Government Healthcare: Turning to IT for Transformation

By Barbara DePompa

Of the $2.1 trillion spent annually on healthcare in the U.S., the federal government accounts for 40 percent of that total. An injection of $19 billion in federal funding for healthcare initiatives, via the American Recovery and Reinvestment Act of 2009, will enable government healthcare organizations to leverage technology to improve both the quality and access to healthcare services nationwide.

Proponents have said the creation of more interoperable health IT systems will improve communications among providers and facilitate better coordination among caregivers. Meanwhile, advances such as personalized medicine, which involves the application of genomics to medical diagnosis will also improve the speed and accuracy of healthcare services. By 2014, one industry report indicated more than three-quarters of prescribers will be using e-prescribing, which can be used to transmit prescriptions to pharmacies electronically, speeding the process of picking up prescriptions. This advance will also reduce harmful drug interactions and avoid duplicate prescriptions.

Increasingly, it’s clear that while the U.S. health care system is still world class, the nation really needs to get a grip on healthcare costs. Clearly, everyone is hoping technological advances such as electronic health records and other health IT applications can help improve quality and efficiency. Kathleen Sebelius, secretary of Health and Human Services, has said she views the widespread use of health information technology as ‘essential to reforming the health care system.’

The current administration’s government-wide healthcare vision centers largely on a virtual lifetime electronic health record that would provide a longitudinal record and include information assurance, privacy safeguards and rules-based access to protect sensitive health information. President Barack Obama has said access to electronic records is “essential to modern health care delivery and the paperless
administration of benefits.”

A recent report conducted by Visante Inc., indicates that ARRA funding should aid in cutting costs, while increasing efficiency. Based on estimates by the Congressional Budget Office (CBO) and American Academy of Family Physicians (AAFP), Visante analysts estimated that stimulus funding will help the federal government cut costs by $22 billion and will save citizens who pay for healthcare services a
total of $56.2 billion.

According to Paul Foley, vice president and senior consultant for Visante, Inc., the increase in health IT adoption will also “prevent 3.5 million adverse drug reactions and 585,000 hospitalizations stemming from those reactions.” Although the law’s incentives will not totally offset providers’ outlays for acquiring electronic health records, the report predicts that “pay-for-performance measures implemented by the private sector will likely provide further financial inducement for providers to adopt the technology,” he added.



While typically considered conservative in its projections, Foley said the Congressional Budget Office’s savings estimates (see chart, s2) underscore the savings potential.

The CBO’s savings estimates are large, and closely matched what Visante reported separately. These numbers from CBO also underscore how most of the adoption of health information technology will take place in the next four to five years, Foley said.

Other primary findings from Visante’s report on ARRA savings estimates include:

*ARRA will increase e-prescribing adoption to more than 75 percent of prescribers in just five years, a more than four-fold increase from the usage rate today, and nearly double the rate anticipated after the passage of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).

*Under ARRA, e-prescribing will help prevent some 3.5 million serious medication errors known as adverse drug events (ADEs) that would have otherwise sickened, hospitalized or killed patients over the next ten years.

Separately, according to a recent press release from Surescripts, which operates the country’s largest national electronic prescribing network, more than 100,000 prescribers are now routing prescriptions electronically in the U.S. Also, the use of three critical components of e-prescribing, electronic prescription benefit, history and routing, jumped 61 percent in the first quarter of 2009, resulting in more than 134 million e-prescribing messages being exchanged among prescribers, payers and pharmacies. “In the past two years, the U.S. has gone from 19,000 to 103,000 prescribers routing prescriptions electronically – punctuated by 39 percent sequential growth in prescriber adoption in the first quarter of this year,” said Harry Totonis, president and CEO of Surescripts, in a prepared statement.

He continued, “the past two years have also witnessed a sevenfold increase in the use of e-prescribing. And while this growth shows clear evidence that the steps taken by policymakers, prescribers, payers, pharmacies and others are having a positive impact, swift and specific action is required for the U.S. to achieve mainstream adoption and use of e-prescribing.”

The adoption and use of e-prescribing grew significantly in 2008, according to Surescript’s study, which also reported:

*By the end of 2008, there were 74,000 active prescribers, vs. 36,000 at the end of 2007 and 16,000 in 2006.

*Prescriber use of benefit information and prescription history grew from 37 million in 2007 to 78 million in 2008 and from 6 million in 2007 to 16 million in 2008, respectively.

* Prescriptions routed electronically more than doubled from 29 million in 2007 to 68 million in 2008.

*By the end of 2008, increased participation by payers in e-prescribing enabled access to prescription benefit and history information for 65 percent of patients in the U.S.

Still, according to Surescript’s report, only about 10 percent of eligible prescriptions are routed electronically. The organization said work is needed to ensure ‘meaningful use’ under the American Recovery and Reinvestment Act of 2009, requires the actual use of e-prescribing. For more information and to download a copy of the full report, please visit: http://surescripts.com/news-sign-up.html.

In other recent developments, industry surveys indicate large numbers of physicians still don’t know the details of the federal incentive program, including how much money they are eligible to receive, when it will be allocated, how they can qualify and how to meet ARRA’s requirements for information exchange. This is why a team of industry suppliers including Allscripts, Cisco, Citrix, Dell, Intel, Intuit, Microsoft Corp., and Nuance have joined forces to launch the EHR Stimulus Tour to provide answers via executive briefings, roundtables, trade show presentations, webcasts and local meetings bringing physicians together with industry experts and medical groups that have already adopted electronic health records (EHR). Interested physicians can register to take part in the EHR Stimulus Tour by calling (877) EHRNOW1, or by visiting www.EHRStimulusTour.com.