is, what kind of
cognizance might there be with not only the regulatory aspects of
e-prescribing but some of the data warehouse that is exist to create
such function as we saw with Katrinahealth.org.

**[\>\>]{.underline}**

Any comments? Any thoughts on this? Karen; there \-- is there an element
that you\'d like to get on the table with respect to this topic?

**[\>\>]{.underline}**

Let me take the prerogative of asking the ONC staff if there are any
elements with respect to the e-prescribing and pharmacy allergy that you
had wanted to the working group to consider.

**[\>\>]{.underline}**

I believe that \-- I don\'t know if Karen has dropped off for a second.

**[\>\>]{.underline}**

I just did, I have to turn off the mess upstairs, the noise on the PA
system, I apologize. Karen, the discussion is about there was no
feedback from the group on raising this e-prescribing potential policy
implication to the pharmacy allergy priority. And so my only knowledge
of this is that it\'s just that there\'s potential policy issues with
regards to the prescribing regs. Is the question do we want to maybe not
prioritize this as highly on the list because we know there\'s these
other issues?

**[\>\>]{.underline}**

Well, actually, it\'s a little bit more than that. As you think about,
it getting lab results in and interoperable exchange of lab results, is
essentially in many ways a be all and end all. Having medication lists
or even ones that the patient tells you about, are very much linked to
\-- could very much be linked to e-prescribing, not just knowing what
the patient is on but also it could lead to a whole other functionality.
And to the real question is, do we want to consider the functionality of
e-prescribing as being a significant priority that would be included
along with the medication, the history, the list of pharmacies, and the
allergies?

**[\>\>]{.underline}**

From the emergency providers, College of Emergency Physicians and
others, we understood that these were \-- they were really looking from
the perspective of data elements that \-- if one could access large
amounts of \-- or information about large numbers of individuals.

**[\>\>]{.underline}**

That is correct in terms of what we did on the emergency responder. But
in terms of the information elements, that are \-- to physicians, and
could lead to greater levels of adoption or be more useful in adoption.
Surely medication was a part of that. If we wanted to add on their use
as part of an e-prescribing use or use in we could note that as well.
That\'s really only reason I bring this up. Rather than just having it
as a data element. Because it has a unique functionality as part of
e-prescribing. That could be of interest and could be something that the
group would like to consider.

**[\>\>]{.underline}**

Well, let me recommend we haven\'t gotten any feedback, I don\'t know
whether the hour is late and we\'re losing people to other activities
given that it\'s both a Friday and a long call and very rich call
already. Why don\'t \-- I ask that the ONC staff send out that as a
question around the prioritization document so I think at this point
we\'ve gone through two or three iterations on the prioritization of the
data elements. Why don\'t we throw that out as a question for some
discussion we can come back to that either at the next working group
meeting or beforehand and put that up on the Website the results of the
discussion.

**[\>\>]{.underline}**

Especially with the recent final rules from the administration, which
specifically now would require in any scenario where IT software is
donated, presumably for the use of EHRs, that it must include an
e-prescribing component, I think that makes that all the more important
that we kind of prioritize the policy implications there.

**[\>\>]{.underline}**

Okay, let me can you, would you link it with the pharmacy allergy at
that priority level, are you offering a different recommendation?

**[\>\>]{.underline}**

I don\'t know that I\'m referring a different one, I don\'t think
somebody made a definite \-- maybe it\'s not that important, and I think
given the rules that come out, it really is.

**[\>\>]{.underline}**

I think as a clinician and internist that this is one of the critical
elements not only do I want the mechanism functionally to understand
what a person\'s been on, but this is a pivotal tool in terms of getting
to interoperable health information.

**[\>\>]{.underline}**

Right and by the administration including it, I think they think it\'s a
foregone conclusion this is one of the easiest parts should be able to
include in their EHR systems.

**[\>\> Chantal Worzala:]{.underline}**

This is Chantal at the American Hospital Association. Just two thoughts.
One, you know, there\'s a difference between data availability and
function of the system. All for e-prescribing, just a question of are we
opening a new category of areas to think about. I did want to raise
something that is a policy implication probably both if e-prescribing is
something put in as a function but also really having pharmacy
information available in an emergency situation. And that is that the
order entry systems that hospitals use, do not currently generally use
NCPD script and other standards used by outpatient e-prescribing, so
physician office EHR, e-prescribing components. And so for example, in
the Gulf States, during Katrina, and Rita, you couldn\'t really get,
even where there were good hospitals, electronic systems, you couldn\'t
get the medication information for your critically ill patients. Who
were being transferred from one place to another. And I have heard from
some hospital CIOs from that region as we move forward we need to work
on that problem.

**[\>\>]{.underline}**

That\'s a good point. And noted. I think it really was cognizant that
the southern governors and other\'s testimony spoke to the importance
this being a data element. That this should be prioritized in any system
or any priority list that comes forward.

**[\>\>]{.underline}**

Right, I guess I\'m raising the corollary standard problem.

**[\>\>]{.underline}**

Which is in order to get that data out of the hospital system, we\'re
going to need a way to tie standards \-- how hospital (indiscernible)
gets this order entry data and NCPD script and be able to draw
information from all those different places into one central database
when there\'s a crisis.

**[\>\>]{.underline}**

I think that\'s a very fair point. Especially also in terms of just the
communications infrastructure but I\'m not sure that we\'re going to \--
I think we may need to defer for this conversation the engineering
aspect, but to recognize and appreciate the point that you\'re making.

**[\>\>]{.underline}**

Other comments, thoughts?

**[\>\> Alicia Bradford:]{.underline}**

This is Alicia Bradford. I wanted to make a clarification because it
might be confusing from looking at it. The essence of this priority list
is toward the state of the technology critical component for the
ambulatory EHR adoption, so it\'s not specific to only the first
responder. That information here on this list, per request of the
Lillee. Additionally with the IM key capabilities but broader than first
responder data needs.

**[\>\>]{.underline}**

And I think the real concept here is on to assure that we have some of
the high priorities of data that will be most useful to physicians and
EHR adoption and getting back to your initial concerns, Jonathan, that
very first column is the list that we actually are going with and we had
a lot of discussion about and we just want to make sure that everyone is
in concert with how it should be prioritized. And also, picking up on
the previous discussion, if there are other issues that come up with any
of these items, then just to make sure we have all of those and that
would be the last column. It\'s really the first and last column we\'re
concentrating on with assurance that the first column is prioritized.

**[\>\>]{.underline}**

I think we\'ve heard both interest and endorsement on the prescribing
aspect. And particularly with respect to the new regs. Other comments or
issues?

**[\>\>]{.underline}**

If anyone has an open microphone, please mute your phone. Thank you.

**[\>\>]{.underline}**

Hearing none, I think then you hear both an endorsement for the
importance of the amendment as well as for the list overall, and we\'ll
use that as our working list for the time being, reserve the prerogative
to revisit as new issues arise. Let\'s switch now to the visioning
exercise, and appreciate again the support and put up the Office of the
National Coordinator. This is a document in evolution, and I think it
still requires a good bit of work. Being a recovering English major and
I take some issue with the word cataclysmic transformation, meaning a
violent upheaval or disaster. I believe the current state changing to
widespread implementation of health IT will be a paradigm shift and
possibly even a disruptive change, but I\'m more optimistic than
cataclysm. Nevertheless, we have a major paradigm to shift to occur to
achieve what I think many of us intuit as a future state where health
information is available, broadly interoperable, and supports not only
the clinicians across various aspects of care delivery but the patients
themselves as informed consumers and empowered consumers of healthcare.
So there is a long way and this is an emerging document that\'s helping
\-- or hoping to begin to set what is the future state look like when we
have achieved this interoperability. What is that future state in terms
of environment that promotes the safety and effectiveness and efficiency
of healthcare more broadly. So let me just open for some general
discussions here, I don\'t think we\'re going to wordsmith the document
today. But I\'d like to hear any comments on the general direction
issues particularly if they may relate to safety, personalized
healthcare, policy issues, the capacity for using health information for
learning systems particularly as we approach personalized medicine
genomic medicine and let me turn over to you for comments.

**[\>\> Chantal Worzala:]{.underline}**

This is Chantal. I thought this was good a document. I kind of like the
three columns in the table, indicating that we\'re moving forward. And
agree with pretty much everything on the front page there. On the second
page, I just had some thoughts. First, in the first point, the financial
business model, would think that we want to sustain physician and
hospital adoption and maintenance of EHRs. That\'s a question. And then
I do think that we have raised a number of policy issues in the
prioritization exercise as well as in our discussions, that will need to
be addressed and would think we probably want to put a sixth issue down
that is really addressing some of the policy issues. Patient ID, privacy
issues. Some of the things that we\'ve talked about as barriers along
the way.

**[\>\>]{.underline}**

Great points. And in fact we\'ll have some discussion of CLIA
momentarily from Dr. Bell. But great points. And personally look to the
future in terms of the information broadly in terms of constituencies
and that use that information.

**[\>\>]{.underline}**

Other comments, reactions to Chantal\'s comments?

**[\>\> Jason DuBois:]{.underline}**

I do have one thing. I think kind of building off \-- this is Jason.
Just building off what Chantal said. I think the issues of authorization
and authentication can probably be put into the fourth piece on that
second page.

The other thing, I don\'t see any talk of \-- a big part of what the
administration is doing \-- is both helping to foster the development of
RHIOs and the Nationwide Health Information Network. And that\'s not
reflected here at all. So I don\'t know whether that\'s appropriate or
not. But it was just something that I noticed.

**[\>\>]{.underline}**

That\'s a great point. We should have something that alludes to
expression of a architecture. I don\'t think we want to be specific in
terms of what that might look like, but certainly this is an aspiration
to create a framework for that interoperability.

**[\>\> Connie Laubenthal:]{.underline}**

This is Connie Laubenthal with ACP. I agree with the last comment and
also think that it can probably be done by expanding bullet number \--
the statement in number 2.

**[\>\>]{.underline}**

Okay, appreciate that.

**[\>\> Robert Smith:]{.underline}**

Jon, this is Rob Smith. Speaking for the VA more as a representative, I
think the other thing that is implicit in a lot of the documents here
but really I think should be mentioned more strongly is the impact on
patient safety. We\'ve talked about it a lot, I know it\'s been a major
topic in prior meetings, but it\'s not as much a part of this as I would
have expected.

**[\>\>]{.underline}**

Okay, I appreciate that. And I think that is critical, particularly
given the toll that we continue to report in terms of errors, avoidable
adverse events and every aspect of health services delivery.

**[\>\>]{.underline}**

Absolutely.

**[\>\> Jonathan Perlin:]{.underline}**

Other thoughts, inputs? Thoughts, inputs? Let me offer one of my own,
which is the good fortune to be working with the Institute of Medicine
on the learning health systems round table, and one of the things that I
see and hope for is a utility of this network of health information in
the future as contribution development of knowledge. Right now I\'m not
sure it\'s a patient expectation. It may be an anti-expectation their
data, their health data be used for the advancement of science. We
don\'t have systemic mechanism to understand potential downsides of new
drugs or products, but we also don\'t have the surveillance or the
cognizance of \-- for new uses. The other is the ability to match
patients\' health status and disease states with the genetic
information, and I think obviously there are any number of policy
issues. I think the privacy, but the real issue is the issue that
getting toward a learning health system we need to have an expectation
that are de-identified data be used to advance the state of knowledge,
then. This certainly is the platform for what is learning health system,
where new knowledge is created as a natural byproduct of the care
that\'s delivered and that occurs each and every day. I\'d like to see
that really as one of the emerging in this discussion. This lab document
in evolution. A tremendously important one of the let me thank the ONC
staff for the work on this thus far.

I think I believe it was Chantal who teed up the issue of policy as
relates to CLIA, and I\'ll turn to Dr. Bell for discussion of EHR
recommendation 3.0, and update on that.

**[\>\> Karen Bell:]{.underline}**

Thank you very much, Jonathan. I\'ve been working very closely with
Alicia and with the folks at CMS as well as our own legal staff in ONC
around various models and how we might move forward without a clear
guidance or regulation change. We actually are very close. We also have
been working outside of the government arena, in bringing the
appropriate parties to the table. When I say that we are very close, I
mean that we have discussed all of the issues. We have concepts that we
believe we believe we can move forward with, but the actual language
still needs to be reviewed by CMS to make final signoffs. So we were not
able to bring that to the Workgroup today. We intend to be able to bring
it at the next meeting. I did want to assure everyone that the work has
been in progress and we have certain directions that we believe we
should be going in. We just need to get the language down to everyone's
comfort. So, thank you very much.

**[\>\>]{.underline}**

Let me thank you for that update. Let me ask Karen or Alicia if there is
anything you would like to see up before we go to public comments.

**[\>\>]{.underline}**

Not here from HHS, no. I wonder if anyone who may be tuned in who is not
a working group member might like to offer any comments or questions at
this point, for the record. Let\'s open the phones for any public
commentary that people may wish to provide.

**[\>\> Jonathan Perlin:]{.underline}**

I\'m Dr. Perlin. I\'ll just give people a quick explanation of how they
can get in. Members of the public that are following along with us on
the Web right now will see the phone number up on a slide as well as
simple instructions to press Star 1 once you\'re dialed into the
meeting. That will put you into the question queue. I know we also have
some members of the public who were actually dialed in and listening to
this over the phone. If any of them would like to make a comment, they
simply need to press Star 1 if they are already called in. We will see
the name in the queue and open it up. You should give this about a work
their way through the operators and I will jump in and let the Chairs
know if anybody gets into the queue with comments.

**[\>\> Karen Bell:]{.underline}**

In the interim, this is Karen again. I had already promised Lillee and
Jonathan that we would never do a Friday afternoon Workgroup again and
I\'m making the promise to everyone else as well. Apparently, this had
been set up quite some time ago and given the rest of the schedule we
weren\'t able to change it. I know it\'s a very awkward time for most
people, so please accept our apologies for this one and only Friday
afternoon Workgroup.

**[\>\> Alicia Bradford:]{.underline}**

The next meeting is November 7, election day here in the D.C. metro area
at least, and I think the same timeframe in the afternoon.

**[\>\>]{.underline}**

Thank you, Alicia.

**[\>\>]{.underline}**

While we are waiting for the public to call in. I\'ll make the changes
we discussed today to the visioning document and send out both the
visioning document and the state of technology critical component
prioritization document to the Workgroup members, first thing Monday if
not later today. And if I could have a three-day turnaround on that so
we can wrap that piece of our work up.

**[\>\>]{.underline}**

Do we have anyone who is in queue?

**[\>\>]{.underline}**

No, it doesn\'t look we do today.

**[\>\> Jonathan Perlin:]{.underline}**

Okay, well let's call it a day. Let me thank all the presenters, for the
record, just terrific presentations. Very informative, important
contributions to the discussion. Very informative to the direction. To
Alicia and Dr. Bell and staff, and the Office of the National
Coordinator, let me thank you for putting together such a, for
facilitating the testimony of each of these terrific experts. I would
recommend that these presentations be available to the broader
community, as they were that good and that important. With specific note
of their importance and relevance to the entire communities work. Thanks
to all who have hung on, on this Friday afternoon. I wish everyone a
good weekend. Thank you for your participation. I would like to thank my
Co-chair Lillee for her terrific leadership and we\'ll talk to you all
next time. Thank you very much.

**[\>\>]{.underline}**

Thanks to you all. Bye now.