Health Information Exchange: A State and National Perspective

1. ATHS HIE Summit Health Information Exchange:A State and National Perspective Laura L. Adams President and CEO, Rhode Island Quality Institute Board Member, National eHealth Collaborative Faculty, Institute for Healthcare Improvement, Boston, MA May 8, 2009

2. The Need and the Opportunity • We spend 40% more per capita on health care than the next most expensive nation on earth • The U.S. ranked 37th in a 2000 WHO study of the health care systems of 191 industrialized nations • Our own Institute of Medicine has sounded a warning in To Err is Human and Crossing the Quality Chasm • Widespread variation present (Fisher and Wennberg, Annals of Internal Medicine, 2003, McGlynn, NEJM, 2003) • The Economist magazine ranked health care second only to mining in investment in information technology

3. Snapshot of theRhode Island Quality Institute • A public-private partnership founded in 2001 by then RI Attorney General, now US Senator Sheldon Whitehouse • Not-for-profit statewide multi-stakeholder collaborative with the mission of improving health care quality, safety and value • 24 Board members • Hospitals, physicians, nurses, consumers, health insurers, behavioral health professionals, the QIO, business, academia, professional associations and state government • One organization/person--one vote on the Board • Consensus is the primary decision-making mode • High levels of participation beyond the Board • Several hundred committee members, participants and contributors (See www.riqi.org for the complete list of committee chairs and members)

4. The Principles that Guide the RI Quality Institute • Collaboration—first and foremost • Real improvement in consumer-centered quality, safety and value is required • Focus on system improvements that none of us can achieve alone • Transparency • Senior leaders required

5. The Cost and Quality Opportunity Practice Variation “…30% of direct health care outlays are the result of poor-quality care…” MBGH, Juran, etal 2002 “…20 to 30 percent of the acute and chronic care that is provided today is not clinically necessary.” Becher, Chassin 2001 “…cost of poor quality was … nearly 30% of the expense base…The biggest opportunities were in the core medical processes that comprise the majority of what we do.” Mayo Clinic “Costs associated with poor health care account for 30% of the premiums people pay.” David Lawrence, MD “The cost of poor quality in health care is as much as 60% of costs” Brent James, MD, IHC Unnecessary Cost Fisher, Wennberg, et al, Annals of Internal Medicine, 2003

6. RIQI’s Approach • Tell the truth about the performance of RI’s health care system; blame no one--but hold ourselves accountable for changing it • Galvanize an entire state to work together on a common vision to implement health IT and connectivity as a foundation for improvement • Provide strong leadership guided by incontrovertible principles: • Inclusion and cooperation • Acting to benefit the entire community • Transparency of actions • Accountability for results • Top leaders leading

7. RIQI’s Approach (cont’d) • Place this work in it’s rightful context—the foundation for virtually all other health care redesign or reform efforts on the table • Mobilize as many parts of the system as possible, such as: • Individual stakeholders (providers, consumers, payers, state and federal government, employers, etc.) • Payment systems • Legislation and regulation – state and federal • The entire pot of money available for health IT

8. RIQI’s Key Health IT Initiatives • RI one of 6 states to receive $5M federal AHRQ contract for HIE demonstration • RIQI in a unique public-private partnership with the State • Private matching funds raised (but were not required) • Starting with labs and meds and 4 major data sharing partners • Characterized by very strong consumer involvement • CEOs/highest-ranking leaders still at the table after 8 years and more engaged than ever

9. RIQI’s Key Health IT Initiatives (cont’d) • Electronic Prescribing • RI was the national beta test site for the Surescripts eRx system in 2003 • RIQI’s eRx Committee is led by the Director of the RI Department of Health • Good cooperation from major insurer in developing incentives • We closely track our progress and customize strategies based on the data

10. RIQI’s Key Health IT Initiatives (cont’d) • Electronic Medical Record Adoption • History of cultivating physician EMR leaders • Systematic application of the theories of social networking (a.k.a. the “tipping point”, “diffusion of innovations”, “academic detailing theories”) • The State of Rhode Island just completed its first publicly-reported measurement of statewide EMR adoption through the RI Department of Health; RIQI served as an advisory body to this effort

11. Our Results So Far • Our national ranking for the advancement of eRx was #1 in 2006, #2 in 2007 and #2 again in 2008 • RI has only one more pharmacy to electronically enable in the state and we will have 100% of our pharmacies electronically enabled and connected • Our rate of adoption of “qualified” EMRs is 36.4% • We have mapped our peer-nominated physician leaders, their “communities”, the stages of adoption of each of the “community” members, etc.

12. Our Results So Far (cont’d) • 100% of Federally-qualified Community Health Centers in RI are in some stage of electronic medical record (EMR) adoption; 70% are in advanced stages • RI’s hospitals rank #1 in the nation in use of HIT for medication safety • We’ve established the business case for HIE in Rhode Island through a contract with Boston Consulting Group (BCG) • We’re just about to complete our work on our long-term funding (sustainability) model, also with Boston Consulting Group

13. Our Results So Far (cont’d) • We hold one of 18 board seats on the National eHealth Collaborative– initially formed by HHS Secretary Leavitt to help govern the nationwide health information network • RI legislature passed ground-breaking privacy and security legislation in 2008, the result of an effort co-led by the RIQI and the RI Dept. of Health

14. Some Key Provisions of the RI HIE Privacy & Security Statute Voluntary participation by consumers and providers Consumers can see who has looked at their records Notification of any breach of security of the HIE Strong data security procedures Stiff penalties for anyone convicted of misusing data in the system Oversight by the RI Department of Health

15. Statewide/Regional HealthInformation Exchange (HIE) Current system fragments patient information and creates redundant, inefficient efforts The HIE consolidates information and provide a foundation safer, higher-quality care Dept. of Health Dept. of Health Hospitals Public Health Hospitals Public Health Primary Care Physician Laboratory Primary Care Physician Laboratory Data Exchange System Pharmacy Pharmacy Patient and Family Patient and Family Payors Specialty Physician Specialty Physician Payors Ambulatory Center (e.g. imaging centers) Ambulatory Center (e.g. imaging centers)

16. % of Savings Captured 11% 89% Misaligned Incentives Others Physicians Ambulatory Computer-based Physician Order Entry Source: Center for Information Technology Leadership, 2003

17. The “Others” Receiving 89% of the Benefit of HIT Purchasers of Health Care Other Federal Privately Insured State/Local Medicaid Medicare Employers (Self-Insured) Source: Health, United States, 2004

18. Rhode Island Quality Institute Business case for Health Information Exchange December 5, 2008

19. Estimates of annual value creation potentialof an Exchange in Rhode Island Potential value at end-state Working estimate Value creation hypothesis Avoid duplicative testing and imaging as patient moves across care settings by allowing access to recent, relevant results $37M 1 Prevent unnecessary readmissions by providing discharge plan to receiving care settings (O/P, LTC) so they can provide effective follow-up $21M 2 Reduced length and complexity of stay for heart failure, AMI and pneumonia patients by providing access to baseline labs and images 3 $17M Avoid incremental utilization (O/P, ER, I/P) arising from preventing adverse drug events stemming from drug interactions and allergies by giving fuller access to medication and allergy history 4 $4M Reduced administrative burden for collecting, managing, and distributing medical records information with other providers $8M 5 Avoid duplicative consults and unnecessary admissions for conditions already being managed as patient moves across care settings $23M 6 $110M Allowance for overlap across hypotheses $2M Total annual value creation potential $108M

20. This value will not be distributed equally: snapshot of value allocation across stakeholders Working base case for 2014 Local payers4 with $32M Local providers5 with $8M6 1. Includes Federally funded portions of Medicaid and SCHIP. 2. Includes consumer out of pocket; other private sources besides private health insurance. 3. Stand alone labs, imaging centers, nursing homes and pharmacies. 4. Includes State, employers and health plans. 5. Includes physicians and hospitals. 6. Not $9M due to rounding. Source: BCG RI Exchange Value Model: working case scenario.

21. Rhode Island Quality Institute Funding Models for the Exchange Update to RIQI Operations and RHIO Oversight Committees April 24, 2009

22. Myriad of approaches but essentially four funding models deployed or being considered Funding model Description Dedicated taxes • Designated or special taxes for the purpose of supporting HIT activities • May require some periodic application process to access funds Taxes Grants and contracts • Shorter term grants and contracts which are usually used for capital expenditures and operational expenses during the start-up and early parts of the growth phase Contribution On-going contributions • Longer-term contributions (funding and in-kind) from local organizations and other collaborators (eg, CareSpark's relationship with ActiveHealth) Look-up charge • Fees charged for accessing patient clinical data on the Exchange for patient treatment (pull) • May be subscription or look-up charge Access charges Savings gain-sharing • Savings resulting from accessing data on Exchange specified and portion provided the Exchange as revenue Results delivery • Fees charged for diagnostic and other results delivery (push) • May be subscription/annual charge or per transaction Decision support • Fees charged with analysis of conformance of provider care versus medical standards where patient component is identified • Recommendations provided on gaps in care Service charges Quality review • Only available when a large enough data set exists • Fees charged for analysis of conformance of provider care versus medical standards where patient component de-identified • May be paid by payers looking for data to support pay-for-performance programs or providers looking to assess own performance Professional services • Fees charged for various ancillary IT services (eg, data hosting) • Typically pays 10-15% of budget where deployed

23. Most RHIOs deploying a diversity of funding strategies Source of funding Govern-ment Funding model Emp-loyers Health plans Hospitals Physicians Other Taxes Dedicated taxes VITL VITL Contribution IHIE Care- Spark Care- Spark IHIE CORHIO Grants & Contracts VITL CORHIO1 DHIN1 DHIN On-going contributions VITL Care- Spark Care- Spark Care- Spark Access charges Look-up charge Cal- RHIO (v 1.0) Cal- RHIO (v 1.0) DHIN VITL (Rx pilot) Savings gain-sharing Cal- RHIO (v 2.0) Cal- RHIO (v 2.0) Results delivery IHIE Care- Spark IHIE Care- Spark Health-bridge CORHIO Health- bridge Service charges Decision support Care- Spark Quality review IHIE VITL IHIE Professional services Health- bridge 1. Mix of funding from private sector sources. Specific breakdown still being determined. Note: Preliminary categorization. To be verified based on interviews and further research

24. The Health IT Landscape at the Federal Level • Federal advocacy for health care IT • Limited federal funding in recent past • NY State alone spending more than the federal government • Re-structuring the market • Establishing standards • ‘Harmonizing’ privacy and security legislation • Safe harbor for hospital funding of physician IT • Accrediting products as standard-compatible • Stimulating development of models for national ‘highway’

25. The Federal Health IT Landscape (cont’d) • American Recovery and Reinvestment Act (ARRA); HITECH component: • Medicare and Medicaid provisions for EMR incentives, if criteria for “meaningful use” is met • eRx • Reporting of quality metrics • Use of health information exchange • Funding for health information exchange at a floor of $300M • Regional Extension Centers • Broadband opportunities outside of HITECH

26. HIT Committees at the Federal Level Kathleen Sebelius, HHS Secretary Reviews ONC endorsements and decides whether to adopt 3 Endorses National Coordinator Receives recommendations and decides whether to endorse 2 Recommend 1 SetsPriorities This FACA committee will recommend standards, implementation specifications, and certification criteria for the electronic exchange and use of health information. This FACA committee will recommend policies relating to a national health IT infrastructure and recommend priorities for the development, harmonization, & recognition of standards, specifications, & certification criteria HIT Standards Committee HIT Policy Committee National Institute of Standards and Technology Test standards and creates a conformance testing infrastructure From: Manatt, Phelps and Phillips

27. HITECH Timeline State Grant No Match State Grant No Match State Grant 1:10 Match State Grant 1:7 Match State Grant 1:3 Match 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Medicare Incentive Bonus is $18,000 for providers if it is their first year Medicare Incentive Bonus is $15,000 for providers if it is their first year Medicare Incentive Bonus is $0 for providers if it is their first year Medicare Penalties Begin From: Manatt, Phelps and Phillips

28. Contact Information Laura L. Adams, President and CEO Rhode Island Quality Institute ladams@riqi.org www.riqi.org 781.608.8473