HHS Grants available for your EMR now

Many clients want assistance in understanding how to frame up their ARRA/EMR efforts and don't know where to turn. We can provide leadership for your efforts. Please read this post from the White house today and contact us:

THE WHITE HOUSE

Office of the Vice President - For Immediate Release August 20, 2009

Vice President Biden Announces Availability of Nearly $1.2 Billion in Grants to Help Hospitals andDoctors Use Electronic Health Records

CHICAGO, IL – Vice President Joe Biden today announced the availability of grants worth nearly $1.2 billion to help hospitals and health care providers implement and use electronic health records. The grants will be funded by the American Recovery and Reinvestment Act of 2009 (ARRA) and will help health care providers qualify for new incentives that will be made available in 2010 to doctors and hospitals that meaningfully use electronic health records.
"With electronic health records, we are making health care safer; we’re making it more efficient; we’re making you healthier; and we’re saving money along the way, "said Vice President Biden. "These are four necessities we need for healthcare in the 21st-century."
"Expanding the use of electronic health records is fundamental to reforming our health care system," said HHS Secretary Sebelius. "Electronic health records can help reduce medical errors, make health care more efficient and improve the quality of medical care for all Americans. These grants will help ensure more doctors and hospitals have the tools they need to use this critical technology."
The grants made available today include:
Grants totaling $598 million to establish approximately 70 Health Information Technology Regional Extension Centers, which will provide hospitals and clinicians with hands-on technical assistance in the selection, acquisition, implementation, and meaningful use of certified electronic health record systems.
Grants totaling $564 million to States and Qualified State Designated Entities (SDEs) to support the development of mechanisms for information sharing within an emerging nationwide system of networks.
The Extension Center grants will be awarded on a rolling basis, with the first awards being issued in fiscal year 2010. Grants to States will be made in fiscal year 2010. Those interested in applying for these grants may visit http://www.whitehouse.gov/the_press_office/Vice-President-Biden-Announces-Availability-of-Nearly-12-Billion-in-Grants-to-Help-Hospitals-and-Doctors-Use-Electronic-Health-Records/#TB_inline?height=220&width=370&inlineId=tb_external&linkId=1 for more information.
"With these programs, we begin the process of creating a national, private and secure electronic health information system. The grants are designed to help doctors and hospitals acquire electronic health records and use them in meaningful ways to improve the health of patients and reduce waste and inefficiency," said Dr. David Blumenthal, National Coordinator for Health Information Technology. "They will also help states lead the way in creating the infrastructure for health information exchange, which enables information to follow patients within and across communities, wherever the information is needed to help doctors and patients make the best decisions about medical care."
The Department of Health and Human Services will also provide additional assistance to health care providers through the Health Information Technology Research Center (HITRC). The HITRC will gather relevant information on effective practices from a wide variety of sources across the country and help the Regional Extension Centers collaborate with one another and with relevant stakeholders to identify and share best practices in EHR adoption, effective use, and provider support.
Attached are two fact sheets on the Health Information Technology Extension Program and the State Health Information Exchange Cooperative Agreement Program.
###
The activities described in this release are being funded through the American Recovery and Reinvestment Act (ARRA). To track the progress of HHS activities funded through the ARRA, visit http://www.whitehouse.gov/the_press_office/Vice-President-Biden-Announces-Availability-of-Nearly-12-Billion-in-Grants-to-Help-Hospitals-and-Doctors-Use-Electronic-Health-Records/#TB_inline?height=220&width=370&inlineId=tb_external&linkId=2. To track all federal funds provided through the ARRA, visit http://www.recovery.gov/.

Best,

Don Lyons, FACHE
CEO and Managing Partner
InterOPERANT

Planning for your EMR projects

Billions of dollars are ready to be deployed via ARRA stimulus funding plan. Despite the volume of material being published daily here a few simple ideas to remain "directionally correct."

Are you ready?

Here are some bullet points you should consider:

• 80 percent of your process will involve people and 20 percent will involve technology. Don't get it the other way around...

• Leaders should commit 12 to 18 months depending on Hospital or Practice size to prepare for launch day. You will be working through a checklist in some cases over 2,000 items depending on size and complexity. Don't forget about the Hospital/Physician interoperability planning for communications and linkages!

• The key is preparation and keeping your administrative or executive team up to speed through your particular governance model - there are many effective derivatives of this depending on your organization's size, complexity and culture.

• There are deadlines in the law, not the least of which is 2015. That's when providers must adopt government sanctioned IT standards, or risk cuts in their Medicare payments.

• Before meeting with vendors, re-examine your hospital or clinics long-term technology plan and to what degree it should be tweaked or overhauled in light of federal funding.

• Read the Joint Commission analyses to absorb some of their implicit lessons. Consider which components will help your physicians and clinicians in their daily work flow. This is perhaps of most importance. It's their work flow technology needs to facilitate.

• Re-visit patient work flow and patient treatment processes.

• You must have a heightened sense of quality if you want to create data that is usable once an electronic record is adopted.

If you are a Doctor or Clinician:

• Even with Stark relaxed, physician-hospital communication and interoperability links have been slow to develop - that will change so plan for this (or pay the price downstream).

• Getting rid of paper on both sides will help lower the cost structure. This level of integration must be closely analyzed prior to your purchase decision. How should you/must you communicate with the hospital to achieve maximum efficiency?

• Hospitals/Providers everywhere are willing to help you with some portion of the cost of funding the project.

• Many physician are now trading money for time (quality of life) and as such an increase in EMR roll-outs to hospital owned physician groups. Find a way to work with your provider - today it is all about collaboration.

• That being said, HHS requires requires hospitals to offer physicians "interoperable" EHR's that allow them to communicate online with other hospitals. Although CCHIT certification has been interpreted as a sign of interoperability, most EHR's still do not truly provide it.

• The big incentive for interoperability projects is to support and engage clinicians in quality improvement projects - community wide.

• If you live in a region that has a plethora of providers all using different EMR's then becoming a member of an HIE, or Health Information Exchange is important. HIE's will allow the exchange of data across the continuum without surrendering control of their patient information.

• Consider putting more pressure on vendors to use standardized messaging formats like the Continuity of Care Document - this will save time and money in the design of your HIE.

The result of these efforts will absolutely support getting patients through the hospital faster, discharge them faster, provide more care in the PCP or whatever is defined as the "Medical Home" environment, and eliminate costly and sometimes unjustified admissions that wastes everyones time and money...

For more detailed planning and to develop a specific roadmap for your organization, please contact us at http://www.interoperant.com/.


Best,

Don Lyons, FACHE

CEO and Managing Partner

InterOPERANT

HITECH Act - details for Healthcare Entities

Electronic Health Records and Health Information Technology Under the New Federal Stimulus Act: How Are Healthcare Entities Affected?

This article was gleaned through many hundreds from Duane Morris LLP and is very relevant to having detailed conversations around planning.


March 3, 2009


The recently enacted federal stimulus package, the American Recovery and Reinvestment Act of 2009, contains a set of provisions known as the Health Information Technology for Economic and Clinical Health Act ("HITECH Act") that advance the use of technology in healthcare, principally by encouraging hospitals and physicians to adopt an electronic health record ("EHR") system before the end of 2015. The act also provides funding for, among other things, an EHR infrastructure and technologies to allow for the electronic flow of information; the support of regional and sub-national efforts toward health information exchange; the promotion of interoperable clinical data repositories performing comparative effectiveness research on how electronic data use impacts healthcare treatments and strategies; and the integration of health IT education in the training of healthcare professionals. In addition, the HITECH Act establishes new responsibilities for the U.S. Department of Health and Human Services ("HHS"), through the Office of the National Coordinator for Health Information Technology (the "National Coordinator"), to develop and adopt policies and standards, including new privacy standards, for EHRs and other forms of health information technology. Given the scope of the HITECH Act, and its mandate to HHS to act quickly, regulations and guidance are likely to be issued by the agency regarding the next steps for providers and others to take in the near future. Below are some preliminary questions that hospitals and physicians may want to consider.

How does the HITECH Act encourage physicians and hospitals to adopt EHRs?

Adopting an EHR system is "voluntary" - but there will be financial consequences for a hospital or physician participating in Medicare. For these providers, "meaningful EHR users" are eligible for Medicare incentive payments starting in 2011, and ending in 2015. After 2015, physicians and hospitals that are not "meaningful EHR users" will receive reduced Medicare payments. The HITECH Act also allows for an additional reimbursement of 10 percent for hospitals and physicians providing services in an area designated by the Secretary of HHS as a "health professional shortage area." Some exceptions to the payment rules exist. Also, Medicaid monies will be available to the states, certain hospitals and certain physicians to develop EHR systems.
In general, for "eligible professionals" who show "meaningful use" of an EHR system, the maximum Medicare incentive payment that a physician may receive for early use (i.e., 2011) is $48,400, which is available if the physician predominantly furnishes services in a health professional shortage area. Other physicians may receive up to $44,000 for early use. For each year after 2011 that the physician becomes a "meaningful EHR user," these incentive payments will be reduced. The incentive provision excludes "hospital-based eligible professionals," and special rules are established for "eligible professionals" affiliated with "qualified Medicare Advantage organizations."

"Qualified hospitals" that show "meaningful use" of an EHR will receive a Medicare incentive payment for early use of an EHR system calculated as the sum of a base amount ($2,000,000), added to its "discharge related amount" and then multiplied by its Medicare share. These payments will be reduced over a four-year transition period (using the formula of 100 percent - 75 percent - 50 percent - 25 percent). Starting in 2015, any "eligible hospitals" that do not turn in the required quality data will be subject to a 25-percent reduction in their annual update. Critical access hospitals have a more generous formula for incentive payments.

Are monies currently available to adopt an EHR system?

Not specifically. However, the HITECH Act creates a number of grant and demonstration project programs for EHR and health information technology activities. The National Coordinator's website at www.hhs.gov/healthit is a starting point for understanding the health information infrastructure contemplated under the HITECH Act, and various activities and programs. Many states have established health information technology agencies or private collaboratives that are aware of (and ultimately may distribute HITECH Act monies for) health information projects at the provider/enterprise level.
What is a "meaningful EHR user" who qualifies for the Medicare incentive payments?
In general, to be a meaningful EHR user, a provider must adopt a "certified EHR system," according to standards to be established by HHS. These standards must include e-prescribing. Also, the user must demonstrate, pursuant to agency standards (to be issued), that it engages in the exchange of health information to promote the quality of care and care coordination. Finally, the user must be able to report on clinical quality measures as requested by HHS, using the EHR technology.

If not a physician or a hospital – Is adopting an EHR system necessary, and are these other entities affected by the HITECH Act?

In general, a lab, skilled nursing facility, etc., is not required to adopt an EHR system under the HITECH Act. However, the larger goal of creating a national EHR system is unlikely to work without the ability to share health information, including information in an EHR, among providers, payors and others in the healthcare system. There are likely to be further laws or guidance from HHS on how these other providers will be encouraged to adopt EHRs. The HITECH Act may affect these other entities since it has revised existing privacy and security requirements under HIPAA, which may make them subject to these requirements.

When and how will standards be adopted to direct the implementation of EHR and health information technology systems?

The HITECH Act generally requires the National Coordinator to develop and propose standards, implementation specifications and certification criteria for EHRs and other components of a national health information infrastructure to the Secretary of HHS. An initial set of standards, implementation specifications and certification criteria must be adopted by December 31, 2009. These initial standards should address a number of areas, including the use of a "certified" EHR record by every individual by 2014; a national infrastructure to permit the electronic use and "accurate" exchange of health information; the use of EHRs to improve "quality of care"; and technologies to ensure the privacy and security of health information, ensure "the comprehensive collection of patient demographic data" and address "the needs of children and other vulnerable populations." Ensuing recommendations from the National Coordinator must be reviewed by the Secretary within 90 days of receipt.

Should healthcare entities start the process of implementing a health information technology system or wait for standards to be adopted?

While the Medicaid reimbursement payments are not scheduled to begin until 2011, healthcare entities will not qualify for the reimbursements simply by purchasing and implementing a system; they must demonstrate that they are a "meaningful EHR user" of a certified EHR. The transition to a new EHR system may take time in order for organizations to choose the right system for their practice, develop an implementation plan, install the system and connect to other networks and providers. The demand to install systems over the next few years (in order for providers to receive the largest reimbursement benefits under the statute) may outweigh the ability of healthcare IT software vendors and consulting professionals to supply the products and services. Therefore, organizations may wish to start considering what steps to take in order to begin the process.

How does the HITECH Act impact existing HIPAA privacy and security requirements?

The HITECH Act substantially modifies the existing HIPAA privacy and security requirements to provide additional privacy and security rights and requirements that benefit the individual and requires that the business associate agreements between covered entities and business associates be updated to reflect any new privacy or security requirements of the HITECH Act. Unless otherwise specified, the effective date of all provisions is 12 months from the date of enactment of the HITECH Act, or February 17, 2010. Additional changes are:
HIPAA privacy and security rules apply to covered entities, which include healthcare providers, health plans and healthcare clearinghouses, and requires these covered entities to enter into specialized confidentiality agreements with business associates, those third parties that perform business functions on behalf of covered entities (e.g., consultants). Under HIPAA, these third parties were subject to contractual breach only if they failed to comply. Under the HITECH Act, covered entities will now include "business associates" who will be directly subject to HIPAA's privacy and security requirements, including administrative, physical and technical safeguard requirements (such as the need to develop and implement comprehensive written security policies and procedures with respect to the protected health information), as well as its criminal and civil fines and penalties. Also, the HITECH Act maintains that organizations that provide data transmission of protected health information ("PHI") to covered entities or their business associates, such as health information exchange organizations, regional health information organizations or vendors that contract with a covered entity to allow that covered entity to offer a personal health record to patients as part of its electronic health record, are considered business associates and must have a business associate agreement with such covered entities.
Under the HITECH Act, there are new breach notification requirements for all covered entities requiring the covered entities to report most security breaches directly to individuals. Large security breaches will be reported to HHS and prominent media outlets. The Secretary is required to issue interim final regulations governing the duty to notify within 180 days of enactment of the HITECH Act (August 16, 2009), and these requirements will go into effect 30 days after the date that the interim final regulations are promulgated.
Under the HITECH Act, covered entities must, when otherwise permitted, disclose only the "minimum necessary" to accomplish the intended purpose for such disclosure. There will be new guidance issued governing what constitutes "minimum necessary" for purposes of disclosures under the privacy rule within 18 months after the date of enactment of the HITECH Act (August 17, 2010).

Under the HITECH Act, individuals may request an accounting of the disclosures of his/her electronic protected health information, as is contained in the EHR, over the preceding three years. Therefore, covered entities with EHRs may want to begin accounting for disclosures as early as January 1, 2011, depending on when they acquire and begin to use an EHR.
Under the HITECH Act, an individual may request that her protected health information not be disclosed to her health plan if she pays for medical care in full.

Under the HITECH Act, the definition of "health care operations" will be reviewed by the Secretary of HHS by August 17, 2010, and narrowed or clarified.

Under the HITECH Act, the HIPAA Privacy Rule is amended to limit when a covered entity may disclose PHI as part of a healthcare operation if it receives or has received a direct or indirect payment in exchange for making such communication, except in specified circumstances.

Under the HITECH Act, the sale of PHI by a covered entity or a business associate is prohibited without patient authorization except in certain specified circumstances.
As a result of these changes, covered entities should take steps to review their current privacy and security practices to ensure that they are in compliance with the law, update their privacy and security policies, develop a breach notification policy that complies with the HITECH Act (and state law counterparts) and update any business associate agreements to reflect the new obligations under the HITECH Act.

Who will oversee implementation of the HITECH Act and other components of a national, integrated health information network?

Although final responsibility lies with the Secretary of HHS, the National Coordinator has considerable powers. The Office of the National Coordinator was established in 2004 to work with public and private entities to develop a national health information architecture, and applicable policies and procedures. The National Coordinator's website at www.hhs.gov/healthit contains a wealth of information about the office's activities and plans. The National Coordinator also will work with states and others at the state and regional levels to facilitate the electronic use of health information according to national standards, including through the adoption of regional support centers and the distribution of grants and other monies.


For Further Information:

Duane Morris LLP


If you have any questions regarding the HITECH Act or would like more information, please contact John M. Neclerio, Lisa W. Clark, Kathleen Carver Cheney, any member of the Healthcare Information Technology Practice Group or the attorney in the firm with whom you are regularly in contact.

Best,

Don Lyons
CEO and Managing Partner
InterOPERANT

Stimulus Funding for HIT - as of today

Congress is expected to approve $19 billion toward health information technology, with $17 billion allotted to incentives and $2 billion to jump-start healthcare IT adoption, according to a Wednesday night draft of the stimulus package.

• 
  The original House version of the bill designated $20 billion for healthcare IT, with the Senate setting aside $22 billion.
• 
  The $789 billion conference agreement between the House and Senate versions of the American Recovery and Reinvestment Act (H.R. 1) still faces potential amendments before a final vote, and some healthcare provisions of the bill were not scored as of Wednesday night.
• 
  Speaker of the House Nancy Pelosi (D-Calif.) said a final vote is expected before Saturday.
  The conference agreement includes measures to codify the Office of the National Coordinator for Health Information Technology (ONC) and establish an open and transparent process led by the national coordinator to develop standards by 2010 that allow for secure nationwide electronic exchange of health information.

It also would improve and expand current federal privacy and security protections for health information, such as requiring that an individual be notified if there is an unauthorized disclosure or use of his or her health information and requiring a patient's permission to use his or her personal health information for marketing purposes.

Medicare and Medicaid HIT provisions in the bill include funding for the adoption and use of health IT, such as electronic health records by providers who serve Medicare and Medicaid patients. It would provide temporary bonus payments ranging from $44,000 to $64,000 for physicians and up to $11 million for hospitals that meaningfully use electronic health records. The bill supports Medicare and Medicaid incentive payments for critical access hospitals, federally qualified health centers, rural health clinics, children's hospitals and others and phases in Medicare payment penalties for physicians and hospitals not using electronic health records starting in 2014. It seeks a 90 percent HIT adoption rate for physicians and 70 percent for hospitals for using electronic health records and would generate savings of more than $12 billion through improvements in quality of care and care coordination and reductions in medical errors and duplicative care.

Of recent note was Microsoft CEO Steve Ballmer sending a letter to Congress urging quick passage of the bill. "We believe information technology can help create a connected health system that delivers predictive, preventive and personalized care – a system that will improve the health of Americans and help control healthcare spending," he said. "Government support for rapid adoption of information technology is essential and measurable outcomes are needed to help the Administration and Congress achieve the goals of increased access, lower healthcare costs and improved quality of care."

We will stay on top of these developments to determine exact funding mechanisms and deliver this information to our clients.

For more information on "The Roadmap" see: http://www.healthcareitnews.com/news/three-national-panels-release-shared-vision-health-it

Best,

Don Lyons, CEO and Managing Partner
InterOPERANT

Standards for Healthcare IT - Now!

In discussions with Houston/Dallas based Hospital and Integrated Delivery Network (IDN) CEO's last week the financial outlook for healthcare is bleak and the pressure to perform is immense. Despite promises of billions from the new Obama Administration for technology, costs and the rip-tide of emerging demographics are against maintaining profitability - margins will absolutely continue to shrink if it's business as usual (with little or no innovation).

We must use technology with good governance to leverage the provider position in the marketplace. It will be key to maintaining efficient and high quality operations. Quality is critical...

Along with other mission critical services we provide, InterOPERANT believes in the standardization of clinical operations, functions, and access to key clinical and financial data...

What is the value of standardization?

What does it mean?

The value of standardization is comprised of very simple concepts such as:

Having all or a significant number of the applications reside in common environments which deploy like operating systems and common database types.

Focus IT staff on a limited number of technologies to become deeper content experts limiting reliance on vendor provided resources who may not have the same level of dedication to the institution.

Separate infrastructure contracting from software contracting to leverage better pricing due to volume discounts.

When standard platforms exist in an environment, standard tools for environment monitoring and recovery can be deployed as well as a number of more complex concepts such as:

Can actually achieve reliable, unaltered business performance metrics because the need for data normalization is significantly reduced

Sets a foundation to effectively build an EHR through integration as well as interfacing. When interfacing data across unlike platforms, data is very likely to get changed in some manner to achieve “integration”. This can be insignificant in most cases, but very significant in a few. The data normalization when interfacing can be very complex and require extensive support overhead.

If you achieve integration through interfacing, a significant part of the enterprise becomes tied to one platform which has a track record of being a high maintenance environment with questionable stability.

What will be the exact deliverables from InterOPERANT?

An Application inventory and standards implementation assessment – this would provide an expert pathway from current state to desired end state leveraging the most prevalent current investments and functionality.

Then we roll up our sleeves and help you get it done.

Why hire us to do it? Could you just do it yourselves? How do we co-source partner with you?

The partners of InterOperant have over 75 years of combined experience and have directly been involved in standards implementations in several multi-billion dollar companies. These implementations spanned years in each organization and were accomplished by:

Establishing the proper governance for hardware and software selection and deployment (this involves significant education of the entire organization to the proper guidelines to insure compliance to policy)

Effective auditing of the entire enterprise to identify technologies or platforms not in alignment with the strategy and planning for the mitigation of these within desired timelines

Working with the vendors to transform the implementations of their platforms into compliance with the adopted standards or plan a mitigation strategy which might mean replacement of the platform should the platform not be able to be remediated.

Educating the organizational stake-holders to the importance of a balance of application functionality to platform standardization to achieve an overall standards based environment.
Implementation of enterprise standards is a very difficult task and without continued reinforcement throughout the change process, these initiatives can get derailed or linger on until the initial goals become irrelevant or outdated.

This type of change has to be deliberate and continuously supported until it is completely adopted in the environment in order to shift into the support and evolutionary stages that follow. There will always be continuous change prevalent in computing environments and this change is harder to manage and is more costly in a heterogeneous environment where standards are attempting to be deployed.

What will we build to help them maintain standards after InterOPERANT leaves?

The governance is the key piece to maintaining the implemented standards. There has to be a solid roadmap for departments to bring projects forward, have these projects reviewed and championed in partnership with IT to insure standards are being adhered too. There can be tools constructed to audit and monitor the application inventory present on the network for offending applications to the standards. Some of the tools you already own, the rest we can supply.

Best,

Don Lyons, CEO and Managing Partner

Blenda Shipp, Chief Development Officer and Senior Partner

Governing High Complexity - Verse 2

In late 2002 having been newly recruited from Seattle, and upon entering the halls of one of the top cancer centers in the world, I was presented with enormous challenges. The central IT division was almost equal in size to it's "federated components." These "islands of automation" in most cases were highly effective - but perhaps were not the most efficient from a data integration and cost perspective. They were in many cases highly independent. Although I functioned in the Deputy CIO role, our organization had at least 20 or so "other CIO's." I can attest to the fact that most all of them had the next great idea! In fact, the division of Radiology under physician leadership had built an absolute world-class clinician portal called "Clinic Station." Having spent a number of years with this team, and having had a long career as a leader and a technologist - I would say Clinic Station today has few, if any, equals...it was and is a smashing success (thanks to Kevin, and Chuck)! Clinic Station through leveraging the SOA (.xml) environment continues to improve with new releases. Stay tuned for new developments as "Research Station" rolls out in the near future...


The challenge - the costs of managing this portfolio in a distributed manner were and are absolutely staggering. Also, not all functions could be efficiently integrated such as CPOE, Medication Management, etc. And what about using the data for clinical research? Data was everywhere - it was the land of databases...

Structured decision making, or the lack thereof often led to poor technology choices - the result of which became a very (massively) expensive "de-installation" project for other clinical applications. What the scenario lacked was effective decision making rooted in the technical and user community, managed by a collaborative governance team.

Extraordinary expense levels could not continue, and data integration became the new mantra. So how did we go about managing for results, and leading for transformation in this scenario?

As the Deputy CIO and in conjunction with our team of operational executives and physicians; we formed the Information Services Executive Team (a few consultants were added to the mix). The team began to define the need for:

1. Effective IS Governance.
2. A clear and credible organizational IS Strategy.
3, Well coordinated IS projects.
4. The need to provide substantial value through those projects.
5. Building relationships between central and distributed IS organizations.

From there we laid out the charge, the guidelines, the committee's, participation, etc. Today, and according to Gartner Research, the organization has reached a pinnacle in governing itself around IS technology, people, and related process issues. We were pioneers in tackling these problems with all it's political implications - I was proud to be part of the solution.

One size does not fit all, and we at InterOPERANT can help you design, build and implement the proper solution for your organization. Much of our research comes from Gartner, the CISR at MIT, Sloan School of Management, http://mitsloan.mit.edu/cisr/. Also, see our blog post, "Governance - Verse1." As well, InterOPERANT relies on the work from HITSP, and are commenting members of ANSI, HITSP, http://www.hitsp.org/.

Today, health care organizations are just beginning to understand how to manage the expense and complexities of it's information technology functions. As I have mentioned in prior posts, IT is both a value creation, and service delivery center all tied to core functions and processes at every level of the organization. It is a concept which must be embraced by everyone - and effective, and participative (read collaborative) governance will help create, and deliver real value across perceived organizational boundaries.

Some of you may have friends at Stanford Hospital and Clinics - we do. They have a huge appetite for advanced clinical systems, and an annual capital budget of $40 to $60 million allocated to information systems. Not only are they huge and wonderfully complex, but in 2004 they established a seven year system-wide information technology out-source contract with Perot Systems Corporation. As well, a few large scale consulting firms got involved...2007 found trouble in paradise.

Today, they are well on there way toward implementing an elegant and strong governance solution to manage their commitment to information technology out-sourcing. This is one of the most difficult of all challenges. If they can do it, so can you. We at InterOPERANT will help you achieve your climb to the summit!

Best,

Don Lyons
InerOPERANT
CEO and Managing Partner

Acute Care, Really?

In performing research for Quantum Leadership (American College of Healthcare Executives) on Acute Care, Managed Care, and Ambulatory Care - we found large variations in what was described, world-wide. InterOPERANT continues it's quest to provide a benchmark understanding of the key terms describing the people, process and technology. These are the systems that encompass the delivery of our national healthcare model. We will start with Acute Care, and continue additional posts on other forms of care delivery most prevalent in the US.

Knowledge of Acute Care Sector

Acute Care defined:

A commonly accepted definition is difficult to find in the literature and changes are by author, or organization, or political administration. However, it conforms generally to the following:

· Acute care refers to necessary treatment of a disease for only a short period of time in which a patient is treated for a brief but severe episode of illness. Many hospitals are acute care facilities with the goal of discharging the patient as soon as the patient is deemed healthy and stable, with appropriate discharge instructions.

· The term is generally associated with care rendered in an emergency department, ambulatory care clinic, or other short term stay facility. An important aspect of the current health care crisis in the US is the result of the growing need for acute care despite a decrease in the number of facilities which provide that care. This mismatch has resulted from the dramatic increase in the number of patients who are uninsured or underinsured, and therefore unable to pay for services rendered. Those patients often turn to emergency departments for their acute care needs. That has resulted in overcrowding and made it increasingly difficult to focus adequate resources on those patients who present with true emergencies.

From the “Wikipedia 2008”...simple, and powerful, another more simplistic notion is the following:

acute care
n.
Short-term medical treatment, usually in a hospital, for patients having an acute illness or injury or recovering from surgery.

DEFINITION AND DESCRIPTION OF ACUTE CARE HOSPITALS:

Acute care is a level of health care in which a patient is treated for a brief but severe episode of illness, for conditions that are the result of disease or trauma, and during recovery from surgery. Acute care is generally provided in a hospital by a variety of clinical personnel using technical equipment, pharmaceuticals, and medical supplies.

Hospitals – the essential partner to the physician a hospital is an institution for health care providing treatment by specialized staff and equipment, and often but not always providing for longer-term patient stays. Today, hospitals are usually funded by the state, health organizations (for profit or non-profit), health insurances or charities, including direct charitable donations. In history, however, they were often founded and funded by religious orders or charitable individuals and leaders. Similarly, modern-day hospitals are largely staffed by professional physicians, surgeons and nurses, whereas in history, this work was usually done by the founding religious orders or by volunteers

Financial and Operational Classes:

· For profit
· Not for Profit
· Community Hospitals
· Academic and Teaching Hospitals
· Government Hospitals

Hospitals may have any of the following departments or units:
Behavioral Health Services
Burn unit
Cancer Center
Coronary care unit
Dispensary
Emergency department
Intensive Care Unit
Labor and Delivery and Neonatal
Laboratory Services
Nursing unit
Orthopedic Services
Outpatient Department
Pharmacy
Psychiatric ward
Rehabilitation Services
Physical Therapy
Post anesthesia care unit
Radiology
Respiratory Therapy
Surgery
Urgent care
Non-medical departments include:
Medical records department
Release of Information department
Other such as Legal, Compliance, etc.

Physicians
· Primary Care – primary contact with the patient
· Medicine – referral
· Surgery - referral
· Diagnosis – referral
· Multispecialty Practices
§ Open to fee for service, and managed care financing
· Group Practices
§ HMO financing
· Independent Physician Associations
· Physician Hospital Organizations
§ Fee for service and managed care.
· Government Physicians
· US Army, VA, etc.
· Academic Medical School Faculties
· Government and Private
Other providers and integrators to the system
· Over 50 professional specialties that support the model.
· Hospice
· LTC
· Vendors and suppliers, equipment, Pharma, Bio-Pharma, etc.

Healthcare Networks and Systems, and Alliances – Consolidations

· An Integrated Delivery Network (IDN) is a network of facilities and providers working together to offer a continuum of care to a specific market or geographic area. Developed in the early 1980s, IDNs emerged to address common concerns like capitation, excess capacity, decreased margins, and complaints from patients regarding access.

· IDNs include many types of associations across the continuum of care and one network may include a short- and long-term hospital, HMO, PHO, PPO, Home Health agency, and hospice services, for example. Multi-hospital systems and mergers may be considered limited IDNs in that different entities join forces to provide care.

· Some members of a network provide identical or complementary services to patients. Such associations in which a similar level of care is provided by members of a network is sometimes called horizontal integration or, as opposed to different levels of care, or vertical integration, generally seen in the more traditional IDN model.

During the 1990s and into the next decade many hospitals pursued twin strategies of vertical and horizontal integration. Each type of integration assumed multiple forms:

· Vertical integration. Proponents of vertical integration between hospitals and other health care providers and payers mentioned several goals underlying these efforts. These objectives reflected a range of efficiency goals (manage global capitation, form large patient and provider pools to diversify risk, reduce cost of payer contracting), access goals (offer a seamless continuum of care, respond to state legislation), and quality goals (assume responsibility for health status of local population).

· Horizontal integration. Hospitals’ rationales for horizontal combinations likewise reflected a mixture of efficiency goals (prepare for capitation, reduce excess capacity, strengthen financial position) and access goals (expand the delivery network). In fact, their objective functions for the two broad strategies often overlapped, which suggests that hospitals did not really understand the difference between the two. A major stated objective in horizontal integration was achieving economies of scale. Such economies were believed to flow from several sources, including large patient volumes, sharing of equipment and services, and group purchasing.

· All of these alternatives give the hospital-based enterprise a role, but by no means the leading role, in linking the services that patients receive. What entity will actually control the process of coordination is still up for grabs. Given the strong trends toward outpatient care, even within a hospital structure, we can probably rule out an inpatient-oriented firm as a contender. The hospital will have to be more than a hospital alone. Economic theory implies that organizational structure and control depend on transaction cost, or its mirror image, transaction productivity. It remains to be seen whether any of the current players, or possibly some wholly new entity, will perform best in that role.

Health Insurance Organizations – primary method to finance healthcare in America

· Healthcare Insurance over 2,000 private payors and commercial companies, BlueCross/BlueShield
· Medicare
· Medicaid
· HMO Act 1973
§ Limits on premium covered – employee premium sharing
§ Limits on payments – deductibles, co-payments
§ Limits of provider selection – PPO’s, POS
§ Provider risk sharing – DRG’s, and capitation
§ Pay for performance – behavior change among physicals

So how about a question for our readership:

The best strategic approach for hospitals to pursue most efficient operations:

1. Pursue vertical integration strategies
2. Pursue horizontal integration strategies
3. Monitor the environment and be aware of emerging strategies to best position for short-term and long term viability focused on the needs of patients.
4. Continue every day with business as usual. Healthcare delivery processes will not evolve.

Correct answer: 3. The environment should be closely monitored for a combination of vertical and horizontal integration strategies and projects on an individual basis of merit with a focus on economic returns, patient, physician and employee satisfaction, and operational re-trenchment, stability and growth.

References:

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2003. Published by Houghton Mifflin Company.

Center for Medicaid and Medicare Services, 2005

Griffith, J.R., and K.R. White, The Revolution in Hospital Management, 2005.

Griffith, and White, The Well Managed Health Care Organization, 6th Edition, 2006.

Rosenberg, C.E., The Care of Strangers, The Rise of Americas Hospital System, 1989.

Glen McDaniel, MS, MBA, The Gerhson, Lehrman Group, Expert Healthcare, 2008.



Lastly, why might a technology executive have a specific interest in what I have written today? Strategic thinking CIO's, and Technology Director's, Manager's, and Staff must understand these components, and follow the genesis of new delivery structures. You are the enablers, and manage potentially the largest "Value Creation and Delivery Center" in Modern Healthcare...

We at InterOPERANT would like to help you climb to your Summit in creating greater value for your organizations.

Best,

Don Lyons

InterOPERANT

CEO, and Managing Partner