e-Prescribing with Formulary Decision Support Increases Usage of Generics

From AHRQ Research Activities, January 2009, "electronic prescribing (e-prescribing) systems that allow doctors to select lower cost or generic medications could save $845,000 per 100,000 patients per year and possibly more system-wide, according to findings from a new study. Complete use among physicians of e-prescribing system with formulary decision support could reduce prescription drug spending by up to $3.9 million per 100,000 patients per year, according to the researchers...

To test the cost-savings potential of an e-prescribing system that includes data on insurers' formularies, researchers at Brigham and Women's Hospital and Massachusetts General Hospital in Boston compared the change in prescriptions written in three formulary tiers before and after an e-prescribing system was launched. The study examined data collected over 18 months from two major Massachusetts health insurers covering 1.5 million patients.

Doctors using e-prescribing with formulary decision support, which accounted for more than 200,000 filled prescriptions in the study, increased their use of generic prescriptions by 3.3 percent. These changes were above and beyond the increased use of generics that occurred among all doctors and the already high rate of generic drug use in Massachusetts. Based on average costs for private insurers, study authors estimate that the use of e-prescribing could save $845,000 per 100,000 patients per year and generate even higher savings with greater use."

Value Cases: AHIC's New Artifact

In January 2009, the AHIC Successor Organization (AHIC) will be relaunched with a new name and a new primary artifact: Value Cases. Value Cases will be used by AHIC 2.0 to "prioritize health IT initiatives and syndicate the cost of interoperability." Catch that? Syndication.

So what exactly is a Value Case? Laura Miller, interim Executive Director for AHIC, discussed Value Cases with the National Committee of Vital and Health Statistics on November 18.

A Value Case "describes an opportunity for information exchange within the context of an interoperability roadmap illustrating specific scenarios for interoperability (similar to a use case) and demonstrates a case for action based technical, business, and societal risk adjusted value. Specifically, a Value Case presents the costs, value, and risks of implementing the specific scenario and describes potential measures of actual impact on improving care. Once recognized, it commits the submitting organization to fund and execute actions necessary to implement the case."

AHIC prioritization will be based on an overall interoperability strategy maintained byAHIC. A call for Value Cases from the healthcare community will begin in January 2009. Decisions on national priorities for this first round will be made in September 2009 with recommendations from expert committees (committees such as "Genomics, Chronic Disease Management or Clinical Research").

HITSP and CCHIT will continue their roles in standards harmonization, standards development and certification, with HITSP transitioning to work on Value Cases in 2010.

News Analysis

This can't possibly work, can it? Pay for interoperability?

It willl work for the big players. The big Healthcare IT businesses will quickly grasp the opportunity to differentiate themselves through first-to-market leadership on carefully crafted Value Cases. Big payers will look for the opportunities to drive down cost related to the chronically ill and to the revenue cycle, among others. Innovation and cost reduction are important to healthcare nationally and will be well funded.

However, key national priorities related to population health management and needs of underserved populations don't necessarily have the financial backing to support syndication. AHIC recognizes that "Public Good Value Cases" may require "scholarship" funding. This is a crucial component to gain support across the broader healthcare community and may be the litmus test of the effectiveness of the new AHIC.

NHIN Forum to Demonstrate AHIC priorities

On December 15-16, seven AHIC priority use cases will be demonstrated as part of the Nationwide Health Information Network (NHIN) December forum.


In a recent briefing, Charles Friedman Deputy National Coordinator for Healthcare IT provided an update on the progress of the Nationwide Health Information Network (NHIN) and the NHIN Trial Implementation Demonstration. The ONC briefing document reports that "the NHIN is being built on the Internet to provide a safe and secure way for health-related organizations to interconnect – bridging various technologies, approaches and geographies. Some of the defining characteristics of the NHIN is that:

• It is a network of networks
• It has no national data store or centralized systems
• It has no national patient identifier
• It consists of standards, implementation guidelines, and specific testing abilities to measure conformance. Together, they represent kind of a shared “dial-tone” that allows diverse organizations using different architectures and technologies to exchange health information, safely and securely. The NHIN technology is being built to permit various policy options, and will continue to adapt as those policies evolve."

The ONC briefing emphasized the results of the "NHIN Cooperative on specifications and trust agreements. They achieved consensus and established a common and replicable way (based upon standards) to interconnect - irrespective of a particular technology or solution. Their work forms the foundation that will enable others to join the NHIN over time. "

The ONC briefing described the NHIN Trial Implementation Demonstration's support for:

1. the patient (emergency care, transfer of care, wounded warrior)
2. consumer preferences (opt in/out of information exchange, others)
3. business use (authorized release of information to Social Security for disability determination).
   

House Calls: Telehealth Delivers Care and Value

California HealthCare Foundation has published Delivering Care Anytime, Anywhere: Telehealth Alters the Medical Ecosystem. The study focuses on the delivery of "care directly to consumers, at a distance, on demand" through videoconferencing, store-and-forward systems for imaging and data, patient monitoring and e-Visits. The report concludes that Telehealth "facilitates access to affordable, high-quality health care services that would otherwise be unobtainable." Telehealth usage is continuing to grow at a moderate pace.

Current State - Case Studies

WellPoint uses videoconferencing for improved care in under-served communities allowing for more rapid diagnosis and treatment of chronic disease. This is reducing "the cost of care by 6% overall - but 42% for follow-up care." Beth Israel Deconess uses videoconferencing for specialty consults, simulation training for interns and to connect interpreters in specialty sites and the ED, improving accessibility, efficiency and "early, proactive intervention for follow-up care".

Kaiser Permanente, Cigna, Aetna and other payers are offering e-visits for minor health problems, reducing office visits and improving patient/consumer communication with their providers.

Center for Connected Health monitors congestive heart failure, hypertensive and diabetic patients through devices communicating over the internet, reducing hospitalization, lowering chronic care costs and enabling "early, proactive intervention for follow-up care".

What is emerging in Telehealth?

Real-time on-demand care is available through phone-based physician consultations (case study TelaDoc) and web-based physician consultations (case study American Well).

Technology adoption is key to the success of Telehealth. The study found that the uninsured are wired in many cases and providers are becoming more technically capable. Shortages of providers and pressure on reimbursements will also help to advance Telehealth. To suceed, telehealth will have to overcome limited consumer awareness, provider liability exposure, state regulations, reimbursement limitations and limited capability for interoperability.

The types of use cases most amenable to telehealth application are minor in nature as well as a few major chronic conditions (such as weight monitoring for congestive heart failure patients).

The full report was written by Carlton Doty of Forrester Consulting, reporting the results of interviews with Payers, Providers, and Healthcare Technology vendors.

Healthcare's "Indefensible Administrative Costs"

Administrative inefficiencies in U.S. healthcare are obvious to the most casual consumer. But how much inefficiency is there?

On December 2nd 2008, Emdeon and Newt Gingrich's Center for Health Transformation (CHT) announced the formation of the U.S. Healthcare Efficiency Index.

The US Healthcare Efficiency Index measures the progress towards use of electronic transactions and stands at a lowly 43%. Current electronic transaction utilization for medical claims ranges from Claims (75%), Eligibility Verification and Claims Status (both 40%), Claim Remittance Advice (26%) and Payments (10%).

Converting the remaining paper transactions to electronic is estimated to save the U.S. healthcare system $30 billion annually. This is equivalent to the bailout of U.S. automakers... twice per year.

The problem of high administrative costs is much bigger than the issue of administrative simplification as it was contemplated under HIPAA. However, the Efficiency Index reveals that HIPAA has failed to deliver the promised percentage of electronic transactions usage as documented in the final rule for Standards for Electronic Transactions.

So what are the broader parameters of high and inefficient administrative costs?

• A 2007 McKinsey Global Institute study of healthcare costs in the US concluded that the US spends $1,600 per capita "more on healthcare than other OECD countries" and "found that the overriding cause ... is the failure of the intermediation system - payors, employers and government - to provide sufficient incentives to patients and consumers." Despite this excess spending, the U.S. provides coverage to 85% of the population, compared to 100% in most other OECD countries. McKinsey estimates that, of the U.S. excess spending on healthcare overall, more than 20% is attributable to administration and insurance.
  

• A 2008 California Health Care Foundation (CHFC) Snapshot: Health Care Costs 101, calculates that 7% of the national health expenditure is on administration. Administration costs are growing at an 8.8% rate, much higher than recent growth in overall healthcare spending (6.7%) and higher still than CPI growth (3.2%). Since 1986, administration costs have grown from 5% to 7% of the national health expenditure, rising from $23 billion to $145 billion. Private spending on administration is 9% while public spending administration is 6%.
  

• On November 21, 2008, Uwe Reinhardt, economics professor at Princeton criticized these "indefensible administrative costs". In referring to the McKinsey study, his analysis concluded that of the 21% excess spending, "85% of this excess administrative overhead can be attributed to the highly complex private health insurance system in the United States. Product design, underwriting and marketing account for about two-thirds of that total. The remaining 15% was attributed to public payers that are not saddled with the high cost of product design, medical underwriting and marketing, and that therefore spend a far small fraction of their total spending on administration."

The Last Mile: Personal Healthcare Monitoring

Improved outcomes for patients with chronic diseases depend in part on the ability to monitor the patient's health and to pro-actively manage and intervene as needed. Connectivity to the home and home health devices represents "the last mile" in this effort.

On November 18 HL7 announced the release of the Personal Healthcare Monitoring Report (PHMR) Implementation Guide (warning: zip file). This Draft Standard for Trial Use (DSTU) guide was co-developed with Continua Health Alliance.


The PHMR conforms to the Continuity of Care Document (CCD) standard:

• According to HL7, PHMR "describes how to use the CCD templates for communicating home health data to an electronic health record".
• This opens the potential for home health device information passing to a regional health exchange or a personal health record.
• Further, Healthcare Information Technology Standards Panel (HITSP) has stated that the Continua Health Alliance architecture is intended for incorporation into the HITSP Consumer Empowerment specifications for Remote Monitoring (IS 77) for Home Healh Devices, such as a "Personal Area Network" device.

Other recent vendor announcements are taking related paths to close this last mile, although their support for the PHMR Implementation Guide has not been announced.

On November 10, Microsoft announced a pilot with Cleveland Clinic using Microsoft's HealthVault. "The pilot will be a physician-driven, invitation-only opportunity offered to a group of Cleveland Clinic PHR users in the areas of diabetes, hypertension and heart failure. Cleveland Clinic plans to enroll approximately 400 patients and aims to demonstrate that the program will enable patients and physicians to better manage and track chronic diseases from home, using the patient’s own computer....Patients will be provided HealthVault-enabled digital devices, such as blood pressure monitors and glucometers, and asked to perform regular health monitoring. By connecting the device(s) to their home computers, their health information will be uploaded, with their consent, to a personal HealthVault account controlled by the patient, and then sent to their Cleveland Clinic MyChart account. This data will create an online log of the readings that will be available to the patient’s physician."

And on the same day, Intel announced it's piloting its 510(k)-approved Health Guide. "Pilot studies in the United States are currently planned with health care organizations such as Aetna, Erickson Retirement Communities, Providence Medical Group in Oregon and SCAN Health Plan. The goals and objectives are to assess how the Health Guide integrates with different care management models in the home. These first studies focus on the ability to demonstrate improved health outcomes for conditions such as heart failure, diabetes, hypertension and chronic obstructive pulmonary disease."