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For a decade now, just about every service industry has taken for granted the benefits of information technology: Increased productivity, faster and better service, and access to services from home. All actionable information is recorded and shared electronically so that ever smarter information systems can help us anticipate and prevent problems. Whether it is retail, financial services, or even fast food, productivity in everything has gone through the roof.

Every service industry except health care, that is.

I stumbled across a presentation that I gave on the topic in 2004 together with Harris Miller, then president of the Information Technology Association of America. The ITAA had just released its chronic care improvement paper describing how Medicare could save money and save lives while stimulating an emerging health care information technology industry by adopting approaches that we have come to expect from every other service business.

Since 2004, the technology industry has responded to the opportunity to improve health care: Microsoft and Google are breaking the impasse in the electronic medical records field by providing connected online personal health records for free. Global technology giants have entered the home health market: Bosch acquired Health Hero Network, Honeywell acquired HomMed, and Intel launched into telehealth with its Intel Health Guide for home health monitoring, each aiming to bring connected health to the homes of seniors in need of chronic care.

The real barriers to advancing and modernizing health care still remain, however. It has not been a lack of technology, innovation, or insight from the information technology industry. Instead, the culprit has been a lack of imagination and initiative on the part of governments to develop, refine, and improve with policy changes aimed at rewarding the proactive management and prevention of chronic disease.

We know a better model of care and better service for the money is possible with smarter information-based approaches. With a new administration in Washington and a fresh infusion of imagination, determination, and energy into government following the recent elections, maybe we can start to turn health care from a net drain on the economy into a model for the world.

Chronic Care ITAA Transcript

• Slide 1: Chronic Care Improvement: How Medicare Transformation Can Save Lives, Save Money, and Stimulate an Emerging Technology Industry May 10, 2004 Presentation by: Harris N. Miller, President Information Technology Association of America 1
• Slide 2: ITAA and E-Health  ITAA is Committed to Improving the Delivery of Healthcare and Controlling Costs through Transition to E-Health  ITAA E-Health Committee Composed of Leading Companies in Sector  Committee Activities Include White Papers and Webcasts Focused on Public Policy and Practitioner Trends 2
• Slide 3: Our Agenda Today  Trends in E-Health  Overview of New Chronic Care White Paper  Your Questions 3
• Slide 4: Healthcare IT Spending: A Comparison View  Financial Services -spends 7% of revenues on IT  Government – spends 4% of revenues on IT  Healthcare – spends only 2-3% of revenues on IT 4
• Slide 5: An Overview of the Healthcare Industry  IT for healthcare is a very large market, measured in the tens of billions of dollars  Healthcare is already an active user of new technology  Healthcare IT spending is growing rapidly – up 17% in one recent year 5
• Slide 6: The E-Health Challenge  How much could IT help healthcare?  What are the success stories?  What are the barriers or inhibitors to using more IT in healthcare? 6
• Slide 7: How Big is the Healthcare IT Opportunity?  Previous ITAA white paper concluded that an industry-wide investment of $18.1 billion would yield over 6 years gross savings of $120 billion  Roughly half the savings are administrative, half are clinical 7
• Slide 8: Healthcare-Information Technology Opportunities  Trends in Managed Care  Impact on incentive  Impact on integration of care  Technological Solutions  Computer-based Patient Records – a source of opportunity and of concern  Data Warehousing – sophisticated analysis of care 8
• Slide 9: Reducing Healthcare Costs Major Goals:  Improve handling of financial and management information  Decrease needless duplication of records  Decrease duplicative and erroneous tests  Reduce the costs of hospital stays 9
• Slide 10: Improving the Quality of Medical Care Major Goals: – Real-time, data-driven medical decisions – Real-time, data entry by mobile medical personnel – Real-time global transport of complex medical records 10
• Slide 11: Improving the Quality of Medical Care – Increase productivity by shifting time from paperwork to patient care – More efficient patient care management – Automated patient records – Use of expert systems and diagnostic tools to assist professionals 11
• Slide 12: Getting to E-Health: The Opportunities for Using IT in the Healthcare Industry Using network technologies for chronic care is the “poster child” for opportunities in using IT effectively in healthcare. 12
• Slide 13: Chronic Care Delivery System – Shift in Emphasis from Acute to Chronic Care Delivery – Integrate Technology-Based Solutions – Communicate, Coordinate, Evaluate – Save $30 Billion per Year – Prevent 1.7 Million Hospitalizations 13
• Slide 14: Technology-based Chronic Care Improvement Steve Brown, Health Hero May 10, 2004 14
• Slide 15: The Challenge of Chronic Illness  At least 45 percent of Americans – or 132 million people – suffer from chronic diseases  Chronic diseases include heart failure, chronic obstructive pulmonary disease, diabetes mellitus, mental health disorders, asthma, and hypertension  Patients with chronic disease account for 78 percent of U.S. healthcare spending  Spending on chronic disease higher than necessary because healthcare system is oriented toward treating patients who reach a crisis, rather than keeping them healthy 15
• Slide 16: Medicare and Chronic Illness  32 million Medicare beneficiaries have at least one chronic condition  8 million patients have five or more chronic illnesses and account for two- thirds of Medicare spending 16
• Slide 17: 2004 Medicare Inpatient Costs: Select Chronic Diseases Disease Discharges Cost per Total cost Coronary artery disease .9 million $29,000 $25.6 billion Chronic heart failure .8 million $19,000 $15.2 billion Chronic obstructive pulmonary disease .4 million $16,000 $6.2 billion Mental health disorders .2 million $16,000 $3.9 billion Diabetes .2 million $20,000 $3.8 billion Hypertension .1 million $22,000 $3.2 billion Asthma .07 million $13,000 $1 billion TOTAL 2.8 million $21,000 $59 billion 17
• Slide 18: Chronic Care Improvement Program Model for Medicare  Geared toward saving lives and saving money by proactively keeping patients with chronic disease healthier and out of the hospital  Model based on daily monitoring, education, guidance, and management by healthcare providers  Reinforcing patient self-care behaviors – diet, exercise, medication adherence – is critical  Key factor is whether doctors and patients identify and deal with problems early, before patient needs hospitalization 18
• Slide 19: Medicare Chronic Care Improvement “Required Conduct of Programs” A. “(G)uide the participant in managing the participant’s health (including all co-morbidities, relevant health care services, and pharmaceutical needs) and in performing activities as specified under the elements of the care management plan of the participant; B. use decision-support tools such as evidence-based practice guidelines or other criteria as determined by the Secretary; and C. develop a clinical information database to track and monitor each participant across settings and to evaluate outcomes.” 19
• Slide 20: Medicare Chronic Care Improvement “Required Elements of Care Management Plans” “To The Extent Appropriate… B. A designated point of contact responsible for communications with the beneficiary and for facilitating communications with other health care providers under the plan. C. Self-care education for the beneficiary (through approaches such as disease management or medical nutrition therapy) and education for primary caregivers and family members. D. Education for physicians and other providers and collaboration to enhance communication of relevant clinical information. E. The use of monitoring technologies that enable patient guidance through the exchange of pertinent clinical information, such as vital signs, symptomatic information, and health self-assessment. F. The provision of information about hospice care, pain and palliative care, and end-of-life care.” 20
• Slide 21: Proven Model of Technology-based Chronic Care Improvement  In-home monitoring devices that guide patients in exchange of information with providers  Personalized guidance and support through devices  Nurse care managers to manage and coordinate care  Decision-support tools to implement evidence-based practice guidelines  Clinical information databases for accountability 21
• Slide 22: VA Published Results from Technology- Based Chronic Care Improvement  40% reduction in emergency room visits  63% reduction in hospital admissions  60% reduction in hospital bed days of care  64% reduction in nursing home admissions  88% reduction in nursing home bed days of care  Significant improvement in Quality of Life SF36V  Source: Disease Management, Volume 5, Number 2, 2002 22
• Slide 23: VA Results Applied to Medicare If Medicare could achieve results similar to the VA’s with similar patients with a model of care coordination that integrates care coordination services with daily in-home monitoring and clinical information tools, Medicare could save $30 billion a year. 23
• Slide 24: Realizing the Promise of Technology- Based Chronic Care Improvement  Applying technology-based chronic care improvement to Medicare shifts thinking from raising taxes and cutting benefits to increasing quality while cutting costs  Key obstacles are lack of awareness, systemic incentives toward crisis-oriented care  U.S., Japan, EU beginning to see technology-based chronic care improvement as way to meet challenge of aging populations and foster a new industry  Medicare transformation can keep program solvent while spurring innovation in key emerging industry 24