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					California Council on Science and Technology

              Steve Ryan
              February 3, 2005
Healthcare Issues
in the U.S. and California

•   Health insurance coverage for all
•   Quality and safety of health care
•   Cost and affordability of health care
•   Information technology in health (HIT)
    • Electronic Health Record (eHR or EMR)
    • Comparative performance
        • Outcome measures
Healthcare Issues

• Health workforce shortages, low professional
  morale, and mismatches of personnel to care
  needs – including nursing staffing and training
• Underinvestment in disease prevention, health
  protection, and public health infrastructure
• Health illiteracy
• Coherent strategies, incentives, and systems to
  promote scientific discovery
• Pressures on Academic Health Centers
• Inadequate management of chronic diseases
Healthcare Issues

• Disparities in care and outcomes
• Closure of trauma-emergency rooms
• Payor Issues
   • No more managed care
   • All insurance
• Employers – have decided to exit
   • Defined contribution- not benefit
   • Outsourcing
• Seismic Code – Hospital Compliance
Healthcare             15% GDP

• Hospitals OPD        9-14%
• Prescription Drugs   9%
• MDs                  5%
Consumer Survey by Harris

• 59% HIT will give them control in managing
  their health
• 63% HIT will prevent unnecessary visits
• 52% believe they will benefit from cost savings
• 53% believe HIT will be more trouble than
  current system
• 77% concerned MDs will miss clues apparent
  in ‘face to face’
• 61% believe HIT will increase cost of HC
• 89% believe they will pay for increased costs

• HIT is HOT AREA in Health Care
  • President Bush – David Brailer
  • California leaders
• Goals
  • Improve quality and safety
  • Reduce cost and improve efficiency
HIT in Health Care

• Reduction of medical errors
• MDs ready access to
   • Best practice guidelines
   • Evidence databases
• EMR in HC network
   • Reduce costs
   • Eliminate redundancy
   • Speed delivery of care
HIT Case

• More theoretical than proven
   • E.g. <10% of hospitals use CPOE
• Broad scale interventions and
  policy changes to transform
  practice of medicine
   • Government policy makers
   • Health system executives
RAND Project

• Quantitative model
• Estimate costs and benefits
   •   Elimination of medical errors
   •    Acute Care
   •    Mortality
   •    Costs for HC payers and

                                       From: Brook and Hillestad
RAND Project (continued)

• Quantify HC quality and savings
  from HIT
• Process view in a system model
• Focus on benefits, costs, barriers,
  and enablers of FUTURE HIT
HIT and Physicians

•   90+ % - Personal use of internet
•   <20% (?5%) EMR
HIT and Physicians

Barriers to Adoption of HIT
• Start up costs – 56%
• Lack of uniform standards – 44%
• Lack of time – 39%

Need HIT tools for all MDs
• Accessible
• Affordable
Barriers to EMR Implementation

•   Organizational
•   Data
•   Cultural
•   Capital
    • $50,000+ per MD
    • 48+ hours training

Wal Mart – organized around coherent goal

HC – Complexity, fluid, patient clues to MD
Patient Confidentiality

• Early concerns, e.g.
   • Local newspaper access to medical histories
• Human Interaction
   • Patient and Physician (HC Provider)
Consumers favor IT in areas of HC but in
    some areas frequently prefer and
    demand “high touch” approaches
The Actual Drivers
of Transformation Today

• The transformation of healthcare in
  California has been driven by:
   •   Health Plans
   •   Medical groups, IPAs
   •   Employers
   •   State government
   •   Hospitals
• The impact of information technology
  is at early stage
   • Demonstrations by medical groups, IPAs
   • Larger investments underway by delivery
     systems, health plans

Mayo – IBM

Enabling Legislation
California Status

• Trails Other States
• Pockets of EMR Implementation
  • Kaiser
California Has National Leaders
in Healthcare IT

•   Robert Brook and Richard Hillestad – RAND
•   Molly Coye – HealthTech
•   Jack Lewin – CMA
•   Leonard Schaeffer – WellPoint (Anthim)
•   Many others
•   Other National Leaders
    •   David Brailer
    •   Harvey Fineberg
    •   Don Berwick
    •   Don Detmer

Application of Information Technology
to Healthcare
  • Improve Quality of Healthcare
     • Protect Patients from Medical Error
  • Reduce Cost of Healthcare
  • Avoid unnecessary duplication
  • Integrate Healthcare System
     • Payors
     • Providers
     • Public
Health Information Network

• High quality care
• Safer care
• Lower cost
   • Reduce
      • Duplicate Diagnostic Tests
      • Unnecessary Admissions
Patient Safety Institute

• Create integrated statewide
   • Clinical Information
   • Sharing Networks

• Jack Lewin, M.D. – CMA EVP/CEO
System Benefits

•   Patient-specific individual medicine
•   Disease surveillance
•   Research
•   Pay for units
    • Pay for performance (outcomes)

                                           From: Lewin/PSI
FDA/Pharmaceutical Benefits

• FDA surveillance of past
  approval (Phase 4)
• Pharmaceutical Industry
   • Costs and profits
   • Safety

                             From: Lewin/PSI
Technology Exists For

• First systemic approach to monitoring
  and surveillance of adverse drug effects
• MDs to monitor compliance with Rx
• Lowering overall cost of health care
• Faster patient recruitment for clinical
                                         From: Lewin/PSI
Barriers to Statewide Networks

• No demonstrated scalable
  architecture supported by MDs –
  Hospitals – Consumers
• No national trusted third party
• No viable business model

                                    From: Lewin/PSI
Architecture: Selected Feature

• Giant Master Patient Index or Switch
  links and retrieves disparate medical
  information at originating sources
• Reliable and Fast. 99.98% availability;
  patient-centric record in 4 to 5 seconds
• Non-profit PSI and its members own the
  license for the open architecture
  technology, not a for profit vendor
                                         From: Lewin/PSI
Molly Coye, M.D.

Health Tech - Founder & CEO
A.H.A       - Board
   • To Err is Human
   • Crossing the Quality Chasm
California - Director of DHS
New Jersey - Commissioner

                                  From: Coye/HealthTech
Molly Coye – Health Tech Convened

   Payors       - Insurance
   Providers    - MDs
                - Hospitals
                - Pharmaceuticals


   Technology   - CISCO
                - Oracle
                - HP

                                    From: Coye/HealthTech
The Need for State Leadership

California lags
   • Legislation: Wyoming, Florida, Delaware
       • Planning bodies
       • Funding
       • Stakeholders brought to the table
   • Medicaid and indigent care:
       • Disease management
       • Investment in IT as administrative match
   • RHIO formation:
       • > 400 communities in the U.S.

                                                    From: Coye/HealthTech
California Health Information Exchange
Project - Vision

  • Support the use of information
    technology, and the creation of a
    statewide health information data
    exchange system to:

     • Improve the safety and quality of
       healthcare in California
     • Improve the efficiency of healthcare in

                                                 From: Coye/HealthTech
Better, Cheaper Care – and Projections
of State Savings

• Projected net annual benefit, at 75% adoption
  rate, for Massachusetts: $2.48 billion
   • Electronic communication between patients and
     their physicians
   • Electronic prescribing
   • Ambulatory computerized physician order entry
   • Inpatient CPOE
   • Regional data sharing
   • Intensivist onsite 24x7 in ICUs
   • Disease management
   New England Healthcare Institute: Advancing Innovation, November 2003
  New England Healthcare Institute
  Estimates – Massachusetts Savings
                                            Total Net Annual Benefit: $2.5 Billion

                                                                                                   Regional Data
                                                                          Patient-       E-
                   2,500                                                 Physician   Prescribing
                                                                           Email       $140            $24
                                                                 E-ICU   $168
                   2,000                              CPOE       $177
                                       Management    $290
      $ Millions


                    500    $977

                                                      Advanced Technologies - October 2003
The Tipping Point – Are We There Yet?

                                                                                    Laggards (16%)
Diffusion of Technology

                                                                  Late Majority (34%)

                                                     Early Majority (34%)

                                            Early Adopters (13.5%)

                                 Innovators (2.5%)

                                     Year                   Everett Rogers, Diffusion of Innovations, 1995
Emergence of Health Data
Exchange in California
                        CURRENT          FEDERAL
                        EFFORTS         INITIATIVES
   FAILED                                                         CALIFORNIA
EXPERIMENTS                                                        NETWORK
                  Plans            Leadership

                  Medical Groups   Clinical Data Standards,
 CDHSv SYS                         EHR Definition             Principles
 MedUnite                          Seed + Demo                Benefits + Costs
                  IDNs             Funding                    Framework
                  Medi-Cal         Purchaser: FEHBP           Financing Models,
 Others                                                       Funding
                  Regional         Interoperability
                  Data-Sharing     Commission                 Platform Technologies
                                   Product Certification      Enabling Legislation,
                  QIO              Commission                 Regulation

                                   Reimbursement              Governance

                                   RHIO Definition            RHIO(s) Formed

                                   Stark, Fraud & Abuse
 From: Coye/HealthTech             Modification
California Health Information
Exchange Project - Goals

•   to help the organizers of regional efforts in California share
    information, materials, technology, and learnings
•   to facilitate
     • development of common governance, processes, technology,
       and other elements of regional healthcare information
       organizations (‘RHIOs’) in California, and
     • encourage the formation of one or more RHIOs within the state,
       with a statewide umbrella organization
•   to help key stakeholders in the health care and business
    communities and state policy leaders develop private and
    public policy agendas that will support the
     • rapid development and implementation of health care
       information technology within California, and the
     • protected exchange of that information
                                                             From: Coye/HealthTech
California Health Information
Exchange Project - Commitments

• to promote widespread access to the
  benefits of information technology and
  data exchange for underserved
  populations and safety net providers

• to make the project, its website and
  publications, and proposals for
  organizational or technical
  developments publicly available for
  comment and contributions.
                                           From: Coye/HealthTech
California Health Information
Exchange Project – Draft Principles
• Transparent
• Common approaches to technology,
  governance, financing, and other
  aspects of information technology
  investment and data exchange
   • Across California
   • Between California and national efforts
• Sound business and financing models
  for each component
• Inclusive

                                               From: Coye/HealthTech
California Health Information
Exchange Project - Organization

                                    Steering Group

    A                                Project Office                    Governance
B        C
                                      HealthTech                      Working Group

    Coordination of                                                 Working Group
     Local Efforts

                  Communication &                          Working Group
                  Summit Planning
                                          Working Group
                   Working Group
                                                          From: Coye/HealthTech

The Vision
  Advancing the use of new technology to make people healthier
The Mission
  To create a trusted source of expert information about the future of health
  care technologies
The Means
  A non-profit pooled research center for delivery systems and health plans.
  Funding independent of developers and vendors of technology

                                                        From: Coye/HealthTech
State Agenda for IT Transformation

Federal role:
•   Clear the underbrush
     • Standards and certification
     • Fraud and abuse, Stark
     • Enable RHIOs

•   Build the highways
     • Network certification for data exchange
     • Public use data:
          • Public health
          • Quality and safety
          • Defense
     • Health quality and efficiency reports

•   Reimbursement
                                                 From: Coye/HealthTech
State Agenda for IT Transformation

State agenda:
•   ‘Bank accounts’ for all
     •   EHR, direct access for all Californians
     •   Security and confidentiality
     •   Access for underserved
•   Neural networks across the state
     •   Providers, anceillary, plans, patients
     •   Regional data exchange networks coalesce
     •   Establish RHIOs to provide governance, financing
•   State investment in IT and IT-enabled programs
     •   Medi-Cal financing and savings
     •   Uninsured, county responsibilities
     •   Private public infrastructure model
     •   Remote management approaches
     •   Rapid research and deployment mechanisms
•   Focus on chronic care, disabled, rural and
    underserved, and SNF populations
           • Reduce risk
           • Generate savings
                                                            From: Coye/HealthTech
•   Need for leadership

Information technology and
creation of statewide health
information data exchange to:
   • Improve quality and safety of
     healthcare in California
   • Improve efficiency and provide
     cost effective healthcare in