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Reducing Health Care Costs by Pulling IT into Healthcare Organizations

By Kresimir Peharda Much has made of the government’s effort to “push” IT, or more accurately electronic health records (EHRs), into healthcare. The HITECH Act and Affordable Care and Protection Act have been the 800 pound gorilla driving change. As a result, many healthcare organizations have devoted a great deal of attention to EHR evaluation […]

By Kresimir Peharda

Much has made of the government’s effort to “push” IT, or more accurately electronic health records (EHRs), into healthcare. The HITECH Act and Affordable Care and Protection Act have been the 800 pound gorilla driving change. As a result, many healthcare organizations have devoted a great deal of attention to EHR evaluation and implementation and rightly so. EHRs are critical to quality care and cost containment. Nevertheless, EHRs are only the beginning and not the endpoint. IT can play a transformative role in many other areas such as billing, clinical decision support, communication, drug interactions, mobile access to patient data, patient scheduling, reimbursement, revenue cycle management, and telemedicine to name a few.

According to SK&A, as of October 2011 75% of physician offices with more than 26 practicing physicians had adopted an EHR. Given that an overwhelming majority of larger healthcare organizations have implemented EHRs it is time for them to “pull” IT into their organizations. Pulling IT into their organizations requires them to: 1. form innovation teams to locate and pilot innovative solutions, and 2. publish an explanation on how to sell to them. Innovation teams should be comprised of at least an innovation hunter, an IT professional with an understanding of clinical workflows (like those already in use at Kaiser Permanente), and a senior member of the clinical staff. The innovation teams mandate would be to search out and pilot promising IT solutions.

Demystifying the decision-making process for IT purchasing by describing it in plain-English has several benefits. Much of the innovation in HIT comes from start-ups and early stage companies who cannot survive a 12-18 month evaluation/sales process. For example, some organizations do not use a formal RFP process for buy decisions under $X million so a faster approval process is possible if the solution falls under the threshold. This information together with the name and contact details of either a decision-maker or member of the innovation team would accelerate the process for both the buyer and seller.

Providers have argued that the expense, untested nature of solutions, long implementation cycles, significant training, and cultural resistance are barriers to IT adoption. These criticisms may be a reflection of poor customer experiences with EHR systems, but should not be used as an excuse to ignore potential solutions. Not every IT offering is or has to be a bet the company proposition with the concomitant implementation, cost, and harm issues.

Healthcare is undergoing reform and some players are already taking risks. The Commonwealth Fund issued a briefing note in November 2011entitled The New Wave of Innovation: How Healthcare Is Reforming describing how healthcare organizations are already experimenting with delivery models and payment reform. Some specific examples cited were testing accountable care organizations, bundled payments, and medical homes so exploring IT solutions beyond EHRs makes sense. The Healthcare Information and Management Systems Society published an advisory report a few days ago entitled In the Spotlight: Electronic Business Transformation that examines how IT could both reshape health payments and create opportunities for operational improvement for healthcare providers.

The missing piece in the equation could be federal incentives. A survey conducted by HealthLeaders Media from June 2011 entitled Better Care and the Bottom Line revealed that 73% of healthcare executives believed that federal technology adoption incentives should be extended beyond EHRs to include operational and system efficiency.

Here are two candidates for IT intervention. Utilizing evidence based medicine and improving communication (both provider-provider and patient-provider) are areas that have the potential to dramatically lower healthcare costs. According to the HealthLeaders Media survey, evidence based medicine and communication comprised 4 of the top 6 interventions deemed likely to lower healthcare’s overall cost structure. Fortunately both areas have plenty of vendors for healthcare organizations to choose from. Now is the time to start pulling these solutions into organizations. The solution is out there.
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