Lining Up for Health IT

The huge challenges of implementing a $30 billion program are just beginning to hit the states.
by | July 2010

To get a sense of the information technology (IT) challenges states face under the new health-care law, take a quick peek at Jonah Frohlich's schedule. On a recent day, California's deputy secretary for health IT started the morning by meeting with the leaders of 12 departments from the state's Health and Human Services Agency. The agenda: the implications of a health information exchange (HIE) on the agency's business processes. Next up, a get-together with officials from the California Public Employees' Retirement System--the pension fund is a large employer--to discuss the role their purchases play in supporting e-health initiatives. Then it was on to a briefing on Medi-Cal's electronic health record (EHR) incentives, which was followed by a meeting with academics at a University of California school of informatics. The subject: an anticipated demand for skilled health IT labor. Back at his office, Frohlich was briefed on a broadband infrastructure the California Telehealth Network is developing, and he then met with a local HIE organization.

The meetings upon meetings aren't what wear on Frohlich. The hard part, he says, "is coordinating this grand scheme." Every jurisdiction--from the smallest town to the federal government--plays a role in creating a health IT system that can bring efficiency and modernization to the health-care system. "The alignment is tough," Frohlich admits.

Health IT wasn't supposed to require this much government intervention. In 2004, when President George W. Bush set 2014 as the goal for widespread use of EHRs, his administration saw development of the infrastructure to transmit health data as something the private sector could handle--with a little guidance and incentives from the states. That model was foundering when in 2009, President Barack Obama signed the American Recovery and Reinvestment Act, a portion of which addressed and provided funding for health IT. Besides the $14 billion to $28 billion in Medicare and Medicaid incentives for providers who become "meaningful users" of health IT, the Health IT for Economic and Clinical Health (HITECH) Act also set aside $2 billion in federal grants--a 30-fold increase--for states to use to promote EHR use and create HIEs, which are the regional and statewide networks that enable sharing of patient data.

Suddenly responsible for administering millions of dollars in grants, once-sleepy state health IT offices are gearing up--they must oversee Medicaid incentive programs; health IT training initiatives; portals that make information accessible on health insurance exchanges; and regional extension centers, which are responsible for helping physicians adopt EHRs. The new law "calls for a more involved role for state government," says Lynn Dierker, project director for the State Level HIE Consensus Project. "It is an immense load to drop on people."

As states work to implement the program, four key issues top health IT leaders' to-do lists: identify ongoing matching funds for statewide HIE, engage small physician practices in EHR adoption, find consensus on privacy and security policies, and develop governance mechanisms.

Funding is the No. 1 priority. Some money from the feds comes with no matching-strings attached. There is a pot of $564 million allocated from the HITECH Act for statewide HIE development, with no match required in the startup phase. The federal government already has awarded $386 million of it. But starting in 2011, states that receive program funds beyond the start-up phase must come up with matching money. The matching formula starts at $1 for every $10 federal dollars the first year and increases to $1 for every $3 by 2013.

Finding the match in this day of constrained budgets is a challenge. Some states are ahead of the game. In 2008, Vermont created a dedicated health IT fund for its own health reform initiatives, Blueprint for Health. Set to expire in 2015, the fund is derived from a small (0.199 of 1 percent) quarterly fee on health-care insurance claims and is expected to raise $32 million overall. "With the fund, we already have ready-made matching dollars," says state Rep. Steve Maier, chair of the House Health Care Committee. Fortunately for Vermont, its Blueprint for Health aligns with the federal government's program, which means the state can continue steering the course it already planned and use its money to capture federal dollars.

New York also has planned for and started making major investments in health IT. Since 2007, the Empire State has put some $250 million into health IT projects, and that money has been augmented by local funding and in-kind donations. That puts the state in an excellent position to meet grant matches and keep building what it was building.

States without programs in place--or with just the minimal beginnings of one under way--face a daunting road. They may lack a collaborative culture among health-care stakeholders, the presence of which could make fundraising from the private sector possible. Or the state may be experiencing a severe budget crunch that will limit its ability to come up with public matching funds. Or it's both.

New Jersey, for instance, has a fledgling HIE system, but with the state economy still reeling from the recession, no private or public monies are available for the program. The federal government awarded the state a $11.4 million start-up grant, but without seeing how he can raise public or private funds to gain other grants, Bill O'Byrne, state coordinator for Health Information Technology Development, wonders how the state will build a connected system of care.

A key part of a health IT system is the EHR. In a growing number of states, hospitals and large physician practices have begun to use them-large organizations tend to have the financial base and technological expertise to put an expensive and complicated system in place. But that is not the case with smaller practices consisting of 10 or fewer physicians. Not only are they resistant to the investment, but they also lack access to the technological expertise to make the change. Nonetheless, it is important to convert them if there is to be a bona fide health exchange network: Small-practice physicians account for three-fourths of the nation's practicing doctors.

New York City developed what many, including federal health IT officials, consider the model for helping small physician offices adopt EHRs. Launched in 2007 by the New York City Department of Health and Mental Hygiene, the Primary Care Information Project centralized technical support and education for doctors and worked with the software supplier to tweak and tailor the system to the small-practice physicians' needs. While the program's rollout is ongoing, by 2010, computerized records were being used by 2,200 primary care providers in the city's underserved communities--in settings such as hospital outpatient clinics, small group practices and a jail.

For Rachel Block, the state's deputy commissioner for health IT, the next step is to adapt the project to serve 5,000 physicians in upstate New York. She will tap federal grants for regional extension centers to pay for the effort, but is concerned about the implementation cost. "From the New York City experience," she says, "what it took in terms of effort and money for each physician practice was about twice as much as [regional extension centers] are receiving."

Although it has conducted health IT planning for many years as part of its larger Blueprint for Health reforms, Vermont also has much work to do to get small practices to deploy EHRs. Most doctors are in one-person practices, and EHR usage is only around 20 percent, according to David Cochran, president of Vermont Information Technology Leaders Inc., the nonprofit agency that runs the state HIE and acts as the regional extension center. Some physicians, he notes, have expressed confusion about the definition of "meaningful use." Under the law, physicians can receive incentive money for putting EHRs in place--so long as they can demonstrate meaningful use. "For providers, this is a high-risk business, and ambiguity breeds caution," Cochran says. "Our goal is to help them work through those things with the idea that clarity will emerge later." In working with physician groups, Cochran finds the key is to focus on improvements in patient care and physician reimbursement rather than on the technology itself. It is more effective, he suggests, to "focus on what you are trying to fix that IT can assist."

Once computerized medical records exist, privacy issues abound. First is the question of getting patients' consent to having providers share their personal health data; second is how to handle privacy over sensitive information, such as substance abuse and HIV/AIDS.

Finding consensus on privacy and security "is absolutely one of the biggest issues that we face," Frohlich admits. "There is a patchwork of rules, case law and a state constitutional right to privacy that essentially is different from or in addition to federal HIPAA [Health Insurance Portability and Accountability Act] privacy rules." Many current state laws may need to be amended.

But there is little agreement on what the solutions to some privacy issues should look like. For two years, the California Privacy and Security Advisory Board has been working to develop privacy and security policies. Pam Dixon, co-chair of the board, says the group has had difficulty finding common ground between consumer advocates like herself and health-care industry organizations, such as physician groups and hospitals. As an example, she points to the patient consent issue. "Opt-in consent has to be granted for sensitive information," she says. But how? "There have to be some ingenious policy and technology solutions to make it happen," she says, and she sees her board members as the ones to do it. "We cannot pass the buck farther down the line."

Similar privacy debates are being held in almost every state or between states. In Vermont, Hunt Blair, an assistant director in the state's Office of Health Access, is concerned about sharing patient data across state lines. "It doesn't appear there will be federal pre-emption on privacy and security laws, and every state has its own laws and regulations," he says. "We are working on a pilot project involving providers and patients in Maine, New Hampshire and Vermont, and we will have to confront these issues."

As to the governance challenges, New York has spent several years addressing some of those issues with some success. So far, Block reports, the state has found that a public-private governance model is essential to success, and that it's important to include clinical end-users in the design process of HIEs. "If we are going to get to clinical transformation," she says, "their considerations have to be baked into the design."

Another potential governance stumbling block involves this fall's elections. Thirty-eight governorships will be contested, with at least 24 governors definitely leaving office. New administrations will come in, but in most states, the health IT programs have no history or institutional memory to carry them over to the new officials.

And that's why Frohlich thinks California is in good shape. Cal eConnect, the organization overseeing HIE development in the Golden State, is a nonprofit organization, which keeps it one step outside government. "That's essential," Frohlich says. "It's important to have continuity between administrations."

David Raths | Contributor |