# Presentation: 847626

## US Barriers to the Adoption of HIT

- Blackford Middleton, MD, MPH, MSc
- Partners Healthcare System, Inc.
- Harvard Medical School
- AHIC EHR WG October 13, 2006

## Agenda: Three Key Points

- Asymmetry of Risk and Reward for HIT
- Market Failure for HIT
- Early Market Effects
- Discussion

## Asymmetry of Risk and Reward for HIT

- “He who pays is not he who gains”
- Disincentives for long-term care management (payers and providers)
- Disincentives for healthcare information exchange
- No contribution to margin
- Decreased ancillary services

## The Value of Ambulatory CPOE

- Summarized costs and benefits across clinical, financial, and organizational factors
- ACPOE Taxonomy:
- Basic: passive references, no pt data, no EDI
- Intermediate: some order and Rx patient-specific CDSS, limited pt data, no EDI
- Advanced: adv. order and Rx patient-specific CDSS, full patient data, with EDI
- Full-time ambulatory provider
- panel of 2,000,  3875 annual visits, capitation rate 11.6%
- Total Rx, Lab, Radiology expenditures (almost $1.2M):
- Rx: $650K
- Lab: $166K
- Radiology: $355K

## National Cost Savings to Providers and Other Healthcare Stakeholders

- National Cost Savings to Providers and Other Healthcare Stakeholders

**In US Millions**

## Market Failure for HIT

- Absent effective business case, slow development of standards
- EMR functional definition
- Healthcare information exchange and interoperability
- Messaging, information model, controlled terminology
- Hidden Costs of Knowledge Management

## Value of HIEI: Key Findings

**Standardized, encoded, electronic healthcare information exchange would:  **
- Save the US healthcare system $337B over a 10-year implementation period
- Save $78B in each year thereafter
- Total provider net benefit from all connections is $34B
- Net benefits to other stakeholders:
-     	 - Payers  $22B			- Pharmacies  $1B
- 	- Laboratories  $13B 		- Public Health  $0.1B
-  	- Radiology centers  $8B
**Dramatically reduce the administrative burden associated with manual data exchange**
**Decrease unnecessary utilization of duplicative laboratory and radiology tests**

- Walker, J et al Health Aff 2005 Jan 19

**Notes:**
First, let me share with you the Headlines, or the punch lines, of our analysis. 
(cite above)

## US Would Benefit from Healthcare Information Exchange

- Nationwide implementation of standardized healthcare information exchange would:
- Save $337B over 10 years
- Save the US $78B annually at steady state
- Cumulative breakeven during year five of implementation
- There is a business case for standardized healthcare information exchange and interoperability

**Notes:**
Cite above

## Early Market Effects

- Early adopters
- Turmoil in the HIT vendor space
- First mover disadvantages
- No network effects achievable with sparse adoption
- Low functionality product offerings limit value

## Accelerating US EHR Adoption

**Financial Incentives to Stimulate EHR Marketplace**
- Reimbursement reform
- Capital availability
- EHR Certification and Accreditation
**HIT Standard Setting**
- Specify essential standards for EHR (data, messaging, reference architecture)
- Specify a minimal clinical data set
- Specify minimal functional standards for HIT systems
**Enabling Policy**
- Relaxation of Stark (MMA)
- Establish federal policy on clinical data ownership and stewardship
- Establish policy framework for Regional Healthcare Information Authorities
- Establish U.S. National licensure in the health professions
**Educational, Marketing, and Supporting Activities**
- Establish educational and marketing campaign for the public – "Got EHR?"
- Establish educational campaign for health professionals
- Establish educational campaign for healthcare management
- Create a National Healthcare Information Technology Resource Center

*Middleton B et al. JAMIA Oct 2004*

## Discussion

## “I conclude that though the individual physician is not perfectible, the system of care is, and that the computer will play a major part in the perfection of future care systems.”						Clem McDonald, MD						NEJM 295:1355, 1976

- Thank you!
- Blackford Middleton, MD
- bmiddleton1@partners.org