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  • 1. USHealthNet, LLC 1. Business Plan - Capsule…………. 2. Business Plan - Long Version…… 3. Conceptual Design Document…... 4. DiagAssist - Point-of-Care tools… 5. Screen Shots of Prototype…….… 6. ScriptPAD Specificaions…….…….
  • 2. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 3938 USHealthNet’s ‘Executive Summary1 IntroductionUSHealthNet will provide a branded, integrated, Internet Application Service Platform (iASP) for the administrative, communications andinformation needs of healthcare professionals and for the healthcare information needs of consumers. USHealthNet’s Web destination willconsist of two distinctly different linked Web sites—a subscription-based site for healthcare professionals and a free Health, Wellness andself-service portal site for consumers. USHealthNet will be the single point of access to EDI services, enhanced communications services,branded healthcare content, and other Web-based offerings. For healthcare professionals, USHealthNet is designed to simplify healthcarepractices by integrating multiple administrative, communications and research functions into a single, easy to use Web-based solution.USHealthNet will deliver rich content and application services through its vertical healthcare portal. This portal will be segmented byhealthcare professionals, culled by specialty, and targets a consumer strategy leveraging physician patients. The consumer portal is based onan AOL model building on the community theme. Through a strategic partnership with BroadVision USHealthNet will offer apersonalization engine allowing true 1-2-1 relationship management and InfoMediary services. USHealthNet plans to aggregate the largestnumber of physicians and their patients through an aggressive Merger and Acquisition strategy.In an effort to facilitate a plug-&-play e-commerce platform for third party products and services USHealthNet will develop joint venturesand affiliate partnership alliances. This strategy will include various healthcare centric disciplines: content sourcing and publishing, PracticeManagement Systems, Clinical Information Systems, Backend EDI services, and Integrated Delivery Networks. The trend to consolidatethese operational silos will take a focused and phased implementation plan. The basis for these M & A transactions is to reach critical mass inInternet time, which will drive demand creation for both the B2B and B2C segments. Fueling the inertia created by USHealthNet’s channelstrategy will be the Company’s vision for deploying its iASP offering -- Point-of-Care Knowledge Delivery and Acquisition tools.The value proposition for both the healthcare professional and consumer will be in the Company’s ability to lower physician operating costs,increase revenues and enable quality care through measurable clinical outcome analysis, improving care delivery and disease management.USHealthNet plans on building knowledge bridges that will forge improved relationships bonding physicians, patients and a fragmentedhealthcare system. USHealthNet’s portal will become a trusted brand and premiere destination for brokering healthcare information,products and services that differentiates and provides a sustainable competitive advantage ensuring future annuity business.1.1 Market OverviewAccording to the Health Insurance Association of America, healthcare is the largest single sector of the U.S. economy, consumingapproximately $1 trillion annually, or 14% of the country’s gross domestic product. The healthcare industry consists of a complex mix ofparticipants, which includes:• ”Providers”—physicians, medical practice groups, hospitals and other organizations that deliver medical care;• ”Payers”—the government agencies, insurance companies, managed care organizations and other enterprises that pay the bills for healthcare, this includes PBMs and employers;• ”Suppliers”—clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services;• ”Consumers”—individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employers select health plans, determinebenefit levels, enroll employees and maintain employee eligibility data. Providers verify patient eligibility, collect patient histories, orderdiagnostic tests and x-rays, receive and interpret test results, render diagnoses, make referrals and submit claims to payers. Payers managereferrals, establish medical care protocols and reimbursement policies and process claims. Suppliers analyze and process patient samples ortests, provide results, fill prescriptions and submit claims for reimbursement. These and many other healthcare transactions are also highlydependent on information, and each participant is dependent on the others for parts of that information. In sum, the finance and delivery ofhealthcare requires that consistent, accurate information be shared confidentially across a large and fragmented industry.• Physicians control 85% of the national expenditures for healthcare.• The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.• The physician market size in the U. S. is over 800,000 today.• Those physicians providing outpatient care average 1647 patients per year; each with an annual per capita expenditure of $3875, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Factors contributing to these exorbitant expenses are:
  • 3. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 3938• =Inappropriate diagnosis and prescription drug use, resulting in a significant number of hospitalizations—between 5 and 25 percent. The costs of treatment for inappropriate drug therapies are staggering - estimated at $100 billion each year1• =The healthcare industry has become an information-intensive profession plagued by substandard methods of data collection, storage, and retrieval, propagating and reinforcing the dysfunctional characteristics of a fragmented healthcare system• With over two thousand information technology vendors and systems integrators competing for their share of the healthcare industry, incompatible operational and technology silos are making it difficult to exchange vital information and critical life-saving knowledge. This need strains the resources of the healthcare community since information must be gathered from disparate sources.• =A large part of healthcare waste is related to compliance red tape, paperwork and decentralized heterogeneous data sources.1.2 The ProblemIn providing care to those patients the physicians face similar basic challenges of people, process and technology:• =Management of patient data during the course of their relationship• =No access to patient data prior to their relationship• =Limited access to patient data throughout the extended healthcare enterprise• =Inconsistent processes and deteriorating relationships across providers, payers, and suppliers• =No communication and leverage of data beyond the practice walls and across the continuum of care• =The need to keep abreast of health findings, enable peer collaboration and review new treatment protocols• =Need to contain costs (administrative, compliance, fraud ) and expand revenue opportunities and measure quality of care and lifeSeveral of the core applications needed by those physicians to manage their patients needs are currently not WEB enabled and less than 6%of the office based physicians population use any combination of the following Point-of-Care (POC) tools:• =Electronic Medical Records (family and payer demographics, medication history, allergies, problem list, etc)• =New prescription orders and refills processing, with Internet fulfillment through Drugstore.com• =Lab Order Entry and Resource Scheduling (workflow processing)• =Diagnostic Decision Support (expert knowledge systems)• =Procurement applications (e-commerce and e-business and ERP)Those core applications have not penetrated the undeserved portion of this market for the following reasons:• They are primarily client server applications that are both expensive to implement (software licensing, hardware, training and backend integration), but are also a large distraction to the practice staff and operations from a management perspective – Back Office versa Front Office - Practice Management versa Patient Management.• Managed Care has driven costs to the lowest level in history, leaving caregivers to question the quality of care and their ability to earn a living and compete in the growing Physician Provider Organization (PPO) space.• =Those practices that do invest in these applications generally only leverage a small percent of their value due largely to the fact that back-office-billing systems are complex data entry systems and do not extend themselves to support front-office POC functions.• =Since the applications are local to each practice, they do not receive the benefits of a consolidated patient treatment profile and outcomes data across practicesStudies show that 94% of this market is considered “under served” by the current applications on the market and unable to address the Point-of-Care information needs. The Total-Cost-of-Ownership (TCO) on a per seat (single-user) basis would exceed $150,000 dollars over fiveyears. With more than 325,000 physicians working in physician group practices, it is easy to see why the turnkey systems integration servicesmarket for this segment will double in revenue by the end of the decade. Its $10 billion mark today, according to leading analyst MikeKnepper of Volpe, Welty & Co. The domestic market for digital clinical information networks has been estimated at $350 billion dollars,international (including U.S.) at $1.2 - 1.3 trillion dollars yearly (the estimate based on data from the World Health Organization, the U.S.Census Bureau).1 National Pharmaceutical Council.
  • 4. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 39381.3 The SolutionUSHealthNet’s iASP offering consists of an N-tiered application service strategy, which connects physicians and patients to USHealthNet’sportal through a single access point using a Web browser based Thin-Client interface. These services integrate critical Point-of-CareKnowledge Tools allowing secure global access over the Internet. A patient has access to a read only EMR and a Java Smart card containingvital healthcare data will be offered for free to consumers, and for healthcare professionals the full POC suite will be offered through theCompany’s premium subscription services. Extranet access is offered to branded affiliate partners, enabling local e-commerce transactionsmaximizing site stickiness while ensuring a consistent user experience and ensuring patient privacy and physician confidence.USHealthNet’s Java Enterprise Beans and Corba application component framework supporting the iASP subscription service offering willconsist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP analytical reporting services9. Java and XML Search Engine, integrating (UMLS) Tools and semantic networksThe USHealthNet vision is to provide increased functionality to a broader cross-section of the physician’s market by breaking down thecurrent barriers to entry and providing the following benefits to the physicians practice, patients and consumers, and pharmaceutical industry:1.3.1 Value Propositions – Physicians• Significantly lower cost of entry through a multi-tiered subscription model, effectively eliminating the Total-Cost-of-Ownership• More intuitive functionality, delivering a point and click information rich experience through Web based Thin-Client interface• Less intrusive infrastructure, remotely managed, eliminating hardware and software obsolescence (Outsourced to ASPs)• Guaranteed Quality of Service, by our national network operations center alliance partners• Clinical data repository management, providing analytical reporting services (InfoMediary service)• Leverage EMR database beyond the practice and across the continuum of care, location and technology independence• Reduced encounter documentation time (SOAP/Progress notes) enabling an increase in patient flow, as well as reduced liabilityAdditional benefits to the consumer and Pharmaceutical markets will be:1.3.2 Value Propositions – ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium and proprietary health and wellness content.Consumers can use the information to educate themselves on healthcare-related matters, allowing them to make better-informed healthcaredecisions. In addition, USHealthNet can e-mail updates based on a consumer’s profile and can search and retrieve member-specifichealthcare information from the Web. InfoMediary service affiliates will be marketing third party products and services using BoardVisionenabling a true 1-2-1 user experience. Affiliates target against high-level patient/consumer profiles, which do not compromise personal data,only segment level profiling data is available and this is secured in a BroadVision database behind USHealthNet’s data center fire-walls.1.3.3 Value Propositions - Pharmaceuticals• Access to clinical data repository, reducing new drug time-to-market expense and risk• Provide direct to physician and patient/consumer (DTC)2 marketing channel, influencing prescribing behavior• Access to patient base for clinical trails and analytical reporting services (Data Mining) 3• Direct link to Physicians Desktop for branded InfoMediary services• Access to patients and consumers of healthcare products through sponsorship programs on USHealthNet’s portal2 Predicted spending on DTC advertising for 1998 is close to $1.6 billion, a 60% increase over 19973 All personal healthcare information is highly confidential and USHealthNet understands its commitments to patient privacy and will notunder any circumstances compromise a patient’s personal healthcare data.
  • 5. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 39381.4 Revenue ModelsThe Company’s delivery strategy for this vision is to raise the management of these applications up into the network, delivering subscription-based access to these applications for individual practices. The applications will be Internet based, providing the scale, security and ease ofuse that has been the hall-mark and success of the WEB today.Key sources of revenue from this business will be:• Subscript to Vertical Healthcare Portal (content and community only), targeting physicians, and segmented by specialty• Subscript services for Internet Application Service Platform (iASP – Point-of-Care Knowledge Delivery tools)• InfoMediary services allowing affiliate partners to participate in the Company’s e-Commerce platform and service offerings• Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)• Transaction processing (EDI Claims, patient eligibility, transcription services and e-commerce)• Health Plan Auctions, giving PPOs and employers more control over contract negotiations with payer organizations• Advertising - using the Physicians Desktop the Company can use both a Push and a Pull model, supporting new off-line messaging1.5 Capital requirements will be:• $10 - 30 million for sales, marketing and PR, operations, partnership acquisitions, technology licensing and development, and Merger & Acquisition opportunities.• Outsource portal development and content sourcing to Agency.com.• Outsource infrastructure deployment to NaviSite, a CMGi company, and USinternetworking• Affiliates pre-paid or underwriting physician subscriptions (General content subscription levels, not premium, which offers iASP services)4• To fuel the Company’s consumer e-Commerce and InfoMediary service strategies USHealthNet’s market capitalization projections are $500 million with 10 % market penetration are not unrealistic1.5.1 Investment OpportunitiesThis is an early stage opportunity for investors:• The research has been done and the business case proven• Prototypes have been developed• Business plan has been drafted• Several key members of the management team have been identified, with an eager desire to identify additional members• Industry experts from both the medical and internet fields have committed to advisory roles• Technology partners have been identified and initial negotiations have begun• An initial venture partner has expressed a desire to participate if a second partner can be secured1.6 ManagementRichard Lynes - is the founder and CTO of USHealthNet and has a proven track record serving as CIO and CTO for several successfulcompanies. To his credit Mr. Lynes brings more then twenty-four years of industry experience in Information Systems, Tele-communications, and business. His involvement with the Internet spans more then a decade and inspirers many of his visionary strategies,bridging e-commerce/e-business, integrating ERP and SCM, and his Thought-Leadership in the areas of converging business models andtechnologies is without question. Mr. Lynes is an experienced leader, mentor and team player, and understands the value of human capital.1.7 ConclusionUSHealthNet ‘s charter and strategic vision is to provide e-commerce capabilities and service excellence for the healthcare industry bydeveloping Internet transport and Web-based clinical applications, management services, and a community healthcare information deliverynetwork. USHealthNet will be the premier provider of Point-of-Care knowledge tools and services for the healthcare industry.USHealthNet’s strategy reflects the future state, vision and direction for the healthcare industry. This premise is based on the fact that allroads lead to the patient and physician, therefore all investment decisions, including IT capital and human resources need to be alignedstrategically across all points of patient and physician interaction.4 The pre-paid or underwritten subscription services will be paid for in part from our shared revenue and joint marketing programs foraffiliate, and alliance partnerships
  • 6. The healthcare industry sits on a vast body of medical knowledge that it has failedto exploit. Practitioners and patients pay the price.Dr. KnowBy Regina E. Herzlinger, DBA & Russell J. Ricci, MDHealthcare is one of the worlds most knowledge-intensiveindustries--yet the practitioners on its front lines are cut off from thenetwork connectivity tools that could deliver information to those whoneed it. Every day, physicians rely on their wits, their training, theirpast experiences with patients, and the information shared amongcolleagues to make critical medical judgments. And yet few attemptshave been made to codify systematically physicians experience intreating patients so that the resulting body of knowledge could be moreefficiently shared among colleagues.The healthcare industry, ofcourse, spews out "raw"information by the ton, but useful,meaningful information that couldinfluence patient outcomespositively and point to medicalbreakthroughs isnt sharedefficiently--if at all. Whilemedical bills are computerized,diagnosis and treatment recordslargely arent. Likewise, little hasbeen done to track and studypatient outcomes methodically sothat physicians could identify themost successful treatments.The answer, many believe, lies in evidence-based medicine. This newapproach has already demonstrated that it can deliver better care atlower cost--no mean feat in an industry plagued by escalating costs,
  • 7. IBM Global Healthcare Industry News - Dr. Know and in many parts of the world, increasingly dissatisfied customers. But it is not without controversy. In fact, it may be one of the most hotly debated topics among medical practitioners today. The problem is well known. "What has been referred to as a double standard of truth in medicine persists," says Dr John Wennberg, an epidemiologist and director of The Dartmouth Atlas of Health Care in the United States, a 10-year study that has documented a wide variation in medical treatments. In the US, new drugs are tested to determine clinical efficacy, he points out, but "the outcomes of other treatment options...are not systematically subject to evaluation." The result, says Dr Wennberg, is unnecessary scientific uncertainty about medical treatments. For decades, practitioners have been concerned about wide variations in medical treatment documented the world over. Demography-based health patterns and differing health care systems contribute to these differences, but what troubles many is the extent to which incomplete information may cause disagreement among physicians about diagnoses and treatments. Enter evidence-based medicine. Heres how it works: Physicians, in concert with their colleagues, use data mining and relational databases to sift through patient histories and clinical research data in order to glean knowledge--to understand the risks and benefits of various medical treatments and how they affect different "classes" of patients. The best practices--or optimal outcomes--that emerge are then used to create treatment guidelines for subsequent patients. Ideally, computer networks could deliver these up-to-the-minute guidelines and decision-critical data directly to the point of service. It is an iterative process, with each new patient or clinical trial added so that constant learning is assured and new ways of doing things are never stifled. Some call this real-time medicine. "In the ideal world," says Dr Steve Shaha, a research director for the US-based Gartner Group, "practitioners would have the data right at their fingertips at the point of decision-making, like the heads-up display for a fighter pilot. To accomplish this, wed need a lot of computerization to capture electronic patient records and feed back critical clinical data. These data repositories would be designed to allow people to make the best possible diagnoses and choose the best treatment path." Evidence in Practice The efficient sharing of medical knowledge is probably best promulgated through an organizational approach known as the focused factory. Torontos Shouldice Hospital is one such facility. It performs
  • 8. just one procedure--hernia operations--but through sheer repetition anddedicated focus to the constant acquisition of knowledge, it appears toperform them better than anyone else. At Shouldice, a hernia operationtakes half the time and costs half as much as at the average hospital.Whats more, it fails only 1 percent of the time, compared to a 10 to 15percent failure rate elsewhere. Capture in computer databases what caregivers at Shouldice do right, and that focused knowledge could become treatment guidelines, exportable via networks to support physicians at facilities worldwide. Thats the goal at the M.D. Anderson Cancer Center in Houston, Texas, a focused factory, and perhaps the most advanced user of evidence-based medicine in the US. Using a network-based data program enabled by the clinical evidencecollected, grouped, and deemed critical by its doctors, the centerscomputer system currently tracks patients and suggests treatmentsalong 98 different treatment paths covering 8 diseases.The results, according to Dr Mitchell Morris, associate vice presidentfor information services, are quality outcomes at lower cost. Forhysterectomies, Dr Morris cites a reduction of total hospital costs by20 percent, length of stay by 33 percent, medication costs by 35percent, and lab testing by 74 percent--all the while increasing patientsatisfaction. Comparable results have been achieved in lung resections,with a 30 percent drop in overall hospital costs, and most importantly,decreased readmissions, meaning the treatment was done right the firsttime.The practice of evidence-based medicine is not confined to focusedfactories. It is being implemented at clinics and hospitals around theworld. At the Childrens Hospital of Buffalo (CHOB) in New York, DrLinda Brodsky, director of CHOBs Center for Integrated OutcomesHealth Care, has led the institutions development of an outcome-basedapproach to medicine predicated on patient data. "We started bylooking at patient data historically," says Brodsky, "and then we askedourselves what we would like to see happen to these patientsmedically, and what would we like the outcome to be in terms ofpatient satisfaction and cost." The results were more far-reaching thanexpected, and from their initial 2 pilot programs, CHB is nowconducting over 20 studies."We saw a ripple effect," says Dr Brodsky. "We improved thesame-day surgery process and the use of anesthesia, we cut operating
  • 9. IBM Global Healthcare Industry News - Dr. Know room time, drug use, etc. And weve seen a slow change in the method of practice--partly due to peer pressure and partly due to the fact that the results are compelling." For example, based on their training and experience, individual surgeons at CHOB tended to practice one of two methods for a specific type of eye surgery. By sharing patient data and studying outcomes, they learned that one method wasnt better than the other. Instead, different methods were warranted based on the patient profile--and doctors now apply both in a different way. Already, several large organizations in the US are convinced of the merits of evidence-based medicine. Among them are VHA, a cooperative of 1,600 hospitals and facilities serving 26 percent of US patients, and BJC Health System, the second-largest nonprofit healthcare system in the nation. VHA is building one of the countrys largest healthcare extranets, which expedites the sharing of best practices and will include a knowledge database to develop treatment pathways for major conditions like pneumonia, asthma, and acute stroke. BJC has nearly finished its efforts to centralize information within a network, with an eye toward improving patient care and outcomes through computer-assisted treatment decisions. Despite the momentum, success is hardly assured. Tens of thousands of practitioners, clinics, pharmacies, and hospitals have amassed a cornucopia of information in treating patients but have left it to molder away in paper form. Moving it to databases will be a monumental task, requiring new outlays for IT. Second, the industry will have to push hard for standards so that data can be shared. Third, patient privacy concerns will have to be met through technology solutions (which do already exist) and stringent organizational procedures. But the biggest barrier could be the concerns raised by caregivers. Evidence on Trial Some doctors and patients protest that computer-driven medicine will never be accepted. Doctors may balk at surrendering some of their expensively acquired diagnostic and treatment skills to a computer, and patients may not want to see their physicians pecking away at keyboards like airline reservation clerks during consultations. Physician resistance to evidence-based medicine has many sources. One is the old debate of man versus machine. Here, the computer has some obvious advantages, including computational memory. At the Latter Day Saints Hospital in Salt Lake City, Utah, a computer determines which antibiotic should be administered to a patient by analyzing 45 variables. A doctor typically considers three to five. The computer-fed results have led to fewer complications and shorter hospital stays. A computers "judgment" cant be clouded from a bad nights sleep,
  • 10. imperfect recall, or nerves aggravated byjangling phones. Of course, a computerdoesnt have judgment per se; it suggeststreatments based on algorithms and availableclinical data. Nor can computers take intoaccount the ineffable--a doctorsunderstanding of how a patients personalityor circumstances might affect treatment andrecovery, for example.Moreover, healing, some argue, is an art, nota business process. To purists, computers mechanize--if notprofane--the sacred art of medicine. The art advocates have a point.The human body is not reducible to a machine. But then,evidence-based medicine is not intended to be medicine by computerfiat. Treatment guidelines only help to narrow therapeutic options; theydo not eliminate them. And guidelines arent created out of whole clothby a computer: They are the sum total of physicians expertise; theirprevious diagnoses and treatment decisions. But becauseevidence-based medicine is predicated on team decision-making andcollaboration--anathema to many professionals, not just medicalpractitioners-- such arguments sometimes fall on deaf ears.Not surprisingly, the pursuit of evidence-based medicine has given riseto charges of cookbook medicine. "Cookbook medicine," says DrMorris, "is meant to imply a simplistic approach to care, somethingbeneath the skills of a trained doctor. People are not cups of sugar andcant be quantified that way. But, in fact, weve long used cookbookmedicine in areas like clinical trials. And the reality is, the insuranceindustry is trying to develop its own medical cookbook from a purelycost-control standpoint. So weve worn down physician opposition bytelling them, The cookbook is coming. Whom do you want to write it?Insurance people or doctors?"Next in a long line of hurdles is the possibility that evidence-basedmedicine will be misused or abused. No physician will dare buck thecomputer, its suggested. Or, more worrisome, no managed-careprovider or hospital administrator will allow a physician to do so.Health care driven by an institutions cost-control objectives alone isnot the desired outcome, and if physicians take the lead, is not theinevitable one.As Dr Shaha points out, managed-care operations often stumble atattempts to institutionalize evidence-based medicine because theirmotives are suspect. But done correctly--which to Shaha necessitatesthat physicians lead the process--evidence-based medicine, hebelieves, facilitates a true patient-practitioner partnership, and "is thebest way to reduce unwanted or unproductive variation in practice and
  • 11. optimize cost and clinical satisfaction."Ultimately, pressures to leverage information in order to glean newmedical knowledge and share it may come from several quarters.Already, the Joint Commission on the Accreditation of HealthcareOrganizations, the predominant standards and accrediting body forhealthcare organizations in the US, has announced that assessingpatient outcomes will become part of the accreditation process by1999. As standards and criteria evolve sufficiently to facilitatecomparison, the data will be made public. And people are turning tothe web in record numbers to find out more about their medicalconditions and explore new treatments--all of which they want todiscuss with their doctors. The information explosion via all mediameans that paternalistic or arbitrary systems will be under increasingassault. In other words, "we know best" policies just wont cut it.Patients will be the judge of health care and they will demandproof--evidence in the form of usable information. Some practitionerswill be ready to provide it.Regina E. Herzlinger, DBA, is a professor at the Harvard Business School and isthe author of several critically acclaimed books, including Market-Driven HealthCare: Who Wins, Who Loses in the Transformation of Americas Largest ServiceIndustry (Addison Wesley Longman, 1997).Russell J. Ricci, MD, is IBMs General Manager of the global healthcare industry.Prior to joining IBM, Dr Ricci was the president of New Health Ventures at BlueCross and Blue Shield of Massachusetts. Copyright (c) 1998 International Business Machines Corporation. Reprinted with permission from Think Leadership 1998 Volume 3 Number 2 All rights reserved Illustrations by Sandra Dionisi Think Leadership magazine online edition: http://www.ibm.com/thinkmag
  • 12. USHealthNet, LLC Seeking: $10,000,000 -$30,000,000 , Already Invested: $200,000: Company: Contact: USHealthNet, LLC Mr. Richard Lynes 3 Acorn Street CTO and Founder Scituate, MA 02066 Phone: 781-545-3938 Web site: http://www.USHealthNet.com Fax: Email: Incorp: LLC, 7/15/99, DE cto@mediaone.net Industry 1: Physician-Practice Management Referred by: Industry 2: Internet Service Providers Red Herring Magazine USHealthNet Boston, MA Table of Contents s Company Overview s Marketing s Business Description s Management & Staffing s Product or Service s Capitalization s Sales s Financial DataCompany Overview (return to top)USHealthNet, a visionary Community Healthcare Information Delivery Network.USHealthNet will provide a branded, integrated, internet Application Service Platform (iASP) for theadministrative, communications and information needs of healthcare professionals and for the healthcareinformation needs of consumers. USHealthNets Web destination will consist of two distinctly differentlinked Web sites--a subscription-based site for healthcare professionals and a free Health, Wellness andself-service portal site for consumers. USHealthNet is a single point of access to EDI services, enhancedcommunications services, branded healthcare content, and other Web-based offerings. For healthcareprofessionals, USHealthNet is designed to simplify healthcare practices by integrating multipleadministrative, communications and research functions into a single, easy to use Web-based solution
  • 13. Application ReviewBusiness Description (return to top)MissionUSHealthNet s charter and strategic vision is to provide e-commerce capabilities and service excellencefor the healthcare industry by developing Internet transport and Web-based clinical applications,management services, and a community healthcare information delivery network. USHealthNet will bethe premier provider of Point-of-Care knowledge tools and services for the healthcare industry.Key GoalsUSHealthNets strategy reflects the future state, vision and direction for the healthcare industry. Thispremise is based on the fact that all roads lead to the patient and physician, therefore all investmentdecisions, including IT, capital and human resources need to be aligned strategically across all points ofpatient and physician interaction.USHealthNet expects to accomplish the following by the end of Q-4 99:- Secure the appropriate level of funding and high profile investment partners- Develop strategic relationships with hosting companies, i.e. NaviSite, Digex and Usi in order to provide the data center infrastructure needed to support iASP services.- Develop syndicated content relationships with healthcare publishers.- Develop affiliate partners programs to support e-business and InfoMediary services.- Achieve milestones for Physician downloads of PDA to support service subscriptions.- Achieve milestones for Consumer B2C and B2ME InfoMediary services.Stage: startupStarted working: October 1, 1996Do you have a prototype or demo?Search KeywordsiASP, IDN, CHIN, internet Application Service Platform, Point-of-Care Knowledge Delivery andAquisition Tools, Electronic Medical Records (EMR), InfoMediary Services, B2B, B2C and B2MEProduct or Service (return to top)Problem SolvedAll healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employersselect health plans, determine benefit levels, enroll employees and maintain employee eligibility data.Providers verify patient eligibility, collect patient histories, order diagnostic tests and x-rays, receive andinterpret test results, render diagnoses, make referrals and submit claims to payers. Payers managereferrals, establish medical care protocols and reimbursement policies and process claims. Suppliersanalyze and process patient samples or tests, provide results, fill prescriptions and submit claims forreimbursement. These and many other healthcare transactions are also highly dependent on information,
  • 14. Application Reviewand each participant is dependent on the others for parts of that information. In sum, the finance anddelivery of healthcare requires that consistent, accurate information be shared confidentially across alarge and fragmented industry.Underlying TechnologyUSHealthNets iASP offering consists of an N-tiered application service strategy, which connectsphysicians and patients to USHealthNets portal through a single access point using a Web browser basedThin-Client interface. These services integrate critical Point-of-Care Knowledge Tools allowing secureglobal access over the Internet. These POC tools will be offered for free to consumers and through theCompanys premium subscription services for healthcare professionals. Further access is offered tobranded affiliate products and services, maximizing site stickiness while ensuring a consistent userexperience.USHealthNets Java Enterprise Beans and Corba application component framework supporting the iASPsubscription service offering will consist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP9. Java XML Search Engine, integrating (UMLS) Tools and semantic networksIntellectual PropertiesDo to the nature of providing our outsourcing iASP offerings, several key technology partners have beenidentified and will require license agreements.Manufacturing ProcessWe have an outsourcing agreement in place for all custom development and integration services throughour strategic partnership with a local Boston based developer.Sales (return to top)Unique selling propositionThe Value Proposition - Healthcare ProfessionalA Web-based Thin-Client front-end application provides a Single Point of Access for healthcareprofessionals. This reduces the need for healthcare professionals to use multiple administrative,communications and information services by integrating these applications and services via the Internet.USHealthNet will enter into relationships to assist healthcare professionals in obtaining all hardware andancillary services necessary to use USHealthNet, including Internet access, computer hardware, training,and support. USHealthNets Premium subscription access to iASP and Knowledge Management Servicesprovides a suite of Point-of-Care (POC) tools, including backend EDI services for healthcare http://www.garage.com/garage/preview.shtml (3 of 15) [6/16/1999 2:46:37 AM]
  • 15. Application Reviewprofessionals, eligibility verification, and prescription processing. The Electronic Medical Recordmanages patients across the continuum of care, ScritpPAD, Lab Order Entry and DiagAssist a DiagnosticDecision Support tool, offer healthcare professionals unparalleled control throughout the life-cycle ofcare.The USHealthNet vision is to provide increased functionality to a broader cross-section of the physiciansmarket by breaking down the current barriers and providing the following benefits to the healthcareprofessionals:Value Propositions - Physicians- Significantly lower cost of entry (Multi-tiered subscription models)- More intuitive functionality (Web based Thin-Client)- Less intrusive infrastructure (Outsourced to ASPs)- Remotely managed through national network operations centers- Clinical data management and analysis (InfoMediary service)- Leverage of database beyond the practice and across the continuum of care- Freedom from hardware and software obsolescenceAdditional benefits to the consumer market will be:Value Propositions - ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium and proprietaryhealth and wellness content. Consumers can use the information that is provided through USHealthNetwithout charge to educate themselves on healthcare-related matters, allowing them to make betterinformed healthcare decisions. In addition, USHealthNet can deliver personalized content and e-mailupdates based on a consumers profile and can search and retrieve member-specific healthcareinformation from the Web. InfoMediary service affiliates will be marketing products against high-levelpatient/consumer profiles, which do not compromise personal data, only segment level profiling data isavailable and this is secured in a BroadVision database behind USHealthNets data center fire-walls.Premium and Proprietary ContentOnline Healthcare Communities.Through planned acquisitions, USHealthNet will provide access to online communities that provideconsumers with personalized information about their health conditions and allow them to participate inmessage boards, real-time chat rooms and support networks via the Web. In addition, onlinecommunities provide member-generated content based on shared experiences.Convenience and Reliability.Through USHealthNet Web site, patients can obtain information regarding office hours, location andother matters without having to place a telephone call to the physicians office. In addition, patients canreceive healthcare information that is reviewed and approved by medical professionals under theirphysicians USHealthNet Web site -- a reliable and familiar source of information.
  • 16. Application ReviewBenefits to the pharmaceutical market will be:Value Propositions - Pharmaceuticals- Access to clinical data repository- Reduced new drug R & D life cycle- Improving Time-to-Market- Access to patient base for clinical trails- Direct link to Physicians Desktop for promotions and advertising- Access to consumers of healthcare products (Direct to Consumers)USHealthNets Vertical Healthcare Portal is segmented by specialty for physicians and personalized onthe consumers B2C portal. USHealthNet uses a 1-2-1-personalization engine for physician profiling andpatients -- only branded affiliate products and services are offered and transacted within the sites,customized physician Intranets and knowledge delivery services are tailored based on a multi-tieredsubscription model. USHealthNet intends to add services and content in the future, including aWeb-enabled medical transcription service offering, hospital/physician referral services and insurancebenefits administration.Ease of Use.USHealthNet will offer a bundled Thin-Client Application Suite and Knowledge Management servicesprovided by a standards-based Java Physicians Desktop interface integrated with a Web browser.Therefore, subscribers who use the USHealthNet s services do not require training on multipleproprietary devices and require no knowledge of the Internet and its navigation issues.Cost Savings.USHealthNet will offer tiered InfoMediary services allowing affiliate partners to market products andservices targeted against confidential profiles achieving true personalization across all points of contactinsuring a consistent user experience. By aggregating physicians and reaching critical mass USHealthNetwill be uniquely positioned to offer procurement services, practice management service, and other thirdparty offerings through these affiliate partners. Physicians and patients will be offered financial incentiveawards for referring non-members and by participating in other marketing programs.In-addition to the USHealthNets POC tools a unified messaging platform, supporting chat, conferencingand email service will be rolled-out. USHealthNets Web sites and premium research and educationalcontent will be priced competitively and healthcare professionals will pay no more for these services thanif purchased individually.Distribution plansUSHealthNet plans to evolve demand creation by launching creative advertising campaigns acrosschannels and through strategic partners, Internet search engines, banners ads and more traditional mediaplays. The Company has started discussions with Omnicom subsidiaries that will lead to strong strategicpartnerships. These subsidiaries provide brand strategy, PR and media buys, campaigns, andUSHealthNet will partner with Agency.com for the development of the Companys Portal sites.
  • 17. Application ReviewPricing strategyThe Companys delivery strategy for this vision is to raise the management of these applications up intothe network, delivering subscription access to these applications to individual practices. The applicationswill be Internet based, providing the scale, security and ease of use that has been the hall-mark andsuccess of the WEB today.Key sources of revenue from this business will be:- Subscript to Vertical Healthcare Portal (Segmented based on specialty)- Subscript service for Internet Application Service Platform (iASP - Point-of-Care tools)- InfoMediary services allowing affiliate partners to participate in the Companys e-Commerce- Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)- Transaction processing (EDI Claims, patient eligibility and e-commerce)- Advertising (Using the PDA, the Company can us both a Push and a Pull model)MarginsThe annuity service based model supporting multi-tiered revenue streams can not be compared to themore traditional product model companies, which report gross margins of only 30-60%.Top 3 ProductsName Description Avg. PriceTier-I, Point-of-Care Provides critical life saving SubscriptionsKnowledge Acquisition & knowledge at the point of service (tiered pricing)Delviery Tools InfoMediary services allowingTier-II, InfoMediary Variable and affiliate partners to market productsServices fixed pricing -- and services TransactionTier-III, Extranet - iASP, shared e-commerce/e-business model - standardProcurement platform and vertical portal p Year 1 Year 2 Year 3 Year 4 Year 5 1998 1999 2000 2001 2002Name units units units units unitsTier-I, Point-of-CareKnowledge Acquisition &Delviery ToolsTier-II, InfoMediaryServices
  • 18. Application ReviewTier-III, Extranet -ProcurementOther Products:Marketing (return to top)Marketing StrategyUSHealthNets channel strategy will be organized according to its four main customer segments:providers, payers, suppliers and consumers. USHealthNets direct sales force will target significantpotential customers in each market segment by region. In certain instances, USHealthNets direct salesforce will work with complementary brokers, value-added resellers and systems integrators to delivercomplete solutions for major customers. In addition, senior management plays an active role in the salesprocess by cultivating industry contacts. USHealthNet markets its applications and services throughdirect sales contacts, strategic relationships, the sales and marketing organizations of its strategicpartners, participation in trade shows articles in industry publications. USHealthNet will attend a numberof major trade shows each year and will sponsor executive conferences, which feature industry expertswho address the information systems needs of large healthcare organizations. USHealthNet will supportits sales force with technical personnel who perform demonstrations of USHealthNets applications andassist clients in determining the proper hardware and software configurations.The key to market dominance, is first mover advantage, value proposition, execution, and most importantaggregating users through acquisition and retention strategies. A parallel strategy is to make the cost ofentry to high for competitors and the switching costs for users to high for consideration.Target MarketAccording to the Health Insurance Association of America, healthcare is the largest single sector of theU.S. economy, consuming approximately $1 trillion annually, or 14% of the countrys gross domesticproduct. The healthcare industry consists of a complex mix of participants, which includes:- "Providers" -- physicians, medical practice groups, hospitals and other organizations that deliver medical care;- "Payers" -- the government agencies, insurance companies, managed care organizations and other enterprises/employers that pay the bills for healthcare;- "Suppliers" -- clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services; and- "Consumers" -- individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employersselect health plans, determine benefit levels, enroll employees and maintain employee eligibility data.Providers verify patient eligibility, collect patient histories, order diagnostic tests and x-rays, receive andinterpret test results, render diagnoses, make referrals and submit claims to payers. Payers manage
  • 19. Application Reviewreferrals, establish medical care protocols and reimbursement policies and process claims. Suppliersanalyze and process patient samples or tests, provide results, fill prescriptions and submit claims forreimbursement. These and many other healthcare transactions are also highly dependent on information,and each participant is dependent on the others for parts of that information. In sum, the finance anddelivery of healthcare requires that consistent, accurate information be shared confidentially across alarge and fragmented industry.- The U.S. Healthcare expenditure is $1.2 trillion and growing.- Physicians control 85% of the national expenditures for healthcare.- The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.- The physician market size is over 800,000 today.- Those physicians provide care to an average of 1647 patients per year; each with an annual per capita expenditure of $3633, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Forrester Research, Inc. reports that the overall market for outsourcing packaged software applicationswill grow from approximately $1 billion in 1997 to over $21 billion by 2001. These services includepackaged application software implementation and support, customer support and network developmentand maintenance. Reasons for the growth in outsourcing include:- The scarcity of information technology professionals.- The challenges faced by a non-technical company in hiring, motivating and retaining qualified application engineers and information technology employees.- The desire by companies to focus on their core business.- The difficulties that businesses experience in developing and maintaining their networks and software applications.- The fast pace of technical change that shortens time to obsolescence and forces increases in capital expenditures as companies attempt to keep up with leading technologies.These factors do not reflect the growth of more tranditional e-commerce/e-business projections.CompetitionUpon first glance the competitive situation may be perceived as high risk due to the large number ofInternet healthcare content sites, vendor/systems integrators, and back office billing system vendors.USHealthNet sees short-term competition from Internet sites that have subscription models targetinghealthcare providers and consumers. USHealthNet is differentiating itself by offering premium servicesfor healthcare content alongside application services.Many of the Companys current and potential competitors have greater resources to devote to thedevelopment, promotion and sale of their services; longer operating histories; greater financial, technicaland marketing resources; greater name recognition; and larger subscriber bases than the USHealthNetand, therefore, have a significantly greater ability to attract subscribers and advertisers. Many of thesecompetitors may be able to respond more quickly than the USHealthNet to new or emerging technologiesin the Internet and the personal communications market and changes in Internet user requirements and todevote greater resources than the USHealthNet to the development, promotion and sale of their services.
  • 20. Application ReviewIn addition, USHealthNet does not have contractual rights to prevent its strategic partners from enteringinto competing businesses or directly competing with the USHealthNet. While these statements can bepositioned as a negative resulting in a high-risk investment, they represent the reality of marketconditions for every company today and well into the future.Competitive AdvantageUSHealthNets integrated Web service delivery model (iASP) positions the true competitive situationwith a more focused strategic value proposition.Many of the more sessioned players in the healthcare market have been traditional product companies,which would prevent them from competing in the Internet service space in the short-term. Thesecompanies are not the usual first-movers and early adopters. They have funded business plans buildaround a product model company and operational structures to support them. Product development lifecycles constrain traditional product companies from the point of view that measures success bytime-to-market, mass customization, personalization, and elasticity to rapidly changing market dynamics.Many of these companies will seek security in partnership strategies that include them in the marketsnatural trends toward consolidation and disintermediation.Management & Staffing (return to top)Full-time permanent employees: 1Part-time employees: 0Contractors: 7Critical positions not yet filledCEO, COO, Chief Marketing Officer, SVP Business Development, VP Research & DevelopmentPersonnel Richard Lynes Role Founder Title CTO Functions Provide IT vision and strategy alignment http://www.garage.com/garage/preview.shtml (9 of 15) [6/16/1999 2:46:37 AM]
  • 21. Application ReviewPrior Experience Strategic Planning and Information Technology Solutions Thought-Leader, achieving improved operating efficiency through IT and business strategy alignment, and increased shareholder value by leveraging technology as a competitive differentiator. Professional Competencies: - Strategic IT and Business planning for e-commerce, e-business and Knowledge Management as a competitive differentiation in the B2B, B2C and B2ME markets, integrating both buy-side, sell-side and customer facing processes - Mentoring companies executives in their migration from traditional mass marketing and operational practices to those of 1-2-1 personalization; Customer Relationship Marketing (CRM) utilizing interactive media, database marketing, and the integration of legacy Line-of-Business applications, including SCM, OLR and ERP solutions - Guiding executives on the sweeping changes, trends and impacts of technology on competitive strategies, business objectives and business transformation - Technical team lead on the design, development and deployment of scaleable Enterprise-wide information, software and systems architectures. Supporting Intranet/Extranet application infrastructure components for MRO purchasing and e-catalog procurement, Human Resources, Sale Force Automation, Knowledge Management, and strategies for linking channel partners, suppliers and customers. Serving as CIO and CTO for several market leaders, Mr. Lynes past successes have been achieved by developing visionary technology strategies and facilitating information flow within the senior management strategic planning function. By improving knowledge utilization through linking corporate stakeholder processes and objectives, client business strategies, and facilitating cooperation between cross-functional teams, Mr. Lynes insights have created a more customer centric approach and methodology. Colleagues have often described Mr. Lynes as an approachable team player who has a proven knack of forecasting and keeping them abreast of critical changes in the dynamic, fast paced world of technology. His talent does not come from a crystal ball, but from a substantial career of following the movements within both the Information
  • 22. Application Review Technologies and Tele-communications industries. Employment Company Title Years History Sequitor Medical EVP, CIO 2 Technology, Inc. Bronner Slosberg VP, CTO 3 Humphrey CommSoft Technoloy, VP, R & D 3 Inc. Education Institution Degree Year Georgia Tech BS Computer Science 1980 Chris Bulter Role Advisor Other Boards Opus2Other Affiliations Agency.com Wendy Roberts Role AdvisorOther Affiliations Agency.com Jack Barette Role AdvisorOther Affiliations Agency.com Don Leavitt Role AdvisorOther Affiliations Harvard Business School Pat Morand Role Advisor Kelly Mahoney Role AdvisorOther Affiliations Essential.com Jeff Heywood
  • 23. Application Review Role Advisor Part-time Employee Title Chief Financial Officer Other Boards StarQuest Software, Inc.Other Affiliations Adobe Systems, Inc. Functions Responsible for Companys financal modeling, M & A strategies, VC and partnership development.Capitalization (return to top) Shares $ Invested Founders: 10,000,000 $200,000 Other Senior Managers: Other Employees: Outside Directors: Other Investors: Total: 10,000,000 $200,000Current investors?We currently have none.Do you have any debt financing?No...Total funding to date: $200,000How have funds been used to date?I have bootstrapped all the research, prototype development, and strategy. No other funding vehicle hasbeen approached todate.Now seeking: $10,000,000How will the money you are now trying to raise be used?USHealthNets working capital requirements for fiscal year 1999 and 2000 will be raised throughexternal private angle investors, partners and institutional equity funding vehicles in the amount of $10million, along with additional commitments to enable the Companys acquisition strategy. Projectedramp-up costs, operations, sales and marketing, and product/service development will be running at anestimated average monthly burn rate of $550,000 for the first eighteen months. As part of our strategy,year two revenue coupled with stock valuations and market capitalization, as well as a possible IPO, will
  • 24. Application Reviewbe used to help fund the continued growth into international markets and additional merger / acquisitionopportunitiesDo you have any preferred skills for your investors?USHealthNet seeks professional high profile investment partners that will provide assistance indeveloping a world class management team, board-of-directors and advisory board. The Company wouldalso expect our investment partners to actively solicit their network for opportunities in the area of M &A strategy and strategic partnerships. Furthermore, the Company would expect to have access to the rightinvestment bankers in order to build the relationships with analysis and others in preparations for takingthe Company public.Dream investors?1. Pharmaceutical Companies2. AOL and Amazon.com3. Intel (as part of their data center strategy)4. Ericsson Inc., IBM, Sun5. CMGi Ventures, AT&T Ventures6. ibankersWhat are you offering?EquityHow else have you tried to raise money?I have not started this process until now.Exit StrategyUSHealthNets exit strategy is simple, Longer term, as measured in Internet time (12-18 months),Healtheon/WebMD, Synetics, EMR (Electronic Medical Records) vendors and other competitors maybegin to view USHealthNet as a valued asset. USHealthNet views itself as a possible acquisitioncandidate for Healtheon/WebMD, Synetics or AOL. USHealthNet and its investors will evaluate both M& A and IPO strategies as a function of the Companys requirements for new capital and current capitalmarket conditions.The downside to any investment needs to be articulated as a high risk and assess the leverage points toillustrate the high returns and value of the Companys tangible assets, Intellectual Property, partnershipsand subscriber-base. USHealthNets investment in IT based assets will be evidenced by planned patentfilings, as well as the unique Web based Java/Corba framework, which delivers on the promise ofUSHealthNets iASP offerings.Understanding this, the worst case scenario is that the Company assets will be acquired by one of severalInternet based healthcare market leaders. This minimizes the risks as it is a win - win for those who canafford to stay in.Top 3 ConcernsImmediate GoalsUSHealthNet expects to accomplish the following by the end of Q-4 99:
  • 25. Application Review- Secure the management talent required- Secure the appropriate level of funding and high profile investment partners- Develop strategic relationships with hosting companies, i.e. NaviSite, Digex and Usi in order to provide the data center infrastructure needed to support iASP services.- Develop syndicated content relationships with healthcare publishers.- Develop affiliate partners programs to support e-business and InfoMediary services.- Achieve milestones for Physician downloads of Physician Desktop Applications to support service subscriptions.- Achieve milestones for Consumer B2C and B2ME InfoMediary services.3 References or customers1. Malcom Speed, Chairman & CEO, Rapp Collins2. Wendy Roberts, Partner, Agency.com3. Kelly Mahoney, Chief Marketing Officer, Essential.comFinancial Data (return to top)Capital needed to break even: $30,000,000Quarter to break even: 3/2000Fiscal Year End: 12/31Months of cash on hand: 0Current revenues: $0 (per month)Current expenses: $20,000 (per month) ($ numbers in Year 1 Year 2 Year 3 Year 4 Year 5 000s) Year: 1998 1999 2000 2001 2002 Revenues: $0 $0 Cost of goods: Operating Expenses: Net income: Investment received: Capital Expenditures: End of year cash balance:
  • 26. Application Review # of employees:General Counsel:Currently interviewing several Boston based firms.Bosotn, MATBDLegal Disputes?"none"Bank: Fleet and Bank BostonBoston, MATBDAccountants: Thomas Britt, CPAWater Town, MATom BrittAudited Financials? noFor how long? (in months)Anything else?I do not wish to have any of this information shared with parties whom may have invested in Healhteonor WebMD.The financial projections are not finished and therefore are not included because of the ambiguityinvolved in modeling these service based revenue streams. However, a ten- percent market sharerepresenting 80,000 physician subscribers and five-percent of the insured population or 12 millionpatient/consumer members represents a multi-billion dollar annuity based opportunity.
  • 27. USHealthNet USHealthNet Business Plan for USHealthNet, a visionary Health Care Information Delivery System. June 11, 1999 Business Plan Copy Number [1 of 50 ]This document contains confidential and proprietary information belonging exclusively to Richard Lynes Richard Lynes Chief Technology Officer 3 Acorn Street Scituate, MA 02066 (781) 545-3938 cto@mediaone.netThis is a business plan. It does not imply an offering of Securities. Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  • 28. USHealthNet TABLE OF CONTENTSUSHEALTHNET’S ‘BUSINESS PLAN’ .................................................................................................................. 11 EXECUTIVE SUMMARY ............................................................................................................................... 1 1.1 MARKET OVERVIEW........................................................................................................................................ 2 1.2 THE PROBLEM ................................................................................................................................................. 3 1.3 THE SOLUTION ................................................................................................................................................ 4 1.3.1 Value Propositions – Physicians........................................................................................................... 4 1.3.2 Value Propositions – Consumers .......................................................................................................... 5 1.3.3 Value Propositions - Pharmaceuticals.................................................................................................. 5 1.4 REVENUE MODELS .......................................................................................................................................... 5 1.5 CAPITAL REQUIREMENTS WILL BE: .................................................................................................................. 6 1.5.1 Investment Opportunities ...................................................................................................................... 62 INTRODUCTION ............................................................................................................................................. 73 THE BUSINESS ................................................................................................................................................ 94 THE STRATEGIC OPPORTUNITY.............................................................................................................. 95 THE MARKET POTENTIAL/MARKET SIZE/MARKET GROWTH RATES ....................................... 96 THE MARKET DRIVERS/KEY TRENDS .................................................................................................. 107 THE OPPORTUNITY .................................................................................................................................... 108 THE SOLUTION............................................................................................................................................. 119 THE PRODUCTS/OFFERINGS ................................................................................................................... 1110 THE VALUE PROPOSITION — HEALTHCARE PROFESSIONAL..................................................... 12 10.1 EASE OF USE............................................................................................................................................. 12 10.2 COST SAVINGS.......................................................................................................................................... 1211 THE VALUE PROPOSITION — CONSUMERS ....................................................................................... 13 11.1 PREMIUM AND PROPRIETARY CONTENT ................................................................................................... 13 11.1.1 Online Healthcare Communities ......................................................................................................... 13 11.1.2 Convenience and Reliability................................................................................................................ 1312 THE STRATEGIC GRIPPER: “THAT’S FANTASTIC” .......................................................................... 1313 ADVERTISING AND PUBLIC RELATIONS............................................................................................. 1414 THE BUSINESS MODEL .............................................................................................................................. 1415 SALES AND MARKETING .......................................................................................................................... 14 Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  • 29. USHealthNet16 IMMEDIATE GOALS.................................................................................................................................... 1517 COMPETITION.............................................................................................................................................. 1518 OUR DIFFERENTIATORS........................................................................................................................... 1519 USE OF FUNDS .............................................................................................................................................. 1620 EXIT STRATEGY .......................................................................................................................................... 1621 FINANCIAL ANALYSIS/PRO-FORMA ESTIMATES ............................................................................. 1622 MANAGEMENT TEAM ................................................................................................................................ 1723 DEVELOPMENT TEAM............................................................................................................................... 1824 ADVISORY BOARD ...................................................................................................................................... 1825 CONCLUSION ................................................................................................................................................ 22 Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  • 30. USHealthNet USHealthNet’s ‘Business Plan’1 Executive SummaryUSHealthNet will provide a branded, integrated, internet Application Service Platform (iASP)for the administrative, communications and information needs of healthcare professionals and forthe healthcare information needs of consumers. USHealthNet’s Web destination will consist oftwo distinctly different linked Web sites--a subscription-based site for healthcare professionalsand a free Health, Wellness and self-service portal site for consumers. USHealthNet is a singlepoint of access to EDI services, enhanced communications services, branded healthcare content,and other Web-based offerings. For healthcare professionals, USHealthNet is designed tosimplify healthcare practices by integrating multiple administrative, communications andresearch functions into a single, easy to use Web-based solution.USHealthNet will deliver rich content and application services through its vertical healthcareportal. This portal will be segmented by healthcare professionals, culled by specialty, and targetsa consumer strategy leveraging physician patients. The consumer portal is based on an AOLmodel building on the community theme. Through a strategic partnership with BroadVisionUSHealthNet will offer a personalization engine allowing true 1-2-1 relationship managementand InfoMediary services. USHealthNet plans to aggregate the largest number of physicians andtheir patients through an aggressive Merger and Acquisition (M & A) strategy.In an effort to facilitate a plug-&-play e-commerce platform for third party products and servicesUSHealthNet will develop joint ventures and affiliate partnership alliances. This strategy willinclude various healthcare centric disciplines: content sourcing and publishing, PracticeManagement Systems, Clinical Information Systems, Backend EDI services, and IntegratedDelivery Networks. The trend to consolidate these operational silos will take a focused andphased implementation plan. The basis for these M & A transactions is to reach critical mass inInternet time, which will drive demand creation for both the B2B and B2C segments. Fuelingthe inertia created by USHealthNet’s channel strategy will be the Company’s vision fordeploying its iASP.The value proposition for both the healthcare professional and consumer will be in theCompany’s ability to lower physician operating costs, increase revenues and provide quality carethrough measurable clinical outcome analysis. USHealthNet’s portal will become a trusted brandand premiere destination for brokering healthcare information, products and services thatdifferentiates and provides a sustainable competitive advantage ensuring future annuity business. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 1 - June 11, 1999
  • 31. USHealthNet1.1 Market OverviewAccording to the Health Insurance Association of America, healthcare is the largest single sectorof the U.S. economy, consuming approximately $1 trillion annually, or 14% of the countrysgross domestic product. The healthcare industry consists of a complex mix of participants, whichincludes:• "Providers" -- physicians, medical practice groups, hospitals and other organizations that deliver medical care;• "Payers" -- the government agencies, insurance companies, managed care organizations and other enterprises that pay the bills for healthcare, this includes employers;• "Suppliers" -- clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services; and• "Consumers" -- individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement.Employers select health plans, determine benefit levels, enroll employees and maintain employeeeligibility data. Providers verify patient eligibility, collect patient histories, order diagnostic testsand x-rays, receive and interpret test results, render diagnoses, make referrals and submit claimsto payers. Payers manage referrals, establish medical care protocols and reimbursement policiesand process claims. Suppliers analyze and process patient samples or tests, provide results, fillprescriptions and submit claims for reimbursement. These and many other healthcaretransactions are also highly dependent on information, and each participant is dependent on theothers for parts of that information. In sum, the finance and delivery of healthcare requires thatconsistent, accurate information be shared confidentially across a large and fragmented industry.• The U.S. Healthcare expenditure is $1.2 trillion and growing.• Physicians control 85% of the national expenditures for healthcare.• The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.• The physician market size is over 800,000 today.• Those physicians provide care to an average of 1647 patients per year; each with an annual per capita expenditure of $3633, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Factors contributing to these exorbitant expenses are:• Inappropriate diagnosis and prescription drug use, resulting in a significant number of hospitalizations -- between 5 and 25 percent. The costs of treatment for inappropriate drug therapy are staggering - estimated at $100 billion each year, National Pharmaceutical Council.• The healthcare industry has become an information-intensive profession plagued by substandard methods of data collection, storage, and retrieval. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 2 - June 11, 1999
  • 32. USHealthNet• With over two thousand information technology vendors competing for their share of the healthcare industry, incompatible operational and technology silos are making it difficult to exchange vital information and critical life-saving knowledge. This need strains the resources of the healthcare community since information must be gathered from disparate sources.• A large part of healthcare waste is related to red tape, paperwork and decentralized data sources.1.2 The ProblemIn providing care to those patients the physicians face similar basic challenges:• Management of patient data during the course of their relationship• Lack of access to patient data prior to their relationship• Lack of access to patient date throughout the extended healthcare enterprise• Inconsistent processes and deteriorating relationships across providers• No communication and leverage of data beyond the practice walls• Need to keep abreast of health findings and new treatments• Need to contain costs and expand revenue opportunitiesSeveral of the core applications needed by those physicians to manage their practices needs arecurrently not WEB enabled and less than 6% of office based physicians use any combination ofthe following Point-of-Care (POC) tools:• Electronic Medical Records• New prescription orders and refills processing• Lab Order Entry and Results• Diagnostic Decision Support• Procurement applicationsThose core applications have not penetrated the undeserved portion of this market for thefollowing reasons:• They are primarily client server applications that are both expensive to implement (software licensing, hardware, training), but are also a large distraction to the practice operation from a management perspective – Back Office versa Front Office.• Managed Care has driven the cost to new levels, leaving caregivers to question the quality of care and their ability to earn a living and compete in the growing PPO space.• Those practices that do invest in these applications generally only leverage a small precent of their value due largely to the fact that back-office billing systems are complex data entry systems and do not extend themselves to support front-office Point-of-Care services.• Since the applications are local to each practice, they do not receive the benefits of consolidated patient or treatment and outcome data across practices. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 3 - June 11, 1999
  • 33. USHealthNetStudies show that 94% of this market is considered "under served" by the current applications onthe market and unable to address the Point-of-Care information needs. The Total-Cost-of-Ownership1 on a per seat basis would be $150,000 dollars over five years. With more than325,000 physicians working in physician group practices, it is easy to see why turnkey systemsintegration services market segment will double in revenue by the end of the decade, from its$10 billion mark today, according to leading analyst Mike Knepper of Volpe, Welty & Co.The domestic market for digital clinical information networks has been estimated at $350 billiondollars, international (including U.S.) at $1.2 - 1.3 trillion dollars yearly (the estimate based ondata from the World Health Organization, the U.S. Census Bureau).1.3 The SolutionUSHealthNet’s iASP offering consists of an N-tiered application service strategy, whichconnects physicians and patients to USHealthNet’s portal through a single access point using aWeb browser based Thin-Client interface. These services integrate critical Point-of-CareKnowledge Tools allowing secure global access over the Internet. These POC tools will beoffered for free to consumers and through the Company’s premium subscription services forhealthcare professionals. Further access is offered to branded affiliate products and services,maximizing site stickiness while ensuring a consistent user experience.USHealthNet’s Java Enterprise Beans and Corba application component framework supportingthe iASP subscription service offering will consist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP9. Java XML Search Engine, integrating (UMLS) Tools and semantic networksThe USHealthNet vision is to provide increased functionality to a broader cross-section of thephysicians market by breaking down the current barriers and providing the following benefits tothe physician practice:1.3.1 Value Propositions – Physicians• Significantly lower cost of entry (Multi-tiered subscription models)• More intuitive functionality (Web based Thin-Client)• Less intrusive infrastructure (Outsourced to ASPs)1 Review http://www.fujitsu-computers.com/coo/main.html and http://www.info-edge.com/55090301.htm Confidential & Proprietary Property of Richard Lynes Draft Only – Page 4 - June 11, 1999
  • 34. USHealthNet• Remotely managed through national network operations centers• Clinical data management and analysis (InfoMediary service)• Leverage of database beyond the practice and across the continuum of careAdditional benefits to the consumer market will be:1.3.2 Value Propositions – ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium andproprietary health and wellness content. Consumers can use the information that is providedthrough USHealthNet without charge to educate themselves on healthcare-related matters,allowing them to make better informed healthcare decisions. In addition, USHealthNet candeliver personalized content and e-mail updates based on a consumers profile and can search andretrieve member-specific healthcare information from the Web. InfoMediary service affiliateswill be marketing products against high-level patient/consumer profiles, which do notcompromise personal data, only segment level profiling data is available and this is secured in aBroadVision database behind USHealthNet’s data center fire-walls.2Benefits to the pharmaceutical market will be:1.3.3 Value Propositions - Pharmaceuticals• Access to clinical data repository• Reduced new drug time-to-market expense• Access to patient base for clinical trails3• Direct link to Physicians Desktop for promotions• Access to consumers of healthcare products1.4 Revenue ModelsThe Company’s delivery strategy for this vision is to raise the management of these applicationsup into the network, delivering subscription access to these applications to individual practices.The applications will be Internet based, providing the scale, security and ease of use that hasbeen the hall-mark and success of the WEB today.Key sources of revenue from this business will be:• Subscript to Vertical Healthcare Portal (Segmented based on specialty)• Subscript service for Internet Application Service Platform (iASP – Point-of-Care tools)• InfoMediary services allowing affiliate partners to participate in the Company’s e-Commerce• Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)2 All personal healthcare information is highly confidential and USHealthNet understands its commitments topatient privacy and will not under any circumstances compromise a patient’s personal healthcare data3 Ibid. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 5 - June 11, 1999
  • 35. USHealthNet• Transaction processing (EDI Claims, patient eligibility and e-commerce)• Advertising (Using the PDA, the Company can us both a Push and a Pull model)1.5 Capital requirements will be:• $10 - 30 million for sales, marketing and PR, operations, partnership acquisitions, technology licensing and development, and M & A opportunities.• Outsourced portal development to Agency.com.• Outsourced infrastructure deployment to NaviSite, a CMGi ISP, and USinternetworking• Affiliates pre-paid or underwriting the first 100,000 physician subscriptions (General content subscription levels, not premium, which offers iASP services)4• To fuel the Company’s consumer e-Commerce and InfoMediary services strategiesUSHealthNet’s market capitalization projections are $500 million with 10 % market penetrationare not unrealistic. Anticipated revenue growth will be:1.5.1 Investment OpportunitiesThis is an early stage opportunity for investors:• The research has been done and the business case proven• Prototypes have been developed• Business plan has been drafted• Several key members of the management team have been identified, with an eager desire to identify additional members• Industry experts from both the medical and internet fields have committed to advisory roles• Technology partners have been identified and initial negotiations have begun• An initial venture partner has expressed a desire to participate if a second partner can be securedUSHealthNet s charter and strategic vision is to provide e-commerce capabilities and serviceexcellence for the healthcare industry by developing Internet transport and Web-based clinicalapplications, management services, and a community healthcare information delivery network.USHealthNet will be the premier provider of Point-of-Care knowledge tools and services for thehealthcare industry.USHealthNet’s strategy reflects the future state, vision and direction for the healthcare industry.This premise is based on the fact that all roads lead to the patient and physician, therefore allinvestment decisions, including IT, capital and human resources need to be aligned strategicallyacross all points of patient and physician interaction.4 The pre-paid or underwritten subscription services will be paid for in part from our shared revenue and jointmarketing programs for affiliate, and alliance partnerships Confidential & Proprietary Property of Richard Lynes Draft Only – Page 6 - June 11, 1999
  • 36. USHealthNet2 IntroductionUSHealthNet will implement, operate, and support packaged Point-of-Care (POC) softwareapplications that automate the physician’s front-office processes, which can be accessed andused over the Company’s internet Application Service Platform (iASP) and vertical healthcareportal sites. The iASP services are based on packaged software applications from best-of-breedsoftware vendors. These iASP services will be deployed through USHealthNet, the Company’sbranded network operations center (NOC). The Company will target both single and a multi-physician practices; and further segmented these groups by specialty. USHealthNet’s healthcareportal has a consumer strategy reflecting trends in self-service, preventative care content andapplications.USHealthNet’s service rollout strategy includes the following business functions in its initialrelease, which are bundled with a multi-tiered subscription service model, providing healthcareprofessionals a single point of access through USHealthNet and the World Wide Web:• Electronic Medical Records, (consumers will have read only access).• Online Prescription Processing, (next day delivery by FedEx and UPS).• Lab Order Entry and Results, (push technology will deliver result in real-time).• Diagnostic Decision Support, (real-time feedback and differential diagnostic engine).• Relationship Management, (targeting 1-2-1 personalized InfoMediary services).• E-commerce, aggregating procurement transactions (consumer transactions as well).USHealthNet will deploy these application services through affiliate partner data centers.USHealthNet will configure them to meet the needs of our clients, and package them withsecurity, Internet access, back-up and operational support. Our clients purchase these products aspart of a tiered subscription service model, paying us on a monthly basis as the services aredelivered.The advantages our clients realize by subscribing to our iASP services rather than purchasing theapplication software directly and implementing it them-selves include:• FASTER TIME TO BENEFIT. Because we have pre-configured our products and operate them in an established environment, we can reduce implementation time significantly.• REDUCED TECHNICAL AND INTEGRATION RISK. A single vendor, USHealthNet, takes full responsibility for delivering the service, including ongoing upgrades.• REDUCED RELIANCE ON EXTERNAL MULTI-VENDOR SOLUTIONS. USHealthNet employees implement and operate our applications and provide client support twenty-four hours a day, seven days a week, allowing a Single-Point of Access.• LOWER TOTAL-COST-OF-OWNERSHIP. USHealthNet offers its services at a lower cost than its clients would otherwise bear to implement these applications on a traditional basis, and we also reduce our clients up-front investment. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 7 - June 11, 1999
  • 37. USHealthNetTo deliver its services, USHealthNet will built strategic relationships with the following keynetwork providers through the development of Co-Branded Community Healthcare Portals:• NaviSite• Digix• USInternetworkingOur secure network will incorporates a high level of redundancy, bypassing Internet congestionpoints, and enabling real time back up of client sites across dispersed geographies. As a result,we believe our clients benefit from superior response time, reliability and security.Once an iASP contract is signed, we invest in the hardware, software and implementation neededto deliver client service. This will require a substantial investment in the early years to build ourclient base. We expect to benefit from rapidly growing annuity based revenue, which we believewill generate substantial positive cash flow in later years.We will make substantial investments to pursue our strategy. These investments include:• Building a global network of data center relationships• Allying with particular software providers• Investing to develop unique product features• Developing implementation resources around specific applicationsForrester Research, Inc. reports that the overall market for outsourcing packaged softwareapplications will grow from approximately $1 billion in 1997 to over $21 billion by 2001.These services include packaged application software implementation and support, customersupport and network development and maintenance. Reasons for the growth in outsourcinginclude:• The scarcity of information technology professionals.• The challenges faced by a non-technical company in hiring, motivating and retaining qualified application engineers and information technology employees.• The desire by companies to focus on their core business.• The difficulties that businesses experience in developing and maintaining their networks and software applications.• The fast pace of technical change that shortens time to obsolescence and forces increases in capital expenditures as companies attempt to keep up with leading technologies. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 8 - June 11, 1999
  • 38. USHealthNet3 The BusinessUSHealthNet provides a branded, integrated, internet Application Service Platform (iASP) forthe administrative, communications and information needs of healthcare professionals and forthe healthcare information needs of consumers. The Companys Web destination consists of twodistinctly different linked Web sites--a subscription-based site for healthcare professionals and afree Health, Wellness and self-service portal site for consumers. USHealthNet is a single point ofaccess to EDI services, enhanced communications services, branded healthcare content, andother Web-based offerings. For healthcare professionals, USHealthNet is designed to simplifyhealthcare practices by integrating multiple administrative, communications and researchfunctions into a single, easy to use Web-based solution.For consumers, USHealthNet provides premium, branded content to assist consumers in makinginformed healthcare decisions, personalized information about specific health conditions targetedaccording to the medical profiles of individual consumers and content-specific onlinecommunities that allow consumers to participate in real-time discussions and support networksvia the Web. The Companys objective is to become the Webs premium brand for healthcare-related applications services, facilitating joint collaborative communications and knowledgemanagement services.4 The Strategic OpportunityThe Company’s vision is to become the “Pre-eminent Leader” of information technology andknowledge delivery to the healthcare industry by offering client/server software applications,services, and relevant up to date information increasing productivity while managing risk.This unique approach of mixing WEB hosted applications, services, and e-commerce capabilityresults in business opportunities forging new partnership models and marketing programs. Thesemodels and programs will maximize and leverage distribution channel affiliate partners, enablingjoint revenue sharing, joint marketing/co-branding, InfoMediary and advertising for bothUSHealthNet and its partners.5 The Market Potential/Market Size/Market Growth RatesUSHealthNet’s iASP services allow physicians to automate their front office POC and back-office billing processes. Outsourcing these application functions through iASP services reducesthe barriers to entry for physicians. Current per physicians costs are estimated $25,000 with $5-10k for annual support just to implement Electronic Medical Records, the Total Cost ofOwnership (TCO) dilutes current ROI expectations. Estimates reveal that only 2-6% of thenations 800,000 physicians currently use an EMR system in the daily practice and a recentsurvey revealed that 67% of physicians currently use the Internet and 50% of all the Internet usescurrently search the net for up-to-date healthcare information. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 9 - June 11, 1999
  • 39. USHealthNet6 The Market Drivers/Key TrendsIn order to obtain service excellence, an integrated healthcare delivery system, similar to anIntegrated Delivery Network (IDN), must be developed encompassing Point-of-Care (POC)knowledge management tools: virtual medical records, diagnostic decision support, lab anddiagnostic orders, clinical pathways for disease management, drug interactions, prescriptionfulfillment, coding and billing.We believe that the availability of Internet-enabled packaged software makes it possible, for thefirst time, to implement these applications on the Internet in predictable time frames, withpredictable costs, and without writing custom code.The need for an integrated approach to providing these services.Forrester Research, Inc. reports that the overall market for outsourcing packaged softwareapplications will grow from approximately $1 billion in 1997 to over $21 billion by 2001.Furthermore, according to Forrester Research, Inc., U.S. firms are now spending approximately aquarter of their overall information technology budgets on outsourcing services. These servicesinclude packaged application software implementation and support, customer support andnetwork development and maintenance.Reasons for the growth in outsourcing include:• The scarcity of information technology professionals.• The challenges faced by a non-technical company in hiring, motivating and retaining qualified application engineers and information technology employees.• The desire by companies to focus on their core business.• The difficulties that businesses experience in developing and maintaining their networks and software applications.• The fast pace of technical change that shortens time to obsolescence and forces increases in capital expenditures as companies attempt to keep up with leading technologies.7 The OpportunityWith healthcare expenditures in the U.S. totaling approximately $1 trillion each year andgrowing; physicians, payers, providers, pharmaceutical companies, and patients are searching fornew healthcare models that strive to contain costs and liabilities, while improving the quality ofcare through measurable outcomes, and new revenue opportunities.Inefficiencies within the healthcare system consume enormous amounts of time, resources anddollars. It is estimated that over $250 billion, or 25% of every healthcare dollar, are wastedthrough the delivery of unnecessary care, performance of redundant tests and procedures, andexcessive administrative costs. USHealthNet believes much of this inefficiency and waste is adirect result of poor information exchange among healthcare participants. Consumers do not Confidential & Proprietary Property of Richard Lynes Draft Only – Page 10 - June 11, 1999
  • 40. USHealthNethave easy access to the detailed information they need to compare health plans, select physicians,or manage their own healthcare and benefits.Providers often lack timely access to relevant patient information, and this lack of informationcauses them to prescribe unnecessary tests or procedures and hinders their ability to diagnose andtreat patients. Providers and suppliers often rely on manual processes to share data, and errorsand information bottlenecks resulting from these manual processes cause delays in determiningeligibility, approving referrals, reporting test results and paying claims. These inefficienciescontribute to the rising cost of healthcare. As a result, the government and other purchasers ofhealthcare have increasingly placed pressure on the healthcare industry to improve the cost-effectiveness of healthcare while maintaining the quality of care.8 The SolutionUSHealthNet believes a significant opportunity exists to leverage the power of the Internet toprovide secure, open, universally accessible network services that connect participants andautomate workflows throughout the healthcare delivery process. USHealthNet believes that sucha solution has the potential to create significant improvements in the way that information is usedby the healthcare system, enabling improved workflows, better decision-making and, ultimately,higher quality care at a lower cost.9 The Products/OfferingsThese knowledge resources are provided and maintained, as part of USHealthNet’s syndicatedaffiliate program. A suite of Point-of-Care knowledge tools described below will be offeredbased of premium subscription services. USHealthNet will be the first Internet service to offerthese applications as a bundled service offering.The three tiers of deployment for iASP services consist of the following:1. Tier One is invaluable to a physician’s office. This Intranet tier integrates the front office POC with back office billing systems, provides a POC decision-support system for the physician, and automates all aspects of disease management, spanning the continuum of care and the extended healthcare enterprise. Tier One includes DiagAssist (Diagnostic Decision support system) and ScriptPad (Prescription and Drug Interaction Database), LifeTime (Longitudinal Electronic Medical Records), LabDirect (Lab Order and Results) Enterprise Workflow Engine and XFDL/XML based Forms Engine, and care plan eligibility and payer formulary authentication.2. Tier Two maintains the Master Patient Index, clinical data repository and data warehouse application services accessed through a secure Extranet. Tier Two is the USHealthNet Service Center (NOC) which, in addition to providing the infrastructure to support practice management services (iASP), also handles billing, claims submission and benefits administration for each provider’s office transparently and automatically. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 11 - June 11, 1999
  • 41. USHealthNet3. Tier Three is a shared e-commerce/e-business platform and vertical portal supporting virtual communities on the Internet. This illustrates USHealthNet’s goal of becoming the most efficient and comprehensive procurement and knowledge management service provider for third party products and services in the healthcare industry.10 The Value Proposition — Healthcare ProfessionalA Web-based Thin-Client front-end application provides a Single Point of Access for healthcareprofessionals. This reduces the need for healthcare professionals to use multiple administrative,communications and information services by integrating these applications and services via theInternet. USHealthNet will enter into relationships to assist healthcare professionals in obtainingall hardware and ancillary services necessary to use USHealthNet, including Internet access andcomputer hardware. USHealthNet’s Premium subscription access to iASP and KnowledgeManagement Services provides a suite of Point-of-Care (POC) tools, including backend EDIservices for healthcare professionals, eligibility verification, prescription processing. TheElectronic Medical Record, which manages patients across the continuum of care, ScritpPAD,Lab Order Entry and DiagAssist, a Diagnostic Decision Support tool, offer healthcareprofessionals unparalleled control throughout the life-cycle of care.USHealthNet’s Vertical Healthcare Portal is segmented by healthcare professional andpatients/consumers, and culled by specialty. USHealthNet uses a 1-2-1-personalization enginefor physician profiling -- only branded affiliate products and services are offered and transactedwithin the site, customized physician intranets and knowledge delivery services are tailoredbased on a multi-tiered subscription model. USHealthNet intends to add services and content inthe future, including a Web-enabled medical transcription service offering, hospital/physicianreferral services and insurance benefits administration.10.1 Ease of Use.USHealthNet will offer a bundled Thin-Client Application Suite and Knowledge Managementservices provided by a standards-based Java Physicians Desktop interface integrated with a Webbrowser. Therefore, subscribers who use the USHealthNet s services do not require training onmultiple proprietary devices and require no knowledge of the Internet and it’s navigation issues.10.2 Cost Savings.USHealthNet will offer tiered InfoMediary services allowing affiliate partners to marketproducts and services targeted against confidential profiles achieving true personalization acrossall points of contact insuring a consistent user experience. By aggregating physicians andreaching critical mass USHealthNet will be uniquely positioned to offer procurement services,practice management service, and other third party offerings through these affiliate partners.Physicians and patients will be offered financial incentive awards for referring non-members andby participating in other marketing programs. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 12 - June 11, 1999
  • 42. USHealthNetIn-addition to the USHealthNet’s POC tools a unified messaging platform, supporting chat,conferencing and email service will be rolled-out. USHealthNet’s Web sites and premiumresearch and educational content will be priced competitively and healthcare professionals willpay no more for these services than if purchased individually.11 The Value Proposition — Consumers11.1 Premium and Proprietary ContentUSHealthNet provides healthcare consumers with a single point of access to premium andproprietary health and wellness content. Consumers can use the information that is providedthrough USHealthNet without charge to educate themselves on healthcare-related matters,allowing them to make better informed healthcare decisions. In addition, USHealthNet candeliver personalized content and e-mail updates based on a consumers profile and can searchand retrieve member-specific healthcare information from the Web.11.1.1 Online Healthcare CommunitiesThrough planned acquisitions, USHealthNet will provide access to online communities thatprovide consumers with personalized information about their health conditions and allow them toparticipate in message boards, real-time chat rooms and support networks via the Web. Inaddition, online communities provide member-generated content based on shared experiences.11.1.2 Convenience and ReliabilityThrough a physicians USHealthNet Web site, patients can obtain information regarding officehours, location and other matters without having to place a telephone call to the physiciansoffice. In addition, patients can receive healthcare information that is reviewed and approved bymedical professionals under their physicians USHealthNet Web site--a reliable and familiarsource of information.12 The Strategic Gripper: “That’s Fantastic”Wall Street has placed market caps of 5-20 billion plus on similar business strategies in the sameindustry segment for companies less than a year old with reported losses of more than $100million. The market potential for the segment that USHealthNet intends on pursuing is estimatedto be over $250 billion in 2000. The recent merge between Healtheon and WebMD created an800-pound guerilla with a market capitalization of $20 billion. Another one to watch is Synetics,which just completed the acquisition of Medical Manager PMS for $1.4 billion. The cat is out ofthe bag, the convergence of healthcare and the Internet will change the face of medicine forever,and the real paradigm shift has only just begun.The reality of a $1.2 trillion dollar healthcare market with over-burdened administrativeoverhead and red tape provides a feeding frenzy for first-to-market movers and early adopters. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 13 - June 11, 1999
  • 43. USHealthNetThe administrative and decentralized functional silos that make up the extended healthcareenterprise compound inefficiencies and are responsible for more than $250 billion in waist.13 Advertising and Public RelationsUSHealthNet plans to evolve demand creation by launching creative advertising campaignsthrough strategic partners, Internet search engines, banners ads and more traditional media plays.The Company has started discussions with Omnicom subsidiaries that will lead to strongstrategic partnerships. These subsidiaries provide brand strategy, PR and media buy campaigns,and USHealthNet will partner with Agency.com for the development of the Company’s Portalsites.14 The Business ModelUSHealthNet’s business model is based on the founding principle of establishing sustainablesources of annuity based revenue while exploiting business opportunities for the Company andits partners, as described.USHealthNet offers network-based application services and information services on a transactionand subscription fee basis. The outsourced iASP model reduces the initial investment required toobtain the benefits of high-end information technology infrastructure, enabling physicians, smallorganizations and individuals to gain access to these systems for the first time. By enabling theshift from fixed information technology costs to variable costs and from a vendor/productmodels to a tiered service model, USHealthNet believes that it will be able to achieve criticalmass and broad-based adoption of the USHealthNet Community Healthcare Delivery Network.15 Sales and MarketingUSHealthNet’s channel strategy will be organized according to its four main customer segments:providers, payers, suppliers and consumers. USHealthNet’s direct sales force will targetsignificant potential customers in each market segment by region. In certain instances,USHealthNet’s direct sales force will work with complementary brokers, value-added resellersand systems integrators to deliver complete solutions for major customers. In addition, seniormanagement plays an active role in the sales process by cultivating industry contacts.USHealthNet markets its applications and services through direct sales contacts, strategicrelationships, the sales and marketing organizations of its strategic partners, participation in tradeshows articles in industry publications. USHealthNet will attend a number of major trade showseach year and will sponsor executive conferences, which feature industry experts who addressthe information systems needs of large healthcare organizations. USHealthNet will support itssales force with technical personnel who perform demonstrations of USHealthNet’s applicationsand assist clients in determining the proper hardware and software configurations. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 14 - June 11, 1999
  • 44. USHealthNet16 Immediate GoalsUSHealthNet expects to accomplish the following by the end of Q-4 99: Secure the appropriate level of funding and high profile investment partners Develop strategic relationships with hosting companies, i.e. NaviSite, Digex and Usi in order to provide the data center infrastructure needed to support iASP services. Develop syndicated content relationships with healthcare publishers. Develop affiliate partners programs to support e-business and InfoMediary services. Achieve milestones for Physician downloads of PDA to support service subscriptions. Achieve milestones for Consumer B2C and B2ME InfoMediary services.17 CompetitionUpon first glance the competitive situation may be perceived as high risk due to the large numberof Internet healthcare content sites, vendor/systems integrators, and back office billing systemvendors. However, understanding USHealthNet integrated Web service delivery model (iASP)positions the true competitive situation with a more focused strategic value proposition.USHealthNet sees short-term competition from Internet sites that have subscription modelstargeting healthcare providers and consumers. USHealthNet is differentiating itself by offeringpremium services for healthcare content alongside application services.Many of the Companys current and potential competitors have greater resources to devote to thedevelopment, promotion and sale of their services; longer operating histories; greater financial,technical and marketing resources; greater name recognition; and larger subscriber bases than theUSHealthNet and, therefore, have a significantly greater ability to attract subscribers andadvertisers. Many of these competitors may be able to respond more quickly than theUSHealthNet to new or emerging technologies in the Internet and the personal communicationsmarket and changes in Internet user requirements and to devote greater resources than theUSHealthNet to the development, promotion and sale of their services. In addition, USHealthNetdoes not have contractual rights to prevent its strategic partners from entering into competingbusinesses or directly competing with the USHealthNet. While these statements can bepositioned as a negative resulting in a high-risk investment, they represent the reality of marketconditions for every company today and well into the future.18 Our DifferentiatorsUSHealthNet’s value is not that it necessarily has a technological advantage, which provide asustainable differentiation. Although the USHealthNet plans on filing patents to protect itstechnology and intellectual assets, more correctly it’s the assemble of the parts, along withknowledge management services and the valuable Clinical Data resulting from the use of theUSHealthNet’s WEB Based applications at the Point-of-Care. The key strategic advantages forUSHealthNet will be its strong management team, board of Directors, advisory board, strategicpartners and the measured execution of the Company’s business plan. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 15 - June 11, 1999
  • 45. USHealthNet19 Use of FundsUSHealthNet’s working capital requirements for fiscal year 1999 and 2000 will be raisedthrough external private angle investors, partners and institutional equity funding vehicles in theamount of $10 million, along with additional commitments to enable the Company’s acquisitionstrategy. Projected ramp-up costs, operations, sales and marketing, and product/servicedevelopment will be running at an estimated average monthly burn rate of $550,000 for the firsteighteen months. As part of our strategy, year two revenue coupled with stock valuations andmarket capitalization, as well as a possible IPO, will be used to help fund the continued growthinto international markets and additional merger / acquisition opportunities20 Exit StrategyUSHealthNet’s exit strategy is simple, Longer term, as measured in Internet time (12-18months), Healtheon/WebMD, Synetics and EMR (Electronic Medical Records) vendors andother competitors may begin to view USHealthNet as a valued asset. USHealthNet views itselfas a possible acquisition candidate for Healtheon/WebMD, Synetics or AOL. USHealthNet andits investors will evaluate both M & A and IPO strategies as a function of the Company’srequirements for new capital and current capital market conditions.21 Financial Analysis/pro-forma estimatesThe following Business section contains forward-looking statements, which involve risks anduncertainties. The Companys actual results could differ materially from those anticipated inthese forward-looking statements as a result of certain factors, including those set forth under"Risk Factors" and elsewhere in this prospectus.USHealthNet’s projected P&L statement is outlined in the table below merely as a placeholder.These projections are based on a revenue projection model and budget assumptions. Additionalassumptions are stated in the Detailed Financial Plan, available and accompanying the businessplan. This is available upon requested and upon signing a non-disclosure. 1999 2000 2001 2002 2003 Forecast Forecast Forecast Forecast Forecast Revenue 3,000,000 25,000,000 36,000,000 78,000,000 160,000,000 COGS Gross Margin Operating Exp. R&D % of Revenue M&S % of Revenue G&A % of Revenue Total Operating Exp. % of Revenue EBIT % of Revenue Confidential & Proprietary Property of Richard Lynes Draft Only – Page 16 - June 11, 1999
  • 46. USHealthNetIf we fail to execute our strategy in a timely or effective manner, the Company’s competitorsmay be able to seize the marketing opportunities we have identified. Our business strategy iscomplex and requires that we successfully and simultaneously complete many tasks. In order tobe successful, we will need to:• Build and operate a highly reliable, complex global network.• Negotiate effective partnerships and develop economically attractive products.• Attract and retain iASP customers.• Attract and retain highly skilled employees.• Integrate acquired companies into our operations.• Evolve our business to gain advantages in an increasingly competitive environment.• Expand our international operations.22 Management TeamRichard Lynes – Founder and Chief Technology OfficerStrategic Planning and Information Technology Solutions Thought-Leader, achievingimproved operating efficiency through IT and business strategy alignment, and increasedshareholder value by leveraging technology as a competitive differentiator.Professional Competencies: Strategic IT and Business planning for e-commerce, e-business and Knowledge Management as a competitive differentiation in the B2B, B2C and B2ME markets, integrating both buy-side, sell-side and customer facing processes Mentoring companies executives in their migration from traditional mass marketing and operational practices to those of 1-2-1 personalization; Customer Relationship Marketing (CRM) utilizing interactive media, database marketing, and the integration of legacy Line-of-Business applications, including SCM, OLR and ERP solutions Guiding executives on the sweeping changes, trends and impacts of technology on competitive strategies, business objectives and business transformation Technical team lead on the design, development and deployment of scaleable Enterprise-wide information, software and systems architectures. Supporting Intranet/Extranet application infrastructure components for MRO purchasing and e- catalog procurement, Human Resources, Sale Force Automation, Knowledge Management, and strategies for linking channel partners, suppliers and customers.Serving as CIO and CTO for several market leaders, Mr. Lynes past successes have beenachieved by developing visionary technology strategies and facilitating information flow withinthe senior management strategic planning function. By improving knowledge utilization throughlinking corporate stakeholder processes and objectives, client business strategies, and facilitating Confidential & Proprietary Property of Richard Lynes Draft Only – Page 17 - June 11, 1999
  • 47. USHealthNetcooperation between cross-functional teams, Mr. Lynes insights have created a more customercentric approach and methodology.Colleagues have often described Mr. Lynes as an approachable team player who has a provenknack of forecasting and keeping them abreast of critical changes in the dynamic, fast pacedworld of technology. His talent does not come from a crystal ball, but from a substantial careerof following the movements within both the Information Technologies and Tele-communicationsindustries.23 Development TeamWorldmachine Technologies Corporation is a leading information technology consulting firmthat provides innovative solutions for your organizations business communication needs. Usinga structured process, we leverage best-of-breed Internet, intranet and extranet technologies tooffer you a variety of services and packaged systems. Our ultimate goal is to help you to bettermanage information and improve the way you communicate.Our team of professionals provides you with a wealth of experience in many important areas ofinformation technology. These include Internet, intranet and extranet development, web design,database design, system administration, and system integration.24 Advisory BoardChris Bulter –Mr. Butler was founder and President of Interactive Solutions, an interactive strategy, interactivebranding and web systems integration firm. Mr. Butler grew IS into a 150 person company with$20m in revenue and recently sold it. Mr. Butler has 24 years experience in high technology (PCapplications, CASE tools, electronic publishing, networking). Mr. Butler is a graduate ofHarvard College (AB Computer Science 1976) and the Harvard Business School (MBA 1980).Donald Leavitt -Donald > Leavitt is the founder of Concord Associates, a firm devoted to the development andnurturing of seed-stage venture investments. Mr. Leavitt is also President of Dynographics, Inc.,an Internet-focused management and marketing consultancy specializing in the creation oforganizationally and strategically aligned: • Customer acquisition, development, and retention plans, • Internet-compliant strategic marketing plans, • Internet-driven brand-building initiatives, • Interactive marketing and sales scenarios, • Strategic operating plans for new Internet-based e-commerce initiatives, and Confidential & Proprietary Property of Richard Lynes Draft Only – Page 18 - June 11, 1999
  • 48. USHealthNet • Resolution and workout plans for Internet-generated channel conflict widely considered the single most significant barrier to success for large legacy-driven enterprises transforming from traditional to electronic commerce channels.Many of these issues are analyzed in depth in a case Mr. Leavitt co-authored on BronnerSlosberg Humphrey for the Harvard Business School with David E. Bell, Royal LittleProfessor of Business Administration at HBS. Most recently, Mr. Leavitt collaborated withProfessor Bell on an HBS case that focuses on donor acquisition and retention issues confrontingthe United Way of Massachusetts Bay.Both before and after the emergence of the Internet as the channel of choice for the newmillenium, Mr. Leavitt has been providing strategic product management, M&A analysis, marketassessment, and technology evaluation services to senior management at such marquee clients asFujitsu, Ltd., Merill Lynch, Lehman Brothers, Canon USA, Worldwide Volkswagen, CBS,Eastman Kodak, Jones Day Reavis & Pogue, Ziff Davis, and the Government of thePeoples Republic of China.In 1987, Mr. Leavitt started Spectra Sciences, a designer and manufacturer of high value added,internationally patented specialty chemicals. During his tenure as founder, CEO and CFO of thecompany, he raised nearly $3 million in seed-stage venture capital financing. Today, SpectraScience is redefining laser technology through its work with Nanocrystals.An honors graduate of Brandeis University, Mr. Leavitt began an extensive involvement in theadvanced imaging technology at NASAs Photographic Research Laboratory in the late1960s. At NASA, he co-designed the worlds first digital image enhancement system for picturestaken in space and on the lunar surface by Apollo astronauts.After a number of successful R&D forays covering a variety of rapid access imaging systems,Mr. Leavitt went on to become the Technology Editor of Popular Photography, and theAdvanced Technology consultant for Time Magazine.Mr. Leavitt has also written and produced major stories for Time, New York Magazine, andThe New York Times, where he was one of the first to help chronicle the painstakingrestoration of the Leonardo da Vincis The Last Supper. In the book publishing field, he waspublicity and marketing consultant for Ansel Adams Yosemitt and the Range of Light, one ofthe best selling big-ticket art books of all time; consulting editor for The NEw Ansel AdamsPhotography Series; and creative consultant for The Great Ladies of Jazz. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 19 - June 11, 1999
  • 49. USHealthNetWendy Roberts -Vice President of Business Development- AGENCY.COMWendy brings over 18 years of marketing experience to her work at AGENCY.COM. She hasfocused for the past 8 years on the interactive medium and electronic commerce, working withmany Fortune 500 companies worldwide, including IBM, NCR/AT&T, Federal Express, andGeneral Motors.As vice president of business development, Wendy directly manages the stimulation of newclient opportunities.Prior to joining AGENCY.COM, Wendy served as the Vice President of Business Developmentand Marketing at Tech 2000, the leading developer of interactive communities of interest in boththe Motor Sports and Energy industries on the Internet.Wendy pioneered the Electronic Strategies Consulting capability at Bronner Slosberg Humphrey,which was responsible for consulting both current and new clients on the impact of interactivityon their business landscape. Wendy’s role focused on interactive marketing and databaseinitiatives as well as helping Fortune 1000 clients understand the impact of interactive supplychain, distribution management, internal process and re-engineering their business plan ascompetitive differentiators.Additionally, Wendy also served as the co-founder and chief operating officer of CommSoftTechnologies, a company that developed client-server based electronic catalog applications evenbefore the Internet was a commercial platform. She developed a custom application for asoftware catalog and fulfillment system for NCR’s finance group’s internal, worldwide network. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 20 - June 11, 1999
  • 50. USHealthNetJack Barrette -Practice LeaderHealth & Medical PracticeA seasoned management consulting professional, Jack has created total strategies from bothagency and client perspectives. He is an ardent proponent of integrated business interactivestrategy planning for healthcare and medical organizations worldwide, with over 18 years ofindustry experience.Jack heads the health and medical practice of AGENCY.COM, one of the nations leadinginteractive strategy, creative and technology firms. AGENCY.COM has provided Web strategyconsulting and developed interactive applications for Bard Surgical Products, Eli Lilly, Glaxo-Wellcome, Novartis, Pfizer, Kaiser Permanente, SmithKline Beecham, Harvard Pilgrim HealthCare, Columbia/HCA and a host of other medical and health organizations.Jack joined AGENCY.COM in 1997, after engineering its merger with ECHO Strategies Group,which he founded in 1994. As a specialist in health and medical applications of interactivity,Jack helped create the nationally-recognized Six Senses Healthcare & Medical Web Site ReviewProgram. He has also led the development of interactive programs, from CD-ROMs to laptopand kiosk presentations to Web and intranet applications, on behalf of managed care,pharmaceutical, medical device and health delivery organizations.Prior to founding ECHO, he was Director of Marketing for a national rehabilitation company,with responsibility for management of all aspects of marketing communications, as well as adedicated national sales force of over 200 professionals. Earlier, he developed the healthcaredivision of Agnew, Carter, McCarthy, Inc., one of New Englands leading marketingcommunications agencies.Jack has trained at Harvard University/M.I.T. School of Negotiation in facilitation and conflictresolution. A graduate of Tufts University, he is an active member of the American Society forHealthcare planning and Marketing, the Medical Marketing Association, and the AdClub ofGreater Boston and the New England Society for Healthcare Communications. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 21 - June 11, 1999
  • 51. USHealthNet25 ConclusionIn an Innovative-Growth Paradigm, a company does something that is different from itscompetitors and that its customers perceive to be of significantly superior value. By sharing partof its superiority with its customers, generally in terms of better value, and by capturing the restas profitability, a successful company in the Innovative-Growth Paradigm simultaneously createsrapid growth in revenue, profit and shareholder value. The "something different" at the heart ofthe paradigm -- the growth engine -- can be either a strategic innovation or a stream ofproduct/service innovations, or both.A strategic innovation engine involves a distinct approach to serving customers grounded in amore efficient and effective way of doing business. The consolidation and convergence ofoperational silos in the current healthcare market space is void of any real vision and substantivestrategy. USHealthNet has made clear its intentions and strategies for reaching its objectives.In summary, USHealthNet’s Internet service strategy proposes to make healthcare in the U.S.more affordable and effective by bridging information systems and telecommunications,enabling the timely delivery of healthcare knowledge, while allowing authorized ubiquitousaccess across the continuum of care. Marketing, selling and developing the USHealthNetapplications and services aggressively makes USHealthNet a potential player in a trillion-dollargrowth market. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 22 - June 11, 1999
  • 52. Filename: USHealthNet Business PlanDirectory: D:NewCoBusPlanTemplate: D:program filesmicrosoft officeTemplatesNormal.dotTitle: Major Bullet Points for US Healthcare Business Plan presentation to CMGISubject:Author: Richard LynesKeywords:Comments:Creation Date: 06/07/99 12:55 AMChange Number: 61Last Saved On: 06/11/99 2:58 AMLast Saved By: ctoTotal Editing Time: 932 MinutesLast Printed On: 06/11/99 2:59 AMAs of Last Complete Printing Number of Pages: 25 Number of Words: 7,928 (approx.) Number of Characters: 48,361 (approx.)
  • 53. Yahoo Portal DestinationsUSHealthcare, LLC . al ort Amazon oP ho Ya Judy Amex Erick Internet LL. Bean AOL MSN CNN Sam Bill Cnet Central Dave @home Internet Confidential March 21, 1999 Richard Lynes
  • 54. USHealthNet InfoMediary Revenue ModelUSHealthcare, LLC . Personalization Physician Provider Rx Organization XML/Engine 1-1 PPO Dx Imaging Judy Center EMR EMR Internet CVS Erick AOL RiteAid CHIN Push/Pull Sam Channels - EMR Bill Pharma EMR Organization Dave Rx Health EMR Dx HMO Maintenance USHealthNet Portal Portal B2C Model Confidential March 21, 1999 Richard Lynes
  • 55. USHealthNet InfoMediary Revenue ModelUSHealthcare, LLC B2ME Model .• Rx - Over the Physician Providercounter, and Personalization Rx OrganizationPrescription drugs XML/Engine 1-1 PPO• Dx - Diagnosis & Disease DxManagement Judy Imaging CenterScenario: EMR ErickPatient’s EMR ismined for patternsand compared with EMR Internet CVStheir profile (basedon heuristics poles, AOL RiteAid CHINsurveys,, and Sam Push/Pullpersonality types). ChannelsA patient that has -Kidney stones may EMR Billreceive information Pharmaon local resources EMR Organizationthat specialize in Dave Rx Healththe treatment ofthis disorder. OTC EMR& prescription Dx HMOdrugs may beavailable or a Maintenancepharma companymay be conducting USHealthNet Portal B2C ModelClinical Trails. Confidential March 21, 1999 Richard Lynes
  • 56. Worldmachine Technologies Corporationhttp://www.worldmachine.com/ [6/11/1999 3:14:50 AM]
  • 57. [Home] - Internet, intranet, extranet web development Welcome! Worldmachine Technologies is a leading consulting and engineering firm specializing in the development of highly-functional Internet, intranet, and extranet web sites. We provide businesses with innovative and effective ways to manage their information and improve their communications. Our web site provides current information about our company and the services and solutions that we offer, so please use the links to the left to navigate throughout our site. We suggest that you view the company overview as well as our series of online solution demonstrations. A full web site directory and search engine can also be found on our site map (to the upper right). Be sure to give us a call at (617) 357-4040, or email us at sales@worldmachine.com if you would like to learn more about what Worldmachine can do for you. company | solutions | technology | resources | careers | contact | extranet © 1999 · Worldmachine Technologies Corporation 44 Winter Street · Boston, MA 02108 · (617) 357-4040http://www.worldmachine.com/index.html [6/11/1999 3:15:06 AM]
  • 58. Fujitsu - Total Cost of Ownership Introduction Total Cost of Ownership Fujitsu Ergo$ave - The first quantitative analysis Introduction What are the real costs of owning your PC? It is a lot more than just the initial purchase price. According to the Gartner Group, the initial purchase price of a PC accounts for only 14% of the Total Cost of Ownership (TCO) over its average lifetime. This is a very significant figure and Fujitsu aims to remove the jargon and one which has resulted in TCO being a explain what TCO really means for you. key agenda item for senior IT managers. Many PC vendors have tried What is Total Cost of Ownership? to market TCO as part of their product offering in a vague manner - Fujitsu is What do the expert research the first company to actually quantify consultants say? TCO for large companies. Fujitsu Ergo$ave, what is it ? By developing Fujitsu Ergo$ave, Fujitsu has taken TCO one stage Fujitsu Ergo$ave in practice further by developing a tool that clearly demonstrates the savings that Conclusion... I want an Ergo$ave demo can be made specifically for your organisation - a quantifiable audit of your PC strategy.http://www.fujitsu-computers.com/coo/main.html [6/14/1999 4:09:48 PM]
  • 59. Filename: USHealthNet Business PlanDirectory: D:NewCoBusPlanTemplate: D:program filesmicrosoft officeTemplatesNormal.dotTitle: Major Bullet Points for US Healthcare Business Plan presentation to CMGISubject:Author: Richard LynesKeywords:Comments:Creation Date: 06/07/99 12:55 AMChange Number: 31Last Saved On: 06/09/99 11:54 AMLast Saved By: ctoTotal Editing Time: 448 MinutesLast Printed On: 06/09/99 12:20 PMAs of Last Complete Printing Number of Pages: 24 Number of Words: 7,507 (approx.) Number of Characters: 45,798 (approx.)
  • 60. Worldmachine Technologies Corporationhttp://www.worldmachine.com/ [6/9/1999 12:55:05 PM]
  • 61. [Home] - Internet, intranet, extranet web development Welcome! Worldmachine Technologies is a leading consulting and engineering firm specializing in the development of highly-functional Internet, intranet, and extranet web sites. We provide businesses with innovative and effective ways to manage their information and improve their communications. Our web site provides current information about our company and the services and solutions that we offer, so please use the links to the left to navigate throughout our site. We suggest that you view the company overview as well as our series of online solution demonstrations. A full web site directory and search engine can also be found on our site map (to the upper right). Be sure to give us a call at (617) 357-4040, or email us at sales@worldmachine.com if you would like to learn more about what Worldmachine can do for you. company | solutions | technology | resources | careers | contact | extranet © 1999 · Worldmachine Technologies Corporation 44 Winter Street · Boston, MA 02108 · (617) 357-4040http://www.worldmachine.com/index.html [6/9/1999 12:55:15 PM]
  • 62. Yahoo Portal DestinationsUSHealthNet, LLC . al ort Amazon oP ho Ya Judy Amex Erick Internet LL. Bean AOL MSN CNN Sam Bill Cnet Central Dave @home Internet Confidential March 21, 1999 Richard Lynes
  • 63. USHealthNet InfoMediary Revenue ModelUSHealthNet, LLC . Personalization Physician Provider Rx Organization XML/Engine 1-1 PPO Dx Imaging Judy Center EMR EMR Internet CVS Erick AOL RiteAid CHIN Push/Pull Sam Channels - EMR Bill Pharma EMR Organization Dave Rx Health EMR Dx HMO Maintenance USHealthNet Portal Portal B2C Model Confidential March 21, 1999 Richard Lynes
  • 64. USHealthNet InfoMediary Revenue ModelUSHealthcare, LLC B2ME Model .• Rx - Over the Physician Providercounter, and Personalization Rx OrganizationPrescription drugs XML/Engine 1-1 PPO• Dx - Diagnosis & Disease DxManagement Judy Imaging CenterScenario: EMR ErickPatient’s EMR ismined for patternsand compared with EMR Internet CVStheir profile (basedon heuristics poles, AOL RiteAid CHINsurveys,, and Sam Push/Pullpersonality types). ChannelsA patient that has -Kidney stones may EMR Billreceive information Pharmaon local resources EMR Organizationthat specialize in Dave Rx Healththe treatment ofthis disorder. OTC EMR& prescription Dx HMOdrugs may beavailable or a Maintenancepharma companymay be conducting USHealthNet Portal B2C ModelClinical Trails. Confidential March 21, 1999 Richard Lynes
  • 65. USHealthNetConfidential & Proprietary Property of Richard Lynes Draft Only - Page 13 - May 21, 1999
  • 66. USHealthUSHealthNet,USHealthNet, LLC ealthNet
  • 67. USHealthUSHealthNetCommunity Healthcare Information DeliverySystems Prepared by Richard D. Lynes Executive Vice President Chief Technology Officer A Conceptual Design Document for USHealthcareNet, a visionary Healthcare Information Delivery System.
  • 68. USHealthAConceptualDesignDocument USHealthcare, LLC 1999 3 Acorn Stree Scituate, MA 02066 Phone 781-545-3938 Email cto@mediaone.net Community Healthcare Information Delivery Systems, DiagAssist MEDNET, and USHealthNet are trademarks of Richard Lynes.
  • 69. USHealthTABLE OF CONTENTSFOREWORD ...........................................................................................................................VI PURPOSE ................................................................................................................................. VI WHAT IS USHEALTHNET?....................................................................................................... VI WHY USE USHEALTHNET?..................................................................................................... VI DOCUMENT STRUCTURE ......................................................................................................... VITHE CURRENT DILEMMA IN HEALTH CARE................................................................ 1 HEALTHCARE IN THE INFORMATION AGE ................................................................................. 1 HEALTHCARE DELIVERY TRENDS ............................................................................................ 2 SUMMARY................................................................................................................................ 3THE USHEALTHNET SOLUTION........................................................................................ 5 OVERVIEW OF USHEALTHNET................................................................................................. 5 USHEALTHNET BENEFITS........................................................................................................ 6 THE USHEALTHCARE VISION .................................................................................................. 7 REALIZING THE VISION............................................................................................................. 8 Outpatient Encounter Scenario .......................................................................................... 8 Patient Registration ...................................................................................................................... 8 Appointment Scheduling.............................................................................................................. 8 The Office Visit............................................................................................................................ 9 Billing Process.............................................................................................................................. 9 Specialist Collaboration Scenario...................................................................................... 9 ADOPTING A PATIENT-CENTRIC MODEL................................................................................. 11 ELECTRONIC COMMERCE ....................................................................................................... 12 SUMMARY.............................................................................................................................. 13TIER 1: PHYSICIAN/PROVIDER GROUPS ...................................................................... 15 OVERVIEW ............................................................................................................................. 15 ELECTRONIC MEDICAL RECORDSSYSTEM (EMR).................................................................. 15 Background ...................................................................................................................... 17 Computer-Based Patient Record...................................................................................... 17 Information Processing .................................................................................................... 18 Compilation of a Comprehensive Record of Care ...................................................................... 18 Patient Care Processes................................................................................................................ 19 Information Presentation ................................................................................................. 20 Related Data and Knowledge Bases ................................................................................ 20 EMR Summary ................................................................................................................. 21 DiagAssist™.................................................................................................................... 22 Drug Dose Determination ................................................................................................ 22 Preventive Care Reminders.............................................................................................. 23 Active-Care Advice........................................................................................................... 23 Health Maintenance Tracking.......................................................................................... 24 Laboratory Data............................................................................................................... 24 Medical Tracking with Drug Interaction Database ......................................................... 24 Electronic Signatures ....................................................................................................... 25 Managed Care and Outcomes Management .................................................................... 25 Summary of Medical Consult ........................................................................................... 25 PRACTICE MANAGEMENT SYSTEM......................................................................................... 25 Billing and Accounts Receivable...................................................................................... 26 Practice Management Reporting...................................................................................... 26 Custom Templates ............................................................................................................ 26 Electronic Claims............................................................................................................. 26 iii
  • 70. USHealth .......................................................................................................................................... 27 Appointment Scheduling................................................................................................... 27 Financial Accounting ....................................................................................................... 27 Document Processing....................................................................................................... 27 Medical Practice Consulting............................................................................................ 28 Individualized Charts ....................................................................................................... 28 Tracking the Insurance Plan ............................................................................................ 28 .......................................................................................................................................... 29 Profitability Reporting ..................................................................................................... 29 RBRVS Tracking and Analysis ......................................................................................... 29 Diagnostic Coding Software ............................................................................................ 30 Practice Management System Summary .......................................................................... 30 SUMMARY.............................................................................................................................. 31 WHAT’S NEXT?...................................................................................................................... 31Tier 2: USHealthNet SERVICE CENTER PLATFORM .................................................... 32 OVERVIEW ............................................................................................................................. 32 TIER 2 FEATURES................................................................................................................... 32 DATA STORAGE ..................................................................................................................... 33 Data Warehouse............................................................................................................... 34 On-line Analytical Processing (OLAP) ...................................................................................... 35 ELECTRONIC MEDICAL RECORDSSYSTEM.............................................................................. 36 Application Functions (EMR) .......................................................................................... 36 Knowledge Acquisition Functions.................................................................................... 36 Data Sources............................................................................................................................... 37 Data Entry Devices..................................................................................................................... 37 Data Import ................................................................................................................................ 38 Data Definition ........................................................................................................................... 38 Input Identification..................................................................................................................... 38 Input Validation ......................................................................................................................... 39 Storage Functions ............................................................................................................ 39 Permanence ................................................................................................................................ 39 Ongoing Maintenance ................................................................................................................ 39 Backup and Recovery................................................................................................................. 40 Durability ................................................................................................................................... 40 Sabotage Precautions.................................................................................................................. 40 Updating Obsolete Systems........................................................................................................ 40 Administrative Processes............................................................................................................ 41 Security Functions............................................................................................................ 41 Access Control ........................................................................................................................... 41 Data Protection........................................................................................................................... 42 Integrity ...................................................................................................................................... 42 Operational Processes................................................................................................................. 43 Legal and Administrative Characteristics ................................................................................... 43 PRACTICE MANAGEMENT SERVICES ...................................................................................... 44 .......................................................................................................................................... 45 Central Administration of Multiple Practices .................................................................. 45 ENTERPRISE-WIDE INDEXING ................................................................................................. 45 Enterprise Master Patient Index (EMPI) .................................................................................... 46 Master Patient Index Requirements ................................................................................. 46 Benefits of MPI .......................................................................................................................... 47 Components of the EMPI ........................................................................................................... 47 MPI Functional Modules ................................................................................................. 48 MPI Data Base ........................................................................................................................... 48 MPI Patient Identification .......................................................................................................... 48 MPI Records Management ......................................................................................................... 48 CLINICAL REPOSITORY ........................................................................................................... 49 SUMMARY.............................................................................................................................. 50 iv
  • 71. USHealthTIER 3: INTERNET HEALTHCARE COMMUNITY ....................................................... 51 VIRTUAL ENTERPRISE ............................................................................................................ 52 THE DIGITAL ECONOMY ........................................................................................................ 52 MEDNET: THE USHEALTHCARE SOLUTION ......................................................................... 53 SUMMARY.............................................................................................................................. 57USHEALTHNET TECHNICAL DESCRIPTION................................................................ 58 USHEALTHNET SYSTEM IMPLEMENTATION........................................................................... 58 ENABLING TECHNOLOGIES FOR USHEALTHNET .................................................................... 59 Information Sharing System ............................................................................................. 60 Architecture for Information Sharing............................................................................... 60 Interface or Event Manager ........................................................................................................ 60 Session Manager......................................................................................................................... 60 Gateways .......................................................................................................................... 60 Models .............................................................................................................................. 61 Meeting On the NET (MONET)........................................................................................ 61 Future Extensions............................................................................................................. 61 Value-added Agents for USHealthNet............................................................................ 61 Monitoring Agents ..................................................................................................................... 62 Prioritization Agents................................................................................................................... 62 Scheduling Agents...................................................................................................................... 63 Filing Agents .............................................................................................................................. 63 Information Access Agents......................................................................................................... 63 Agent Implementation ................................................................................................................ 64 An Example of Agent Implementation ....................................................................................... 65 Enhancements to Browsers......................................................................................................... 65 High Performance Distributed Web Servers............................................................................... 65 Logical URLs ............................................................................................................................. 65 URL tables.................................................................................................................................. 66 Virtual URLs .............................................................................................................................. 66 Groupware Applications............................................................................................................. 67 Smarter Servers, Smarter Clients................................................................................................ 67 Prefetching Strategies................................................................................................................. 68 Hot Directories ........................................................................................................................... 68 DATA WAREHOUSING AND REAL-TIME ANALYTICAL PROCESSING........................................ 68 Understanding Multi-dimensional Data .......................................................................... 68 Real-time Analytical Processing (RAP) ........................................................................... 68 Other considerations about RAP: ............................................................................................... 69REFERENCES......................................................................................................................... 70GLOSSARY ............................................................................................................................. 71 v
  • 72. USHealthFOREWORDPurposeThis paper introduces the concept of a unified healthcare delivery network,USHealthNet™, a patient-centric healthcare information system for the 21stcentury created by USHealthNet.What is USHealthNet?USHealthNet is a collaborative, fully distributed, Internet-based service forphysicians, group practices, patients, providers, payers and other members of thehealthcare community. USHealthNet will enable physicians to free themselves ofadministrative duties and devote more time to patient care in the constantlychanging world of medicine.Why use USHealthNet™?The mandate for USHealthNet stems from the weaknesses of the current U.S.healthcare system. This paper highlights the major shortcomings of the existinghealthcare system and describes the key factors that led to the need forUSHealthNet. The next phase in the development process is for USHealthNet tofinalize the details to progress from strategic concepts to the implementation ofUSHealthNet.Document StructureThis paper consists of the following chapters: Chapter 1 presents the background research that explains the evolution of USHealthNet and describes the flaws in the current healthcare delivery system from business and healthcare perspectives. Chapter 2 describes the features and benefits of USHealthNet and discusses the business vision and strategy. Chapters 3, 4, and 5 present the three tiers of service USHealthNet offers to physicians and group practices, healthcare networks and pharmacies, and other professionals in the healthcare community.Appendixes are attached to this document. Appendix A is a technical descriptionof USHealthNet. Appendix B is a list of references, and Appendix C provides aglossary of relevant abbreviations and concepts. vi
  • 73. D R A F T C O N F I D E N T I A L ChapterTHE CURRENT DILEMMA IN HEALTHCAREDespite the superb skills of U. S. physicians and advanced medical technology, out-of-control costs due largely to the lack of a comprehensive, computerizedmanagement system present the healthcare industry with a serious dilemma.Key factors driving these escalating costs include: Lack of easily retrievable data about operating expenses and real costs; Patient records still stored on paper, which precludes the simple electronic sharing of patient information; and, Inadequate or out-of-date financial systems.Another component of the spiraling costs of healthcare is the dramatic increase inmalpractice suits. Patients sometimes perceive that they have been ignored ormistreated, often because of poor record keeping and lack of time on the part ofthe physician. This sometimes results in malpractice suits.USHealthNet proposes solving these problems with a patient-centric healthcareinformation system called USHealthNet. This system is a collaborative, fullydistributed, network-based hosting service for physicians, group practices,patients, providers, payers, and other professionals within the healthcarecommunity.Healthcare in the Information AgeThe healthcare industry is an information-intensive profession plagued bysubstandard methods of data collection, storage, and retrieval. Sharinginformation efficiently and effectively is critical to patient care. This need strainsthe resources of the healthcare community since information must be gatheredfrom disparate sources. A large part of healthcare waste is related to red tape,paperwork, and decentralized data sources. In addition to the need to sharepatient-related information, physicians are required to routinely upgrade theirknowledge, usually from paper media, to remain abreast of developments in theirspecialties. 1
  • 74. D R A F T C O N F I D E N T I A L Many sectors of the U.S. economy have focused their operations around computerized systems for many years. Banks, airlines, stock markets, and even salvage yards use computers to communicate, maintain inventory control, allocate costs, bill, and manage major activities in an integrated, seamless manner. These industries have experienced enhanced operating efficiency, improved products and services, and, more importantly, increased customer satisfaction. In contrast, most hospitals and clinics have computers, but relegate them to performing isolated, administrative tasks. These tasks include billing and patient admission, discharge and transfer functions. However, few hospitals and clinics link caregivers over networks to facilitate electronic communication and the sharing of patient information and other clinical data. For the healthcare community to benefit from the technology of the information age, they need to integrate a comprehensive, computerized enterprise management system into their organizations. Healthcare Delivery Trends The administrative costs for providing healthcare in 1991 have been estimated at between $108 billion and $135.1 billion per year.1 The rising cost of healthcare throughout the world has created an urgent need to improve healthcare productivity and quality. This sense of urgency has led to the development of new healthcare delivery models, organizational transformation and restructuring, and the redesign of healthcare businesses and clinical processes. Not only are these changes redefining the healthcare environment, they are also creating a demand for a new healthcare information delivery system: USHealthNet. The creation of this new healthcare information infrastructure requires the integration of new and existing systems and services. One core element of this infrastructure includes the Electronic Medical Record (EMR) system, which will enhance and encourage the continuity of patient care through the sharing of patient information across networks. Figure 1-1 illustrates current relationships between organizations within the healthcare industry. Although electronic data sharing (Electronic Data Interchange-EDI) is a common practice in organizations that supply healthcare providers (i.e., pharmaceutical companies), physicians have been slow to embrace this technology.1 Lewin-VHI, “Reducing Administrative Costs in a Pluralistic Delivery System Though Automation.” 2
  • 75. D R A F T C O N F I D E N T I A L Medical/ product Medicare fiscal Health Care surgical intermediaries Financing manufacturers and carriers Administration Medical/surgical Electronic medical distributors companies Claims payers-Purchasing groups HEALTH CARE Indemnity Managed PROVIDERS care- Self-insured Wholesale Medical distributors processors Medicaid Pharmaceutical manufacturers Self-pay Figure 1-1: Current Relationships in the Healthcare Industry Summary The U.S. health care’s current dilemma, spiraling costs due largely to the lack of a comprehensive, computerized management system, has resulted in inefficient operations, financial waste, and frequent patient dissatisfaction. . 3
  • 76. D R A F T C O N F I D E N T I A L C m H C Inform D om unity ealth are ation elivery N ork, TheFoundationof C etw are Healthcare Delivery TechnologyDevelopment Strategy R M isk anagement InsuranceProducts Re-Insurance Market B usiness toBusiness Internet Health Inform D ation istribution Business toConsum er C C m are om unity ElectronicC m om erce C er Service ustom K ledge now E S PM AcquisitionEngine PhysicianG roups PracticeServices Point-of-Care •C puter-basedP om atient Records Services •ResourceScheduling •Medical Consult K ledge now ManagementUSHealthNet ER P M /C R Clinical D R ata epository E S PMDt C aa enter EnterpriseM Patient Index aster D W ata arehouse&O P LA 4
  • 77. D R A F T  C O N F I D E N T I A L ChapterThe USHealthNET SolutionA s illustrated in Chapter 1, the healthcare industry needs to embrace a comprehensive, computerized management system to meet cost containment challenges.Although most physicians and group providers believe they are using computertechnology to automate their practices, they are still frustrated by the number ofpaper- and people-intensive transactions. These tasks include appointmentscheduling, patient record management, patient referrals and consults with otherspecialists. Physicians may wish to consider how the Internet and World WideWeb can be utilized to better manage costs and patient information within theirpractices.USHealthNet proposes a novel solution to these and other issues confrontingmedical practitioners and the healthcare community: the USHealthNet system.The basic premise of USHealthNet is that more affordable and effectivehealthcare can be achieved by applying information systems andtelecommunications technologies and services to improve collaboration amongproviders in the healthcare industry.This chapter introduces the USHealthNet system--the vision, features, andconcepts fundamental to the development of the project: electronic commerce,Internet-based infrastructure and patient-centric models.Overview of USHealthNetUSHealthNet is a service that manages the information network for healthcareproviders, minimizing capital equipment purchases by local primary carephysicians. Data is collected and entered into the network through an intuitive,point-of-care device that is either kept in the examination room or carried by thephysician. An On-line Transaction Processing (OLTP) system provides fault-tolerant disaster recovery functions minimizing outdated error-prone datamanagement methods. 5
  • 78. D R A F T  C O N F I D E N T I A LThe USHealthNet system consists of three tiers: Tier One is invaluable to a physician’s office. This tier computerizes patient records, provides a decision-support system for the physician, and automates all aspects of practice management. Tier Two maintains the database and links with other physicians. Tier Two is the USHealthNet Service Center, which handles accounting, billing and claims submission for each provider’s office transparently and automatically. Tier Three is a virtual community on the Internet, USHealthNet’s Virtual Healthcare Portal. This illustrates USHealthNet’s goal of becoming the most efficient and comprehensive e-commerce, communications and information provider. Internet Application Service Platform ( iASP ) is a component based infrastructure for third party products and services in healthcare space.USHealthNet BenefitsWith USHealthNet, physicians can: Treat patients using Electronic Medical Records (EMR) and an expert system that provides treatment management, reminders, alerts, and feedback (such as protocols and clinical pathways and research findings) from distributed services and resources. Consult with remote specialists using telecommunications with enhancements and desktop conferencing technologies in areas such as radiology (i.e., the use of multimedia in tandem with x-rays, scans, and ultrasound with voice-annotations capability). Collaborate with groups of primary care and specialized-care providers to meet a communitys healthcare needs through multimedia enabled healthcare delivery system.Using USHealthNet, clinical administrators can: Schedule patient appointments, diagnostic testing and reminders. Track and evaluate patient outcomes. Interact with payers for billing, collection and formularyUsing USHealthNet, a patient can: Input the entire family’s medical history directly into the USHealthNet data repository. Make appointments for office visits electronically or via the telephone. Use an optical card containing longitudinal electronic medical record heuristics. 6
  • 79. D R A F T  C O N F I D E N T I A L The USHealthNet Vision The USHealthNet vision is based on the belief that information sharing, communication, and coordination are vital elements of any collaborative endeavor. Within the healthcare domain, collaboration entails healthcare providers working together to deliver quality care to their patients in a timely and cost-efficient manner. Communication among providers and access to patient records will enable healthcare providers to make timely, informed decisions about their patients. The USHealthNet system will enable providers to use information from the most recent episode of care in the patient record. This patient-centric perspective is fundamental to quality health care. Information sharing, communication, education and coordination — crucial aspects of collaboration — need to be integrated in a transparent manner. We need facilities that respond to a user request or events on a timely and consistent basis (such as voice−database query response), and also facilities that query the network for information or keep track of data and provide automatic notification. Agent technologies are designed to provide these services. In this document, we outline specific agents relevant to patient-centric healthcare and have integrated various technology frameworks that facilitate collaboration. Standards-compliant healthcare networks must provide primary care providers, payers, and managed care organizations the infrastructure and impetus for change. Some of these organizations include a full service Community Healthcare Information Delivery Network integrated with Community Health Information Network Systems (CHINS), Community Health Management Information Systems (CHMIS), and Hospital Information Systems (HIS). In te rn e t C o n te n t P ro v id e rs E x tra n e t SMT H e a lt h C a r e C o m m u n it y : • In f o r m a t io n D is tr ib u tio n S e rv ic e s • E le c tr o n ic C o m m e r c eIn t r a n e t • S u p p o r t O p e r a tio n s P a y e rs P h y s ic ia n M a n a g e d C a r e S e r v ic e s : P ra c tic e • D a ta W a r e h o u s in g • C lin c a l R e p o s ito r y G ro u p s • M a s te r P a tie n t In d e x • O u tc o m e A n a ly s is P r a c t ic e M a n a g e m e n t S e r v i c e s : • B illin g & c la im s p r o c e s s in g • F a c ility a n d r e s o u r c e s c h e d u lin g • E le c tr o n ic M e d ic a l R e c o r d sFigure 2-1: Information Delivery Value Chain 7
  • 80. D R A F T  C O N F I D E N T I A LA uniquely integrated expert system can operate behind the scenes, enforcing aQuality Assurance Process for care/treatment management. This is achieved bymonitoring the Electronic Medical Records encounter form and other functionalareas.At the point-of-care contact, the physician or medical staff can invokeMediAssist , a Diagnostic Decision Support agent, by direct query or duringroutine examinations. Attending caregivers may be prompted if standardguidelines and Best Practices are being compromised. This could includeInternational Classification of Diseases (ICD-9/CPT) coding, formularycompliance, cross-referenced insurance plans, drug interactions, disease treatmentprotocols, and diagnostic test ordering.Realizing the VisionWith the implementation of the USHealthNet vision, the following point-of-carescenarios will become routine. These situations illustrate some of the features ofUSHealthNet.Outpatient Encounter ScenarioThe following narrative will examine a typical outpatient encounter in the nearfuture using the USHealthNet system.Patient RegistrationIndividuals may scan on-line physician referral listings, reading profiles of localhealthcare providers, through an Interactive-TV interface or personal computer.After selecting a physician, they can interface with USHealthNet’s local ElectronicMedical Records Registry (EMRR) and provide their medical history. This modelallows all authenticated users, on local and national levels, to have access toinformation that is appropriate for their function and role. The EMRR thenprocesses the information and issues intelligent optical cards containing a detailedsynopsis of the individual’s medical history.Appointment SchedulingWhen an individual becomes ill and needs to see his physician, he can interact withUSHealthNet’s Intelligent Scheduling Agent through the interactive-TV, PC orIVR interface. The Scheduling Agent is linked to healthcare facilities throughUSHealthNet’s secure Extranet (VPN). This software will trigger a programmedevent, which is queued with a workflow engine. Using business logic (rules) andthe expert systems agent services, the availability for the date, time and physicianrequested will be determined. Reminders are sent electronically and they may bereceived through interactive-TV interface, PC or phone mail box in either voice,video or text formats, depending on the patient’s profile. Patient-physiciancorrespondence, from lab test results to pre-natal videos and video-conferencingwill also be accessed in this way. 8
  • 81. D R A F T  C O N F I D E N T I A LThe Office VisitAt the end of each business day, USHealthNet systems generate an electronicchart pull list based on the following day’s scheduled patient appointments. Theworkflow agent then queries the local Computer-based Patient Records Registryand replicates a Java EMRR container to the NT-Intranet Server in the doctor’soffice. When the patient arrives for his scheduled appointment, his intelligentoptical card signals a small transceiver, in much the same way Caller-ID works.This provides the front office staff with a screen-pop detailing encounterinformation. This information is then queued and sent over a wireless LAN to apoint-of-care (POC) device in the examining room. The POC device collects andtransmits data in the Electronic Medical Records to USHealthNet’s EMRR datacenter repository for processing. The caregiver now has the most current medicalrecord information possible on this patient.During the office visit, the physician uses a Java-based pen tablet, NC or PDAwith voice and handwriting recognition to interact with a web browser to navigatethe encounter, billing slip, and Computer-based Patient Record. While reviewingthe patient’s medical history, lab test results and referral notes, the physicianformulates a working diagnosis. During this time, USHealthNet’s MediAssist candiagnose and present the physician with approved procedures, treatment plans andformularies based on scripted screen prompts and input from the physician.Using the POC device the physician and authorized staff can schedule diagnostictesting, prescribe medications, and send the prescription to any pharmacy or toUSHealthNet’s virtual druggist for next day delivery.Billing ProcessUSHealthNet can trigger the billing process by printing or electronicallysubmitting UB-92 insurance forms and invoices. This can be viewed remotely bypatients from their home or on the road, as can most other private healthcareinformation. The USHealthcare data center will process all receivables andcollections, as well as providing performance measurements and continuousimprovement to ensure quality healthcare delivery and efficient practicemanagement.Another advantage is USHealthNet’s data warehouse repository, which uses On-Line Analytical Processing (OLAP) tools to mine the data for patterns andbehaviors that can be used for clinical trials and outcomes, process improvementsand disease management.Specialist Collaboration ScenarioUSHealthNet allows/provides for computer-based collaboration of primary carephysicians with specialists. For example, the primary care physician is in a clinicand the specialist is in a regional hospital. 9
  • 82. D R A F T  C O N F I D E N T I A L The USHealthNet system will have the following capabilities: A primary care physician can order an x-ray or an ultrasound scan via multimedia mail by attaching a specialist’s required forms (i.e., when ordering an ultrasound scan, the primary care physician typically includes the prenatal flow sheets and the POPRAS form). A specialist can respond to a test ordered by the primary care physician via multimedia mail by including his evaluation with the test results. In the case of an x-ray, the radiologist would respond with the x-ray image and his interpretation. A specialist and a primary care physician can discuss a case in real-time via desktop conferencing. The MONET system has been customized for the healthcare scenario. In this system, the physicians will be able to see each other, talk to each other and share compound documents, type from the keyboard or include portions of the patient record and other important documents for pear feedback. Physicians can share an application such as a x-ray viewer and jointly discuss the data being observed. Physicians can mark up the x-ray during their discussion. The conference minutes can be archived. Voice recognition, speech-to-text and text-to-speech methods will enable digital transcribing of consultations with automatic soap notes updates. U S H e a l t h N E T IN F R A S T R U C T U R E P r o v id e r E P a tie n ts P r o v id e r D In te r n e t B a c k b o n e P r o v id e r C P r o v id e r B P r o v id e r A C P R -D B In tr a n e tt I n tr a n e R e p lic a te S erv er S erver H e a lth C a re E x tr a n e t V P N - C o m m u n itie s W i r e le s s In te r n e t LAN D a ta W A N In t e r n e t F ir e w a ll PPO F ir e w a ll F r a m e R e la y IP IP A PEN P EN T a b le ts T a b le ts W EB W EB S t a ff S e rv e r S e rv e r P h a rm a c y HMO A p p lic a tio n O LTP S ervers L A N /W A N D B S e r v e r C lu s te r S M T D a ta M e d ic a l C e n te r CPR DB C o n s u lt S c h e d u lin g D a ta W a r e h o u s e B i llin g W o r k f lo w C lin ic a l R e p o s ito ry S ta ff O LAP C o d in g X c la im s CC lin ic a l T a a ils /O u tc o m s lin ica l T r r ils /O u tc o m e es M a s te r P a tie n t In d e xFigure 2-2: USHealthNet Infrastructure 10
  • 83. D R A F T  C O N F I D E N T I A L Adopting a Patient-Centric Model A Patient-Centric Model (PCM) describes how operations that affect the patient are perceived, and whether those functional areas are adding value, consistency, and resolution. The single most important feature of a patient-centric system is the ability to communicate seamlessly, at any time, any place, and in any way. The key to this is USHealthNet’s dynamic and fluid communications infrastructure, shown in Figure 2-2. Developing USHealthNet’s™ infrastructure requires: Defining the core elements (information, systems and application architecture); Describing the functionality (information requirements); P L A N N E D “IT ” IN F R A S T R U C T U R E In te rn e t/In tra n e t S tr a te g ie s PP R O V ID E RO FF F IC E R O V ID E R O F IC E In te r n e t C o m m u n ity H o s tin g S e r v ic e s In tra NN e tSS e rv e r EE x te rn a lFF ire w a ll x te rn a l ire w a ll In tra e t e rv e r In te rn a t Backbone FF ire w a ll/In tra n e tSS e rv e r ire w a ll/In tra n e t e rv e r HH M O&& MO In s s . In . p h a rm a - PP ro v id e r ro v id e r HH o s p ita ls p h a rm a - o s p ita ls D ia l U p o r L e a s e d PP P O PO CC o m p . om p. cc e u tic a ls e u tic a ls PP o in too fc c a re(N CC ) o in t f a re (N ) L in e s In te rn aa lFF ire w a ll In te rn l ire w a ll O uu tp u tDD e v ic e s O tp u t e v ic e s VV P NG aa te w a y P N G te w a y B ra n c h O ffic e C O R PP O R A T E C OR O R ATE U S HUSHealhtNet Inrtr e r e t S e rv e r t r In tr a n e t S e v a n SS tra te g icPP la n n in g tra te g ic la n n in g D oo c u m e n tM aa n a g e m e n tW oo rk flo w D c u m e n t M n a g e m e n t W rk flo w U S H e a l t h N e t C o rp . FF in a n c e&&AA c c o u n tin g in a n c e c c o u n tin g aa n dPP u b lis h in g n d u b lis h in g PP u b licre la tio nn u b lic re la tio H TT M L PP D F DF SS G M L GML H ML R e m o te G r o uu p w a re U s e rs H R &&SS ta ffin g HR ta ffin g G ro p w a re C o n fe r e n c in g N e w s F e e d s &&ee m a il m a il C o n fe r e n c in g N e w s F e e d s D a ta W a re h o u s e e tc . . . P ra c tic e M anagem ent O PP E R A T IO N S O E R A T IO N S E n te rp ris e M a s te r E -C o m m e rc e P a tie n t In d e x B illin g O uu ts o u rc in g EE x tra N e t x tra N e t O ts o u rc in g C lin ic a l R e p o s ito ry C o n te n t S o u rc in g S c h e d u lin g PP ro d u c tio n ro d u c tio n P a rtn e r s h ip E M R /C P R M a rk e tin g CPR FF u lfillm e n t u lfillm e n t P ro d u c t/S e rv ic e s A n a ly tic a l R e p o rtin g M e d c o n s u lt. PP ro je c tM aa n a g e m e n t ro je c t M n a g e m e n t IT In fra s tru c tu reFigure 2-3: Organizational Structures Identifying environmental characteristics (operational, legal, administrative, socio-political, etc.); Applying the model to specific domains (health care); and, Applying the model to a specific enterprise. 11
  • 84. D R A F T  C O N F I D E N T I A LThe healthcare industry represents a model of communication, consultation andcollaboration. The USHealthNet vision is to work with the innovators in globaltelecommunications to maximize the potential of these networks. Over time wewill develop a repository of data for an international audience, thus building aGlobal Healthcare Community, cross-indexed by culture, language and geography.This concept of communities will be replicated across our communicationsbackbone, first by focusing on an extensive Intranet strategy linking localphysician practices to an Extranet Virtual Private Network (VPN). This VPN willinsure confidentiality on the network by connecting to the Internet through asecure gateway. The USHealthNet web site will consist of local, regional, andnational communities. USHealthNet’s™ partners in the telecommunicationsindustry will provide the content, products and services, and to be configuredsimilar to an N-tiered Electronic Commerce model. USHealthNet iASP datacenters will route transactions through intelligent electronic catalogs representingsuppliers wholesale merchants, distributors and retailers.The transaction model illustrating the transition from the current distributionchannels and supply chain logistics to the New Media vehicles and channels of theInternet is depicted below.The Virtual Private Network will be the gateway for providing practicemanagement services to physicians, providers and payers. This includes thefollowing functional areas: Computer-based Patient Records; Billing, receivables and collections; Resource scheduling; and, Staffing and payroll.USHealthNet will provide additional products and services in the area ofInformatics/Telemedicine. This will include video conferencing and imaging, andworkflow and document management.Electronic CommerceElectronic Commerce is the automation of business transactions and the directcomputer-to-computer exchange of information, business documents, and money.Electronic commerce can free information from paper, allow it to be processedand re-used with little human intervention for a multitude of purposes. 12
  • 85. D R A F T  C O N F I D E N T I A L The USHealthNet vision believes that electronic commerce can be used for the communication between providers and payers. This includes interactions with electronic medical claims companies, value-added networks, clearinghouses, and other organizations. USHealthNet Electronic Commerce Digital Content Channel Supplier Fulfillm ent and Logistics D eskTop Client GUI Electronic Vehicles Content Object Server Trans action & Workflow System s Libraries Interface Electronic M essage Electronic M ember/Prosp Delivery M essage ect Database Delivery decryption - decompressio Order n e- C atalog Product Library C onfigurator Digital Content Auto-Install Library Encryption & Material C ompressio Mgt. n m ail Logistics box M edical Term- M anagement Schedule & inology Library D ocument R outing Online Inventory Accounting Management Control Supply- System Third Party Chain Desktop Billing GUI metering M erchant WS N etw ork Training Library Snooper Multi- Electronic Publishing Product Library Kiosk Media Procedure & Secure D atabase Payment Diagnosis Processing REMOTE C odes H EALTH CARE MAN AGEMENT Content SGML Database Univeral Mail C EN TER Box Library Multi- Electronic Screen Media D ata Search Engine O rder Transaction GUI Phone Metering Fulfillment Interchange HTML D atabase Server Advertising Library Multi- Intranet Media Data Server Text Exception Warehouse PDA Processing Internat Secure Secure Backbone Second Firewall Firewall Opinion Remote Multi- PDF GUI Library WS Media R eport Internet C ontent Generation SNMP M IB S erver Sourcing W WW V ideo/Audi Patient o Publisher GUI R ecords System s Adm. WS Library M anagment Services M IS Reports Insurance GUI WS ITV Provider R eferral OODB U ser Library N ews Media GUI Content Adm. W S D atabase Adm. WS GUI License Product H elpDesk GUI HMO/PPO Electroni c Funds TransferFigure 2-4: Electronic Commerce Model The USHealthNet system also links healthcare providers, medical/surgical manufacturers and distributors, pharmacies, pharmaceutical distributors and claims payers, electronically. Summary In summary, USHealthNet system proposes to make healthcare in the U.S. more affordable and effective by bringing information systems and telecommunications technologies to the healthcare industry through a three-tiered service patient- centric model. 13
  • 86. D R A F T  C O N F I D E N T I A LThe patient-centric model reflects the future state vision for the high performanceenterprise and learning organization. It operates on the premise that all roads leadto the patient and therefore all investment decisions, including capital and humanresources, need to be aligned strategically across all points of patient contact. 14
  • 87. D R A F T  C O N F I D E N T I A L ChapterTIER 1: PHYSICIAN/PROVIDER GROUPST he physician’s office will be the area most obviously affected by USHealthNet from the perspective of the patient and the staff. It is in this setting that USHealthNet will show its advantages most clearly.OverviewFrom the time the patient enters the physician’s office, USHealthNet servicesstreamline the physician/patient encounter process, thereby invoking patient,physician, and office staff satisfaction. With USHealthNet, patients and physiciansneed no longer waste time using outdated methodologies or be concerned withrecalling diagnoses and prescription dosages.Tier 1 of the USHealthNet hierarchy features three integrated services: Provides a migration path from a paper-based record keeping system to a Electronic Medical Record System (EMR); Provides a decision-support system to the physician (MediAssist); and, Automates all aspects of practice management using the Practice Management System.Physicians and administrators access USHealthNet services through a workstationconnection to a wireless Intranet LAN and gateway to the USHealthNet VirtualPrivate Network (VPN). A Point of Care (POC) device, located in the treatmentroom or carried by the physician, provides information about the patient. Allpatient information is stored in a Computer-Based Record System (EMR). TheEMR comes with an innovative Clinical Decision Support System, MediAssist.Electronic Medical Records SystemCurrent health information systems do not adequately reflect appropriateness ofpatient care treatment decisions nor the ability to analyze the real costs associatedwith that care. This lack of support is reflected in the incomplete capture ofpatient data and the sometimes inaccurate coding of patient medical diagnoses forreimbursement. 15
  • 88. D R A F T  C O N F I D E N T I A L The USHealthNet Electronic Medical Records System (EMR): Facilitates the capture, storage, processing, security, and presentation of electronic medical records Supports all healthcare provisioning and organizational processes Provides a communications link to related data and knowledge systems Meets all clinical, legal, and administrative requirementsFigure 3-1: EMR System Components CORBA Services CORBA Services IIOP Kerberos Authentication HTTP HTTP Vertical Vertical Obstetrics Pediatrics Oncology Plug-In Plug-InScriptPAD : Patient/Guarantor Care Plans /Benefits Care Management:•Drug Query Services Information •Problem List•Drug - Interactions •Episodes•Drug Side Effects OODBMS Core EMR Engine RDBMS •Encounters•Drug Dosages •Clinical Pathways Primary Care Drug and Allergy•Patient Information Family History •Protocols Physician History •Payor Formulary (Rules Based) Workflow (Rules Based) Workflow & Forms // Template Engine & Forms Template Engine Care Map Editor Care Map Editor Inference Engine & Natural Language Processor Inference Engine & Natural Language Processor Knowledge Services UMLS: Medical Vocabulary- Lexicons- Ontology’s Third Party Health Care Content The EMR system provides for the collection, merging and processing of information from multiple, diverse sources. For example, text, audio, video, images, graphics, and digitized x-rays can all be stored as part of the patient record. The flexibility of the EMR system allows each department, service, specialty, or caregiver to create views, reports, graphs, and other on-screen and hard-copy output custom tailored to the individual or function. 16
  • 89. D R A F T  C O N F I D E N T I A LBackgroundCurrent information systems merely describe the patients ailments and thetreatment rendered. Data is stored in ways that hinder retrieval and makingcomparisons between patient groups with similar complaints/symptoms difficult,if not impossible. In many healthcare settings, patient information is stored onpaper because of “quill pen laws” that require handwritten signatures.Another problem with the current state of medical record keeping is that, in manycases, patients have insufficient information to make informed choices about thehealth insurance plans, health institutions, and providers available to them.Conversely, providers of care have insufficient means to keep abreast of all thecurrent information generated in their specialty fields. Moreover, they are oftenunable to garner all relevant information on a patient when making medicaldecisions. Health organization administrators are hampered in their ability tomerge administrative and clinical information to make rational choices concerningresource allocations, quality of care, and product and service pricing. Payers haveinsufficient information to determine which formularies and which providers yieldthe best value and measured outcomes for their clients.A Electronic Medical Records (EMR) system includes all the elements thatfacilitate the capture, storage, processing, communication, security, andpresentation of patient information. The EMR system supports healthcareprovisions and organizational processes and provides communication links torelated data and knowledge systems.Specific functions must be in place for Electronic Medical Record System tosupport the provision of healthcare in any organizational context. The EMRsystem provides these functions, as well as links to domain-specific operationalprocesses.Electronic Medical RecordAn EMR contains information about an individuals lifelong medical history, fromboth structured and unstructured data. Three things characterize this information:1. Content (categories of data from multiple sources for different uses by multiple users);2. Representation (structure – natural language or an abstraction thereof, and form – text, voice, image, etc.); and,3. Time continuum (providing a chronology of health information across an individuals life).The EMR replaces the paper medical record as the primary record of care whilemeeting clinical, legal, and administrative requirements. The EMR is also morecomprehensive than todays medical record because it integrates information frommultiple sources and provides decision support. The EMR is the primary sourceof information for patient care. 17
  • 90. D R A F T  C O N F I D E N T I A LInformation technology now permits much more data to be captured, processed,and integrated. The Electronic Medical Record is not a single repository ofinformation, but a collection of health information from disparate sources. Forexample, x-ray images previously stored separately from the medical record can bestored digitally with their interpretation in the computer-based patient record.Likewise, technology may enable the digital storage of a videotaped consultation inlieu of a separately compiled report; summarization can occur through theabstraction of key elements.The Electronic Medical Record integrates health information from externalknowledge bases to supply rules-based, logic-driven decision support. Thisdecision support illustrates the significant impact the EMR system has onhealthcare process and outcomes.A Electronic Medical Record is most beneficial when users actively integrate itwith patient care. The EMR’s point-of-care, real-time use provides the mostcomplete and accurate data resource available, as well as the opportunity torespond to reminders and alerts as they are generated. The EMR is also a resourcefor use beyond direct patient care. Patient data contributes to healthcare bypromoting the evolution of data on the effectiveness and efficiency of clinicalprocesses, procedures, and technologies. The EMR contributes significantly to theenhancement and management of the healthcare system’s discipline of datacollection and its subsequent use.Information ProcessingApplication functions enable the effective processing of data from all sources intouseful information. This ensures the compilation of a comprehensive record ofcare that may be used in patient care and administrative processes. Thesefunctions include the planning of care, resource scheduling and deployment,decision support, caregiver problem solving, rationales for clinical decisions, aswell as the continuity and completion of patient care processes.Compilation of a Comprehensive Record of CareA comprehensive record of care incorporates all types of patient care services andprovides information for patient care, business management, complying withthird-party requirements, and scientific advancement. Information is presented ina systematic and uniform manner, which is also flexible for localization.Information compiled through the EMR system is comprehensive. It includeshealth data about illness and injuries, as well as genetic background,immunizations, risk factors, behavioral data, environmental factors, and healthstatus. This information is drawn from an array of sources: administrative (patientdemographics), provider identification, financial data, and legal documentation(i.e., consents, authorizations, and advanced directives). Information is integratedlogically from any unit in the healthcare organization that collects data: anemergency department, inpatient/outpatient hospitalization, an ambulatory careclinic, home health care, or a nursing home. 18
  • 91. D R A F T  C O N F I D E N T I A LPatient Care ProcessesThe EMR system fosters the integration of clinical information withadministrative data to schedule events, assign responsibility, project resourceutilization and costs, initiate processes, and coordinate associated events.Specifically, the EMR system enables: 1. The use, monitoring, customization, and evaluation of care protocols. 2. Problem lists development, maintenance, and updating in real-time. 3. The integration of patient data with external data from knowledge sources to supply rules-based, decision-support for condition-predicated actions. These include notifications, alerts, prompts and reminders about duplicate services, conflicts, interactions, scheduled events, and required follow-up. 4. The EMR system documents healthcare provided and the rationale for clinical decisions.Retrospective data management is provided through the EMR system to conductproductivity assessments, variance analyses, standards compliance, performancereviews, epidemiological surveillance, ad hoc queries, and audit trails. The systemcould also supply selected information for community, state, and regionaldatabases, third-party payers, communicable disease reporting, accreditationrequirements, as well as education and research.The EMR system provides not only for the creation of an individual patientshealth record, but also the ability to link multiple patient populations whereappropriate. For example: mother and child, multiple births, next of kin, familygroups, guarantors, insured and subscriber, and emergency contacts.Information processing displays quantitative data, as well as tabulating, arranging,graphing, collating, comparing and contrasting, summarizing, and performingother mathematical analyses. It would also index, code, classify, and formatqualitative data. As a multimedia record, it would integrate text, audio, video,image/graphics, and waveforms.Figure 3-2 shows how USHealthNet’s™ Electronic Medical Record linksinformation to users in the medical community, including the provider’s office. 19
  • 92. D R A F T  C O N F I D E N T I A L PROCESS & INFORMATION LINKAGESFigure 3-2: Process and Information Links Provider Practice USHealthNet Data Center Patient Billing HMO/PPO TSR Information Presentation Patient Billing HMO/PPO TSR Insurance Office Automation Insurance Service/Support The wealth of information available through the EMR system will be managed so Office Automation Providers Providers Service/Support those authorized users receive the information they need in a format they prefer. Scheduling Hospitals Administrative Scheduling Providers, for example, may Hospitals customized views of data by patient, source, desire Administrative provider, encounter, problems, dates, or other variables. Data can be presented in Medical Consult Medical Consult Clinics Clinics detail or summary form. Graphical user interfaces and other emerging ease-of-use technologies can accommodate tables, graphs, narratives, and other formats for Education Education the display of information. Information Information Suppliers Suppliers The EMR system will be sufficiently flexible so META each department, service, Computer-Based that Product Product specialty, or provider canRecord Patient create customized views, personal order sets, patient- DATA CATALOG Suppliers Suppliers centered care plans and critical paths, special notifications, and tailoredService lists. work Service Personal Details Suppliers Personal Details Suppliers Selective retrieval also helps maintain patient confidentiality. For example, some users may need toMedicalDetails know only of the presence or absence of certain data, not the Medical Details Marketing Marketing nature of the data. Identifying information could be removed so that the data could be used Insuranceeducation or research. This is accomplished Care for Details Insurance Details Health through Health Care USHealthNetNet’s™ clinical workstation which is the front-end to our SHARED OPERATIONS repository. Accounting Detais Accounting Detais DATA REPOSIT Finance Finance Outcomes Management Outcomes Management Related Data and Knowledge Bases Access to related data and knowledge bases which contain medical literature, clinical guidelines for diagnosis and treatment, outcomes studies, and medication alternatives is integral for the EMR to enhance the healthcare process and results. There is a continuum of sophistication in information processing regarding related data and knowledge bases. Specifically, this includes the ability to display aggregated data in multiple formats, accessing similar cases for comparative studies, as well as decision-support systems (comprehensive rules-based, logic- driven alerts, reminders, and forecasts). Basic use of data and knowledge bases can be found in an EMR system that plots laboratory test results over time in a table or graph. A more sophisticated process could integrate laboratory data with vital sign and medication information. The EMR system could also compile patient information characterized by similar diagnoses and treatment protocols. Data and knowledge bases could also display pricing information for medications, or instructional material for alternative treatments for common conditions (i.e., prostrate problems). The computer can integrate data from external sources and effectively display this information. Information from these resources can provide significant value to the user. Examples of useful external resources include: 20
  • 93. D R A F T  C O N F I D E N T I A L Procedure pricing database; Pharmaceutical formulary database; Physician referral database; Medline; Videotape resource library; and, Scheduling system.Consumer health education may also be included in data and knowledge basesupport. Access to the Internet and its forums, chat rooms, bulletin boards, lists,and e-mail provide a growing and important source of information for patients.Some patients may access Medline and other scientific information; however,much of this information is "unfiltered." This means that there may not be ascientifically recognized authority associated with the information. The influenceof this information could be significant.EMR SummaryThe USHealthNet Electronic Medical Records Management System is a vital toolto augment the accuracy, efficiency, accessibility, and control of patient recordmanagement.Below is a summary of the main features: Allows for complete progress notes; Maintains problem lists; Provides user-definable patient medical , social and family histories; Tracks patient medications and allergies; Stores patient vital signs, immunization record and health maintenance status; Maintains complete laboratory data; Stores correspondence, including consultations and letters; Provides user-definable categories of patient information; Tracks patient prescriptions and identifies harmful interactions and contraindications; Prints patient records and summary sheets; Stores x-ray, EKG, pathology, special studies, and microbiology data; Contains highly selective progress note retrieval capabilities; Exports selected data for statistical analyses (useful for research or education); and, Allows remote access (i.e., from home, hospital, or clinic). 21
  • 94. D R A F T  C O N F I D E N T I A LThis comprehensive system allows the collection and storage of complete progressnotes, problem lists, past medical history, laboratory data, vital signs, medications,and health maintenance status  without changing how medicine is practiced.The EMR user interface is sophisticated, yet easy-to-use. Most patient data isentered directly from progress notes; the EMR automatically updates new patientinformation, entered directly or through transcriptions. This means that all patientrecord data is the most current information available on the patient’s medicalstatus.The EMR system maintains complete progress notes, allowing the user to decidewhat information should be contained in the patients medical, social and familyhistory and in what order it should be displayed. Problem lists, medications andallergies are displayed on the chart summary screen for quick reference. Completehealth maintenance and immunization status is recorded using either standard orcustomized templates, depending on each patients requirements.As rich as these requirements may appear, their impact is not fully realized withoutthe integration of other components, which are detailed in the following sections.MediAssist™MediAssist is a Clinical Decision Support System (CDSS) designed to assist theclinician in determining the patient’s diagnosis or the condition underlying his orher complaint. MediAssist can suggest one or more possible diagnoses based onthe patient’s medical records, signs and symptoms, physical findings, test results,and background information.MediAssist functionality includes patient diagnosis, drug dosage determination,preventive care reminders, and active (diagnostic or therapeutic) care advice.MediAssist may be invoked by direct query by any caregiver. It is tightlyintegrated with the USHealthNet EMR module.Drug Dose DeterminationThe MediAssist system can assist the clinician in determining the proper dosage ofa specific drug, either as an exact quantity or as a recommended range, for aparticular diagnosis and patient, cross-referencing data points in medical recordswith health plan/payer formularies. The algorithms in the knowledge base thenascertain the proper dosage of the drug being prescribed. MediAssist also providesa hyperlink to an on-line Physician’s Desk Reference (PDR) and drug-interactionsknowledge base. 22
  • 95. D R A F T  C O N F I D E N T I A LPreventive Care RemindersMediAssist is designed to remind the clinician to administer preventive healthmaintenance services when necessary; examples include retinal examinations fordiabetic patients and routine immunizations. Computer-aided diagnosis and drug-dose determination are usually designed to provide a single report on a specific setof data on a patient; a preventive care reminder module, however, requiresrepeated input of data on the patient over a period of time. This includes not onlythe patient’s diagnoses and other clinical characteristics, but also the treatmentsand tests administered and their dates.Additional examples of preventive care reminders include blood pressuremonitoring and cervical cancer screening. MediAssist elicits backgroundinformation and risk factors from patients, then compares this information todetailed preventive care guidelines, identifies potential problems, and recommendsappropriate interventions.Active-Care Advice MediAssist is designed to assist the clinician with preventive diagnostic ortherapeutic procedures (including pharmaceutical treatments), particularly forpatients suffering from chronic health problems. MediAssist’s active-careadvisory module requires input from the EMR system on the patient’s healthproblems, tests, and treatments over a period of time. MediAssist specifieswhich diagnostic and therapeutic procedures should be performed at each stageof the health problem presented. MediAssist computer-based clinical advice cantake five basic forms: 1. TREATMENT RECOMMENDATIONS (including pharmaceuticals). MediAssist can provide diagnostic and treatment advice. For example, a DSS would recommend the appropriate antibiotic for patients with meningitis, based on any known allergies of the patient and the organism’s sensitivity. This information would be derived from an EMR. 2. REMINDERS to perform specific diagnostic or therapeutic procedures for patients with chronic health problems, such as adult respiratory distress syndrome. 3. ALERTS regarding potentially adverse events based on abnormal test results. An example might be a deterioration of the patient’s condition. 4. FEEDBACK and PROMPTS regarding testing and treatment options, physician orders, and the entry of information on the patient’s medical history. Specific Feedback and Prompts include: Possibly injurious effects from drug and dietary supplement interactions; Possible conflict or redundancy between diagnostic tests ordered for a patient; Projected test results based on the patient’s history and current clinical condition. If the probability of an abnormal result is low, the provider can reconsider whether the test is appropriate at that time; 23
  • 96. D R A F T  C O N F I D E N T I A L Results of previous tests that are similar to the one being ordered; this allows the provider to reconsider whether the test needs to be repeated at that time; The cost of a test or treatment; this allows the provider to do a risk-benefit analysis and reconsider whether it is appropriate at that time; and, Alternative tests or treatments that would be less expensive than the one ordered. 5. PROGNOSES of intensive-care unit patients. These prognoses are based on the severity of the illness (using vital signs and other physical measures) and physiological reserve (age and general health). MediAssist is also used to determine the severity of the illness and risk-adjusting outcome measures. An expanded prognostic model is designed to predict survival to 180 days (rather than to discharge); it includes patients who are not acutely ill.Health Maintenance TrackingThe Health Maintenance module is invaluable for improving patient care.Standard health maintenance templates, based on age and gender, comprise astandard dataset within the system. These templates may be customized to trackhealthcare requirements for groups of patients or individuals more closely. TheHealth Maintenance Tracking system reminds the user about a patients healthmaintenance needs on each visit. It also generates patient reminder cards for pre-and post-visit follow-up.Laboratory DataThe USHealthcare Medical Records System stores complete laboratory dataincluding CBC, urinalyses, blood chemistries, microbiology, special studies, andmiscellaneous tests. Abnormal results are flagged and are easily distinguished fromresults in the normal range. The system also records the results of diagnosticprocedures such as EKG, pathology, and x-ray reports.Medical Tracking with Drug Interaction DatabaseThis system tracks current and previous medications, presenting collectedinformation chronologically in a multi-date inquiry. Prescriptions are printedquickly and accurately, enhancing patient relations and ensuring precise results.Prescriptions are printed on standard prescription forms. They include refilltracking, drug allergies, and contraindication information.A complete drug interaction database is integrated with the Computer-basedPatient Records System; this feature allows the provider to maximize accuracy andefficiency when prescribing medications. The system supports full Electronic DataInterchange protocol standards for electronic transmission through the InternetHealthcare Community’s virtual pharmacy (EDI. x.12 and x.435). 24
  • 97. D R A F T  C O N F I D E N T I A LElectronic SignaturesWhether a progress note is entered directly by the physician or dictated and thentranscribed, the physician is required to sign the note electronically. Thiselectronic signature is password-protected as well as encrypted for completesecurity. Digital certificates and authentication mechanisms enable additionalsecurity levels to be implemented depending on the organization’s policies.Managed Care and Outcomes ManagementUSHealthNet’s Managed Care System offers administrative functionality formanaging relationships with managed care carriers and for monitoring andanalyzing the profitability of individual contracts. This Managed Care System letsoffice staff handle the requirements of participating in managed care withoutdisrupting the practice. This results in significantly enhanced informationmanagement through more efficient data collection techniques.Summary of MediAssistDecision support provides interpretive information processing. It is based onlogical conditions or rules, but still displays practicable results for the provider andpatient to use when making healthcare decisions. For example, the medicationpricing display could be expanded to include providing alternative medicationsbased on a patients profile. This provides the ability to make choices that are bothefficacious and cost effective.Practice Management SystemUSHealthNet Practice Management System performs powerful billing andaccounts receivable functions that meet the requirements of solid financialmanagement. This service can meet a diverse array of requirements for all types ofmedical practices: single physician offices as well as large multi-physician, multi-specialty group practices.The USHealthcare Practice Management System is integrated with the EMRsystem and the MediAssist module to provide the following functions: CPT/ICD-9 reimbursement coding, billing, accounts receivable and collections; Electronic claims submission and EFT through factoring of receivables; Practice management reporting and clinical outcome analysis; Appointment, resource and facility scheduling; Medical records, treatment and disease management ; Financial and cost accounting; Document, image and workflow processing Medical practice management consulting; Managed care and outcomes management; 25
  • 98. D R A F T  C O N F I D E N T I A L Insurance tracking; and Process re-engineering.Each of these features has been designed for simplicity of operation, ease of chargeentry, audit control, and on-demand reporting to provide the highest level offunctionality and operations.Billing and Accounts ReceivableThe USHealthNet billing and accounts receivable function includes open-itemprocessing, which is the most critical feature for maximum utilization of anypractice management system. It also features split billing capabilities for insuranceand self-pay services, automatic printing of third-party forms, account aging basedon billing dates, and report generation capabilities that include Collection Reports,Unpaid Claims Reports, and Procedure Analysis.Practice Management ReportingThe reporting function of practice management represents one of the mostcomprehensive sets of management reports available to medical practices. Itprovides a true analysis of a practice’s financial history, its current position, as wellas projections for the future. This practice analysis is available through reports thatmonitor patient movement, physician productivity, collection ratio by payer, andcontractual receipt analysis.Custom TemplatesThe USHealthNet Custom Templates function enables medical and clericalpersonnel to record and analyze medications, treatments, test results, and otherdata related to patient care.Electronic ClaimsThe Practice Management System is designed to submit claims electronically anddirectly to Medicare, Medicaid, Blue Cross, or an HMO. Electronically submittedclaims are paid more quickly, and the possibility of data entry errors is eliminated.Sophisticated file transfer and error checking routines ensure data integrity; hardcopy reports maintain a clear audit trail. 26
  • 99. D R A F T  C O N F I D E N T I A L Claim Transaction Flow Correspondence FROI IW Provider FROI ID Card PBM FROI Treatment Plan 148 Managed 278 MCO Data Center Facility Care Facility 148 278 824, 997 FROI 148 EDI Mailbox 148 Gentran 824, 997 148 148 Employer 148 816 824, 148 997 148 Claim Treatment Gentran 816 Data Claim α/β/γ Plan Claim Data Performance Errors Data Tracking date Errors API Claim data PARTNER α/β/γ=date Claim/ Claims MCO Risk Claim ChangeNSP Processing Data Claims Outcomes Data and Claim Data Claim MCO Claim Reporting Data MIIS Appointment Scheduling The USHealthNet Appointment Scheduling function is a fully integrated component that helps provide consistency and accuracy in scheduling patient appointments. It can be tailored to the requirements of individual providers and locations and is completely integrated with patient demographic information. Financial Accounting In order to meet the financial reporting requirements of medical practices, USHealthNet’s financial accounting functions include payroll, general ledger, and accounts payable. These sub-systems enable a practice to produce operating statements, balance sheets, payroll checks/registers, W-2 forms, and vendor analyses. Document Processing The USHealthcare approach to a practice’s word processing needs is WordPerfect. WordPerfect’s word processing, formatting features and user- friendly interface allows users to quickly and efficiently produce crisp, professional-looking letters and documents. 27
  • 100. D R A F T  C O N F I D E N T I A LMedical Practice ConsultingUSHealthNet s Practice Review Analysis contains a variety of graphs depictingvital statistics culled from the practices month-end reports. The presentationreport will contain analyses of both practice and individual provider totals. Thesegraphs and statistics provide analyses for the following:Practice Totals Practice by provider; EM service levels against a bell curve; Payer mix of practice (pie chart); Aging by payer mix (pie chart); Aging of services and payments by payer mix; Chart comparison of the number of new patients in a given time period; Chart comparison of the number of patients seen in a given time period; and, Chart referral analysis information by dollar volume for the top 15 referring physicians.Individual Provider Totals EM service levels against a bell curve; Payer mix of provider; Aging by payer mix; and, Aging of services and payments by payer mix.Each physician would receive a copy of the practice totals report, as well as his orher own totals. A master copy of all the analyses will also be included.Individualized ChartsEach physician or user may enter progress notes in a way that works mostefficiently for him or her. Templates may be used to standardize or customize thedata entry process, or the entire note may be entered in free-form text. Thetemplate process uses a building block methodology, where the user chooses theorder in which the data appears. This allows templates to be as simple or ascomplex as the user prefers.Tracking the Insurance PlanThe USHealthNet Managed Care System tracks critical information at theinsurance plan level. This allows the system to accurately track capitated, fee-for-service, and non-covered services on a procedure basis for each benefit plan.The system maintains eligibility dates for insurance coverage, alerting the operatorfor non-covered services due to ineligibility. This allows the user to bill the patientor a carrier to expedite reimbursement. 28
  • 101. D R A F T  C O N F I D E N T I A L A practice may develop and maintain custom screens and reports for entering, tracking and printing referral authorizations. Provider T ransaction Flow P rov A pp. P rov. P rovide r C orresp. V erbal C ontract M anaged P rov. A pproved M CO A pp. P rov.D ata C enter Facility C are F acility A pp. 996? EDI G entran M ailbox P rov. W eekly D ata 996? P rovider U pdates P rov. G entran P rov. D ata D ata A PI MCO W eb P rov. P anel M IIS D aily S ite D ata P rov. P roviders C laim s P rov. (future) CARE D ata F TP C orresp. D ata P rovider MCO P aym ent P rov. Da ta Q uarterly Prov. L ist for N ew A ppsPBM P rov. D ata Q uarterly Prov. L ist P rov. D ata Profitability Reporting The USHealthNet Managed Care System also offers comprehensive management reporting for analyzing the profitability of health plan participation. Through detail or summary reporting, the system compares standard fee-for-service rates against capitated payments. Capitation methods include per member visit per month, per member per month, and flat fee per month. These reports provide administrators with concise management data on each individual plan. RBRVS Tracking and Analysis A complete RBVRS system is included with the USHealthNet Managed Care System. RBRVS fee schedules may be maintained in addition to standard fee-for- service fee schedules, with an RBRVS calculator for checking calculations. The system maintains historical payment information and allows RVS fee maintenance for any carrier. 29
  • 102. D R A F T  C O N F I D E N T I A LDiagnostic Coding SoftwareThe keys to reimbursement are fully describing patient encounters with accurateand medically specific diagnoses and coding bills correctly. The emergence ofRBRVS and the new Medicare coding regulations have made coding accuratelyessential in order to avoid arbitrary down-coding and rejected claims.Until recently, ICD-9 codes did not affect reimbursement; most practices thoughtof their diagnostic coding as a simple "fill-in-the-blanks" process. In the ever-changing coding game, however, Medicare and other carriers have linkedreimbursements to the ICD-9 codes submitted for reimbursement.By avoiding not-otherwise-specified (NOS) codes and using the most accurate andspecific code available, a practice will maximize reimbursements from insurancecarriers build a more accurate practice profile and greatly reduce the chances ofhaving a Medicare audit. Previously, coding from a superbill was adequate fordiagnosis coding; however, with the new coding regulations, Medicare hasannounced it will audit the inordinate use of NOS codes. Because of spacelimitations, superbills traditionally have relied heavily on the use of NOS codes.Physician’s practices now need to code more accurately and thoroughly in order toproperly document every patient encounter and maximize reimbursement.USHealthNet’s ICD-9 codes use a Ranking System that assists in coding the"Code Underlying Disease" and "Use Additional Code" schema as well asaccurately sequencing multiple diagnoses to the AHA guidelines. This results inthe most appropriate diagnosis for reimbursement being ranked first.A few key strokes is all that is needed to specify codes for more than 55,000diagnoses in a fraction of the time it takes to identify them in a book or acomputer file. A 4th or 5th digit menu is shown for any diagnosis code that musthave a digit or digits appended to the base code to achieve the highest level ofaccuracy.“E-Codes”, "Code Underlying Disease," "Use Additional Codes," and “AIDSCodes” are pre-programmed to make the process of coding easier and less timeconsuming for the coder. The automatic prompts save the coder time and energybecause the additional information needed is accessible with a single keystroke.Integrating USHealthNet’s ICD-9 codes directly into the Practice ManagementSystem maximizes the benefits of this system. This integration allows data entryoperators to code completely and accurately during the charge entry process; thisensures that the correct codes are submitted for reimbursement.Practice Management System SummaryFor cost reduction and more efficient use of personnel and equipment, thePractice Management System is an essential component of USHealthNet It is asolid financial management tool with billing and accounting functions, electronicclaims submission, financial and cost accounting, and much more. 30
  • 103. D R A F T  C O N F I D E N T I A LSummaryFrom increasing accuracy, efficiency, and accessibility, to controlling all aspects ofpatient record management, USHealthNet Tier 1 services is a vital component inthe healthcare provider’s office.The comprehensive Electronic Medical Records System allows storage ofcomplete progress notes, problem lists, past medical history, laboratory data, vitalsigns, medications, and health maintenance status  without changing the way aphysician practices medicine.The EMR system maintains complete progress notes, allowing the user to decidewhat information should be contained in the patients medical, social and familyhistory, and in what order it should be displayed. Problem lists, medications andallergies are displayed on a chart summary screen for quick reference. Completehealth maintenance and immunization status are recorded, using either standardtemplates or by customizing for an individual patients unique requirements.The MediAssist system provides true decision support, adding the dimension ofprocessing that offers treatment advice and recommendations based on logicalconditions or rules. This support system enhances the physician’s ability to makechoices that are both productive and cost effective.The Practice Management System provides functions needed to manage anefficient, cost-effective medical practice. For cost reduction and more efficient useof personnel and equipment, the Practice Management System is a vitalcomponent of the Tier 1 services at the provider office.What’s Next?Although physicians and administrative personnel access Tier 1 services from theirpractice location, these services will be stored and managed at the USHealthNetService Center.The USHealthNet Service Center forms the Tier 2 service offering in theUSHealthNet solution. USHealthNet’s Service Center will handle the accounting,billing, and claims submission for each provider office transparently andautomatically. 31
  • 104. D R A F T C O N F I D E N T I A L ChapterTier 2: USHealthNet SERVICE CENTERPLATFORM- (IASP)T he last five years have seen the shift to managed care drive healthcare providers from a hospital-centered focus to a patient-centered focus.More than 80 percent of the 5,500 acute-care facilities in the United States arenow affiliated with some type of health-care network. This figure is expected toincrease to 100 percent by the year 2000, when experts predict the market will beconsolidated into just a few hundred large, affiliated, integrated-delivery systems(IDS).OverviewThe shifts in the health-care market mean that potentially most providers will joinextended enterprises, which will seek to differentiate themselves in order to attractphysicians to their networks. To be successful, many enterprises will re-engineerthe healthcare process by emphasizing the sharing of clinical information.Information systems, once limited to bill processing, will focus on patient-centered computing to support the analysis and improvement of patient care andto effect cost reductions.To support the challenges of increasingly complex and heterogeneous computingenvironments in the healthcare industry, enterprise information technologyinfrastructures require higher levels of inter-operability between applications.USHealthNet is meeting these challenges through the services of USHealthNetService Center, the second tier and the kernel of the USHealthNet infrastructure.Tier 2 FeaturesThe USHealthNet Service Center maintains the data and applications that supportthe EMR system and the Practice Management system used by the provideroffices. It also maintains a data warehouse, clinical repository, Enterprise MasterPatient Index (EMPI), and a front-end/back-end electronic commerce system toprovide services across the Internet to the international medical community. 32
  • 105. D R A F T C O N F I D E N T I A LThe data warehouse stores all patient information, both clinical and financial. Dataflows between the data warehouse, the Enterprise Master Patient Index, the EMRand PMS databases as information is accumulated at the point-of-care. In addition,USHealthcare extracts data from the data warehouse into a clinical repository foranalysis by various members of the healthcare community.All members of the healthcare community, from providers to payers, will benefitfrom these services through: More efficient clinical management; Increased quality control; Reduced costs; More accurate billing; and, Support for clinical and health services research.Data StorageThe health sector has lagged far behind other sectors of the economy in applyinginformation and communication technologies. As a result, valuable patientinformation is entered multiple times and it is not widely shared. Paper output ismanually filed into patient records.Patient records stored on paper do not provide for efficient clinical management,quality control, cost allocation, accurate billing, or easy access for clinical or healthservices research. The paper record is often not available to the clinician whenneeded.The course of the patient through the health system is frequently obscured by thelack of documentation on decisions, consultations and the sequence ofinterventions the patient experiences. Thus, it is difficult to trace a patient’smedical history and it is impossible to aggregate data across a large number ofsimilar patients. In addition, it is unlikely that all useful medical knowledge can beextracted from the ongoing treatment of the patient.Without reliable and comparative performance feedback to the healthcareprovider, it is unlikely that improvements in care can be effected. Reliablefeedback requires uniform vocabulary and coding standards for healthcareconditions, diagnoses, and procedures.Furthermore, without an active communications interface among providers, it isdifficult to bring the rapidly growing knowledge from biomedical research toproviders and patients, especially in under-served urban and rural areas.The ultimate goals of data storage are to generate knowledge about the treatmentsand technologies that work best for specific clinical conditions, to have thisknowledge available at the point of service, and to provide medical decisionsupport to providers and their patients.USHealthNet can help attain these goals by: Supporting patient and administrative data analysis; 33
  • 106. D R A F T C O N F I D E N T I A L Assisting in data evaluation; Disseminating data; Converting data into useful knowledge; and, Protecting data confidentiality. The geographical variations in medical practices regarding the best treatment for patients with similar conditions have elevated concern about the quality of care being delivered. Analyzing patient data from communities and providing feedback about these findings to providers and consumers can help improve the quality of care. It can also help promote life-long learning for healthcare providers who find it difficult and time-consuming to keep up with the flood of new information in biomedical research and clinical practice guidelines. Data Warehouse Todays competitive business environment combined with more affordable computing power has had a significant impact on business systems, creating a need for ever more complex analyses of increasing volumes of complex data. G LOBAL INFO RMATIO N W AREHOUSE ARCHITECTURE Government, int’ l l Government, int’ Tradi ng partners Tradi ng partners locations, etc. l ocations, etc. V A N or PDN M ulti ple enterpri se External al iases directory EC server/switch (access controls) Enterpri se di rectory server Standard fformats Standard ormats M apping M apping Document database IInternal formats nternal formats E-mail directory Updates I nternal di rectory synchronizati on Document database E-mail di rectoryFigure 4-1: Data Warehouse Architecture 34
  • 107. D R A F T C O N F I D E N T I A L On-line Analytical Processing (OLAP) One of the technologies resulting from the need to turn the vast amount of business data into meaningful business intelligence is data warehousing and on- line analytical processing (OLAP). OLAP data storage optimizes decision support and keeps this data separate from the operational data from which it is derived. This technology offers many advantages: Data can be managed to support fast, parallel and multi-dimensional queries; Derived metrics can be effectively computed; and, Data integrity can be assured when loading the data into the warehouse as part of an archival process. Figure 4-1 illustrates the data warehouse architecture. Figure 4-2 illustrates the application tools that create and access the data warehouse. DATA WAREHOUSE Legacy External databases data sources Data transformation products Data Managers: RDBMS’s, multidimensional databases Metadata catalog Enterprise data Data-access interfaces Transaction and messaging middleware Access and OLAP tools Development tools New information systems Decision Support On-Line complex Transaction Systems processing systems processing systemsFigure 4-2: Data Warehouse Application Suite 35
  • 108. D R A F T C O N F I D E N T I A LRetrieving data from a data warehouse often receives less attention than it meritsfrom warehouse architects. Fortunately, OLAP technology allows accessingbusiness data in a meaningful, intuitive way. In this respect, OLAP is a knowledgemanagement technology.Understanding the significance of OLAP requires an understanding of the multi-dimensional nature of todays healthcare data. One of the key features of OLAP isthat users can navigate through data in any way that makes sense to them, withoutplanning the navigation route.OLAP tools should also be capable of embedding complex business logic in themulti-dimensional model and be capable of responding to changing assumptionsin real time. This allows analysts to explore and interact with the data in a way thatexploits its multi-dimensional structure.Electronic Medical Records SystemAt the USHealthNet Service Center tier, the EMR system consists of thefollowing: Electronic Medical Records; Application functions; Operational processes and workflows; Related data and knowledge bases; and, Legal and administrative characteristicsApplication Functions (EMR)The EMR system includes functions to capture, store, process, communicate, andsecure existing health information. To accomplish these inter-related functions,the EMR system may be considered as a set of existing healthcare informationsystems of various ages and capabilities, as well as new applications that drive itsfull functionality.The EMR system integrates all components across an enterprise, and requiresthem to be interoperable with minimal connectivity. This permits authorizedaccess to specific information for legitimate purposes in disparate componentsexternal to the organization.Knowledge Acquisition FunctionsKnowledge Acquisition refers to the end-point or process, data collection, anddata entry into a computer system. Knowledge Acquisition functions include: 36
  • 109. D R A F T C O N F I D E N T I A L Data sources; Data entry devices; Data import; Data definition; Input identification; and, Input validation.Data SourcesData sources are many and varied. Caregivers have traditionally compiled medicalrecords by questioning the patient and others and entering the information inprogress notes; making and recording observations about the patient; and,documenting the results of diagnostic tests and treatment procedures.Each provider, and in some cases each caregiver within a provider setting,compiled separate records that were not integrated with one another. The level ofintegrity and redundant data collection was high as was the likelihood of nothaving a comprehensive set of data about the patient. The EMR system affordsthe ability to collect the data once and access it from disparate locations.Healthcare recipients have become a direct source of information as well, bymaintaining electronic logs, responding to health surveys, or using patientmonitoring devices. Some patients may access their own EMR to verify theaccuracy of health information; supplement their understanding of care processes;and, become better informed for consenting to the release of information fordependents.While the right to access ones own health information varies among the states,many lawmakers are advocating increased rights to access, particularly for use bynon-providers. Increased access to health information brings the need forincreased commitment to proper documentation, patient education, andadherence to the best healthcare practices.Other less direct sources of information include schools, employers, public healthdepartments, family members and friends. They may contribute information suchas test scores, speech and hearing screening results, environmental data, andcompliance with safety requirements (i.e., the use of goggles or protectiveclothing).Data Entry DevicesData entry devices include keyboards, point-and-click devices, touch screens,pattern recognition (voice and handwriting) software, document imaging, barcodes, and image scanners.Monitoring devices that provide alarms based on changes in vital signs or otherprocesses are also frequently found in intensive care situations. These devices areusually provided to patients who are connected to a monitor at home and use thedevice to initiate an alarm, or create an alarm by virtue of the absence of aspecified signal. 37
  • 110. D R A F T C O N F I D E N T I A LAlthough regulations vary with respect to these monitoring systems, they shouldbe investigated thoroughly by the provider implementing them. Generally, devicesthat provide support to caregivers without direct patient intervention areconsidered information systems. Devices that act on behalf of a caregiver may beconsidered drugs or medical devices and are strictly regulated.Data ImportIn addition to direct data entry, information is often electronically transferredfrom various systems or entered through automated devices such as patientmonitors and laboratory instruments.The provider may have multiple clinical and administrative systems that contributeinformation. External data sources contribute data through electronic datainterchange (EDI). Data imported from other systems depends on standardmessaging protocols and data formats to ensure that it is accurately received andable to be integrated.Data DefinitionData entry entails more than the source and method of entering the data. Dataentry also encompasses the ability to capture the data in a meaningful way. Manyhealthcare information systems are being initiated with data repositories thatmerely store scanned documents with limited structured data.To minimize non-redundant data collection that integrates data from multiplesources, the EMR system uses a standard data dictionary. This dictionary isdesigned according to uniform datasets with comprehensive standardterminologies or vocabularies (ontologies). The EMR possesses common datadefinitions, naming conventions, formats, and coding schemes.There may also be an explicit data model that defines the objects, their attributesand relationships among them. One uniform dataset may be an identifier set thatprovides universal patient, provider, and location identification.Data processing is affected by the way data is structured at the time it is entered.Specifically, data that is highly structured facilitates processing. Text processing isexpected to enhance narrative entry, but is expected to take considerable time todevelop.Input IdentificationData capture also encompasses identifying the source of the data. A uniqueidentifier provides the ability to attribute data to its source, whether the source is aperson, system, or device.Input identification should also include the date, time, location, and role of thesource. The EMR system maintains the ability to identify all transactions by who,what, when, and where such transactions were performed. 38
  • 111. D R A F T C O N F I D E N T I A LInput ValidationValidation refers to the ability to identify the person, system, or device makinginput or having access to the data in the EMR system. There are different meansof validation for different types of data entry.Storage FunctionsStorage refers to the physical location and maintenance of the data. In theultimate form of the EMR system, patient data may be distributed across multiplesystems based on multiple encounters within the healthcare delivery system. Thismakes it possible to compile a lifetime continuum of care record for an individual,or to access any subset of that data.These systems do not yet exist. There are still significant technological,governmental, ownership, and privacy issues that have not been fully addressed orresolved.Because records of many businesses are computerized, courts have developedstandards for establishing their admissability as evidence in court.The following are considerations in the storage of an EMR: Permanence; Ongoing maintenance; Backup and recovery; Durability; Sabotage precautions; and, Updating obsolete systems.PermanenceHealth information must be stored in a permanent and protected mannerregardless of its location. Retention schedules must afford maintenance of theinformation, at least minimally, throughout a persons lifetime.The extent to which information may be retained from conception through deathmay depend on institutional policies or regulations. The extent to whichinformation is considered active or inactive also depends on institutional policies.The ultimate EMR system requires continuous availability of data with a responsetime adequate to support its use as the primary source of patient care information.Ongoing MaintenanceClearly, permanence requires ongoing maintenance. It is essential that systemsoftware and hardware be properly maintained and thoroughly debugged. 39
  • 112. D R A F T C O N F I D E N T I A LPerformance standards should be included in any lease or contract with a vendor,as well as guarantees of reliability, maintenance, and support. Access to sourcecodes for software is vital to a providers ability to support and maintain patientrecord application software.Backup and RecoveryDisaster prevention requires system and file backup and data archiving, as well aspolicies, educational programs, and monitoring of all EMR system components.Disaster recovery is the process whereby an enterprise restores data loss in theevent of fire, vandalism, natural disaster, or system failure. Parallel backupsystems, alternate power supplies and routine drills contribute to timely andorderly recovery. Backup and recovery mechanisms are essential for maintaining apermanent protected EMR.DurabilityEMR systems must be durable for a number of reasons. These include the needto: Support the future care of the patient; Notify patients who have received treatment that creates health risks for them or their descendants; Meet regulatory and accrediting requirements; Provide evidence in a lawsuit; and, Support research efforts.Durability may be difficult to assess with new technology so extra precautionsshould be taken. Copying records from an old system to a new system may beappropriate, but reliable evidence of the chronology of copying must be preservedin the event the copied records are required as evidence in court.Sabotage PrecautionsControlling sabotage contributes to permanence. This is a function of vigilance,ongoing maintenance, security precautions, and taking swift and decisive action inthe event of any attacks.Updating Obsolete SystemsEMR systems should be designed to support future expansion with regard to newtypes of information, new features and capabilities, and new procedures.The EMR system must be extendible and scaleable to meet the expanding needsof the healthcare delivery system. As such, updating obsolete systems alsocontributes to the permanence of health information. As with copying records forarchival purposes, changing to new systems must be done with a well-documentedchain of events and procedures. 40
  • 113. D R A F T C O N F I D E N T I A LAdministrative ProcessesAdministrative operations and financial considerations are also included in theEMR system design. For example, the EMR system performs: Quality assurance; Utilization review; Risk management; Workload allocation; Unedited information flagging; and, Claims support.Other examples of communication possibilities include using electronic mailsystems and other Internet features for consultations, referrals, patient triage,patient education, and patient follow-up.Security FunctionsProperly developed and monitored EMR systems provide better protection ofconfidential health information than do paper-based systems. This is due largely toEMR systems controls support and ensure that only authorized users withlegitimate uses have access to health information.Security functions address confidentiality of private health information throughaccess control and protection and integrity of the data.Access ControlOwnership of the patient record is established by statute in some states and byregulation in others (i.e., hospital licensing regulation).Generally, in the absence of statutory or regulatory authority, some courts haveheld that a medical record is the property of the provider, subject to the limitedproperty interest of the patient.Provider ownership of patient records, however, does not imply that the providerhas a right to use, disclose, or withhold data in the record at will.Access to data in the EMR system should be properly controlled through policiesthat explicitly state who may have access and under what authority.For every access, the EMR system should: 41
  • 114. D R A F T C O N F I D E N T I A L 1. Certify the users identity, role and authorization level. Authentication provides assurance regarding the identity of a subject or object. Authentication may be accomplished through the use of multi-level password assignment and entry, biometric means of identification (e.g., retinal scan, voice recognition), or sophisticated technology (e.g., public/private key encryption). Once a user has been authenticated, ensuring that no other user may access the system under that authentication requires strictly enforced policies, automatic log-off after a period of inactivity, and other similar security methods and policies safety measures. Authorization provides that an authenticated user has access to the function, information, and privileges that the user is requesting the system provide. One method of authorization is based on global rules surrounding sensitivity and is applied to all users. Another method is identity-based. This considers the characteristics of a user, what they interact with, the content of those interactions, and the environment. 2. Record the date, time, and location of the access. 3. Record the nature of the access (i.e., view, create, amend, or copy to external media). 4. Record the scope of the access.The system should provide for periodic review of such accesses.Data ProtectionThe EMR system requires the use of many source systems for capturing healthinformation and providing the information to many users. To accomplish this, theEMR system should maximize the use of open technologies and architectures.These architectures must be fault tolerant and the networking andcommunications systems must support reliable data transport.Data encryption should be considered when it is not possible to maintain controlof the physical storage media or the transmission network. Additionally, directconnection to systems on non-dedicated networks (i.e., the Internet) require theimplementation of a "firewall" as a control point and filtering mechanism.IntegrityIntegrity refers to the property of an object that is in an unimpaired state andrelates to data (its accuracy and completeness), programs, systems, and thenetwork.Data integrity requires data preservation so that any entry does not alter theoriginal data or its context. Mechanisms should ensure that the information putinto the EMR system is not irrevocably altered and does not carry unexplainedcontradictions or conflicting data within the limits specified by the enterprise. 42
  • 115. D R A F T C O N F I D E N T I A LData integrity also requires authentication that includes visual confirmation of thedata entered, including review of any data entered via automated means. Whencorrections are necessary, the system should preserve both the original entry andthe correction, along with the identity of the person making the correction.Operational ProcessesDifferent organizations and different parts of organizations have distinctoperational processes for healthcare delivery. The EMR system must besufficiently flexible to address each of the processes that an organization needs.For example, the processes used by a radiology department differ from those usedby a specimen laboratory or a counseling clinic. The integration of healthpromotion and wellness activities adds new operational processes to organizations.The EMR system must also be able to address future processes in order to captureand disseminate appropriate information for the delivery of future health care.Operational processes are sets of procedures established by an organization toaccomplish its goals. The procedures may include actions, communicationprotocols, and related administrative policies. For example, operational processesassociated with a clinic visit for a new patient may include registration at thefacility’s central location to verify the patients universal identifier and insuranceinformation. Other operational processes might include: accessing patientinformation through a master patient index from another providers ElectronicMedical Recordssystems and the patients own direct entry log; conducting andrecording a physical exam; ordering laboratory tests; prescribing medications thatmay be transmitted remotely to a retail pharmacy of the patients choice;maintaining a tickler file for lab work follow-up; or, initiating a call-back reminder.Alternatively, the processes associated with a home healthcare visit may requirethe caregiver to register at the home through telephone call-back, linking amonitoring device from a hospital base to the patient; reporting specificprocedures performed and the results using a wireless data transmission device;accessing an instructional videotape from a remote medical library that can betransmitted directly to the patients television; or scheduling a follow-up visit.Legal and Administrative CharacteristicsThe EMR system should meet all legal, administrative, and clinical requirements.Legal characteristics of the system include compliance with federal and localregulations and adherence to accreditation mandates and professional guidelines.Administrative characteristics include various aspects of developing,implementing, and maintaining the system.The EMR system brings into play laws of many kinds. For example, systemhardware may be patented and system software may be copyrighted. Medicaldevice laws may apply when decision support systems are used. Tort liability canresult in the event of system failure or when there are unauthorized accesses andbreaches of confidentiality. Criminal liability may be imposed on hackers. Variousprivacy laws limit disclosure or re-disclosure of information stored in the EMRsystem. 43
  • 116. D R A F T C O N F I D E N T I A LOther laws include licensing laws applicable to caregivers, reimbursement andinsurance laws, and public health laws that require reporting of vital statistics andvarious injuries and diseases. Contract law and the Uniform Commercial Codecome into play in contracts for the EMR system. Bankruptcy laws may even beinvolved if a vendor is unable to continue supporting an EMR system.Likewise, each enterprise will have its own business and clinical practice rules;clinical and operations processes; staging and continuity of process tasks; criteriaconditions and actions; resource management, cost management, data collectionand quality assurance requirements; concurrent surveillance, metrics, and analyses;and master indexes for equipment, charges and medications.As healthcare providers come closer to implementing a EMR system, managingcomponents within an application, across applications, within an enterprise, andacross enterprises will require close attention to the EMR environment,application requirements for system architecture, and confidentiality and securityissues.Todays mergers and acquisitions are just a hint of the large-scale efforts required.Clearly, the healthcare delivery system will go through various stages ofimplementation, ultimately resulting in a national health information infrastructurethat supports a fully integrated EMR system.Although EMR systems are recognized requirements for building integrateddelivery systems, the cost of developing a EMR is still an issue for providers.Improving the access and quality of care and reducing costs may require that theEMR system be implemented in phases. A gradual implementation providesvarying returns on investment and should be considered a strategic cost of doingbusiness.Practice Management ServicesUSHealthNet’s Practice Management Services are physically located at theUSHealthNet Service Center to provide for centralized billing, collections, andreporting. This aspect of the USHealthNet solution isolates individual provideroffices from operational complexities and reduces costs by using economies ofscale. 44
  • 117. D R A F T C O N F I D E N T I A L B illing T ransaction F low T rea tm ent PBM IW P rovid er B ill B ill PBM D ata 8 35 M an ag ed M CO 837 $ D ata C enter Facility C are F acility 835 276 EDI $ 82 4 M ailbox 824, 997 G entran 824 837 B a nk B a nk 83 5 824 27 6 EMP B ill D a ta P erform anc e E FT B ill G en tran E FT E rrors T rac kin g D ataNACHA A ck /Exc A PI NACHA M IIS B ill D a ta PARTNER E rrors RA A ck/ B ill B ill Exp D ata RA O utc om es D ata P aym ent an d Pmt N ew F in a ncials E xc M ed . B illing R ep orting D ata P aym ent B ill E FT D ata A ctuarials E FT P m t T otals Central Administration of Multiple Practices Many providers have their own dataset. A multiple provider interface enables the service data center to easily access all provider and patient accounts. Since each provider has access to only their dataset, providers are guaranteed independence and complete security. In addition, USHealthcare automatically runs reports and calculates totals for each provider. Enterprise-wide Indexing Increasing demands to share data from multiple healthcare facilities has led USHealthcare to plan the development of a Master Patient Index (MPI). The MPI solution accommodates patient movement throughout the network while reducing record misidentification and duplication. As healthcare organizations form integrated delivery networks and large multi- faceted alliances, information systems infrastructures must adapt to meet the increased demands of data sharing between organizations. 45
  • 118. D R A F T C O N F I D E N T I A LThis new requirement for integration goes beyond the hospital walls and hospitalinformation systems and extends throughout the healthcare community.USHealthcare will offer solutions that allow data sharing between organizationsand accommodate patient movement throughout the network.Enterprise Master Patient Index (EMPI)A key goal of the USHealthcare infrastructure design is to provide a singlemember/patient identification for all applications on the network.The Enterprise Master Patient Index (EMPI) system will support systems oftomorrow, while adding value to inherited legacy systems.EMPI correlates each patients data from disparate application systems andorganizations. Because it is vendor neutral and legacy system independent, itprovides the flexibility to choose and interchange future systems and repositories.Master Patient Index RequirementsThis section describes the functional requirements of the Enterprise MasterPatient Index and a CORBAMed standard EMPI object interface.The EMPI facility correlates and cross-references patient identifiers from multipleidentifier schemes, or “domains” by matching patient parameters such as name,birth date, and SSN. Additionally, it will be configurable to handle new identifierdomains and to perform its matching function with high accuracy in an unattendedmode.The healthcare industry is aggressively pursuing EMPI capabilities to correlate orconsolidate disparately keyed patient data in applications such as clinical datarepositories and analytical data warehouses. Since the EMPI must integratepatient data among highly diverse and distributed environments, we expect that aCORBA EMPI standard will provide the interface as effectively generalizedservices.Implementations of EMPI’s matching function range from “direct-hit” matchingusing simple fixed criteria to statistical matching by weights and thresholds for anynumber of parameters. Therefore, there will be some necessary variations inconfiguration interfaces. The runtime EMPI interface for correlation, assignment,and conversion, however, can be made to be both simple and generally applicable.The requirements described below will reflect these interface characteristics.Figure 4-3 provides a closer look at EMPI’s role. It shows how EMPI correlatesidentifiers for John Doe and maintains its index (the real EMPI can use more thanname and birth-date for matching criteria). 46
  • 119. D R A F T C O N F I D E N T I A L Matching ProcessSequence of Messages Sent to EMPI Contents of The Enterprise MPIthe EMPI by Source Systems Matching Source Source Enterprise Process System ID ID A 123 2601 Patient 123 is John Doe, birth date 6/9/59 Have’nt EMPI assigns a new System A Seen Before Enterprise ID Patient 222 is Bob Smith, A 123 2601 birth date 2/12/22 Have’nt B 222 2602 System B Seen EMPI assigns another Before new Enterprise ID Patient 223 is John Doe, A 123 2601 birth date 6/9/59 B 222 2602 System C That’s C 438 2601 My 2601 EMPI correlates John Doe across systems.Figure 4-3: EMPI Index Processing Note that systems B and C might be the same “system.” However, they may be separate installations of that system, independently assigning patient IDs that are not comparable to each other. Therefore, it is more precise to say that the EMPI correlates identifiers among multiple “domains” of identifiers, rather than multiple “systems”. Benefits of MPI Accurate member/patient identification Correlates member/patient data from disparate sources Provides accurate data routing for Clinical Data Repository solutions Minimizes duplication of records through sophisticated search algorithms Provides efficient functions for identifying and correcting duplicates Supports heterogeneous application system environments Components of the EMPI USHealthNet’s EMPI is a server-based decision support system that provides enterprise-wide, on-line access to member/patient identification derived from and shared by various departmental or application systems. The EMPI data model incorporates key patient identifiers as well as other demographic data typically employed to help identify patients: 47
  • 120. D R A F T C O N F I D E N T I A L Member/patient name; Date of birth, address, etc.; Social security number; Medical record number; Encounter numbers; and, Member number (managed care).MPI permits rapid identification of patient information by supplying uniqueidentifiers, such as social security numbers. In addition, MPI provides expertsearch algorithms that allow patient lookups based on limited or impreciseidentification information.MPI Functional ModulesMPI Data BaseThe MPI Data Base is a system of server-based functions that is typically pre-loaded with data from member enrollment rosters and key registration systemswithin the enterprise.The data is analyzed to identify suspected duplicate records. Duplicates arereported for user review and special user tools are provided for further analysisand resolution. Once on-line, the MPI Data Base is maintained in synchrony withinformation "feeder" systems through the MPI Interface, and duplicate reviewtools are used for periodic data review and maintenance.MPI Patient IdentificationThe MPI Patient Search module is the main desktop user interface for patientlookup and identification.The patient lookup is based on unique identifiers or other imprecise means ofidentification such as patient name, date of birth, and phonetic matches. Suspectedduplicates are flagged. The Patient Search module may be executed in "stand-alone" mode, or it may be integrated with legacy systems at the desktop.MPI Records ManagementMPI Records Management tools include an automatic duplicate-records detectionmodule and a desktop-based duplicate records review module for Medical RecordsQA personnel. Suspected duplicate records are automatically marked and madeavailable for user review. User actions on the duplicates are reversible and can beimplemented without loss of data. Site-definable statistical reports and qualityassessments of MPI data are also available. 48
  • 121. D R A F T C O N F I D E N T I A LClinical RepositoryThe value of data on patient treatment and outcomes (particularly data that isautomated, uniformly defined, linked, and anonymously aggregated) is increasinglyrecognized and demanded throughout the healthcare sector.This data is needed for clinical research, quality assurance, utilization review,business planning, administrative, and public health purposes. For example,computerized ambulatory patient care data is scarce and not uniform in definition,coding, or content. Computerized hospital clinical care data is collected onhospitalized patients in a small number of settings, but it is not often stored forlong in a retrievable form after the patient has been discharged.The USHealthcare Clinical Repository contains a distillation of the information inthe data warehouse. It contains only medical data that has been abstracted frompatient records for use by clinicians and researchers.With the repository, USHealthNet offers data to the world-wide medicalcommunity that can be used to prepare studies such as: Demographics of patient populations; Patterns of disease outbreaks; and, Distributions of health-care users.In addition, physicians, biologists, researchers, pharmaceutical companies, andenvironmentalists can extract information for use in clinical trials and return theirfindings to the repository.Insurance companies can use the clinical repository for outcome analyses ofpatient treatments and feed the information back to the repository to providecontinuous improvement in health care.Public health officials will be able to more rapidly detect sharp increases in theincidence of influenza, specific bacterial infections, and other public healthproblems and to act quickly in health crises.Public health policymakers often have insufficient information for offeringsolutions to healthcare problems. As a result, public health decisions are madewithout the advantage of timely, relevant information using technology that couldreduce the costs of healthcare and improve patient outcomes and the health statusof populations.As valid methods for assessing the quality of care proliferate, so will the value ofcommunity patient care data. When the benefits from this information are shownto exceed the costs of producing it, society must find a way to pay for theresources necessary to produce it.Confidentiality and privacy are key concerns. Society must deal with perhaps itsmost vital information issue, assuring the privacy, confidentiality, and security ofhealthcare data about identifiable individuals. Even though patient care data canlead to important information for healthcare providers and their patients, it alsohas the potential for personal harm if it is disclosed inappropriately. 49
  • 122. D R A F T C O N F I D E N T I A LClinical repositories aim to extract patient, provider, and service data from claimsand encounters and store them in a shared community data repository. Therepository may be enhanced to include condition-specific data and patient-centered surveys.SummaryThe USHealthNet Service Center is the heart of the USHealthNet system. Ithouses the data repository and the applications that are fundamental to theUSHealthcare vision.The Service Center allows physicians and providers to access the computer-basedpatient records vital to their work. Additionally, administrative personnel canefficiently and cost effectively manage a busy practice with better and more timelycare for their patients and reporting and billing for the insurers and HMOs.The entire healthcare community will also benefit from the services provided bythe USHealthNet Service Center by having ready access to data necessary forresearch into new pharmaceuticals, medical protocols, disease trends, and otherdata-intensive functions. 50
  • 123. D R A F T C O N F I D E N T I A L ChapterTIER 3: INTERNET HEALTHCARECOMMUNITYV irtual Communities entail three concepts that are of tremendous significance to the Internet Healthcare Community. These are Virtual Enterprise, Electronic Commerce, and Customer Service Operations.USHealthNet is the culmination of these three ideas. This chapter will discussUSHealthNet and the components that gave it expression. EVOLVING ELECTRONIC ENVIRONMENTS Electronic Operations Database & Information Teleservices Marketing Communications Services Evolving Interactive Satisfaction Measurement Electronic Purchase Advisory Telecommunication Services Services Systems Environments Marketing Customer Tracking & Services On-line Services Usage Metering Media/ Advertising 51
  • 124. D R A F T C O N F I D E N T I A LVirtual EnterpriseThe Virtual Enterprise is a collection of individual enterprises that cooperate("trade") in order to deliver an end product or service. These cooperatingenterprises are continuously knocking down the walls that obstruct the optimalfulfillment of their collective goal. For the enlightened management driving thesechanges in their own enterprises and industries, Electronic Commerce is clearlyassumed to be essential.Virtual Enterprise is based on the following assumptions: Competition to satisfy the end consumer requirement for products and services will force a collection of diverse enterprises to cooperate in the delivery of those products and services. In order to meet customer demands in an increasingly competitive market, enterprises will explore new strategies for conducting business. Although the goals of these initiatives may sound familiar (reducing costs, increasing productivity, etc.), the tools will be new. Electronic Commerce is an integrated arrangement of business practices and processes, technical application configurations and organizational structures that utilize electronic information exchange. These exchanges occur inter- and intra- company, and are based on a variety of data exchange and communication standards and technologies. ASC X12 will continue to be the responsible body within the United States for developing, maintaining, and publishing national EDI standards and for representing the community of users in the United States in the development and maintenance of international EDI standards. ASC X12 will also be vitally involved with the rapid development, ease of implementation, and standards-compliance issues as essential dimensions of enabling EDI to realize its full potential.The Digital EconomyImagine a time in the future when routine business operations such as paying billsand making reservations or purchases can be carried out with a minimum ofaggravation and customer involvement. Imagine a cooperative trading partnershiparrangement where the emphasis is on meeting a mutually beneficial goal, such asinventory control, rather than the "implementation of technology." 52
  • 125. D R A F T C O N F I D E N T I A LThink about a time when a relationship is established in the morning and theelectronic support systems are executing that agreement by the end of the day.Envision the most complex operation being completed with as much ease ascalling your pharmacy to place an order. Suppose that the information required tomeet a patient’s need, perhaps one not yet anticipated, can be unobtrusivelygathered and made available to an enterprise that can utilize it on the patient’sbehalf at some future point in time. This is the potential of Electronic Commerce,pursuing cooperative advantage by sharing discernable information providedthrough electronic channels.The digital revolution has already started; the convergence of communications,computing and content technologies will undoubtedly transform societies inprofound and unexpected ways. The global web of inter-dependencies in theinformation age will facilitate new ways of doing business and spawn newindustries that will determine the future landscape of the digital economy.MEDNET: The USHealthNet SolutionMEDNET, a Virtual Community based healthcare portal on the Internet, is thetop tier in USHealthNet’s strategy to become the most efficient andcomprehensive communications, information, application and procurementdelivery channel for third-party content, products and services in the healthcareindustry.IPAs that aggregate procurement for economies of scale are targeting costs as ameans to improve the bottom-line ratio. These groups are excellent prospects fordigital commerce services over the Internet. Twenty percent of each dollar spenton products and services is up for grabs. Dis-intermediation is a direct result ofeconomics that drive the supply-chain models.USHealthNet will be a highly functional and high-profile aggregator of third-partyproducts, services and information, specifically designed to address the rapidlychanging needs within health care. As the aggregator, this community will deliverlayered services on the Internet for professionals involved in the delivery of healthcare. This aggregation of services will deliver content to the medical professional’scomputer desktop, PDA, and hand-held communication appliances usingpush/pull models.This virtual community will be made available to the general public via theInternet, and it will also feature secure private areas for the delivery of premiumfee-based services. This community will address the total informational, productand service needs of the healthcare industry, while integrating its own membershipand profile repository to capture and store user preferences, usage behavior andtransaction heuristics. This information will be used for the personalization ofcontent, products and services. This knowledge acquisition capability will allowUSHealthNet to develop closer and more profitable relationships with its users,partners and merchants by addressing needs on a personalized level. This level ofservice will be the impetus for long-term customer loyalty. 53
  • 126. D R A F T C O N F I D E N T I A LUSHealthNet couples this market demand for more comprehensive and richercontent with an increasing willingness to utilize new, more intelligent technologies.It creatively brings these products, services, and information into one virtualspace. The USHealthNet infrastructure also provides increased levels of utility forthe user in Internet meeting rooms, discussion forums, and collaborative virtualworkspaces. This will allow many more healthcare professionals to take part ingroup discussions. 54
  • 127. D R A F T C O N F I D E N T I A L Developing this virtual community will involve leveraging each of the four key stakeholders: healthcare professional users, primary care provider groups, content- providers and merchants of products and services. We will work directly with each of these stakeholders to specify the most appropriate tactical and strategic offerings to our primary target market: physicians and consumers. We will solicit feedback and improve service and product strategies based on market data through several planned in-market field tests and pilots. Throughout this ongoing research, we will continue working toward the goal of delivering the most appropriate third-party products, services and information mix to address this market’s total healthcare needs. PROCUREMENT TRANSACTION TRADING NETWORK Stds. Document data compliance Semantics DB E-forms as checking user interface Business documents •Price lists •Advanced shipping notices/purchase orders •Technical manuals One-time setup Administrat Application/database or E-forms/ •Standard Application •Mapping rules workstation E-mail •Edits VANs Assembly Direct link Create TP /disassembly Central EC Trading repository profiles Translator partner InternetFigure 5-1: Procurement Transaction Trading Network 55
  • 128. D R A F T C O N F I D E N T I A L We will work closely with medical associations to understand their business objectives and to emulate them through our Internet community to develop the most exclusive relationships possible. Our strategy will leverage significant brand sponsorship, funding and joint revenue opportunities targeting premier healthcare associations. We will use this funding to develop complementary web and Internet sites for these associations; this will enable them to conduct their business exclusively on our network at no development or maintenance cost to them. With a long-term exclusive contract, we will effectively create significant barriers for any existing or emerging competition. When partnerships with these key brand sponsors and associations have been forged, we will pursue other third-party content providers, including medical journals and product and service marketeers. Leveraging these key strategic partnerships enables USHealthNet to create premium content areas, which are brand equity segment opportunities for the healthcare community advertisers. PARTNER ENTERPRISE LINKAGES Your Partners’ Views of Your Data Packaged query Packaged query Query generators Query generators Scheduled update Scheduled update Request to update Request to update Shared (or standards-compliant) data dictionary (meaning) Shared (or standards-compliant) data dictionary (meaning) Direct access Direct access EC Clearinghouse for specific for specific Public Data apps. apps. ODBC or IDAPI Gateway Security Security Gateway Security Gateway Security Gateway GatewayExternal data gateway Integrity checker Integrity checker Integrity checker Integrity checker Enterprise Data Architecture Shared (or standards-compliant) data dictionary (meaning) ODBC or IDAPI ODBC or IDAPI Functional-specific Functional-specific data data Business application Business application(e.g., inventory mgmt.) (e.g., transportation) 56
  • 129. D R A F T C O N F I D E N T I A LUSHealthNet will develop community products and services that providemarketeers and third-party product companies the tools to exploit this channel.These products will form the basis for our revenue streams, which will bediscussed in the Product Strategy Document and also in the Business Plan.These revenue models reflect opportunities for high margin sales in: Brand advertising and Sponsorship programs; Transaction Management Services for the sales of the third-party products; Paid For Access to high value content; Community Developed Products such as web sites and electronic catalogs; and, InfoMediary services, providing 1-2-1 personalization and dynamic content Affiliate alliance partnerships Custom Development.SummaryUSHealthNet is the third tier of the USHealthNet solution for a computerizedmanagement system for the healthcare industry.USHealthNet will be the most efficient, comprehensive communications,information, application and procurement delivery channel for third-party content,products and services in the healthcare industry. USHealthNet stems from theconcept of Virtual Enterprise, a collection of individual enterprises that willcooperate in order to deliver a product or service to meet consumer requirements. 57
  • 130. D R A F T C O N F I D E N T I A L AppendixUSHealthNET Technical DescriptionUSHealthNet System ImplementationT he USHealthNet vision of a healthcare service system encompasses all areas of the healthcare community, from individual providers to national and world-wide medical users of the Internet. To realize this vision, USHealthNetis exploring application-rich and service-oriented environment based onnetworking that includes the Intranet in providers’ offices to the Internet servingthe world.The initial conceptual design of the USHealthNet environment will continue toevolve. It has the following distinguishing features: Adoption of the ‘HTTP’d’ and IIOP protocol for client-end interoperability. Adoption of the CORBA, ORB and IIOP specifications for server-end interoperability using Orbix. Gateways to a commercial relational database (Oracle or Informix) for transactions, heuristics and DSS/EIS. Back-end support for electronic publishing and digital content warehousing through the use of an OODBMS (GemStone). Adoption of the ‘Kerberos’ standard for authentication and secure certificates Model-based on wide-area access to patient records and update capabilities to structured and unstructured information through message-based middleware and replication. Federated access control mechanisms, where the information provider decides who can access information. Adoption of a hyper-media based document metaphor (Browser) to support ease of use. Desktop conferencing among healthcare providers using the MONET (Meeting on the Net) system. 58
  • 131. D R A F T C O N F I D E N T I A L Synchronous information sharing for patient information and images (for example, x-rays). Notification and asynchronous communication based on MIME-compliant multi-media mail for ordering laboratory tests, prescriptions and referrals. OPEN ARCHITECTURE Presentation Data Access Services Services Component Development Frameworks User Interface OpenDoc & Java & ActiveX User Interface Files Files Print/View Print/View Application Services Database Digital Database Digital Library Library Multimedia Multimedia Transaction Transaction Workflow Manager Mail Monitor Mail Monitor Communication Services Object Mgmt. Communication Services Conver- Remote Messaging Services Directory X.500 / Security SET SSL sational Procedure Queuing LDAP Model Call MPI CORBA/ORB Time Transaction Manager Common Transport Semantics SNA NETBIOS TCP/IP OSI APPN IPX LAN WAN Channel Emerging Physical NetworkFigure A-1: OSI 7-Layer Model Enabling Technologies for USHealthNet The core enabling technologies for the USHealthNet system consist of three technologies. These are the Information Sharing System (ISS) for integrating heterogeneous, distributed databases; the MONET desktop conferencing system; and, the MIME-compliant multimedia mail system with a browser user-interface. These systems are linked through an open architecture that combines the DCE, OSI 7-Layer Model and the OMG CORBA ORB. These systems integrate Java Beans, Jini and IIOP for interoperability. 59
  • 132. D R A F T C O N F I D E N T I A LInformation Sharing SystemPatient records may be stored in a variety of databases. These records areaccessed transparently and transported across systems using the CORBA standardfor object exchange. The information-sharing sub-component provides access toinformation in diverse formats and systems. In order to effectively deal withheterogeneous legacy environments, interoperability is required. Specifically, astandardized method for communicating with these diverse repositories must bedevised. The CORBA specification has been adopted in the current model forserver level interoperability. We are also supporting the HTTP’d and IIOP-protocols as a mechanism to support client-level interoperability.Architecture for Information SharingThe components associated with the information server for our healthcareapplication. The components associated with this figure are explained below.Interface or Event ManagerThe Interface or Event Manager communicates with the browser-compliant clienton one side and the CORBA-compliant server on the other side. This modulehandles log-ins and translates URL requests from browser clients to documentpages.The module handles log-ins by validating the user name and password usingstandard UNIX mechanisms. The URL translation processes are handled by acombination of state information sent with the URL (i.e. session information), thetype of document requested (i.e. flowsheet, POPRAS form, referral form), thelayout page associated with the document type, and queries to information servers.The Interface/Event Manager is a mechanism that can handle queries frommultiple users simultaneously.We can also use digital certificates in an authentication process - one needs tounderstand the ramification of this on all the servers of the system.Session ManagerThe Session Manager instantiates a new session thread for each user and eventwithin the system. This process involves instantiating a specific set of gateways(such as Oracle gateway and file archiver), setting up sessions to these as the userwho has just logged on and instantiating models (see next section) that interface tothese gateways. The session manager is also responsible for closing theseconnections at the time of closing or log-out using a time-out mechanism.GatewaysThe gateways are Corba ORB servers that interface to information repositories.The gateways have standardized interfaces but their implementations varydepending on the type of repository they are connected to. 60
  • 133. D R A F T C O N F I D E N T I A LModelsThere are collections of user-defined models that specify the types of informationneeded by the system. These models could be specific or generic. An example ofa specific model is a flow sheet. Generic examples include the gateways to Oracleand File Repositories. Information Sharing System (ISS) will have to provide animplementation of these models that function analogous to the mapping. That is,in the case of the Flowsheet model, a C++ or Java implementation of how toinstantiate this flowsheet for a patient who is trying to access it must be provided.Meeting On the NET (MONET)MONET is a multimedia desktop conferencing system that facilitatescommunication and cooperation among geographically dispersed individuals (thevirtual team) in a networked environment. This desktop conferencing systemutilizes effective communication media, including audio, video and graphics. Inaddition, many application programs, such as x-rays and ultrasound viewers, canbe shared over the network using the Cooperative Multi-user Interface to X-window (COMIX) component of MONET. Using these multicast protocolsenables efficient audio and video data communications.Future ExtensionsFuture directions for the USHealthNet system include: Agent-based technologies for patient tracking; Workflow at the application level and at the message-based middleware level; and, Advanced User Interface technologies based on enhancements to browsers and support-rich VRML.Value-added Agents for USHealthNetWe are investigating extensions to the USHealthNet environment based on agenttechnologies. The healthcare domain presents a large number of interestingoperations that can be supported by these emerging technologies. Several agentsthat provide value-added services for the USHealthNet environment have beenidentified. They are described in the following section.Agents are semi-autonomous, goal-directed software objects, components, orapplets. These agents may be modified by the end-user using a business logic layerwhere the user defines business processes, functions and rules. Programs can alsodispatch their own agents when necessary. The primary difference between agentsfor humans and agents for software lies in the nature of the agents’ publicinterface. The key to this is the encapsulation of business objects and rules.Embedded systems can provide enormous benefits when tightly integrated. Someof the generic agents we have identified include: Monitoring and notification agent; 61
  • 134. D R A F T C O N F I D E N T I A L Prioritization agent; Scheduling agent; Filing agent; Information access agents (authentication); Search and retrieval agents; Workflow and process agents; Middleware agents (for security and TP monitors); and, Clinical data mining and abstract agents.Monitoring AgentsThese agents generally monitor parameters and goals, as well as notifying someonewhen appropriate. These parameters and goals will vary depending on themonitoring agent. This monitoring is a fundamental aspect of any coordinationmechanism. For extending USHealthNet’s™ capabilities, four monitoring agentshave been identified: Referral and order management agents. These agents send referrals and orders for tests on patients. They also inform the provider when the results of the order or summaries of the referral consultations become available. Our current implementation of this agent manages orders for ultrasound tests and x-rays. The notification is provided and presented as an HTML document when the provider logs onto the system. Caseworker support agent for prenatal patients. This agent determines if prenatal patients miss scheduled appointments and notifies a caseworker when follow-up actions are required. Prenatal appointments are currently tracked manually. Missed appointments are followed through with patients since providers are legally responsible for ensuring that pregnant women follow prenatal care- guidelines. Follow-up of these situations is delegated to a caseworker. Home-monitoring agent. Under the authority of the provider, the home- monitoring agent checks with the patient at home (or at a nursing home) using physiological parameters such as blood glucose levels, blood pressure, pulse rate, compliance to treatment and the patient’s general well-being. The home- monitoring agent reports back to the provider with this patient information. Sign-off monitoring agent. This agent monitors whether providers have signed- off on patient data. All new information (for example, laboratory test results) has to be reviewed and signed-off by a provider before it can be included in a patient’s record. If providers do not sign-off on new patient information, corrective action is taken.Prioritization AgentsPrioritization agents are responsible for sorting action items using a priority eventmechanism. Examples of these agents in USHealthNet are: 62
  • 135. D R A F T C O N F I D E N T I A L Sign-off prioritization agents. Providers currently get new patient information in a stack on their desks. Not all of this information is of the same priority. Information with a higher priority may include abnormal test results. The patient’s clinical status could also affect the priority of new information. Contact prioritization agents. Although caseworkers follow-up with all patients on missed appointments, this agent prioritizes the calls to ensure that urgent cases are handled appropriately.Scheduling AgentsScheduling agents are one of the most studied agents in Distributed ArtificialIntelligence (DAI) literature. In USHealthNet, there are three agents to supportscheduling: Provider to provider consultation (or constraint-based) scheduling agent. USHealthNet supports synchronous desktop consultations between providers and specialists. This agent helps in scheduling these consultations and on-line patient education. Patient-visit scheduling agent. This agent--aware of the provider’s schedule-- can present itself in the home computer or network computer of a patient to arrange a follow-up office visit, lab work or diagnostic testing with the patient. Filing and reporting agent. This agent is a workflow knowledge mechanism, which facilitates the deadlines for filing and reporting authorities.Filing AgentsNew information is constantly presented to the USHealthNet system frommultiple, geographically distinct locations. In USHealthNet, this is currentlyhandled by browser-based HTML-forms that are designed to input specific typesof information. This information is stored transparently so that it is accessiblethroughout the healthcare community network. Filing agents, however, could betrained to properly route this information.An extension of this Filing agent could provide automatic data collection frommultiple sources by building a multi-dimensional VRM model for viewing patientcare and provider performance and compliance to policies, procedures andmeasurement guidelines.Information Access AgentsWhen several autonomous organizations are combined into a single network,information is dispersed throughout the network, possibly in different formats. Adhoc queries become difficult to manage. Information Access Agents can alleviatethis by interacting between users and information in the network. One abstractionof this information is represented by a fully distributed knowledge layer at thenetwork level which provides seamless ease of access for human and non-humansystems. 63
  • 136. D R A F T C O N F I D E N T I A LAgent ImplementationWe desire an array of agents for the USHealthNet system; this implementationrequires coordinating several different technologies in a distributed environment.Legacy code and local host resources will be accessible through CORBA/IDLinterfaces. Distributed coordination and agents will be implemented in Java. Userinterfaces and other structured information (such as multi-media mail) will bespecified using SGML, HTML, and PDF formats; the display, however, maycontinue to use another technology, such as a browser. The Common ObjectRequest Broker Architecture (CORBA) is an industry standard for providing alocation- and language-independent method for invoking objects. Once an objectis registered with an Object Request Broker (ORB), other objects can access it,even if those objects reside on another node of the network, or if they areimplemented in another language. The Interface Description Language (IDL)provides a language-independent means of describing object interfaces. Java is a distributed programming language in which all first-class language objects are mobile in the network. A Java application can reconfigure itself or send new pieces to remote sites on the network. Java can support a variety of programming paradigms, including agents, client/server and peer-to-peer. In particular, Java can support applications that seamlessly combine agent and other types. For example, an application (such as a multimedia conference call) can embed parts of itself in smart agents that move around the network locating resources. After locating these resources, the distributed elements of the application function on those nodes in a more traditional manner. Mobile Java objects in the health-care network can communicate with local resources through IDL interfaces. A primary function of agents is the intelligent analysis of information so that it can be filtered, manipulated, or reformatted for the end user. Agents need access to the underlying structure of the information; if this is not provided, the agent must derive it. The SGML standard can be viewed as a meta-language to describe markup languages for specific types of information (normally called documents, but SGML can be applied to a much larger variety of structured bit vectors). HTML and HTML+, used by the World Wide Web (WWW), are examples of SGML-compliant languages. "Extensible Markup Language, abbreviated XML, describes a class of data objects called XML documents and partially describes the behavior of computer programs which process them. XML is an application profile or restricted form of SGML, the Standard Generalized Markup Language. By construction, XML documents are conforming SGML documents." A key insight from the development of SGML is that no single markup language is sufficient for all information. Information converted to a single markup language, such as HTML, has lost its original semantic structure. SGML provides a standard way both for describing the information that agents need to access and manipulating it, even though that information may be transformed into HTML or Postscript for display. The more the information is structured, the more we can relieve the burden of document analysis from the agent. 64
  • 137. D R A F T C O N F I D E N T I A LAn Example of Agent ImplementationConsider the caseworker support agent that must undertake a complex series ofactions across the network.A monitor agent sits and waits for a scheduled visit, or event object. As theappointment approaches, the agent may contact the caseworker to schedule areminder telephone call. After the scheduled time passes, the agent examines thesites in the network to determine if the appointment has been kept, and at whichclinic. Sending sub-agents to each of the clinics can do this. If no visit occurred, atelephone call is arranged. The monitoring agent contacts the caseworkersscheduling agent, as well as dispatching another agent to create a patient dossier.Since the dossier will have a standard structure, the caseworkers scheduler cananalyze and prioritize it. Finally, a user interface agent, customized by thecaseworker, can convert the dossier to a personalized multimedia mail orhypertext document. Part of the schedulers function is to keep track of thecaseworker and send him or her necessary information at the correct site.In this scenario, the agents are all programmed in Java; the databases, e-mailsystems and user interfaces are all accessed through CORBA interfaces. Theinformation to be displayed is defined in SGML to facilitate manipulation byagents.Enhancements to BrowsersImprovements being considered include: • High-Performance • Better Management of Hot Distributed Web Servers Directories • Virtual URLs • URL tables • Groupware Applications • Smarter Servers • Prefetching Strategies • Logical URLsHigh Performance Distributed Web ServersIn the near future, we will have to service large numbers of requests, includinglarge multi-media objects. To meet these anticipated requests, we are investigatingdistributed and multi-threaded web server implementations with I/Ooptimizations.Logical URLsCurrently the URL is a specific reference to a particular object at a particularserver. This approach has scale-up and fault tolerance problems, particularly fordocuments in great demand. 65
  • 138. D R A F T C O N F I D E N T I A LAttempts to access a document are routed to the server named in the URL,forcing delays throughout the network. In addition, this may render the links inthe URL inaccessible to anyone who does not have them on their hotlist. Theseproblems will be particularly challenging to commercial ventures, since theytranslate into lost business and inferior service; these problems might sendcustomers elsewhere.Document replication is necessary to better balance network traffic and providecontinued access in the face of server and network failures, but the current URLprotocol provides no means of supporting this. We are considering twoapproaches-- one short term and one long term--for resolving this problem, URLtables and Virtual URLs.URL tablesURL tables perform server to server translations. It is simple enough to place thesame document in several locations, but it is more complex to convey thatinformation to a client. Here, the URL designates a primary server that has sentcopies of a particular document to multiple mirror servers. The primary serverretains the list of secondary servers. When a request comes to a server, the serverresponds with the list of mirror servers. The server may also send the document,depending on its current load. If the document is not returned, then the client maycontact one of the mirror servers.On the client side, a table of mirror servers is kept for frequently used URLs. Ifthe client wishes to access a mirrored URL, then the servers are contacted in arandom fashion until one responds or the request is canceled. Since all serversreturn the list of mirror sites, the table can be updated automatically on eachrequest. Deleting the less frequently accessed URLs can control the size of thistable. An alternative to the table is to include the list of mirror servers in the URL,as contained in other documents. This, however, would be difficult to update.Virtual URLsA logical URL names a set of servers that contain the desired document, but itdoes not refer to a particular physical server. When a request is sent to a logicalURL, any server in the set may respond. The client is freed from any considerationof the physical server responding to the request, and servers can enter and leavethe set without the client’s involvement. This kind of behavior is required in high-availability transaction processing systems {reference ISIS and TeknekronInformation Bus}. To implement this on the Internet, we will be using theReliable Multicast Protocol (RMP) currently being developed. RMP creates avirtual token ring in the network that allows members to communicate with eachother and it also allows outside processes to send messages to the ring. The set ofservers in the logical URL corresponds to the RMP token ring; the client is anoutside process communicating with it. 66
  • 139. D R A F T C O N F I D E N T I A LBoth Virtual URLs and URL tables require that servers communicate updates toeach other "behind the scenes". This is a standard distributed database problem.RMP provides a technology to support this on the network, although there aremany alternatives. Due to the growing volume of traffic and the initiation ofcommercial ventures on the Web, we suspect that there will be a number ofmethods proposed, not all of which will use the public network.GroupWare ApplicationsThe Web currently uses strict client/server architecture for object delivery (forexample, hypertext), with a stateless protocol between clients and servers. Thesame approach is being used for current commercial applications. Distributedhypertext and on-line catalogs are just part of the potential applications for theWeb. The Internet already supports a variety of interactive, multi-userapplications, from usenet newsgroups to multi-user dungeons (MUDs) to theMBONE multi-user whiteboard. We are looking at ways of using or expanding thecurrent Web architecture to support GroupWare applications. Although agraphical MUD communicating with browser-based users through a Web serverwill probably be the first significant Web GroupWare application, fields such ashealthcare can also benefit.Smarter Servers, Smarter ClientsThe development of GroupWare, commercial services, and other applications tobe accessed through the Web represents a fundamental shift in the way the Webwill be traversed. The current hypertext-based traversal paradigm assumes thatusers proceed in a random (or at least unpredictable) walk through the URL graph.The current stateless protocol is perfectly acceptable in this scenario, as there is noreason to retain state that is more likely to be thrown away than kept. With a shiftto applications, this will no longer be true. Traversal, if that is still the right term,in an application is both far more predictable and far more stateful. Complexapplications, such as GroupWare, can be implemented using the currentarchitecture through scripts and forking child processes. This starts to becomeawkward as the applications become more sophisticated. At the same time, thepurely fetch/display architecture of the clients severely limits the complexity thatcan be placed into a single page.We will attack this problem on the server side by placing intelligence directly in theserver. We will first wrap the server API in a C++ class library, and then to wrapthat in a Java interpreter. Java has mobile objects designed for distributed andmulti-user applications. Linking this with the server provides either an intelligentserver, or applications that use HTML as their GUI. Using a distributed language,such as Java, will also simplify implementing the replicated server strategydescribed above. On the client side we will add the ability to receive sets of formsand pages, as opposed to just a single page at a time. As mentioned above,traversing an application will be significantly more routine than traversinghypertext. We can take advantage of this by downloading working sets of HTML,based on knowledge of the application. 67
  • 140. D R A F T C O N F I D E N T I A LPrefetching/Caching StrategiesSince a page is the current focus of attention, all the hot-links visible in the currentpage are possible candidates for prefetching. We are investigating other strategiesto reduce the size of this set.Hot DirectoriesIn the current implementation, management of hotlists may become unwieldy ifthe hotlist becomes too large (since the hotlist is a linear structure). We will beimplementing hierarchical directories that can be organized and managed moreeasily.Data Warehousing and real-timeAnalytical ProcessingUSHealthNet will use data warehousing to maintain the large amounts ofmultidimensional data used throughout the system and real-time analyticalprocessing to support fast, multidimensional queries.Understanding Multi-dimensional DataMultidimensional data is accessed in fast, multi-dimensional queries. It is rarely100% populated. That is, of all the theoretical cells in the database, only a smallpercentage is populated. Even though a table could contain a theoretical 32million cells, only 800,000 may actually be populated.When dimensions are added to the hyper-cube, the sparsity is likely to increase.This means that when we add more dimensions, each number does not breakdown into a possible value for each member of the new dimension. If we add apatient dimension containing 10,000 patients to a medical hyper-cube, we increasethe theoretical volume of the hyper-cube by a factor of 10,000. The actualpopulated volume of the hyper-cube is unlikely to increase by more than a factorof ten, where ten is the average number of patients who visit a medical facility in amonth. A fully calculated hyper-cube is dozens of times, and occasionallythousands of times, larger than the raw input data. Although this would notappear to be a problem since disk space is relatively cheap, a 200 MB source filecould expand to 10 GB.Real-time Analytical Processing (RAP)Real-time Analytical Processing has two main design objectives: linear access andcalculated results. 68
  • 141. D R A F T C O N F I D E N T I A LOne of the design objectives of the server that handles multi-dimensional data isto provide fast, linear access to the data regardless of the way the data is beingrequested. The simplest request is a two-dimensional slice of data from the n-dimensional hyper-cube. The objective is to retrieve the data equally fast,regardless of the requested dimensions. In practice, simple slices are rare.Generally, the requested data is a compound slice with two or more dimensionsnested in rows or columns. RAP seeks to provide linear response time, regardlessof the data’s retrieval location in the hyper-cube.A second design objective of the server is to provide calculated results. The mostcommon calculation of RAP is aggregation, but more complex calculations such asratios and allocations are also required. The design goal offers complete algebraicability when any cell in the hype-rcube can be derived from any others, using allstandard business and statistical functions including conditional logic.Other considerations about RAP:RAP takes the approach that derived values should be calculated on demand. Inorder to calculate and provide fast response, data must be stored in memory. Thisgreatly speeds calculation and results in very fast response to the vast majority ofrequests.Another refinement of this would be to calculate numbers when they arerequested but to retain the calculations (as long as they are still valid) to supportfuture requests. This has two compelling advantages. First, only the aggregations,which are needed, are performed. In a database with a growth factor of 1,000 ormore, many of the possible aggregations may never be requested. Second, in adynamic, interactive update environment, (budgeting, for example), calculationsare always up to date. There is no waiting for a required pre-calculation after eachincremental data change.A multi-dimensional application of any size can fit into memory because all multi-dimensional databases store each number very efficiently, generally 10 to 15 bytesper number. As the following chart of real applications shows, a server with 500MB of memory can store about 45 million input numbers.Since RAP does not pre-calculate, the RAP database is about 10% to 25% the sizeof the data source. This is because the data source requires at least 50 to 100 bytesper record. Generally, the data source stores one number per record that will beinput into the multi-dimensional database. Since RAP stores one number (plusindexes) in approximately 12 bytes, the size ratio between RAP and the datasource is between 12 / 100 = 12% and 12 / 50 = 24%.Another reason that applications generally fit into memory when using RAParchitecture is due to the very high sparsity previously mentioned. With sparsitytypically 99% or greater in models with 5 or more dimensions, the 45 millionactual values that a .5 GB server can accommodate represents a model with atheoretical volume of more than 4 billion cells. Few financial multi-dimensionalmodels approach these data volumes. A few million populated cells is a largefinancial model. 69
  • 142. D R A F T C O N F I D E N T I A L AppendixREFERENCES ASTM E1769-95, "Standard Guide for Properties of Electronic Health Records and Record Systems," Annual Book of ASTM Standards, Vol. 14.01, February, 1996. EMRI, Electronic Medical Record Concept Models, Draft Version 1.0. Schaumburg, IL: Computer- based Patient Record Institute, April, 1996. EMRI, Electronic Medical Record Description of Content. Schaumburg, IL: Electronic Medical Record Institute, May, 1996. EMRI, EMR Project Evaluation Criteria, Version 2.1. Schaumburg, IL: Electronic Medical Record Institute, March, 1996. EMRI, Description of the Electronic Medical Record and Electronic Medical Record System. Schaumburg, IL: Electronic Medical Record Institute, May, 1995. EMRI, Framework for Definition and Modeling of the EMR Environment. Draft Version 1.0. Schaumburg, IL: Electronic Medical Record Institute, May 27, 1996. EMRI, Glossary of Terms Related to Information Security for Electronic Medical Record Systems. Schaumburg, IL: Electronic Medical Record Institute, July, 1996. EMRI, Guidelines for Establishing Information Security Policies at Organizations Using Computer- based Patient Records. Schaumburg, IL: Electronic Medical Record Institute, February, 1995. EMRI, System/Application Functional Requirements Related to Security of Computer- based Patient Records, Draft Version 1.0. Schaumburg, IL: Electronic Medical Record Institute, July, 1996. Dick, R.S. and Steen, E.B. (Eds.). The Computer-based Patient Record: An Essential Technology for Health Care. Washington, DC: National Academy Press, 1991. Dickinson, G.L. EMR/EMR System Qualifying Characteristics. Comment Paper of Health Data Sciences Corporation, March 3, 1995. Schiller, A. and Andrew, W. "The EMR: A Patient Perspective," Healthcare Informatics. pp. 82-84, March, 1996. 70
  • 143. D R A F T C O N F I D E N T I A L AppendixGLOSSARYAdministrative data Data used in the administration of a medical practice. This includes hospital discharge abstracts, health insurance claims, and enrollment records.Administrative simplification Reduction of the cost and complexity of healthcare by standardizing and automating the administrative activities of healthcare providers and insurers.ANSI American National Standards Institute.ASC (Accredited Standards Committee) A committee chartered by ANSI to work on standards in a particular area of commerce. For example, ASC X12 is the committee working on standards for the insurance industry, including health insurance.ASTM American Society for Testing and Materials.Asymmetric encryption An encryption scheme in which information intended for an individual is encoded with his/her well-known, public encryption key. This data may only be decoded with his/her private key (generated from a guarded password).ATM (Asynchronous Transfer Mode) A fast networking protocol based on small, uniform packets. ATM communications are suitable for the continuous transfer of large amounts of data, including video streams. 71
  • 144. D R A F T C O N F I D E N T I A LAuthenticator A device that provides an internally stored or calculated response to verify a user’s identity when logging onto a computer. Only authorized users are likely to know a unique piece of information (the password) and to be in possession of a unique piece of equipment (the authenticator).Automated data collection Direct transfer of physiological data from monitoring instruments to a bedside display system or a computer-based patient record.Backbone A high-capacity communications channel that carries data acquired from smaller branches of a computer or telecommunications network.Bandwidth The amount of information an electronic connection can carry per unit of time, usually expressed in bits per second.Biometrics identifier A retinal pattern, fingerprint, or other anatomical feature that can be used by a computer program (along with appropriate interface equipment) to positively identify a user.Capitation A healthcare payment structure based on a set fee per health plan member per unit of time.CBA (cost-benefit analysis) A comparison of the net costs of an intervention with the net savings.CD-ROM Compact disk, read-only memory.CDSS Clinical decision support system.CEA (cost-effectiveness analysis) A structured, comparative evaluation of two or more healthcare interventions.CHESS (Comprehensive Health Enhancement Support System) An interactive computer system developed at the University of Wisconsin that provides information, social support, and problem-solving tools for people living with AIDS and the HIV virus.CHI (Consumer Health Informatics) The study, development, and implementation of computer and telecommunications applications and interfaces which are designed to be used by consumers of health services. 72
  • 145. D R A F T C O N F I D E N T I A LCHIN (Community Health Information Network) Electronic systems that facilitate a community-wide exchange of clinical and administrative information among providers, payers, banks, pharmacies, public health agencies, employers, and other participants in the healthcare system.CHMIS (Community Health Management Information System) An electronic system similar to a CHIN which emphasizes the creation of a data repository to assess the performance of healthcare providers and insurance plans.Clinical decision support An information tool to help a clinician diagnose and/or treat a patient’s health problem, including relevant diagnostic procedures and treatments.Clinical information system A hospital-based information system which collects and organizes clinical, as opposed to administrative, data related to the care of a patient.Clinical practice guideline An outline of broad parameters for the diagnosis, treatment, prevention, or rehabilitation of a particular health problem.Coding standard A system for assigning alpha-numeric codes to specific words, concepts, or actions for the purpose of standardizing messages between computers and organizations.Computer-based patient record A compilation of the clinical and administrative information related to the care of a single individual in digital form.EMR Computer-based patient record.CPT-4 (Current Procedural Terminology, Fourth Edition) A classification and coding system for health services maintained by the AMA. CPT-4 is used in billing by clinicians and other non-institutional providers.CSN (Community Services Network) A project in Washington, DC that uses communication and computer technologies to support and coordinate health and human services at the community level.Data distillation An informal label for analyzing raw data.Data repository The component of an information system that accepts, files, and stores data from a variety of sources. 73
  • 146. D R A F T C O N F I D E N T I A LDecision support See Clinical decision support.EDI (Electronic Data Interchange) The application-to-application interchange of business data between organizations using a standard data format.Fault-tolerant computer systems Reliable computer systems which incorporate redundant processors, disk drives, and power supplies to ensure the full-time operation of a critical information network.Firewall Computer hardware and software that block unauthorized communications between an institution’s computer network and external networks.Frame relay A fast networking protocol in which data are packaged in variable-length frames for shuttling between computer networks.HL7 (Health Level 7) An application-level interface specification for transmitting health-related data, usually within a single institution.HMO Health maintenance organization.ICD-9-CM (International Classification of Diseases, Ninth Revision, ClinicalModification) A classification and coding system for health problems and services, maintained by NCHS and HCFA, and used for billing by inpatient hospitals and other institutional providers.IDS (integrated delivery system) An organized system of healthcare providers spanning a range of healthcare services.IPA (Independent Practice Association) An organization that contracts with a managed care plan to deliver health services at a single capitation rate.ISDN (Integrated Services Digital Network) A digital telephony protocol that represents the next major jump in telecommunications technology. Standard modems restrict speeds to 28,800 bps with the analog phone system, but ISDN allows speeds of 64,000 bps and 128,000 bps.Knowledge-based system A decision support system based on an automated, systematized application or sets of rules or heuristics for analysis of raw data. 74
  • 147. D R A F T C O N F I D E N T I A LLAN (Local Area Network) Communications lines linking a localized group of computers, printers, and servers.Laser optical card A plastic device the size of a credit card that can hold large amounts of digital data. The data cannot usually be altered once it is written to the card.Magnetic strip card A plastic card with a magnetic strip on the back. The card can store about 250 characters and it is used primarily for personal identification and verifying eligibility for insurance benefits.Managed care (or managed health care) The various systems of healthcare delivery that attempt to manage the cost, quality, and accessibility of health care.Managed care organization An organization, such as an HMO or PPO, that uses one or more techniques of managed care.MBone MBone stands for the IP Multicast Backbone on the Internet. IP Multicast-based routing facilitates distributed applications to achieve time-critical "real-time" communications over wide-area IP networks through a lightweight, highly-threaded model of communication without congesting server nodes.NCHS National Center for Health Statistics.NCHSR National Center for Health Services Research.NII National Information Infrastructure.NIST National Institute for Standards and Technology.NLM National Library of Medicine.NUBC National Uniform Billing Committee.OCR (optical character recognition) Automated scanning and conversion of printed characters to computer-based text. 75
  • 148. D R A F T C O N F I D E N T I A LOLAP (On-Line Analytical Processing) A database architecture that supports querying of complex, multi-dimensional databases.Patient record Information about a patient. Once stored exclusively on paper, this patient information is now available electronically in some health organizations.Payer Insurance company, self-insured employer, administrator, or other entity responsible for paying for an individual’s health care.PBM (pharmacy benefit management) A method of managing pharmaceutical benefits for insurers and employers. PBM uses disease management, pharmacy networks, negotiated discounts and rebates, lists of preferred drugs, and on-line utilization review. PBM also refers to organizations (such as pharmacy benefit managers) that perform PBM services.PDQ (Physician Data Query) A system of on-line (Internet) information regarding various cancers, ongoing clinical trials, and individuals and organizations involved in cancer care, maintained by NCI.PPO Preferred provider organization.Primary data Data collected directly from individuals (e.g., survey, observation) or documents (e.g., medical record review).Privacy Act The Federal Privacy Act of 1974 (5 U.S.C. Section 552a, 1988), which protects individuals from non-consensual disclosure of confidential information by government agencies.Provider (or healthcare provider) Any person (physician, nurse, etc.) or institution (hospital, nursing home, etc.) that provides healthcare services to patients.Purchaser An organization (usually a large employer) that purchases health insurance (usually for its own employees).Quality assessment Measurement and evaluation of the quality of health services delivered to patients, usually focusing on the processes and outcomes of those services. 76
  • 149. D R A F T C O N F I D E N T I A LRAID (redundant array of independent disks) Multiple computer disks configured as a single disk to provide either data redundancy or enhanced access speed.Relational database A collection of computer-based information that is organized or accessed according to relationships between data items.Reliability The reproducibility of a measure, or the extent to which the measure yields similar results each time it is used on similar samples, or the extent to which its components yield similar results for the same or similar samples.Rule-based expert system A decision support system based on large numbers of heuristics, or rules of thumb, that is derived from the analysis of experts’ actions or from published literature.Shared decision support systems A system which provides information to patients and providers regarding the prevention, diagnosis, management, and treatment of medical conditions.Smart card A plastic device the size of a credit card with an embedded computer processor and memory.SNOMED (Systematized Nomenclature of Medicine) A system for classifying and coding health problems, symptoms, and services.Speech recognition The automated conversion of spoken words into computer-based text. Some speech recognition systems recognize only one person’s voice; others are speaker-independent but recognize a limited vocabulary. These devices may recognize continuous speech or, more commonly, require that slight pauses be inserted between words.Structured data entry A data collection technique that constrains the language and format of clinical descriptions for the purpose of ensuring uniform, unambiguous, interchangeable messages.TCP/IP (Transmission Control Protocol/Internet Protocol) A communications protocol governing data exchanged on the Internet.Telemedicine The use of information technology to deliver medical services and information from one location to another. 77
  • 150. White Paper – Point-of-Care Knowledge ToolsDiagAssist™An interactive Clinical Diagnostic Decision Support Tool, which considers most of the Internal Medicinedomain, is designed to assist the clinician in determining the patient’s diagnosis or the condition underlyinghis or her complaint. DiagAssist can suggest one or more possible diagnoses based on intelligent mappingof the patient’s chief complaint to our vocabulary (UMLS Metathesaurus), which returns codified medicalconcepts linking over seven thousand HTML pages, providing Care Maps or Clinical Pathways for healthmaintenance and disease management. Another way to navigate DiagAssist is through a series of questionsbased on specialty and topic. These questions encapsulate signs and symptoms, physical findings, testresults, and background information. As the clinician answers each question a Java Inference Enginereturns a differential diagnosis.DiagAssist’s functionality includes clinical diagnosis, drug interactions, preventive care reminders, andactive (diagnostic or therapeutic) care advice and ICD-9/CPT-4 coding. It is tightly integrated with theUSHealthNet™, our CORBA application server, which provides CORBA services for our Java clientsusing an internet/intranet connection, while allowing easy integration with back-office systems.Constructs such as questions and diagnoses categories are built on top of a more general rules based engine.CORBA and IIOP are used between the client and server. questions, diagnoses, it i MedCo DiagAssist DiagAssist Client Server CORB Rules API Rules API Rules Client Server CORBA facts, ti rules Proprietary and Confidential Property of Richard Lynes
  • 151. Preventive Care RemindersDiagAssist is designed to remind the clinician to administer preventive health maintenance services whennecessary; examples include retinal examinations for diabetic patients and routine immunizations.Computer-aided diagnosis and drug-dose determination are usually designed to provide a single report on aspecific set of data on a patient; a preventive care reminder module, however, requires repeated input ofdata on the patient over a period of time, reflecting longitudinal care. This includes not only the patient’sdiagnoses and other clinical characteristics, but also the treatments and tests administered and their dates.Additional examples of preventive care reminders include blood pressure monitoring and cervical cancerscreening. DiagAssist elicits background information and risk factors from patients, then compares thisinformation to detailed preventive care guidelines, identifies potential problems, and recommendsappropriate interventions.Active-Care AdviceDiagAssist is designed to assist the clinician with preventive diagnostic or therapeutic procedures(including pharmaceutical treatments), particularly for patients suffering from chronic health problems.DiagAssist’s active-care advisory module requires input from an EMR module regarding the patient’shealth problems, tests, and treatments over a period of time. DiagAssist specifies which diagnostic andtherapeutic procedures should be performed at each stage of the health problem presented. DiagAssist’scomputer-based clinical advice can take five basic forms: 1. TREATMENT RECOMMENDATIONS (including pharmaceuticals). DiagAssist can provide diagnostic and treatment advice. For example, DiagAssist would recommend the appropriate antibiotic for patients with meningitis, based on any known allergies of the patient and the organism’s sensitivity. This information would be derived from an EMR. 2. REMINDERS to perform specific diagnostic or therapeutic procedures for patients with chronic health problems, such as adult respiratory distress syndrome. 3. ALERTS regarding potentially adverse events based on abnormal test results. An example might be a deterioration of the patient’s condition. 4. FEEDBACK and PROMPTS regarding testing and treatment options, physician orders, and the entry of information on the patient’s medical history. Specific Feedback and Prompts include: Possible injurious effects from drug and dietary supplement interactions Possible conflict or redundancy between diagnostic tests ordered for a patient Projected test results based on the patient’s history and current clinical condition. If the probability of an abnormal result is low, the provider can reconsider whether the test is appropriate at that time Results of previous tests that are similar to the one being ordered; allowing the provider to reconsider whether the test needs to be repeated at that time The cost of a test or treatment; allowing the provider to do a risk-benefit analysis and reconsider whether it is appropriate at that time Alternative tests or treatments that would be less expensive than the one ordered 5. PROGNOSES (Future) of intensive-care unit patients. These prognoses are based on the severity of the illness (using vital signs and other physical measures) and physiological reserve (age and general health). DiagAssist is also used to determine the severity of the illness and risk-adjusting outcome measures. An expanded prognostic model is designed to predict survival to 180 days (rather than to discharge); it includes patients who are not acutely ill. Proprietary and Confidential Property of Richard Lynes
  • 152. Health Maintenance TrackingThe Health Maintenance module is invaluable for improving patient care. Standard health maintenancetemplates, based on age and gender, comprise a standard data set within the system. These templates maybe customized to more closely track healthcare requirements for groups of patients or individuals. TheHealth Maintenance Tracking system reminds the user about a patients health maintenance needs at eachvisit. It also generates patient reminder cards for pre- and post-visit follow-up.Laboratory Data IntegrationThe EMR module stores complete laboratory data including CBC, urinalyses, blood chemistries,microbiology, special studies, and miscellaneous tests. Abnormal results are flagged and are easilydistinguished from results in the normal range. The system also records the results of diagnostic proceduressuch as EKG, pathology, and x-ray reports.Drug Dose DeterminationThe ScriptPAD™ module can assist the clinician in determining the proper dosage of a specific drug, eitheras an exact quantity or as a recommended range, for a particular diagnosis and patient, cross-referencingdata points in medical records with health plan/payer formularies. The algorithms in the knowledge basethen ascertain the proper dosage of the drug being prescribed. DiagAssist also provides a hyperlink to anon-line Physician’s Desk Reference (PDR) and drug-interactions knowledge base.Medical Tracking with Drug Interaction DatabaseThis system tracks current and previous medications, presenting collected information chronologically in amulti-date inquiry. Prescriptions are printed quickly and accurately, enhancing patient relations andensuring precise results. Prescriptions are printed on standard prescription forms. They include refilltracking, drug allergies, and contraindication information.A complete drug interaction database is integrated with the Electronic Medical Record module; this featureallows the provider to maximize accuracy and efficiency when prescribing medications. The systemsupports full Electronic Data Interchange protocol standards for electronic transmission through theInternet Health Care Community’s virtual pharmacy (EDI/XML).Electronic SignaturesWhether a progress note is entered directly by the physician or dictated and then transcribed, the physicianis required to sign the note electronically. This electronic signature is password-protected, as well asencrypted for complete security. Digital certificates and authentication mechanisms enable additionalsecurity levels to be implemented depending on the organization’s policies.Summary of Medical ConsultDecision support provides interpretive information processing. It is based on logical conditions or rules,but still displays practicable results for the provider and patient to use when making health care decisions.For example, the medication pricing display could be expanded to include providing alternativemedications based on a patients profile. This provides the ability to make choices that are both efficaciousand cost effective. Proprietary and Confidential Property of Richard Lynes
  • 153. USHealthNet POC ArchitectureDevelopment Team21 November1999Purpose of this SectionThis document is designed to show the current thinking on different aspects of the USHealthNet project.Specifically it deals with architectural and implementation issues. It follows on from the USHealthNetServer Architecture (Version 1) document (Development Team 24th October 1998) and the subsequentdiscussions within management, particularly the conference call of the 8th November.USHealthNet Architecture (Revised) Concurrency Control Context Manager Application / Module Layer ... ... Script Pad DiagAssist Application / Module API ... SC - API DA - API Core Services Layer (Object M d l) ... Patient DaigAssist Server Drug DaigAssist UMLS Patient Session ICD9 & CPT4 Interactions Services Episode Lookup UMLS API ... EMR Core FDB Patient DiagAssist DiagAssis ICD9 / CPT4 Repository Record Knowledge Session Store Repository EMR Base UMLS Episodes Storage / Repository EMR 3rd Party Figure 1: The original layered architectureFigure 1 shows the original layered diagram for the USHealthNet Architecture. Team USHealthNet hassubsequently elaborated upon this diagram so it now resembles Figure 2 (Note: For clarity purposes, not alllinks between components are shown). Proprietary and Confidential Property of Richard Lynes
  • 154. Cxt Mgr Pat Mgr ScriptPad DiagAssist Application/Module Layer Foundation APIs Service APIs System API EMR API SC API MC API UMLS API Client/Server API (CORBA Layer) Transaction Services Knowledge Services Patient Patient Drug TM ICD9 & Security Episode CPT4 Interactions Lookup MC Ccurrency Session SP ... MC UMLS Session ... Server Services Core Services Layer (Object Model) EMR Core MedCons EMR ICD9 / CPT4 User Table Patient Knowledge Episodes Repository Record Base SP Session MC Session FDB UMLS Store Store Repository Repository System Database EMR Knowledge Bases Storage/3rd Party Figure 2: The revised layered architecture The Application Layer The application layer now has four definite application/modules, which are in different stages of development. As well as these there are other components, which are in research or planning stages and these may be added to the USHealthNet suite. The components that are in development are DiagAssist, ScriptPad, Patient Manager, and Context Manager. The components which have been researched, planned or discussed include a UMLS Knowledge Component, a Discharge Summary Writer, and User Manager. The API Layer The API layer provides the interface between the client and the server. At this stage it has been decided to implement the API through CORBA (specifically Orbix 2). This provides us with a level of technology independence. There are two types of API within this layer, The Foundation API’s and the Service API’s. The Foundation API’s are so called because they are central to the system. They provide the functionality around which the system is built. The Foundation API set currently contains the EMR and the System API’s.1.1.1. The EMR API The EMR API provides the interface to patient details. It contains calls for interfacing with one or many patients. The EMR API has different layers of granularity. At the highest level there is the concept of dealing with several patients. This can then be brought down to the level of a single patient. For single patients there is the concept of an episode (or case), which is composed of several sessions. A session is a single interaction between a patient and a physician. For example there can be DiagAssist Sessions, which Proprietary and Confidential Property of Richard Lynes
  • 155. are single question and answer sessions. There can be ScriptPad Sessions, which is essentially a single prescription. An episode usually spans all sessions relating to a single illness or complaint.1.1.2. The System API The System API has three functions: • Security • Concurrency and multi-user issues • Transaction monitoring As can be seen the System API is concerned with the interactions between users and USHealthNet. In a senses it can be considered to be parasitic upon the system in that it has nothing to do with medical data, but at the same time the System API is vital for a fully functioning system. The security issues involved include user authentication, logging onto the system and measures to prevent unauthorized access to the system. The concurrency and multi-user issues have to be addressed to prevent data inconsistency. Finally transaction monitoring provides us with two functions. On the one hand it allows us to see how, when and where users make use of the system. We can use this to make the system more responsive and also to see what services users find most useful. Transaction monitoring also allows us to providing costing to users for their use of the system.1.1.3. Service API’s The service API’s can be taken on a case by case basis. They provide an interface to services provided by USHealthNet. Currently two Service API’s exist, the ScriptPad API and the DiagAssist API. Other Service API’s will be formalized as the services are defined. The existing API’s will also undergo changes. The current DiagAssist API, for example, provides an interface to EMR functions that are inappropriate for this API. Our understanding of the ScriptPad API is that it provides an interface to a drug database and as such will possibly function as a more general API. The Core Services Layer This is the server side of USHealthNet. It is divided into two sections, the Transaction Services and the Knowledge Services. The Transaction Services are those which concern users of the system, or patients. These are services such as EMR services, Transaction Monitoring Services, Security Services and so on. The Knowledge Services are those which add value by virtue of the meaningful information they impart to the user. The Knowledge Services may include ‘smarts’ which more efficiently impart information. An example of this is the DiagAssist Service, which has ‘smarts’ that allows it to make best-fit diagnosis based on criteria. The Storage Layer The purpose of the Storage Layer is to provide persistence within the system. This is the layer at which the various databases reside. The databases as seen in the diagram may be actual DB’s or may be bridges to external DB’s. The connection between the Core Services Layer and the Storage Layer is via ODBC, which gives us some level of independence from the underlying DB technology. Proprietary and Confidential Property of Richard Lynes
  • 156. Cxt Mgr Pat Mgr ScriptPad DiagAssist Application/Module Layer Foundation APIs Service APIs System API EMR API SC API DA-API UMLS API Client/Server API (CORBA Layer) Transaction Services Knowledge Services Patient Patient Drug TM ICD9 & Security Episode CPT4 Interactions Lookup MC Ccurrency Session SP ... DA UMLS Session ... Server Services Core Services Layer (Object Model) EMR Core DiagAssist EMR ICD9 / CPT4 User Table Patient Knowledge Episodes Repository Record Base SP Session DA Session FDB UMLS Store Store Repository Repository System Database EMR Knowledge Bases Storage/3rd Party Figure 3: USHealthNet Architecture – Implementation TimeframesFigure 3 above gives an indication of the dates when different components of USHealthNet come onstream.The diagonal lines represent components that will be installed in Beaumont Hospital in December. Thevertical lines are ScriptPad components, which should be integrated early in the Q1-98. The horizontallines represent the system components of USHealthNet. USHealthNet Version 2 should be ready by end ofQuarter 1 ’99 which would have the system components integrated and possibly other application modules. Proprietary and Confidential Property of Richard Lynes
  • 157. USHealthNet ArchitecturePurpose of this documentThis document is designed to show the current thinking on different aspects of the USHealthNetproject. Specifically it deals with architectural and implementation issues. It follows on from theUSHealthNet Server Architecture (Version 1) document (October 1998) and the subsequentdiscussions within Team USHealthNet particularly the conference call of the 8th November.USHealthNet Architecture (Revised) Concurrency Control Context Manager Application / Module Layer ... ... Script Pad DiagAssist Application / Module API SC API DA API ... Core Services Layer (Object Model) Patient ... DiagAssist Server Drug DiagAssist UMLS Patient Session ICD9 & CPT4 Interactions Services Episode Lookup UMLS API ... EMR Core FDB Patient DiagAssist DiagAssist ICD9 / CPT4 Repository Record Knowledge Session Store Repository EMR Base UMLS Episodes Storage / Repository EMR 3rd Party Figure 1: The original layered architectureFigure 1 shows the original layered diagram for the USHealthNet Architecture. Team USHealthNethas subsequently elaborated upon this diagram so it now resembles Figure 2 (Note: For claritypurposes, not all links between components are shown). Proprietary and Confidential Property of Richard Lynes
  • 158. Cxt Mgr Pat Mgr ScriptPad DiagAssist Application/Module Layer Foundation APIs Service APIs System API EMR API SC API DA-API UMLS API Client/Server API (CORBA Layer) Transaction Services Knowledge Services Patient Patient Drug TM ICD9 & Security Episode CPT4 Interactions Lookup MC Ccurrency Session SP ... DA UMLS Session ... Server Services Core Services Layer (Object Model) EMR Core DiaAssist EMR ICD9 / CPT4 User Table Patient Knowledge Episodes Repository Record Base SP Session DASession FDB UMLS Store Store Repository Repository System Database EMR Knowledge Bases Storage/3rd Party Figure 2: The revised layered architectureThe Application LayerThe application layer now has four definite application/modules, which are in different stages ofdevelopment. As well as other components, which are in research or planning stages and thesemay be added to the USHealthNet suite. The components that are in development areDiagAssist ScriptPad, Patient Manager, and Context Manager. The components which havebeen researched, planned or discussed include a UMLS Knowledge Component, a DischargeSummary Writer, and User Manager.The API LayerThe API layer provides the interface between the client and the server. At this stage it has beendecided to implement the API through CORBA (specifically Orbix 2). This provides us with alevel of technology independence. There are two types of API within this layer, The FoundationAPI’s and the Service API’s. The Foundation API’s are so called because they are central to thesystem. They provide the functionality around which the system is built. The Foundation APIset currently contains the EMR and the System API’s. Proprietary and Confidential Property of Richard Lynes
  • 159. The EMR API The EMR API provide the interface to patient details. It contains calls for interfacing with one sor many patients. The EMR API has different layers of granularity. At the highest level there isthe concept of dealing with several patients. This can then be brought down to the level of asingle patient. For single patients there is the concept of an episode (or case), which iscomposed of several sessions. A session is a single interaction between a patient and a physician.We well be implementing the CorbaMed Enterprise Master Patient Index specification and allpatient object requests will be filtered through this Interface. For example there can beDiagAssist Sessions, which are single question and answer sessions. There can be ScriptPadSessions, which is essentially a single prescription. An episode usually spans all sessions relatingto a single illness or complaint.The System APIThe System API has three functions: Security Concurrency and multi-user issues Transaction monitoringAs can be seen the System API is concerned with the interactions between users andUSHealthNet. In some senses it can be considered to be parasitic upon the system in that it hasnothing to do with medical data, but at the same time the System API is vital for a fullyfunctioning system. The security issues involved include user authentication, logging onto thesystem and measures to prevent unauthorized access to the system. The concurrency and multi-user issues have to be addressed to prevent data inconsistency. Finally transaction monitoringprovides us with two functions. On the one hand it allows us to see how, when and where usersmake use of the system. We can use this to make the system more responsive and also to seewhat services users find most useful. Transaction monitoring also allows us to providing costingto users for their use of the system.Service API’sThe service API’s can be taken on a case by case basis. They provide an interface to servicesprovided by USHealthNet. Currently two Service API’s exist, the ScriptPad API and theDiagAssist API. Other Service API’s will be formalised as the services are defined. TheScriptPad API provides an interface to a drug database and as such will possibly function as amore general API.The Core Services LayerThis is the server side of USHealthNet. It is divided into two sections, the Transaction Servicesand the Knowledge Services. The Transaction Services are those which concern users of thesystem, or patients. These are services such as EMR services, Transaction Monitoring Services,Security Services and so on. The Knowledge Services are those which add value by virtue of themeaningful information they impart to the user. The Knowledge Services may include ‘smarts’which more efficiently impart information. An example of this is the MedConsult Service,which has ‘smarts’ that allows it to make best-fit diagnosis based on criteria. Proprietary and Confidential Property of Richard Lynes
  • 160. The Storage LayerThe purpose of the Storage Layer is to provide persistence within the system. This is the layer atwhich the various databases reside. The databases as seen in the diagram may be actual DB’s ormay be bridges to external DB’s. The connection between the Core Services Layer and theStorage Layer is via ODBC, which gives us some level of independence from the underlying DBtechnology. Proprietary and Confidential Property of Richard Lynes
  • 161. Wendy RobertsVice President of Business Development- AGENCY.COMWendy brings over 18 years of marketing experience to her work atAGENCY.COM. She has focused for the past 8 years on the interactivemedium and electronic commerce, working with many Fortune 500 companiesworldwide, including IBM, NCR/AT&T, Federal Express, and GeneralMotors.As vice president of business development, Wendy directly manages thestimulation of new client opportunities.Prior to joining AGENCY.COM, Wendy served as the Vice President ofBusiness Development and Marketing at Tech 2000, the leading developerof interactive communities of interest in both the Motor Sports andEnergy industries on the Internet.Wendy pioneered the Electronic Strategies Consulting capability atBronner Slosberg Humphrey, which was responsible for consulting bothcurrent and new clients on the impact of interactivity on theirbusiness landscape. Wendy’s role focused on interactive marketing anddatabase initiatives as well as helping Fortune 1000 clients understandthe impact of interactive supply chain, distribution management,internal process and re-engineering their business plan as competitivedifferentiators.Additionally, Wendy also served as the co-founder and chief operatingofficer of CommSoft Technologies, a company that developed client-server based electronic catalog applications even before the Internetwas a commercial platform. She developed a custom application for asoftware catalog and fulfillment system for NCR’s finance group’sinternal, worldwide network.
  • 162. RICHARD LYNES Professional Resume3 Acorn Street (781) 545-3938Scituate, MA 02066 cto@mediaone.netPROFESSIONAL PROFILE:Strategic Planning and Information Technology Solutions Thought-Leader, achieving improvedoperating efficiency through IT and business strategy alignment, and increased shareholder value byleveraging technology as a competitive differentiator.Professional Competencies: Strategic IT and Business planning for e-commerce, e-business and Knowledge Management as a competitive differentiation in the B2B, B2C and B2ME markets, integrating both buy-side, sell-side and customer facing processes Mentoring companies executives in their migration from traditional mass marketing and operational practices to those of 1-2-1 personalization; Customer Relationship Marketing (CRM) utilizing interactive media, database marketing, and the integration of legacy Line-of-Business applications, including SCM, OLR and ERP solutions Guiding executives on the sweeping changes, trends and impacts of technology on competitive strategies, business objectives and business transformation Technical team lead on the design, development and deployment of scaleable Enterprise-wide information, software and systems architectures. Supporting Intranet/Extranet application infrastructure components for MRO purchasing and e-catalog procurement, Human Resources, Sale Force Automation, Knowledge Management, and strategies for linking channel partners, suppliers and customers.Serving as CIO and CTO for several market leaders, my past successes have been achieved by developingvisionary technology strategies and facilitating information flow within the senior management strategicplanning function. By improving knowledge utilization through linking corporate stakeholder processes andobjectives, client business strategies, and facilitating cooperation between cross-functional teams, my insightshave created a more customer centric approach and methodology.My colleagues have often described me as an approachable team player who has a proven knack offorecasting and keeping them abreast of critical changes in the dynamic, fast paced world of technology. Thistalent does not come from a crystal ball, but from a substantial career of following the movements within boththe Information Technologies and Tele-communications industries.____________________________________________________________________________EXPERIENCE:Jan. 1997- Sequitor Medical Technologies, Inc., Boston, MA.Present Executive Vice President, Chief Information OfficerDeveloped corporate IT strategy supporting business objectives, positioning Sequitor as a leader in the Point-of-Care Knowledge Acquisition and Delivery tools market. Primary accomplishments have been:• Established strategic component-based architecture, network centric computing infrastructure, and development partnerships• Lead the company in the development of a Community Health Care Information Delivery Network strategy• Developed Internet/Intranet and Extranet based Electronic Medical Records solution, tapping into the Point-of-Care knowledge Delivery and Acquisition market, based on Java, CORBA, IIOP/HTTP, XML/DHTML, JavaScript and applications integrating AI inference Engines, NLP, Ontology’s, Domain specific lexicons and semantic network knowledge Services.• Recently competed a Java client-server three-tiered development project, producing an integrated prescription-writing module coupled with a Diagnostic Decision Support solution.• Directly oversaw development efforts spread across five out-sourced R & D firms from Boston to Dublin, Ireland.
  • 163. RICHARD LYNES Professional Resume3 Acorn Street (781) 545-3938Scituate, MA 02066 cto@mediaone.net• Managed multiple parallel projects with increased complexity do to the distributed nature of the remote development teams, which were completed on schedule and on budget, even when scope was increased. This was a multi-million dollar development effort and one of the first to fully implementing a three tiered client-server architecture integrating JavaBean components, Corba, IIOP/HTTP, WEB server and Sequel Server over the Internet/Intranet topology.• Playing the additional role of chief architect, designed the overall IT strategy, which lead to the design and development of a complete Corba API controlling all method invocations between the Java client and Corba applications server and WEB server.June 1996- Diversified Technologies Group, Hull, MA.Jan. 1997 Managing PartnerAs a principal, managed consulting engagements with fortune 500 clients. Projects involved creating corporatevision and strategy leveraging new technologies and service models in support of measurable businessobjectives. Each engagement was awarded as a result of proactively advising the clients of new businessopportunities that could be achieved through the application of technology.• Defined interactive advertising, marketing and commerce strategies for Internet development company through the identification of site tracking, measurement, RAD commerce tools and dynamic content development through personalization mechanisms.• Additional engagements led to the development of a WEB Based Enterprise Asset Management Model. The infrastructure supporting this model is an adaptive framework architecture supporting corporate IT procurement processes (ERP) and corporate wide asset management. The conceptual design integrates an Intranet based e-catalog coupled with auto discovery agents, which support a Total-Cost-Ownership (TCO) model enabling configuration management, license management, and ESD.• Other engagements involved the conceptual design of a visionary Network Centric Community Health Care Delivery System. The vision provides for a layered architecture enabling community health care delivery services. The design goal is to leverage the Internet/Intranet tools and architecture, and develop a community level Extranet (Frame Relay VPN) supporting Practice Management Services integrating other tele-medicine applications.March 1994 - Bronner Slosberg Humphrey, Boston, MA.June 1996 Chief Technology OfficerSenior executive responsible for research and development, as well as guiding corporate technology strategyand policy for the development of new interactive media capabilities. Consulted with Clients on the impact ofemerging technologies to their existing and new marketing practices. Developed the corporate technologystrategy for several key clients.Client Projects Executed• Assisted fortune 50 package shipping company in the development of a new business opportunity, which leveraged key database and electronic cataloging technologies, integrating with their core business of Logistics and Material Management, to that of digital information and content, leveraging merchant and other supply-chain relationships in a Global Business-Business Internet E-commerce Hub• Conducted IT assessment and re-designed the software product strategy of a fortune 50 technology company, providing them with a greater potential market penetration• Developed technology plan to support personalized interactive marketing strategy for top ranked direct mail catalog company• Greatly enhanced the service offerings of a fortune 50 telecommunications company in the area of online services as a direct result of a technology assessment and requirements development engagement• Lead a cross functional team in the development of functional specifications and technology strategy which enabled the virtual integration and consolidation of 175 corporate call centers• Conducted IT assessments, infrastructure vision development and implementation plans in support of corporate business and marketing strategies
  • 164. RICHARD LYNES Professional Resume 3 Acorn Street (781) 545-3938 Scituate, MA 02066 cto@mediaone.netInternal Corporate Development • Developed Advanced Technology Group, which identified requirements from all functional areas of the organization and identified technology standards for the execution of internal and external client engagements • Identified new technologies and alliance opportunities • Directed the technology strategy development of three agency capabilities, resulting in three integrated practice areas: -Electronic Strategy (E-commerce Consulting) -Tele-services (Call Center Consulting) -Customer Based Management Strategy (1-2-1 Relationship Management Consulting) April 1992 - CommSoft Technology, Inc., Braintree, MA. March 1994 Co-Founder and Vice President of Research and Development • Developed ESD product vision and directed development efforts for electronic catalog marketing applications supporting procurement of IT assets through the Internet • Responsible for managing a multi-million dollar budget and all technology related development efforts in support of the organization’s business model • Actively participated in strategic business planning and execution • Key Clients Served: - Bell Laboratories -IBM -NCR/AT&T Brussels, Belgium -Boeing (BCAG) -Software Development Company (SDC) -Microcomm -Digital Equipment Corporation -Ungermann Bass June 1991 - Ronlyn Information Technologies, Augusta, GA. April 1992 Technical Consultant • Reviewed government bids for small business • Assisted in the RFQ/RFP process, technical specifications and resource analysis June 1990 - Diversified Technologies Group, Augusta, GA. April 1992 Senior Consultant/Systems Integrator • Consulted on Electronic Software Distribution (ESD) for the following companies: -IBM -DEC -SDC (Programmers Shop) -Sprint -MCI -NCR -North Point (NPSV) -Corporate Software • Provided IT architecture design and integration services in the following market segments: Lite Manufacturing & MRP -Retail (POS) -Wholesale Distribution & JIT -Imaging -Document Management -Health Care Dec 1988 - Applied Solutions/Systems Integration Group, Augusta, GA. June 1990 Division Manager • Developed a business plan targeting four primary vertical industry segments: -Medical Practice Management -Integrated Office Automation -Retail Point-of-Sale -Wholesale Distribution • Managed sales, marketing, systems integration, and support operations • Managed the transition and reorganization of a technology M&A transaction • Established strategic business partnerships with IBM, AT&T, UNISYS
  • 165. RICHARD LYNES Professional Resume3 Acorn Street (781) 545-3938Scituate, MA 02066 cto@mediaone.netMarch 1984 - Automated Business Applications, Inc., Augusta, GA.Dec 1988 Managing Principal• Founding Core Team member of new innovative technology start-up• Directly oversaw Finance, Operations, Sales & Marketing• Directed daily Systems Integration planning & implementation• Developed supply-chain-management consulting infrastructure practice• Designed & development practice methodology, process and tools selectionNov. 1982 - Technology Import Group, Augusta, GA.March 1984 Senior Consultant• Provided research for business plan• Developed strategic technology partnership in Pacific Reign• Established vendor selection methodology and process• Conducted in-field product testing and selectionSept 1981 - Gould Simulated Systems Division, Augusta, GA.Nov 1982 Senior Field Engineer• Maintained US Army Signal Corps. first interactive computer based training simulator. This was a 7 million multi-year project• Facilitated reorganization of existing support programs and streamlined maintenance processes and procedures• Briefed command staff on technical improvements for future simulators• Conducted circuit level diagnostics and troubleshooting• Maintained depot level repairs and local parts stock/inventoryMay 1975 - U. S. Army Strategic Communications CommandMay 1981 Lead Communications Engineer• European and Pacific Theater of Operations, responsible for the engineering and deployment of the strategic communications backbone. This includes wireless RF Microwave facilities, fixed station Dial Central Office facilities, Satellite and tactical Digital Switching Systems. Managed a team of experts which were responsible for site assessment, engineering & network design, and implementation of world wide strategic communications systems
  • 166. RICHARD LYNES Professional Resume3 Acorn Street (781) 545-3938Scituate, MA 02066 cto@mediaone.net____________________________________________________________________________EDUCATION:Continuing Education Areas:-Object oriented design & analysis -Enterprise applications design & analysis-Network: systems management-Electronic Software & Service DistributionUNIVERSITY OF GEORGIAGEORGIA INSTITUTE of TECHNOLOGY-BS Computer Science 19823 years of advanced communications engineering DOD schools for the United States Armed Services____________________________________________________________________________WHITE PAPERS AUTHORED:-Re-engineering enterprise work flow processes -Enterprise Messaging-Enterprise Information Systems -Electronic Software Distribution-Electronic Catalogs -Enterprise-Intranet Directions-Virtual Call Centers -Adaptive Infrastructures-E-commerce -Learning Organizations____________________________________________________________________________Professional Associations:-Institute of Electrical and Electronics Engineers (IEEE )-Re-engineering International Association-Workflow Management Coalition (WfMC)-Object Management Group (CorbaMed)
  • 167. Concord Associates688 Concord Avenue, Belmont, MA 02478 617-489-3505 FAX 617-484-9354Professional Biography of Donald LeavittDonald > Leavitt is the founder of Concord Associates, a firm devoted to the development and nurturing of seed-stage venture investments. Mr. Leavitt is also President of Dynographics, Inc., an Internet-focused management andmarketing consultancy specializing in the creation of organizationally and strategically aligned: • Customer acquisition, development, and retention plans, • Internet-compliant strategic marketing plans, • Internet-driven brand-building initiatives, • Interactive marketing and sales scenarios, • Strategic operating plans for new Internet-based e-commerce initiatives, and • Resolution and workout plans for Internet-generated channel conflict widely considered the single most significant barrier to success for large legacy-driven enterprises transforming from traditional to electronic commerce channels.Many of these issues are analyzed in depth in a case Mr. Leavitt co-authored on Bronner Slosberg Humphrey forthe Harvard Business School with David E. Bell, Royal Little Professor of Business Administration at HBS. Mostrecently, Mr. Leavitt collaborated with Professor Bell on an HBS case that focuses on donor acquisition andretention issues confronting the United Way of Massachusetts Bay.Both before and after the emergence of the Internet as the channel of choice for the new millenium, Mr. Leavitt hasbeen providing strategic product management, M&A analysis, market assessment, and technology evaluationservices to senior management at such marquee clients as Fujitsu, Ltd., Merill Lynch, Lehman Brothers, CanonUSA, Worldwide Volkswagen, CBS, Eastman Kodak, Jones Day Reavis & Pogue, Ziff Davis, and theGovernment of the Peoples Republic of China.In 1987, Mr. Leavitt started Spectra Sciences, a designer and manufacturer of high value added, internationallypatented specialty chemicals. During his tenure as founder, CEO and CFO of the company, he raised nearly $3million in seed-stage venture capital financing. Today, Spectra Science is redefining laser technology through itswork with Nanocrystals.An honors graduate of Brandeis University, Mr. Leavitt began an extensive involvement in the advanced imagingtechnology at NASAs Photographic Research Laboratory in the late 1960s. At NASA, he co-designed theworlds first digital image enhancement system for pictures taken in space and on the lunar surface by Apolloastronauts.After a number of successful R&D forays covering a variety of rapid access imaging systems, Mr. Leavitt went onto become the Technology Editor of Popular Photography, and the Advanced Technology consultant for TimeMagazine.Mr. Leavitt has also written and produced major stories for Time, New York Magazine, and The New YorkTimes, where he was one of the first to help chronicle the painstaking restoration of the Leonardo da Vincis TheLast Supper. In the book publishing field, he was publicity and marketing consultant for Ansel Adams Yosemittand the Range of Light, one of the best selling big-ticket art books of all time; consulting editor for The NEwAnsel Adams Photography Series; and creative consultant for The Great Ladies of Jazz.
  • 168. Jeff Heywood - BioOver the past 12 years held senior management positions at the following companies:CFO, StarQuest Software, Inc. 12/98-current-Middleware software company specializing in connectivity software for networks, routers, andeCommerce solutions (web Servers, application servers) for large enterprises in all industry segments.-Privately held, venture funded (Sierra Ventures).Prior Management positions:V.P. of Finance and Operations, Birmy Graphics Corporation June 98 – Dec 98-Leading manufacturer of software applications for the color inkjet industry-Privately heldController, Adobe Systems, Inc. 1990-1998-currently ranked as the third largest application software company in the world-publicly traded on NASDAQDirector of Finance/Controller, Emerald City Software. 1988-1990-graphic application software company-venture funded-sold to Adobe in 1990Controller, Mountain View Golf Company 1986-1988-A golf course management and development company-privately heldPrior to the above from 1979-87:I worked as in various accounting/finance and management roles at various high tech companies such asAcuson, HP, Wiltron, Thomas Industries and I worked for a large metropolitan hospital San Jose HealthCenter (as a lab tech & system administrator after I finished my Bio degree).The following is my educational background:BA -Bio SciencesBS -AccountingMBA -Finance & ManagementCalifornia State University, San Jose, CA.Personnel Statistics:Age – 41Single, with one son (attending USC), live in Los Altos, CA (heart of Silicon Valley)
  • 169. PATRICK G. MORAND2529 Kingston Drive Telephone: 847-291-4192Northbrook, Illinois 60062 Fax: 847-291-4193 Email: pgmorand@ameritech.net CAREER SUMMARYGeneral management executive. Expertise in: strategic and business planning, public accountability,turnaround, product and market positioning, strategic relationships, management development, headquartersand division operations. DEMONSTRATED STRENGTHS• Delivered strong and sustainable revenue growth for national multi-million dollar organizations within highly competitive environment• Adept in building, motivating and leading culturally diverse teams with a strong commitment to customers and focused on the achievement of organizational goals• Confident and innovative thinker, problem solver and decision maker with an exceptional ability to forge successful business relationshipsCENTEON, LLC; King of Prussia, Pennsylvania 12/1/98 - Present$900M international plasma protein manufacturer; division of Aventis Pharmaceuticals General Manager Accountable for startup in clinical trials partnerships • Built a successful network of pharmaceutical/biotech companies, software licenser and the blood and plasma industry with first-year revenues of $1MSEQUITOR MEDICAL TECHNOLOGIES, INC.; Chicago, Illinois 6/1/96 - 5/1/98International development-stage, startup company marketing disease management software. Executive Vice President/Investor Company’s first employee, implementing investors’ vision; generating interest among prospective usersLIFESOURCE, INC.; Chicago, Illinois 1992 - 5/30/96$33M high-profile pharmaceutical manufacturer of blood products; 450 employees President and Chief Executive Officer Full P/L accountability to the Board of Directors for leadership and direction to competitively position the company for growth and acquisition • Refocused the corporate mission, developed strategic plan and designed competency-based critical success factors, resulting in unprecedented year over year 14% growth with lower than CPI price increases • Quickly turned around financial performance and increased net income 88% • Promptly reversed negative regulatory status from near closure by FDA • Assured companys future by engineering an alliance with ITxM in Pittsburgh • Spearheaded the consolidation, financial negotiations and relocation of 4 separate sites into a new 74,000 sq. ft. headquarters location within 12 months. • By developing a high-performance senior management team and instituting a continuous improvement culture, transformed the company into an energetic and sophisticated provider of products and services
  • 170. Patrick G. Morand Page TwoAMERICAN RED CROSS 1974 - 1992 Chief Executive Officer/Division President, Baltimore, Maryland (1987 - 1992) Full P/L accountability for all operations of the systems third largest organization with $50 M revenues and 1,000 employees. Developed business and strategic plans; negotiated contracts; designed and implemented corporate initiatives. Headed extensive capital campaign drives. • Designed and secured $13 M in financing for the construction of a 111,000 sq. ft. facility in less than 18 months • Saved $10 million by consolidating two major regional centers and streamlining workforce by 42% without service disruption; negotiated two labor contracts • Reduced turnover by 20% and increased minority recruitment by 50% through diversity initiatives • Founded the National Holocaust and War Victims Tracing and Information Center; organized the national Board of Advisors; raised $388,000; gained recognition for the Center through front-page coverage in New York Times, Washington Post and Wall Street Journal and prime time broadcasts of CBS, NPR and CNN • Skillfully merged two boards of directors maintaining unwavering support from key high-profile members, resulting in high quality governance Chief Executive Officer/Division President, St. Paul, Minnesota (1982 - 1987) Full P/L accountability for the system’s twelfth largest regional center providing a variety of community-based services including those to academic medical centers and urban/rural hospitals within a five-state area. • Initiated the first organ, bone marrow, bone and tissue transplantation program affiliated with a major community organization • Under leadership, contributions surged 500% by galvanizing a network of 300 community/civic leadersPrevious experience -- Assistant Executive Director (Dallas), Center Administrator (Toledo), AssistantAdministrator and Account Executive (Columbus). ACADEMIC CREDENTIALS B.A., Philosophy ⋅ Athenaeum of Ohio ⋅ Cincinnati, Ohio Diplomate, American College of Healthcare Executives CIVIC AND COMMUNITY LEADERSHIP Research and Education Foundation of the Michael Reese Medical Staff, Director District 30 School Board Selection Caucus, Chair Northwestern University Associates, Member Red Cross Holocaust and War Victims Tracing and Information Center, Chair – Nominating Committee AFFILIATIONS Executives Club of Chicago, Chairman of Healthcare Special Interest Group American College of Healthcare Executives, Regents Advisory Council Member
  • 171. Filename: Pats resumeDirectory: D:NewCoHRTemplate: D:program filesmicrosoft officeTemplatesNormal.dotTitle: PATRICK GSubject:Author: Patrick MorandKeywords:Comments:Creation Date: 06/15/99 12:39 PMChange Number: 2Last Saved On: 06/15/99 12:39 PMLast Saved By: ctoTotal Editing Time: 0 MinutesLast Printed On: 06/22/99 12:51 AMAs of Last Complete Printing Number of Pages: 2 Number of Words: 678 Number of Characters: 4,437
  • 172. Filename: Jeff Heywood BiographyDirectory: D:NewCoHRTemplate: D:program filesmicrosoft officeTemplatesNormal.dotTitle: Jeff Heywood Biography:Subject:Author: Craig FixlerKeywords:Comments:Creation Date: 06/16/99 3:49 PMChange Number: 3Last Saved On: 06/22/99 12:53 AMLast Saved By: ctoTotal Editing Time: 1 MinuteLast Printed On: 06/22/99 12:53 AMAs of Last Complete Printing Number of Pages: 1 Number of Words: 225 Number of Characters: 1,349
  • 173. ScritpPAD quicklyallows physicians towrite or refill drugpresciptions, enteringdose, route and othercritical information.ScritpPAD quicklyalerts physicians aboutdrug side-effects &other dangerous druginteractions.
  • 174. USHealthNetDesign Specification for ScriptPad ComponentVersion 2.0 – September 11, 1997SctiptPad Design Specification Page 1 09/12/97
  • 175. Table Of ContentsI. Purpose of this document................................................................................................................................... 3II. User Requirements ............................................................................................................................................. 4III. Functional Overview........................................................................................................................................... 5 Core Functionality........................................................................................................................................... 5 System Features............................................................................................................................................. 5IV. GUI DesignUser Experience & GUI ................................................................................................................. 6V. System Design: High-Level Object Model And Process Flow.......................................................................... 9VI. System Design: Context Management & EMR Data Access ........................................................................ 10VII. System Design: Formulary/First Data Bank Integration ................................................................................ 11SctiptPad Design Specification Page 2 09/12/97
  • 176. I. Purpose of this documentThis document details the functional/design specification for the ScriptPad component of the "USHealthNetVirtual Physician Desktop". It will define the overall design of the application and its GUI interface, themethods by which the application retrieves necessary data, and an initial specification of the CORBAinterfaces which will be used for the drug-interaction component with the First DataBank knowledge baseand third-party formularies.Preliminary system requirements have been refined through interviews with practicing physicians, andtheir comments have been integrated into this draft specification.SctiptPad Design Specification Page 3 09/12/97
  • 177. II. User RequirementsOur research with physician users and medical IS professionals has encouraged us to refocus ourdevelopment efforts on the prescription writing experience itself. In particular, we consistently heard thefollowing:1) Physicians typically know which medications they are going to prescribe.2) Drug cost and provider coverage is an important consideration when the physician writes a prescription.3) Evaluating drug interactions is an “organic” part of the prescription writing process. That is, in choosing a medication, the physician is already considering what negative interactions must be avoided.4) Knowing a patient’s drug history will often impact the decision making process.5) Allergy information is critical, but not always provided in a consistent format. Many times, physicians rely on a patients memory of possible allergies.6) Physicians were skeptical that an expert-system (such as MedConsult) would provide meaningful advice on medication. All of the physicians we spoke to indicated that “that’s my job.”7) Physicians never want to be limited in their ability to make decisions.8) An interactive prescription system should utilize organizational and interactive metaphors that correspond to a physician’s daily activities.9) Physicians do not follow a linear decision making process in prescribing medications.Both the functional and behavioral specifications for the ScriptPad component should integrate the userobservations/requirements above.SctiptPad Design Specification Page 4 09/12/97
  • 178. III. Functional OverviewThe ScriptPad will be one component within the overall physician desktop currently consisting of theMedConsult diagnosis expert system, and an HTML-based electronic medical record. The purpose of theScriptPad is to allow a physician to manage a patient’s medications.Based on the user requirements outlined above, We have broken this primary functional requirement intotwo categories: core functionality and system features.Core Functionality 1) Create a new prescription. 2) Modify an existing prescription. 3) View a patient’s current medication and medication history.System Features 1) Automatic verification and notification of drug allergies. 2) Automatic verification and notification of drug interactions. 3) Integration with 3rd party formularies. 4) Automatic dosage calculation. 5) Ability to select drugs from a drug database (i.e., First Data Bank). 6) Some ability to enhance prescription writing with supplemental diagnosis information from MedConsult.We propose that the ScriptPad should act primarily as an advisor during the drug selection process. At nopoint should the ScriptPad limit physicians during the selction process. Instead, the ScriptPad should actas an intelligent advisor, highlighting important information, but making it easy for the physician tooverride its suggestionsThe system will also have some level of integration with the MedConsult diagnosis application. Upon thesuccessful diagnosis of the patient through MedConsult, the ScriptPad will have access to the diagnosis(ICD9) code (and all other patient information) through a standard set of defined APIs. The ScriptPadshould retrieve the diagnosis code and construct a list of recommended drugs for that diagnosis.After the physician has finished creating a prescription, he/she will digitally sign the order. This data willthen be persisted to the EMR. The actual mechanism for digitally signing has yet to be determined (theFDA has outlined requirements for digital signatures). At some future point, integration with an outsidepharmacy system would be valuable. For the interim, printing out the script may be all that is required.As mentioned previously, all patient information from outside sources (i.e. the EMR and MedConsult)will be accessible through a standard set of APIs. This set of APIs will be a superset of the currentlyexisting ones in use by MedConsult. Upon creation, ScriptPad will have access to this object and utilize itfor all patient data needs. The design of the API set should be such that ScriptPad can also use standardmethod calls to update any patient information.SctiptPad Design Specification Page 5 09/12/97
  • 179. IV. User Experience & GUI DesignResearch completed since the preliminary draft of this design specification has led us to reevaluate thelinear, step-based approach to the prescription writing experience. Our preliminary design supported astructured, multi-stepped prescription writing routineOur new design presents a user experience that addresses all of the functionality of the previous design,and also meets the following user requirements:1) Works within an existing, familiar metaphor – writing a prescription. In this case, the script itself will encompass dense functionality, allowing the physician to use it as both a data entry tool and the primary vehicle for user interactions.2) Recognizes that the physician probably knows which medication he/she wants.3) Presents supplemental information (allergies, etc.) as soon as available, without requiring the physician to dismiss modal dialog boxes and alerts.4) Supports a “drill down” approach to more detailed information without using multiple data screens that may disrupt the physician’s natural work flow.5) Complements the physician’s natural, non-linear decision-making process.Patient InformationThe current patients name andassociated information isdisplayed for the physiciansreference. This information willbe pulled from the medicalrecord. If the user wants toselect a different patient theycan click on the Patient buttonand a search dialog box willappear allowing the doctor tosearch on the patients name. Ifmultiple patients match a listwill appear with additionalinformation that helps inselecting the correct patient likeDate of Birth.Medication IncrementalSearchingAfter a user has typed in apredetermined number ofcharacters, the application willquery the FirstData drugdatabase and return to the dropdown list the drugs that start Patient is allergic to Special message here willwith the letters typed. As the penicillin. provide details to whateveruser types more letters, the list is highlighted on the left. Formulary does not coverwill scroll down to the nextclosest match. The doctor canalso scroll through the list ofdrugs and select the one theywant.SctiptPad Design Specification Page 6 09/12/97
  • 180. Out of Formulary IndicationIf the selected drug is not in the formulary for the patients insurance company, a red "NF" will appearnext to the selected drug. If a user clicks on the “NF”, a dialog box will appear with all drugs in that sameclass that are in the formulary with their associated costs.Literature Available IndicationIf there is any literature or other related information available for the selected drug the “i” button will beenabled. If a user wants a list of the literature they click on the “i” button and a dialog box is displayedwith the items listed in alphabetical order. Print and view buttons on this dialog will enable the doctor toprint and/or one or more of the items.Medication Specific Route/Form/DoseThe Route/Form and Dose will display only the possible values for the currently selected drug. So ifValium is only available for Oral consumption, then Oral will be the only choice and automaticallyselected. Once a route is selected only the Forms for that route will be available. If no drug is selected,these fields will be clear and the controls will be greyed out.SigSpecific instructions for a given prescription can be entered into the Sig field.SignatureIf the prescription is going to be sent electronically the doctor enters their electronic signature in theSignature field.Order ButtonOnce the prescription is complete the doctor can send it electronically or FAX it to the patients pharmacyof choice or print it out and sign it if their pharamcy does not accept electronic or FAXed prescriptions.Alerts TabThe Alerts tab displays any information related to the selected drug. The types of alerts available willinclude Allergic Reactions, Drug Interactions, and Not in Formulary. The righthand section of that tabwill display a short description of the currently selected alert.Allergies TabLists any allergies recorded in the medical record. The allergies that coincide with the current drug willbe highlighted in a different color and detailed information for the selected item will be displayed to theright.Current Medications TabLists any potential reactions and detailed information for the selected item will be displayed to the right.The other drugs that the patient is currently taking will be highlighted in a different color. If the doctorwants to refill a current medication they can select the refill button next to the drug to populate theScriptPad for a refill. If a doctor wishes to discontinue a drug, he or she selects the “discontinue” buttonnext to th drug listing.Drug History TabLists any drugs that the patient has taken before highlighting any matches with the current drug.Status BarDisplays any system messages or the current status of the application. An example would be to displaythe progress of a database search.SctiptPad Design Specification Page 7 09/12/97
  • 181. SctiptPad Design Specification Page 8 09/12/97
  • 182. V. System Design: High-Level Object Model And Process FlowThe diagram below is the object model for the ScriptPad component.SctiptPad Design Specification Page 9 09/12/97
  • 183. VI. System Design: Context Management & EMR Data AccessContext Management is the means by which the ScriptPad is notified of changes external to the coreScriptPad classes. These changes might include: • Selection of a new patient at the desktop level • Modifications and/or additions of diagnoses codes • Any applicable data changes within the Electronic Medical Record application which are used by the ScriptPad when performing its duties.The ScriptPad is also responsible for committing any data changes made within the component to thepersistent store.One elegant mechanism by which these tasks can be accomplished is through the use of theModel/View/Controller Design Pattern upon which the Java Developers Kit 1.1 Event Handlingmechanism is based. Applying this model to the "Virtual Physician Desktop" is quite simple. Workingtogether with MGH and the other USHealthNet vendors, the ScriptPad will implement this design pattern tomaintain a consistent context with other system components.A single ChartBean object (implemented as a JavaBean) will be instantiated for any single physiciansession. This bean will serve two functions:1) Present an interface that allows various components to access required patient data (i.e., demographics, current medications, etc).2) Provide registration services that will allow different components to “listen” for changes to the current patient context.To implement this context management in a heterogeneous operating environment (i.e., HTML & Java),all components must be launched from a single browser instance. Java and JavaScript – in conjunctionwith either BeanConnect or LiveConnect – will be used to pass messages between different components.SctiptPad Design Specification Page 10 09/12/97
  • 184. VII. System Design: Formulary/First Data Bank IntegrationOne of the core requirements of the ScriptPad is integration with 3rd party formularies and the FirstDataBank drug database and knowledge module system. When a physician is in the drug order process,ScriptPad should cross-reference the formulary of the 3rd party payor. It is important to realize that theformulary can be in any number of formats, relational database, hierarchical database, flat files, etc. Amechanism which can be easily adapted to accommodate any of these formats must therefore be adopted.The other requirement is integration with the set of logic modules contained in the First DataBankproduct called "Drug Toolkit". There are a number of features provided through the toolkit for suchthings as: 1) Drug-Drug interactions 2) Food-Drug interactions 3) Dosage Recommendations 4) and many more...These are currently available only as a Windows .dll and are therefore severely limited in their uses.Fortunately, CORBA should provide an ideal encapsulation method for both requirements. A set ofCORBA interfaces will be defined for accessing Formularies in a generic way with the appropriate remoteobjects. Moving between the various types of formularies requires only the creation and implementationof a set of "adapter" classes on the server side for each different type. Each adapter class is responsible forthe formulary specific access methods, they package results up in the standard interface objects, and theclient application only ever has to deal with these standard objects. FirstData Bank integration will occurin the same way. The "Drug Toolkit" dll will be encapsulated within a CORBA interface. Server sideadapter methods will access the dll functions and package the results in the standard CORBA object.These are then passed on for use by the client.This mechanism will provide an easily extensible architecture which is very open to future changes. Asnew proprietary formularies appear, the simple creation of a new adapter class is all that is required totake advantage of it. It can be imagined that in the future a "wizard" can be created to allow this processto occur in an automated fashion by a non-programmer. Applet nService FDB ORB IIOP ORB interfaces (Java) (Java) APIFig. 7-1 Interfacing with the First Databank API.SctiptPad Design Specification Page 11 09/12/97
  • 185. System StartUp DBAdaptor First Data Bank DBBroker DBAdaptor Object Request Formulary Broker DrugQuery DBBroker starts up. It creates a confiurable number of DBAdapters for Orb Starts Up and each database. It then creates a creates an instance of configurable number of each of the DrugInteraction DBBroker DrugServices. DrugEducation Application StartUp DrugServices Each Drug Service is invoked starts up and when needed by the client. retrieves a Each uses one of the pre- ScriptPad Starts reference to existing DBAdaptor objects for Up, retrieves a DBBroker from the the actual querying of the reference to the ORB. database. Orb, and the DrugServices also creates a provides wrapper DrugServices methods for Object. accessing each of the Drug Services. Physician types in the name of a drug he wishes ScriptPad DrugServices asks to prescribe and presses populates a ScriptPad invokes the DBBroker for a reference to Enter. choose box DrugServices.getAllDrugs a DrugQuery Object and with the drugs, method passing in the calls the getAllDrugs and the doctor name of the drug the method on it. In return, it picks the physician entered. gets a list of all drugs appropriate matching the given drug. one. Interaction/Use Case diagram detailing the use and encapsulation of the FirstDatabank and Formulary Interfaces via CORBA. Fig. 7-2 Data encapsulation via CORBASctiptPad Design Specification Page 12 09/12/97
  • 186. UMLS Metathesaurus Fact Sheet UMLS ® Metathesaurus ®The UMLS Metathesaurus is one of three knowledge sources developed and distributed by the National Library of Medicineas part of the Unified Medical Language System® (UMLS®) project. The Metathesaurus contains information aboutbiomedical concepts and terms from many controlled vocabularies and classifications used in patient records, administrativehealth data, bibliographic and full-text databases and expert systems. It preserves the names, meanings, hierarchicalcontexts, attributes, and inter-term relationships present in its source vocabularies; adds certain basic information to eachconcept; and establishes new relationships between terms from different source vocabularies.The Metathesaurus supplies information that computer programs can use to interpret user inquiries, interact with users torefine their questions, identify which databases contain information relevant to particular inquiries, and convert the usersterms into the vocabulary used by relevant information sources. The scope of the Metathesaurus is determined by thecombined scope of its source vocabularies. The Metathesaurus is produced by automated processing of machine-readableversions of its source vocabularies, followed by human review and editing by subject experts. The Metathesaurus is intendedprimarily for use by system developers, but can also be a useful reference tool for database builders, librarians, and otherinformation professionals.The Metathesaurus is organized by concept or meaning. Alternate names for the same concept (synonyms, lexical variants,and translations) are linked together. Each Metathesaurus concept has attributes that help to define its meaning, e.g., thesemantic type(s) or categories to which it belongs, its position in the hierarchical contexts from various source vocabularies,and, for many concepts, a definition. A number of relationships between different concepts are represented. Some of theserelationships are derived from the source vocabularies; others are created during the construction of the Metathesaurus. Mostinter-concept relationships in the Metathesaurus link concepts that are similar along some dimension. The Metathesaurusalso includes use information, including the names of selected databases in which the concept appears, and, for MeSH®terms, information about the qualifiers that have been applied to the terms in MEDLINE®. Information on theco-occurrence of concepts in MEDLINE and in some other information sources is also included.Content of the MetathesaurusThe 1999 version of the Metathesaurus contains 626,893 biomedical concepts with 1,358,891 different concept names fromabout 50 source vocabularies. Important additions for 1999 include the Beth Israel Clinical problem list vocabulary; theAlcohol and Other Drug Thesaurus; clinical drug terminology derived from Micromedex; the Pharmacy Practice ActivityClassification; the Patient Care Data Set, which contains detailed nursing terminology; Alternative Billing Concepts, used tobill for procedures by licensed practitioners of alternative therapies; a small initial set of valid values for segments of HL7messages; and terminology used to characterize cancer research projects. Many existing source vocabularies have beenupdated to more current versions, including SNOMED, the Read Codes, LOINC, and MeSH®. A complete list of theUMLS Metathesaurus source vocabularies appears in the Appendix to the License Agreement for the Use of UMLSProducts. Statistics for the number of strings present from each source appear in the UMLS Documentation Appendix B.3.Metathesaurus ApplicationsThe Metathesaurus is used in a wide range of applications including: information retrieval from databases with humanassigned subject index terms and from free-text information sources; linking patient records to related information inbibliographic, full-text, or factual databases; natural language processing and automated indexing research; and structureddata entry. In many cases, the utility of the Metathesaurus is enhanced when it is used in combination with the SPECIALIST http://www.nlm.nih.gov/pubs/factsheets/umlsmeta.html (1 of 2) [5/28/1999 10:19:22 PM]
  • 187. UMLS MetathesaurusLexicon, the lexical programs, and the UMLS Semantic Network. To obtain coherent, comparable results in data creationapplications, such as patient data entry, it is necessary to define which Metathesaurus concepts and terms can be included inthe records being created. This may be done by selecting one or more of the many Metathesaurus source vocabularies whichprovide the most appropriate concepts and terms for the specific data being created. Other Metathesaurus concepts and termswill then provide synonyms and related terms which can help to lead users to the vocabularies selected for a particular datacreation application.The 1999 edition of the UMLS Knowledge Sources includes Metamorphosys, software useful in producing customizedversions of the Metathesaurus.Obtaining the UMLS MetathesaurusNLM does not charge for the Metathesaurus (or other UMLS products) and it is available to both U.S. and internationalusers. Those who wish to obtain the UMLS Metathesaurus and the other UMLS Knowledge Sources must sign a LicenseAgreement for the Use of UMLS Products and send it to the address at the end of the agreement. Licensees are responsiblefor complying with the restrictions on use of the contents of the UMLS Metathesaurus that are detailed in the agreement.Some uses of some Metathesaurus source vocabularies require separate agreements, which may involve fees, with theindividual vocabulary producers.The UMLS Metathesaurus is available to licensees via ftp, Web interface, and applications program interface (API) from theUMLS Knowledge Source Server. It is also available on CD-ROM by explicit request. A complete description of theKnowledge Sources and their distribution formats can be found in the UMLS Documentation.Other Fact Sheets in the UMLS series: Unified Medical Language System, UMLS Semantic Network, SPECIALISTLexicon, and UMLS Knowledge Source Server.For additional information contact: E-mail: custserv@nlm.nih.gov or 1-888-FINDNLMU.S. National Library of Medicine (NLM)http://www.nlm.nih.gov/Last updated: 1 March 1999 http://www.nlm.nih.gov/pubs/factsheets/umlsmeta.html (2 of 2) [5/28/1999 10:19:22 PM]
  • 188. Unified Medical Language System Fact Sheet Unified Medical Language SystemBackground:In 1986, the National Library of Medicine, (NLM) began a long-term research and development project to build a UnifiedMedical Language System® (UMLS®). The purpose of the UMLS is to aid the development of systems that help healthprofessionals and researchers retrieve and integrate electronic biomedical information from a variety of sources and to makeit easy for users to link disparate information systems, including computer-based patient records, bibliographic databases,factual databases, and expert systems. The UMLS project develops machine-readable "Knowledge Sources" that can be usedby a wide variety of applications programs to overcome retrieval problems caused by differences in terminology and thescattering of relevant information across many databases.UMLS Development Strategy:The project is directed by a multi-disciplinary team of NLM staff. NLM encourages broad use of the UMLS products bydistributing annual editions free-of-charge under a license agreement. The Knowledge Sources are iteratively refined andexpanded based on feedback from those applying each successive version.UMLS Knowledge Sources:There are three UMLS knowledge sources: q UMLS Metathesaurus q SPECIALIST Lexicon q UMLS Semantic NetworkThe Metathesaurus provides a uniform, integrated distribution format from about 50 biomedical vocabularies andclassifications and links many different names for the same concepts. The Lexicon contains syntactic information for manyMetathesaurus terms, component words, and English words, including verbs, that do not appear in the Metathesaurus. TheSemantic Network contains information about the types or categories (e.g., "Disease or Syndrome," "Virus") to which allMetathesaurus concepts have been assigned and the permissible relationships among these types (e.g., "Virus" causes"Disease or Syndrome"). NLM also distributes associated lexical programs and software helpful in producing customizedversions of the UMLS Metathesaurus.NLM has discontinued release of the UMLS Information Sources Map.UMLS Applications:NLM and many other institutions are applying the UMLS Knowledge Sources in a wide variety of Applications includingpatient data creation, curriculum analysis, natural language processing, and information retrieval. NLMs own applicationsinclude Internet Grateful Med® , and PubMed.An issue of NLMs Current Bibliographies in Medicine series, Unified Medical Language System® (UMLS®), covers thestructure and semantics of the UMLS Knowledge Sources, their development and maintenance, and assessments of theircoverage and utility for particular purposes, and the full range of UMLS applications. It contains 280 citations covering theperiod from January 1986 through December 1996. More recent references can be found by searching for Unified Medical http://www.nlm.nih.gov/pubs/factsheets/umls.html (1 of 2) [5/28/1999 10:19:31 PM]
  • 189. Other Web-based EMR Projects Web based EMR or Clinical Information Systems Project/Product Organization ContactGuardian Angel MIT Peter Szolovitz PhDW3 EMRS Harvard University/Childrens Hospital I. Kohane MD, PhDWeb/Java based ICU monitoring Spacelabs Medical Corporation/Boston University K. Wang PhDARTEMIS West Virginia Universitys Juggy PhDWeb based CIS Columbia University J.J. Cimino MDVirtual EMR Hewlett-Packard/Virginia Neurological Institutes James KazmerWeb access project. Massachusetts General HospitalWeb access project University of Missouri in ColumbiaPrimary Rheumatology Web Munich University Project W. SwobadaThe GEODE-CM Harvard Medical School Paul Eric Stoufflet MDSPIDER Medical College of Wisconsin C. Kahn MDJava Interface to THE ELECTRONIC Duke University Medical Center D. Pollard MBAMEDICAL RECORDAffinity Marina L. Douglas RN CompuCare MSChartMax MedPlusWeb based system Telemachus Inc/TMACBenefit Management Healtheon Corporation David Shnell MDMediVault Service Emergency Medical Systems Inc. Oacis Healthcare Systems Inc.Araxys Solution Araxys Inc.Webpatient System Syracuse UniversityIntranet product Lawson SoftwareWebrad Analogic Inc. P. KeezerALI Webserver ALIFreeview (gateway for viewing Passport Technologies division of Elscint Inc.DICOM-3 images)Webrad Radiology department at Georgetown University HospitalHealthcare Online Daou Systems Dept. of Family Medicine and Pediatrics,Java based CPR A.E Zuckerman MD Georgetown University School of MedicineVirtual Medical Manager Secureware Inc./Emory University Charles Watt PhD Regenstrief Institute for Health Care, IndianaWeb interface to CIS J.M. Overhage MD PhD UniversityWeb access to ultrasound Indiana University School of Medicine A.M. Golichowski MDhttp://www.telemedical.com/webemr.htm (1 of 3) [5/28/1999 10:44:49 PM]
  • 190. Other Web-based EMR ProjectsWeb interface to childhood LCS at MIT E.M. Jordan SMimmunizations Section on Medial Informatics and Dept ofWebreport H.J. Lowe MD Pathology at University of PittsburgTeleMed Los Alamos National Laboratory D.W. Forslund PhDWeb version of the PIS and RxPad PDX Inc.RxMedQSINET Quality Systems Inc.Avicenna Systems Synetic CorporationEnVenture Health Systems Integration Inc.Care-Web Institute for Interventional Informatics Dave Warner MDIDXtendR Outreach IDX Cedric Priebe MDCareNet Praxis Corporation/Datahouse Inc.ClinicalWare CompuRad division of LumisysInc. Wang Inc. Integrated Healthcare Solutions Eclipsys Inc.Internet Prescription Ordering Physicians Online Inc.Clinical Information System Kaiser Foundation John Maddison MD Axolotl Inc. HBOC Inc. Medicalogic Inc. Medica Computer Systems/MYSYS LTD Oceania Protocol Systems Health Systems Technologies Inc. HealthMagic Inc. Advanced Medical Systems Inc. UCSD/SAIC Project Medvision Healthdesk Inc. VitalWorks Inc. Healtheon Inc. Masterchart Lucents HRM system SMS Cerner Object Products Inc.http://www.telemedical.com/webemr.htm (2 of 3) [5/28/1999 10:44:49 PM]
  • 191. Other Web-based EMR ProjectsWebsight Dynamic Healthcare Technologies Inc.This list is being researched and created by Foster P. Carr MD. and is the 1996-1997 copyright of Digital Med Inc., All rights are reservedhttp://www.telemedical.com/webemr.htm (3 of 3) [5/28/1999 10:44:49 PM]
  • 192. Duke Medical Informatics Research Duke Medical Informatics Research Research activities in the Division of Medical Informatics at Duke include: q computer-based patient record systems q decision support systems q hospital information systems q computer-assisted management protocol systems q standards development q security, confidentiality, and privacy q medical data mining Much of the current research in the division is centered around The Medical Record (TMR), a comprehensive longitudinal computer-based patient record system (CPRS) developed at Duke University over the last 25 years. TMR provides total administrative, financial, and medical management capabilities for the patient encounter. The TMR record focuses on the patient as an individual. Rather than storing information as a series of unrelated accounting transactions, TMR creates an integrated medical and accounting database which allows detailed reviews of both health and financial history. TMR - The Medical Record q Introduction q Appointment Section q The Patient Encounter: Check-in q The Patient Encounter: Medical q The Patient Encounter: Check-outhttp://dmi-www.mc.duke.edu/dukemi/research/research.html (1 of 2) [5/28/1999 10:45:33 PM]
  • 193. TITLECalendar of Download Become a OMG Press Room OMG Store Contact UsEvents Specifications Member PublicationsThe OMGOMG HomeAbout the OMG CORBA Med SpecificationMember CompaniesLiaison Relationships by ChapterOMG News & InfoHow Were OrganizedStaff Contacts & Partners For your convenience we have provided you with the discrete chapterCORBACORBA for Beginners breakdown of formal/99-03-01: CORBA Med Specification to make itSuccess Stories easy for you to copy/print the sections you are interested in. The fullCORBAnetProducts and Services Guide CORBA Meds document is also available as a single downloadable fileCORBA Academy Training here, for those who wish to copy/print the book in its entirety.Free Stuff Copies of the CORBAMed book in the printed binder form will beThe OMA available for purchase on our website after April 1st, 1999. After thisIDL Text FilesCORBA/IIOP date you will be able to order through our Ordering Department using ourDomain Interfaces on-line Order From on the Web at /store/publications.html.Common FacilitiesCORBA ServicesCORBA TelecomsCORBA Finance IndexCORBA MedMOF DocumentsUML Cover Page Table of Contents PageTechnology ProcessForm for Reporting Issues Chapter 1 - OverviewOMG Revision Issues Chapter 2 - Person ID specificationTechnical Commitee GroupsTechnology Process FAQ Chapter 3 - Lexicon QueryRFI FAQ IndexTC Home PagesTC Work in ProgressTC DeadlinesTC Vote StatusTechnical Library CoverLibrary IndexDocument Search 99-03-02.pdfAbout OMG Documentation 99-03-02.psPresentation LibraryListen to the Experts Return to IndexWhitepapersMeeting Information Table of Contents 99-03-03.pdfhttp://www.omg.org/corba/cmchptr.html (1 of 2) [5/28/1999 10:57:31 PM]
  • 194. Series 13, No. 129 [ Page 17Table 9. Number, percent distribution, and annual rate of injury-related ambulatory care visits, according to intent, mechanism, andambulatory care setting: United States, 1995 Combined settings Number of visits in Percent Physician Outpatient Emergency Physician Outpatient Emergency 1 Intent and mechanism thousands distribution Total offices departments departments Total offices departments departments Percent distribution Number of visits per 1,000 persons2All injury visits . . . . . . . . . . . . . . . . . . . . . 126,129 100.0 100.0 64.7 5.8 29.5 481.6 311.7 27.7 142.1Unintentional injuries . . . . . . . . . . . . . . . . . 90,639 71.9 100.0 63.1 5.3 31.7 346.1 218.5 18.4 109.6 Falls . . . . . . . . . . . . . . . . . . . . . . . . . . 23,245 18.4 100.0 63.1 4.1 32.9 88.8 56.0 3.6 29.2 Motor vehicle traffic accidents . . . . . . . . . . 13,118 10.4 100.0 63.5 4.5 32.0 50.1 31.8 2.2 16.0 Striking against or struck accidentally by objects or persons . . . . . . . . . . . . . . . . 8,913 7.1 100.0 54.9 6.8 38.3 34.0 18.7 2.3 13.0 Overexertion and strenuous movements . . . . 8,946 7.1 100.0 77.2 5.0 17.8 34.2 26.4 1.7 6.1 Cutting or piercing instruments or objects . . . 5,232 4.1 100.0 36.7 5.9 57.4 20.0 7.3 1.2 11.5 Natural and environmental factors . . . . . . . 3,767 3.0 100.0 53.6 *5.4 41.1 14.4 7.7 *0.8 5.9 Poisoning by drugs, medicinal substances, biologicals, other solid and liquid substances, gases, and vapors . . . . . . . . . . . . . . . . 1,354 1.1 100.0 43.3 *5.8 50.9 5.2 2.2 *0.3 2.6 Fire and flames, hot substance or object, caustic or corrosive material, and steam . . . 1,296 1.0 100.0 40.9 *11.8 47.2 4.9 2.0 *0.6 2.3 Machinery . . . . . . . . . . . . . . . . . . . . . . 1,129 0.9 100.0 59.5 * 34.5 4.3 2.6 * 1.5 Pedal cycle, nontraffic, and other . . . . . . . . 993 0.8 100.0 52.0 *5.9 42.1 3.8 2.0 *0.2 1.6 Motor vehicle, nontraffic . . . . . . . . . . . . . . 634 0.5 100.0 * * 34.1 2.4 * * 0.8 Other transportation . . . . . . . . . . . . . . . . 449 0.4 100.0 * * 28.8 1.7 * * 0.5 Firearm missile . . . . . . . . . . . . . . . . . . . 256 0.2 100.0 * *28.8 * 1.0 * *0.3 * Other and not elsewhere classified . . . . . . . 9,249 7.3 100.0 66.3 6.7 28.1 35.3 23.4 2.4 9.9 Mechanism unspecified . . . . . . . . . . . . . . 12,059 9.6 100.0 76.9 5.0 18.0 46.0 35.4 2.3 8.3Intentional injuries . . . . . . . . . . . . . . . . . . . 3,671 2.9 100.0 25.2 4.9 69.9 14.0 3.5 0.7 9.8 Assault . . . . . . . . . . . . . . . . . . . . . . . . 3,320 2.6 100.0 26.8 5.1 68.1 12.7 3.4 0.6 8.6 Self-inflicted . . . . . . . . . . . . . . . . . . . . . 299 0.2 100.0 * * 96.0 1.1 * * 1.1 Other violence . . . . . . . . . . . . . . . . . . . . * * 100.0 * * * * * * *Injuries of undetermined intent . . . . . . . . . . . * * 100.0 * * * * * * *Adverse effects . . . . . . . . . . . . . . . . . . . . 5,115 4.1 100.0 69.5 6.3 24.2 19.5 13.6 1.2 4.7Blank cause . . . . . . . . . . . . . . . . . . . . . . 26,651 21.1 100.0 74.7 7.7 17.6 101.8 76.0 7.8 17.9*Figure does not meet standard of reliability or precision.1 Intent and mechanism are based on the International Classification of Diseases, 9th Revision, Clinical Modification (ICD–9–CM), Supplementary Classification of External Causes of Injury andPoisoning (5). A detailed description of the ICD–9–CM E-codes used to create the groupings in this table is provided in the Technical Notes.2 Based on U.S. Bureau of the Census estimates of the civilian noninstitutionalized population as of July 1, 1995. Figures used are monthly postcensal estimates and are consistent with Census reportsPE-10/PPL-41, Addendum 1 and have been adjusted for net underenumeration using the 1990 National Population Adjustment Matrix.NOTE: Numbers may not add to totals because of rounding. Click here to view source document at http://www.cdc.gov/nchswww/data/sr13_129.pdf
  • 195. Introduction, Summary, and Options nformation technologies are transforming the way health care is delivered. Innovations such as computer-based pa- tient records, hospital information systems, computer-based decision support tools, community health information net-works, telemedicine, and new ways of distributing health in-formation to consumers are beginning to affect the cost, quality,and accessibility of health care. The technologies that supportthese applications—relational databases, network communica-tions, distributed processing architectures, optical disk storage,and others—are used today by some health care providers andpayers. Yet information technology is often found in isolated“islands of automation” in health care provider and payer institu-tions. Despite the incorporation of high technology into almostevery other aspect of clinical practice, information technologieshave not been fully embraced. Meanwhile, transformations in the way health care is deliveredare creating new opportunities for innovative applications of in-formation technologies. The health care delivery system is cur-rently undergoing many changes, including the emergence ofmanaged health care and integrated delivery systems that arebreaking down the organizational barriers that have stood be-tween care providers, insurers, medical researchers, and publichealth professionals. These barriers have supported a clear de-marcation between clinical health information and administrativehealth information and reinforced a long-standing distinction be-tween treatment of disease and preservation of health. These dis-tinctions are gradually eroding as new health care deliverypatterns emerge that are supported by, and in some cases relianton, the widespread use of networked computers and telecommu-nications. |1
  • 196. 2 | Bringing Health Care Online: The Role of Information Technologies This report discusses the synergy between in- primarily large health care institutions. As theformation technologies and new trends in the figure indicates, almost 70 percent of those re-health care delivery system as health care is sponding have introduced electronic systems forbrought online. It identifies some of the opportu- submitting insurance claims, and more are in thenities to improve health care delivery through in- process of adopting them. Technologies that allowcreased use of information technology, and communication between computers at disparatediscusses some of the conceptual, organizational, locations, for example physician-hospital dataand technical barriers that have made its adoption networks or enterprise-wide networks, are beingso uneven. The report identifies key technologies adopted or planned by a substantial number ofand shows how they are being used to communi- these institutions as well. Computer-based patientcate clinical information, simplify administration record (CPR) systems, which are difficult to im-of health care delivery, assess the quality of health plement because they require such close integra-care, inform the decisionmaking of providers and tion between many different systems, are at leastadministrators, and support delivery of health care in the planning process, according to 50 percent ofat a distance. responding CIOs, but so far only about 20 percent consider that they have CPRs operating at leastCHALLENGES AND OPPORTUNITIES FOR at an experimental level. When asked whichINFORMATION TECHNOLOGIES technologies they were currently evaluating con-The technologies used for collecting, distilling, ceptually for future implementation, the two moststoring, protecting, and communicating data are frequently mentioned by CIOs were communitywidely used throughout American industry. In the health information networks and telemedicine.1health care industry, however, their application The health care delivery system has severalhas been limited to scattered islands of automa- unique characteristics that discourage the spreadtion, usually limited to discrete departments with- of information technologies. Health professionalsin hospitals. Computers are widely deployed, but perform a wide variety of tasks including rapidlynot widely connected. Clinical and administrative changing combinations of “hands-on” care, in-health information are rarely commingled. Both ductive and diagnostic thinking, detailed record-types of health information are still stored and keeping, patient education, and communicationconveyed primarily in paper form. Health in- with colleagues. Most of the hardware and soft-formation is rarely converted to digital form and ware approaches that address one of these aspectsshared among the clinics and primary care offices of medical practice intrude unacceptably on somewhere most health care occurs, the hospitals and other aspect: computers are not yet as useful, ubiq-critical care units where most health care dollars uitous, and handy as the stethoscope and otherare spent, or the population-based health services common medical technologies. In addition, medi-that address community-wide health issues. Com- cal practice is extraordinarily complex and itputers are typically used to organize and adminis- changes rapidly. Systematizing even the processter specific, limited types of health information, of performing medical procedures, much less ra-but are not linked into an infrastructure that might tionalizing the language and scientific knowledgeallow broader efficiencies or higher quality health underlying those procedures, is an almost intrac-care. table problem. Despite the ongoing efforts of stan- Figure 1-1 shows the level of adoption of some dards-setting bodies, no unified conceptual modelselected information technology applications as exists that is powerful enough to construct thereported by chief information officers (CIOs) of mapping between the information that must be 1 College of Healthcare Information Management, Telecommunications in Health Care Survey, 1994 (Ann Arbor, MI: 1994), pp. 20-21.
  • 197. Chapter 1 Introduction, Summary, and Options | 3 FIGURE 1-1: Information Technology Applications Currently Being AdoptedSOURCE: Center for Healthcare Management Information, Telecommunications in Healthcare Survey, 1994 (Ann Arbor, MI: 1994).stored in computer databases and medicine as it is petitive advantages and accumulated patient re-practiced. In a sense, there is not yet a consensus cords as corporate assets.about what information should be kept in comput- Information technologies tend to flatten orga-er-based patient records or how it should be de- nizations and may not mesh well with the rigidlyscribed, organized, and indexed. defined job roles and hierarchical structure of cur- Apart from the complexity of clinical knowl- rent medical practice (see box 1-1). Many types ofedge and practice, there are structural reasons that organizational changes will emerge throughoutdiscourage implementation of information the health care system if information technologiestechnologies in health care settings. In addition, are widely adopted. In other industries, changesmany communities have only a few hospitals or associated with the introduction of informationmajor insurers. The cooperation necessary to in- technologies have included large reductions in theterconnect medical information within a horizon- demand for some types of workers (e.g., mid-leveltal layer of the health care system may be seen as managers and bank tellers), increased responsibi-anticompetitive and subject to antitrust regula- lities for workers in jobs that traditionally in-tion, or it may be hindered by organizations that volved little decisionmaking (line workers inregard their internal information systems as com- manufacturing industries), and an increase in
  • 198. 4 | Bringing Health Care Online: The Role of Information Technologies BOX 1-1: Effects on the Health Care Workforce Increased use of information technology will continue to affect the jobs of the 10 million Americans who work in health care. This workforce is currently growing at about 3.9 percent per year. Changes in the structure of health care delivery are affecting the composition of the workforce. For example, hospi tal employment, while it still represents half of people employed in health care, is the slowest growing sector at 1.7 percent per year. Home health care however, is growing at about 18 percent annually, although it still accounts for only a small portion of the workforce.1 This report does not analyze the changes that information technology might bring to jobs in health care, or the effects that these changes might have on the quality of the work environment. These would be fruitful areas for future research. In general, it appears that information technology applications could reduce the need for some types of work and could redefine some job roles. For example, electronic data interchange (EDI), defined as the application to application exchange of business documents, is increasingly being used to carry out medical payments and other administra tive transactions between health care providers and insurance payers. Application to application means that computer programs at different firms exchange information and complete transactions di rectly, without human intervention. Physicians office staffs, for example, often notice a decrease in the number of telephone calls they make and letters they write after being linked with insurers through on line systems. Much of the potential savings foreseen through administrative simplification" of the health care payments process comes from reduced personnel costs.2 The systems currently being implement ed do not totally eliminate human intervention, and within many provider and payer organizations some of the employee time saved by automated payment systems will be spent on other tasks. Nevertheless, a likely outcome of widespread use of electronic medical payments is the elimination of some jobs in both provider and payer organizations. (continued) ______________ 1 U.S. Department of Commerce, U.S. Industrial Outlook, 1994 (Washington, DC: 1994), pp. 42 1 to 42 6. 2 See, for example, Workgroup on Electronic Data Interchange, 1993 Report (Hartford, CT and Chicago, IL: October 1993), p. 7 30.competition for local experts from nonlocal health care reflect the ability of computer net-sources (discount stockbrokers, for instance). works and digital telecommunications to act as aSimilar changes are likely to occur for health pro- nervous system that can connect previously inde-fessionals, along with a redistribution of status, pendent parts of the health care delivery and ad-responsibilities, and remuneration associated ministrative systems, forming new bodies knownwith the various health disciplines. as integrated delivery systems. These new corpo- Information technologies not only redefine rate structures may pose antitrust questions asjobs, but they may have more subtle ramifications they challenge traditional providers of health careas well. The widespread adoption of integrated in- in isolated markets.formation systems will challenge the legal sys- Information technologies diffuse decisionmak-tem. Information technologies facilitate alliances ing and responsibility because they are developed,between geographically separate parties. Thus, maintained, and employed by a variety of people.they may challenge the existing structure of state Physicians—who have held unique positions ofmedical licensing and malpractice laws, as well as status and compensation, as well as legal respon-“pen and quill” laws that require paper-based sibility and risk, under the traditional systems ofmedical recordkeeping. Consolidations and merg- licensure and malpractice law—may be put in theers among the many companies offering managed uncomfortable position of being solely responsi-
  • 199. Chapter 1 Introduction, Summary, and Options | 5 BOX 1-1: Effects on the Health Care Workforce (Cont’d.) Information technology also can change job roles. For example, when physicians place medication orders at a computer terminal, they take on a data entry task that might previously have been done by a ward clerk, a pharmacist, or a pharmacy clerk. With proper design, the technology can help integrate this task with others the physician performs retrieving information about the patients condition, look ing up the proper dosage and use of medications, or making judgments and decisions about additional tests and treatments. Whether data entry is an additional burden, or an integral part of an improved and more efficient process for rendering care, depends on a wide variety of personal, institutional, hard ware, software, and interface design factors. In some cases, role changes are induced by other organizational changes in which information technology is a facilitator. For example, one way that health care organizations are reducing costs is by redesigning work so that tasks once done by high cost personnel are now done by lower cost person nel. For example, much primary health care previously done by physicians is now being done by physi cian extenders like physician assistants and nurse practitioners. In some hospitals, work previously done by licensed and registered nurses is now done by nursing aides sometimes labeled patient care technicians,3 while nurses take on the role of managing a team of caregivers.4 This trend is typical of a reengineering" movement in hospital management known as patient centered care or patient focused care as opposed to department focused care. Computer technologies including computer based decision support tools and treatment protocols, online patient information systems, patient monitoring devices, and teleconferencing systems can support and assist people giving care in these new ways. SOURCE: Office of Technology Assessment, 1995. ______________ 3Wall Street Journal, Feb. 10, 1995, p. B1. 4M.L. Parsons and C.L. Murdaugh, Patient Centered Care: A Model for Restructuring (Gaithersburg, MD: Aspen Publishers, 1994).ble for implementing complex policies resulting ployment in an industry whose sophisticated tech-from a mix of research findings, technical nological base is seen by some to be a drivingconstraints, and business priorities. Networked force in making health care more expensive.information technologies may pose new chal-lenges to the traditional legal assumption that con- TRENDS IN THE HEALTH CARE SYSTEMsumers are adequately protected against poorquality of care through the ability to file lawsuits „ Aggressive Cost Managementagainst their providers, and alternate guarantees of A major concern for providers, payers, policy-high-quality care may need to be designed to re- makers, and consumers alike is the rising costs ofplace the current legal remedies. delivering care. Health care expenditures in- Finally, information technologies are expen- creased from 5.9 percent of gross domestic prod-sive to implement and their benefits may be diffi- uct in 1965 to 13.9 percent in 1993.2 Totalcult to directly measure, even when all parties are expenditures for health care in 1993 were $884.2happy with the results. This may delay their de- billion. Government sources pay for about 43 per- 2 Katharine R. Levit et al., “National Health Expenditures, 1993,” Health Care Financing Review, vol. 16, No. 1, fall 1994, pp. 247-294.
  • 200. 6 | Bringing Health Care Online: The Role of Information Technologiescent of this total; the federal government alone care payments) are also using at least some carepays nearly 32 percent. Health care is also a major management techniques to manage their costs.segment of the economy, employing approxi-mately 10 million people, about 2.6 million of „ Integration of Health Serviceswhom do primarily administrative work.3 Health care has historically been a very frag- As the costs of health care have continued to mented industry. Routine medical care, crisisrise, there have been concerns in government and medical care, medical insurance, medical re-in the industry itself about how to contain and re- search, and management of public health typicallyverse the increase. In the 1990s, particularly in the have been handled by entirely separate organiza-103d Congress, a number of proposals were made tions in business, government, and universities,for far-reaching reforms in the health care indus- and a large number of intermediary institutions astry. At the same time, within the health care and well. There are more than 1.2 million health careinsurance industries, many initiatives to control providers—ranging from solo practitioners tocosts are already under way. In fact, perhaps due in 1,000-bed hospitals—and they are often isolatedpart to these efforts, the growth rate of health care in separate corporate entities from the more thancosts appears to have slowed during the 1990-93 3,000 private insurance payers that distribute pay-period. ments for health care services. The providers and One of the major influences in the health care insurance companies are further isolated from theindustry has been the growth of managed health medical research community, government healthcare. “Managed care” is a somewhat nebulous care agencies, and public health organizations. Aterm, but generally refers to a “system of manag- network of private-sector intermediaries hasing and financing health care delivery to ensure formed to facilitate the complicated relationshipsthat services provided to managed care plan mem- between the various organizations. It is unlikelybers are necessary, efficiently provided, and ap- that any of these entities will be willing to collectpropriately priced.”4 Managed care organizations or organize data that save money or effort for someuse a number of techniques to control access to other organization, but deliver the intermediary noproviders, contain costs, manage utilization of re- immediate benefit; systemic savings may be irrel-sources, and ensure favorable outcomes for pa- evant in a vertically fractured industry.tients. Some of this fragmentation may be reduced The number of people enrolled in managed care with the current trend toward vertical and horizon-plans has increased dramatically in the past 20 tal integration of providers and payers into sys-years. By 1992, enrollment had grown to over half tems that offer the full “continuum of care” toof all employees covered by employer group covered populations. An integrated delivery sys-health insurance.5 As shown in box 1-2, the con- tem is one that brings together hospitals, primarycept of managed care has expanded to include care providers, nursing homes, home health caremany types of health plans and delivery systems. providers, pharmacies, and other services into aMany traditional fee-for-service health insurance single system through purchase, merger, jointplans (those that reimburse members for health venture, contract, or other means. As hospital ad- 3 U.S. Congress, Office of Technology Assessment, International Comparisons of Administrative Costs in Health Care, OTA-BP-H-135(Washington, DC: U.S. Government Printing Office), September 1994. 4 Marrianne F. Fazen, Managed Care Desk Reference (Dallas, TX: HCS Publications, 1994), p. 149. 5U.S. Congress, General Accounting Office, Managed Health Care: Effect on Employers’ Costs Difficult To Measure, GAO/HRD-94-3(Washington, DC: U.S. Government Printing Office), October 1993.
  • 201. Chapter 1 Introduction, Summary, and Options | 7 BOX 1-2: Managed Care Managed care can refer to both the elements of managing care and the institutional structures withinwhich care is managed. To some, managed care means the use of management tools such as preadmission certification (for ensuring that only members who need hospital care are admitted to the hospital), concurrent review (ensuring that necessary and appropriate care is delivered during a hospitalization), or financial incentives or penalties for both providers and plan members. To others the term isequated with alternative delivery systems that are variously known by names such as health maintenance organization (HMO) or preferred provider organization (PPO). In contrast to traditional fee for service or indemnity insurance plans where the insurer simply reimburses the insured individual for incurred health expenses and has no direct relationship with the providers of care, managed care organizations create a direct relationship between the insurer and theprovider of care. Whether physicians are salaried employees or contractors, they have a relationshipwith the managed care plan wherein they give up some clinical and financial autonomy to that organization. The consumer who joins a managed care plan also surrenders some freedom of choice. The HMOor PPO in turn takes on a managerial role with the hope of containing costs and enhancing the quality ofcare. One concept used in certain forms of managed care is capitation. Under capitated payment systems, providers receive a set payment per patient per period, regardless of the amount of services theyprovide. Providers who exceed their budgets will suffer losses. A second concept common to managedcare is the limitation on the patients choice of providers. Some plans only allow patients to choose froma panel of providers associated with the plan (closed panel"). Others permit patients greater flexibility,but require patients to pay a higher share of costs when using outside providers. While the concepts ofcapitation and limitations on the patients choice originated with early HMOs, they are now pervadingthe whole health care industry, and many insurance plans, including traditional indemnity plans, mayinclude these features to some degree. Some managed care organizations have tighter controls bothover payments and over patient provider relationships; others maintain looser controls. Closed panelHMOs are generally the most restrictive, while independent practice associations (IPAs) HMOs wherephysicians work under nonexclusive contracts and may also have fee for service patients are less so,as are PPOs.Managed Care and Cost Savings According to recent studies, care management techniques reduce health care costs, primarilythrough the reduced use of services. For example, the Congressional Budget Office (CBO) reports that,compared to indemnity plans, closed panel HMOs reduce the use of medical services by about 19.6percent and IPAs reduce use by about 0.8 percent. The combined average effect of all HMOs is a reduction in services of 7.8 percent when compared with the current mix of indemnity plans.1 Less restrictive types of managed care have not shown such significant reductions, according to CBO.SOURCE: Adapted from U.S. Congress, Office of Technology Assessment, Understanding Estimates of National Health ExpendituresUnder Health Reform, OTA H 594 (Washington DC: U.S. Government Printing Office, May 1994), p. 76.______________ 1 U.S. Congress, Congressional Budget Office, The Effects of Managed Care and Managed Competition (Washington, DC: Congressional Budget Office, 1995).
  • 202. 8 | Bringing Health Care Online: The Role of Information Technologiesmissions and inpatient days have declined be- Finally, the government has a stake in helpingcause of cost control efforts begun in the 1980s, to develop inexpensive, standardized approachesmany hospitals have entered these other lines of to information exchange so it can effectively fundbusiness. Some integrated delivery systems are medical research, manage widespread publicbeing organized by insurers or managed care orga- health problems, reduce its administrative costs,nizations. and reduce the cost of the health care it purchases and provides through Medicare, Medicaid, veter-„ Increasing Value of Digital Information ans’ care, and employee insurance programs. AnNew patterns in health care delivery are enhancing indication of the magnitude of this interest is thethe value of clinical health data and creating in- designation of health care applications as a keycentives for collecting and disseminating health component of the National Information Infra-information electronically within and between or- structure (NII) by the Administration’s Informa-ganizations. As managed care organizations grow tion Infrastructure Task Force (IITF). Appointedand fee-for-service care wanes, doctors and other by the President, the IITF is comprised of high-practitioners have both a financial interest in de- level representatives of the federal agencies thatlivering low-cost care and incentives for docu- play a role in developing and applying informa-menting and analyzing their care practices. tion and telecommunications technologies. TheAdministrators in Health Maintenance Organiza- IITF’s Committee on Applications and Technolo-tions (HMOs) and integrated delivery systems gy coordinates efforts to develop, demonstrate,have long sought to reduce transaction costs (after and promote applications of the NII and developsan initial investment in equipment and software) and recommends technology strategy and policyby computerizing internal communications and to accelerate its implementation. One part of thisautomating communications with suppliers and committee is the Health Information and Applica-other business partners. In addition, they have a tions Working Group. This group is again dividedvested interest in understanding the clinical de- into subgroups in the categories of telemedicine,tails of how care is delivered in order to efficiently consumer health information, standards, andmanage resources. emergency medicine. For example, it is possible to use administrative These private and governmental interests inrecords alone to limit overuse of optometry ser- digitizing health information in order to managevices by approving eye examinations purely on costs and integrate delivery of health services arethe basis of elapsed time since the last exam. How- manifest in a slow but perceptible trend towardever, care can be more prudently and perhaps com- standardization of health care information and op-passionately managed by considering not only the timization of care delivery. These processes aretime of the last billing, but also the clinical record occurring on many levels. The medical and com-of that visit and other health information about the puting communities are slowly developing: a)patient. Were the previous results normal, or did lexicons for consistently describing medical care,they indicate a problem? Does the patient have b) consensus standards for exchanging medicalany other conditions that might warrant frequent data between computers, and c) models for how toeye examinations? Could the current complaint be collect and organize medical information digital-due to an adverse reaction to a prescribed medica- ly. Protocols for standardizing delivery of care andtion and, hence, warrant a visit to the prescribing metrics for measuring the quality of health carephysician rather than an optometrist? This fine- services are being developed, as well as decisiongrained analysis of clinical records is contingent support systems that may increase the efficacy ofon standardization and digitization of clinical re- medical decisions. And throughout the health carecords because paper records are generally inade- delivery system, innovative applications of in-quate for these purposes.
  • 203. Chapter 1 Introduction, Summary, and Options | 9formation technologies are being studied, tested, The bills call for standards for:and implemented. 1. defining common sets of data elements to be stored electronically in patient records,CONGRESSIONAL INTEREST 2. performing administrative transactions,Recognizing the changes occurring in both health 3. assigning uniform patient and provider identi-care and telecommunication technology and their fication numbers,relevance to the congressional agenda, the Chair- 4. assigning codes to medical procedures and de-man of the Senate Committee on Labor and Hu- scriptions,man Resources asked the Office of Technology 5. applying electronic signatures, andAssessment (OTA) to conduct a study on the im- 6. ensuring patient privacy and data security.pacts of information technology on the health care Most bills specify the adoption of the standardssystem. The request was supported by the Chair- by DHHS within two years or less, and, followingman of the House Committee on Energy and the adoption, provide various measures designedCommerce.6 to encourage rapid adoption of the standards by Recently, there have been numerous legislative nearly all health care providers. These measuresinitiatives addressing aspects of incorporating in- may include direct incentives, such as require-formation technologies into the delivery of health ments that all health plans implement the stan-care. In the 103d Congress, several comprehen- dards for all transactions, or indirect incentives,sive health care reform bills were introduced,7 and such as requirements that all transactions regard-this pattern has continued in the 104th Congress. ing Medicare patients be filed electronically. TheThese bills seek to restructure various aspects of incentives may also be provisional: they may di-the payment and insurance framework of the rect the Secretary to assess whether sufficienthealth care industry, but, in addition, they often numbers of health plans are utilizing the standardsspecify procedures for simplifying administration and to require full participation, should it prove toof health care delivery through the use of informa- be cost-effective. Most bills include exceptionstion technologies. For example, several recent for small hospitals and those that can show theybills direct the Secretary of the Department of are in the process of installing an adequate in-Health and Human Services (DHHS) to adopt uni- formation system. Some of the bills override stateform standards for various medical data, based on laws requiring the maintenance of paper-based pa-the work of standards committees accredited by tient records.the American National Standards Institute and on Several bills seek to establish national or statethe advice of groups such as the Workgroup for databases of health information for quality assess-Electronic Data Interchange and the Computer- ment purposes, control of fraud, or tracking dis-Based Patient Records Institute.8 ease patterns.9 Other bills would authorize grants 6 This committee is now known as the House Committee on Commerce. 7 Two examples are U.S. Congress, Senate, S. 1757, Health Security Act, and S. 1494, Health Care Information Modernization and SecurityAct of 1994 (Washington, DC: U.S. Government Printing Office, 1994). 8 U.S. Congress, House of Representatives, H.R. 1200, American Health Security Act of 1995 and H.R. 1234, Basic Health Care Reform Actof 1995 (Washington, DC: U.S. Government Printing Office, 1995); and U.S. Congress, Senate, S. 7, Family Health Insurance Protection Act(Washington, DC: U.S. Government Printing Office, 1995). 9 U.S. Congress, House of Representatives, H.R. 798, Veterans’ Benefits, Title 38 U.S.C., Amendment (Washington, DC: U.S. GovernmentPrinting Office, 1995), and H.R. 1200 and S. 7, ibid.
  • 204. 10 | Bringing Health Care Online: The Role of Information Technologiesfor rural telemedicine efforts10 or establish a tele- needs of those in rural or other underserved areasmedicine commission to formulate plans for through telemedicine.widespread implementation of telemedicine.11 Advanced information technologies offer an Finally, there have been efforts in both the 103d array of other possibilities for influencing deliv-and 104th Congresses to reform and deregulate ery of health care services. It was impossible to ad-telecommunications.12 Such reforms may affect dress all applications in this report. Those selectedthe price of telecommunications services and, were viewed as having the most potential for de-therefore, help determine the feasibility of incor- creasing costs and improving quality and access inporating telecommunications into health care de- health care. Particular emphasis is placed on ad-livery on a large scale. In addition, current bills ministrative simplification, quality assessment,have certain direct influences on health care, in- and telemedicine, as specified by the congression-cluding a requirement that prices for telecommu- al committee requesting the report. The report alsonications service to rural health care providers be briefly mentions the potential for telecommunica-comparable to those for urban providers.13 tions to assist consumers in becoming better in- formed and more involved in decisions affectingREPORT SUMMARY their health care, and points to the need for addi- tional study. Emerging applications of informa-„ Scope of the Analysis tion technology, including remote surgery andIn chapters 2 through 5, this report discusses some virtual reality applications, were not considered,of the challenges and opportunities for using in- nor were issues related to the reform of medicalformation technology to improve the health care education to include greater use of informationsystem. First, it addresses the potential impact of technology. These are, however, fertile areas forinformation technologies on health care delivery future research.and introduces a variety of technologies that are Before computers were introduced into thebeing used to collect, organize, and share clinical health care delivery system, clinical and adminis-information needed for providing patient care. trative records were kept separately in paper form,The report then explores the exchange of health patient utilization of services was rarely scruti-information for administrative purposes among nized systematically, and clinical information wasthe many stakeholders including providers, payers, seldom exchanged between business organiza-employers, consumers, and government agencies. tions (or even among the various clinicians an in-It discusses how the quality of health care might dividual might see). Thus, paper-based technolo-be improved by providing health care profession- gies and common organizational policies workedals with high-quality information and decision along with various state laws to provide an ad hocsupport tools at the point of care. Finally, the re- level of protection for individual privacy that isport explores the potential for addressing the clearly inadequate in the emerging world of com- 10 U.S. Congress, House of Representatives, H.R. 851, Rural Telemedicine Act of 1995 (Washington, DC: U.S. Government Printing Office,1995), and U.S. Congress, Senate, S. 7, op. cit., footnote 8. 11 U.S. Congress, House of Representatives, H.R. 426, National Committee on Telemedicine Act (Washington, DC: U.S. Government Print-ing Office, 1995). 12 U.S. Congress, House of Representatives, H.R. 3626, Antitrust and Communications Reform Act of 1994; Antitrust Reform Act of 1994(Washington, DC: U.S. Government Printing Office, 1994), and U.S. Congress, Senate, S. 1822, Communications Act of 1994; Telecommunica-tions Equipment Research and Manufacturing Competition Act of 1994, and S. 2111, Telecommunications Services Enhancement Act of 1994(Washington, DC: U.S. Government Printing Office, 1994). 13 U.S. Congress, Senate, S. 652, Telecommunications Competition and Deregulation Act of 1995 (Washington, DC: U.S. GovernmentPrinting Office, 1995).
  • 205. Chapter 1 Introduction, Summary, and Options | 11puterized patient records, integrated delivery ser- system, the magnitude of the savings is very diffi-vices that operate on a nationwide basis, and cult to predict for several reasons.instant electronic messaging. New combinations Most cost containment predictions maintainof legislative protections and technical safeguards the traditional fault line between administrativewill be necessary to protect individual privacy as information and clinical information. Administra-health care information is computerized and stan- tive processes include activities such as transmit-dardized. These issues are discussed briefly ting and processing claims, utilization review,throughout this report, but were discussed in de- purchasing supplies and tracking inventory, pay-tail in the OTA report Protecting Privacy in Com- ing bills, managing internal finances, negotiatingputerized Medical Information.14 contracts, complying with regulations, and con- The issues and policy options that emerge from trolling quality. Administrative costs of providingeach chapter of this report are briefly summarized health care have been estimated at between $108in the sections that follow. First, however, two key billion and $135.1 billion per year in 1991,15 orthemes are introduced that echo throughout the between 12 and 15 percent of the health care bill.chapters. These are cost containment and stan- Estimates of annual savings that could be realizeddards development, and they reflect congressional through increased use of information technologyconcerns about containing health care costs and in administrative functions have ranged from $5enabling administrative simplification that are billion to $36 billion,16 or enough to reduce ad-manifest in the bills of the 103d and 104th Con- ministrative costs between 0.5 and 3.6 percent.gresses. These estimates, discussed in more detail in chapter 3, may be somewhat optimistic because„ Cost Containment they assume rapid adoption of electronic data in-Reducing the cost of delivering health care is per- terchange and high rates of market penetrationhaps the prime motivation for congressional inter- that do not appear to be materializing. The deeperest in exploring the use of information technology. problem with such predictions is that they areAnticipated cost savings are based on analogous often based on merely converting all transactionsreductions in transaction costs for industries such within the existing system of fee-for-serviceas banking—which built information infrastruc- health care to electronic form. However, the shift-tures supporting automated teller machines and ing landscape of health care delivery patterns can-point-of-purchase credit card verification—and not be treated as a perturbation within a more rapidon the increase in productivity and product quality process of digitizing health information. Suchin domestic manufacturing industries associated digitization did not happen over the past two de-with just-in-time inventory control, continuous cades despite the availability of increasingly capa-quality improvement, and other techniques that ble computer and telecommunication systems;are highly dependent on information technolo- indeed, several organizational and technologicalgies. Although similar efficiencies and improve- impediments (discussed in chapter 2) make it like-ments may be possible within the health care ly that widespread digitization will happen only in 14 U.S. Congress, Office of Technology Assessment, Protecting Privacy in Computerized Medical Information, OTA-TCT-576 (Washing-ton, DC: U.S. Government Printing Office, September 1993). 15 Allen Doubloon and Matthew Bergheiser, “Reducing Administrative Costs in a Pluralistic Delivery System Through Automation,” pre-pared by Lewin-VHI for the Healthcare Financial Management Association, Apr. 30, 1993. 16 Project HOPE, Center for Health Affairs, “Estimating the Cost-Effectiveness of Selected Information Technology Applications,” unpub-lished contractor report prepared for the Office of Technology Assessment, March 1995.
  • 206. 12 | Bringing Health Care Online: The Role of Information Technologiessynergy with the progressive adoption of man- quires that these effects be valued in monetaryaged health care practices and development of in- terms. One of two techniques—the human capitaltegrated service delivery systems. approach or the willingness-to-pay approach—is A second class of economic considerations generally used to measure benefits. The humanconcerns the effectiveness of encouraging specific capital approach considers the value of a humaninformation technology implementations. These life by estimating an individual’s projected futureare of concern to Congress for purposes of guiding earnings. The willingness-to-pay approach con-procurement decisions and research priorities. In siders how much individuals are willing to pay forrecent years, the field of economic evaluation of a reduction in the risk of death or illness.medical technologies has expanded rapidly. Ris- Applying the formal techniques of CEA anding spending on health care has stimulated the use CBA to information technology applications inof formal techniques such as cost-effectiveness health care is difficult for a number of reasons.analysis and cost-benefit analysis to assess the Some of the difficulties are general to all medicalcost and health effects of using particular medical technologies: the competing alternatives for atechnologies. technology are not always known; a technology Cost-effectiveness analysis (CEA) has emerged may be cost-effective in some patient groups andas the most popular technique for economic evalu- not in others; technologies constantly undergoations. CEA involves a structured, comparative change; there are no standards on how to defineevaluation of two or more health care interven- costs (e.g., whether and how to consider indirecttions. Analyses are designed to show the relation- costs such as productivity losses, or intangibleship between resources used (costs) and health costs such as pain and suffering); there are no stan-benefits achieved (effects) for given technologies dards regarding the length of patient followupor programs. In CEA, the cost per specified health time to consider; analysts differ in their use ofeffect, such as lives saved or quality-adjusted life- methodologies by which to adjust health effectsyears saved, is calculated for particular technolo- for quality-of-life factors; and there are many un-gies or programs. If the ratio is measured similarly certainties underlying such analyses. A generalfor different technologies or programs, the cost problem with CBA involves trying to place aper effect can be compared. Formal CEA involves monetary value on reductions in mortality or mor-a number of explicit steps, including: bidity.1. identifying the perspective of the study, Beyond these general difficulties, evaluating2. identifying the competing interventions, information technologies presents some unique3. defining costs, problems. It is difficult to conduct comparative4. defining effects, studies because system features and levels of ser-5. discounting future costs and effects to their vice vary widely across institutions and users. In present value, addition, many applications have been in exis-6. adjusting for quality-of-life factors, tence only a short time. Information technologies7. analyzing the incremental costs and conse- and applications change frequently, making anal- quences of one option over another, and yses difficult—and making even some well-con-8. examining uncertainties underlying ducted analyses quickly obsolete. In general, it is the analysis. difficult to identify and quantify appropriate In cost-benefit analysis (CBA), the net costs of costs, savings, and health effects. For most evalu-an intervention are compared with the net savings: ations of information technology, direct coststhe benefits of a program or technology are ex- would include equipment and operating costs, thepressed entirely in monetary terms. Because the value of the technician’s time, and the cost ofbenefit of medical technology generally involves maintaining equipment. However, it is hard to ac-health effects such as life-years saved, CBA re- curately identify and quantify indirect costs such
  • 207. Chapter 1 Introduction, Summary, and Options | 13as productivity gains or losses. In general, it is OPTION 4: Establish baseline data for the costs ofvery difficult to tie the use of information technol- current information structures in the health care deliveryogies to health consequences. system so that future implementations can be objec As a result of these limitations, most existing tively evaluated.economic evaluations do not constitute formal Given these possibilities for cost-benefit analy-cost-effectiveness or cost-benefit analyses. Instead, ses and systemic cost analyses, it should be notedmost have attempted to estimate savings in terms that some stakeholders who contributed to this as-of productivity gains to the system. Some have sessment indicated that rigorous cost-benefit oralso speculated about how various applications cost-effectiveness analyses would not play a ma-will ultimately influence patient care. The design jor role in their decisions to implement informa-and scope of such analyses vary widely across tion technologies. Rather, these technologies andstudies, as does the level of rigor. systems of technologies were considered by many stakeholders to be as fundamental and as immuneCongressional Options to cost-benefit analysis as the telephone: adoptionRecognizing that implementation of information of the technologies would be necessary to remaintechnologies will be an incremental process, Con- competitive in the health care industry.gress may wish to attempt to evaluate the possiblesystemic savings associated with implementation „ Standards Developmentof information technologies in a way that recog- The second major theme that recurs throughoutnizes the shifting patterns of health care delivery. this report is the central role of standards develop-Alternatively, Congress could evaluate, for ad- ment for systematizing the compilation and ex-ministrative purposes, the costs and benefits of change of health care information. One value ofimplementing various specific technologies or digitized health information is that it can be ma-sets of technologies. These are difficult chal- nipulated quickly and accurately by computerslenges. However, should Congress wish to pursue without human intervention. The accuracy, speed,such analyses, it could direct agencies or congres- and cost of machine-processing are adversely af-sional support services to implement one or more fected by novelty, diversity, and frequent changesof the following options: in the rules. Until standards are in place and com- pliance is widespread, costly activities—such as OPTION 1: Analyze systemic savings that might maintaining multiple formats for health care in-be associated with implementation of information formation, dealing with exceptions, and develop-technologies and related changes in health care deliv ing new interface software as new proprietaryery systems using realistic estimates for the pace of im approaches to managing health information be-plementation. come fashionable—will continue to offset some potential savings of processing health care recordsOPTION 2: Conduct or fund research to evaluate and transactions electronically.the costs and effectiveness of individual information Standards development is an ongoing process.technologies, such as order entry systems, clinical pro A number of organizations are working on stan-tocols, and electronic interchange of claim and pay dards for the content and format of electronicment information. health information. Standards for the format of billing and core insurance transactions are well OPTION 3: Evaluate the potential for synergies be developed, and the Health Care Financing Ad-tween information technologies by funding research in ministration (HCFA) has adopted some of them.the implementation of multiple simultaneous applica Another area of standardization that could facili-tions in test and control facilities. tate electronic transactions is a system of unique
  • 208. 14 | Bringing Health Care Online: The Role of Information Technologiesidentifiers for individuals, providers, and sites of ganizations as they grow larger and morecare. At present, each provider uses its own num- complex. One approach to solving this problem isbering system, which can create confusion when to liberate health information from its traditionalhealth information is exchanged between differ- paper medium by creating, transmitting, and proc-ent institutions. essing it through more flexible electronic means. The development of technical standards is pri- Electronic information can be used again andmarily a private-sector activity. However, it could again, in different forms for different purposes. Itbe accelerated through federal participation in de- can be reformatted easily and transmitted cheaplyveloping standards that would encourage in- once the infrastructure to do so is in place.formation exchange and protect the privacy of Chapter 2 identifies the broad currents of in-participants in the health care system, and through formation flowing within the health care system,expeditious implementation of such standards in and then describes various approaches to comput-all federal health care matters as a catalyst for erizing clinical information within hospital andtheir adoption by the private sector. This should ambulatory care units. One portion of this clinicalnot be construed as a call for federal agencies to information is the patient’s medical record, whichindependently establish standards for implement- has conventionally been kept as a thick folder ofing information technologies—such efforts would paper forms and films. The chapter describes thealmost certainly fail to meet the needs of various design of paper recordkeeping systems and thestakeholders. Rather, federal agency participation reasons they are inadequate for documenting carein existing standards activities would preempt du- in an integrated health care delivery organization.plicative development of federal regulations and It discusses ways that this information might berequirements. Further discussion of standards ap- digitized and then disseminated (with appropriatepears in individual chapters of this report. security measures) through standardized commu- nications protocols.„ Information Technologies for A diverse suite of key computer and commu- nication technologies supports the digitization Transforming Health Care and dissemination of clinical records. The chapterThe potential for new computing and telecommu- describes technologies for: a) capturing data asnications technologies to reduce the cost of deliv- it is generated by caregivers and the machinesering health care, while facilitating broad structur- they use to monitor and treat the patient; b) com-al changes in the health care industry, may presage pressing, storing, securing, and retrieving data;a rapid expansion in the application of informa- c) networking and telecommunications technolo-tion technologies to the health care system. Chap- gies sharing information; and d) refining data andter 2 charts the technological and organizational comparing data streams so computers can supportfactors that will help guide the path of that expan- medical decisionmaking. Insight and wisdomsion should it occur. must somehow be culled from an overwhelming flood of bits and bytes.Policy Issues This suite of advanced information technolo-Many of the practical frustrations encountered by gies is also the context for discussions in subse-participants in the health care system can be traced quent chapters of the report that addressto the inability of current information systems to administrative health data management, qualityprovide accurate, timely information where it is assessment and decision support, and deliveringneeded in the health care process. Poor informa- health care services and information at a distance.tion mobility has become an impediment to effi-cient delivery of high-quality health care. This Congressional Optionsimpediment becomes more prominent, expen- Many of these core technologies have been devel-sive, and problematic for health care delivery or- oped by the private sector for nonmedical pur-
  • 209. Chapter 1 Introduction, Summary, and Options | 15poses and will be adopted within the health care 3. advise Congress on specific needs of the medi-system as needed. Nonetheless, Congress may cal, technical, and consumer communities withwish to consider certain policy options that could respect to legislation establishing regulationsencourage harmony in how that adoption pro- and policies pertinent to information technolo-ceeds. gies; and 4. set national standards for patient and institu-OPTION 1: Support standards setting activities. tional identification numbers and security pro- cedures to be used with patient records. Congress could direct relevant agencies to sup-ply personnel to actively participate in standards- „ Networks for Health Administrationsetting meetings. This would proactively obviateany federal regulatory activity that might be at Chapter 3 explores the exchange of healthodds with consensus standards by making sure information among the many stakeholders—pro-that government interests are represented within viders, payers, employers, consumers, and govern-the standards-setting process. Congress could ment agencies—particularly for administrativealso provide financial support for the process, in- purposes.cluding funding research support to help resolveany technological roadblocks that impede stan- Policy Issuesdards development. Congress could also direct As part of a larger effort to reduce costs, improvefederal agencies to set aggressive schedules for quality of care, and improve access to health care,implementation of consensus standards in their efforts to effect administrative efficiency throughown health care delivery and administrative acti- greater use of electronic commerce in health carevities as a catalyst for similar private-sector ac- are an important component. Today, about 75 per-tion. cent of hospital claims are submitted electronical- ly, the vast majority of these being MedicareOPTION 2: Fund and coordinate research efforts to claims submitted to HCFA. Physicians submit some 47 percent of their Medicare claims elec-overcome specific technological barriers. tronically, but only about 16 percent of total These efforts could include research into hu- claims.17 Between some payers and providers, theman-computer interface technologies for use in process of billing and being paid has been totallyhealth care settings and research into large-scale, automated, with the organizations exchangingopen architecture implementations of information electronic claims, remittance advice (documentstechnologies in health care settings. that explain how much of the claim is paid), and electronic funds transfers. However, such levelsOPTION 3: Coordinate federal efforts to implement of automation are still unusual. Electronic claimhealth care information technologies. services help providers deal with the multitude of different formats and requirements of payers. The agencies or committees charged with this They offer software and services for translatingcoordination could: and reformatting claims and other electronic1. establish procedures for expediting approval transactions among the 400 or so different sys- and distribution of medical software; tems in use.2. establish mechanisms (or support similar pri- Compared with a paper-based system, it ap- vate-sector efforts) for reviewing and dissemi- pears that electronic information reduces costs for nating clinical protocols; some users. Most of the estimates for savings re- 17 “Automated Medical Payments Statistical Overview,” Automated Medical Payments News, Feb. 8, 1993, p. 3.
  • 210. 16 | Bringing Health Care Online: The Role of Information Technologiessulting from the use of information technology are means, everything that is done for the patient dur-based on cost reductions in payer-provider trans- ing a stay or visit, and to document informationactions resulting from automation in a fee-for-ser- about resource utilization and costs in order tovice environment. Managed care organizations prepare an appropriate bill. Electronic patient re-can have equivalent transactions that presumably cords are under development in many locationswill cost less using information technology. How- throughout the country. In addition to technologi-ever, the major savings that are expected to accrue cal and organizational barriers, there are a numberfrom managed care come from better management of regulatory and legal barriers to complete imple-of both resources and patient and clinician behav- mentation of electronic patient records, includingior—for example, reduction of unnecessary ser- conflicting state laws and regulations about howvices. Information technology should assist in this patient records must be maintained and the wayas well. For example, having up-to-date patient re- privacy and confidentiality of records should becords available at the point of service should re- protected.duce duplicate testing or the provision of Health information is not limited to the patientnonallowed treatments. While it has been argued record. Rights of patient access and procedures forthat information technology fosters better man- protection of privacy and confidentiality are notagement, actual evidence of its contributions to clearly defined for secondary and tertiary users ofcost reduction in this area is difficult to find. health information (e.g., payers, researchers, and Community health information networks organizations maintaining health data reposito-(CHINs) facilitate exchanges of clinical or admin- ries) under federal or most state laws. While mostistrative data among providers and payers in a par- health care is local, in that people usually see care-ticular community or region. CHINs can help givers in their own communities, health informa-offset the lack of standardization by providing tion often needs to cross state lines because thetranslations and interfaces between incompatible payer, provider, patient, and/or employer may becomputer systems used by different network sub- in different states.scribers. Some networks, often called CHMISs(Community Health Management Information Congressional OptionsSystems), may also maintain a repository of ad- Savings may be available to the health care systemministrative information for use in performing as a whole as a result of universal implementationoutcome research and quality assessments of pro- of electronic medical payments. However, at cur-viders and insurance plans in the community. At rent implementation rates, universal compliancethis point it is not clear whether community net- may not be achieved for some time, if ever. Get-works, which offer service to competing providers ting started with electronic commerce requires ain the community, will survive as more vertically solid organizational commitment and a signifi-integrated health care organizations build propri- cant investment in equipment, software, processetary information networks. redesign, and education, but some organizations While exchanging health information electron- have weak financial incentives to make the invest-ically offers advantages, it also raises fears that ments needed to institute electronic payments.privacy and confidentiality of health information Others are forging ahead, unwilling to wait formay not be protected. Many consumers already standards. The health care industry in the Unitedfear that too many people have access to their States is not organized as a “system” with a centralhealth information. Most information needed for focus or consensus on how to deal with system-health care administrative transactions comes wide problems. The different parts of the frag-ultimately from the patient record. Clinical in- mented system have diverse incentives, andformation in coded, abstracted form becomes ad- efforts by participants to control costs in their ownministrative information. The provider attempts area can tend to increase costs elsewhere. How-to capture, either through manual or automated ever, these shifted costs are so subtle and spread
  • 211. Chapter 1 Introduction, Summary, and Options | 17over so many participants in a complex system A national system of electronic commerce forthat they are difficult to quantify. health information will operate more smoothly if The federal government has provided some there is a better system for uniquely identifyingleadership in helping the health care industry participants in that system, both to prevent du-move toward greater use of electronic informa- plication and loss of information and to facilitatetion, and may wish to continue this leadership coordination of benefits when multiple providersrole. There are three major areas in which govern- and payers are involved in a patient’s care. Be-ment action might be considered: 1) providing cause of its national reach, the federal governmentleadership in the adoption of standards for elec- may be in the best position to establish systems oftronic medical payments and other transactions identifiers.and exchanges of health information; 2) establish- In order to create a consistent legal and regula-ing a system of unique identifiers for people, pro- tory environment for electronic health informa-viders, and payers; and 3) establishing a more tion, Congress may wish to consider the followingconsistent regulatory environment for interstate options:exchanges of health information. OPTION 5: Encourage the passage of uniformOPTION 1: Continue to influence the standardiza state legislation with regard to privacy and confidentialtion of health care information primarily through the fed ity, allowable storage media, and standards for healtheral governments role as a major insurer. information. The Health Care Financing Administration’s A number of industry groups have been work-(HCFA’s) adoption of claims submission stan- ing with state governments to encourage adoptiondards, along with incentives such as faster pay- of uniform legislation, and the Department ofment of electronic claims, has already been Health and Human Services has been assigned theinstrumental in encouraging some payers and pro- lead role in designing model state privacy laws.viders to begin use of electronic payment systems. An alternative or supplement to this option may be: OPTION 2: Require the adoption of industry developed standards for core electronic transactions, in OPTION 6: Establish federal legislation and regulacluding minimum and maximum data sets, and set tion regarding privacy and confidentiality of medical intimetables for their implementation. formation, storage media for patient records, and If it is believed that HCFA’s influence alone standards for storage and transmission of medical in formation.will not ensure high enough levels of participationin a standardized electronic health payment sys- Additional federal legislation may be neces-tem, then a more active federal role may be con- sary as a framework for state legislation, or to re-sidered. A corollary to this option may be: place state laws, if the process of revising legislation on a state-by-state basis is seen as inef- OPTION 3: Charge a government agency with re fective or too time-consuming.sponsibility and authority to set standards and data definitions for administrative transactions in consultation OPTION 7: Charge a government agency with rewith industry groups, and to manage changes to stan sponsibility to oversee the protection of health caredards over time; alternatively, create an agency or com data; provide ongoing review of privacy issues; keepmission for this purpose. abreast of developments in technology, security mea sures, and information flow; and advise Congress OPTION 4: Establish a system of unique identifiers about privacy matters in the area of health care informafor patients, providers, and sites of care. tion.
  • 212. 18 | Bringing Health Care Online: The Role of Information Technologies Because of the importance of privacy and con- cians, and more rapid and widespread dissemina-fidentiality to the public, the continually changing tion of the results of performance measures touses for health information, and the constantly various parties.changing nature of threats to privacy and confi- Empirical evidence demonstrating the abilitydentiality, it may be necessary to establish one or- of these technologies to achieve these goals is lim-ganization as an ongoing locus of responsibility. ited, mixed, or incomplete. Moreover, concerns have been raised about possible adverse effects on„ Improving the Quality of Health Care the quality of health care arising from these technologies, including:Chapter 4 finds that advanced informationtechnologies—computer-based patient records, 1. incorrect parameters or criteria, or omitted orstructured data entry, advanced human-computer altered steps, in CDSSs that could lead to inap-interface technologies, portable computers, auto- propriate care;mated data capture, online query, knowledge- 2. excessive reliance on monitoring equipmentbased information systems, and computer and CDSSs, which could undermine the abilitynetworks—can potentially improve the quality of of clinicians to exercise professional judgmenthealth care by enhancing clinical decision sup- in nonroutine cases and reduce the interperson-port, and by improving data for assessing both the al aspects of patient care (the “quality of car-effectiveness of health services and the perfor- ing”); andmance of health care providers and insurance 3. the temptation to use readily available adminis-plans. trative data for assessing the effectiveness of Information technologies could facilitate faster specific health services or the performance ofand easier collection of information about the pa- providers or insurance plans.tient and the health problem at hand. Portions of If the data are incomplete or inaccurate, the re-that information could be entered by clinicians at sults could be misleading.or near the point of care, captured directly fromdiagnostic and monitoring equipment, or entered Policy Issuesby the patient prior to care. Technologies such as The private sector has been largely responsible forrelational databases with online query could sup- the development and application of informationport faster and easier search and retrieval of pre- technologies in clinical decision support and per-viously collected information about the patient, as formance assessment of health care providers andwell as information from local or remote knowl- insurance plans. The federal government’s roleedge bases. Development of computer-based clin- has mainly involved:ical protocols and other forms of clinical decisionsupport systems (CDSSs) that apply decision 1. developing information systems and perfor-rules and other knowledge-based approaches to mance measures for its own health insuranceinformation about the patient and health problem and health care delivery programs, most nota-at hand could recommend diagnoses, tests, treat- bly Medicare;ments, and preventive care. They could also lead 2. funding of intramural and extramural researchto more rigorous construction and analysis of and demonstration projects; andmeasures of service effectiveness and perfor- 3. participating in voluntary standards-setting ac-mance of providers and plans. Computer net- tivities with private-sector organizations.works, high capacity telecommunications, All of these activities in both the private andadvanced human-computer interface technolo- public sectors are likely to continue, with some in-gies, and improved graphics software could lead creasing and others decreasing. In an era of bud-to more flexible organization and display of this getary and regulatory restraints, however, majorinformation as appropriate for individual clini- new government initiatives, such as funding for
  • 213. Chapter 1 Introduction, Summary, and Options | 19technology development or mandated regulation G evaluate the effectiveness and safety of clinicalof clinical information systems, are unlikely. It information systems, including CDSSs.can be argued that this is appropriate—in otherwords, that the federal government should not in- OPTION 1b: Maintain or increase funding for HCFAterfere in private market decisions regarding the to develop and evaluate performance assessmentselection of new technologies or their applica- methods and systems suitable for Medicare and Medtions. icaid enrollees, using intramural research and extramu On the other hand, the federal government— ral grants and contracts to private sector organizationsspecifically HCFA—is responsible for ensuring for research and demonstration projects as needed.tight the quality of health care rendered to Medi-care and Medicaid beneficiaries.18 Recent efforts OPTION 1c: Assign the task of coordinating the deto move more beneficiaries into managed care velopment and evaluation of performance assessment methods and systems and clinical information systemshave underscored quality concerns, given the ex- to a single federal agency.pectation that capitation creates an incentive forunderservice.19 Several policy issues regarding OPTION 1d: Reduce funding for development andthe potential impact of information technology on evaluation of performance assessment methods andthe quality of care delivered to Medicare and Med- systems and clinical information systems, and directicaid beneficiaries deserve the attention of federal HCFA to employ performance assessment methodspolicymakers. and systems developed and evaluated in the private The foremost issue is the extent to which clini- sector, with minimal adaptation.cal information systems actually change clinicalpractice patterns and patient outcomes, and wheth- Until more solid evidence is available regard-er those changes are beneficial to providers and ing the effectiveness and safety of existing clinicalpatients. Empirical research on this issue remains information systems and the reliability and validi-limited, mixed, or incomplete, and more solid evi- ty of performance assessment systems, more dras-dence regarding these impacts needs to be ob- tic action—such as mandating the testing andtained. To pursue such research, Congress could certification of all such systems—is probably notconsider the following options. justified. Legal questions regarding who should be held liable in situations in which such systems lead clinicians to make decisions that harm pa-Congressional Options tients are probably best left to the courts to re- solve.OPTION 1a: Maintain or increase funding for intra Assuming that clinical information systems aremural research and extramural grants and contracts to found to be effective and safe in terms of their im-private sector organizations for research and demon pacts on practice patterns and patient outcomes,stration projects designed to: the next set of issues focuses on the most efficientG develop and test the reliability and validity of means of developing and implementing those sys- various methods of measuring and assessing tems. (with risk adjustment) the performance of pro- One issue regarding government involvement viders and health plans; in the development of standards and technologyG develop, implement, and evaluate specific sys- concerns the classification and coding of health tems of risk-adjusted performance indicators; services. Many major payers currently employ 18 The state governments share responsibility for the Medicaid Program with the federal government. 19 Given a fixed payment per plan member, providers may be tempted to minimize the volume and/or intensity of services rendered for eachpatient.
  • 214. 20 | Bringing Health Care Online: The Role of Information Technologiestwo separate systems for coding health services: could be applied to all health care services performedICD-9-CM20 for billing by inpatient hospitals and by all providers in all settings.other institutional providers, and CPT-421 for“professional” billing by clinicians and other non- OPTION 2b: Establish a new executive branch proinstitutional providers and suppliers. gram to develop a unified service classification and For payment and other purposes, services ren- coding system.dered by a clinician in an inpatient setting must becoded using both of these systems, creating addi- OPTION 2c: Once a unified service classificationtional costs for providers. For many services, and coding system is developed, mandate that all fedhowever, the codes in ICD-9-CM cannot be eral agencies that manage health insurance and healthequated (“crosswalked”) with those in CPT-4 be- care delivery programs use that system in those pro grams.cause of substantial structural differences betweenthe two coding systems. Moreover, both OPTION 2d: Provide minimal funding for monitoringICD-9-CM (Vol. 3) and CPT-4 have serious tech- and facilitating private sector development of a unifiednical limitations, such as overlapping and duplica- service classification and coding system.tive codes and inconsistent and noncurrent use ofterminology. Most importantly, neither has ade-quate room for expansion, so both are running out „ Telemedicine: Remote Access to Healthof codes as new services are created or different Services and Informationuses of existing services are distinguished. In ad- Telemedicine can be broadly defined as the use ofdition, neither system provides sufficient clinical information technology to deliver medical ser-detail to support the creation of the kinds of data- vices and information from one location to anoth-bases required to accurately assess patient out- er. The use of telecommunications to delivercomes using advanced information technologies. health care services and exchange information is Citing these and other problems, the National not new. Chapter 5 discusses how recent techno-Committee on Vital and Health Statistics, an advi- logical advances—such as fiber optics, integratedsory body to the Secretary of Health and Human services digital networks, and compressed videoServices, has recommended developing a unified —have eliminated or minimized some of theclassification and coding system for health care problems (e.g., poor quality images and slowservices.22 However, in 1994, even HCFA reaf- transmission speeds) that limited earlier applica-firmed its intention to continue this dual coding tions.system policy in its Medicare and Medicaid pro- Currently, there is much interest in the potentialgrams, despite the substantial barriers this poses of telemedicine to lower costs, improve quality,to efficient information processing and analysis. and increase access to health care, especially for those who live in remote or underserved areas. Pi- OPTION 2a: Provide additional funding for intramu lot tests are also under way to test the feasibility ofral and extramural research on the feasibility of devel delivering a variety of services directly to con-oping a single classification and coding system that sumers in their homes. 20 Practice Management Information Corp., International Classification of Diseases, 9th Revision, Clinical Modification, Fourth Edition,1993 (Los Angeles, CA: 1993). 21 American Medical Association, Physicians’ Current Procedural Terminology, 1994 (Chicago, IL: September 1993). 22 U.S. Department of Health and Human Services, Public Health Service, National Committee on Vital and Health Statistics, The NationalCommittee on Vital and Health Statistics, 1993 (Washington, DC: May 1994), pp. 8-10, 54-75.
  • 215. Chapter 1 Introduction, Summary, and Options | 21 Although there are no studies that prove the Telemedicine appears to have the potential tocost-effectiveness of telemedicine, in some cases improve the quality of care, but this has not yetit would seem to have the potential to reduce costs been proven. It can provide faster, more conve-for some participants. For example, telemedicine nient treatment and minimize the disruption of thecan eliminate the time and wages lost at work and patient’s life. By reducing the need for referrals,traveling expenses incurred when specialists and/ the continuity of patient care is ensured. The qual-or patients have to travel for consultations. In ad- ity of care may be better for a patient who has thedition, keeping patients in their own communities benefit of family support in the local area. For pro-can increase revenues for local hospitals and de- viders, ready access to information to help themcrease the cost to patients. The cost of a bed in a make more informed decisions will improve thecommunity hospital is considerably less than in a quality of the care they deliver. Electronic accesslarge medical center. Costs might also be reduced will help them stay up to date and enable them toby staffing hospitals and clinics with allied health receive continuing medical education creditsprofessionals, such as nurse practitioners and phy- without leaving their communities. Some believesician assistants, who would deliver services that the establishment of clinical practice guide-where there is no resident physician. Overall costs lines for telemedicine could help to provide aalso could be lower using telemedicine if it allows more consistent level of care.patients to be seen earlier, thus preventing the While telemedicine has been practiced for 30need for later, more costly care. Using telecom- years, its current iteration is still in the early stagesmunications to deliver services directly to the of development. It will take a number of years be-home would also reduce the costs of travel, as well fore it is used widely enough and evaluated suffi-as the pressures on clinics, emergency rooms, and ciently in terms of its effectiveness and efficiencydoctors’ offices. for definitive statements to be made about its In the short term, however, costs could in- overall value and recommended uses. Like all newcrease. Telemedicine could add an extra step to the technologies, there will be impacts that cannot beprocess if the patient still requires referral to a anticipated in advance. Rigorous evaluation stud-larger medical center. If it improves access to care, ies are needed to determine telemedicine’s poten-there may be increased use of health services as tial benefits, and such research is currently beingmore people take advantage of their availability. If supported by a number of federal agencies. The re-reimbursement for telemedicine services becomes sults should provide policymakers with the datawidespread, the system may be vulnerable to they need to make decisions about the efficacy ofabuse through overuse or fraudulent claims. Cost telemedicine. Proposed federal budget cuts, how-is not the only criterion, however. It is important to ever, are likely to have a negative impact on tele-consider the “value” of delivering services to medicine research efforts.those who might otherwise not get them at all be-cause of their physical location. Telemedicine can increase access to health care Policy Issuesfor populations in rural or inner city areas. It can While the use of telecommunications in deliver-do so by making these areas more attractive to ing health services has great potential, it alsohealth care providers by giving them immediate raises a number of issues that need to be resolvedelectronic access to up-to-date information and re- if telemedicine is to thrive. In general, patient con-sources, specialists for consultative purposes, sultations using telemedicine are not reimburs-continuing medical education, and other col- able (except for teleradiology and telepathology).leagues. Enabling local hospitals to remain eco- This will have a negative effect on its diffusion un-nomically viable by keeping patients in their own til HCFA promulgates a national policy. One ofcommunities is another benefit for access, as well the reasons for HCFA’s reluctance is the fact thatas for the economic stability of the community. there is a lack of research available to support the
  • 216. 22 | Bringing Health Care Online: The Role of Information Technologiessafety, efficacy, clinical utility, and cost-effective- eling its separate path, will have an effect on tele-ness of telemedicine. medicine’s progress. Another issue is the cost of the telecommunica- Implementation of telemedicine is likely totions links required for telemedicine. In many ru- proceed with or without federal support as provid-ral areas, the communication infrastructure is ers recognize its benefits to their practices. How-unable to support the bandwidth necessary to ever, federal government support will be requiredcarry the signals for telemedicine using two-way if it is to benefit those who need it the most—interactive video. In addition, the costs of connec- people living in rural and inner-city areas wheretions between local and long-distance telecom- market forces are unlikely to provide the servicesmunication carriers can pose a significant barrier needed. In a time of tight fiscal constraints andto telemedicine projects. Under the existing tariff shrinking research budgets, federal funding pro-structures, telephone calls placed to locations in- vided will need to be carefully monitored to en-side the local access transport area boundaries are sure it is being used wisely. If Congress wishes tooften more expensive than those placed outside encourage the diffusion of telemedicine to helpthe same service area. solve the disparities in health care availability, it Telemedicine raises some difficult legal and can have the most impact in the areas of researchregulatory issues as well. Remote diagnosis and funding and reimbursement for telemedicine con-treatment across state lines could bring different sultations. The two are closely connected, in thatlaws and regulations into play. A previous OTA formulating a standard reimbursement policy isreport found that the present legal scheme does not dependent on obtaining satisfactory answers toprovide consistent, comprehensive protection of many of the questions raised about telemedicine’sprivacy in health care information, whether it ex- efficacy and cost-effectiveness. Congress mayists in a paper or computerized environment. wish to:Clearly the privacy implications for telemedicinewill continue to receive careful scrutiny. Physi- OPTION 1: Continue to support demonstration andcian licensing becomes an issue because telemedi- evaluation projects.cine facilitates consultations without respect to The research currently under way is crucial tostate borders and could conceivably require con- answering many of the questions about the bene-sultants to be licensed in a number of states. This fits of telemedicine. To ensure that projects arewould be impractical and is likely to constrain the sustainable when funding ends, agencies need todiffusion of telemedicine projects. Telemedicine build in certain requirements. This is currentlymay, in fact, decrease the threat of malpractice achieved by requiring that grantees make a finan-suits through improved recordkeeping and data- cial investment in the project, often throughbases, and the fact that taping the consultations matching funds. Many of the current funding op-will automatically provide proof of the encounter. portunities for telemedicine projects focus on ru-However, it may also raise other liability issues, ral areas. Telemedicine also offers potential forsuch as the lack of a “hands-on” examination by solving some of the problems of inner-city healththe consultant. facilities. After assessing these needs, Congress could target support for depressed areas where theCongressional Options needs are great and a limited investment might beResponsibility for telemedicine policy is shared highly leveraged.among federal, state, and local lawmakers, and Because the data that would support a uniformmany of the decisions affecting the diffusion of reimbursement policy for telemedicine consulta-telemedicine are influenced largely by the private tions are not yet available, HCFA is moving slow-sector. Federal efforts to reform both the health ly and deliberately in accumulating the necessarycare and telecommunications systems, each trav- information on which to base a sound decision.
  • 217. Chapter 1 Introduction, Summary, and Options | 23This seems a prudent strategy. Experimenting In many cases, those who might benefit mostwith reimbursement in a small number of demon- from telemedicine applications know very littlestration sites will provide valuable insights that about them. While information dissemination iswill eventually enable the agency to craft a careful increasing in a variety of formats, there is a needpolicy based on actual results. Congress may wish for a centralized, online database of telemedicineto ensure that adequate funding is provided to information. Such coordination might includesupport those experiments. As the results become creating an electronic clearinghouse that wouldavailable, Congress may wish to provide oversight provide a range of information about telemedicineand conduct hearings to determine what further projects, including funding opportunities, currentaction may be warranted. projects, and people to contact for assistance and Until recently, there was a lack of coordination advice. Congress might wish to ensure that mech-of federal efforts in research, policymaking, and anisms exist, either in the public or private sectors,implementation of distance care. This has been re- to widely disseminate research results and othermedied considerably by the creation of the teleme- information about telemedicine.dicine working group of the Administration’s One of the goals of the IITF telemedicine work-Information Infrastructure Task Force. ing group is to investigate the feasibility of setting The costs of implementing telemedicine can be up an online database of telemedicine activities,a barrier to its diffusion, especially for small com- and work is continuing to determine the best waymunities and facilities. To address this barrier, to achieve this. Such a clearinghouse could be es-Congress may wish to: tablished in a designated federal agency within DHHS, such as the National Library of MedicineOPTION 2: Create incentives for cooperative efforts or the Office of Rural Health Policy. Alternatively,and consortia. Congress could provide support for a private-sec- In many small communities, it makes econom- tor group, such as the Telemedicine Informationic sense for groups to share the costs of imple- Exchange network at the Telemedicine Researchmenting, operating, and maintaining a Center, Oregon Health Sciences University. Thistelecommunications network. For example, option would avoid duplication of effort and pro-schools, medical clinics, libraries, social services, vide a single site where telemedicine informationand others who would benefit from improved in- could be maintained and obtained. However, itformation services may need to join forces to get would also require careful consideration concern-started. The Department of Defense and the Na- ing the content of the database and how informa-tional Aeronautics and Space Administration tion would be structured and formatted. Any(NASA) have been leaders in research related to telemedicine clearinghouse would only be usefultelemedicine applications, and the military has if kept up to date, and support for qualified staffhealth facilities in a number of locations. In some would needed to be assured.sites the military has cooperated with civilianhealth care personnel to deliver services using OTHER APPLICATIONStelecommunications. Where possible, the exper- The applications of information technology de-tise that exists in the military and NASA should be tailed in chapters 2 through 5 and summarizedshared with the civilian sector. Agencies such as above were selected because of their potential tothe Department of Veterans Affairs could also be improve access to health care, improve the qualityinvolved in cooperative efforts with the civilian of care, and reduce the costs of delivering care.sector. These were of particular interest to the study’s re- questers. OTA was unable to undertake an in-OPTION 3: Ensure that information about telemedi depth analysis of a number of other applicationscine is widely disseminated. of information technology that also have potential
  • 218. 24 | Bringing Health Care Online: The Role of Information Technologiesfor improving health care. Two are mentioned er-based systems as transforming the culture ofhere—consumer health informatics and commu- the health care system to one in which patients,nity networking. physicians, and other providers play equal roles in decisionmaking. 27„ Consumer Health Informatics Information technology also could play an im-Consumer health informatics has been defined as portant role in reducing a consumer’s need for“the study, development, and implementation of health care services. Demand management can becomputer and telecommunications applications defined as the “the support of individuals so thatand interfaces designed to be used by health con- they can make rational health and medical deci-sumers.”23 The basic principle is that of empower- sions based on a consideration of the benefits anding people to play a greater role in their own health risks of the options available.”28 Current exam-care and to be active participants in decisions af- ples include health risk appraisals, written and au-fecting their health.24 Information technology can diovisual media, telephone counseling services,be used to provide more health-related informa- and community resources. Although a compre-tion to consumers, “the largest untapped resource hensive demand management system does not yetfor health care.”25 Taking measures to prevent ill- exist, information technologies can make inter-ness and disease, by adjusting lifestyles or taking ventions more available and effective, and pro-safety precautions, for example, could have a pos- vide a sophisticated, multipurpose informationitive impact on the health care delivery system and system based on a new concept of the individualallow people to lead healthier lives. health record. When developed, these comprehen- Shared decision support systems are designed sive services will allow consumers to understand,to inform patient/provider decisions regarding choose, and evaluate health services in new ways,prevention, diagnosis, management, and treat- and could have a positive impact on health carement, and ultimately to improve the quality of costs and quality.29care and reduce costs. Choices are made collabo- Information technology also fosters commu-ratively by patients and their caregivers. An exam- nication among people who can provide supportple is the interactive video disk system developed and encouragement to those dealing with chronicat Dartmouth Medical School that allows men illnesses or a medical crisis. There is a large andwith benign prostatic hyperplasia and early stage growing community of people using computers toprostatic cancer to share in decisions on their provide help and support to one another to addresscourse of treatment.26 Some regard these comput- a variety of concerns. For example, as of early 23 Tom Ferguson (ed.), “Consumer Health Informatics: Bringing the Patient Into the Loop,” Proceedings of the First National Conferenceon Consumer Health Informatics, July 1993, p. 2. The Administration’s Information Infrastructure Task Force, Consumer Information Sub-group, defines consumer health informatics as “any information that enables individuals to understand their health and make health-relateddecisions for themselves or their families.” 24 John Wennberg, “Shared Decision Making and Multimedia,” Health and the New Media: Technologies Transforming Personal and Pub-lic Health, Linda M. Harris (ed.) (Hillsdale, NJ: Lawrence Erlbaum Associates, Inc., 1995). 25 Vergil Slee and Deborah Deatrick, “Reengineering Health Care Decision Making,” Health Commons Update, vol. 2, winter 1995, p. 6. 26 Wennberg, op. cit., footnote 24. 27 Deborah Deatrick, Executive Director, Health Commons Institute, personal communication, June 9, 1995. See also Slee and Deatrick, op.cit., footnote 25, p. 1. 28 D.M. Vickery, “Demand Management, Self-Care, and the New Media,” Linda M. Harris (ed.), op. cit., footnote 24. 29 Ibid.
  • 219. Chapter 1 Introduction, Summary, and Options | 25May 1995, America Online reported it had 148 tions are needed to foster greater electronic healthscheduled self-help groups.30 Some of these resources for consumers. These included:groups address health-related concerns, such as 1. support research and development;diabetes, stroke, AIDS, cancer, or disabilities. 2. support wide access to the NII as it develops;Others support the caregivers of people suffering 3. insist on good needs assessment for consumerfrom Alzheimer’s disease or other debilitating ill- applications;nesses. Nonprofit groups, such as the American 4. incorporate medical informatics into the med-Self-Help Clearinghouse, provide assistance and ical education curriculum;information to those wishing to set up an electron- 5. support clinical trials of different ways of shar-ic support group or find out about such groups.31 ing health data;Information on a variety of online health resources 6. reduce the cost of telephone links to electroniccan be obtained from the National Health In- bulletin boards;formation Center.32 7. subsidize premarket development of tools that The CHESS system is an example of one that private corporations can use and resell;allows consumers to access information about 8. facilitate the use of technology by managedtheir illnesses and to support one another using care organizations;home terminals.33 Another is the Connect Sys- 9. educate, support, and train users; andtem, a computer and voice-mail system used to 10. provide grassroots technology “set-asides.”monitor inner city drug-using pregnant women inCleveland, Ohio. At Case Western Reserve Uni- The Administration’s Information Infrastruc-versity, ComputerLink was a demonstration proj- ture Task Force has a subgroup of representativesect that supported the caregivers of persons with from federal agencies who are addressing con-Alzheimer’s disease and AIDS by delivering in- sumer health information and the NII. This com-formation, communication, and decision support, mittee has coordinated the development of a draftaccessed through home terminals.34 (See ch. 5 for white paper outlining key policy issues for themore complete discussion of these systems.) Fu- federal government to consider as the public in-ture systems geared to the needs of consumers are creasingly relies on electronic means of informa-likely to include interactive video to the home. tion access and exchange.35 This paper was Participants in an OTA workshop in July 1994 released for public comment at a federally spon-had a number of suggestions regarding what ac- sored national conference on networked consum- 30 Todd Woodward, Self-Help Information Center, America Online, personal communication, May 8, 1995. 31 Barbara J. White and Edward J. Madara (eds.), The Self-Help Sourcebook: Finding and Forming Mutual Aid Self-Help Groups, 4th ed.(Denville, NJ: St. Clares-Riverside Medical Center, 1992). 32 NHIC’s home page on the World Wide Web is located at <URL: http://hic-nt.health.org/ >. NHIC is a service of the Office of DiseasePrevention and Health Promotion, Public Health Service, U.S. Department of Health and Human Services, and the George Washington Univer-sity Himmelfarb Medical Library. 33 F.M. McTavish et al., “CHESS: An Interactive Computer System for Women with Breast Cancer Piloted with an Under-Served Popula-tion,” n.d. 34 Patricia F. Brennan, “Differential Use of Computer Network Services,” American Medical Informatics Association, Proceedings,Seventh Annual Symposium on Computer Applications in Medicine, Oct. 30-Nov. 3, 1993, Washington, DC, p. 27. 35 Kevin Patrick and Shannah Koss, “Consumer Information ‘White Paper,’” Consumer Health Information Subgroup, Health Informationand Application Working Group, Committee on Applications and Technology, Information Infrastructure Task Force, working draft, May 15,1995.
  • 220. 26 | Bringing Health Care Online: The Role of Information Technologieser health information in May 1995. It will serve as formation and communicate with one another. Anthe cornerstone for Administration policy in ap- earlier OTA report discussed the role of the localplications technology development and use. community infrastructure—schools, libraries, se- Key policy issues for the federal government nior centers, and town halls—in delivering federalidentified in the paper include: services to citizens electronically, especially thoseG the need to coordinate federal consumer health in rural areas, small towns, inner cities, and people information dissemination efforts both within with special needs37 (see box 1-3). The difficulties the government (federal, state, and local) and of building an infrastructure can be a barrier, how- with private providers; ever. One group of researchers commented:G assurance of privacy and confidentiality; Although there is widespread endorsement ofG assurance of the availability of information such proposed efforts as managed care and one- critical for public health; stop shop service delivery, the more difficult task in most communities is to build an infra-G the need for research and evaluation of the im- structure that supports such coordination with a pact of consumer health information; holistic approach to service and care.38G the role of standards in vocabularies and data transmission; One example of a project using telecommu-G information validity and integrity; nication and computer technologies to supportG assurance of telecommunications infrastruc- and coordinate health and human services at the ture for adequate information delivery; and community level is the Community Services Net-G education and training. work (CSN) in Washington, DC. This is a joint ef- fort of the U.S. Public Health Service, Howard University School of Social Work, Rice Universi-„ Community Networking ty and Baylor College of Medicine, MacroHuman services, including health care, are often International, Inc., United Seniors Health Cooperatidelivered in a fragmented fashion, leading to du- ve, and Bell Atlantic Corp. Several communitiesplication of effort on the part of providers and con- across the country are currently exploring the de-sumers. Telecommunications could be used to velopment of CSNs. The Lawrence Livermorecoordinate and streamline these services through Lab in California is helping Macro and other part-community networking,36 enabling the providers ners develop test-beds to move CSNs from pilot toof a wide variety of social services to share in- early operational status.39 36 For a discussion of the role of information technology in strengthening community action, see Nancy Milio, Engines of Empowerment(Ann Arbor, MI: Health Administration Press, 1995). 37 U.S. Congress, Office of Technology Assessment, Making Government Work: Electronic Delivery of Federal Services, OTA-TCT-578(Washington, DC: Government Printing Office, September 1993), ch. 5. See also U.S. Congress, Office of Technology Assessment, Telecom-munications Technology and Native Americans: Opportunities and Challenges, OTA-ITC-621 (Washington, DC: U.S. Government PrintingOffice, August 1995). 38 G.A. Gorry et al., “Health Care as Teamwork: The Internet Collaboratory,” in Health and the New Media, op. cit., footnote 24, p. 97. 39 Kevin Patrick, Department of Health and Human Services, personal communication, May 10, 1995.
  • 221. Chapter 1 Introduction, Summary, and Options | 27 BOX 1-3: Grassroots Computer Networking: Lessons Learned OTA commissioned two grassroots computer networks to conduct computer conferences on the topic ofelectronic service delivery. Big Sky Telegraph (BST), headquartered in Dillon, MT, and the National Public Telecomputing Network (NPTN), headquartered in Cleveland, OH, conducted the conferences during late summerand fall of 1992. Lessons learned include: 1. The costs to users of grassroots computer networking can be minimized. Almost any personal computer(PC) and modem will suffice; high end, high speed equipment is not necessary. Online telecommunicationcharges can be reduced by copying messages to a PC and preparing responses with the telecommunicationsline turned off, and by using fractional rates and bulk purchase discounts. Use of equipment that transmitsmessages faster will reduce online charges further. 2. Any local community can have a community computer bulletin board. BST has, in effect, created sixLittle Skys" where people can dial in with a local call further reducing online costs. BST is a rural equivalentof the NPTNs network of FreeNets." BST is a rural FreeNet. All you need is a PC, modem, telephone line, andinexpensive bulletin board software. And to further reduce costs, the Little Sky" or FreeNet" can dial up ahost computer once a night at off peak rates to copy or add bulletin board items. 3. Community computer bulletin boards really extend a sense of community. BST and NPTN, like CompuServe and Minitel, found that users participate as much for sociability as for content. Users seek a comfortlevel and degree of intimacy that is not always prevalent in the community at large. Computer conferencingalso greatly reduces any biases due to sex, physique, disabilities, speaking ability, etc. It is a leveling technology in this sense. 4. Community computer networks usually get only limited support from the established government andbusiness community. The BST and NPTN approach is low cost and decentralized; the state and federal bureaucracies tend to favor higher cost, more centralized, or at least more controllable, approaches. Also thenot invented here" syndrome is evident. Each organization has a tendency to invent its own solution or approach. 5. Grassroots computer network utilities like BST and NPTN can facilitate local access to national computernetworks that might not be otherwise technically feasible or affordable. If local residents find computer networks such as the Internet expensive or difficult to access directly, computer utilities can provide low cost,user friendly connections. 6. Grassroots computer conferencing works for children. Children as young as the third grade can usecomputer conferencing to learn keyboarding, e mail, and the concept of communicating among a group electronically (even some first graders can handle it). 7. Grassroots computer conferencing has significant potential for government service delivery. For example: a) agricultural extension services, b) small business assistance, c) international trade global trade networks offer tremendous potential for locally based global entrepreneurial networking, d) Indian reservation services, especially for the Indian schools and hospitals, e) vocational education for displaced homemakers, f)job opportunities potential for computerized catalogs of jobs and skill requirements, and g) public access tothe legislative process. 8. Training is essential to computer conferencing success. It is important for first experiences to be positivein order to develop self confidence. Help lines work, rather than forcing users to struggle through manuals. Asconfidence builds, users can do more themselves and handle more complex functions. Initially many peopleare not ready for searching databases; but eventually users will want to and can do searches. 9. Federal programs largely miss the potential of grassroots computing. The government does not havegood mechanisms to support small, local innovators who lack a major institutional affiliation. Suggestions:mini grants of up to $5,000 or so to local innovators; more flexibility in the National Science Foundation andother federal grant programs to support individuals and small, grassroots organizations; inclusion of grassroots representatives on federal advisory and peer review panels; technology showcases and demonstrations(e.g., fiber to the school demonstrations in rural, economically disadvantaged areas).SOURCE: Big Sky Telegraph, National Public Telecomputing Network, and Office of Technology Assessment, 1993.
  • 222. The ASP MarketThe ASP MarketASP.Unheard of even a year ago, the term ASP is now used all over the industry. But what is an ASP?ASP is an acronym for Application Service Provider. As outsourcers of enterprise applications, at the bareminimum ASPs take on the hosting and application service needs of companies whose core competenciesare not in information technology (IT). A large draw for middle market customers is that ASPs canessentially work with their IT departments to host complex applications for e-commerce, human resources,and financial management solutions. ASPs offer them access to Fortune 500 applications to which theywere previously denied.USi: A Superior ASPBut not every company using the term ASP can deliver the same service. Some outsourcers only offerco-location or hosting, yet claim the ASP title. Any company considering an ASP to outsource theirenterprise solutions would do well to ask the ASP the following key questions.How many software partners do they have? What are the capabilities of their network? How quickly canthey get your solution up and running? What kind of capital outlay will you have to provide up-front?How large is their technical staff? How much expertise do they possess to implement and manage yourapplication, and respond to any emergency? Is their network secure? Is it redundant, failsafe, andgeographically mirrored? How fast is their connectivity?Are regular software and network upgrades included in the service? Do they offer contracts with servicelevel agreements and project timeframes that include financial penalties when these promises are not met?A top of the line ASP can offer all of this so its clients dont have to — and USi aspires to over-reach thesebenchmarks. USi has partnerships with a number of best-of-breed software vendors, Cisco-PoweredGlobal Network, and a partnership with telco U S WEST. This ensures that our clients have multipleoutsourcing options, can leverage a world-class network, and have high-speed Internet access andperformance. Info | News | Products | Technology | Sales | Careers | Events | Support | Contact Site Search - Enter Keywords Below searchhttp://www.usinternetworking.com/news/features/99-05-24-asp.html [6/2/1999 2:34:01 PM]
  • 223. Phrma: Publications: Industry Profile 1998, Chapter 4 Value Brochure Biomedicine Leading the way Return to Table of Contents Annual Report Health Guides Ind. Profile 99 q Pharmaceutical Expenditures in Perspective q Cost-effectiveness of Pharmaceuticals q From the Manufacturer to the Patient q Compliance with Medication Regimens Prescription drugs not only prolong life and improve the quality of life, they also frequently reduce or replace more expensive forms of medical treatment such as hospitalization, nursing care, and surgery. With the great potential for continued pharmaceutical breakthroughs, prescription drugs will continue to play an important role in containing costs, even as overall health-care expenditures increase. PHARMACEUTICAL EXPENDITURES IN PERSPECTIVE Rising health-care costs can be attributed to several factors, notably demographic shifts in the population and the explosion of life-prolonging innovation. In 1997, total national health expenditures (NHE) in the United States amounted to 1.1 trillion dollars—13.5 percent of gross domestic product (GDP)—according to the Health Care Financing Administration. The share of GDP allocated to health has nearly doubled since 1970, when it was just 7.4 percent. Beyond 2010, the aging of the population will have a significant impact on health-care spending. Those 65 and older are about 13 percent of the population today and account for roughly 34 percent of health expenditures. As baby boomers enter their 70s and 80s, the share of the population 65 and over will exceed 20 percent. Because the frequency and intensity of health-care utilization increase sharply with age, this demographic shift will raise health expenditures. The U.S. currently devotes a higher percentage of GDP to health expenditures thanhttp://www.phrma.org/publications/industry/profile99/chap4.html (1 of 9) [6/16/1999 1:15:41 PM]
  • 224. Phrma: Publications: Industry Profile 1998, Chapter 4 any other major industrialized country [Figure 4-1]. Since 1980, the gap has widened between the U.S. and other industrialized countries in the share of GDP allocated to health. In contrast, the share of GDP devoted to pharmaceuticals in the U.S. is about average for an industrialized country [Figure 4-2]. Since 1980, the share of GDP allocated to pharmaceuticals also has increased in the U.S., although this has been at a much slower rate than with other health-care components and is in line with increases elsewhere. These data suggest that pharmaceutical expenditures do not contribute to higher than average health expenditures in the U.S. Overall, the proportion of health expenditures allocated to outpatient prescription drugs in this country has declined from past levels, but has risen somewhat in recent years [Figure 4-3]. In 1965, 9.0 percent of health expenditures was allocated to prescription drugs. In 1997, the percentage was 7.2. In relation to consumer spending on other items, expenditures on prescription drugs are relatively small. According to the Department of Commerce, per capita personal consumption expenditures on pharmaceuticals averaged 64 cents a day in 1997. This compares to consumer expenditures of $8.45 a day on housing, $7.94 on food, $2.84 on clothing, and $1.07 on telephone services [Figure 4-4]. COST-EFFECTIVENESS OF PHARMACEUTICALS Prescription-drug therapy is highly cost-effective. Other interventions—such as surgery, hospitalization, physician visits, and nursing care—are typically time-consuming and expensive. Prescription-drug therapy often eliminates the need for these costly interventions. Until cures are discovered, incremental advances in drug therapies often reduce treatment costs by controlling symptoms and alleviating pain. Ulcer therapy illustrates the progression of drug innovation and its ability to lower medical costs. Prior to the advent of H2 antagonist drug therapy in 1977, 97,000 operations were performed for ulcers each year.1 By 1987, the number of surgeries had dropped to 18,926. In the early 1990s, the annual cost of drug therapy per person amounted to about $900, compared to $28,000 for surgery.2 The discovery that the H. pylori bacterium is the principal cause of ulcers has led to the use of antibiotics in combination with H2 antagonists to treat duodenal ulcers. At a cost of about $140 per patient, combination therapies now eradicate the bacterial cause of most ulcers. More recent examples of the cost-effectiveness of prescription drugs include: q For asthma patients, increased drug spending keeps patients out of the hospital. Results from the Virginia Health Outcomes Partnership program for Medicaid asthma patients demonstrated an average 42 percent decline in the rate of emergency room and hospital urgent care visits. In a little more than one year after the program was implemented, it saved Medicaid about $285,000. Had the program been in effect throughout the state—rather than in just sevenhttp://www.phrma.org/publications/industry/profile99/chap4.html (2 of 9) [6/16/1999 1:15:41 PM]
  • 225. Phrma: Publications: Industry Profile 1998, Chapter 4 counties—it is estimated that the savings could have topped $2 million. q In a year-long disease-management program for about 1100 patients with congestive heart failure run by Humana Hospitals, pharmacy costs increased by 60 percent, while hospital costs declined 78 percent. The net savings were $9.3 million.3 q Researchers at the National Bureau of Economic Research recently examined the overall costs of treating heart attacks and depression, two conditions for which drugs play an important role. They found that the total cost of restoring health for heart attack patients has fallen by about 1 percent annually from 1984 through 1991.4 Similarly, researchers found that the aggregate price of treating acute major depression fell by 25 percent during 1991–1995.5 These trends highlight the cost-effectiveness of prescription drugs and the need for health-care plans to examine prescription drug costs comprehensively in the context of the overall costs of treating patients. q A recent study sponsored by NIH found that treating stroke patients promptly with a clot-busting drug not only reduces disability—it also saves health-care costs. The study showed that while it initially costs more to treat patients with the drug, the expense is more than offset by reduced rehabilitation and nursing home costs.6 Treatment with the clot-buster costs an additional $1.7 million per 1,000 patients. But reduced rehabilitation and nursing-home costs result in net savings of more than $4 million for every 1,000 patients [Figure 4-5]. According to NIH, use of the clot-busting drug in the tens of thousands of eligible stroke patients could amount to savings to the health-care system in excess of $100 million per year.7 q A study published in the American Journal of Managed Care shows that a new drug for migraine headaches is lowering the total cost of caring for patients with this disease. Although drug expenditures for patients in the study increased, the total costs of treating these patients for migraine headaches declined 41 percent as a result of treatment with the new drug.8 Another study showed that the drug lowered lost-labor costs and reduced employees’ lost productivity due to migraines. The benefit to employers of this reduction in lost productivity was valued at $435 per month per employee [Figure 4-6]. In contrast, the cost of the drug was $43.78 per month. The benefit-to-cost ratio was 10 to 1.9 q A study released by the Agency for Health Care Policy and Research in September 1995 concluded that increased use of a blood-thinning drug would prevent 40,000 strokes a year, saving $600 million. In economic terms, the lifetime cost of a stroke exceeds $100,000, while the average annual cost of drug therapy and monitoring is $1,025.10 q In a 1993 study, cancer patients whose immune systems were weakened by high-dose chemotherapy were helped by a new pharmaceutical known as a colony-stimulating factor. The treatment saves $30,000 per patient inhttp://www.phrma.org/publications/industry/profile99/chap4.html (3 of 9) [6/16/1999 1:15:41 PM]
  • 226. Phrma: Publications: Industry Profile 1998, Chapter 4 hospitalization costs for bone-marrow transplants [Figure 4-7]. q A study published in the New England Journal of Medicine showed that patients on ACE inhibitors for congestive heart failure avoided nearly $9,000 each in hospitalization costs over a three-year period—and that the drug reduced deaths by 16 percent. The potential savings for Americans with heart failure amounts to $2 billion a year.11 q A drug for schizophrenia has enabled many patients to be treated outside the hospital, in less costly settings, according to a 1990 study. The annual cost of the drug therapy was $4,500, compared to more than $73,000 a year for treatment in a state mental institution. Between 133,000 and 189,000 schizophrenia patients could potentially be helped by schizophrenia therapy.12 q Patients with kidney disease who suffer anemia may be treated with drug therapy at an annual cost of $3,600 to $4,000 a patient. Drug therapy saves $6,540 a patient in the cost of medical care plus costs associated with reduced productivity, such as lost wages.13 q Immunosuppressive drugs have dramatically improved the success rate of organ-transplant surgery by preventing patients’ immune systems from destroying the new tissue. One of these drugs was found to shorten average hospital stays by as much as 10 days and reduce rehospitalization after kidney transplants. The cost of postoperative hospitalization may be nearly $10,000 less for patients treated with the drug.14 q Combination drug therapy of three medicines—including a protease inhibitor— can reduce the AIDS virus in many patients to undetectable levels, enabling them to return to work and reducing the need for hospitalization. The annual cost of the three-medicine therapy ranges from $10,000 to $16,000. In contrast, the cost of treating advanced AIDS in a hospital is estimated at $100,000 a year [Figure 4-8; also see box on HIV/AIDS in Chapter 1]. q A 1994 study published in the Journal of the American Medical Association estimated that a routine chicken pox vaccination program in the U.S. would save $391 million annually in work-loss costs [Figure 4-9]. Work-loss costs include the value of work missed by adults with chicken pox and the value of work parents miss when their children are sick. q Use of a cholesterol-lowering drug in patients with angina or who have had a heart attack increases life expectancy in men and women of various ages and varying cholesterol levels, according to a Scandinavian study. The Scandinavian researchers analyzed the direct costs saved by this therapy for people of different ages and cholesterol levels and found that savings ranged from $3,800 per year of life for 70-year-old men with cholesterol levels over 300, to $27,400 per year of life for 35-year-old women with cholesterol levels in the lower 200s.15http://www.phrma.org/publications/industry/profile99/chap4.html (4 of 9) [6/16/1999 1:15:41 PM]
  • 227. Phrma: Publications: Industry Profile 1998, Chapter 4 q The 6,595-patient "West of Scotland Coronary Prevention Study" found that a cholesterol-lowering drug reduced the risk of heart attack by 31 percent and the risk of death from all cardiovascular causes by 32 percent in individuals who have elevated cholesterol levels, but have never had a heart attack. These findings showed for the first time that cholesterol-lowering drugs could prevent heart disease and reduce the risk of death.16 q The Centers for Disease Control estimates that every $1 spent on the vaccine for measles-mumps-rubella (MMR) saves the health system $21, every $1 spent on the oral polio vaccine saves $6, and every $1 spent on the diphtheria-tetanus-pertussis vaccine saves $30.17 The introduction of the oral polio vaccine eliminated the need to build the national iron-lung centers envisioned by the government in the 1950s, saving billions of dollars.18 q Cases of bacterial meningitis among young children dropped nearly 80 percent over 11 years after the introduction of a vaccine, saving $135 million a year in avoided hospital costs.19 q Bronchial-mucolytic therapy for cystic fibrosis, when used in conjunction with standard therapies, was proven in clinical trials to reduce the risk of respiratory-tract infections requiring IV antibiotic therapy by 27 percent, reducing costly hospitalizations and other related medical costs.20 q Estrogen-replacement therapy can help aging women avoid osteoporosis and crippling hip fractures, a major cause of nursing-home admissions. Estrogen-replacement therapy costs approximately $3,000 for 15 years of treatment, while a hip fracture costs an estimated $41,000.21 FROM THE MANUFACTURER TO THE PATIENT The cost-effectiveness of prescription drugs—combined with a steady stream of new-product introductions—has contributed to healthy industry growth since 1970, when sales amounted to $6.6 billion [Figure 4-10]. Sales by research-based pharmaceutical companies are projected to reach $134.1 billion in 1999, a 7.6 percent increase from $124.6 billion in 1998. Sales within the United States by both U.S.-owned and foreign-owned research-based companies account for $91.8 billion of the 1998 total. Sales abroad by U.S.-owned companies account for the remaining $42.3 billion. According to data published by the health- care information company IMS Health, the main drivers of growth in the late 1990s have been non-price factors, including increased volume of prescriptions, record sales of new products and new product formulations, and the changing mix of available products being used.22 In 1998, 80 percent of industry growth was due to non-price factors [Figure 4-11]. IMS data differ from the sales figures quoted above because they include all products on thehttp://www.phrma.org/publications/industry/profile99/chap4.html (5 of 9) [6/16/1999 1:15:41 PM]
  • 228. Phrma: Publications: Industry Profile 1998, Chapter 4 market as well as added costs from drug wholesalers. In 1997, manufacturers’ net U.S. sales of human-use prescription pharmaceuticals amounted to $71.8 billion and was dominated by five major product classes. In 1997, the largest class was pharmaceuticals acting on the central nervous system, with $14.4 billion or 21.9 percent of manufacturers’ U.S. sales [Figure 4-12]. Over the same period, products acting on the digestive or genito-urinary system generated $9.0 billion or 13.6 percent of sales. Cardiovasculars accounted for $11.5 billion or 17.5 percent. Anti-infectives sales totaled $9.6 billion or 14.6 percent. Sales of pharmaceuticals affecting neoplasms (cancers), the endocrine system, and metabolic diseases amounted to $12.1 billion or 18.4 percent of U.S. sales. Smaller classes included respiratory products with 10.9 percent of the market, dermatological products with 2.1 percent, and vitamins and nutrients with less than 1 percent. Pharmaceutical manufacturers’ sales are mainly to large drug wholesalers. Wholesalers, in turn, distribute the products to retail pharmacies, hospitals, HMOs, clinics, mail-order companies, and other organizations that fill prescriptions. In 1998, 78.4 percent of sales of human-use ethical pharmaceuticals flowed through wholesalers, up from 71.8 percent in 1990, and 57.3 percent in 1980 [Figure 4-13]. In 1998, the retail sector—including independent, chain, food store, and mass- merchandise pharmacies—dispensed more than 2.1 billion prescriptions, according to IMS Health. In terms of dollar sales, retail channels account for over 64 percent of dispensed prescription sales in the U.S. [Figure 4-14]. Sales by hospital pharmacies account for 12.8 percent of the market, mail-order pharmacies comprise 10.8 percent, clinics 6.1 percent, long-term care pharmacies 3.1 percent, and staff-model HMOs 1.5 percent. More than 90 percent of HMOs contract with retail pharmacies to fill prescriptions.23 COMPLIANCE WITH MEDICATION REGIMENS Unless patients take their medicines according to physicians’ instructions and systems are in place to guard against adverse drug interactions, prescription drugs may not be used cost-effectively. It is estimated that only about half of prescribed medicines are taken correctly. Noncompliance is a costly problem—for employers, insurers, the health-care system and, of course, patients. The National Pharmaceutical Council (NPC), an industry research organization, estimates that noncompliance costs more than $100 billion a year, due to increased hospital admissions, nursing-home admissions, lost productivity, and premature deaths.24 Noncompliance results in more hospital admissions, emergency-room care, physician visits, and, occasionally, surgeries. There are also serious personal consequences. For example, failure to take contraceptives can lead to unwanted pregnancies, failure to take estrogen-replacement medication can cause osteoporosis, and failure to takehttp://www.phrma.org/publications/industry/profile99/chap4.html (6 of 9) [6/16/1999 1:15:41 PM]
  • 229. Phrma: Publications: Industry Profile 1998, Chapter 4 hypertension medicine can result in heart attack or stroke. Compliance rates vary with the disease and setting of the patient group. According to data reported in the Journal of Clinical Pharmacy and Therapeutics, patients in homes for the aged had relatively high rates of compliance, as did patients in the first year of antihypertensive treatment. In contrast, patients taking penicillin for rheumatic fever had relatively low rates of compliance. The National Council on Patient Information & Education (NCPIE) divides noncompliance into two categories: acts of omission and acts of commission. Acts of omission include never filling a prescription; taking less than a prescribed dosage; taking a medicine less frequently than prescribed; taking medicine "holidays"; and stopping a regime too soon. Acts of commission include overuse; sharing medicines: and consuming food, drink, or other medicines that can interact with a prescribed drug. One way to improve compliance is to provide patients with easy-to-understand information about their medicines. As a result of voluntary, private-sector programs, more than 60 percent of patients now receive written information about their medicines with their prescriptions. This percentage increases every year. ENDNOTES 1. Boston Consulting Group, The Contribution of Pharmaceutical Companies: What’s at Stake for America, September 1993. 2. PhRMA, based on data supplied by the Health Care Financing Administration, 1993. 3. "Provide Education about Congestive Heart Failure and Pump Up Your Savings," Managed Healthcare, April 1998, Vol. 8, No. 4, pp. 42–44. 4. Cutler, D., et al., "The Costs and Benefits of Intensive Treatment for Cardiovascular Disease," American Enterprise Institute/Brookings Institution, December 1997. 5. Frank, R.G., et al., "Price Indexes for the Treatment of Depression," American Enterprise Institute/Brookings Institution, December 1997. 6. Fagan, S.C., et al., "Cost-effectiveness of Tissue Plasminogen Activator for Acute Ischemic Stroke," Neurology, Vol. 50, pp. 883–889, 1998. 7. National Institutes of Health, National Institute of Neurological Disorders and Stroke, "New Stroke Treatment Likely to Decrease Health Care Costs and Increase Quality of Life," news release, April 22, 1998. 8. Legg, R.F., et al., "Cost-effectiveness of Sumatriptan in a Managed Care Population," The Journal of Managed Care, Vol. 3, No. 1, January 1997. 9. Legg, R.F., et al., "Cost Benefit of Sumatriptan to an Employer," Journal ofhttp://www.phrma.org/publications/industry/profile99/chap4.html (7 of 9) [6/16/1999 1:15:41 PM]
  • 230. Phrma: Publications: Industry Profile 1998, Chapter 4 Occupational and Environmental Medicine, Vol. 39, No. 7, July 1997. 10. Secondary and Tertiary Prevention of Stroke Patient Outcome Research Team: 9th Progress Report, March 1996. 11. "The SOLVD Investigators," New England Journal of Medicine, Vol. 325, No. 5, pp. 293-302, 1991; Walsh America/PDS. 12. Hospital and Community Psychiatry, Vol. 41, No. 8, 1990. 13. Levy, R.A., "What to Tell Patients About the Cost-Benefit of Medications," Wellcome Trends in Pharmacy, January 1993. 14. Showstack, J., et al., "The Effect of Cyclosporine on the Use of Hospital Resources for Kidney Transplantation," The New England Journal of