Futurist Questions HITECH's Viability

Jeff Bauer: EHR Incentives Likely to Fail
Healthcare futurist Jeff Bauer contends the HITECH Act Medicare and Medicaid electronic health record incentive program has a 70 percent chance of failure, mainly because of the tough standards for qualifying.

As more hospitals and physicians become aware of the high costs and hassles involved in qualifying for the federal EHR incentive payments, many will choose not to participate, Bauer predicts. Instead, he says, they'll follow their own "digital transformation" agendas at their own pace.

In an interview (transcript below), the futurist also contends:

  • Federal healthcare reform has a high probability of failure because the courts may overturn the requirement that individuals must purchase health insurance and Republicans may succeed in limiting funding.
  • American consumers eventually will want to broaden access to their electronic health records and other information to enable researchers, pharmaceutical companies and others to develop personalized medicine that offers treatments tailor-made to individuals' genetics and conditions.
  • The use of telemedicine, including in-home monitoring of vital signs, will dramatically grow. He acknowledges, however, this will require the use of encryption and other security technologies to protect the information.

Bauer, who holds a Ph.D. in economics, has 40 years of experience as a medical school professor and consultant. A frequent speaker at industry events, he formerly served as vice president for healthcare forecasting and strategy at ACS, a Xerox company. His most recent book is "Paradox and Imperatives in Health Care: How Efficiency, Effectiveness, and E-Transformation Can Conquer Waste and Optimize Quality."

HOWARD ANDERSON: We want to talk to you today about your forecast for the top five trends for healthcare in the next year and beyond. So, what are some of the biggest changes we'll see?

JEFF BAUER: Well I really think we are right at the cusp of a shift from the 20th century model of one-size-fits-all medicine -- the assumption that everybody that had a given disease has the same version of that disease. I really think 2010 will go down as the tipping point. We realize from the last five to seven years of research that actually diseases that look the same and that have the same symptoms can play out very differently at a molecular level in different patients. The really dramatic shift is toward physicians and other caregivers ... to actually do diagnostics and do treatment plans for patients realizing that patients can be very different.

So to me, the really exciting trend peeking right now is the shift from one-size-fits-all to personalized, predictive medicine. That will be accompanied by transformation from a focus on acute care to management of disease. The biggest thing going on in medicine right now ... is this shift to a recognition that we're all different and we have rather dramatic variations in what were thought to be common diseases.

Privacy Issues

ANDERSON: So what are the privacy and security implications of this type of medicine?

BAUER: As more people discover that they are maybe not going to benefit from the most common drug for the disease that was thought to be the same for everybody, they are going to discover real value in having their health history available for research. They are going to discover they may want to have people be able to delve into their medical record. ... I think a growing number of patients ... are saying, "I would be happy to have my health information public because, that way, people who are doing research, people who are looking for the variations that I might have will be able to identify me, bring me into a research group and match me with the drug that is known to relate to my particular variation of this ... disease.

So, it's not for 2010 and 2011, but by 2015, I think we're going to be having a vibrant debate from an awful lot of people that say all of this HIPAA protection and stuff like that is actually getting in the way of me being able to have my health data searched by those who are really focusing on people with my particular type of disease. I think it is going to be a stunning shift that really is going to throw open ... the idea that everybody's health protection needs to be kept at the highest possible level. ...

Medical Home Model

ANDERSON: So what other trends are on the horizon?

BAUER: As a very quick and direct result of this shift from one-size-fits-all to personalized predictive medicine, I think this whole concept of the patient-centered medical home is just going to blossom. It is absolutely implied as we realize that patients are different, and therefore we need to customize our treatments and our diagnoses far more than we ever did in the past. In fact, when you look back over the two years of pretty unfocused debate over health reform that took place in Washington, one common denominator was this whole idea that came from the medical community: the patient-centered medical home. ... But from a clinical point of view, I think it's very, very powerful. And as more and more patients understand the need to be treated on their own particular terms, we're going to discover the progressive health plans, the insurance companies that want to save money, are really going to force providers ... into beginning to treat patients much more as individuals rather than as collective groups with the same old disease. ...

ANDERSON: How does that affect the approach to ensuring privacy and security if at all?

BAUER: Because it is an extension of what I had to say about personalized, predictive medicine and the increasing complexity and diversity of diseases, it is going to play out in exactly the same way. As more and more patients get personalized care, they are going to be willing to open up their databases to more of the caregivers that might help them, to the drug companies, to the pharmacist, and the nurse practitioners. Again, I just don't think HIPAA and the recent increases in security and confidentiality protections in the HITECH Act mesh at all with the advantages of allowing people to open up the records much more. So again, I see a pretty tumultuous conflict between what people may want and the restrictions that the laws impose.

ANDERSON: I suspect you would get a strong argument from consumer advocates on this issue.

BAUER: I really think that they have a very one-sided view that, first of all, isn't recognizing some of the protections that we've got, such as the Genetic Information Nondiscrimination Act. ... But above all, I love taking them on because I think they are just generally insensitive to the fact that a lot of people don't share their highly pronounced concerns about having more people have access to their information. I really think that, to the extent that people are prevented from allowing access to their information, those people are being prevented from getting some of the more modern advantages of this new kind of care.

Role of Telemedicine

ANDERSON: I understand that you are forecasting expansion of telemedicine. What are the implications of that?

BAUER: Well telemedicine just makes so much sense -- with the diagnostic quality of pictures you can take on leading cell phones right now and devices that can be in the home to monitor your blood pressure and listen to your chest. At least 30 percent of the information that a physician or a nurse picks up when you have to go into the doctor's office for your visit ... can be picked up over a distance. The patient can be monitored by something that is worn on the belt. To me, one of the trappings of 20th century medicine that the quicker we move beyond it, the better, is this idea that you have got to go see a doctor or the nurse in the office to figure out whether you are sick. Telemedicine now allows that information to be monitored on a real-time basis, and you can have excellent medical care provided without a doctor, nurse and a patient ever coming together.

There are restrictions on access to telemedicine and some pretty archaic concepts toward paying for it; it can be so much more cost-effective. We are going to see tensions between those people who want to protect the trappings of 20th century medicine and those people that increasingly will see not only the cost advantages but the outcomes improvements that come from being able to use telemedicine and some of the other care opportunities that can be had outside of traditional doctor's offices and hospitals.

Fairly soon, people will realize that telemedicine, care delivered outside of doctor's offices and hospitals, is not only capable of being considerably less expensive, but it can be at least as good if not better. ... More progressive health insurance companies are beginning to recognize that, and they are willing to provide reimbursement for this because they recognize the service is at least as good and it is less expensive and can be reimbursed at a lower rate.


ANDERSON: Doesn't that trend raise some issues about protecting the data as it traversing from one site to another?

BAUER: Oh absolutely. ... It reminds us that we perhaps need to be more serious about encryption and controlling access to our databases, but the technologies are all there. But at the same time, I don't see it as an impediment for us moving forward because we know how to take care of these things.

The other issue that it does raise that deserves more attention is that as we introduce telemedicine, we're using more and more software -- the software that might be in a vendor's home blood pressure monitoring kit or the intelligence software that might be embedded in the electronic health record system. We're going into the issue of relying on software that someone else developed ... I think software accountability is at least as important as security and confidentiality. ...


ANDERSON: What other trends should we be looking for?

BAUER: I guess the one that I end up talking about the most ... is the very high probability of the HITECH Act electronic health record incentives and the health reform law failing. I find that most policy analysts assume that the $30 billion dollars in HITECH funds will be dispersed and lots of organizations will become meaningful users of EHRs and there will be lots of certified EHR technology out there. I find lots of people assuming that by 2014, Americans will be mandated to have health insurance. And yet as a forecaster, I think the probability of HITECH and health reform playing out as an enacted, as passed by Congress and signed by the president, is down there well below 50 percent, in fact 30 percent and falling. Not only do we have the Republicans able now, through the House Ways and Means Committee, to prevent funding for parts of health reform that they don't like, and parts of HITECH that might strain the budget, but we also have a lot of people who want to file court suits against health reform. We just saw a federal judge in Virginia allowing a challenge to the constitutionality of health reform to go forward. ...

Remember I assign probabilities; I think the probability of them playing out is in the 30 percent or less category. That means a 70 percent chance that we're not going to see HITECH become what it was enacted to be and a 70 percent or greater chance that we're not going to see health insurance being mandatory by 2014. So we better have plan B. When you ask me about the other big issues, it's "cover your bets. Don't count all your chickens before the eggs are hatched."

EHR Incentives Weak?

ANDERSON: So when you talk about the potential failure of HITECH, is that, in part, because you don't think hospitals and physicians are going to bother with applying for the incentive payments because it's too much hassle?

BAUER: That is certainly a factor. I think that they are going to discover not only is it a hassle, but they are also going to discover that it's "all or nothing" (when it comes to meeting the requirements.) And that is going to play out within the next six months as people begin to look at ... that list of the 15 reports that they've got to be able to crank out roughly a year from now. ... You are going to have to do all 15 or you don't get a penny. So, yeah a lot of people are going to back off and not try. A lot of people are going to say, "Hold it. Is this worth the chances that I'm going to get a 99 on the exam and get nothing for my efforts?" ... As more and more organizations become aware of the real cost of compliance ... that they can spend $4 million dollars to get $3.5 million in incentives ... it does not compute.

Then they might discover that if they weren't trying to get the HITECH funds, they would actually be doing their digital transformation in some very different ways. Anyone who is trying to comply with HITECH is being forced into a very narrow category of things based on a bad law when there are so many other things they could be doing.

But please don't let anyone think that my cynicism towards the HITECH legislation is in any way a criticism of digital transformation. I just think that HITECH prevents a lot of people from doing the digital transformation that would be done quite differently if they weren't chasing the dollars.

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