Healthcare Technology and Physician Services

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1 Healthcare Technology and Physician Services A Regional Alignment Strategy for Healthcare Systems and Community Physicians Presented by: Bob Svendsen, CEO December 30, 2009

2 TABLE OF CONTENTS Executive Summary 3 Environment 4 Opportunities and Gains 6 Meaningful Use 7 Planned Implementation 8 IT Infrastructure 8 Regional Connectivity 9 Health System Role 9 Alignment Partners 10 Conclusion 11 2

3 EXECUTIVE SUMMARY THE NATIONAL FOCUS ON HEALTHCARE REFORM is an opportunity to affect change in the way healthcare is delivered and financed. With growing concern among policy makers, insurance companies, employers, health care providers and consumers about the viability of the current healthcare finance model, change is inevitable. The Healthcare Information Technology (HIT) provisions of the American Recovery and Reinvestment Act of 2009, and the elimination of the Sustainable Growth Rate (SGR) formula applied to Medicare, demonstrate a renewed commitment on the part of Congress to achieve significant healthcare cost savings without compromising healthcare quality and outcomes. Given the financial incentives provided by recent legislation, and the emerging opportunities to integrate care through information management, now is a prudent time for Hospitals (Health Systems) and independent physician practices (Community Physicians) to explore Electronic Health Record (EHR) technology. The link between Health Systems and Community Physicians is undeniable. The reliance of Health Systems on viable data from Community Physicians requires a results-driven partnership to ensure integrated outpatient care and inpatient admissions. According to a recent survey by Merritt, Hawkins & Associates, a healthcare consulting firm, an estimated $1.5 million in Net Revenue is contributed annually per referring/admitting MD to their associated Health System. It is conceivable, therefore, that 300 Community Physicians could represent $450 million in revenues to the Health System(s) in which they are aligned. Partnership alignment is a strategic leadership opportunity for a Health System. By aligning the right partners with the appropriate resources, Health Systems become the conduit for adjustment, change management and, ultimately, EHR adoption. The necessary adoption of EHR systems by physicians is perhaps the most fundamental proposition on today s national health care agenda. Although the many benefits of EHR technology are clear, adoption is at remarkably low levels, especially among Community Physicians. Due to limited funding and resources, Community Physicians demonstrate the greatest need for assistance to facilitate successful adoption. In turn, Health Systems most often structure their own adoption of EHR around interoperability primarily with the many disparate systems (i.e. Registration, LIS, Radiology, etc.) utilized internally. This narrowly focused approach presents challenges to the adoption of compatible EHRs by Community Physicians, as there is rarely a well defined path for connectivity, and often insufficient resources exist to achieve interoperability. This white paper provides information on the current environment of EHR adoption among employed and independent physicians, and proposes strategies for achieving regional alignment among Health Systems, IPA s, and Community Physicians with regard to healthcare technology and administrative services. 3

4 Environment THE VAST MAJORITY OF EHR ADOPTION has occurred among Health System, multi-specialty employed physicians. Government guidelines and regulations surrounding EHR adoption are historically based upon large clinic (Health System) utilization. EHR vendors have developed their software to comply with and satisfy the needs of this market segment. Similarly, with sales primarily targeting large Health Systems, EHR training, implementation, and support mechanisms have been oriented to serve the Health System model. Caught outside the scope of these EHR adoption initiatives are Community Physicians lots of them. Insufficient funding, disparate systems, poor IT support infrastructure, and minimal leadership assisting Community Physicians in selecting an EHR solution in their region have perpetuated low adoption rates in this segment. Of the small percentage of physicians in private practice who have adopted an ambulatory EHR, the majority of systems embraced were never engineered with connectivity or interoperability in mind. This has created a tremendous need for a community standard with regard to IT infrastructure and the ability to share clinical data and processes across Health Systems, IPA s, and Community Physicians within the given region. These factors pose a significant challenge for deployment goals contemplated by ARRA/HITECH and HCR initiatives. Acknowledging these challenges, the concept of the Regional Extension Center (REC) was born. REC s are expected to address the adoption needs of 200,000 primary care physicians with a budget of $6,500 per doctor. However, this effort falls short in terms of providing guidance in obtaining and championing a viable community standard across the region. There is an opportunity for the Health System to play a significant leadership role individually as well as through interaction with local IPAs to foster alignment of goals and priorities aimed at achieving meaningful clinical integration among all stakeholders. There are three main components to EHR: Purchase, Implementation, and Ongoing Utilization. The following page provides an illustration of the various costs for EHR from a 2008 Medical Group Management Association (MGMA) Survey of over 3,300 medical groups nationwide. 4

5 The substantial costs associated with EHR adoption have driven the Community Physician to seek lower cost options and alternatives. Due to a lack of supplementary funding, and the absence of a comprehensive solution to address the various needs in the physician community, numerous partial fixes and non-integrated applications have emerged to address specific needs, such as free eprescribing and web-based order entry, etc. While these limited services may provide a partial solution for a subset of Community Physicians, they ultimately become deterrents in achieving the community-wide goal of an integrated and connected healthcare system. 5

6 OPPORTUNITIES AND GAINS TO ACHIEVE THE RESULTS stakeholders are eager to gain in a connected community, a fully integrated EHR is essential. Non-computerized and manual management of the volumes of medical information processed by healthcare providers is costly and impractical for today s physicians and regional Health Systems. The most serious flaw with paper records is that they impede clinical decision support and the data is often stored in inaccessible and non-sharable formats which do not incorporate decision support tools. In addition to EHR purchase and support costs, there must be fully developed physician training and deployment resources to accelerate adoption and appropriate utilization of the EHR within the community, across all stakeholders. Health Systems are currently the only viable entities, with support from REC s that could conceivably provide the necessary leadership to align regional vendor partners to drive an initiative to fruition. A fully connected community with a data exchange/repository provides stakeholders with the ability to access pertinent patient clinical information. Benefits include: Reduced duplicate data collection efforts (e.g. the majority of patient information recorded by specialists has already been gathered by other providers, such as primary care physician, lab, radiologist, hospital, pharmacy, etc.) Improved timeliness and accuracy of communication with and responsiveness to patient (Rx refills, lab interactions, etc.) Reimbursement opportunities (PQRI, eprescribe, ARRA/HITECH) Clinical Integration Practice automation and enhanced administrative efficiency. 6

7 MEANINGFUL USE THE ABILITY TO CREATE a clinical data repository requires various stakeholders (hospitals, physicians, pharmacy, labs) to be using electronic systems so that data can be accumulated and accessed. The Community Physician practice is the most challenged in this area as they typically do not have the internal resources and funds to purchase and implement the systems needed. The best EHR vendors meet the physicians needs from an application standpoint, but often they are severely limited in their ability to provide training, application configuration, implementation and on-going support. Health Systems have a leadership opportunity to present Community Physicians with a results-driven ambulatory-based EHR solution. The Health System should identify a respected, certified local implementation partner who understands the complexity and nuances of physicians practices, and can apply the resources necessary for on-going support. The implementation partner organization s success must be tightly aligned with physician and staff satisfaction to ensure meaningful use of the EHR system. Ideally, the partner organization facilitates the sharing of data between the physician stakeholders clinical systems and the clinical data repository. The clinical data repository will change over time, resulting in the need to modify and upgrade the technology as required. Minimizing the number of EHR systems, the number of support organizations, and standardized use of the EHR system allow for the best possible reporting, analytics and overall success of the alignment strategy. 7

8 PLANNED IMPLEMENTATION WHILE MOST PHYSICIANS see the benefits of EHR utilization, a valid concern is the amount of time required for implementation. To physicians, this translates to a decrease in productivity for their practice. Implementing EHR mandates changes in practice workflows which can bring great efficiencies in reducing manual tasks. Shifting of personnel and duties will bring about tangible wins for EHR users who remain committed to fully adopting EHR into the practice. An implementation plan which systematically stages the adoption in phases allows EHR users to achieve a successful integration into the practice. The planned implementation requires hands-on support with timelines, objectives and goals to ensure all users are competent with the application. The phased-in process becomes viewed as achievable in a supportive and well-organized approach. IT INFRASTRUCTURE THE NECESSARY COMPONENTS of a connected IT infrastructure should include: Centralized hosting via an ASP or SASS model utilizing a secure facility such as a Collocation for the server(s) which provides high availability of mission critical systems in a secure, managed environment. Dedicated Network Engineers with autonomy from hardware and software vendors. Serious consideration should be given to accessing support outside of the Health System, as in-house technical resources are often unavailable to provide the response and resources necessary. Application support, training and implementation staff must understand the nuances of working with the scope of the ambulatory practices including Community Physicians, practice staff and their patient relations. Example of a Managed Implementation with Phased-In Training and Use of EHR 8

9 REGIONAL CONNECTIVITY MEANINGFUL CLINICAL INTEGRATION across Health Systems, IPA s, and Community Physicians requires both a technical and policy framework that accommodates local variables inherent to the region. Generic, broad-based approaches to connectivity between these entities are doomed by design, because they minimize regional priorities between the stakeholders. In order for successful alignment to occur, an integrative solution must be developed which draws from the multiple disparate systems utilized by the stakeholders to create a single, virtual patient health record. Before this type of meaningful clinical integration can occur, there must be early and thoughtful involvement of all stakeholders across the region. The regional Health System has the opportunity to play a leading role as the driving force behind alignment of the Community Physician. It can put forth funding attached to broad goals associated with serving the healthcare needs of the community. IPA s have the opportunity to unite Community Physicians around such proposed goals and offer the resources to conduct consensus formation in the achievement of the goals. The IPA s may help reduce individual requirements and demands posed by Community Physicians. Community Physicians demands will be numerous and varied from one practice to the next. The Heath System can take the leadership role by providing extensive outreach to the IPA(s) and non-affiliated Community Physicians to gather input and set the stage for consensus between the stakeholders within the region. HEALTH SYSTEM ROLE THERE ARE MANY WAYS the Health System can bring about an effective alignment strategy. Leadership, consolidation, and financial assistance are all individually important, but in concert these tools can be of mutual benefit for the Health System and the Community Physicians. Outcomes include establishing standards of care, clinical protocols and eliminating un-reimbursed services and redundant costs, both clinical and IT-related. This strategy can be perceived as an investment in the region, which allows all parties to benefit from economies of scale and efficiencies across the continuum of care, including the entire community Health System, Community Physicians and the patients served. Leadership by the Health System in this scenario is symbolic. The Health System puts its foot forward first, signifying its support for the Community Physicians by acknowledging the fiscal importance of embracing a single electronic records platform in which to interoperate. This form of leadership is natural, vital, and appropriate. Leading in this scenario is not dictating or mandating; it provides a strong foundation and support structure the Community Physicians can safely look to as they prepare to adopt EHR and integrate with the community. A successful alignment strategy with Community Physicians will embody high level priorities as follows: 1) Deploy EHR to physician practices. 2) Get these practices connected and utilizing EHR in a meaningful way. 3) Create and provide access to a single patient record across the Community. 9

10 The Health System can most effectively exercise its leadership role in the following fashion: 1) Clearly identify objectives, priorities and processes including system and vendor selection. Ambiguity or indifference in this area will result in confusion, delay or divergence amongst Community Physicians. 2) Determine resource allocation. How much capital, staffing, marketing and even goodwill is the Health System prepared to invest? 3) Lead by example. ALIGNMENT PARTNERS SUCCESSFUL LEADERSHIP and the management of alignment between the Health System and the Community Physicians requires acceptance of the differences between Community Physicians and hospital-employed physicians. Similarly, the independent practices cannot be viewed as hospital departments. It is important to note that the goals and mission of the Health System are different from those of Community Physicians in private practice. By including the Community Physicians as stakeholders in the design and planning of the alignment strategy, the Health System is better informed and can make certain adequate support and resources are part of the process, laying the framework for buy-in from Community Physicians as a prerequisite to success. To successfully design, build and implement EHR for a wide range of Community Physician practices, the resources charged must have extensive experience working with private practices. In addition, they must be responsive to the unique needs of physicians and their staff while ensuring the goals of the entire alignment initiative are retained. The overall strategy of the regional alignment initiative must be clearly defined and communicated. It is equally important that the Community Physicians clearly understand the key aspects: What is the cost? What are the services offered? Where and to whom are they offered? How long will it take to implement? What are the expected benefits? 10

11 CONCLUSION HEALTH SYSTEMS HAVE A COMMON GOAL: to improve the health of the population they serve by delivering high-quality, accessible, and financially sustainable healthcare. If primary care, secondary care, and hospital-based care within a region are not well integrated, it is not possible to provide the seamless, proactive care management necessary to improve health outcomes. Alignment between the Health System and Community Physicians is vital, and will prevent the excessive decentralization of care through adoption of many disparate and non-interoperable technologies by Community Physicians. Meaningful technological and administrative integration across all stakeholders in the region is fundamental to providing cost effective improvements to healthcare delivery. Thus, a compelling case can be made for change towards an interoperable and connected environment where a Health System leads the charge in providing technological and administrative support for standardized electronic health records platform adoption by Community Physicians. 11

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