It’s true. The US healthcare industry’s IT progress lags compared with the financial and consumer retail markets.
Waste abounds. According to the U.S. Healthcare Efficiency Index, approximately $30 billion is wasted each year through the excessive use of paper in the industry. Physicians have difficulty transferring patient information to coordinate care, sometimes resulting in preventable errors, because they’re still working with hardcopy charts. And, due in part to a lack of preventive measures and inefficient processes, fraud, waste and abuse siphons between $68 and $226 billion from the healthcare system annually, according to the National Health Care Anti-Fraud Association (NHCAA).
Let’s also not forget that we are one of the few nations world-wide to continue using the ICD-9 code set. Largely because of industry pushback, the Centers for Medicare and Medicaid Services (CMS) will likely delay the implementation of ICD-10 beyond the current October 2013 deadline. As a pre-requisite to ICD-10 implementation, providers and payers were required to adopt the ASC X12 version 5010 claim submission standards, the deadline for which was January 1, 2012. Here, too, CMS has announced a delay — enforcement of the new standards will not occur until June 30, 2012.
Okay. It sounds bad — really bad, if we forget about the big picture. In reality, if we can view the industry from a different angle, there’s a lot of progress being made. With a look at some of the more significant policy changes, advancements in technology and the dedication of people working within the healthcare industry, we’re actually making huge strides.
Progress is being made
Those critics zeroing in only on our industry’s problems will miss a lot of bright spots. While the costs associated with manual, outdated paper-based processes in the US are well into the billions, the Department of Health and Human Services (HHS), together with CAQH® and other leading associations, has helped to develop an operating rules mandate for Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ERA). This is progress — by December 31, 2013, payers will be required to send payments electronically. And while providers are not required to accept these payments and can request paper checks, the savings resulting from the mandate are expected to be substantial. By some estimates, the average cost of a single paper check sent to a provider is between six and eight dollars.
Last, and certainly not least, is the rate of EHR adoption by the provider community. While in many respects, EHR adoption (and the subsequent digitization of clinical data) is a first step, it will enable the healthcare community to engage in a deeper level of collaboration and coordination on patient care plans. This exchange of information is anticipated to significantly reduce costs associated with unnecessary tests, medication errors and preventable readmissions. But most importantly, the “meaningful use” of health information will enhance patient care and increase quality.
Now, the rate of EHR use is not anywhere near 100 percent, but CMS’ meaningful use incentive program, among others, can be credited with increasing the rate of adoption in recent years. In February 2012, Kathleen Sebelius, Secretary of the HHS, announced that the number of hospitals using EHRs in the last two years has more than doubled. Additionally, an HHS statement noted that 85 percent of hospitals reported that by 2015 they intend to take advantage of the incentive payments made available through the Medicare and Medicaid EHR Incentive Programs.
A combination of people, policy and technology
Sure, contrasted with the U.S. banking and financial sectors, healthcare is not where it could be in terms of efficiency and cost reduction. But this is akin to comparing apples and oranges — the two industries have drastically different needs and purposes. Given sensitivities with patient information security and privacy, as well as the current regional, decentralized approach to patient care coupled with a diverse commercial and government payer system — the progress made by healthcare organizations to date has been substantial. Policy changes, mandates and new standards are sometimes unpleasant, but they’re working. The Affordable Care Act and the HITECH provision, together with tools like the US Healthcare Efficiency Index, have provided both the incentive and penalties many believe are forcing positive change affecting the uptake of healthcare IT. Ultimately, this shift can drive a more effective community better able to focus on patient care.
We still have a long road ahead, but I’m confident that with a combination of highly motivated people, targeted, attainable policy efforts and continued advancement in healthcare technology, the industry will soon see great returns on its efforts: improved patient care combined with overall decreased costs.
Miriam Paramore is the senior vice president of clinical and government affairs for Emdeon as well as a member of the HIMSS National Board of Directors. As a longtime advocate for HIT in the public sector, Paramore serves as an advisor to key Congressional committees and the Congressional Budget Office on health IT, healthcare administrative simplification and other practical solutions that can take costs out of the system and make healthcare more efficient.