When one considers the confluence of regulatory change, digital technology, and capital forces affecting medical professionals today, it's safe to say there has been no other time in healthcare quite like the period we are entering now.
As healthcare executives, we have the opportunity to succeed in this time of increasing financial risk and performance-based reimbursement, or go the way of the dinosaurs. Although only 42% of hospitals reported that 10% or more of their revenue is tied to value-based contracts, momentum towards taking on risk for lowering costs and improving outcomes is building. And penalties of up to 6% are being levied against hospitals who treat Medicare patients who don't meet quality standards.
Hospitals will no longer stay in business if they persist in old ways of operating: essentially, throwing expensive clinical labor at problems. Adopting technology is the only way to survive in this time of change.
So the CFO should care about Health IT as much as the CIO.
The government is leading the way for this quality charge. CMS has announced that 50% of payment for services provided through Medicare will be tied to alternative models such as ACOs or bundled payments by 2018 and a full 90% will depend on proving quality and value.
Commercial insurers are also changing their approach. Blue Cross Blue Shield of Massachusetts initiated its ambitious Alternative Quality Contract (AQC) in 2009. An innovative payment model, the AQC pays a lump sum to cover the costs of care for a population. BCBSMA announced earlier this year that they would expand the program to cover one million lives given the success they've achieved in lowering costs.
United Healthcare announced its shift from fee for service to value-based contracting model in 2012. Aetna already has 30.6% of its spending tied to value-based care and has committed to a strategy they call "frugal innovation", which includes paying doctors and hospitals based on outcomes.
Why does HIT matter so much? Clinical analytics to learn what works best is critical to improving care and bending the cost curve. But the challenge is not only achieving better outcomes, but documenting and reporting on those outcomes. Reimbursement under value-based models is directly linked to the ability to report on quality measures. If your reports don't match the quality of the care you deliver, you are simply out of luck.
The traditional way of solving this problem (as well as many other problems in healthcare) has been to dedicate additional labor to completing these tasks. However, with the narrow margins hospitals operate on, it is not feasible to hire more personnel for costly manual abstraction processes that can be accomplished via technology.
There is one catch that may not be familiar to CFOs used to dealing with financial systems: Clinical systems are filled with data and documents that are captured in the clinical workflow, including in unstructured physician notes. Further, up to 80% of relevant information in these systems might be contained in these free form notes. Doctors and nurses communicate in notes, because they capture the nuance of the patient history the way drop down menus and multiple choice fields cannot. Although these notes often capture important facts about patients, the information they contain is not usable by traditional reporting tools that depend on structured data fields.
But physicians are rebelling against the need to fill in fields and select from pull down menus when documenting information in electronic health record systems. This is because completing these rigid tasks forces them to limit their observations and removes the rich narrative that communicates so much more than a simple lab value or a template-based discharge summary. In fact, some of the strongest predictors for issues like readmissions are socio-economic factors, such as living arrangement (with 81% predictive value) that are only documented in the narrative.
Using data found in structured fields for reporting – the easiest way to report – can miss up to 90% of quality-critical information, putting reimbursement and reputations at risk. Manual chart abstraction (that is, paying highly trained nurses to manually read charts to pull facts for reporting) is expensive. And human beings can't be expected to find everything, given that the average patient record grows by 80 MB a year, and is made up of hundreds of digital screens.
With the advent of natural language processing (NLP) and advanced clinical reasoning technology that combines NLP with medical knowledge, it is now possible to generate usable, reportable data from both structured fields and unstructured notes. This prevents workflow disruption and physician rebellion, and allows for maximum "return on information."
A reluctance to adopt health information technology is not just an impediment to your physicians' workflow, it is a bad business practice. The role of the new CFO should be to champion the appropriate health information technology that not only captures clinical data, but leverages that data in an actionable way without burdening clinicians.
The message to healthcare executives is clear: Take action now while you are still in control.
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