Health IT Joins The 21st Century: Page 2

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Pay for performance

Better-quality care through more accessible information is one of the outcomes that policy-makers and experts expect from HIT. And better-quality care is expected to reduce overall costs.

But drastically reducing costs is another goal of this effort and is probably the one facing the most resistance from physicians, insurance companies and hospitals alike.

Caregivers are often unwilling to be measured because, they say, health care is not easily quantifiable and is influenced by factors outside their control, such as poverty and genetics. Hospitals rarely disclose costs, and insurers are unwilling to share payment schedules for competitive reasons.

But that, too, is starting to change.

New York, for instance, has begun publishing a report card measuring the performance of hospitals and costs charged by insurers for certain procedures.

And a little-known provision in the year-end tax package passed by the 109th Congress will require the Centers for Medicare and Medicaid Services (CMS) to implement a pay-for-reporting system by July.

The system created by CMS will reward physicians who participate in IT-supported data collection by making them eligible for a bonus of 1.5 percent of their total revenues from Medicare and Medicaid, according to Christine Bechtel, director of government affairs for the American Health Quality Association.

According to Paulus, the CMS is also punishing hospitals that fail to provide quality data by holding back annual cost adjustments. "People resist, but the fact is they adapt to it, and as systems get better, data reporting gets easier and better."

The federal government has been leading the pay-for-performance charge. Health & Human Services secretary Mike Leavitt predicted that within five years, "the word 'value' will be a standard part of the medical lexicon."

He called on the nation's largest employers to join him in putting pressure on insurance and health care companies to make the industry's finances more transparent and quality-based.

Jaz-Michael King, senior director of corporate development at health care IT organization IPRO, which developed the New York scorecard, explained that government and employers are gaining negotiating power in pricing that they never had before.

"They're not looking for the cheapest, they're looking for the best value," he noted.

Congress has also made it easier for hospitals to subsidize purchases by individual physicians who can't afford to pay for IT systems on their own by exempting those kinds of fiduciary arrangements from a law policing kick-backs.

Challenges remain

But the health care industry will have several obstacles to overcome before it can boast robust patient information networks and more cost-effective services.

Paulus said that one of the first lessons at Geisinger was that new technology can introduce new kinds of errors if it's not accompanied by a cultural transformation.

He said Geisinger learned this the hard way when it implemented a new in-patient pharmacy system before ironing out new workflows involving the physician ordering system.

"Technology alone is not enough -- workflow redesign has to go along with it," he said. He said research has shown that "mortality increased after systems were implemented because of workflows and systems that people were not prepared for."

Another issue involves privacy. Currently, many networks still refuse to share information with other health organizations because of conflicting rules about handling special classes of information like mental health and substance abuse and the form of patient consents. Some RHIOs, for instance, require patients to explicitly opt in to their networks, while others require them to opt out.

Ultimately, however, there seems to be real momentum for change and many opportunities for systems vendors.

This article was first published on InternetNews.com. To read the full article, click here.

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