Posted by Mark Brousseau
The ultimate goal of many small business owners is to see their products on the shelves of major retailers. In order to automate the transmission and receipt of any number of business documents—including purchase orders, remittance advice, invoices, advance shipping notices, hang tags, labels, and catalogue updates—many suppliers and retailers use EDI, or Electronic Data Interchange. However, EDI is Greek to most small businesses and very difficult to perform internally without significant expenditures of money and manpower.
In addition, suppliers that fail to submit automated business transactions according to retailer specifications are faced with pricey penalties known as “charge backs.” For the supplier, these chargebacks can result in fines in the tens or even hundreds of thousands, and irrevocably damage business relationships. For the consumer, this botched paperwork could mean those red open-toe Ferragamo pumps won’t be available for summer and Tickle Me Elmo will be AWOL for Christmas.
Fortunately, dedicated EDI providers can help small businesses automate this complex process, solve compliance issues, improve trading partner relationships, and focus on core competencies, all while reducing business expenses.
“While the manual workload required for non-EDI vendors is prone to errors, delays, and steep overhead costs, a dedicated EDI provider can be an invaluable asset for small businesses,” says Thomas J. Stallings, CEO of EasyLink Services International Corporation.
Stallings offers the following recommendations for small businesses thinking about choosing an EDI provider:
… Educate yourself about EDI, what it is, how it functions, and what it means for your business.
… Research the depth of the provider’s retail relationships, and the number of pre-existing EDI templates they have on file. (Retailers use fields in different documents in different ways. These individual templates, called “maps,” are what differentiates automated business documents for Wal-Mart from, say, Sears.)
… Make certain your provider is equipped with redundant backup that achieves 100 percent compliance.
… Ensure your provider keeps abreast of industry changes. (For example, about four years ago, several retail giants gravitated away from VAN-based EDI transmissions in favor of a new, secure protocol called AS2.)
“Electronic Data Interchange helps bring small business products to the shelves of some of the nation’s largest retailers,” Stallings says.
Friday, May 23, 2008
Thursday, May 22, 2008
A Virtual Safe-Deposit Box
Posted by Mark Brousseau
An interesting article from Wall Street & Technology about Wells Fargo's new vSafe offering:
Wells Fargo Introduces vSafe, a Virtual Safe-Deposit Box
May 21, 2008
Security and convenience -- that's what San Francisco-based Wells Fargo is promising customers with its new vSafe service. The Web-based virtual safe-deposit box allows users to archive almost any file format, from Microsoft (Redmond, Wash.) Word documents and PDFs, to audio and video files, according to Stephanie Smith, senior vice president of the Wells Fargo Internet services group.
"You can import any electronic or digitized document," Smith explains. Preestablished folders, such as "Medical" and "Family," help users organize their documents, and users can create or delete folders to personalize the storage solution, she adds. "Customers can just drag and drop their documents into those folders," Smith says, emphasizing the product's ease of use.
According to Smith, the product was conceived in response to Wells Fargo's ($575 billion in assets) research into how customers manage their financial lives, including document storage. A study of the bank's customers revealed that three-quarters of participants "weren't happy" with their own document management, she reports. From a battered shoebox stuffed with papers to unreachable manila folders on top of the refrigerator, customers' homemade storage solutions were neither secure nor convenient, Smith says.
From the catastrophic (accessing insurance policies after a house fire) to the more routine (getting copies of medical records while you're traveling), the the Web-based vSafe service, however, gives customers secure access to their files at any time, from any location, unlike hard drives and other archiving solutions, Smith contends. But, she cautions, vSafe is intended only as a backup storage solution. "We're not telling customers that it's as good as the original," Smith stresses. "It's a copy."
An Online Vault
The vSafe service, Smith adds, leverages the same security measures and stores customer data behind the same firewall that the bank uses for its online banking platform. "It's an extension of what we've been doing for 156 years -- safely and securely storing customer information," she comments, adding that customers who want additional protection can secure their accounts with two-factor authentication supported by RSA's hardware tokens, which can be purchased from the bank. Bedford, Mass.-based RSA is the security division of EMC (Hopkinton, Mass.).
Smith notes that the new offering, which will be integrated with Wells Fargo's other online banking services, was created without outside vendor support. "We built this ourselves," she says, adding that the solution employs "much of the same [technology] as we use for Wells Fargo online banking."
Javelin Strategy & Research (Pleasanton, Calif.) analyst Mary Monahan notes that the trust Wells Fargo has established with consumers may help adoption of the vSafe service. "Wells Fargo is a name known to them," she observes. The service, she adds, appears to meet a customer need and gives users a reason to stick with the bank, helping Wells Fargo's customer-retention efforts.
A Green Solution
In addition to helping customers organize their document storage, the vSafe product also can help the environment, Wells Fargo's Smith says, adding that the bank sees the service as an extension of its environmental initiatives. It will help customers "lessen their carbon footprints ... through online banking," she explains.
For example, customer statements will be uploaded to their vSafe accounts automatically. Though Javelin's Monahan says bank customers in general are "not really ready to get rid of their paper statements," she adds that the new Wells Fargo service is "very green -- and secure."
The cost of the vSafe service to Wells Fargo customers starts at $4.95 a month for one gigabyte of storage -- approximately 10,000 documents. The bank initially offered the vSafe service to its team members in March. A public rollout to personal banking customers and small business clients is scheduled for the summer.
An interesting article from Wall Street & Technology about Wells Fargo's new vSafe offering:
Wells Fargo Introduces vSafe, a Virtual Safe-Deposit Box
May 21, 2008
Security and convenience -- that's what San Francisco-based Wells Fargo is promising customers with its new vSafe service. The Web-based virtual safe-deposit box allows users to archive almost any file format, from Microsoft (Redmond, Wash.) Word documents and PDFs, to audio and video files, according to Stephanie Smith, senior vice president of the Wells Fargo Internet services group.
"You can import any electronic or digitized document," Smith explains. Preestablished folders, such as "Medical" and "Family," help users organize their documents, and users can create or delete folders to personalize the storage solution, she adds. "Customers can just drag and drop their documents into those folders," Smith says, emphasizing the product's ease of use.
According to Smith, the product was conceived in response to Wells Fargo's ($575 billion in assets) research into how customers manage their financial lives, including document storage. A study of the bank's customers revealed that three-quarters of participants "weren't happy" with their own document management, she reports. From a battered shoebox stuffed with papers to unreachable manila folders on top of the refrigerator, customers' homemade storage solutions were neither secure nor convenient, Smith says.
From the catastrophic (accessing insurance policies after a house fire) to the more routine (getting copies of medical records while you're traveling), the the Web-based vSafe service, however, gives customers secure access to their files at any time, from any location, unlike hard drives and other archiving solutions, Smith contends. But, she cautions, vSafe is intended only as a backup storage solution. "We're not telling customers that it's as good as the original," Smith stresses. "It's a copy."
An Online Vault
The vSafe service, Smith adds, leverages the same security measures and stores customer data behind the same firewall that the bank uses for its online banking platform. "It's an extension of what we've been doing for 156 years -- safely and securely storing customer information," she comments, adding that customers who want additional protection can secure their accounts with two-factor authentication supported by RSA's hardware tokens, which can be purchased from the bank. Bedford, Mass.-based RSA is the security division of EMC (Hopkinton, Mass.).
Smith notes that the new offering, which will be integrated with Wells Fargo's other online banking services, was created without outside vendor support. "We built this ourselves," she says, adding that the solution employs "much of the same [technology] as we use for Wells Fargo online banking."
Javelin Strategy & Research (Pleasanton, Calif.) analyst Mary Monahan notes that the trust Wells Fargo has established with consumers may help adoption of the vSafe service. "Wells Fargo is a name known to them," she observes. The service, she adds, appears to meet a customer need and gives users a reason to stick with the bank, helping Wells Fargo's customer-retention efforts.
A Green Solution
In addition to helping customers organize their document storage, the vSafe product also can help the environment, Wells Fargo's Smith says, adding that the bank sees the service as an extension of its environmental initiatives. It will help customers "lessen their carbon footprints ... through online banking," she explains.
For example, customer statements will be uploaded to their vSafe accounts automatically. Though Javelin's Monahan says bank customers in general are "not really ready to get rid of their paper statements," she adds that the new Wells Fargo service is "very green -- and secure."
The cost of the vSafe service to Wells Fargo customers starts at $4.95 a month for one gigabyte of storage -- approximately 10,000 documents. The bank initially offered the vSafe service to its team members in March. A public rollout to personal banking customers and small business clients is scheduled for the summer.
Wednesday, May 14, 2008
Mike Leavitt On Electronic Medical Records
Posted by Mark Brousseau
The Hill caught up with Health and Human Services Secretary Mike Leavitt to ask him about the status of the president's electronic medical records initiatives. The full transcript appears below:
Q&A with Mike Leavitt
By Jeffrey Young
In 2004, President Bush introduced a sweeping initiative to promote the development of a nationwide system of health information technology. One key goal is to provide every citizen with access to an electronic medical record by 2014. Bush tasked Health and Human Services Secretary Mike Leavitt to helm the gargantuan effort, which represents an attempt to bring together the private and public sectors to create a technological infrastructure for the healthcare system of the future.
Q: Is President Bush’s 10-year plan for electronic medical records on track?
I believe that will be accomplished. I think the goal may be exceeded. There will be a point where this begins to happen quickly. That’s the way technology develops: There are some early adopters, the mechanism has to be put into place, people begin to catch the vision. Once the consumer begins to see its value, it spreads quickly.
Q: Other than electronic medical records, what are the key components of a fully wired healthcare system?
I think it’s important to remember that the goal here isn’t electronic medical records. The goal is to transform the sector of healthcare into a system of healthcare, a system that provides consumers with information about the quality and the cost of their care.
To accomplish that, we need to have information digitized rather than on paper and we need to have that information mobilized so that it can be assembled in many different ways that are useful, not just to consumers but to various parties. If you look at digital health information, the goal looks different depending on who you are and what your interests are.
If you’re a consumer, you’re interested in having all of your health information accessible to you in a timely, useful way. You’d like to have your pharmacy records for the three pharmacies that you do business with in one place. You’d like to have the information from your doctor, from your hospital, from your specialists, from the labs, accessible to you in one place. You don’t want to have to go to your doctor and pick up a big brown envelope and transport it to a specialist for them to see a test that you took three days before. You’d like that to be electronically transferred, like everything else can be in your life.
If you’re a clinician or a doctor, you’re interested in having a clinical record that has more information than likely a consumer is interested in. You’re interested in being able to have decision-support information that would provide backup for decisions that you need to make, and alternatives and options that would help you make better decisions.
If you are a public-health expert, you’d like to be able to gather a lot of data from many different places. Even though it doesn’t have anyone’s name attached to it, it would provide you with statistical backup to look for trends. If you’re a researcher, you’d like to see something quite similar, but you would like to see it from a wider area.
My point is that, if you’re a consumer or a clinician or a researcher, all of this looks different to you. To put it a different way, it will look different depending on the way you view the world.
The goal here is to, first of all, get information transferred from paper into a digital format, then create a means by which it can be mobilized so it can be assembled in various forms, and to provide benefit to consumers, to practitioners, to hospitals, to researchers, to public health, or to those in the business of health.
Q: What will be the biggest advantages to better incorporating information technology into the healthcare system?
In the long run, it will provide better health, lower costs, fewer medical mistakes and a lot less hassle.
Q: All three of the presidential candidates’ healthcare reform plans depend in part on health IT saving money. How much money could be saved through the efficiencies that should come with from using these technologies?
The best source of that may be the RAND study. The RAND Corporation did a study that said … there was a 30 percent inefficiency in the costs. I’m not predicting a 30 percent reduction but I do believe that over time we can begin to have medical inflation more closely approximate regular inflation. If you could make that change in the glide pattern or the slope of growth, it would make a profound economic difference.
Q: Since the administration’s effort began, what’s done and what’s still to be accomplished?
Three years ago, there were 200 vendors who were producing electronic medical records for sale. None of them had the capacity to be interoperable because there were no standards for interoperability. Interoperability essentially means one computer system being able to talk to another.
We developed a process for developing standards that incorporated the medical family, developers of technology, government entities, insurance companies, et cetera, and have now instituted a means by which those standards are emerging.
We also created a process for certifying systems that meet those standards. Three years ago, there was no process and obviously no means of certifying that people were on the pathway to health IT or to interoperability. We have accomplished that: Some 75 percent of all the systems now available for sale are certified by the CCHIT, which is the Certification Commission on Health Information Technology.
Let me tell you why that’s important. I bumped into, at a pathology bench at Stanford University, a young student who was ready to go out into practice. He said, “I heard your speech about electronic health records and I subscribe to your view. In fact, I’m going to set my practice up next year and I want to buy a system. I only have one question: What system should I buy? I can only afford to do this once and I can’t get it wrong.” It was not possible for me to recommend a system before. Now, I’m able to say to him, “Whatever system you buy, make sure it is CCHIT-compatible. If you do, you’ll be on a pathway to interoperability and your vendor will need to continue to update their system to meet those standards.” I think that’s a significant step forward.
If interoperability was two feet long, we’d be at about the six or eight inches mark. Next year, we will be at eight or 10 inches. Each year, we’ll get a little closer to interoperability. We won’t see full interoperability for some time but we will see functional interoperability beginning to develop real soon.
That’s on records themselves. The next challenge is to lay in a system for a national health information network, where information can be transported between systems. We will see live data transmitted over that system in September. We’ll see real data begin to flow early next year. All of this is being done at a fairly rudimentary level. The sophistication of it will increase as our experience grows.
A second area of real challenge is in adoption among small- and medium-sized physicians. If you talk to a small- or medium-sized physician today, they will ask the question, “Why should I buy this system for $40,000 or $50,000 when the benefit will go to insurance companies and/or consumers/” We have to change the macroeconomics of medical reimbursement so that everyone benefits.
We have just announced and will conduct a Medicare demonstration project that will help us learn how to do that. We’re choosing 1,200 small physician practices throughout the country and we’re going to start paying them more if they have an electronic medical record. The second year, we’ll pay them more if they report a series of quality measures over their system. And the third year and the fourth year and the fifth year, we’ll pay them more if they can demonstrate that they followed the quality measures and report them on their electronic medical record that’s certified. Over that period of time, we’ll get better and better at learning how to share the value of electronic medical records with everyone.
A third step will be actual implementation of certain portions of it on a national basis. The most logical next step is e-prescribing. I’m hopeful that the Congress will act with the SGR [physician sustainable growth rate payment formula] fix, which will likely be at the end of June, to enable HHS to use its leverage as a payer to motivate physicians to adopt and use e-prescribing.
Q: What have been the biggest obstacles that have kept the healthcare system so behind the curve on IT compared to the rest of the economy?
First of all, it’s far more complex than any other sector of the economy. If you look at banks, for example, they’re highly interoperable but they deal with a very basic measure, and that’s the dollar. They have a currency and once you’re managing where those dollars go, it’s easier than if you’re having to develop the means of managing all of the conditions and the information that goes into healthcare. So, it’s substantially more complex. It’s also far more segmented.
There is no such thing as a national healthcare market. It’s a lot of individual communities and the collective network of communities is the national health insurance market. You essentially have to deal with this one marketplace at a time.
Q: Why is it important the federal government be involved in this process? Why can’t the private sector be left to develop this system on its own?
The best illustration of that is the fact that we had 200 vendors producing electronic medical records, all of whom viewed it as in their interests to be separate from the others to create proprietary interest. I believe the government has a role, and it’s to be that of an organizer of the system.
We have a role not just in our capacity as regulators but in our capacity as a payer. Medicare is the largest single payer. Medicaid, through its affiliations with the states, is another very large payer. That gives us the responsibility, in my judgment, to motivate a collective action. There’s no one else who has that amount of influence.
Q: Who should be responsible for covering the costs of developing and implementing IT in the medical system?
I want to make sure that you and your readers understand what’s involved in interoperability. If you were to take five different systems that are different sizes and different complexities, they don’t need to do everything the same. They simply need to do a limited number of functions the same.
Just to give a rudimentary illustration, let’s assume that there were three systems: one that would do 100,000 different things, one that one would 50,000 different things, and one that would do 10,000 different things. We need those three systems only to do about 800 things the same in order for them to [be considered] interoperable.
We have identified those 800 things and were are aggressively working to develop standards that can be adopted by anyone who is developing a new technology, whether it is a device that could monitor health results outside the hospital or whether it’s a clinical system or a system at a pharmacy, and all of these need to converge.
Let me give you a good example. We know that if diabetics have their hemoglobin A1c tested every quarter, that the chances of them having a complication that would cost a lot of money is reduced because we see the complications as they develop and we can get ahead of them. Well, sometimes it’s difficult to get diabetics to test their blood sugar every day, let alone their hemoglobin A1c on a regular basis. I saw a cell phone that had the equipment necessary to check one’s blood sugar, and various other components, built into the cell phone. You could prick your finger, draw the blood with the end of your cell phone, it would then analyze the blood and use the telephone technology to send it back to an electronic health record. That would be a valuable way of managing the chronic illness of diabetes, but if the cell phone collected the information in a form that could not be transmitted through the telephone to the electronic health record, we would have missed out on that opportunity. So the standards not only apply to electronic medical records, they need to apply to devices that may be in the marketplace.
The private sector will be developing the technology. We simply need to provide the basic standards that they can build into the technology so that it can communicate with other technology that may be developed independent of them.
Q: What are the key legislative changes that Congress should consider in the near term?
Congress could do four things in the near term that would have a substantial impact on this vision maturing.
The first would be standing behind the standards process and developing all of our incentives to support that. Interoperability requires standards. A network, a system, requires standards. If you look at other industries that have been through this — you look at cell phones, you look at ATMs, you look at things as big as airports — they all require standards so that information can be used interchangeably as it develops. It’s vital that Congress support the standards-development process that we have in place that’s now working and that any legislation they do points toward that, as opposed to competing with it.
The second thing I would point to is e-prescribing. That’s a logical next step. We have the technology in place, the standards are in place, we know it saves time and money — and it’s time. The legislation that’s being proposed would provide the secretary with tools necessary to leverage our power as a payer in encouraging the rapid adoption of e-prescribing.
I think a third area would be in helping us leverage our power as a payer to encourage the adoption of electronic medical records. …
When they put [ATMs] into banks, people didn’t use them. They were accustomed to walking up to the counter and dealing with a teller who had become their friend. They first put people in the lobbies to try to bring people over to the machine and teach them how to use it. They would give them toaster ovens and lots of things to incentivize them to use the ATM because it was a more efficient way. At some point, the banks concluded, “We can’t afford to do business with you in the same way if you insist on using the teller at the counter for every transaction. Therefore, we’re going to charge you more if you go to the counter.” Once they did that, people started to move to the ATMs. The same thing was true when we went from dial telephones to touch-tones. There was a transition that had to take place in the way people used the telephone.
We’ll have to go through the same thing with electronic medical records. At first, we’ll have to give people incentives and reasons to use it. But there will be a point where we will have to say we can no longer afford to deal with you in the same way if you’re not going to use the most efficient way of doing business. So, we’ll continue to pay you, but we can’t pay you at the highest level unless you have electronic medical records. There may be, at first, some kind of incentive that helps them transition, but at some point, they have to recognize that they can’t be paid the same if they’re less using a less efficient way of doing business.
The fourth one is, one of the real virtues of electronic medical records is the ability to define quality and cost in a way that’s usable for consumers. The most important tool in doing that is information from claims data. Right now, we have two federal courts that are conflicting on the use of Medicare claims data. A Florida court says we can’t give to anybody to measure quality and a D.C. court says we have to give everything to everybody. Neither of those is the right answer. The right answer is to use the data in way that will help define quality in a controlled and effective way. We need legislation to resolve that dispute. I might add that all of those are part of the SGR legislation.…This isn’t about having people have computers that keep electronic data. It’s enabling the data to be in a form that’s usable to people and that can be mobilized and assembled in a lot of different ways.
One of those ways is giving consumers information about the cost and quality of their care so that they have choices and they can compare. We know when people have choices, they make decisions that drive the quality up and the costs down.
Health information technology is an enabler of better quality, lower costs, fewer mistakes and more convenience.
That’s why we push for electronic medical records. It isn’t just because it’s a tidier way to do business. It’s because it produces value. The actual implementation of the records is a necessary step toward that larger goal. The goal is the value that the records produce, not just the existence of the records.
The Hill caught up with Health and Human Services Secretary Mike Leavitt to ask him about the status of the president's electronic medical records initiatives. The full transcript appears below:
Q&A with Mike Leavitt
By Jeffrey Young
In 2004, President Bush introduced a sweeping initiative to promote the development of a nationwide system of health information technology. One key goal is to provide every citizen with access to an electronic medical record by 2014. Bush tasked Health and Human Services Secretary Mike Leavitt to helm the gargantuan effort, which represents an attempt to bring together the private and public sectors to create a technological infrastructure for the healthcare system of the future.
Q: Is President Bush’s 10-year plan for electronic medical records on track?
I believe that will be accomplished. I think the goal may be exceeded. There will be a point where this begins to happen quickly. That’s the way technology develops: There are some early adopters, the mechanism has to be put into place, people begin to catch the vision. Once the consumer begins to see its value, it spreads quickly.
Q: Other than electronic medical records, what are the key components of a fully wired healthcare system?
I think it’s important to remember that the goal here isn’t electronic medical records. The goal is to transform the sector of healthcare into a system of healthcare, a system that provides consumers with information about the quality and the cost of their care.
To accomplish that, we need to have information digitized rather than on paper and we need to have that information mobilized so that it can be assembled in many different ways that are useful, not just to consumers but to various parties. If you look at digital health information, the goal looks different depending on who you are and what your interests are.
If you’re a consumer, you’re interested in having all of your health information accessible to you in a timely, useful way. You’d like to have your pharmacy records for the three pharmacies that you do business with in one place. You’d like to have the information from your doctor, from your hospital, from your specialists, from the labs, accessible to you in one place. You don’t want to have to go to your doctor and pick up a big brown envelope and transport it to a specialist for them to see a test that you took three days before. You’d like that to be electronically transferred, like everything else can be in your life.
If you’re a clinician or a doctor, you’re interested in having a clinical record that has more information than likely a consumer is interested in. You’re interested in being able to have decision-support information that would provide backup for decisions that you need to make, and alternatives and options that would help you make better decisions.
If you are a public-health expert, you’d like to be able to gather a lot of data from many different places. Even though it doesn’t have anyone’s name attached to it, it would provide you with statistical backup to look for trends. If you’re a researcher, you’d like to see something quite similar, but you would like to see it from a wider area.
My point is that, if you’re a consumer or a clinician or a researcher, all of this looks different to you. To put it a different way, it will look different depending on the way you view the world.
The goal here is to, first of all, get information transferred from paper into a digital format, then create a means by which it can be mobilized so it can be assembled in various forms, and to provide benefit to consumers, to practitioners, to hospitals, to researchers, to public health, or to those in the business of health.
Q: What will be the biggest advantages to better incorporating information technology into the healthcare system?
In the long run, it will provide better health, lower costs, fewer medical mistakes and a lot less hassle.
Q: All three of the presidential candidates’ healthcare reform plans depend in part on health IT saving money. How much money could be saved through the efficiencies that should come with from using these technologies?
The best source of that may be the RAND study. The RAND Corporation did a study that said … there was a 30 percent inefficiency in the costs. I’m not predicting a 30 percent reduction but I do believe that over time we can begin to have medical inflation more closely approximate regular inflation. If you could make that change in the glide pattern or the slope of growth, it would make a profound economic difference.
Q: Since the administration’s effort began, what’s done and what’s still to be accomplished?
Three years ago, there were 200 vendors who were producing electronic medical records for sale. None of them had the capacity to be interoperable because there were no standards for interoperability. Interoperability essentially means one computer system being able to talk to another.
We developed a process for developing standards that incorporated the medical family, developers of technology, government entities, insurance companies, et cetera, and have now instituted a means by which those standards are emerging.
We also created a process for certifying systems that meet those standards. Three years ago, there was no process and obviously no means of certifying that people were on the pathway to health IT or to interoperability. We have accomplished that: Some 75 percent of all the systems now available for sale are certified by the CCHIT, which is the Certification Commission on Health Information Technology.
Let me tell you why that’s important. I bumped into, at a pathology bench at Stanford University, a young student who was ready to go out into practice. He said, “I heard your speech about electronic health records and I subscribe to your view. In fact, I’m going to set my practice up next year and I want to buy a system. I only have one question: What system should I buy? I can only afford to do this once and I can’t get it wrong.” It was not possible for me to recommend a system before. Now, I’m able to say to him, “Whatever system you buy, make sure it is CCHIT-compatible. If you do, you’ll be on a pathway to interoperability and your vendor will need to continue to update their system to meet those standards.” I think that’s a significant step forward.
If interoperability was two feet long, we’d be at about the six or eight inches mark. Next year, we will be at eight or 10 inches. Each year, we’ll get a little closer to interoperability. We won’t see full interoperability for some time but we will see functional interoperability beginning to develop real soon.
That’s on records themselves. The next challenge is to lay in a system for a national health information network, where information can be transported between systems. We will see live data transmitted over that system in September. We’ll see real data begin to flow early next year. All of this is being done at a fairly rudimentary level. The sophistication of it will increase as our experience grows.
A second area of real challenge is in adoption among small- and medium-sized physicians. If you talk to a small- or medium-sized physician today, they will ask the question, “Why should I buy this system for $40,000 or $50,000 when the benefit will go to insurance companies and/or consumers/” We have to change the macroeconomics of medical reimbursement so that everyone benefits.
We have just announced and will conduct a Medicare demonstration project that will help us learn how to do that. We’re choosing 1,200 small physician practices throughout the country and we’re going to start paying them more if they have an electronic medical record. The second year, we’ll pay them more if they report a series of quality measures over their system. And the third year and the fourth year and the fifth year, we’ll pay them more if they can demonstrate that they followed the quality measures and report them on their electronic medical record that’s certified. Over that period of time, we’ll get better and better at learning how to share the value of electronic medical records with everyone.
A third step will be actual implementation of certain portions of it on a national basis. The most logical next step is e-prescribing. I’m hopeful that the Congress will act with the SGR [physician sustainable growth rate payment formula] fix, which will likely be at the end of June, to enable HHS to use its leverage as a payer to motivate physicians to adopt and use e-prescribing.
Q: What have been the biggest obstacles that have kept the healthcare system so behind the curve on IT compared to the rest of the economy?
First of all, it’s far more complex than any other sector of the economy. If you look at banks, for example, they’re highly interoperable but they deal with a very basic measure, and that’s the dollar. They have a currency and once you’re managing where those dollars go, it’s easier than if you’re having to develop the means of managing all of the conditions and the information that goes into healthcare. So, it’s substantially more complex. It’s also far more segmented.
There is no such thing as a national healthcare market. It’s a lot of individual communities and the collective network of communities is the national health insurance market. You essentially have to deal with this one marketplace at a time.
Q: Why is it important the federal government be involved in this process? Why can’t the private sector be left to develop this system on its own?
The best illustration of that is the fact that we had 200 vendors producing electronic medical records, all of whom viewed it as in their interests to be separate from the others to create proprietary interest. I believe the government has a role, and it’s to be that of an organizer of the system.
We have a role not just in our capacity as regulators but in our capacity as a payer. Medicare is the largest single payer. Medicaid, through its affiliations with the states, is another very large payer. That gives us the responsibility, in my judgment, to motivate a collective action. There’s no one else who has that amount of influence.
Q: Who should be responsible for covering the costs of developing and implementing IT in the medical system?
I want to make sure that you and your readers understand what’s involved in interoperability. If you were to take five different systems that are different sizes and different complexities, they don’t need to do everything the same. They simply need to do a limited number of functions the same.
Just to give a rudimentary illustration, let’s assume that there were three systems: one that would do 100,000 different things, one that one would 50,000 different things, and one that would do 10,000 different things. We need those three systems only to do about 800 things the same in order for them to [be considered] interoperable.
We have identified those 800 things and were are aggressively working to develop standards that can be adopted by anyone who is developing a new technology, whether it is a device that could monitor health results outside the hospital or whether it’s a clinical system or a system at a pharmacy, and all of these need to converge.
Let me give you a good example. We know that if diabetics have their hemoglobin A1c tested every quarter, that the chances of them having a complication that would cost a lot of money is reduced because we see the complications as they develop and we can get ahead of them. Well, sometimes it’s difficult to get diabetics to test their blood sugar every day, let alone their hemoglobin A1c on a regular basis. I saw a cell phone that had the equipment necessary to check one’s blood sugar, and various other components, built into the cell phone. You could prick your finger, draw the blood with the end of your cell phone, it would then analyze the blood and use the telephone technology to send it back to an electronic health record. That would be a valuable way of managing the chronic illness of diabetes, but if the cell phone collected the information in a form that could not be transmitted through the telephone to the electronic health record, we would have missed out on that opportunity. So the standards not only apply to electronic medical records, they need to apply to devices that may be in the marketplace.
The private sector will be developing the technology. We simply need to provide the basic standards that they can build into the technology so that it can communicate with other technology that may be developed independent of them.
Q: What are the key legislative changes that Congress should consider in the near term?
Congress could do four things in the near term that would have a substantial impact on this vision maturing.
The first would be standing behind the standards process and developing all of our incentives to support that. Interoperability requires standards. A network, a system, requires standards. If you look at other industries that have been through this — you look at cell phones, you look at ATMs, you look at things as big as airports — they all require standards so that information can be used interchangeably as it develops. It’s vital that Congress support the standards-development process that we have in place that’s now working and that any legislation they do points toward that, as opposed to competing with it.
The second thing I would point to is e-prescribing. That’s a logical next step. We have the technology in place, the standards are in place, we know it saves time and money — and it’s time. The legislation that’s being proposed would provide the secretary with tools necessary to leverage our power as a payer in encouraging the rapid adoption of e-prescribing.
I think a third area would be in helping us leverage our power as a payer to encourage the adoption of electronic medical records. …
When they put [ATMs] into banks, people didn’t use them. They were accustomed to walking up to the counter and dealing with a teller who had become their friend. They first put people in the lobbies to try to bring people over to the machine and teach them how to use it. They would give them toaster ovens and lots of things to incentivize them to use the ATM because it was a more efficient way. At some point, the banks concluded, “We can’t afford to do business with you in the same way if you insist on using the teller at the counter for every transaction. Therefore, we’re going to charge you more if you go to the counter.” Once they did that, people started to move to the ATMs. The same thing was true when we went from dial telephones to touch-tones. There was a transition that had to take place in the way people used the telephone.
We’ll have to go through the same thing with electronic medical records. At first, we’ll have to give people incentives and reasons to use it. But there will be a point where we will have to say we can no longer afford to deal with you in the same way if you’re not going to use the most efficient way of doing business. So, we’ll continue to pay you, but we can’t pay you at the highest level unless you have electronic medical records. There may be, at first, some kind of incentive that helps them transition, but at some point, they have to recognize that they can’t be paid the same if they’re less using a less efficient way of doing business.
The fourth one is, one of the real virtues of electronic medical records is the ability to define quality and cost in a way that’s usable for consumers. The most important tool in doing that is information from claims data. Right now, we have two federal courts that are conflicting on the use of Medicare claims data. A Florida court says we can’t give to anybody to measure quality and a D.C. court says we have to give everything to everybody. Neither of those is the right answer. The right answer is to use the data in way that will help define quality in a controlled and effective way. We need legislation to resolve that dispute. I might add that all of those are part of the SGR legislation.…This isn’t about having people have computers that keep electronic data. It’s enabling the data to be in a form that’s usable to people and that can be mobilized and assembled in a lot of different ways.
One of those ways is giving consumers information about the cost and quality of their care so that they have choices and they can compare. We know when people have choices, they make decisions that drive the quality up and the costs down.
Health information technology is an enabler of better quality, lower costs, fewer mistakes and more convenience.
That’s why we push for electronic medical records. It isn’t just because it’s a tidier way to do business. It’s because it produces value. The actual implementation of the records is a necessary step toward that larger goal. The goal is the value that the records produce, not just the existence of the records.
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