Ashley Leonzio<br />BMIS 2056 – MIS Practicum<br />Industry and Firm Analysis<br />Healthcare Informatics Industry<br />Introduction<br />Informatics is the utilization of information technologies and information management tactics to enhance process efficiencies. According to wisegeek.com, healthcare informatics <br />“combines the fields of information technology and healthcare to develop the systems required to administer the expansion of information, advance clinical work flow, and improve the security of the healthcare system.”<br />More generally, this industry is the intersection of business, information science, and healthcare. Health informatics tools include not only computers, but also clinical guidelines, formal medical terminologies and standards, as well as information systems. These tools help support the areas of clinical care, health services administration, patient and provider education, and research. <br />Role of IS in the industry <br />The broad term “healthcare informatics” is used to describe an industry focused on reducing costs, increasing efficiency, and providing the best care possible. (In 2007, overall healthcare spending as a percentage of GDP was 16% in the United States!) Atypical to many, the healthcare industry faces regulatory and institutional pressures that force hospitals to fight tough battles to remain financially viable. They must increase quality and provide better access to healthcare while controlling costs at the same time. The role that IS plays in healthcare is increasing data availability and transparency to generate data-driven methods to improve healthcare research and practice. IS applications are redefining traditional relationships between providers, payers, and patients and helping hospitals remain financially secure. <br />According to PricewaterhouseCoopers’ list of top 10 healthcare issues for 2010, IS also plays a major role in regulatory compliance. In last several years, there have been multiple <br />
Health Insurance Portability and Accountability Act (HIPAA) of 1996
Patient Protection and Affordable Care Act (PPACA) of 2010
The American Recovery and Reinvestment Act (ARRA) of 2009
The Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, a.k.a Meaningful Use (MU)
Patient Protection and Affordable Care Act (PPACA) of 2010
For example, IS will certainly play a major role in the HITECH Act. One particular requirement of this act is that<br />“In the case where a provider has implemented an EHR [Electronic Health Record] system, the Act provides individuals with a right to obtain their PHI in an electronic format (i.e. ePHI). An individual can also designate that a third party be the recipient of the ePHI. The Act provides that only a fee equal to the labor cost can be charged for an electronic request.”<br />In summary, IS most definitely plays a major in the healthcare informatics industry. This is evident by the increase in college and universities providing specific degrees in this area as well as the regulatory compliance acts enforcing the use of technology in healthcare stated above.<br />Aspects of the field<br />Beginning in the 1990s with new investments in IT, faster computer processors, the introduction of mainstream email, and the affects eCommerce, the productivity of the U.S. workforce has essentially doubled since the 70’s and 80’s. Unfortunately, healthcare sector has lagged behind this shift in productivity until the 2000’s. One possible reason Stephan Kudyba, the founder of Null Sigma, Inc suggests is that this lag could be attributed to most activity in healthcare and healthcare services being paper based (e.g. charting patient records). Kudyba notes that paper and handwriting can be eligible, lost, or just simply cannot be analyzed. In line with Kudyba’s analysis, one major focus in the healthcare informatics industry is digitizing paper based resources into computerized information. This is being accomplished though means such as electronic health records (EHR) and computerized physician order entry (CPOE). Once digitized, this information can be used for billing, scheduling, and research. <br />Another focus many firms are taking is the development of automated decision support systems for healthcare. With increasing access to electronic data, hospitals are able to analyze the data like never before. For example, McKesson Automation’s Automation Decision Support (ADS) utilizes data from 15 different categories to compare the dispensing profile of each nurse to a diversion profile to detect narcotic diversion. <br />One final example of industry focus is on that of automating patients’ medical history. The Portland, Oregon VA Hospital has introduced a computer based system that operates much like that of an airline kiosk. The system checks patients into their appointments, verifies insurance information, and walks the patient though their medication reconciliation. <br />Industry Trends and Issues<br />According to healthcare-informatics.com, the 2010 trends and issues in the healthcare informatics industry are: <br />
Computerized Physician Order Entry (CPOE): The image of CPOE is being transformed and many hospitals are rushing to qualify for meaningful use under ARRA-HITECH.
HITECH: Meeting regulatory compliance is forcing non-clinical projects to the backburner. Once work on CPOE and data sharing is complete, hospitals will be able to focus on projects such as business intelligence and asset tracking. This could become troublesome for firms providing non-clinical products and services.
Clinical Informaticists: With hospitals racing to meet HITECH requirements and demonstrate meaningful use with EHR and CPOE systems, hospitals will want clinical informaticists with medical, nursing, and pharmacy backgrounds to participate in IT projects.
Data Infrastructure: Experts say the need for robust data infrastructures to support performance improvement and transparency is growing. Creating these infrastructures is complex and difficult as there is not much precedence in this area.
Reimbursement Reform: The industry seems to know that reimbursement reform is coming, but when or how is still yet to be seen. Industry leaders see the value in early preparation for changes to come.
Telemedicine: As the government continues releasing reimbursement initiatives for readmissions and telemedicine, industry leaders expect to see an explosion in this area.
Market Leading Firms<br />Each year the Health Informatics Journal releases a list of the top 100 health informatics companies by revenue. In 2010 the top 10 companies on that list included:<br /> <br />Organization and Individual Industry Leaders<br />
Children’s Hospital of Pittsburgh: Recipient of the 2010 Innovators Award from Healthcare Informatics Journal for a project where IT and clinician leaders teamed up with their clinical IT vendor to co-develop an always-available clinical dashboard that has improved the effectiveness nurses working in the highly time-sensitive environment of the hospital's three ICUs.
Healthcare Informatics Journal: This journal has over 49,000 copies in circulation each month
David Blumenthal, MD, MPP: David serves as the National Coordinator for Health Information Technology under President Barack Obama. In this role he is responsible for developing and executing the nation's Health Information Technology agenda.
Governmental and Regulatory Agencies<br />
The Office of the National Coordinator for Health Information Technology (ONC)
ONC is a resource to the entire health system to support the adoption of health information technology and the promotion of nationwide health information exchange to improve health care.
ONC is organizationally located within the Office of the Secretary for the U.S. Department of Health and Human Services (HHS).
ONC consists of two Federal Advisory Committees
Agency for Healthcare Research and Quality (AHRQ)
AHRQ is one of 12 agencies within the Department of Health and Human Services
AHRQ supports research that helps people make more informed decisions and improves the quality of health care services
Informational and Networking Resources <br />
American Health Information Management Association (AHIMA)
AHIMA leads the health informatics and information management community to advance professional practice and standards.
Healthcare Information and Management Systems Society (HIMSS)
HIMSS is an organization dedicated to improving the quality, safety, cost-effectiveness, and access to, healthcare through the best use of information technology and management systems
HIMSS represents more than 23,000 individual members, of which 73% work in the patient care setting
HIMSS also includes over 380 corporate members and 50+ not-for-profit organizations that share the mission of transforming healthcare through the effective use of IT and management systems.
Firm Analysis: McKesson Technology Solutions (MTS)<br />McKesson Corporation operates in two segments. The McKesson Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment and health and beauty care products throughout North America. The McKesson Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, strategic management software solutions, pharmacy automation for hospitals, as well as connectivity, outsourcing and other services, including remote hosting and managed services, to healthcare organizations. This segment is a major player, if not the number one player, in the healthcare informatics industry. This segment will be the focus of analysis below.<br />Figure 1: McKesson Organizational Chart<br />MTS’s customers include hospitals, physicians, homecare providers, retail pharmacies and payors from North America, the United Kingdom, Ireland, other European countries, Asia Pacific and Israel. In the US, the customer base includes 52% of all health systems, 80% of health systems with more than 200 beds, 20% of all physician practices, and 25% of home care agencies. They also support more than 50,000 home care visits annually.<br />Financial Summary<br />McKesson Corporation is number 14 on the 2010 Forbes 500 List of America’s largest companies. This is up number 15 in 2009. McKesson Technology Solutions reports financially along with McKesson Distribution Solutions to the overall McKesson Corporation.<br /> <br />Table 1: Revenues and Stock Value <br />For additional information on company financials, see Appendix A. <br />Executive Team<br />Role of IS at McKesson Technology Solutions<br />Information systems and information technology is at the core of each MTS business unit. Many of the trends in healthcare informatics mentioned earlier, such as CPOE and EHR, are products and services provided by MTS. <br />
Horizon Expert Orders is McKesson’s CPOE solution
Horizon Business Insights is McKesson’s decision support solution
Horizon MedComm-Rx is a fax solution to digitize written medication orders
Horizon Meds Manager is a comprehensive pharmacy information system
These are just some examples of the hundreds of products developed and delivered by McKesson that add value to the healthcare informatics industry. <br />Recent Successes and Crises <br />McKesson Automation becomes exclusive North American Distributer for Health Robotics CytoCare, I.V. Station, and I.V. Soft<br />In August of 2009, McKesson Automation became the North American strategic partner for Health Robotics’ Cytocare oncology IV compounding robotic device. In May of 2010, that partnership grew to include I.V. Station and I.V. Soft<br />Law Suits<br />McKesson Corporation is actively involved in over 10 lawsuits currently. Most of these suits fall McKesson Distribution Solutions, but the effect is felt throughout the entire organization. These lawsuits also affect market values for McKesson stock. <br />Additional Information<br />For additional information on McKesson Corporation or McKesson Provider Technologies, visit www.mckesson.com <br />Bibliography BIBLIOGRAPHY Cummings, J. (2010, September 23). McKesson Shares Fall After Key Customre Files Lawsuit. Retrieved October 3, 2010, from The Wall Street Journal: http://online.wsj.com/article/BT-CO-20100923-710151.htmlDepartment_of_Veteran_Affairs. (2010, March 22). Health Informatics. Retrieved October 3, 2010, from Youtube: http://www.youtube.com/watch?v=6D9GvfYUuVY&feature=relatededucation-portal.com. (2010). Top Healthcare Administration Degree Programs. Retrieved October 3, 2010, from Education Portal: http://education-portal.com/articles/Top_Healthcare_Administration_Degree_Programs_-_Atlanta_GA.htmlFirst AMA-IEE EMBS Medical Technology Conference on Indvidualized Healthcare. (2010, March 21). Retrieved October 3, 2010, from ama-ieee.embs.org: http://ama-ieee.embs.org/overview/speakers/Forbes. (2010). Fortune 500 2010. Retrieved October 3, 2010, from CNN Money: http://money.cnn.com/magazines/fortune/fortune500/2010/full_list/Hagland, L. R. (2010). Articles/Archives. Retrieved October 3, 2010 , from Healthcare Informatics: http://ww.healthcare-informatics.com/ME2/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=3&Tier1=Tech+Trends+2010HealthIT.hhs.gov: Home. (2010). Retrieved October 3, 2010, from http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__home/1204Informatics, H. (2010, June 27). The 2010 HCI List. Retrieved October 3, 2010, from Healthcare Informatics: http://www.healthcare-informatics.com/ME2/dirsect.asp?sid=3FD926E0A2884506947FD7451869716C&nm=The+2010+HCI+100+ListKudyba, S. (2010, April 19). What is Healthcare Informatics? Retrieved October 3, 2010, from Youtube: http://www.youtube.com/watch?v=pzS--PaGC9oLanders, J. B. (2010, September 8). What is Health Informatics? Retrieved October 3, 2010, from wisegeek.com: http://www.wisegeek.com/what-is-healthcare-informatics.htmLeyva, D. a. (2010). HITECH Act and HIPPA. Retrieved October 3, 2010, from HITECH Survial Guide: http://www.hipaasurvivalguide.com/hipaa-survival-guide-21.phpManos, D. (2009, December 17). Healthcare IT among PWC's list of top 10 healthcare issues for 2010. Retrieved October 3, 2010, from Healthcare ID News: http://www.healthcareitnews.com/news/healthcare-it-among-pwcs-list-top-10-healthcare-issues-2010McKesson Corp. (2010). Healthcare IT Solutions Give you the Power to Perform. Retrieved October 3, 2010, from McKesson Corporate: http://www.mckesson.com/en_us/McKesson.com/Our%2BBusinesses/McKesson%2BProvider%2BTechnologies/McKesson%2BProvider%2BTechnologies.htmlMcKesson Corp. (2009, September). McK - Org Chart. Retrieved October 3, 2010, from McKesson Corporate: http://mcknetappprev.mckesson.com/corp/McKNet/Corporate/Documents/McKOrgChart_9-22-09.pdfMcKesson Corporation. (2010). ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE. San Francisco, CA: McKesson.Services, U. D. (2010). Agency for Heathcare Research and Quality. Retrieved October 3, 2010, from http://www.ahrq.gov/Special Issue on IS in Healthcare. (n.d.). Retrieved October 3, 2010, from Informs Online: http://www.informs.org/Journal/ISR/Special-Issues/Special-Issue-on-IS-in-HealthcareSteinwald, A. B. Health Care Spending: Public Payers Face Burden of Entitlement Program Growth, While All Payers Face Rising Prices and Increasing Use of Services. Testimony Before the Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, Committee on Appropriations, House of Representatives, February 15, 2007. GAO-07-497T.The 2010 Innovators Awards:Honoring Leaders in Healthcare IT Innovation. (2010, March). Retrieved October 3, 2010, from Healthcare Informatics: http://www.healthcare-informatics.com/ME2/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=2EF722994825484BB0AE06850BFC8C1CVendome. (2010). Healthcare. Retrieved October 3, 2010, from Vendome Group, LLP: http://www.vendomegrp.com/healthcare.htmlYahoo Finance. (2010, October 1). McKesson Corporation Common Stock. Retrieved October 3, 2010, from Yahoo Finance: http://finance.yahoo.com/q?s=MCKZither, D. D. (2010, Feb 2). What is Health Informatics. Retrieved October 3, 2010, from Youtube.com: http://www.youtube.com/watch?v=VKPSuDG_bTU&feature=related<br />Appendix A: McKesson three year financials <br />