August 2005
IN THIS ISSUE:
NHIN Projected to Cost More Than $156 Billion
According to a new study whose results were published in the August 2 issue of the Annals of Internal Medicine, President Bush's proposal to create a National Health Information Network (NHIN) would cost more than $156 billion in initial capital investment and $48 billion in annual operating costs over the next five years. 
The study was conducted by researchers at Brigham and Women's Hospital and Massachusetts General Hospital and funded jointly by the Harvard Interfaculty Program for Health System Improvement and the Commonwealth Fund.
According to the article, the study projected that establishing and operating the HIT systems would account for about two-thirds of the $156 billion initial capital investment and that the remaining one-third of funds would be allocated to support system interoperability. Maintaining system functionalities would require about $27 billion annually, and ongoing interoperability efforts would cost about $21 billion annually. An earlier study by the Center for Information Technology Leadership estimated that a national health information infrastructure would generate $78 billion in annual savings when fully phased in.
National Health IT Coordinator Dr. David Brailer, a panelist and one of the developers of the financial model used for the study, said using government funds as the principal source of financing for the NHIN would be "incredibly inefficient," adding that using public funds "comes with all kinds of strings attached and all kinds of rules and regulations that would stop us from achieving the goal" of interoperable electronic health records. 
Similarly, the 21st Century Health Information Act (H.R. 2234), introduced by Caucus co-chairmen Murphy and Kennedy, envisions that the federal government would prime the pump, making it cost-effective for the private sector to invest more substantially in health IT.
Another Patient Safety Bill Introduced by Senator Frist
S. 1503, the "Healthy America Act of 2005", was introduced by Senators Frist, McConnell, Gregg, Enzi, Murkowski and DeMint on July 26 that proposes to reduce healthcare costs, expand access to affordable healthcare coverage, and improve healthcare and strengthen the healthcare safety net. Specifically, the legislation includes provisions on: value based purchasing, expansion of the Medicare-Medicaid Data Match pilot program, codifies the Office of the National Coordinator for Health Information Technology, codifies the American Health Information Collaborative, proposes to implement and certify health information standards, studies state laws and practices, studies HIPAA, and provides Stark Reform and Anti-kickback Act exemptions.
Aetna Makes Public Cincinnati-area Physicians' Fees
While many words have been spoken and ink spilled over the potential for consumer-driven health care to lead to more efficient allocation of health care resources, the opaqueness of relevant quality and pricing information has made the principle difficult to test. Aetna has now taken a first step towards providing the marketplace with pricing information, for the first time making public the fees it has negotiated with Cincinnati-area physicians for procedures and tests. The insurer has indicated that it hopes to take the pilot national.
HHS creates organizational chart for Office of National Coordinator
From the National Alliance for Health Information Technology:
The Department of Health and Human Services has officially created the office that's been supporting the efforts of Dr. David Brailer to advance the adoption of health IT. In a two-page notice in the Federal Register, HHS issued a statement of organization, functions and delegation of authority within an officially articulated Office of the National Coordinator for Health Information Technology (ONCHIT). That office was created in April 2004 through an executive order by President Bush; Dr. Brailer became the office's chief executive 10 days later. This new action formalizes the office within HHS and lays out an organizational chart.
The Federal Register notice splits ONCHIT into five components:
- The Immediate Office of the National Coordinator, through which Dr. Brailer will provide executive direction.
- The Office of Health Information Technology Adoption, which will work with and coordinate all other offices within ONCHIT to identify health IT strategies, implement them and monitor outcomes in the context of fulfilling the President's goals.
- The Office of Interoperability and Standards, which will provide leadership in the development and implementation of a nationwide interoperable health IT infrastructure.
- The Office of Programs and Coordination, which will ensure integration of efforts across ONCHIT and support dissemination and adoption of the Administration's health IT policy.
- The Office of Policy and Research, which will conduct studies in support of ongoing health IT and will support and coordinate efforts that inform policy decisions related to health IT.
Each of the sub-offices will be headed by a director. Dr. Brailer has not appointed any of the directors yet, though it's likely that he will look inward to the team he assembled more than a year ago. Since forming a circle of advisers in the summer of 2004 to put together and start work on his strategic framework for health IT advancement, Dr. Brailer has operated the office in a manner similar to a start-up venture, with a relatively flat organizational structure and loosely structured lines of authority. This new blueprint, signed by HHS Secretary Michael Leavitt, introduces a tactical separation of objectives that will move ONCHIT into the operational phase in support of Secretary Leavitt's American Health Information Community and other health IT initiatives. Guiding these initiatives is a formal mission statement in the Federal Register notice declaring that ONCHIT "provides leadership for the development and nationwide implementation of an interoperable health information technology infrastructure to improve the quality and efficiency of health care and the ability of consumers to manage their care and safety."
U.S. and Canada To Link Health Databases
The CDC and the Public Health Agency of Canada have signed an agreement to link their electronic databases in an effort to more quickly and efficiently halt outbreaks of infectious diseases. The agreement, that links PulseNet Canada and PulseNet USA, will allow each country's public health agency to compare the genetic fingerprints of bacteria as they are generated in real time from labs throughout both countries. The memorandum of understanding is intended to allow prompt response to bioterrorism and natural outbreaks of diseases such as SARS or the avian flu.
Johnson Introduces Pay-for-Performance Legislation
H.R. 3617, the Medicare Value-Based Purchasing for Physicians' Services Act of 2005, that proposes to provide for value-based purchasing in the payment for physicians' services under the Medicare Program, was introduced on July 29 by Rep. Nancy Johnson (R-CT) with 15 co-sponsors. The bill would also replace the current physician formula. The legislation was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for consideration.
CMS Ends Contingency for non-HIPAA Compliant Electronic Medicare Claims
The Centers for Medicare and Medicaid Services (CMS) has announced that as of October 1, 2005, it will no longer process claims that are not HIPAA compliant. According to CMS, as of June 2005, only about .5% of the claims were filed in a non-compliant format. The contingency plan has been in place since July 2003 because only 31% of Medicare claims were filed in a HIPAA compliant manner. There has been a steady increase in the number of HIPAA compliant electronic claims, which has had a dramatic impact on claims processing. CMS intends to end the contingency for claims filed under other programs in the very near future.
Commission on Systemic Interoperability Discusses Report Recommendations
The Commission on Systemic Interoperability (CSI) held its latest meeting on August 10, 2005 to discuss possible recommendations and a timeline for the Commission's final report, which will be delivered to Congress on October 24, 2005. Chartered as part of the Medicare Modernization Act of 2003, CSI is tasked to review the U.S. healthcare information technology landscape. As part of the report, the Commission is expecting to present challenges and recommended solutions for the technical, financial, and governance issues associated with the deployment of interoperable healthcare systems nationwide. Additional information is available on the CSI website.
Staff Delegation Trip to View Electronic Ambulatory Healthcare
HIMSS has arranged for a local staff delegation trip on Monday, September 26, to view live electronic ambulatory healthcare in practice at the office of Peter Basch, MD, Medical Director, MedStar e-Health. Annually, $578 billion is spent on ambulatory healthcare, more than on acute healthcare, yet less than 5% of all ambulatory care providers have full electronic health records. The short trip will provide Hill staff with a personalized tour to see an EHR not far from Capitol Hill. A van will depart Capitol Hill at 10:30 a.m. to travel to the office of Dr. Basch. Dr. Basch will then give staff a presentation and demonstration of an ambulatory EHR. Following this presentation, staff will be able to have lunch and continue discussing key HIT topics with Dr. Basch and HIMSS. A van will return staff to Capitol Hill NLT 2 p.m. Space is very limited for this trip, so please e-mail Dave Roberts at droberts@himss.org ASAP to attend. Enclosed is an article recently published by Dr. Basch on this topic.
IHI Promising Practice of the Month: Rapid Response Teams
We're all used to the dramatic image of hospital staff rushing to the bedside of a patient who has suddenly gone into cardiac arrest. What if the intervention happened much sooner, at the first signs of a patient's condition deteriorating? That's the life-saving principle behind Rapid Response Teams, a cornerstone of IHI's 100,000 Lives Campaign and a practice that's taking hold at hospitals across the U.S. http://www.ihi.org/IHI/Topics/CriticalCare/IntensiveCare/ImprovementStories/RapidResponseTeamsTheCaseforEarlyIntervention.htm