Stimulus Funding, Meaningful Use and the Transformation of our Health Care Delivery System

1. Stimulus Funding, Meaningful Use and the Transformation of our Health Care Delivery System October 27, 2009 California Center for Connected Health

2. Five years ago… “…Within 10 years, every American must have a personal electronic medical record. That's a good goal for the country to achieve. The federal government has got to take the lead in order to make this happen..” George W. Bush, Speaking to the American Association of Community Colleges, April 26, 2004 2

3. Historical Look at Spending in Health IT • Total Federal Health IT Spending (through ONC) before HITECH: $300,000,000 • Total expected gross outlays through HITECH (up to): $45,000,000,000 • i.e., a 15,000% increase • Put yet another way – it represents a 600% increase in the EMR market, essentially overnight 3

4. HITECH Overview 4

5. Funding Flows – Entitlements Entitlement Funds (Up to $45 billion in gross outlays) Program Distribution Agency* Use of Funds Acute Care and Children’s Hospitals Medicare Payment Incentives Incentive Payments through Carriers CMS Incentive Payments through State Agencies Medicaid Payment Incentives CMS and states Physicians and Dentists Nurse Practitioners and Midwives “Meaningful Use” FQHC Source: California HealthCare Foundation, 2009 CMS is Center for Medicare and Medicaid Services, 5

6. Funding Flows – Appropriations Loans Appropriated Funds ($2 billion in gross outlays) Use of Funds Program Distribution Agency* State-designedEntity HIE Planning and Development $564 million in State grants ONC States EHR AdoptionLoan Program (“may”) Loan Funds Health CareProviders ONC Health ITExtension Program $598 million - up to 70 competitive grants to non-profits ONC Indian Tribes Medical Health Informatics & EHR in Medical School Curricula, Funding amount unknown WorkforceTraining Grants HHS,NSF Nonprofits Least-advantaged Providers New Technology Research and Development Grants Health Care Information Enterprise Integration Research Centers NIST, NSF Higher Education Medical/Graduate Schools Source: California HealthCare Foundation. ONC is Office of the National Coordinator, HHS is Department of Health and Human Services, NSF in National Science Foundation, and NIST is National Institute of Standards and Technology. Federal Government Labs 6

7. Two Programs in Support of Meaningful Use 7

8. Health Information Exchange Cooperative Agreement Program $564 million Federal program; $38.8 million for California States must develop Strategic and Operational Plans: Operational plans must address five “domains” identified by ONC: Governance, Finance, Technical infrastructure, Business and technical operations, Legal and policy Coordination with Medicaid (Medi-Cal) Governance entity Priority: Support Meaningful Use 8

9. Meaningful Use Priorities • E-prescribing and medication reconciliation • Electronic lab ordering and results reporting • Continuity of care • Administrative transactions (claims and eligibility) • Public health reporting • Quality reporting 9

10. Regional Extension Center Program • $598 million in federal funding, 70+ centers funded in three cycles, $30 M max per REC • ~$500 million for technical assistance • ~$100 million for core support: • Three organizations asked to submit proposals to ONC by November 3rd: • LA Care • CalOptima • CalREC (CPCA, CMA, CAPH) • Common governance structure • Centralized “core” services • Decentralized technical assistance services • Coordination with Medi-Cal critical • Up to $30,000 per provider to support EHR acquisition 10

11. REC Core Principles • The REC program should support as many providers as possible to enable their meaningful use of electronic health records and maximize their share of the $45 billion in expected meaningful use incentive payments • The REC program should maximize California’s collective receipt of federal funding under the REC cooperative agreement program • The REC program should coordinate its activities closely with the State’s HIE activities, the Medi-Cal meaningful use incentive program and other relevant programs including telehealth, broadband and workforce initiatives 11

12. Centralized oversight with decentralized services REC Critical Components 12

13. ONC to release Meaningful Use definition and CMS to issue proposed rule by end of December 2009 • 60 day public comment period • First round of administrative HIT payments could be released in Q1 2010 Overall Timeline State HIE Grant Application Anticipated Project Start Date Final Rule issued on Meaningful Use Anticipated Award Announcements ONC releases State HIE Procurement Letter of Intent due 5pm EST on Sept 11th Earliest Medicare payments will be made available Application due by 5pm EST on October 16th ONC to issue guidance on EHR loan program; ONC to craft Meaningful Use definition Regional Extension Center Application Full applications due by Nov 3rd Full applications due by Aug 3rd Full applications due by March 2nd Preliminary applications under 2nd cycle due by Dec 22nd Preliminary applications under 1st cycle due by Sept 8th Preliminary applications under 3rd cycle due by June 1st ONC releases REC Procurement Awardee Selection Awardee Selection Awardee Selection 13

14. …A Foundation for Health Reform “…investments in electronic records and preventive care are just preliminary steps. They will only make a dent in the epidemic of rising costs in this country… But what accounts for the bulk of our costs is the nature of our health care system itself – a system where we spend vast amounts of money on things that aren't making our people any healthier; A system that automatically equates more expensive care with better care… Health care reform is the single most important thing we can do for America's long-term fiscal health..” Barack Obama, Speaking to the American Medical Association, June 15, 2009 14

15. Coronary Bypass Proceduresper 100,000 Population, 2006 *2005 **2004 Data: OECD Health Data 2008 (June 2008). 15

16. CABG Procedure Variation in CAper 100,000 Population, 2007 16 Data: OSHPD

17. International Comparison of Health Spending Average spending on health per capita 1980 – 2007 ($U.S. PPP) $7,290 Source: OECD Health Data 2007. 17

18. International Comparison of Health Spending Average spending on health per capita 1980 – 2007 ($U.S. PPP) Poverty level = $10,294 Minimum wage = $13,624 Median income = $26,036 20% of GDP $7,290 $11,045 2014 Source: OECD Health Data 2007. 18

19. Timely Preventative Care? Adults receive recommended care about half the time Sources: The World Factbook (ISSN 1553-8133; also known as the CIA World Factbook). Wal-Mart 2006 Annual Report. 19

20. Columbia Basin Health Association 20

21. 24,991 Patients 75% Hispanic or Latino 57% of Patients Best Served in a Language other than English 47% Migrant/Seasonal Agricultural Workers Demographics 21

22. Patient Income 22

23. Payer Mix 23

24. Outcomes Measurement ` 90th percentile – national HMO commercial plans EMR Go-Live 24

25. Outcome Measures, Continued EMR Go Live 25

26. “If we can measure it, we can manage it." - Greg Brandenberg, CEO, Columbia Basin Health Association 26 26

27. Pediatric Partners Medical Group - Temecula 27 27

28. Data-Driven Processes Revenue cycle management services in 2001 Significantly reduced days in A/R Payor dashboard – allows deep level of analysis EHR implemented in 2006 Productivity reports: By provider By staff No more faxes Electronic lab results and e-Prescribing 28

29. Pediatric Partners Growth 29 29

30. NASA’s Mission to the Moon “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.” - John F. Kennedy, Rice University, Houston Texas, May 25, 1962 30

31. “The power of space was to raise our aspirations to those things that are possible, IF WE WILL COMMIT.” A Final Word -NASA flight director Eugene F. Kranz Mr. Kranz is not just making a statement. He’s asking a question — Will we commit? 31

32. Thank you Jonah Frohlich Deputy Secretary for Health Information Technology California Health and Human Services Agency jfrohlich@chhs.ca.gov Sign-up for regular updates, get involved: HIT&E@chhs.ca.gov Up-to-date information on State and Federal activities: www.hie.ca.gov 32