Assuming the role of the nation's new healthcare information technology leader, HHS Secretary Mike Leavitt last week laid out a new plan to shape the nation's IT system through an expanded government role.
Leavitt's decision to serve as the chairman of a new IT advisory committee, dubbed the American Health Information Community, or AHIC, answers the call of those in the industry who have asked the government to help set standards. Leavitt also announced that HHS would contract out to private-sector organizations key portions of the work in the committee's main areas of interest3/4a move he said maintains the government's commitment to finding market-based solutions to the national healthcare IT challenge.
Yet, the changes are seen as a needed departure from the Bush administration's laissez-faire approach, according to some industry leaders. Healthcare IT needs more government direction and funding than it is currently getting, they said.
David Brailer, head of the Office of the National Coordinator for Health Information Technology at HHS, said he is fully behind the plan. Leavitt announced the changes in a speech at a June 6 meeting of the Healthcare Information and Management Systems Society in New York. The government may expand exemptions in Stark laws and use pay-for-performance programs to help users buy IT systems, Leavitt said.
"It is a ratcheting up," said Linda Kloss, executive vice president and chief executive officer of the American Health Information Management Association. "It seems to me the right time for this kind of leadership."
Scott Wallace, president and CEO of the National Alliance for Health Information Technology, said Leavitt's direct role indicates commitment and political courage.
"This is his device to drive performance on his timeline," Wallace said. "This needs to be done now. And he's using a great deal of his political capital. It's high-stakes. There is no clear exit path for the secretary, other than success." The alliance hosts an online directory of more than 1,000 healthcare standards by more than 250 standards-setting organizations.
Leavitt's plan includes the hiring of contractors to do jobs that Brailer's office previously enlisted private organizations to volunteer for, which means the government will likely fund some private-sector operations already under way. For example, the Certification Commission for Health Information Technology, a not-for-profit private corporation last year at Brailer's behest, will bid for the job it is already doing: certifying the functionality of various healthcare IT products. If it wins, the government will supply the funding (See story, p. 7).
Brailer supports new approach
Brailer said he doesn't feel his position has been usurped by Leavitt's decision to chair the committee, which will take on duties previously addressed largely by Brailer's office.
"There is a big difference between me saying to (CMS Administrator) Mark McClellan, `This is what we're going to do,' and the secretary of HHS saying, `This is what we're going to do,' " Brailer said. "I'm astonished, positively astonished, that he (Leavitt) is going to take the time to do it."
Brailer said he concluded some time ago "We would not get there fast enough" with a laissez-faire approach alone. He said he planned to set up an advisory group similar to AHIC, but now, with the HHS secretary as chairman, "This is that on steroids."
The commission members will be "not your normal experts," Brailer said. "They'll be real decisionmakers" in the private sector at the CEO level, and since Leavitt is, in effect, CEO of the federal healthcare program, "This can put him at the table with his peers."
The announcement came after last month's criticism from the Government Accountability Office, a congressional watchdog agency. In an otherwise uncritical report on HHS efforts thus far to promote healthcare IT, the GAO chided the department for failing to establish milestones on which it could measure its own progress in achieving goals. Brailer said the GAO criticism "was right on." He noted, however, that without an initial budget for his office, creating a timeline last year would have been merely speculative.
Brailer said the new advisory commission and the hired contractors will help select a private sector group as the anointed standards setter in specific areas, "and when we tap one, it's the government saying (to other organizations) don't go there." When it comes to IT standards, only one set of standards will do, he said.
The decision to "turn on the switches" and shift from jawboning for IT pennies to procuring federal contracts that directly effect change came in February, Brailer said, the same month Tommy Thompson left HHS. With Leavitt's arrival and the vetting of the proposals "all the way up and down the government," it took this long to bring the plan to public release, he said.
Funding IT still a big issue
There still is a big question about who is going to pay. So far, the Bush administration has put a relatively small amount of federal money into private-sector IT promotion. HHS, in a news brief, noted that the advisory committee "has minimal costs associated with it" but will "leverage and enhance private spending on health IT."
HHS will spend $86.5 million on IT in the current fiscal year, the department said, adding that Bush has asked Congress to provide $125 million for IT spending in the fiscal 2006 budget. It is a small amount compared with the cost of extending IT to more than 5,000 hospitals and 200,000 physician offices, according to several healthcare leaders interviewed for this story. A study released in January by the Center for Information Technology Leadership concluded that it would take $276 billion to build a national clinical information exchange system and $16.5 billion a year to run it. But the system also would generate a net value of up to $77.8 billion a year in savings. The center is a research organization sponsored by Boston-based Partners HealthCare System.
Blackford Middleton, a physician informaticist with Partners HealthCare, chairman of the Center for Information Technology Leadership and chairman of the HIMSS board of directors, lauded Leavitt's plan. Middleton also decried what he called the "myopic view" of those payers and software system vendors who favor development of their individual, incompatible IT systems. Despite a lot of talk about interoperability, "The vendors haven't done it yet, so I think it's a perfect role for the federal government. If it (AHIC) does what (Leavitt) says it's going to do, focus on standardization without a mandate, it's going to be really helpful to the industry," Middleton said.
However, Sandy Phillips, senior vice president and chief information officer of the two-hospital, Miami-based Jackson Health System, said the money problem isn't solved by the plan. The system's flagship, 1,247-bed Jackson Memorial Hospital, treats a large number of indigent and uninsured patients.
"Many of the things we're talking about here are not going to help those people," he said after hearing Leavitt speak. "There are a lot of good ideas, noble thoughts here, but noble thoughts don't get PDAs in our physicians' hands. I don't think pay-for-performance is going to help because we don't get paid. That's where we need the help.
"I'm not knocking what Secretary Leavitt said, but I'm thinking there is an underlying healthcare cost that they're missing. There is an inherent assumption that it's going to get paid for somehow. That's not necessarily the case," Phillips said.
Ken Kizer, president and CEO of the not-for-profit National Quality Forum, said Leavitt's changes were "all steps in the right direction, but having said that, I would probably also say that anything short of a Manhattan Project is questionable whether it will get us there."
"There has to be this sense of mission, this higher calling, that we're going to put whatever resources are needed into it," Kizer said. "Having been down this road some already and having been burned some myself, what is being asked for seems so straightforward. But the details are so complex. These things are immensely more complicated than anyone imagines."
Summit attendee Howard Landa, physician informaticist for Kaiser Permanente, said the number of organizations developing healthcare standards is "dizzying," so some federal coordination in standards setting could be a good thing.
But Landa warned "if they don't have all the big players up there" in agreement when standards are selected, "it's going to be Sony Betamax." Echoing Brailer's warning, Landa said "We can't afford to have two or three competing standards for 10 years, or like Sony, have the best standard fail because of inferior marketing."
Charlene Underwood, chairman of the HIMSS Electronic Health Record Vendors Association and director of government and industry affairs for Siemens Medical Solutions, said she sees the increased level of government participation "clearly as a positive, not a negative, that the vendors couldn't do it together." Some efforts have worked well without government oversight, but in some areas they got stuck and need some help from the government, she said.
Leavitt said he is aware of users' problems in funding IT. He pledged to take on a technology "adoption gap" in which larger and wealthier medical groups have higher rates of IT use compared with smaller physician offices3/4largely because of the historically high cost of selling and supporting electronic health-record systems to small groups or solo practices, where the majority of office-based physicians work.
As possible help, he specifically mentioned expanding IT exemptions in the Stark laws as well as pay-for-performance plans under Medicare and Medicaid. Stark prohibits hospitals from paying physicians for Medicare or Medicaid referrals. Some hospital leaders have said they'd be willing to subsidize the cost of extending their IT systems to affiliated, office-based physicians, but won't out of fear of triggering Stark implications.
During a news briefing after his speech, Leavitt said he thinks Congress will address the Stark problem soon and sees pay for performance "as a significant way to deal with the adoption gap."
"The first step is to get a (pay-for-performance) system in place," he said, "and then experiment with what works best."
He also said he expected the major health insurance companies will rally to his proposals.
Game plan for new commission
The primary focus of the advisory commission will be to facilitate the development of IT interconnectivity standards, Leavitt said, but the commission also will make recommendations on privacy and security, IT product certification and the architecture of an Internet-based healthcare IT communication infrastructure.
Privacy will remain a part of an "ongoing debate, as well it should be," Leavitt said.
Leavitt in his speech likened the massive task ahead of shaping a national healthcare information network to the construction of the transcontinental railroad. "I believe we have to transform healthcare just as the railroads transformed transportation in America," Leavitt said. "We'll do it with one thunderous click of a mouse after another."
Leavitt assigned the committee with the task of making recommendations to the government and the private-sector healthcare industry on ways to boost IT in several keys areas.
He also announced that HHS would contract with private-sector companies to make recommendations in four of those areas and HHS issued formal requests for proposals for those contracts June 7, including the one CCHIT planned to bid on.
Leavitt said a lack of consensus on IT standards plagues healthcare data-system connectivity just as, initially, railroad expansion was hampered because no standard existed for the width between the rails. Leavitt said he is focusing on advancing healthcare IT because he knows he can't solve the problems facing Medicare and Medicaid without it.
"We can figure this out," he said, "and I feel deeply committed to doing it."
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