Payment Reform Is Among The Keys To Unlocking Health IT Potential – RAND Commentary

Adoption of electronic health records continues to rise, but analysis from the RAND Corp. suggests that interoperability and technical issues continue to keep the promise of lower cost and higher quality health care at bay, with a key factor in changing that course being a move to a health care delivery system that favors paying for value rather than quantity.

A recent RAND Corp. analysis cites a number of improvements that need to be made before health information technology can live up to its full potential in improving health care quality and lowering costs, including interoperability, ease of use and effective use. However, there also is a lack of incentive for physicians to push vendors to address these issues so long as physicians are reimbursed for what they do as opposed to how well they do it, and a shift in payment approaches ultimately will be key to getting the most out of health IT.

“Fully interoperable, patient-centered and easy-to-use systems are necessary but insufficient to unlock the potential of health IT,” RAND’s Arthur Kellermann and Spencer Jones wrote in commentary published in the January issue of Health Affairs. “Ultimately, there is only so much that the government and vendors can do. Providers must do their part by reengineering existing processes of care to take full advantage of the efficiencies offered by health IT. This revamping of health care delivery is unlikely to happen before payment models are realigned to favor value over volume.” Kellermann is the Paul O’Neill Alcoa Chair in Policy Analysis and Jones is an information scientist at RAND, the policy analysis organization.

In an e-mail, Kellermann noted that many physicians have complained that early health IT platforms “were engineered to facilitate billing and documentation of procedures rather than make care more efficient. … When reimbursement shifts to approaches that encourage optimizing outcomes with lower levels of spending, health systems and providers will have a powerful incentive to eliminate duplicative testing, needless consults and inappropriate or equivocal procedures and instead seek the efficiencies [that] could be achieved” from adoption and use of health IT.

But as the reimbursement landscape stands, there is little incentive for physicians and health systems to make the process changes and press the vendor community to provide products that enable health IT to facilitate a value-based reimbursement system. This is because, under the prevalent fee-for-service model, the incentive on the provider side is to continue using health IT that emphasizes capturing all billable items and services.

A transition to a reimbursement system that emphasizes value over volume will be a catalyst that drives these needed changes in the health IT system and will enable the realization of the promise of better quality and lower cost, Kellermann said. One area of promise is accountable care organizations, which have grown as the result of the Affordable Care Act. ACOs, which reward providers based on patient outcomes and cost containment, are learning that health IT can be essential to ensuring those outcomes are achieved (Also see "Pharmacists, HIT Can Be Key To Successful Rx Care In ACO Model" - Pink Sheet, 29 Oct, 2012.).

And until the immediate issues are addressed, ongoing challenges in adoption also will make it difficult for EHRs to live up to their research potential. In the context of value-based health care, where comparative effectiveness research is poised to play a significant role, EHRs are viewed as an important source for future CER data (Also see "PCORI Methodology Committee Begins Examining How Best To Interface With EHRs" - Pink Sheet, 21 Nov, 2011.).

Key Health IT Issues

The commentary’s authors point to a number of areas that need to be addressed within the EHR environment to make them a more effective product.

The first one is interoperability. Kellermann and Jones note that the “health IT systems that currently dominate the market are not designed to talk to each other. Moreover, until now, health care providers have had little incentive to acquire or develop interoperable health IT systems.”

They point to providers and vendors as hurdles to achieving interoperability, despite federal initiatives, such as health information exchange requirements embedded in the Medicare and Medicaid financial incentive programs for the adoption and meaningful use of EHRs (Also see "EHR “Meaningful Use” Requirements Raise Expectations For Health Information Exchange In Stage 2" - Pink Sheet, 24 Feb, 2012.).

“Although the federal initiatives needed to achieve higher levels of interoperability are still in a nascent state, they are already triggering resistance from providers and vendors,” Kellermann and Jones write. “Both of these groups must look beyond their short-term interests for the good of the nation and the long-term sustainability of the health care industry.”

They note that the current generation of health IT systems function less like an ATM card, which allow users to access bank account information at any ATM regardless of the bank, and more like a frequent flyer card “intended to enforce brand loyalty to a particular health care system. … The lack of progress on interoperability is so stark that it has led some to speculate that major health IT vendors are opposed to interoperability.”

House Republicans have called for a halt to EHR meaningful use incentive payments until true interoperability can be demonstrated (Also see "House Committee Leaders Want EHR Incentive Payments Paused Until Standards Are Strengthened" - Pink Sheet, 5 Oct, 2012.). Interoperability is further complicated when data needs to cross state lines (Also see "HIT Health Information Exchange Could Be Hampered By State Lines" - Pink Sheet, 18 Oct, 2010.).

Ease Of Use An Issue

The authors highlight ease-of-use as another issue that needs resolution in order to get more buy-in, particularly from the physician community, and suggest the push to receive federal performance incentives may be complicating providers’ practices. A recent survey revealed physician enthusiasm on EHRs has dampened (Also see "As EHR Use Grows, Physicians’ View Of Their Impact Is Moderating" - Pink Sheet, 2 Jul, 2012.).

But getting vendors to address these issues also might be a challenge. “Some experts fear that the federal government might inadvertently exacerbate the problem by encouraging providers to purchase hard-to-use systems that will be costly to replace at a later date,” the authors note.

Adding to it is the difficulty in getting “comprehensive data on the usability of competing health IT systems,” Kellermann and Jones note. “Instead of demanding product transparency or insisting that health IT vendors create more user-friendly technology, many large health care systems have rushed to adopt existing systems to qualify for time-limited incentives. As a result, their clinicians must read thick user manuals, attend tedious classes and accept periodic tutoring from ‘change champions’ to master the various steps required to enter and retrieve data.”

Gains in quality from EHRs have been documented, January issue of but the gains require sustained use of EHRs as well as a high degree of technical assistance for some of the quality measures to surface. In a separate Health Affairs article reviewing EHR use supported by the Primary Care Information Project, EHR implementation alone was shone to be not enough to improve quality. The Primary Care Information Project provides subsidized EHRs and technical assistance to primary practices in underserved neighborhoods in New York.

“Only those physicians who received high levels of technical assistance concomitant with EHR implementation improved quality,” the article notes. “Even relatively long periods of EHR use – up to two years – were not associated with quality improvement for physicians who received no technical assistance or only moderate levels of assistance.” And for those who received a high level of assistance, quality gains did not come until at least a year after implementation, with continued high-level technical assistance.