It is heartening to me to see the CMS launching a new five-year Medicare pilot project that harnesses the enlightened self-interest of 1,200 physicians by integrating "pay-for-IT/pay-for-performance." Basically, Medicare will pay physicians cash bonuses for completing various tasks electronically, including retrieving laboratory results and writing prescriptions. Successfully demonstrating cost reduction, better quality and patient safety and improved outcomes would support the business case for private-sector payers to support similar bonus programs for quality-measures reporting using EHRs.
At the same time, the CMS has included, for the first time, use of electronic health records and electronic prescriptions in its 119 quality measures list for 2008. Physicians who report compliance with as many as three of the measures will qualify for a bonus of up to 1.5% of their Medicare fees.
Both of these latest federally promoted clinical IT programs are an integral part of one of President Bush's executive orders promoting EHRs and HHS Secretary Mike Leavitt's Partnership for Value-Driven Health Care. This growing national partnership is publicizing and promoting four specific "cornerstones" for reforming American healthcare. These are the creation and adoption of health IT standards (to enable interoperable healthcare IT), quality and price standards (to allow the measurement and publishing of quality and price information) and incentives (to promote quality and efficiency of care).
As the 2008 presidential election rapidly approaches, there is a growing discussion about whether and how to change the healthcare system in the U.S. Many Americans are skeptical that a government or not-for-profit organization can do a better job than a broad collection of private companies embedded in a truly competitive marketplace. The overriding question is can such a market exist in the U.S.?
Over the last 60 years, the development of a consumer-centric healthcare marketplace in the U.S. has been blocked by the lack of interoperable healthcare IT and the volume-driven payment methodology first initiated by private health plans and then adopted by Medicare and Medicaid in the 1960s. Moving healthcare from volume to value-driven will disrupt the imperfect status quo, but in economic terms it is the only logical long-term solution to annual double-digit cost increases and inconsistent care quality.
Even before the baby boomers start flooding into Medicare, there are compelling financial and demographic incentives to continue expanding the private-public sector collaboration that is necessary to replace chronic market failure with market-directed restructuring.
Between 1960 and 2004, America's private healthcare spending for health services and supplies decreased from 70% to 61% of total spending. During the same period, public expenditures (i.e. federal, state and local government) grew from 30% of total expenditures in 1960 to 39% of the total of the $1.8 trillion spent in 2004. In 2006, when total expenditures increased to $2.2 trillion, 85 million Americans had public health insurance coverage (28% of the U.S. population) and public expenditures increased to 45% of total spending. At the same time, an estimated 60% of the 47 million medically uninsured people in the U.S. are not unemployed. They are small-business employees, owners and their family members.
Albert Einstein once noted that "the definition of insanity is doing the same thing over and over again and expecting a different result." The CMS pilot project is definitely not just doing the same thing. It is seeking to harness what Clayton Christensen calls the technologic and business model "enablers" for the multiple disruptive healthcare innovations that are needed to produce meaningful industry integration, restructuring and reform.
In the face of the inexorable growth in public and private healthcare spending, inconsistent care quality and coverage problems, this CMS pilot may now seem like only a "tiny step." However, if it works and is widely emulated, I believe it could prove to be an important milestone in advancing the critical national goals of reducing the barriers to physician IT adoption, achieving widespread IT interoperability and helping catalyze the transition to a consumer-driven industry.
Bob Coli, M.D.Diagnostic Information System Co.Warwick, R.I. To submit a letter to YOUR VIEWS, click here. Please include your name, title and hometown.