California Council on Science and Technology Steve Ryan February 3, 2005

1. California Council on Science and Technology Steve Ryan February 3, 2005

2. Healthcare Issuesin the U.S. and California • Health insurance coverage for all • Quality and safety of health care • Cost and affordability of health care • Information technology in health (HIT) • Electronic Health Record (eHR or EMR) • Comparative performance • Outcome measures

3. Healthcare Issues(continued) • Health workforce shortages, low professional morale, and mismatches of personnel to care needs – including nursing staffing and training • Underinvestment in disease prevention, health protection, and public health infrastructure • Health illiteracy • Coherent strategies, incentives, and systems to promote scientific discovery • Pressures on Academic Health Centers • Inadequate management of chronic diseases

4. Healthcare Issues(continued) • Disparities in care and outcomes • Closure of trauma-emergency rooms • Payor Issues • No more managed care • All insurance • Employers – have decided to exit • Defined contribution- not benefit • Outsourcing • STEM CELLS • Seismic Code – Hospital Compliance

5. Healthcare 15% GDP • Hospitals OPD 9-14% • Prescription Drugs 9% • MDs 5%

7. Consumer Survey by Harris • 59% HIT will give them control in managing their health • 63% HIT will prevent unnecessary visits • 52% believe they will benefit from cost savings BUT • 53% believe HIT will be more trouble than current system • 77% concerned MDs will miss clues apparent in ‘face to face’ • 61% believe HIT will increase cost of HC • 89% believe they will pay for increased costs

8. Summary • HIT is HOT AREA in Health Care • President Bush – David Brailer • California leaders • Goals • Improve quality and safety • Reduce cost and improve efficiency

9. HIT in Health Care • Reduction of medical errors • MDs ready access to • Best practice guidelines • Evidence databases • EMR in HC network • Reduce costs • Eliminate redundancy • Speed delivery of care

10. HIT Case • More theoretical than proven • E.g. <10% of hospitals use CPOE • Broad scale interventions and policy changes to transform practice of medicine • Government policy makers • Health system executives

11. RAND Project • Quantitative model • Estimate costs and benefits • Elimination of medical errors •  Acute Care •  Mortality •  Costs for HC payers and organizations From: Brook and Hillestad

12. RAND Project (continued) • Quantify HC quality and savings from HIT • Process view in a system model • Focus on benefits, costs, barriers, and enablers of FUTURE HIT

13. HIT and Physicians • 90+ % - Personal use of internet • <20% (?5%) EMR

14. HIT and Physicians Barriers to Adoption of HIT • Start up costs – 56% • Lack of uniform standards – 44% • Lack of time – 39% Need HIT tools for all MDs • Accessible • Affordable

15. Barriers to EMR Implementation • Organizational • Data • Cultural • Capital • $50,000+ per MD • 48+ hours training Wal Mart – organized around coherent goal HC – Complexity, fluid, patient clues to MD

16. Patient Confidentiality • Early concerns, e.g. • Local newspaper access to medical histories • HIPAA • Human Interaction • Patient and Physician (HC Provider)

17. Consumers favor IT in areas of HC but in some areas frequently prefer and demand “high touch” approaches

18. The Actual Drivers of Transformation Today • The transformation of healthcare in California has been driven by: • Health Plans • Medical groups, IPAs • Employers • State government • Hospitals • The impact of information technology is at early stage • Demonstrations by medical groups, IPAs • Larger investments underway by delivery systems, health plans

19. Models Mayo – IBM Enabling Legislation Delaware Florida Wyoming

20. California Status • Trails Other States • Pockets of EMR Implementation • Kaiser

21. California Has National Leaders in Healthcare IT • Robert Brook and Richard Hillestad – RAND • Molly Coye – HealthTech • Jack Lewin – CMA • Leonard Schaeffer – WellPoint (Anthim) • Many others • Other National Leaders • David Brailer • Harvey Fineberg • Don Berwick • Don Detmer

22. GOAL Application of Information Technology to Healthcare • Improve Quality of Healthcare • Protect Patients from Medical Error • Reduce Cost of Healthcare • Avoid unnecessary duplication • Integrate Healthcare System • Payors • Providers • Public

23. Health Information Network • High quality care • Safer care • Lower cost • Reduce • Duplicate Diagnostic Tests • Unnecessary Admissions

24. Patient Safety Institute • Create integrated statewide • Clinical Information • Sharing Networks • Jack Lewin, M.D. – CMA EVP/CEO

25. System Benefits • Patient-specific individual medicine • Disease surveillance • Research • Pay for units • Pay for performance (outcomes) From: Lewin/PSI

26. FDA/Pharmaceutical Benefits • FDA surveillance of past approval (Phase 4) • Pharmaceutical Industry • Costs and profits • Safety From: Lewin/PSI

27. Technology Exists For • First systemic approach to monitoring and surveillance of adverse drug effects • MDs to monitor compliance with Rx regimen • Lowering overall cost of health care • Faster patient recruitment for clinical trials From: Lewin/PSI

28. Barriers to Statewide Networks • No demonstrated scalable architecture supported by MDs – Hospitals – Consumers • No national trusted third party • No viable business model From: Lewin/PSI

29. Architecture: Selected Feature • Giant Master Patient Index or Switch links and retrieves disparate medical information at originating sources • Reliable and Fast. 99.98% availability; patient-centric record in 4 to 5 seconds • Non-profit PSI and its members own the license for the open architecture technology, not a for profit vendor From: Lewin/PSI

30. Molly Coye, M.D. Health Tech - Founder & CEO A.H.A - Board IOM • To Err is Human • Crossing the Quality Chasm California - Director of DHS New Jersey - Commissioner From: Coye/HealthTech

31. Molly Coye – Health Tech Convened Stakeholders Payors - Insurance Providers - MDs - Hospitals - Pharmaceuticals Government Technology - CISCO - Oracle - HP From: Coye/HealthTech

32. The Need for State Leadership California lags • Legislation: Wyoming, Florida, Delaware • Planning bodies • Funding • Stakeholders brought to the table • Medicaid and indigent care: • Disease management • Investment in IT as administrative match • RHIO formation: • > 400 communities in the U.S. From: Coye/HealthTech

33. California Health Information Exchange Project - Vision • VISION • Support the use of information technology, and the creation of a statewide health information data exchange system to: • Improve the safety and quality of healthcare in California • Improve the efficiency of healthcare in California From: Coye/HealthTech

34. Better, Cheaper Care – and Projections of State Savings • Projected net annual benefit, at 75% adoption rate, for Massachusetts: $2.48 billion • Electronic communication between patients and their physicians • Electronic prescribing • Ambulatory computerized physician order entry • Inpatient CPOE • Regional data sharing • Intensivist onsite 24x7 in ICUs • Disease management New England Healthcare Institute: Advancing Innovation, November 2003 www.nehi.net

35. New England Healthcare Institute Estimates – Massachusetts Savings Total Net Annual Benefit: $2.5 Billion Regional Data Sharing E- Prescribing Patient-Physician Email $140 $24 $168 E-ICU Ambulatory CPOE $177 Disease Management $290 $ Millions $710 Inpatient CPOE $977 Advanced Technologies www.nehi.net - October 2003

36. Laggards (16%) Late Majority (34%) Diffusion of Technology Early Majority (34%) Tipping Point Early Adopters (13.5%) Innovators (2.5%) 2003 Everett Rogers,Diffusion of Innovations, 1995 Year The Tipping Point – Are We There Yet?

37. FEDERAL INITIATIVES CURRENT EFFORTS FAILED EXPERIMENTS CALIFORNIA NETWORK Leadership Clinical Data Standards, EHR Definition Seed + Demo Funding Purchaser: FEHBP Interoperability Commission Product Certification Commission Reimbursement RHIO Definition Stark, Fraud & Abuse Modification Plans Medical Groups IPAs IDNs Medi-Cal Regional Data-Sharing Organizations QIO CDHSv SYS MedUnite Calinx Others Principles Benefits + Costs Framework Financing Models, Funding Platform Technologies Enabling Legislation, Regulation Governance RHIO(s) Formed Emergence of Health Data Exchange in California From: Coye/HealthTech

38. California Health Information Exchange Project - Goals Cal-RHIO GOALS • to help the organizers of regional efforts in California share information, materials, technology, and learnings • to facilitate • development of common governance, processes, technology, and other elements of regional healthcare information organizations (‘RHIOs’) in California, and • encourage the formation of one or more RHIOs within the state, with a statewide umbrella organization • to help key stakeholders in the health care and business communities and state policy leaders develop private and public policy agendas that will support the • rapid development and implementation of health care information technology within California, and the • protected exchange of that information From: Coye/HealthTech

39. California Health Information Exchange Project - Commitments COMMITMENTS • to promote widespread access to the benefits of information technology and data exchange for underserved populations and safety net providers • to make the project, its website and publications, and proposals for organizational or technical developments publicly available for comment and contributions. From: Coye/HealthTech

40. California Health Information Exchange Project – Draft Principles DRAFT PRINCIPLES • Transparent • Common approaches to technology, governance, financing, and other aspects of information technology investment and data exchange • Across California • Between California and national efforts • Sound business and financing models for each component • Inclusive From: Coye/HealthTech

41. $ A Funding Council Steering Group B C Projects Project Office HealthTech Governance Working Group Coordination of Local Efforts Technical Working Group Communication & Summit Planning Working Group Finance Working Group Clinical Working Group California Health Information Exchange Project - Organization STATEWIDE UMBRELLA ORGANIZATION From: Coye/HealthTech

42. www.healthtech.org The Vision Advancing the use of new technology to make people healthier The Mission To create a trusted source of expert information about the future of health care technologies The Means A non-profit pooled research center for delivery systems and health plans. Funding independent of developers and vendors of technology From: Coye/HealthTech

43. State Agenda for IT Transformation Federal role: • Clear the underbrush • Standards and certification • Fraud and abuse, Stark • Enable RHIOs • Build the highways • Network certification for data exchange • Public use data: • Public health • Quality and safety • Defense • Health quality and efficiency reports • Reimbursement From: Coye/HealthTech

44. State Agenda for IT Transformation State agenda: • ‘Bank accounts’ for all • EHR, direct access for all Californians • Security and confidentiality • Access for underserved • Neural networks across the state • Providers, anceillary, plans, patients • Regional data exchange networks coalesce • Establish RHIOs to provide governance, financing • State investment in IT and IT-enabled programs • Medi-Cal financing and savings • Uninsured, county responsibilities • Private public infrastructure model • Remote management approaches • Rapid research and deployment mechanisms • Focus on chronic care, disabled, rural and underserved, and SNF populations • Reduce risk • Generate savings • Need for leadership From: Coye/HealthTech

45. GOAL Information technology and creation of statewide health information data exchange to: • Improve quality and safety of healthcare in California • Improve efficiency and provide cost effective healthcare in California