Last July, I bemoaned the fact that there was no health IT component to the health care reform proposals then under consideration. In that iHealthBeat column, I urged Congress to go beyond the provisions of the American Recovery and Reinvestment Act of 2009 and HITECH to recognize that other health care providers, in addition to hospitals and doctors, could benefit from health care IT investments, specifically the long-term care (LTC) community.
Well, what do you know, sometimes you get what you wish for.
Health IT Funding for Long-Term Care Facilities
Remarkably, the Patient Protection and Affordable Care Act (PPACA), includes a grant program for long-term care facilities. That there is any such program is a victory worth celebrating. But before anyone starts popping corks, let's recognize that this is a pretty small victory worthy of a small celebration.
To Congress' credit, PPACA addresses a range of issues pertinent to assuring the availability of long-term care for older Americans and people with disabilities. Embedded in those provisions is a Certified EHR Technology Grant Program for LTC facilities. Under this program, the secretary of HHS is authorized to make grants to LTC facilities for the purpose of purchasing, leasing, developing and implementing certified electronic health record technology designed to improve patient safety and reduce adverse events and health care complications resulting from medication errors.
Grant funds can be used for a wide array of purposes including:
- Purchasing, leasing, and installing software and hardware, including handheld computer technologies;
- Improving existing software and hardware;
- Upgrading existing software and hardware to enable e-prescribing; and
- Training facility staff to use such technology.
Grant recipients are required to participate in health information exchanges. Importantly, PPACA also directs the HHS secretary to adopt transaction standards for LTC clinical data.
But, curiously given the time frames for other HIT program implementation, Congress gave the secretary 10 years -- TEN YEARS!! -- to have procedures in place to accept the electronic submission of clinical data by LTC facilities.
So, how much money did Congress allow for this important expansion of HIT into the long-term care community? NOT MUCH! PPACA authorizes $20,000,000 for the program in fiscal year 2011, $17,500,000 in FY 2012 and $15,000,000 per year in FY 2013 and 2014. (For those unschooled in the mystery language of federal spending, authorization for spending is not spending. As in this case, authorizing spending essentially allows the appropriations committees to actually permit the relevant agencies to commit funds and cut checks.)
Assuming the appropriators act on the authorization, HHS will have the grand sum of $67.5 million to fund HIT in LTC facilities. Of course, I'll take what I can get, but come on! Compared with the $30 billion for HIT "meaningful use" incentives for doctors and hospitals, this will hardly touch the need.
There are approximately 16,000 nursing homes in the country. If every nursing home received an equal share of the total available funds, each would get $4,200. That is not going to wire the LTC system.
Hopefully, HHS Secretary Kathleen Sebelius will use her discretion wisely to focus these limited dollars, get the states to chip in a fair share (the states bear roughly half the cost of LTC), engage the vendor community in developing LTC focused technologies (not just to deploy in facilities, but more importantly, to deploy in communities so as to avoid unnecessary institutionalization) and challenge the LTC providers to leverage the paltry federal funds PPACA authorized.
The Threat to HIT
To my friends in the HIT community -- PAY ATTENTION!
PPACA includes provisions which -- depending on the decision of the secretary of HHS -- could undermine economic support for health IT. Congress, for the first time, set standards for the proportion of each premium dollar that must be spent on medical care. In the insurance world, this proportion is inartfully referred to as the "medical loss ratio."
To address its concern that health plans have been spending too much on administrative costs and profits, Congress requires that health plans in the large group market have an MLR of no less than 85%. Those in the small group and individual markets must have an MLR of 80%. Medicare Advantage plans must also meet the 85% requirement.
Those that fail to meet these requirements will face a variety of serious penalties. Plans would have to rebate the excess administrative spending, commercial plans could be excluded from competing in state health insurance exchanges and MA plans could be barred from enrolling new members or even kicked out of the program.
Requiring plans to spend more of each premium dollar on medical services is pretty appealing. But, as with all policies relating to health care, the devil is in the details. In this case, there are activities, technologies and services that might not neatly fall into either the medical care bucket or the administrative expense bucket. Health care IT is one of those items (others include clinicians who never see a patient but are directly involved in care coordination, case management and the development of clinical protocols).
Depending on how Sebelius allocates clinical health IT, she will either create an incentive for health plans to invest in HIT or a disincentive. Plans will aggressively manage their administrative expenses to ensure they meet the MLR threshold. If clinical HIT is considered an administrative expense, the economic incentives will be to spend less in that area. If that happens, much of the momentum resulting from the Recovery Act and its HIT meaningful use incentive programs will be eroded.
I believe that Sebelius will make the right decision. Clearly, she understands how important HIT is to realizing a data-driven health care system. But it would not hurt for those in the HIT community to let HHS know their views on this subject.