INFORMATION TECHNOLOGY AS STRATEGIC LEVER IN HEALTHCARE: PENN MEDICINE S ELECTRONIC HEALTH RECORDS PLATFORM

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1 INFORMATION TECHNOLOGY AS STRATEGIC LEVER IN HEALTHCARE: PENN MEDICINE S ELECTRONIC HEALTH RECORDS PLATFORM Cibbey Abraham, Aetna Better Health, Glenside, PA, (267) , cabraha2@villanova.edu Q B. Chung, Villanova University, Villanova, PA, (610) , q.chung@villanova.edu ABSTRACT Despite laudable advancements in medical technologies, the healthcare sector in the United States seems to be in a perpetual problem of inefficiency and high cost. We explore how information technology can serve as a strategic lever as healthcare organizations seeks solutions. Penn Medicine of Philadelphia is used as a case in point. We raise and answer a natural followup question of whether healthcare organization can leverage IT as a strategic weapon as in the cases of corporate America. Healthcare industry, electronic health records, Penn Medicine, information technology as strategic lever INTRODUCTION The healthcare sector has a unique problem. It is not purely non-profit such as academic or research institutions, nor is it a pure profit-driven marketplace. Furthermore, it is an industry with confused consumers who are shielded from true costs, with non-transparent value creation processes, and with producers who have no clear idea regarding the value of their services. With multiple layers of providers each with distinct jurisdiction and responsibilities, it can be described as a riddle, wrapped around a mystery, inside an enigma. Ironically, this is why we can claim that no other sector has as much potential for information technology (IT) to serve as a strategic lever than healthcare. In fact, the healthcare industry can rival any other industries in terms of technological advancements. Medical science has advanced to allow for physicians to peer deep into the human body. Insurance providers have sophisticated claims systems and even more sophisticated analytics methodologies to analyze the generated data. Hospitals can coordinate and monitor care to hundreds of patients with varying disease severities at any given moment. Without a doubt, healthcare is not an area of little technological advancement. What the healthcare sector lacks, however, and what IT could provide is a unifying information enterprise to help deliver the most effective care possible at the most affordable and sustainable cost. This paper is devoted to unpacking how IT can be used as a strategic lever when a healthcare delivery organization aims at helping to lower costs, engage patients in their own care, and ultimately coordinate better care for society at large. This is the promise and potential for the opportunity that IT can hold within healthcare.

2 ANATOMY AND EFFICACY OF THE U.S. HEALTHCARE INDUSTRY It is true that the United States spends the most on healthcare of all the nations in the developed world. The U.S. also has the lowest ROI for each health dollar spent. Many potential reasons can be named. It has a fragmented healthcare industry with multiple types of payers, thousands of providers, and millions of consumers otherwise known as patients. What s more? These consumers have unique biological idiosyncrasies that will determine how effective care will ultimately be. The net effect is that there is a fundamental disconnect in how much effective care is given and what it costs. An intermediated healthcare paradigm sustained over seventy years has produced incredible amounts of waste and poor outcomes. Innovation is possible and will be necessary for sustainability. According to the World Health Organizations, total health care spending in the U.S. was 17.9% of its GDP in 2011, the highest in the world [6]. Every day several thousand baby boomers retire and begin to receive care under Medicare. The recent slow economic recovery has seen Medicaid rolls swell to new records. Delivering and paying for all that care would become unsustainable if no actions were taken today. All of the public and private sector healthcare consumers remain fundamentally disconnected from, and uninformed of, the true cost and the consequences it may bring to their own health. The cycle of more services leading to more waste followed by higher costs to keep the system alive is being perpetuated. Why Information Technology holds the key There is a tremendous amount of data being generated within healthcare that can be made available for analysis. In some ways, there is too much data for any one single entity to monitor, control, collect, and analyze in a meaningful way. Furthermore, the U.S. healthcare sector remains to be an industry that is locked in an individual doctor-patient relationship paradigm, in which only the doctor can have the final say in what is offered and only the patient has the right to choose which treatment they receive. One of the key problems created by this doctor-patient relationship is that it is a serious hindrance factor in the data collection mechanism. Even in our increasingly paperless society, there are an astounding portion of paper-driven processes that encumber much of medical practice. Numerous studies have found that only a small percentage of healthcare providers use an electronic health records (EHR) platform, otherwise known as electronic medical records (EMR) systems. The implication is that valuable data and insights related to diagnostic tests and routine examinations that have the potential to be gathered lie dormant and silent in individual folders stacked neatly on shelves in a physician s office. This information is only being used in the treatment of a single patient. The great potential that IT holds in this space through adoption of EHR is that by aggregating this data, trends in disease, treatment effectiveness, or even waste can be more easily spotted [3]. Analysis of large populations can be done to understand what causes the variation in outcomes. For a hospital health system, it can gain the ability to effectively manage the patient both in inpatient and out-patient settings, and even move to reduce costly emergency treatment for certain conditions. A case in point of a successful implementation of IT strategy in this arena is that of the University of Pennsylvania Health System, Penn Medicine.

3 Information Technology as strategic lever: The case of Penn Medicine Known as one of the world s foremost medical center, Penn Medicine the University of Pennsylvania Health System in Philadelphia, PA began a multi-year conversion project to an EHR platform in 1998 [4]. As of 2011, Penn Medicine had reached 100% implementation of their dual acute and ambulatory EHR platforms. At present, Penn Medicine has reached 100% in-patient order entry in its main hospitals. Comparatively, this feat has only been achieved in less than 10% of U.S. hospitals nationwide. In addition, all Penn Medicine satellite hospitals and out-patient practices across the region have been integrated. Every ambulatory care setting is now also fully networked and utilizes digital data entry for orders and keeping records. This massive collection of data is stored in the internal data warehouse known as the Penn Data Store. Over 1.4 billion lines of information is collected and can be analyzed by Penn Medicine clinicians. Innovative Healthcare Delivery Enabled by Electronic Health Records While the implementation and uptake of the EHR platforms in the case of Penn Medicine is already impressive, its healthcare delivery system is expanding the scope to even more cuttingedge applications. In 2011, Penn Medicine was able to build an application that has the ability to search for specific patient criteria, mining the data stored and maintained in the EHR, to identify potential candidates for drug trials. This application has helped to cut down on the time it would take for clinicians to identify patients through individual paper record, subsequently helping to reduce the time it takes for patients to receive innovative care. Penn Medicine also reports that they have been able to achieve a 4% cost reduction in CT scan overutilization. By creating an application that sits on top of the existing EHR, physicians are walked through a series of questions requiring them to substantiate the need for the CT scan. Recent modifications to this application have allowed physicians to see how many previous scans were requested and what the results were to avoid duplicate diagnostic tests. In addition to the above two examples of how Penn Medicine leverages IT to deliver better healthcare, in the future, by augmenting these applications, Penn Medicine is seeking to advance telemedicine to bring healthcare to underserved or remote areas. Mobile Healthcare for Engaging Patients An additional focus has also been in the mobile health arena. As all Penn Medicine hospitals as well as out-patient centers are fully networked and connected, Penn Medicine is emphasizing patient-focused educational applications on the iphone and ipads, with the keen intention to engage more effectively its patients in their own healthcare decisions and to give them a better view into the healthcare processes. Optimal patient engagement has long been sought within the healthcare sector. Unfortunately, since a good majority of healthcare cost is usually covered by third-party payers, whether private or government, most patients do not feel the difficulty of choice due to price. Additionally, the perverse effect of generous healthcare leads to patients who tend to neglect preventive measures to avoid sickness in the first place. One clear example of this is the obesity driven diabetes epidemic that is currently affecting much of the United States.

4 Even as more and more health records are converted to digital records, patients are still lagging behind in their ability to access their own records. However, the mobile technology platform allows for patients not only to easily access their own records, but to carry and integrate them with other health-related data. In this regard, it would be a strategic interest for healthcare delivery organizations to provide for, and encourage patient engagement in their own healthcare. An engaged patient who can identify symptoms, adhere to therapy, identify needed healthcare providers, and even locate appropriate care centers, is one who will cost the system less in the long run. An added benefit is that an engaged patient can become much more aware of what the true costs for care are or even better informed of how to identify the lowest costing service providers, thus proving that an engaged patient is an empowered patient. Penn Medicine is not alone in leveraging mobile platforms and IT in the goal of improving overall health. Insurers, pharmacies, and even private practices are using some part of the mobile platform to integrate data and connectivity to push forward applications in what is known as ehealth. Acquisitions by large insurers such as Aetna purchasing Healthagen, makers of the most popular mobile health app itriage, represent a commitment by firms to gain and expand their foothold in this space [2]. CAN IT TRULY SERVE AS STRATEGIC LEVER IN HEALTHCARE? We started out by asking how IT can help alleviate the healthcare troubles. An equally valid question that can be raised from the managerial perspectives is, Is the healthcare sector in general or healthcare delivery organizations such as Penn Medicine truly being strategic in leveraging IT such as EHR or telemedicine or mobile applications? That is, is IT recognized as a strategic tool by the decision makers in the medical field? One could easily say yes as there is evidence of new efficiencies and operational capabilities that have been gained. Additionally, EHR adoption by the broader healthcare system will allow for future applications that are not yet thought of. Finally, there is data to suggest a definitive difference in the quality of healthcare delivery between the new digitized systems that have full EHR adoption and those that still use traditional paper-based record-keeping systems. However, the recent trend in EHR adoption does not seem to be limited to a few hospitals that are looking to be more cutting edge than the other. As part of the Affordable Care Act of 2009, the U.S. government has incentivized and required EHR, stimulating adoption of EHR at a faster pace. It would seem that EHR is an industry-wide endpoint that everyone will adopt in some way or another. One might ask Facing the prospect widespread adoption of EHR due to national healthcare policy, does Penn Medicine s head-start EHR implementation initiative really represent any strategic use of IT? It is a painfully valid question because what makes a technology strategic is scarcity and uniqueness not ubiquity [1]. It would seem that Penn Medicine s EHR implementation is more akin to improvements in infrastructure or commodities that any business requires such as water or electricity. EHR and IT leverage may not really differentiate Penn Medicine strategically. Those are things that all healthcare organizations will eventually come to. For a patient, does it matter if the healthcare

5 provider is using a computer instead of a paper chart and pen? Perhaps the only thing they want to be assured of is that they get the best care regardless of the involvement of IT. Perhaps EHR and a greater pervasiveness of IT in healthcare will be expected as baseline to a patient, like going to an office and expecting there to be electricity and running water. CONCLUDING REMARKS Use of IT in healthcare may not truly be the strategic differentiator as is the case in other industries. However, it is strategic nonetheless. Penn Medicine for that matter, any other hospital that has heavily invested in IT systems is in fact still making a strategic choice and leveraging IT. They are leveraging the future capabilities of IT to help deliver better care today. Digitally connected hospitals, doctors offices, clinics, backend health systems, and patients can reduce waste and avoid errors. By doing so, they are pushing the productivity frontier [5] farther out within their own enterprise. There are efficiencies to be gained because digital records are more cost and time effective than paper-based records are. It is within reach because of the new possibilities for data aggregation and analysis that will help bring about better care overall. Without IT, it would be nearly impossible. By leveraging IT, the newer healthcare system can empower patients to make better decisions about their health and act on them. By connecting patients to health-related information and their own personal records, it will make them better patients in the long run. This type of connectivity will provide a means of duplex communication, in which both healthcare providers and consumers act as a proactive source of queries as well as responses. However, a more immediate benefit is practically guaranteed to the healthcare providers. By encouraging patients to become more connected and facilitating that connection, Penn Medicine will be able to control that connection. Penn Medicine can send out check-up reminders, wellness tips, and also provide information on the latest therapy. It can also run clinical surveys to help monitor the overall health of their patients and allow doctors to prescribe preventative measures even before a patient steps into the office. This is truly innovative, as both healthcare consumers and providers did not have this ability or access before. REFERENCES [1] Carr, N. G. (2003). IT doesn't matter. Harvard Business Review, 81(5), [2] Constine, J. (2011). Aetna reveals it acquired Healthagen, developer of the #1 mobile health app itriage. [3] Hillestad. R., Bigeiow, J., Bower, A., Girosi, F., Meiii, R., Scoviile, R., and Tayior, R. (2005). Can electronic medical record systems transform health care? Potential health benefits, savings, and costs. Health Affairs, 24(5),

6 [4] Laurello, J. (2011). Lessons learned from a health care CIO: A case study of EHR implementation. Health IT Exchange. CommunityBlog/lessons-learned-from-a-health-care-cio-a-case-study-of-ehr-implementation. [5] Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), [6] WHO. (2011). World health statistics Geneva: World Health Organization. ISBN