"If we want to overcome our economic challenges, then we must finally address our health care challenge."
-President-elect Barack Obama
So said the next president of the United States during a press conference where he introduced Tom Daschle as the next HHS secretary, as well as a new post -- head of the White House Office of Health Reform.
Health IT has gone mainstream. It's beyond hospital CIOs' offices, inside-Beltway legislation, and presidential candidate promises. Kaiser Permanente placed an ad in November 2008 titled, "Unleashing the Power of Connectivity in Health Care." The ad wasn't in a health trade journal; it was in The New Yorker magazine.
2009 will be a crossroads kind of year for health IT. Welcome to my annual iHealthBeat end-of-the-year column providing a look forward at health IT. The drivers shaping health IT in 2009 are bound up in one major "uber-uncertainty" facing the nation: that is, the macroeconomy and how it affects business, the financial markets, government agencies at both the federal and state level, citizens ... and the health microeconomy.
Health Is Part of Larger Macroeconomy
What's become clearer for the forecast is that Obama views health as part of the larger economy. He made that clear in the above statement and elsewhere on the campaign trail and during several public appearances since winning the election. A stimulus package might not embrace the flagging automobile industry, but it most assuredly will have specific components targeting health care and IT.
Team Obama views investment in health IT as an investment in the U.S. infrastructure -- a major focus of the economic stimulus platform. Obama wants his administration to spend $10 billion a year in grants and tax incentives on health IT initiatives over the next five years.
The main effort will be to help providers adopt health IT with the express goal of improving patient outcomes. The promise of funding is not only for technology itself, but for technical assistance in implementing electronic health records and financial systems. One specific number has been mentioned: that those physicians who meet standards could be eligible for up to $40,000 over five years. Hospital providers would qualify for even higher levels of subsidy.
Furthermore, there are plans for standards to get interoperability, privacy and security finalized. There's also talk about making open source software available at nominal cost to providers.
The economic stimulus rationale for investing in health care was put this way by the Obama team: "pouring billions of dollars into an array of health programs will not only boost the economy but also make a down payment on promises of broader health care reform."
Vendors Re-Imagine Themselves
Recession will be the mother of innovation to those of us who live in a can-do, glass-half-full world.
GE has taken out full-page ads in national newspapers this week, saying: "Today ... GE Healthcare technology will help doctors save nearly 3,000 lives." The bottom of the ad concludes with, "So just imagine what we'll do Tomorrow." The tagline is, "Innovation you don't have to wait for."
As GE tries to bring good things to life, it's rethinking what it's bringing to health.
All health IT vendors, large and small, will do the same in 2009 as they try to sell their wares to hospitals and physicians facing illiquid credit markets, declining reimbursements, self-rationing among patients for services and growing patient bad debt.
Vendors will focus firmly on helping clients do more with less, such as deploying open architecture for connecting existing systems. Vendors who provide real value -- who can help providers drive efficiency in business processes and patient care -- will survive the downturn.
How Will EHRs Play Out?
CDC's latest look into electronic health records found that 38% of physicians are using EHR systems -- either "fully" or "partially." This topline grew from 29% in 2006.
It looks like the tipping point for EHR adoption is here. Notwithstanding the tight economy of the medical practice, several forces have converged to drive the adoption of EHRs in 2009.
Furthermore, states are providing grants for EHR adoption. For example, New York state is offering a $106 million grant program, and is also allowing hospitals to financially support IT for physicians. As cash-strapped as they may be, a National Conference of State Legislatures' study found that 44 states passed 132 bills containing health care IT provisions between 2007 and 2008 -- three times the number of bills on the topic passed between 2005 and 2006. Health IT is seen as integral to health reform at the state level.
More proof of ROI for EHRs is emerging. A Harvard study showing that the use of health IT can stem the amount of malpractice settlements was recently published. A growing evidence base is being collected by the Agency for Healthcare Research and Quality along with a host of other Health IT proponents.
As these forces try to foster health IT adoption, the financial market liquidity crisis and macroeconomic realities will temper further EHR market penetration. According to the Noblis Center for Health Innovation Forecasts 2009 Trends in Provider Health Care Delivery, margins will decline with the economic downturn negatively affecting investment income, philanthropy, interest payments, unemployment, cash flow, bad debt and charity care.
These trends are already playing out in the fourth quarter of 2008. As of November, nearly six in 10 hospital CFOs planned to defer IT purchases, and four in 10 are postponing existing IT expansion projects. According to a survey from The College of Healthcare Information Management Executives, National Alliance for Health Information Technology and AHA Solutions, these CFOs expect the capital crunch to last another 12 to 24 months.
Getting the existing "partial" EHR users to full-blown implementation will generate a greater ROI on these investments. That's the sort of time-investment that can be made during tough economic times that will yield solid cost-savings for providers and health systems in 2009.
Modest Movement for PHRs
There was a bit of an uptick in the use of personal health records in 2008, according to Manhattan Research's Cybercitizen Health v8.0. Use of PHRs increased from 2.5 million users in 2006 to seven million in 2008.
Insurers such as Aetna and WellPoint are providing incentives to doctors to adopt EHRs. The BlueCross BlueShield Association is planning for all plan members to have a PHR by the end of 2009. Anthem and BCBS of Massachusetts have been at the forefront of these efforts.
According to Manhattan Research's Meredith Abreu-Ressi, "The problem with PHRs is the consumer knowing what they are. People may have been offered a PHR by their health plan, but a huge PR effort has to happen before any of this takes off in a big way."
Will the awareness issue abate in 2009? Based on research from Morpace, a research organization, 27% of Americans will be likely to create an online PHR to track medical history and medications. The firm agrees with Manhattan Research in that PHRs need more awareness-building in the market.
E-Prescribing Switches On in 2009
The least uncertain of health IT forecasts is for electronic prescribing. Allscripts, an e-prescribing vendor, has already seen a five-fold increase in the number of doctors who adopted e-prescribing in 2008.
There will undoubtedly be more growth in 2009. As of Jan. 1, 2009, physicians who use e-prescribing will receive a 2% payment bonus from Medicare for all of 2009 and 2010. While we enter the new year with about 10% of physicians being e-prescribers, the rate of adoption of e-prescribing in 2009 will rise.
By 2012, most physicians will have adopted e-prescribing. Those still using paper in 2012 will be fined based on the Medicare Modernization Act of 2003, which included the e-prescribing provisions.
E-prescribing has another benefit to the overall health system (if not to branded pharmaceutical companies): It drives the use of drugs on plan formularies, which translates into greater use of generic prescription drugs. This saves money for the consumer and the health plan.
In her next perspective, Jane Sarasohn-Kahn will offer her consumer-related health IT predictions for 2009.