This commentary is in regard to two items in the Feb. 26 issue of Modern Healthcare. The first was an excellent editorial by Todd Sloane where he noted that "universal access in today's healthcare system is a recipe for fiscal disaster." I wholeheartedly agree.
A variety of health reform proposals are being introduced at the federal level to expand access to care, many of which would supplement and support state-level health-reform innovations. These proposals are admirable except they are missing a key ingredient. They address only half of the healthcare equationfinancing. Without addressing the other halfdeliverythey will merely escalate demand and healthcare cost inflation, creating a new wave of affordability problems for most Americans.
Making health information technology a reality must be an integral part of health reform. It provides an essential infrastructure for achieving higher quality and more efficient healthcare. Some estimates project annual savings of 12.5% or more in national healthcare spendingmore than $200 billion per yearfrom a fully wired healthcare system. No one knows exactly how much the savings will be, but common sense tells us that without health IT we can't achieve to better value in our system. Many other developed countries are far ahead of us, without having waited for any rigorous cost-benefit studies on health IT. In the meantime, our healthcare spending is 2.5 times greater, even though we have fewer physicians, nurses and acute-care patient days per capita.
This brings me to the second item, Still the matter of money by Joseph Conn. This article reported results of Modern Healthcare's latest annual IT survey of healthcare executives. It shows that health IT spending as a percentage of operating costs has not increased and that health IT spending as a percentage of capital costs has actually decreased. In fact, the survey reported that more executives plan on spending less on health IT over the next three years.
These survey results would not be as troublesome if most healthcare providers were on their way to being fully wired. They are not. For example, the American Hospital Association just released the results of its health IT survey of community hospitals, with only 11% of the respondents indicating they had fully adopted electronic health records. Even for large, teaching and urban hospitals the percentages respectively were only 23%, 17% and 16%. In addition, in only 10% of the responding hospitals were 50% or more of the medical staff ordering medications electronically. Think how much worse the situation must be for physician offices, nursing homes, community health centers and home health agencies.
As both surveys indicate, the primary obstacle is money. Depending on the type and size of the organization, the initial capital costs, at least initially, can run into the tens of millions of dollars with increased operating costs before any offsetting savings can be captured. Moreover, most of these investments must be made in tandem to yield an integrated set of compatible health IT tools.
Most not-for-profit healthcare providers cannot afford to do this on their own for themselves, much less assist their affiliated physicians. And while collectively payers are expected to be primary beneficiaries of cost savings derived from health IT, individually their budgets and/or competitive pressures preclude them from providing the necessary financial support. The invisible hand of the marketplace is not making it happen. Instead we are in a state of gridlock.
The Alliance for Advancing Nonprofit Health Care proposes specific actions to make health IT a reality in the U.S. To eliminate the gridlock, the federal government, representing all of the people and the largest healthcare payer, must aggressively intervene, much as it did 60 years ago when it created the Hill-Burton Act to modernize and expand the nation's infrastructure of public and private not-for-profit hospitals and other healthcare institutions. The national capacity issue then was facilities. Now it is health IT.
Two specific federal actions are urged:
Offer long-term, interest-free federal loans on a matching basis to not-for-profit healthcare providers to help cover their capital and initial operating costs of health IT adoption and those of affiliated physicians whom they need to help. They should be able to pay back the loans in cash or in kindthrough the provision of above-average portions of care to low-income, uninsured or medically indigent patients. The criteria for determining the latter, as well as the length of the loan repayment period, should vary by type of not-for-profit healthcare provider (e.g., hospital, nursing home, home healthcare agency, community health center) in order to recognize their differing needs and circumstances.
Provide tax credits to individuals or organizations making private donations to not-for-profit healthcare organizations earmarked for health IT development, acquisition, implementation or operations.
We cannot continue to put the proverbial cart before the horse. How can we have accurate and meaningful public reporting on quality, value-purchasing arrangements, medical technology assessments and rapid diffusion and use of best clinical practice information without a health IT infrastructure? How are we going to have meaningful regional, state and national health information exchanges if healthcare providers are not well-wired?
Until we make health IT a reality, we will all suffer directly or indirectly, in terms of the safety, quality and efficiency of our healthcare system as well as access to it.
Bruce McPhersonPresident and chief executive officerAlliance for Advancing Nonprofit Health CareWashingtonWhat do you think? Write us with your comments at [email protected]. Please include your name, title and hometown.