Health Care IT Suite            State of the Health Care IT Union            Addressing Current and Future Industry Impera...
Health Care IT Suite                                                                        Contributing Analysts         ...
Health Care IT Suite                                               State of the                                           ...
Drivers of Change in Health Care IT                                                                                      7...
Drivers of Change in Health Care IT                                                                        9              ...
11                                            Second of Three Increasingly Complex Stages                                 ...
State of the Industry – Health Information Exchange                                                                       ...
State of the Industry – Health Information Exchange                                                                       ...
State of the Industry – ICD-10                                                                                            ...
State of the Industry – Electronic Data Warehousing                                                                       ...
21                                            Road Map                                                            1     Dr...
Where We’re Headed - The Great Risk Shift                                                                                 ...
Where We’re Headed                                                                                               25       ...
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iHT2 Health IT Summit in Seattle 2012 – Opening Keynote “State of the Health Care IT Union”


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Addressing Current and Future Industry Imperatives
1. Understand the business and regulatory drivers impacting health care organizations and the state of the IT industry’s capability to respond
2. Explore the different levels of interoperability and understand why they matter
3. Understand why change management is the most critical factor in technology adoption

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iHT2 Health IT Summit in Seattle 2012 – Opening Keynote “State of the Health Care IT Union”

  1. 1. Health Care IT Suite State of the Health Care IT Union Addressing Current and Future Industry Imperatives IHT2 Health IT Summit August 22, 2012 • Seattle, WA©2012 THE ADVISORY BOARD COMPANY • ADVISORY.COM
  2. 2. Health Care IT Suite Contributing Analysts Jim Adams Ernie Hood Mike Davis Ken Kleinberg Peter Kilbridge, MD Robin Raiford Design Consultant Hillary Tisdale Senior Advisor Dave GaretsLEGAL CAVEAT IMPORTANT: Please read the following.The Advisory Board Company has made efforts to verify the accuracy of the The Advisory Board Company has prepared this report for the exclusive use of its members.information it provides to members. This report relies on data obtained from many Each member acknowledges and agrees that this report and the information contained hereinsources, however, and The Advisory Board Company cannot guarantee the (collectively, the “Report”) are confidential and proprietary to The Advisory Board Company.accuracy of the information provided or any analysis based thereon. In addition, By accepting delivery of this Report, each member agrees to abide by the terms as statedThe Advisory Board Company is not in the business of giving legal, medical, herein, including the following:accounting, or other professional advice, and its reports should not be construed asprofessional advice. In particular, members should not rely on any legal 1. The Advisory Board Company owns all right, title and interest in and to this Report. Exceptcommentary in this report as a basis for action, or assume that any tactics as stated herein, no right, license, permission or interest of any kind in this Report isdescribed herein would be permitted by applicable law or appropriate for a given intended to be given, transferred to or acquired by a member. Each member is authorizedmember’s situation. Members are advised to consult with appropriate professionals to use this Report only to the extent expressly authorized herein.concerning legal, medical, tax, or accounting issues, before implementing any of 2. Each member shall not sell, license, or republish this Report. Each member shall notthese tactics. Neither The Advisory Board Company nor its officers, directors, disseminate or permit the use of, and shall take reasonable precautions to prevent suchtrustees, employees and agents shall be liable for any claims, liabilities, or dissemination or use of, this Report by (a) any of its employees and agents (except asexpenses relating to (a) any errors or omissions in this report, whether caused by stated below), or (b) any third party.The Advisory Board Company or any of its employees or agents, or sources or 3. Each member may make this Report available solely to those of its employees and agentsother third parties, (b) any recommendation or graded ranking by The Advisory who (a) are registered for the workshop or membership program of which this Report is aBoard Company, or (c) failure of member and its employees and agents to abide by part, (b) require access to this Report in order to learn from the information describedthe terms set forth herein. herein, and (c) agree not to disclose this Report to other employees or agents or any thirdThe Advisory Board is a registered trademark of The Advisory Board Company in party. Each member shall use, and shall ensure that its employees and agents use, thisthe United States and other countries. Members are not permitted to use this Report for its internal use only. Each member may make a limited number of copies, solelytrademark, or any other Advisory Board trademark, product name, service name, as adequate for use by its employees and agents in accordance with the terms name, and logo, without the prior written consent of The Advisory Board 4. Each member shall not remove from this Report any confidential markings, copyrightCompany. All other trademarks, product names, service names, trade names, and notices, and other similar indicia herein.logos used within these pages are the property of their respective holders. Use of 5. Each member is responsible for any breach of its obligations as stated herein by any of itsother company trademarks, product names, service names, trade names and logos employees or agents.or images of the same does not necessarily constitute (a) an endorsement by suchcompany of The Advisory Board Company and its products and services, or (b) an 6. If a member is unwilling to abide by any of the foregoing obligations, then such memberendorsement of the company or its products or services by The Advisory Board shall promptly return this Report and all copies thereof to The Advisory Board Company.Company. The Advisory Board Company is not affiliated with any such company.
  3. 3. Health Care IT Suite State of the Health Care IT Union Addressing Current and Future Industry Imperatives©2012 THE ADVISORY BOARD COMPANY • 25191A 6 Road Map 1 Drivers of Change in Health Care IT 2 State of the Industry©2012 THE ADVISORY BOARD COMPANY • 25191A 3 Where We’re Headed
  4. 4. Drivers of Change in Health Care IT 7 The Reform Paradox Giving More Care to More People, and Paying Less for It Raise taxes? How do we How do we Reallocate spending? maximize afford Cut benefits?©2012 THE ADVISORY BOARD COMPANY • 25191A access to expanded Cut reimbursement? care? access? Delivery system change? Source: Advisory Board analysis. Drivers of Change in Health Care IT 8 Beginning of a Fundamental Transformation Legislation Only One Part of Health Care Reform Delivery System Reform Timeline HAC Medicaid reimbursement Acute Care stops - 2012 Episode Coverage ICD-10 Core Demonstration Expansion Readmissions Conversion Measures 2010 2010-2014 Program - 2012 2014 SGR1 1997 2016©2012 THE ADVISORY BOARD COMPANY • 25191A Never Physician Group Meaningful Shared Bundled Events Practice Use Savings Payment Campaigns Demonstration 2011-2015 Program Program 2005 2012 2013 1) Sustainable growth rate. Source: Advisory Board analysis.
  5. 5. Drivers of Change in Health Care IT 9 Toward Accountable Care New Incentives, Greater Risk Characterize Industry Transformation Strategic and Operating Imperatives Management Fee for Accountable Imperative Service Care Optimize performance within the Optimize performance across settings Accountability facility and time Redirect acute-care utilization to lower Utilization Maximize acute-care utilization acuity settings Physician Align economically to drive Align economically to manage shared Partnerships acute-care volumes risk Technology Win clinical technology “arms Wire the health system for Investments race” coordination and collaboration©2012 THE ADVISORY BOARD COMPANY • 25191A Centralize and co-locate acute- Widely distribute primary care and Facility Strategy care services preventive services Invest in only as an “avoidable Develop high-performance partner Care Coordination losses” strategy network across continuum Manage inpatient cost trend Expense Management Drive care to lowest-cost setting below revenue growth trend Source: Advisory Board analysis. 10 Road Map 1 Drivers of Change in Health Care IT 2 State of the Industry©2012 THE ADVISORY BOARD COMPANY • 25191A 3 Where We’re Headed
  6. 6. 11 Second of Three Increasingly Complex Stages Data Capture and Sharing Advanced Clinical Processes Improved Outcomes Stage 1 Stage 2 Stage 3 • Increase implementation and • Increase exchange of health • Drive use of real-time data at the adoption of electronic health information point of care record (EHR) systems • Demonstrate care coordination • Use outcomes-focused clinical • Capture structured data across sites of care quality measures©2012 THE ADVISORY BOARD COMPANY • 25191A • Empower patients with health • Utilize clinical decision support information for prevention, disease management, and safety Source: HITPC Meaningful Use Workgroup, Stage 3 Subgroups; Medicare and Medicaid Programs; Electronic Health Record Incentive Program-- Stage 2 Proposed Rule at; IT Strategy Council analysis. State of the Industry – Acute Care EMR Adoption 12 Stages of EMR Adoption HIMSS Analytics EMR Adoption Model, Q1 2012 Percent of Stage Description Hospitals At Stage Q3 Q2 2009 2012 Complete EMR; CCD transactions to share data; Data warehousing; Data 7 0.5% 1.7% continuity with Emergency Dept, ambulatory, Outpatient venues Physician documentation (structured templates) on one inpatient unit, full clinical 6 1.2% 6.5% decision support (variance and compliance), full radiology PACS 5 Closed loop medication administration fully implemented on one inpatient unit 4.8% 11.5% 4 CPOE and clinical decision support implemented in at least one inpatient unit 4.1% 13.3%©2012 THE ADVISORY BOARD COMPANY • 25191A Nursing/clinical documentation (flow sheets) on one inpatient unit, clinical decision 3 40.4% 42.4% support (error checking in pharmacy), image access outside radiology dept. Clinical data repository, controlled medical vocabulary, clinical decision support 2 29.8% 11.7% capability, may have document imaging; HIE capability 1 All three ancillary systems installed 7.1% 5.1% 0 Not all ancillary systems (lab, radiology, pharmacy) installed 12.1% 7.9% Source: HIMSS Analytics™
  7. 7. State of the Industry – Health Information Exchange 13 Towards Higher Levels of Interoperability ” Definition of Interoperability “In health care, interoperability is the ability of different information technology systems and software applications to communicate, to exchange data accurately, effectively and consistently, and to use the information that has been exchanged.” NAHIT, 2005 Process • Assumes Semantic interoperability Semantic • Includes shared process • Assumes Syntactic interoperability definitions and inter-participant Degree of Difficulty • Requires participants to use the workflow orchestration same reference terminologies • Requires mapping to a reference©2012 THE ADVISORY BOARD COMPANY • 25191A information model Syntactic • Based on agreement on how to parse the content exchanged • Generally sufficient for human use of the exchanged content • Computer use requires a mapping between the terminologies used by the participants – this acknowledges the (very real) possibility of different meanings associated with mapped terms (semantic ambiguity) Increased Usefulness of Interoperability Source: NAHIT, 2005 and Advisory Board research and analysis. State of the Industry – Health Information Exchange 14 HIE Market: Everyone Wants to Get into the Act! Representative Category Strengths Challenges Examples Established client base of IDSs, Competing EMR vendors Acute EMR Epic, Allscripts, some experience with ambulatory, will not play in the Vendors Cerner, GE… lab and payer integration “sandbox” CareFx, Covisint, Built for HIEs, have connectors and Often reliant on grants dbMotion, ICA, adapters to most ambulatory and and government-based HIE Vendors Intersystems, lab systems, support for non-sustainable funding MobileMD, Orion, centralized and federated models sources RelayHealth Knows networking and Lack of clinical HIE Carriers Verizon, AT&T communications experience©2012 THE ADVISORY BOARD COMPANY • 25191A Existing extensive national Fee structures not Specialty Surescripts, Emdeon backbone connectivity with popular for HIE providers, payers Experienced with transaction United Health/Axolotl, Payer “parents” not Payers networks/clearinghouses – now Aetna/Medicity trusted by providers extending into provider space Source: Advisory Board research and analysis.
  8. 8. State of the Industry – Health Information Exchange 15 Direct Project – Information Sharing Incremental Improvements ” Today’s Technology – FAX Direct Project Announcement from ONC “The Direct Project specifies a simple, secure, scalable, standards-based way Direct Project - for participants to send authenticated, E-mail Attachments encrypted health information directly to known, trusted recipients over the Internet.”©2012 THE ADVISORY BOARD COMPANY • 25191A Connect Project – XDS Documents The Direct Project Overview, 11 October 2010 Source: Advisory Board research and analysis. State of the Industry – Protected Health Information Breaches 16 More Than Just Incentives At Stake Breaches Are Costly and Destroy Trust Quintuple Whammy from a Breach Redspin’s 2011 Report on Breaches 385 breaches of protected health information (PHI) 19,016,894 patient health records affected $??? M $1,000 per patient seems to be the metric for lawsuits 49,396 average # of patient records per breach in 2011, Maximum annual penalty an 80% increase over 2010 59% of all breaches involved a business associate $1.5 M from HHS due to HIPAA violations 39% occurred on a laptop or other portable device Cost to solve single case 25% occurred on a desktop PC or server 60% resulted from malicious intent (theft, hacking) $20,663 of medical identity theft* 97% increase in total records breached, 2010-2011 Potential loss of Meaningful 76% increase in records breached involving a business associate, 2010-2011 $??? M Use money due to HIPAA violation 525% growth in records breached due to loss 2010-2011 ” $??? M Cost to your reputation©2012 THE ADVISORY BOARD COMPANY • 25191A Daily Disclosures of Breaches are Becoming Alarming – It’s “When,” not “If” Some of the latest include Stanford Hospital and Clinics (20,000 patients’ data posted to the web; sued for $20M), Tricare (SAIC – 4.9M patients’ data lost; sued for $4.9B), Fairview Health Services and North Memorial Health System (Accretive Health – 16,800 total patients data stolen), Nemours (1.6M total individuals’ data lost); UCLA Health System (16,288 total patients data stolen). *Miliard, M, “Medical Identity Theft on the Rise,” Healthcare IT News, March 15, 2011, available at: Redspin Breach Report 2011, Protected Health Information, (accessed 17 February 2012 (accessed March 30. 2011)
  9. 9. State of the Industry – ICD-10 17 ICD-10 versus ICD-9 Explosion of Granularity Diagnosis Procedure 72,000 69,000 14,300 12,500 3,800 0©2012 THE ADVISORY BOARD COMPANY • 25191A ICD-9-CM ” ICD-10-CM ICD-10 (WHO) ICD-9-PCS ICD-10-PCS ICD-10 (WHO) ICD-10 CFO Survey respondents who expect to lose revenue through transition: • 28 % predict revenue loss between 6% and 10%1 • 23 % anticipate revenue losses to last one to two years1 1) Shaw, HealthLeaders Media, 7/26/11. State of the Industry – Use of Mobile Technologies 18 Mobility-Enabled Business Process Management Who is waiting on what from who? Patients and Physician Families Nurse When can we pick up Mother? When will I get When will I get that order those lab results?  Medication reconciliation from the physician to give this pain medication?  Medication administration  Discharge processing  Bed management  Billing©2012 THE ADVISORY BOARD COMPANY • 25191A Pharmacist Transport What shall we do about When can I wheel this this medication conflict? cranky old man to the Administration pick-up area? When can we get this bill out? Source: Care Advisory Board interviews and analysis.
  10. 10. State of the Industry – Electronic Data Warehousing 19 Business Intelligence Framework Business Intelligence is key to developing a thoughtful system of care out of the organic, ad hoc processes that we have today. 3 2 Prescriptive: What should we do? Degree of Difficulty Beware the Predictive: False Summits! 1 What might happen? Analyze the Actions • Mathematic Models Descriptive: Analyze the Future What happened? • Linear Programming • Statistical models • Constraint Programming Analyze the Past • Correlation Analysis • Reports and graphs •©2012 THE ADVISORY BOARD COMPANY • 25191A Forecasting • Dashboards • Simulations Three levels of BI maturity with • Drill down/around each level more difficult and more advantageous than the last. Degree of Competitive Advantage State of the Industry – Movement in the Market 20 State of the Enterprise Vendors You Win Some, You Lose Some… Number of Hospitals Gained/Lost, 2005–2011 458 204 160 41©2012 THE ADVISORY BOARD COMPANY • 25191A 15 56 57 Source: HIMSS Analytics Database.
  11. 11. 21 Road Map 1 Drivers of Change in Health Care IT 2 State of the Industry©2012 THE ADVISORY BOARD COMPANY • 25191A 3 Where We’re Headed Where We’re Headed – IT Budgets Going UP 22 Spending Up, But Return Down Where We’re Headed—IT Budgets Going UP IT as a Percentage of Total Breakdown of Capital Spending Capital Spending In Thousands Moody’s-Rated Hospital, In Thousands • Remote computing • Edge solutions $34,824 • Image storage Liquidating • Outsourcing the asset Total IT D&A Expenses $33,249 Costs Return on Invested Capital©2012 THE ADVISORY BOARD COMPANY • 25191A 40% 8% 12% 6.6% 2008 2009 2008 2009 Source: Moody’s Preliminary Medians for Not-for-Profit Hospitals, April 2010; Advisory Board analysis.
  12. 12. Where We’re Headed - The Great Risk Shift 23 Toward Accountable Payments Building Accountability Through Experiments in Payment Capitation/Shared-Savings Models Episodic Bundling Degree of Shared Risk Hospital-Physician Bundling Pay-for-©2012 THE ADVISORY BOARD COMPANY • 25191A Performance Care Continuum Source: Health Care Advisory Board interviews and analysis. Where We’re Headed – It’s All About Change 24 Emphasis on Change Management Is Essential Under-Adoption, Under-Utilization, Sabotage Not Desirable Options Technology Adoption ” The application of human Change Management principles to technical projects, such as Electronic Medical Records or ICD-10 implementation. Claire McCarthy It’s Always About People • Only 1/3 of change initiatives©2012 THE ADVISORY BOARD COMPANY • 25191A Human achieve success. Users determine Change + success or failure of project. Management Process • Change is messy. People start where they are, not where we want them to be. Get to hearts + EMR and minds to develop willingness and ability.
  13. 13. Where We’re Headed 25 The Intelligent Enterprise Prescriptive Predictive Models Models Operational Data Store Exploration, Rules Engine Real-Time Update visualization, and analysis tools Active Archive Data Marts Detailed data Data Warehouse Processing-Oriented Operational Systems Fact and RCM Dimension Tables Detailed Transaction EMR data Summarized Information©2012 THE ADVISORY BOARD COMPANY • 25191A Extract Detailed data Fact and HIE Snapshot Dimension Fact and Tables Metadata CMS Dimension Systems External Tables CIN Cleaned Standardized, Consistent Staging Area 2445 M Street NW I Washington DC 20037 P 202.266.5600 I F 202.266.5700