We should all be pleased by the announcement that David Blumenthal will be the next national coordinator for health IT. I won't recount Blumenthal's many accomplishments and honors since they are readily available through a Google search.
I will share with you my impressions of him and why I think he is the right person for the job. Beyond his significant abilities as a physician, Blumenthal for many years has been a serious student of health care policymaking and public policymaking in general. It is precisely this breadth of view that I think makes his selection particularly insightful.
Some in the health IT community may be unfamiliar with Blumenthal's background. Indeed, I would not classify him as a health IT wonk. But that is not what is needed at this juncture in the development and execution of a workable national health IT policy.
Instead, as we confront the real opportunities and challenges offered by the health IT incentives found in the American Recovery and Reinvestment Act, we will quickly learn that offering cash to physicians and hospitals for "meaningful use of certified electronic health records" is not enough to create the data-driven health care system that lies at the heart of health care reform. It is his wide range of experience and involvement in so many aspects of the health care policy debate that leads me to believe Blumenthal is the right guy for this job at this time.
Huge Bet Placed on Health IT
The very important questions raised by my iHealthBeat columnist colleague, Thomas Lee, M.D., in his recent column are precisely those that Blumenthal will need to answer. The Congress and the Obama administration have put a huge bet down on health IT. It has been widely reported that the Recovery Act provides $19 billion over 10 years (the bulk being spent between 2011 and 2019) for various health IT investments.
It's noteworthy that the $19 billion is the "scored" amount. The stimulus package actually provides about $30 billion in health IT spending offset by $10 billion in savings projected by the Congressional Budget Office based on its assumption that the health IT incentives and penalties will result in meaningful EHR use by 90% of practicing physicians with savings to follow. You'll recall President Obama said, during his campaign, that he would spend $10 billion a year to digitize the health care system. I would count the Recovery Act's health IT provisions as one campaign promise met.
Is $19 billion or $30 billion the right amount of money? Is the money being spent in the right ways? And beyond incentivizing physicians and hospitals to use EHRs, what are the implications of the health IT incentives for the larger effort to reform the health care system?
I think the last question is the most important. How will well-used EHRs, even those that are exchanging clinical data, help to transform our failing health care system? It is that tiger whose tail Blumenthal must now hold.
Immediate 'Meaningful' Challenge
So, Dr. Blumenthal, here's an immediate challenge that, if not fixed, will serve to lock the health care delivery system in old structures and that will build barriers to new health care delivery and financing arrangements, such as Accountable Care Organizations, being explored by the administration and congressional health policy leaders. (An excellent article on ACOs is "Fostering Accountable Health Care: Moving Forward In Medicare" by E. Fisher et al., Health Affairs, Jan. 27, 2009.)
Beginning in 2011, the Recovery Act provides, through the Medicare program, economic incentives for physicians who are "meaningful EHR users" and, beginning in 2015, will impose financial penalties for those who are not. But for a physician to be eligible for the incentive, they must have at least $20,000 per year in Medicare billings. Assuming a doctor gets over the billings threshold and is a "meaningful user," then they will receive incentive payments of as much as $44,000 over four years (even a bit more in medically underserved areas). Sounds good. But, how will the money actually flow?
The Recovery Act provides that in most instances, the incentive payments will go directly to individual physicians. Think traditional Medicare, think Medicare Part B, think individual physicians practicing alone or with a small group. The Recovery Act does provide for one alternative, what I call the Kaiser provision. This would allow the incentive payments that ordinarily would be paid to individual physicians to be aggregated and paid as a lump sum to staff-model or exclusive group-model Medicare Advantage HMOs (a la the Kaiser/Permanente arrangement). This MA HMO arrangement recognizes that in such structures, physicians see all their Medicare patients through the arrangement with the MA HMO. For Kaiser, Group Health of the Puget Sound and similar MA HMOs, this should work just fine.
However, for a large number of physicians, neither of these arrangements will work. Physicians who participate in physician groups, medical groups and independent practice associations will in many cases fall between the cracks.
In these instances, physicians are organized into groups that are clinically and economically integrated, often through use of EHRs and other health IT. These physician groups then contract with one or more MA HMOs to provide care to the HMO's Medicare enrollees. The MA HMO pays the physician group, often on a capitated basis, which then compensates its physician members.
This model is predominant in California and is found in major markets in Texas, Tennessee, Florida, New York and elsewhere. In such arrangements, CMS may never make a direct part B payment to the physician and the structure of the MA HMO; the physician group arrangement does not meet the Recovery Act's requirements for payment to an MA HMO.
At best, a large number of physicians who provide significant Medicare services and who are meaningful EHR users might be denied the health IT incentives that the Recovery Act should provide.
Structural Defect Inhibits Reform
From a systemic reform perspective, this structural defect works against the objectives of health care reform. The president's 2010 Budget Overview calls for "physicians to form voluntary groups that coordinate care for Medicare beneficiaries and to receive performance-based payments for the coordinated care." The president, ACO advocates and many health policymakers recognize that physician groups are essential to achieving the objectives of care coordination, disease management and prevention incentivized by payments that encourage coordination and high performance. The Recovery Act's failure to provide for the participation of physician groups and their physician members in the health IT incentive program works against the kinds of fundamental reforms being called for.
But all is not lost. Physician group advocates convinced the crafters of the Recovery Act to direct the secretary of HHS to come up with a legislative solution to this problem and to do so in time for it to be fixed this year. While HHS staff had begun working on the issue before Blumenthal's appointment, it is this sort of issue where his leadership will be essential.
So, Dr. Blumenthal, welcome to Washington. I am delighted you have arrived. The challenge now is not to lose sight of the fact that digitizing health care is not an end to itself. Instead, please keep us all focused on the real purpose of a data-driven system: to support a reformed and restructured health care system that provides quality, affordable care for us all.