Why is implementing an EHR so hard?

This very topical and provocative question was asked on LinkedIn Health 2.0 group by Paul Roemer. I am editing and summarizing the discussion go here if you want to see it in the entire glory: (http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=80236&discussionID=4467471&commentID=4576469&trk=NUS_DIG_DISC_Q_ucg_mr&goback=.hom#commentID_4576469)

As EHRs are entering the national health care agenda here are some difficult "factoids" that Paul quotes:
Studies suggest that 200,000 healthcare IT professionals are needed for EHR. The total number it healthcare IT professionals today is 100,000
• It’s not known which EHRs qualify for incentives under ARRA
• Less than 8% of non-VA hospitals have EHR in even a single department (this does not mean these pass meaningful use test)
• Only 1.5% have them in all departments
• Studies state that 1/3 to 2/3’s of implementations fail
• Implementation by small practices has been almost non-existent
• Small and individual practices will need a full service “wrap around” solution encompassing the following services:
o Project management
o Selection
o Implementation
o Adapting work flows
o Training
o Support
• Major reasons for not doing EHR are
o Up-front costs
o Lack of IT skills
o Ongoing support costs
• Hospitals and large providers usually use their own IT departments for EHR, none of which has ever implemented EHR. Hence for the most important project undertaken by a provider, they elect to do it with people with no experience, relying on the vendor
• Where will the EHR vendors find the IT expertise and project management resources to staff a national roll out?

All important questions... here is the key feedback from other respondents

• Mark Tumblin mentioned the adoption is slow and problematic because there is no positive incentive and lots of negative incentive to adoption.
• Kim Ewer noted that when she implemented an EMR in 2006 in a geographically distributed practice they experienced system stability and support issues. Raising the question around the maturity of this technology and the support processes.
• Lauren Blumenthal mentioned an implementation requires more than IT professionals, it requires clinicians and folks with strong domain expertise.
• Cameron Lewis suggested an EHR implementation is no different than a large scale SAP implementation. Change is hard.
• Ernie Chang raised the question of cost vs. benefits of an EHR/EMR. The physicians bear the costs and the benefits are targeted towards others.
• A number of folks raised the issue of older doctors being averse to change (expanding on Ernie's earliest comment).
• Satish Nagarajan pointed out that effective Change Management could easily overcome the change resistance of clinicians. Lauren and Larry Ozeran concurred with additional insights.

Overall this group of interested knowledgeable people agree this is going to be a BHAG (Big Hairy Audacious Goal) to get a nationwide adoption and rollout of EHRs. However this discussion has sourced some excellent ideas and I am optimistic we can get it done.

How will Public and Private Health Plans compete?

A twitter friend @jaymefanucci asked the question "How will the proposed Public and current Private Health Plans compete?"

I made a previous post on June 12th asking this question and the emerging wisdom seems to be in two camps:

WSJ Health Blog (http://blogs.wsj.com/health/2009/06/25/separating-fact-from-fiction-on-health-care-reform) says private health plans are worried that the public plan will under-cut prices and margins because the public plan does not need to make a profit. The counter-point is I once heard the then CEO of Trinity Health (a large non-profit Catholic IDN) say "no margin, no mission".

A friend and astute health care insider at a large very successful mid-western hospital says "the government is basically incompetent at providing this kind of large scale service and so will just act as a Financial back-stop while leaving all the juicy bits to private health insurers".

Either way this works out I expect there will be substantial opportunity and risk in the coming change.

Healthcare Reform June 2009 Summary

Here is a summary of the Health Reform debate as of June 2009.

1. Every one should have health insurance
2. Some one will have to pay for this (read new taxes)
3. There should be a health plan that will accept all comers regardless of health condition

There seems to be relative consensus on the above. What is still pretty contentious is:

a. What will this cost?
b. How will this be paid for?
c. Will this be done by creating a new public health plan or by regulating current health insurers?
d. Will people be subsidized?
e. What will this do to the competitive landscape?

Are Health plan CEOs really saying pay less for services?

An organization called Health CEOs for Health Reform has come out with its ideas for health care reform (http://www.newamerica.net/files/DeliverySystem2pager.pdf). While they have a number of recommendations they can be summarized into three primary points:

1. Medicare needs to fix health care...
2...this is best done by bundling payments instead of payment for services, and...
3...having medicare evaluate and manage quality and utilization.

These are interesting thoughts especially given the source...these are health plan CEOs. One possible take is they are asking for Medicare to provide "political cover" for doing the hard work of the reform -- remember the backlash to HMOs and managed care from a decade ago?

The other way to think about this is to interpret this as "Medicare is causing the health cost inflation by undermining the great work of the health plans and they should cease and desist."

Either view is likely controversial, but definitely very interesting.

Universal Insurance = High Premiums?

Forbes has an Article today "ObamaCare could punish you for being healthy" at http://www.forbes.com/2009/06/11/obama-health-care-reform-insurance-business-healthcare-obamacare.html.

The gist of the article is if we had to insure every one and had to give every one the SAME rate then the cost of the insurance for healthy people is going to be greater than that for sick people.

This of course is a true statement. The deeper question is to evaluate two things:

a. Are insurance premiums a strong incentive/dis-incentive for healthy/unhealthy behaviors?
b. Is health insurance like car insurance or is it more akin to utility?

The primary incentive for being healthy is you live longer and in less physical pain. You are less restricted for longer in doing whatever activity you want to engage in. Healthy behaviors extend the healthy state, and unhealthy behaviors shrink the period we are healthy. I don't think using the insurance premium as a incentive or penalty gets you much "utility".

Now people have mentioned that in auto insurance if you drive poorly (unhealthy behavior) your rates go up; if you drive well and have no claims (healthy behavior) your rates stay low. The logic extreme of course is there comes a point at which insurance is no longer affordable and you don't (should not) drive any more. So when your health insurance does not become affordable we would say the person should not...?

I think health insurance is not a category similar to other risk insurance. Health insurance is by definition risk pooling and socializing of costs. So you are better off creating population sized pools (I am not advocating single payer) -- but create large pools such that the costs reflect the population costs and then treat it is a tax -- everybody pays an equal share. Some people get subsidized because they can't afford it otherwise.

To make it fair and market oriented we should try to allow lots of fair competition with clear standards, opportunities for profit, price and quality transparency and lots of choice. We do this in lots of other industries without this crazy runaway inflation and terrible quality record.

How about quasi-public health plans?

Senator Kent Conrad has an idea (http://voices.washingtonpost.com/ezra-klein/2009/06/has_kent_conrad_solved_the_pub.html?hpid=topnews). Lets create non-profit coops which will act as health plans in addition to the current health plans. This is meant to be a compromise between single payer government model and just market based model.

It is not clear why the coops of 2010 are different than a Blue Cross or Blue Shield plan of 50 years ago. If we are really injecting competition why don't we lower barriers to entry? There are lots of companies in "nearby" industries who could enter this market if it was made attractive.

Apparently coops will be sized to reach 500,000 members. A 500,000 member plan will be one of smaller participants in most markets. It is not clear to me what savings such a small plan will achieve either in administrative costs or demand management.

I hope the senate can come up with something more transformative.

Will Universal coverage displace current health insurance policies?

The Wall St. Journal had an article on June 12, 2009 (http://online.wsj.com/article/SB124476642576608477.html) that indicates health plans are worried that a Government run health plan will displace them.

So whatever the Government does is fraught with opportunity and risk. The opportunity is the millions of uninsured will become potential customers, growing the market for health insurance. The risk is what if instead of creating a floor the Government options end up displacing some of the products offered by existing plans?

I am sure this will create enormous lobbying opportunities in the short-term and market and strategy options in the medium term. Government entering/expanding its role in the market is similar to boulder falling into a pool, we are going to have waves not ripples. Some plans are going to ride the waves and others are going to be lost...

What's missing in the Healthcare Reform debate

I applaud our political leadership for starting a serious debate on health care reform. This is over due and it appears this time to be getting more traction than the previous attempt under Hillary Clinton. The primary ideas that seem to be floating around this version of the reform debate seem to be:

a. Socialize the cost of care by spreading it around
b. Expect a quality improvement by investing in lots of new back-office technology
c. An acknowledgment that costs are too high and getting higher but no real consensus as to how to reduce them.

What seems to be missing is the traditional tools we have used in other markets:

1. Price transparency -- Imagine what the cost of clothing would be if you could go to the store and pick up a pair of jeans but did not find out the total cost for 45 days and only 20% of this unknown cost came from your pocket at that time.

2. Quality information -- Using our clothing analogy; imagine the retailer can't advertise and there is no way to evaluate quality. You are told it is all too complicated to understand. Plus the retailer will tell you which jeans are appropriate for you, you don't get to pick.

3. Competition -- a highly regulated industry that seems to use regulations to raise barriers to entry instead of reducing costs and improving quality.

4. Access and Availability -- what good is all this "insurance" if you can't get access to high quality care when you need it where you need it?

The states are trying different experiments, its just I don't see anything fully comprehensive.

Introduction

Hi,
My name in Satish Nagarajan. I am a Healthcare and Healthcare IT strategy consultant. I work mostly on the health insurance side, but I am familiar and interested in the devices and provider sides too. I will be using this Blog to consolidate and comment on the news and happenings in healthcare and healthcare IT.

I will be following:

* Health care reform
* Health plans
* Electronic Health Records
* Health care cost and quality

I invite your comments and feedback.