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USING INFORMATION TECHNOLOGY: FOR THE

HEALTH OF IT

HEARING

BEFORE THE

SUBCOMMITTEE ON THE FEDERAL WORKFORCE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

SEPTEMBER 1, 2006

Serial No. 109–245

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

BRIAN P. BILBRAY, California

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

LAWRENCE HALLORAN, Deputy Staff Director

BENJAMIN CHANCE, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON THE FEDERAL WORKFORCE AND AGENCY ORGANIZATION

JON C. PORTER, Nevada, Chairman

JOHN L. MICA, Florida

TOM DAVIS, Virginia

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

PATRICK T. MCHENRY, North Carolina

JEAN SCHMIDT, Ohio

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

ELEANOR HOLMES NORTON, District of

Columbia

ELIJAH E. CUMMINGS, Maryland

CHRIS VAN HOLLEN, Maryland

EX OFFICIO

HENRY A. WAXMAN, CALIFORNIA

RON MARTINSON, Staff Director

CHAD BUNGARD, Deputy Staff Director

CHAD CHRISTOFFERSON, Legislative Assistant

ADAM C. BORDES, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on September 1, 2006 ....................................................................... 1

Statement of:

Crane, James P., M.D., associate vice chancellor for clinical affairs, CEO

Washington Univ. Physicians Faculty Group Practice, Washington University School of Medicine ............................................................................ 58

Green, Daniel A., Deputy Associate Director, Center for Employee and

Family Support Policy, Office of Personnel Management ......................... 10

Paz, George, chairman, president and chief executive officer, Express

Scripts, Inc. .................................................................................................... 46

Powner, David, Director, IT Management Issues, U.S. Government Accountability Office ......................................................................................... 21

Rothstein, Mark A., Institute for Bioethics, Health Policy, and Law University of Louisville School of Medicine ...................................................... 67

Letters, statements, etc., submitted for the record by:

Crane, James P., M.D., associate vice chancellor for clinical affairs, CEO

Washington Univ. Physicians Faculty Group Practice, Washington University School of Medicine, prepared statement of .................................... 62

Green, Daniel A., Deputy Associate Director, Center for Employee and

Family Support Policy, Office of Personnel Management, prepared

statement of ................................................................................................... 13

Paz, George, chairman, president and chief executive officer, Express

Scripts, Inc., prepared statement of ............................................................ 51

Porter, Hon. Jon C., a Representative in Congress from the State of

Nevada, prepared statement of .................................................................... 3

Powner, David, Director, IT Management Issues, U.S. Government Accountability Office, prepared statement of ................................................. 23

Rothstein, Mark A., Institute for Bioethics, Health Policy, and Law University of Louisville School of Medicine, prepared statement of ............... 69

(1)

USING INFORMATION TECHNOLOGY: FOR THE

HEALTH OF IT

FRIDAY, SEPTEMBER 1, 2006

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON FEDERAL WORKFORCE AND AGENCY

ORGANIZATION, COMMITTEE ON GOVERNMENT REFORM, St. Louis, MO.

The subcommittee met, pursuant to notice, at 1 p.m., in the Main

Auditorium, Eric P. Newman Education Center, Washington University Medical Center, St. Louis, MO, Hon. Jon C. Porter (chairman of the subcommittee) presiding.

Present: Representatives Porter and Clay.

Staff present: Ronald Martinson, staff director; B. Chad Bungard,

deputy staff director, chief counsel; Chad Christofferson, legislative

assistant; and Adam C. Bordes, minority professional staff member.

Mr. PORTER. Good afternoon. I would like to bring the meeting

to order. I appreciate you all being here today. Can you hear me

OK? I guess that’s a yes. Thank you very much.

Today I’d first like to acknowledge our committee and staff that

are with us. As subcommittee chairman, it’s an honor for me to

have some great folks that work for me that helped put today’s

meeting together. We are the Subcommittee on the Federal Workforce and Agency Organization, where we have jurisdiction over all

Federal employees, and jurisdiction over all Federal agencies. Plus

we have oversight on many, many other issues that are impacting

our communities across the country.

I am a Member of Congress from the State of Las Vegas. I used

to tell folks that I represent Nevada and people would say, Well,

that’s nice. And one time I was at a—actually I was at Bethesda

Naval Hospital and one of the folks that had been serving in Iraq

had been in the hospital and I introduced myself as coming from

Nevada, and he looked up to me and said, Have you ever been to

Las Vegas? And I smiled, and he smiled, and I said, Yeah, I represent Las Vegas. The young man next to him in the hospital bed

said, Yeah, I want to go to Las Vegas when I get out of the hospital. So I find that if I say I’m from Las Vegas, I seem to get a

twinkle, and many times a story. Just know that what happens in

Las Vegas stays in Las Vegas.

But I am honored to be here today with my committee and

staff—I was asked to be here by Lacy Clay, also a very good friend

of mine, and a good friend I know to St. Louis and the State and

the country. I want you all to know that it is Lacy that has brought

the subcommittee here on a very important topic that I know is

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going to impact every man, woman and child in the country, and

it has to do with technology and information and healthcare and

what we can do to help improve healthcare.

Lacy and I worked on numerous pieces of legislation to try to

help our families with the healthcare and have some ownership of

healthcare. And today we had a chance to have lunch and have a

meeting next door to the hospital at the Barnes-Jewish Center.

And I tell you, again, great folks. We met with Michael Behaven,

Senior Vice President, General Counsel; Lee Fetter, President of

the Children’s Hospital; David Weiss, Dr. Andy Ziskin, LeeAnn

Chilton. I don’t think I have missed anyone, but to our friends at

BJC, thank you very much for your hospitality and sharing with

us some of the state-of-the-art equipment, technology and means of

taking care of your patients. So to those folks at BJC, thank you.

Truly, we have had numerous hearings on this around the country, and BJC has some of the finest. So it is a credit to you, Lacy,

and your community.

Before I give my formal opening comments, I would like to turn

it over to Lacy Clay for his opening statement.

[The prepared statement of Hon. Jon C. Porter follows:]

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Mr. CLAY. Thank you, Mr. Chairman. Let me begin by welcoming

you and our committee staff to St. Louis, my hometown. It’s been

a real pleasure working with you on health IT issues, and I look

forward to continuing that.

We are especially lucky today to be hosted by our friends at

Washington University Medical Center, whose leadership is firmly

committed to utilizing and pioneering the latest in medical treatments and technological advances on a daily basis.

I look forward to hearing the testimony of our distinguished panels. The benefits of utilizing health IT in our healthcare system will

result in shorter hospital stays, improved management of chronic

disease, and a reduction in the number of needless tests and examinations administered by physicians.

Although it is not a silver bullet for our Nation’s healthcare deficiencies, health IT is a tool that will allow us to reduce medical errors, improve the quality of care provided, and strengthen our

health-related research capacities in the future.

According to 2004 data, our national healthcare expenditures make up approximately $1.9 trillion of our gross domestic product.

That represents 16 percent of our entire economy. Nevertheless,

the institute of medicine estimates that medication errors alone result in approximately 1.5 million unnecessary injuries annually.

These errors often lead to significant injuries, or in some cases

death. Thus, it seems only appropriate to embrace health IT as a

tool, not only to improve our healthcare outcomes, but to also receive a better return on our critical healthcare dollars.

Therefore, I believe it is time for the Federal Government to lead

in the development and adaptation of a nationwide health information network for electronic records that is more efficient than current paper-based record systems, which will pave the way for improved-quality measures to track patient outcomes.

We are not alone as advocates for health IT. In fact, Health and

Human Services Secretary Leavitt recently stated that the implementation of electronic health records is the most important thing

happening in healthcare today.

According to the Center for Studying Health System Change, the

use of HIT for clinical activities such as electronic health records

has nearly doubled since 2001 to about 20 percent of all providers

nationally. Local examples, whom I am very pleased to represent,

include physicians here at Washington University Medical Center,

and also providers within Missouri’s Medicaid program. These programs are now able to measure patient outcomes and the effectiveness of treatment regimens in order to improve future care.

Furthermore, electronically stored information can serve as a

basis for broad-based medical research as patient identities are removed and records are studied to determine the outcome of past

therapies and treatments. As we pursue treatments and cures for

genetically based disorders, such as some cancers and Parkinson’s

disease, having identifiable clinical information readily available to

the research community will be invaluable.

I readily agree with my friends who believe that stronger security and privacy protection for a person’s medical information are

desperately needed, and these protections should be integral to the

establishment of a nationwide health IT network.

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However, I do not agree with critics who state that health IT

platforms used for the preservation or transmission of identifiable

patient information are any more vulnerable to security breaches

than and current paper-based record systems.

In fact, many (inaudible) in accordance with HIPAA have already

transitioned from paper-based records to electronic health records

for exchanging patient financial and clinical information. What we

need now is Federal leadership to define the roles and responsibilities of a nationwide health IT infrastructure. Appropriate standards should include: Requirements for protecting patient information, system interoperability standards, vendor software and hardware requirements and auditing processes to ensure institutional

and vendor compliance with all laws and regulations.

In addition, we must explicitly give patients control over their

health information for third-party disclosure or research purposes.

As long as patients can be assured that they have ultimate control

over the sharing of their personal information, then I believe that

most will embrace the benefits and efficiencies of E-Health solutions in the future.

It is in this vein that Chairman Porter and I have authored and

cosponsored innovative legislation to bring the benefits of E-health

to everyone.

Chairman Porter’s bill, H.R. 4859, the Federal Family and

Health Information Technology Act of 2006, and that’s a mouthful,

would establish a program for Federal health benefit carriers to

provide electronic health records among all Federal employees.

I’ve also introduced H.R. 4832, the Electronic Health and Information Technology Act of 2006, along with Chairman Porter, and

in summary, my bill would strengthen the role of HHS, as our Nation’s HIT standard (inaudible) authority provide (inaudible) to

healthcare providers who want to transition to E-Health systems,

and strengthen our patient privacy laws by establishing a uniform

standard for all citizens.

Once again, thank you, Chairman, for your indulgence, and I

welcome our panelists and guests. Thank you very much for being

here.

Mr. PORTER. Also let the record reflect that this is a bipartisan

panel. Contrary to what you read many times, from our friends

around the country in media, and we have some good friends, this

is a very important part of what we do, to work together. As a Republican from the State of Nevada, and I know Mr. Clay is a Democrat, we see what happens across the country and we see what

happens in Washington, but this is an example of an issue that has

no partisan boundaries. This is an issue that is about our families

and our communities, and we agree that this should not be a partisan issue, which is why we are here together today, and I am

honored to be here with my friend, Congressman Clay. And to his

staff, I appreciate their hospitality. It has been a pleasure working

with everyone in your office. And, of course, to Washington University, to the campus, what a great place to be. It’s a phenomenal facility, and your reputation is absolutely one of the best, and I think

very germane and I think the point is well-taken, that we are talking about a key issue in the halls of Washington University where

the university is on the cutting edge of healthcare and education.

8

But also, I gotta tell you, I get nervous when I come to the university. I didn’t do real well myself. Maybe there is still hope because I probably would have been sitting in the room sleeping in

the back, 30 years ago.

But again, it is outstanding, so thank you.

Now, I have to give these formal remarks so bear with me for

a moment. It’s part of being chairman.

The issue before us today is one that has been gathering momentum and is of exceptional importance to every single American. It

is an issue to which every single American can relate. Nearly every

one of us will need some sort of healthcare in his or her life.

As a world leader in healthcare science, the United States is still

deficient in healthcare information management and exchange.

Today we still have people dying because nonexistent or incorrect

information is being presented to the caring physician who then

passes that information, or a lack thereof, onto the patient in the

form of wrong treatment. People are being injured and even killed

by incorrect prescription drugs or drug dosages. Healthcare costs

are increasing at an alarming rate due to the malpractice insurance costs and rising patient premiums. With the implementation

of health IT, we can significantly reduce the number of medical errors in patient costs. This has been studied and proven in many

demonstration projects across this country, and even the globe. We

are here today to discuss what we can do and what is being done

to help further the progress of America as we move out of the

paper-based healthcare system into an electronic one. I don’t think

I can reiterate enough a statement made by former Speaker of the

House, Newt Gingrich, ‘‘Paper kills. Instead of saving lives, our

current paper-based health system is taking over.’’

Over the past year and a half as chairman of the subcommittee,

I met with numerous groups and individuals regarding the use of

health IT, and the more I learned, the more I realized how important it is for us to get health IT in place. It is very unfortunate

that senseless deaths are occurring every day simply because a

pharmacist could not read a doctor’s handwriting, or because a patient was admitted to the hospital unconscious and the doctors

treated him for a stroke when he was having an insulin shock reaction. It is unfortunate, people, like my mother, who is 85, need to

fill an entire cabinet full of information and paperwork that she

must haul to doctors regarding her own treatment, and I think it

is time that we moved forward.

I realize change is difficult, and with technology continuing to

grow, improving and changing at an incredible rate, it can be difficult to change ourselves. Culturally speaking, technology can be

somewhat of a shock to our systems. But if you look around, none

of us are still using telegraph machines to transmit messages. We

have cell phones, Blackberrys, e-mail and much more. It is observed—absurd for the healthcare information exchange to remain

frozen in time while everything else continues to move fast-forward. Think if the rest of healthcare had done the same. Would we

have modern medicines that kill harmful bacteria? Would we have

cancer treatments? Would we even have something as simple and

as commonplace today as the x-ray machine? If all these were created to improve the quality and delivery of healthcare, why are we

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now stumbling and waiting while innocent people are harmed or

killed by paperwork? I for one do not want to stand by while senseless deaths occur each year. That’s why I have introduced legislation, along with my colleague, Mr. Clay, that would provide health

information technology to every Federal employee, and there are

close to 9 million, with their families in the Federal healthcare system.

It is my hope that this will eventually provide a way for health

IT to reach everyone across the country, not just Federal employees.

The President stated that he wanted the Federal Government to

become a leader in the health information technology movement. I

believe that my legislation helps us do that. This legislation would

require insurance carriers that provide health insurance to Federal

employees to create carrier-based electronic health records, and

eventually personal electronic health records. I believe the information about your health should be shared with you and should be

shared in the format that you understand.

Unfortunately, today, in healthcare, the patient really is the last

one to see his own information. Everyone else has it but him or

her.

Mr. Clay introduced legislation, of which I am an original cosponsor, that makes it easier for doctors to begin using health IT, by

offering grant and loan programs as well as creating exceptions to

certain (inaudible) and anti-kickback laws, but also codify the office

of the national coordinator for health information technology along

with this office to receive proper Federal funding. Together, we are

trying to make a difference in modern healthcare.

On August 22nd, the president signed an executive order that I

believe will move the Federal Government’s plans toward better

healthcare. It is something that will be a complement to H.R. 4859

very nicely. The executive order will require insurance carriers that

do business with the Federal Government to provide price transparency to their consumers. It also will require these carriers to

adopt certain quality standards which will be monitored and published by the Office of Personnel Management. The executive order

will require the carriers to adopt HIT interoperability standards.

To be recognized by the Federal Government, it will also require

plans to develop more consumer-driven health options.

Our government witnesses today will hopefully touch upon this

new executive order and what they feel its outcome will be. They

will also tell how the Federal Government’s progress is, in the

realms of HIT, along with what we need to do to improve, we can

expect in the coming months and years as health information technology continues to prosper. It is my hope that the private and education witnesses will tell us how the private sector is working to

make health IT a national reality, whether or not health IT issues

are being taught at very basic levels of medicine and where it is

today in our education and training field. In order for us to change

the paper mindset, new doctors and nurses are going to have to be

trained and educated before they enter the medical field. Otherwise, it will be a continual uphill battle for full HIT implementation.

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I welcome our witnesses today, and welcome those in the audience, many of whom I understand are students and faculty, and I

hope today’s hearing will be interesting and educational.

I would like to note that we will be concluding the hearing at approximately 2:30, that we will be calling on each of our visitors

today to keep their comments to approximately 5 minutes.

But first, we need to do a few procedural matters. I’ll ask unanimous consent that all members have 5 legislative days to submit

written statements, and questions for the hearing record, the answers to written questions to be provided by the witnesses also be

included in the record. Without objection, so ordered.

Also ask unanimous consent that all exhibits, documents and

other materials referred to by members and the witnesses may be

included in the hearing record, that all members be permitted to

revise and extend their remarks. Without objection, so ordered.

It is also the practice of this committee to administer the oath

to all witnesses, so if you would now please stand and raise your

right hands.

[Witnesses sworn.]

Mr. PORTER. Let the record reflect that the witnesses have answered in the affirmative. Please be seated.

As I mentioned, each witness will have approximately 5 minutes,

and any further statements can and will be entered into the record.

Of course, the full committee is not here today. As I mentioned, the

full committee will have the ability to enter information in the

record also.

First I would like to introduce the members of the panel. We will

be hearing from Mr. Daniel Green, the Associate Director of Employee and Family Support Policy at the U.S. Office of Personnel

Management, we will then hear from Mr. David Powner, the Director of IT Management Issues with the U.S. Government Accountability Office.

We will then be hearing from Mr. George Paz, the president and

CEO of Express Scripts, Inc., Dr. James P. Crane, the associate

vice chancellor for clinical affairs, School of Medicine at Washington University, and Mr. Mark A. Rothstein, director of institute for

bioethics health policy and law at the University of Louisville,

School of Medicine. Welcome. We appreciate you being here. Mr.

Green.

STATEMENT OF DANIEL A. GREEN, DEPUTY ASSOCIATE DIRECTOR, CENTER FOR EMPLOYEE AND FAMILY SUPPORT

POLICY, OFFICE OF PERSONNEL MANAGEMENT

Mr. GREEN. Mr. Chairman and members of the subcommittee,

Representative Clay: Thank you for inviting OPM here today to

discuss the benefits of using health information technology to improve the quality and delivery of healthcare. The Office of Personnel Management administers the Federal Employees Health Benefits Program which covers more than 8 million Federal employees,

retirees and their dependents. OPM offers competitive health benefits products for Federal workers, like other large-employer purchasers, by contracting with private sector health plans. OPM has

encouraged participating health plans to be responsive to consumer

interests by emphasizing flexibility and consumer choice as key feaVerDate 11-MAY-2000 10:35 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\DOCS\36679.TXT KATIE PsN: KATIE
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tures of the program. Adoption of health information technology is

an important healthcare improvement that is being implemented

by many of our health plans on behalf of their customers.

In our efforts to ensure healthcare rates are competitive and consumer choice is maximized, we are encouraging the use of health

information technology for medical recordkeeping purposes and for

many provider-to-consumer processes.

As the administrator of the countrys largest employee health insurance program, OPM plays a key role in fulfilling President

Bush’s vision of making medical records easily accessible to consumers through the adoption of advanced technologies.

Ten days ago, the President signed the Executive order, Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs. The order firmly

underscores the President’s continued commitment to the promotion of quality and efficient delivery of health care. With the

order, the President is greatly expanding the information that will

be made available and he is committing the Federal Government

to transparency in pricing and quality, adopting health IT standards, and providing insurance options that reward cost-conscious

consumers.

OPM is strongly committed to working with FEHB carriers on

carrying out the Presidents goals and objectives. In fact, we have

already begun taking steps in this direction.

To ensure the electronic availability of quality and price information, OPM is working with carriers to encourage them to make

their health IT systems interoperable. OPM is also continuing to

work with carriers to ensure that FEHB enrollees have access to

innovative health insurance options that allow consumers to select

health plans with lower premiums as well as allow them to share

in the savings that may result from efficiencies gained with the implementation of health information technology.

Our work with FEHB carriers and the work we are engaged in

with HHS and others have helped us focus our near-term efforts

to further the Presidents initiatives. Some carriers are offering personal health records to enrollees based on the claims, medications

and medical history information already available in their

healthcare systems. Some are also working with their pharmacy

benefit managers to encourage ePrescribing, to link their disease

management programs to health IT, and to ensure compliance with

Federal requirements that protect the privacy of individually identifiable health information.

We plan to expand our Web site information to highlight the

health IT capabilities of plans so that prospective enrollees can

view this information in reviewing their health plan choices for

2007.

We are committed to confronting the rising cost of healthcare to

help members of the Federal family afford the insurance coverage

they need. This is reflected in our commitment to the Presidents

Executive order and in our goals to strengthen the patient-physician relationship through price and quality transparency. We believe greater transparency in healthcare prices and quality can

help patients better control their medical expenses. Therefore, we

have taken steps in the FEHB Program to raise the level of transVerDate 11-MAY-2000 10:35 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\36679.TXT KATIE PsN: KATIE
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parency that is available to enrollees for both provider prices and

health-plan quality by the end of this year. We will highlight the

plans that have demonstrated their commitment to OPMs

healthcare cost transparency standards in our annual Guide to

FEHB Plans and on our Web site.

Our commitment to transparency aligns with our efforts to promote wider use of health information technology. Each initiative

supports the other, as articulated in the Executive order. Information technology will provide for standardized interoperable medical,

pharmaceutical, and laboratory cost and utilization information.

Making this information more transparent to consumers will help

them to understand the value of personal health records in managing their own health needs and their healthcare expenses.

Together, we believe health IT and transparency can drive better-informed and more rational medical care decisions, resulting in

increased efficiency and better quality care.

We appreciate this opportunity to testify before the subcommittee

and look forward to working with you on furthering health information technology initiatives. I will be glad to answer any questions you may have.

[The prepared statement of Mr. Green follows:]

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Mr. PORTER. Thank you, Mr. Green. Mr. Powner, we welcome

you again, and you are the Director of IT Management Issues at

the GAO.

STATEMENT OF DAVID POWNER, DIRECTOR, IT MANAGEMENT

ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Mr. POWNER. Chairman Porter, Representative Clay, we appreciate the opportunity to testify on healthcare information technology. As we have highlighted in several recent reports and testimonies for you, Mr. Chairman, as well as for Chairman Davis at

the full committee, significant opportunities exist to use technology

to improve the delivery of care, reduce administrative costs and to

improve our Nation’s ability to respond to public health emergencies.

Mr. Chairman and Representative Clay, I would like to commend

both of you for introducing key legislation intended to further the

adoption of health IT. Leveraging the Federal Government as a

purchaser and provider of healthcare is critical. Mr. Chairman,

your legislation calling for OPM to advance the creation of health

records does just that. The Federal Employee Health Benefits Program has over 8 million beneficiaries, and advancing electronic

health records to this critical mass would be significant.

Representative Clay, I first would like to thank you for your

many years of overseeing key technology issues as the ranking

member of the technology subcommittee. Your oversight of the Federal Government’s annual $60 billion investment in IT has been essential and appropriately focused on improving the government’s

information security posture. Your health IT legislation highlighting the need for standards, privacy and security practices and a

strategic plan are essential building blocks to accomplish the president’s goal of a nationwide implementation of interoperable health

IT.

This afternoon I will briefly describe the importance of information technology to the healthcare industry, progress to date and additional actions needed to put in place a detailed game plan for

meeting the president’s goals. Information technology can lead to

many benefits in the healthcare industry that we have reported on

for the past several years. For example, using bar code technologies

and wireless scanners to verify the identities of patients and their

correct medications can and has reduced medical errors.

In addition, surveillance systems can facilitate the timely collection and analysis of the disease-related information to better respond to public health emergencies. Standards-driven electronic

health records have the potential to provide complete and consistent medical information necessary for optimal care. Electronic

health records are critical since they are the central component of

an integrated health information system, have the potential to reduce duplicative tests and treatments and can lead to reduction in

medical errors.

Several major Federal healthcare programs including Medicare,

Medicaid and OPM’s Federal Employee Health Benefits Program

provide healthcare services to over 100 million Americans. Given

the Federal Government’s influence over this industry, Federal

leadership can lead to significant change associated with the adopVerDate 11-MAY-2000 10:35 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 C:\DOCS\36679.TXT KATIE PsN: KATIE
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tion of IT. Given this in April 2004, President Bush called for the

widespread adoption of interoperable healthcare records within 10

years, and established a position of the national coordinator for

health IT.

The national coordinator’s office has issued a framework to guide

the Nation’s efforts, establish working groups of industry experts,

and awarded contracts to define future direction. Through these efforts my written statement describes progress that has been made

in five key areas.

First, certification criteria for ambulatory or electronic health

records has been defined and 22 health record vendors have

achieved certification.

Second, interoperability standards have been identified.

Third, prototypes for a national health information network are

currently being pursued.

Fourth, privacy and security issues are being studied through

contractual means in a newly formed American Health Information

Community Work Group.

Fifth, the integration of public health data into these many efforts continues to be a focus area.

HHS through its contracts in the American health information

community has made tangible progress to date, but significant

challenges and efforts remain, including, further refinement of an

accepted interoperability standards and insured widespread and

consistent implementation, agreeing to an approach and deploying

a secure national health information network, addressing privacy

concerns so that these do not impede technological progress, fully

leveraging the government as a purchaser and provider of

healthcare and providing incentives for the private sector to partner and participate.

As we have previously recommended, these challenges and remaining efforts could benefit from a national strategy that includes

detailed plans, milestones and mechanisms to monitor progress.

Until these plans and milestones and performance measures are

completed, it remains unclear specifically how the President’s goal

will be met and what the interim expectations are for achieving

widespread adoption of interoperable electronic health records.

Mr. Chairman and Representative Clay, thank you for your leadership in pushing IT to this critical industry.

[The prepared statement of Mr. Powner follows:]

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Mr. PORTER. Thank you very much for your testimony. We will

go off the script for a moment and summarize what we’ve heard so

far. We feel a responsibility as a Federal Government to set the

standard. There are a lot of different programs, different approaches to health IT and we are happy that’s happening. But as

Mr. Clay and I looked at the issues specific to Federal employees,

we felt that if we can set the standard with 8 million or more participants, that will incur the balance of the private sector across

this country to step up to the plate. That’s the insurance carriers,

providers, all gamuts of the healthcare delivery system.

So not only are we talking about Federal employees, we realize

that if we can set the standards, we will save lives across the country. So we appreciate the government’s perspective, the experts

that we have here today.

Next we would like to hear from the private sector and from the

university system and get their perspective on what’s happening.

I know that we have with us Mr. Paz who is the president and

CEO of Express Scripts, Inc. I understand that you are one of the

largest providers in the country and a major employer here in the

St. Louis area and in the State. Mr. Clay and others in the community have spoken highly of what you are doing for the community

and for healthcare, so we appreciate you being here. Mr. Paz, if you

would give us your testimony, please.

STATEMENT OF GEORGE PAZ, CHAIRMAN, PRESIDENT AND

CHIEF EXECUTIVE OFFICER, EXPRESS SCRIPTS, INC.

Mr. PAZ. Good afternoon, Chairman Porter and Congressman

Clay. My name is George Paz, and I am chairman, president and

CEO of Express Scripts, Inc., a Fortune 150 company based here

in St. Louis.

Express Scripts provides pharmacy benefit management services

to tens of millions of Americans throughout its relationships with

employers, managed care plans, unions and governmental entities.

We employ over 13,000 people across the country and in Canada.

Last year we processed more than 475 million prescription claims,

and in the last quarter we reported an industry-leading generic fill

rate of 56.3 percent.

I am here today to talk about our experiences in electronic

healthcare, and to offer our recommendations for you to consider in

your efforts to spur further adoption and utilization of these exciting technologies. I have prepared additional materials which I

would like to submit for the record.

Before I begin, let me first congratulate the Congress on your efforts to date. Congressional efforts toward the encouragement of

electronic healthcare solutions have created great momentum in

both the public and private sectors. Provisions in the Medicare

Modernization Act relating to electronic prescribing standards have

led to positive dialog toward standards in both government and the

private sector. Inclusion of the directive in the MMA relating to the

creation of exceptions to the Stark law and safe harbors under the

Medicare fraud and abuse laws, have led to positive developments

on both fronts which may help to spur adoption.

Also before I begin, let me just clarify that when we talk about

electronic prescribing, it is important to note that what we mean

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is a process by which a prescribing physician, at the point of prescribing, has access to current eligibility, formulary, medication

history and other relevant information, in order to inform the prescribing decision and facilitate a discussion with the patient about

the costs and benefits of differing treatment options. We are not

simply referring to an electronic process to move a prescription

from point A to point B.

From the early days of the Internet boom, Express Scripts has

been working with technology vendors in their pursuit of solutions

that would allow physicians to prescribe medications more safely,

more efficiently, and more affordably for their patients. Early on,

we formed relationships with many of these companies to provide

formulary information for our members so that it could be made

available to physicians at the point of prescribing. However, as the

industry grew, we came to realize that working with each of these

companies individually did not maximize efficiency, nor did it allow

the industry to maximize the potential of these new technologies.

At about the same time, our chief competitors were coming to the

same conclusions.

In February 2001, we formed RxHub with Medco Health Solutions and a company that is now Caremark. The purpose of RxHub

was three-fold. First, we wanted to create a common infrastructure

to connect many payors and prescription benefit managers to many

electronic prescribing vendors. Second, we wanted to create transaction standards so that we could conduct electronic prescribing

transactions in a standard format across all connected participants.

Finally, we sought to create a critical mass of information so that

physicians who adopted electronic prescribing technologies could

get access to relevant prescribing information for a sizable portion

of their patients.

I am proud to say that our vision for RxHub has been achieved.

In fact, RxHub now connects six data sources to over 30 technology

vendors, and the numbers continue to grow. RxHub led a comprehensive industry-based consensus process that led to the creation of transaction standards for electronic prescribing, and those

standards have become the de facto industry standard. A number

of them are currently being pilot-tested in conjunction with the

CMS pilots for recognition of e-Prescribing standards for the Medicare program. By adopting electronic prescribing solutions connected to RxHub, physicians today can access information to create

safer, more affordable prescriptions for over 150 million Americans.

Nonetheless, our overall vision for electronic prescribing has yet

to be fully realized. The industry remains hampered by a patchwork of State laws and regulations that create conflicting demands

on prescribers and electronic prescribing vendors. The standards

for electronic prescribing envisioned under the Medicare Modernization Act thus far only apply to Medicare, and don’t address

all of the issues germane to electronic prescribing. Whereas, we believe, the MMA envisioned a comprehensive national set of standards for electronic prescribing that would promote broad adoption.

The legislative language has been interpreted as essentially creating a 51st standard of requirements for Medicare patients as an

overlay to the 50 existing State regulatory schemes applicable to

electronic prescribing. Because these State laws are not preempted,

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the Medicare scheme cannot drive the market as is sometimes the

case. This needs to be fixed.

Another remaining issue, perhaps related, is that electronic prescribing cannot reach its full potential until all physicians adopt it.

Getting physicians to adopt the technology has remained more

challenging than we had hoped, and the reasons for that are varied. I’ll offer here just a few.

First, and perhaps foremost, physicians have generally not been

given incentives to transform their paper-prescribing to electronic.

Adoption has been most successful where payors and/or employers

have joined together to help physicians purchase the technology, or

offered financial incentives tied to adoption and the use of it. In

most markets, however, no one employer or payor has a significantly large portion of the market to justify paying for technology

initiatives that will serve to benefit all patients.

Moreover, in order to make a meaningful impact on overall utilization, adoption initiatives often would need to reach thousands of

physicians. While stand alone electronic prescribing solutions are

relatively inexpensive, in the vicinity of $2,000 per physician for

the first year, the cost of providing technology to thousands of physicians is often daunting.

Consequently, physicians must make the decision to adopt, and

fund it on their own. But many physicians believe they should not

be required to fund the technologies themselves, since most of the

financial benefit from enhanced prescribing accrues to the payors,

employers, and patients. These issues could be solved, either

through a funded mandate, or better-aligned incentives for physicians. Given the new Medicare drug benefit, the Federal Government has as much at stake as anyone.

Another issue facing physicians is what to adopt. The significant

and growing interest in Health IT by the Federal Government over

the past few years has drawn great attention, and has spurred the

industry to further develop technologies and pursue interoperable

solutions. At the same time, the sheer volume of activity in the industry and in Washington have left many wondering what the outcome would be. The push toward electronic personal health records,

interoperable electronic medical records and regional health information organizations, combined with Federal initiatives like the

pursuit of a National Health Information Infrastructure, the American Health Information Community, and various legislative proposals, have left some physicians afraid to adopt any technology for

fear of it becoming obsolete in the near future.

This is unfortunate. Workable solutions exist today, and should

not wait. Perfection in the form of interoperable health records for

every American, should not become the enemy of good. Good can

be achieved today, by improving quality and reducing costs in connection with prescription medications, through electronic prescribing. What’s more, in addition to the immediate benefits that are

achievable through broad adoption of electronic prescribing, it is

also a good first step for clinicians toward more sophisticated solutions.

The adoption of electronic prescribing is relatively simple. The

technology generally is compatible with existing office systems used

by physicians, installation is relatively easy, and the learning curve

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for using the technology is quick. At most, physicians need a little

extra time to get used to using a stylus and a handheld computer,

rather than paper and a pen. More importantly, adoption of the

technology does not disrupt other physician-office systems. Existing

records remain, but are augmented by electronic prescribing solutions.

In contrast, for a physician to adopt a full electronic medical

record system, the entire office needs to be transformed. While the

transformation is clearly achievable, and solutions are becoming increasingly sophisticated, it is often daunting for physicians. Entire

rooms of paper records need to be digitized for future access, or a

hybrid system would need to be adopted to accommodate the physicians need to see the historical record in order to make current

treatment decisions. In that instance, physicians would need to access both a paper and an electronic medical record. Many physicians simply cannot face the expense or the disruption of such a

major paradigm shift. This has major implications for the ability of

our healthcare system to tackle the problem. Today, physicians

trained using electronic records often have had to learn to use a

paper system when they joined an existing practice. It is not a simple problem, and a subset of patients with electronic personal

health records wont be enough to push a physician to make the

transition.

Until electronic medical records are widespread in physician offices, we believe the push toward electronic personal health records

may be misplaced. While greater patient involvement in their own

healthcare is a laudable goal, without an interoperable system

through which physicians can easily interact with such records,

they aren’t likely to succeed in enhancing efficiency and safety in

the delivery of care. Ultimately, it will only re-create the current

system in which it is incumbent upon patients to inform their physicians of existing medical conditions and prior history. Having a

new system to achieve that, whether through printouts or Web access, may not add much. Patients who utilize them may be better

equipped to be advocates for their own better care, though many

may elect not to use them given that their physicians wont be able

to do much with them.

In contrast, getting physicians to prescribe electronically will create great impact for our entire healthcare system. Internal unpublished research at Express Scripts has estimated that just a single

percentage point increase in generic utilization creates approximately a 1 percent savings in overall drug spend. Electronic prescribing has been shown in a number of published studies to help

physicians increase generic utilization by multiple percentage

points.

As important, the recent Institute of Medicine report, Preventing

Medication Errors, estimates that there are at least 1.5 million preventable adverse drug events per year, creating cost in excess of

$3.5 billion. That report lists a number of potential solutions which

may help bring this problem under control. Among the offered solutions are the adoption of electronic solutions by prescribers, and

greater patient involvement in their own care. These are achievable goals. Many electronic prescribing solutions integrate solutions

which allow patients to provide inputs as to their own medications,

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including over-the-counter medications, which are then readily accessible to physicians using the system. These solutions are available today. They are affordable, and they have great potential for

transforming the cost and quality of care. We urge you to look

closely at these solutions as you deliberate about how programs for

Federal employees can spur change in our entire healthcare system.

In closing, let me reiterate our principal recommendations: First,

we believe it is imperative to clearly establish a comprehensive,

Federal preemptive set of standards for electronic prescribing,

leveraging industry experience and the workable processes adopted

by standards development organizations.

Second, we urge you to help find ways to either assist physicians

with the cost of adoption of electronic prescribing, or implement appropriate incentive arrangements for them to adopt on their own,

and help push physicians toward adoption of electronic prescribing

as a logical first step toward capturing the advantages of e-health.

Finally, we recommend that any Federal efforts toward the encouragement of other e-health solutions such as personal health

records or electronic medical records, make explicitly clear that all

solutions must be developed to be compatible with the e-prescribing

standards, so that physicians will be confident when adopting electronic prescribing that other developing technologies will be compatible. Thank you for having me here today.

[The prepared statement of Mr. Paz follows:]

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Mr. PORTER. Thank you, Mr. Paz. I appreciate your testimony.

Next we have Dr. James Crane, associate vice chancellor for clinical affairs, Washington University.

STATEMENT OF JAMES P. CRANE, M.D., ASSOCIATE VICE

CHANCELLOR FOR CLINICAL AFFAIRS, CEO WASHINGTON

UNIV. PHYSICIANS FACULTY GROUP PRACTICE, WASHINGTON UNIVERSITY SCHOOL OF MEDICINE

Dr. CRANE. Thank you, Mr. Chairman and Congressman Clay.

We appreciate you coming to Washington University Medical Center today to hold this hearing, as well as the opportunity to discuss

the benefits and challenges of utilizing health information technology to improve both the quality and delivery of healthcare.

My name is James Crane. I am an actively practicing physician

and also serve as CEO of Washington University’s faculty group

practice. By way of background, our group practice is composed of

980 faculty physicians, or roughly one in every 10 physicians practicing in the State of Missouri. We are the third-largest academic

group practice in the Nation and we encompass 53 different medical and surgical subspecialties. Each year we care for nearly

300,000 patients annually, with 75 percent of our clinical activity

occurring here on the Medical Center campus and the remaining

25 percent distributed across 49 locations in suburban St. Louis

and rural Missouri and Illinois. We are the largest Medicaid physician provider in the State of Missouri and a critical provider of specialty care for the uninsured in our community.

I am here today to share with you our progress in implementing

an electronic health record for our patients, the benefits we hope

to achieve and the hurdles we face.

Many of our patients have chronic and complex medical problems

and require highly coordinated care involving multiple subspecialties. This, along with the geographically distributed nature of our

clinical practice, were major catalysts in our decision to move to develop an electronic health record for our patients.

As you’ve heard, EHRs offer many advantages for both patients

and providers. My comments today will focus on four specific ways

in which the quality and efficiency of patient care can be enhanced

by health information technology.

The first specific way is the ability to have a single integrated

patient chart. Historically, each of our 53 subspecialties here on the

campus have maintained their own paper medical records which

are stored in different locations. As you can imagine, managing

paper records for 300,000 patients seeking the care of 53 different

subspecialties across a 130-acre campus, not to mention our dozens

of off-campus clinics, is an enormous and highly complex undertaking. Our EHR initiative allows us to integrate these separate paper

charts into a single integrated health record for each patient. This

insures that all of the physicians involved in a patient’s care have

full access to the information they need to make informed medical

decisions and deliver the best possible care.

The second benefit is the ability to have real-time access to a patient’s chart after-hours. Patients commonly present at nights or on

weekends with emergent and sometimes life-threatening situations.

An integrated EHR provides the treating physician with instant acVerDate 11-MAY-2000 10:35 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 C:\DOCS\36679.TXT KATIE PsN: KATIE
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cess to a complete list of the patients medical problems, their medications, and other information regarding their past medical history

that can eliminate the need for redundant testing, expedite care

and prove critical in guiding management and influencing clinical

outcomes. We have designed our EHR’s so the patients medical

record can be immediately accessed via a HIPAA-compliant secure

network from virtually any location, including a hospital environment, the emergency room, the clinic, a physicians academic office,

their home or even from out of town.

A third major benefit from my perspective is the opportunity to

enhance patient safety. As has been mentioned, the Institute of

Medicine estimates that 1.5 million Americans are injured annually by preventable medication errors. Our EHR solution includes

an e-prescribing component that guards against medication errors

via built-in logic that automatically checks for proper dosage, drug

allergies and potential adverse interactions with other medications

the patient may be taking.

Another way to enhance patient safety is via the task management functionality built into our EHR solution. As an example, the

system automatically alerts the ordering physicians of any abnormal lab results. This ensures that abnormal lab findings are acted

upon promptly and not inadvertently lost or filed without proper

physician review.

The fourth benefit I’ll mention is the ability to advance medical

discovery and define best clinical practice via clinical outcomes research. As a research institution, Washington University is focused

not only on providing the best care possible, but also in finding

ways to make care even better. Properly designed EHRs create a

searchable data base that can be used to answer important clinical

questions about the efficacy and the safety of new therapies and

procedures. We are designing our EHR system in such a way that

anonymous patient data can be mined, analyzed and utilized to advance the practice of medicine. Electronic retrieval of clinical data

will become increasingly important in the future as advances in

genomics allow us to tailor or personalize medical therapies to

make them more effective and reduce unwanted side effects.

Let me move on now to two key challenges and lessons learned

as we have deployed our enterprise-wide EHR at Washington University School of Medicine.

The first point I would like to make is the startup costs are substantial. Once fully implemented, EHRs can enhance physician and

support staff productivity and reduce operating expenses associated

with paper-record storage, dictation and transcription of physician

notes and copying and faxing of paper records to referring physicians and other consultants involved in a patients care. To achieve

these improvements, the Medical School is investing $10.5 million

to implement our EHR solution across the faculty practice, an average cost of $12,445 per faculty physician. Our experience suggests

that while these gains will be sufficient to offset the ongoing maintenance costs for our EHR system, we will not recover the startup

and development costs. This is a significant challenge for us to

fund internally and is the major reason we are phasing in our EHR

over a 4-year period.

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The pace of EHR adoption on a national basis would be greatly

accelerated if external public or private-sector funding were made

available to help providers defray the cost of migrating from paper

record systems to electronic format. This would also be a sound investment for governmental and private payors. For example, the

Center for Health Information Technology has estimated that universal adoption of e-prescribing across the Nation would save

payors $29 billion annually thanks to systems that automatically

alert physicians to formulary coverage and generic drug options.

While payors would be the primary beneficiary of universal e-prescribing, physicians must bear the implementation and ongoing

maintenance cost for e-prescribing systems.

One of the merits of H.R. 4832 is the creation of statutory safe

harbors that would allow hospitals and payors to donate health IT

software and hardware to physicians, thereby helping to mitigate

the substantial financial costs associated with EHR adoption. As

the door is opened for the donation of technology, we believe steps

should be taken to ensure that such assistance is motivated by the

goals of improved patient care and quality and not for purposes of

competitive advantage.

Direct Federal funding to help providers implement EHRs would

serve as an even greater catalyst to facilitate the widespread physician adoption of health information technology and should be given

serious consideration.

The second point I would like to make has to deal with the complexity of designing an integrated EHR. A key challenge in getting

physicians to migrate to electronic health records is demonstrating

their value. Busy clinicians must feel confident that an EHR will

enhance their ability to deliver better care and to enhance patient

safety. Physicians also need assurances that any EHR solution will

improve, not impede, physician and staff productivity. To provide

these assurances, we have taken great care to design our EHR to

meet the unique needs of each subspecialty in terms of what information is captured and how that information is organized in an

electronic format to streamline work flow and efficiency.

We have developed a process for engaging the physician and support staff stakeholders within each subspecialty to customize the

design of our EHR to meet their particular needs. This process

takes, on average, 6 months to complete the design, train the physicians and staff and then ‘‘go live.’’

We have also had to invest significant time and resources in

building interfaces with other clinical information systems to provide our clinicians with the ability to review radiology studies online and to review lab results and inpatient hospital data within

a single integrated electronic record.

The take-home lesson here is that designing and building a robust EHR requires careful thought, meaningful stakeholder engagement and most importantly, time. The complexity of EHR development and implementation needs to be appreciated by Federal

leaders as they craft legislation defining timelines and standards

for electronic health records.

We recognize that legislation such as H.R. 4832 is intended to

foster the growth of interoperable health information systems. I am

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encouraged by such efforts, especially those to assist healthcare

providers in making this paradigm change.

Thank you, again, for the opportunity to share our experience

and our perspective as providers and for your understanding of

these complex and important issues.

[The prepared statement of Dr. Crane follows:]

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Mr. PORTER. Thank you, Dr. Crane. I appreciate it. Next is Mark

Rothstein, director, Institute for Bioethics Health Policy. Welcome.

STATEMENT OF MARK A. ROTHSTEIN INSTITUTE FOR BIOETHICS, HEALTH POLICY, AND LAW UNIVERSITY OF LOUISVILLE

SCHOOL OF MEDICINE

Mr. ROTHSTEIN. Thank you very much. Good afternoon, Chairman Porter, Representative Clay. My name is Mark Rothstein. I

am the Director of the Institute for Bioethics Health Policy and

Law at the University of Louisville School of Medicine. I am also

Chair of the Subcommittee on Privacy and Confidentiality of the

National Committee on Vital and Health Statistics, which is the

statutory public advisory committee to the Secretary of Health and

Human Services on health information policy. I am testifying today

in my individual capacity.

I am pleased to testify about the significant privacy and confidentiality issues surrounding the conversion of our health records

system from paper to electronic form and the linking of electronic

health record systems through an interoperable network to create

the Nationwide Health Information Network.

Many individuals are concerned about the potential for sensitive

information to be divulged through negligent or intentional acts of

snoops, hackers, rogue employees, or—as we’ve seen recently—the

careless storage of sensitive information. Although these concerns

are valid and demand strong security measures, I want to focus on

more fundamental questions of privacy and confidentiality. In

short, as we move from paper to electronic records, its not just the

form of the records that will change, its the magnitude and nature

of the contents.

Today, the No. 1 protection for privacy and confidentiality of individual health information is the fragmentation of the health

records system. It would be practically impossible to aggregate all

of the paper health records for the typical adult who has lived in

several places and who has seen numerous healthcare providers for

a myriad of conditions over many years. In an electronic health

records system, however, the fragmentation will be gone. That’s a

good thing for a variety of individual and public health reasons

that you heard discussed previously. But, it will mean that with a

few key strokes, healthcare providers will be able to obtain all of

an individual’s health records. In many cases, the old records will

have no medical relevance or clinical utility to the reason the person is currently being treated. Furthermore, the old records may

contain extremely sensitive information related to domestic violence reports, drug and alcohol treatment, reproductive health, sexually transmitted diseases, mental health, and all sorts of other

things.

An even more troubling implication is the fact that individual

health records are frequently used in nonhealthcare settings. It is

common for employers, life insurers, and other third parties to condition a job or an insurance policy on an individual signing an authorization for the release of his or her health records. Such practices are legal. According to my research, there are approximately

25 million compelled authorizations in the United States each year.

Today, sensitive health information is disclosed to numerous entiVerDate 11-MAY-2000 10:35 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00070 Fmt 6633 Sfmt 6633 C:\DOCS\36679.TXT KATIE PsN: KATIE
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ties, many of which are not covered under the HIPAA Privacy Rule.

In the future, the volume and detail of these records will increase

greatly.

In designing the NHIN, individuals need to be given a meaningful say in how their records are linked and disclosed. To date, however, there has been inadequate consideration of the specific rights

of individuals to, for example, opt in or out of the NHIN or to control what records are disclosed and to whom. There also has been

little effort in researching the feasibility of privacy-enhancing technologies that could be incorporated into the NHIN. If such measures are not included within the NHIN architecture, it may be too

late or prohibitively expensive to add these features in the future.

Mr. Chairman and Representative Clay, our health records system and our healthcare system in general are based on the trust

that individuals have in their physicians, nurses, and other professionals to safeguard their confidential information. If we develop an

interoperable, comprehensive health records system that undermines patient trust, then the political support for the NHIN will

be destroyed, and substantial numbers of individuals are likely to

engage in defensive practices to protect their privacy that could

jeopardize their own health and also the health of the public. I

thank the members of the subcommittee, and I look forward to

your questions.

[The prepared statement of Mr. Rothstein follows:]

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Mr. PORTER. Thank you very much. We appreciate your testimony. I will open up the questions from the panel. And due to

time, we will be submitting additional questions for you to respond

to after today’s meeting.

Mr. Clay, would you have any questions?.

Mr. CLAY. I would like to start with Mr. Paz. Your testimony was

pretty compelling, and I know that a major concern within your industry is that many States have different E-prescribing standards

that are not uniform with Federal standards authorized for Medicare. Please explain to us how this impacts your business and services provided. Is legislation required to harmonize Federal and

State standards as some have proposed, or are current HHS E-prescribed standards adequate to meet the needs of our——

Mr. PAZ. Yes, Congressman Clay. In response to your question,

I would say that there are several limiters for physician adoption

of electronic prescribing. One that is often cited is that of trying to

get a universal standard, because the concern is that to the extent

that the one that exists in the Medicare Modernization Act doesn’t

necessarily comport with all State laws. It has to be—it has to fit

both of those two different standards. As you know, the State pharmacy boards often regulate those type areas and impact on the legislation that’s ultimately passed.

And when we look at that, we see that many different physicians

are more reluctant to adopt the technology because, again, they

don’t want to go through the cost and the hassle of implementing

if in fact they don’t know for sure what the ultimate end game is

going to be. I think if we could standardize the end game, we have

a much better chance of getting adoption by the physicians.

Mr. CLAY. How about in your business, the interoperability between you and your competitors? Is that easy for you-all to communicate, to do comparison of E-script, I guess, with your patients and

maybe you-all have common patients, share patients, can you all

communicate now?

Mr. PAZ. Yes, us and our two largest competitors. There are

three large prescription benefit managers in the United States: Express Scripts, Medco Health Solutions and Caremark. The three of

us have come together and standardized the process through an entity call RxHub which we each have funded in order for it to help

identify a standard process in this vein. So to the extent that you

are a member or your prescription is managed by any one of the

three of us, that data is there. It is on the standardized format.

Any type of device that accesses that data can go into the RxHub

and find out which of our different plans actually exist, and from

that we can gain eligibility data, prescribing information on that

individual, a whole wealth of data that can really have a very positive outcome on that member’s—that patient’s ultimate health outcome.

Mr. CLAY. Thank you for the response.

Dr. Crane, we have just passed the first anniversary of Hurricane Katrina, and in a few days we will mark the fifth anniversary

of the 9/11 attacks. One of the lessons that we learned from these

national tragedies is that in case of a terrorist attack or a major

national disaster, emergency responders are hampered by a lack of

information and inability to communicate with each other quickly.

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From the homeland security perspective, in a national emergency,

how valuable would a secure national electronic health records network be for emergency room physicians and other medical providers?

Dr. CRANE. I would think again, it would be extremely valuable,

Congressman Clay, to be able to access patient information like

that in such situations. I would say that I think the issue of disaster preparedness is more complicated than that. We had the experience here in St. Louis after Katrina. While we weren’t directly affected, we mobilized and staffed a command center out at the airport, and that was a demonstration to me, again, of perhaps there

were opportunities to improve our preparedness just to be able to

manage and staff a facility such as that, mobilize the manpower,

for example, to be able to staff such a facility. And recently we had

a severe heat wave and power outage in the St. Louis area and I

think we did a little better that time around. There were some of

the emergency rooms in the area that stopped accepting new patients, some hospitals that had to stop admitting new patients, and

we learned some lessons from Katrina. But I believe there is still

opportunity to improve.

To answer your question, I think, again, it could be extremely

valuable. We have to make sure that the system not only exists but

they can be operated in emergency situations. You have to have redundant facilities. And one of the concerns in this area would be

an earthquake. So wherever that information is housed is impacted, again, having a system in and of itself is not very helpful.

Mr. CLAY. I am sure your experience with the Katrina evacuees

was very difficult to piece together their medical history once they

arrived here.

Dr. CRANE. Absolutely.

Mr. CLAY. Thank you very much.

Mr. PORTER. I want to talk about one of the success stories for

the moment of Katrina, and in the hours before Rita, Blue Cross

Blue Shield transferred about 800,000 of their insurer’s files from

manual to electronic data form literally in 4 days. That’s true of

the success of the industry, 800,000 in 4 days. I know that concern

about losing files in that natural disaster. And I know you mentioned Homeland Security and how critical that is.

We experience a challenge in our community of Nevada with 40

million visitors a year in a State of about 2.2 million people. Of

course, a lot of folks who travel aren’t sure about all their health

information. And I’ve had a number of meetings and hearings in

Nevada, and if I could mention Colorado, but probably 10 to 12 percent of the visitors to our emergency rooms in Nevada are visitors

for different reasons. Unfortunately a lot of folks don’t know what

their information is. And as I mentioned in my opening statement,

may not even be conscious for some health related reasons. So it

is difficult.

What I saw today at Barnes-Jewish Hospital is really an example of where we need to be around the country. I know that a lot

of companies don’t have the ability—or healthcare providers don’t

have the ability to do what the hospital has done here, but it truly

is an example. If more of those in the private sector would do what

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the hospital is doing here, we wouldn’t need to be having hearings

by the way because they have done a tremendous job.

But a concern that I have is privacy. I hear all the time, especially as we are looking at the Federal employees, with the employee labor organizations, and they are very concerned. I know

that we trust our banks and our financial institutions and our

ATM machines and maybe we shouldn’t but we do. We trust that

information when we enter—when I check on my mortgage or

check on other financial tools that I have, I go to the Web. I am

wondering in healthcare, probably one of the bigger areas of concern is if you are in a hospital bed and there is a chart sitting outside your door, there really is access to information, and I think

what we learned at least this morning, a Xerox machine can copy

a lot of papers in a hurry so there is not a whole lot of privacy,

even though they try in a hospital setting. But I guess my question

has to do with how we can eliminate some of these fears on the

security side. Can we trust our financial institutions? It seems to

me the only one that has all of our health information—or the only

one that doesn’t have the health information is the individual. Everybody else has it. But what can we do to provide more security?

I know this is your area. Could you help us a little bit, Mr.

Rothstein?

Mr. ROTHSTEIN. Yes. I would be happy to try. I think security is

a major concern of the public. And actually if you see polls or do

them yourselves as I have done of the public and you ask them are

you concerned about health privacy, they tell you, yes, I’m worried

about somebody hacking into my records. So what they associate

as privacy really is, as you mentioned, security.

There are all sorts of technological proposals and possible solutions to make them more secure. But you raised, I think, a very

good point relative to, how do you build the public’s confidence that

whatever measures we would come up with really do work. That

I think takes a major effort that we have not yet been willing to

undertake.

For example, when we enacted HIPAA and put the privacy rule

into place, there was very little in the way of public and professional education. If we don’t do a better job with the NHIN, then

I’m afraid we’ll have all these doubts that you suggested might

occur. And so the public really needs to have a degree of confidence

that their records will not be wrongfully disclosed. The only way

we can do this is to make sure that people have a role in formulating what the rules are and also that they get good information

about what the protections are that are in place.

Mr. PORTER. I guess what concerns me is that, again, my information is available to the world right now. I can’t get it as an insurer or a patient, but everyone else can get my information. It

seems to me that we can put in technology safeguards where actually I could see the information for once, and not unlike BarnesJewish where there is a log of anyone that checks in, any information there is a log, and anyone that checks in has to have the proper credentials, it seems to me that we can provide that protection,

but why is it that we trust our banks but we would not trust our

healthcare?

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Mr. ROTHSTEIN. Well, I think for many people healthcare information is conceived of being even more sensitive than financial information. You have some kinds of illnesses that are tremendously

stigmatized and that, for example, could result in someone losing

their ability to get health insurance or life insurance or employment or all sorts of other things. Or they fear this, whether it will

actually happen or not. So I think health information is sort of in

a special category that people are more worried about. And also, it

is much more complicated and complex than financial information.

It goes over a long period of years and it has many different dimensions than most people’s financial information. And I think what

happens to that, people don’t really understand.

Mr. PORTER. With our financial records, if the credit reporting is

wrong, we fix it. With healthcare, we have no idea what information they have and they could be providing improper information

now because we don’t know what it is.

Mr. ROTHSTEIN. That’s right, and under the privacy rule you

have a right to suggest corrections, but you don’t have a right to

make those corrections. And, in fact, many healthcare providers

have informally or formally adopted the policy of never making corrections to records because they think it is going to be a bad precedent. So they will take you—if you want to put something in your

file, fine, but we are not changing what’s already in our file, even

if it misidentifies a person or has somebody else’s lab results, they

tend to stay in there and you can object and suggest a correction.

My main concern about privacy is the scope of the information

and who gets it. There are lots of people who have, that is third

party entities, not healthcare people, who have a legitimate interest in individual’s health information, but not the comprehensive

cradle to grave healthcare information. We currently have no way

of restricting the amount of information that is disclosed. So as a

practical matter, even if I have an enlightened employer or an enlightened insurance company and they say send me Mark’s

healthcare information that’s related only to this topic, don’t send

me the rest, there is no way to do that. I am concerned that we

are putting into effect an electronic system that doesn’t have that

capacity either. The amount of information that will be disclosed is

going to be much more great.

Mr. PORTER. I think there is presumption and reality and I think

they are two different issues, but do you think there is the ability

to protect this information if done properly.

Mr. ROTHSTEIN. I think there is. Unfortunately, we haven’t spent

any money in the private or public sectors researching and trying

to develop the technology that would allow us, for example, to develop what’s called contextual access criteria. This was one of the

recommendations of the National Committee on Vital Health Statistics, the secretary in our June letter, and what this would do,

this would be a way of designing information to segregate it into

various categories, and so that when someone says I have a Workers’ Compensation claim that was filed, then the orthopedic information and so forth would go and other kinds—I’m told in a hearing from the designers of the NHIR, this could be done, but there

is no push to do that.

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We also think that there should be in the healthcare uses rolebased access criteria. Now, most of the integrated healthcare systems such as Wash U, and I assume this is the case and I am assure Dr. Crane will correct me, even though the people at Wash U

Medical Center, if their healthcare providers have a right to see patient’s records, they don’t have the same right of access depending

on what their job category is. So, in other words the food service

workers don’t get to see the full records. The billing clerks don’t get

to see the full records but the physicians do. What we’ve suggested

is that when records are transported via the NHIN downstream to

somebody else, that those protections go with them. So that records

that are discovered or obtained through the NHIN also come with

a capacity and the restrictions of these role-based limitations. Unless we built that into the system, we’re going to have a system

that provides less privacy protection than the individual healthcare

systems that we have.

Mr. CLAY. Thank you, Mr. Chairman. Mr. Powner, we know that

at least 50,000 Americans die needlessly each year because of medical errors due to incomplete or inaccurate medical records, lack of

coordination of care between providers and unforeseen drug interactions. Any estimate on how many lives you think could be saved

if we have any national health IT?

Mr. POWNER. I think when you look at the national statistics, it

is in the tens of thousands of people that die annually due to medical errors. It is clear, we don’t have exact numbers, but clearly you

are talking tens of thousands that could clearly be affected due to

the current errors that exist.

Mr. CLAY. Let me ask you about the NHIN that Mr. Rothstein

just mentioned it. Can you identify the flaws in the NHIN planning

efforts concerning issues of security, reliability and long-term integrity, and would you agree that the NHIN, once created, should be

considered a component of our Nation’s critical infrastructure, isn’t

it no different in concept than an electric grid serving a region.

Mr. POWNER. Representative Clay, first of all, when you look at

the NHIN it is currently in a prototype phase, so it is unclear exactly what the security measures will be. I know that’s being

looked at and I know Mr. Rothstein referred to that.

It is important, though, when we look at the NHIN that we build

security in. We focused on security standards. We engineered in up

front many years of looking at information security at the Federal

agencies. That’s one of the big problems, we don’t engineer it up

front and then we pay 10 times later down the road after we found

out about the security vulnerabilities. So that will be key going forward when we look at our approach for the NHIN.

Now, your question in regards to critical infrastructure protection: Public health in the healthcare industry since the mid 1990’s

has been considered critical infrastructure along with the electric

power grid, with our transportation systems, with chemical infrastructure. That’s been called for in Presidential directives and Executive orders as well as laws that currently exist with Homeland

Security.

The healthcare industry, similar to what we are discussing here,

is behind the curve when it comes to securing our critical infrastructures. Public health, clearly when you look at public health

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perspectives, that’s critical infrastructure. Those of us who work in

the critical infrastructure arena are very concerned about—when it

is not a natural disaster but if it is a terrorist activity and you

have a physical attack and then you attack the response mechanisms. So we talked about the benefits with Katrina where we

have electronic health records that are now automated. If you actually had some cyber disruption, that could really wreak havoc. So

clearly it should be considered critical infrastructure, but clearly

the industry needs to move forward as our electric industry, the

chemical industry and some of the others in advancing security in

terms of critical infrastructure protection.

Mr. CLAY. Thank you. Mr. Green, a question. As a member of the

AHIC panel, and since HHS declined to provide a witness today,

I thought I might ask you a question about the panel activities.

The AHIC (inaudible) for HHS to review and accept. These include

standards for secure messaging, lab information transactions and

certification of vendor products. As an AHIC participant, can you

update us on the status of the recommendations and if the final

standards have been developed.

Mr. GREEN. Representative Clay, I will sort of point out, I am not

the best person to speak to this. But I can say that we, as members

of the work group on consumer empowerment and being involved

in the program that the standards—all of the recommendations

that came from the work group require that standards be in place

in order for many of the initiatives to be underway. It is my understanding that the first set of standards are scheduled to be issued

this month.

Mr. CLAY. Thank you for that response.

Mr. PORTER. I have one additional question. What do you think—

from the Federal side, what do you think we need to do to help expedite the implementation of the HIT across the country? What

else can we do?

Mr. POWNER. Mr. Chairman, I think a couple things here. First

of all, we need a clear strategy, a game plan going forward. We

need a clear strategy going forward. Your focus is on leveraging,

the Federal Government, we clearly need to do that. We need to

create incentives for the private sector to participate and partner.

I think it was mentioned by several of our panelists here, your legislation looking at grants and loan programs, that’s a good one. It

has been suggested that we offer tax incentives for providers who

are implementing IT. If got serious about the incentives, we could

help move the marketplace. If we got serious about leveraging the

Federal Government as a purchaser and provider—I mean, we

have 100 million people who are provided services through Federal

healthcare programs. That would do a lot. Those would be the key

items.

Mr. PORTER. What do you think, Mr. Green?

Mr. GREEN. Well, of course, my view is pretty parochial. I’m more

interested and have responsibility for Federal employees and retirees and their families and their healthcare. But I do support the

idea that the government should lead by example, and the Executive order that the president signed, the legislation that you each

have proposed would help forward that. We are very large purchasers. My understanding is that one-quarter of all U.S. citizens

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have health insurance through the Federal Government, so that

can drive the marketplace. And of course, the reason that we are

interested and we are doing this, is because it is—makes good

sense for our program and for our enrollees. So hopefully if that

can also further the overall effort, that’s even better.

Mr. PORTER. Thank you.

Mr. CLAY. Thank you, Mr. Chairman. Mr. Paz, just kind of a

final question that may help summarize some of what we heard

today, we are hopeful that this national health IT system could

save at least $80 billion per year in precious healthcare dollars.

What impact would that money have if applied to closing the

healthcare disparities gap among minorities and low-income Americans, and could be savings that also provide a way to help cover

the 46 million Americans who don’t have any health insurance. I

don’t know if you have given that any thought, but if you have,

could you shed some light on it for folks.

Mr. PAZ. Absolutely, Congressman Clay. A couple things. First of

all, to digress just slightly, since we are on the anniversary of the

hurricane last year, I think it is important to note the value of electronic data and what exists today. When we look at what happened

in New Orleans and the surrounding areas, many of the people

were displaced. Many diabetics without insulin, many people in

need of their heart medications. We at Express Scripts worked

through the Labor Day weekend and worked with many of the

boards of pharmacies. The States did a fabulous job, in my opinion,

and also working together in order to relax those standards which

require before a prescription can be dispensed that they could go

back and look at our prescription drug data. So as an example, an

individual who might be in Oklahoma City or here in St. Louis or

in Minneapolis or anywhere else in the country, if we could show

that person had an insulin prescription delivered within the last 6,

8 months, same thing with different medications, that the boards

of pharmacy waive those rights so they didn’t have to find a local

doctor to write a prescription. I think that’s a small testament to

what actually—both the States working together with the private

sector in order to develop solutions for people that were in great

need. But it did take—it did utilize the electronic information that

exists today. Now, to the extent that we can make that even more

robust and get it in the hands of the prescribing physician, I think

there is a tremendous opportunity here.

With respect to saving money, at Express Scripts, some of the

studies that we have done, we believe that there could be a generic

fill rate in excess of 70 percent in the marketplace today. On average, that number is running slightly north of 50 percent. For every

1 percent reduction means about a 1 percent reduction over all

drug trends. Many physicians are influenced by the pharmaceutical

manufacturers and the very expensive branded products coming to

market. Sometimes those are required, but often the generic solutions are quite—are quite sufficient.

I think to the extent that we can utilize that information that

exist today to inform the physician of the opportunities that exist

out in the marketplace, it could free up significant—millions and

millions of millions of dollars to then further help with those areas

that you referenced, such as the needs of the uninsured. We still

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have multiple, multiple layers of uninsured that exist today. And

again, through the use of generics and other medication and access

opportunities, I think it will go a long way to improving the health

of millions of Americans today.

Mr. CLAY. Thank you for that response. And my time is up. I

want to thank the entire panel for your testimony today. You have

certainly shed some light on this important subject.

I want to also thank my constituents and those in the audience.

I would love to hear from all of you here by e-mail, telephone, letter, and even verbally on your thoughts on health IT so that we

can address it in a very adequate way that may relieve some of

your fears, if you have fears, about the subject. And again, I want

to also thank the chairman, Jon Porter, for being here and the entire staff of the government. Thank you very much.

Mr. PORTER. Thank you. And I think your last question summarized it really quite well. No. 1, we want to save money.

Healthcare—we want to continue to have the best in the world, but

we also want every man, woman and child to have access so it is

not a have-and-have-nots issue. And that’s why we are also working on some technology for Medicaid recipients. That’s critical with

some projects. We have $150 million I think we approved this year

to help in Medicaid so everyone can have access to health technology. And I think some of the Medicaid recipients probably need

as much as anyone because of the moving around and different

communities. We want to make sure that information is available.

As we want to save money, we also want to make sure that people

have ownership over their healthcare. I think with ownership we

are going to have far fewer health problems. We are going to be

more proactive. And I think it is important to mention, it will save

lives. 700,000 injuries related to healthcare accidents from improper prescription to information and close to 80 or 90,000 lives.

So we know what the problem is. I think what we have to find

is a solution to the privacy issue, has to be done sooner, it has to

be done fast. Delivery, we have so many test projects around the

country, I think it is a time that we can stop testing things, stop

talking about things and that’s part of the reason that Lacy and

I are here today. We want to take action, find solutions. Again,

there is the Katrina example, Blue Cross/Blue Shield, there is insurance carriers and there is Barnes-Jewish and there is HCA in

Nevada. So I think really, Mr. Powner, you said it well, we need

a very defined mission and goal and we need to get the job done;

a clear vision. That’s why we are here today. So I thank again, Mr.

Clay, you and your staff for your hospitality. I think that this is

a first-class facility here at the university. Thank you to the folks

at Washington University. To the witnesses, thank you for traveling, those that did. And to students that are here today, we need

your help as we move forward. And one other individual I want to

thank, Frank Taylor, where did he go? Frank, thanks.

So with that, the meeting is adjourned and the members of the

committee will have additional time to submit their questions and

we will be forwarding some to you as witnesses. Thank you all very

much for being here. The meeting is adjourned.

[Whereupon, at 2:38 p.m., the subcommittee was adjourned.]

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