Can HIT help with payment reform?

By Joseph C. Kvedar
02:51 PM

The two biggest healthcare-related themes coming out of the Obama Administration these days are investments in HIT and payment reform.  (They're spending a lot of energy on the subject of extending access, too, but I'm going to take poetic license and not write about that one).

Could the two be strategically related? A casual glance might say they are not.  HIT systems cost money.  It is conventional wisdom amongst healthcare administrators that the technology supporting our healthcare system is a great contributor to why costs in the U.S. are so much higher than elsewhere in the world. The goal of payment reform is to shrink costs...

So is it really as absurd as it sounds - are we going to reward doctors for adopting an expense producer on the one hand, while rewarding them for lowering expenses on the other?

Lets dissect the logic and see.

Premise #1:  Technology is a driver of costs in U.S. healthcare. Certain technologies do this.  The CT scanner didn't replace the plain film.  Doctors often ordered both. The MRI didn't replace the CT scanner. MRIs are more expensive than CTs, which are more expensive than plain films.  For years, acute chest pain was evaluated by the electrocardiogram. With the advent of cardiac artery imaging, this very difficult diagnostic problem got easier to solve - but much more expensive.  Then along came angioplasty and stent placement as a tool for actually managing heart attacks.  Acute coronary disease is much more expensive to manage now than it was 50 years ago.  But the outcomes are so much better.  Kidney dialysis is a wonderful life saving tool - especially if your loved one is a victim of kidney failure.  If you are an actuary, however, it is an expensive tool that prolongs people's lives so they can avail themselves of more costly healthcare services.  The list goes on and on, but you get the picture.  Certain technologies definitely increase costs.  It is beyond the scope of this discussion to say whether that is a good thing or not.

Premise #2:  HIT, therefore, adds to the cost of care. What is often lost in the discussion is the valid point that not all technologies are cost producers. Some come with a net improvement in business performance. Why would the airlines and the financial services companies have invested so heavily in IT, if this was not the case?

A strong argument can be made, especially if one includes ehealth applications broadly, that HIT falls into this latter category. The examples that jump out include costs avoided by avoiding errors and by reducing duplicate, unnecessary tests.  But there is a deeper, more verifiable set of examples. These have to do with health information technologies in the broadest sense, and focus on connected health and population management.

Examples of this sort of technology implementation include home monitoring for conditions such as congestive heart failure.  A multitude of studies have shown that home monitoring of weight and other vital signs can result in decreased hospital admissions and improved quality of health for disease sufferers. The same idea applies to home serum glucose tracking in diabetics and home blood pressure monitoring for patients with hypertension. In each case, an ROI of 3 or 4 to 1 can be calculated, using these tools.  And of course finding the right patients to enroll in these programs is key. This is where electronic registries, a byproduct of electronic medical records, come in.  Stated another way, HIT, in the broadest sense provides a set of tools for proactive management of a patient population; a setting where high-cost events are avoided because of just-in-time intervention and patient self-management.

With so much opportunity for cost savings in these technologies, what is holding them back from further adoption? The answer of course is fee for service reimbursement.  Which leads us to the intersection with payment reform.

Payment reform strategies getting attention right now include: bundled payments or case rates, management fees and shared savings and the patient-centered medical home.  In each case, the provider takes some risk and is paid more for quality and outcome than for units of service.  In these payment reform schemes, the provider is rewarded for proactive patient management and population health management, as well as for just-in-time management and for encouraging patient self-management.

So, it seems that HIT, properly implemented and in the broadest sense, including connected health, is not only acceptable for payment reform, but required.

Joseph C. Kvedar, MD, is the Founder and Director of the Center for Connected Health. A division of Partners HealthCare, the center works with Harvard Medical School-affiliated teaching hospitals, including Massachusetts General and Brigham and Women’s Hospitals in Boston.

Want to get more stories like this one? Get daily news updates from Healthcare IT News.
Your subscription has been saved.
Something went wrong. Please try again.