The third wave of health IT – Alternative Payment Models

There is little doubt today that Alternative Payment Models (APM) will likely be the key strategic driver for healthcare over the next five to ten years. The need to control the rising costs of healthcare while delivering high quality and convenient healthcare has brought together a host of stakeholders including consumers, employers, government and payers, all looking to value-based care as the panacea. Even providers are getting in the game; healthcare information technology (health IT) will be in the center of this mix. 

We in health IT will find the shift to APMs to be no less impactful than Meaningful Use and, for us old timers, HIPAA transaction sets. To my mind APMs are the “Third Wave” of health IT.  Looking at it in its historical context can help us understand and plan for the change.

Twenty-five years ago the first wave of health IT emerged riding the requirements of HIPAA transaction sets.  Why can’t healthcare, at least the wasteful administrative aspects of it, work as efficiently as commercial banks, stakeholders asked? HIPAA transaction sets spawned the “First Wave” of health IT forming around it a new industry of products, toolsets, clearinghouses, and services to help providers and payers transact in a consistent and less costly manner.  

The “Second Wave” of health IT emerged with the rise of electronic health records (EHRs) and Meaningful Use. Why can’t healthcare be as safe as the airline industry, using systems that reduce medical errors while following evidenced-based care that is both safe and clinically effective? The gold rush growth of EHRs not only gave rise to a new software industry but also an industry of consultants needed to understand the software and implement it in a way that would allow the practice to continue to operate efficiently, a challenge that remains for some.  

Now we face the “Third Wave”, the shift to APMs that is aimed directly at the challenge the first and second waves toyed with. How do we make healthcare affordable while not compromising quality, or impeding clinical innovation that saves lives, while at the same time offering the convenience of an Apple Store to consumers deeply frustrated with our current system? 

Looking at APMs in the context of the earlier waves of health IT can help us understand the opportunities and pitfalls of this third major transformation in health IT.  It is no coincidence that this new wave is being driven more by mandate than by innovation, just as HIPAA and Meaningful Use mandates drove the earlier waves. So what does this imply for the role of innovation? How will the transition to APMs, which like HIPAA and Meaningful Use on a fast-track, evolve? Who will be the winners and losers, what changes will occur in the technology stack, will there be legal hurdles, and what shifts can we expect in the roles of payer, provider and third parties?

The HIMSS APM Task Force is seeking to address many of the issues that face us with APMs, starting with governance, administrative challenges and information management, through providing resources – starting this month.

This short article cannot provide answers to all of the many questions raised by this Third Wave – but hopefully, it will stimulate thinking about what we might learn from the historical context of our industry to better understand where we are going in the future. If you would like to share your thoughts on this to help me address some of these questions in a future article please feel free to email me at jmiller@amerihealthcaritas.com.  

About the author:  Joe Miller has over 25 years’ experience in HEALTH IT, serves on the HIMSS APM-I task force and was recently elected to the HIMSS North America Nominating Committee. He is Director of Strategy and Innovation for AmeriHealth Caritas.