The eHealth Connection

America’s health care industry may have many marvels, but information technology is not one of them. By the standards of most other industries, it is just starting to emerge from the digital Dark Ages. Patient data is fragmented among providers and is difficult to transmit or share. Bills and payments move at a glacial pace. Paperwork still consumes untold hours that would be better spent improving service to patients.

As Lake Forest, Calif.-based Apria Healthcare’s new chief information officer Jeri Lose puts it, the industry is “way, way behind.”

The problem has not escaped notice from the federal government, which apparently has decided to do something about it. Washington has figured out that it has a big stake in efficiency, since it directly pays about 32 percent of the nation’s nearly $2 trillion in health care spending.

President Bush has set a goal of having electronic health records for most Americans in 10 years, and his budget for the 2006 fiscal year proposes spending $125 million on health care IT toward that end. Health and Human Services Secretary Michael Leavitt recently called for a public-private effort to create standards for health records and achieve interoperability so that the records could be read by all concerned.

And late last month, word came that CMS may soon announce details of a program that will offer physicians low-cost EHR software, which would be a major step forward in securing their buy-in to a nationwide network.

Earlier this summer, there were at least nine bills in Congress aimed at promoting information technology to make health care more effective and efficient. Most were bipartisan, such as Senate Bill 1262, a measure sponsored by two politicians who conceivably could be facing off in the 2008 presidential election — Senate Majority Leader Bill Frist, R-Tenn., and Sen. Hillary Clinton, D-N.Y.

Another, S.1355, was introduced by a competing team of Sens. Michael Enzi, R-Wyo., and Edward Kennedy, D-Mass. The two bills had different price tags and funding rules, but their goals were similar: to further the adoption of health IT by the nation’s health care providers.

In July, the competing bills were combined into a single piece of legislation called the Wired for Health Care Quality Act, which was quickly approved by the Senate Health, Education, Labor and Pensions Committee. (See sidebar on page 22.)

What impact will all this activity in the nation’s capital have on the typical home medical equipment provider? Initially, say the experts, not much. In time, HME will be part of the emerging eHealth system, a paperless network in which information flows freely and securely to every stakeholder. But Washington has other sectors in its sights right now.

“There are much bigger segments of the health care system — such as institutional care and pharmaceuticals — that are getting the focus, and for good reason,” says Russ Lenahan, Elyria, Ohio-based Invacare Corp.’s vice president for information technology. “I believe it will be a while before there is a direct hit on HME.”

But this doesn’t mean the digital revolution will bypass the industry, or that any HME business can afford to ignore it.

Even if the government were not lifting a finger to promote IT adoption, the economics of home care companies would be reason enough to automate business processes and, when possible, to go paperless. For providers who want to stay profitable and competitive, the eHealth era is already here.

Time, Motion and Money

The main driver behind IT adoption in HME (as in most industries) is the need to cut costs without compromising quality and customer service. The savings are not always easy to measure in dollar terms, but they can make a crucial difference in a low-margin, highly competitive environment. IT automation tends to work in many small steps to produce substantial cost reductions that may not be so obvious at first.

Document imaging, for instance, saves money by literally saving steps. Instead of getting up to fetch paper records from a file cabinet, an employee can call them up on a computer screen without leaving his or her desk.

“Chasing paperwork is very time-consuming,” says Bob Lichtenstein, president of Hollywood Medical in Hollywood, Fla. Not only that, but it’s distracting as well. “Anytime you have to fish for a folder,” he says, “just getting up from a chair disrupts normal work flow.”

Esther Apter, CEO of software maker MedForce Technologies, Chestnut Ridge, N.Y., says companies should budget “at least four to six minutes” for every retrieval of a physical document, and “that doesn’t include the time when you’re going over to the filing cabinet and someone starts yakking, or you decide to take your coffee break.” With electronic imaging, Apter says, the process takes 30 seconds and you use the copier less.

Lichtenstein uses MedForce imaging software and estimates that it saves his business the equivalent of half a clerical employee’s salary — from $15,000 to $20,000 a year. Along with saving time and motion, the software allows him to get access to files from “literally anywhere in the world” and to store records securely. “If the business were to burn to tomorrow, paper files would be up the creek,” he says.

Irene Magee, vice president and director of Northeast Home Medical Equipment, Albany, N.Y., is another MedForce customer. She, too, measures her savings in staff time. Before going electronic, she says, “I had a full-time filing person and would hire a temp every month to clean up the mess. Now only about 40 percent of that full-time person’s job is taken up with filing.”

Automation steps, including document imaging, also have significantly shortened the collection cycle. Days sales outstanding (DSOs) at Northeast were close to 100 four years ago before the firm started going electronic. They are now down to about 50.

Smoothing the Growth Track

Automation also proves its worth by enabling a firm to serve more customers. As Apter notes, HME is “for the most part a variable-cost business.” That is, most of its expenses are not fixed overhead but, instead, are directly tied to sales through activities such as taking orders, sending bills, delivering equipment and instructing patients.

When these costs are high — if, say, a company has to keep hiring new staff to keep up with the paperwork from new customers — new business is barely profitable. But if they can be reduced through IT, more of that sales growth goes to the bottom line.

Rebecca Olivares, vice president of operations and finance at Aircare Home Medical, Van Nuys, Calif., says automation at her company has enabled it to grow 25 to 30 percent without adding staff. “In the old days, we would have had to add several positions,” she says.

Automation also is advancing at the patient-facing side of HME. At Lichtenstein’s Hollywood Medical, which provides respiratory, rehab and other specialized services mainly for pediatric patients, respiratory therapists now use laptop computers in the field to input clinical notes, which then go to the firm’s server.

At Apria, CIO Lose says the typical employee now has a handheld computer at his or her disposal, in addition to the usual telephone access to customer service people. Lose would like to see much more automation in the field, not just to improve service to today’s patient population but to cope with the much larger population of tomorrow. “You can’t just keep adding employees,” she says.

It’s a near certainty that the HME industry will have more customers in coming years as the population ages and the cost of institutional care in hospitals or nursing homes pushes more people into less expensive home settings. What may be equally certain is that the per-patient rate of payment will not rise, and that it will probably fall under pressure from state and federal budget cuts and competitive bidding. Even to maintain today’s level of service, providers will have to do much more with roughly the same number of employees.

Lose ticks off a list of things she would like to see: on-the-spot payment in the field, single electronic orders covering multiple services such as equipment and prescription drugs, pre-qualifying through quick eligibility checks and much more Web-based information for patients, either through computers or TV sets. Such capabilities are still mostly in the future, but Lose says the higher volume of patients and more sophisticated use of technology is bringing them closer.

“The opportunity for home health care is just tremendous,” she says. At some point, she hopes to see the industry and its payers so thoroughly automated that HME providers could take and fill an order for a patient (pre-qualified, of course) and get paid the same day.

Are We There Yet?

That scenario may look farfetched in health care, but it’s the reality in banking, an industry Lose knows well. Before joining Apria, she had spent most of her career in financial services and consumer products, and notes that the global financial system is automated to the point that “we can take our little piece of plastic and buy anything anywhere in the world.”

HME and health care in general are nowhere close to developing such a system, and the reasons are many. One, cited by Lose, is the lack of any rule requiring speedy transactions. The Federal Reserve requires U.S. banks to settle accounts at the end of each day. Big national health care payers, including Medicare, are starting to automate payment processes but feel little pressure to pay providers on demand.

Health care also remains a “cottage industry,” Lose says, with no players large enough to set standards that others will have no choice but to follow.

Before billing for durable medical equipment can truly be automated among all payers, for instance, everyone has to agree on a common classification for the thousands of products on the market. The HME industry has tried to address this problem through the Home Medical Equipment Standards Association (HMESA), but it has been a slow effort. Invacare’s Lenahan says manufacturers and IT firms have been “quick to adopt,” but “participation among HME providers has been limited.”

It’s not that providers are ignoring the need for standardization, he says. “Rather, it is a very difficult task to standardize across many very complex configured products, and it requires input from all parties.”

In other areas with automation potential, such as the filing of certificates of medical necessity, HME providers are forced to wait for other participants in the health care system to get on board. Such is the case with electronic CMNs.

Trac Medical Solutions, Schenectady, N.Y., offers eCMNs through a hosted, password-protected Internet site. Jeff Frankel, the firm’s president and CEO, says eCMNs generally cost between $3 and $4 compared to a range of $18 to $22 for paper. But the saving is diminished if the relevant patient information is first taken down on paper and has to be converted to electronic form.

And, unfortunately for health care in general, doctors tend not to be early adopters of electronic technology. With some exceptions — in large, diversified clinical practices, for instance — physicians still rely heavily on paper to take down and store all-important patient information.

As Frankel puts it, “Physician adoption is the biggest hurdle, because we’re changing the way a physician runs his office.”

Bill O’Loughlin, COO of SecureCare Technologies, agrees. “Most home care, hospice and DME agencies would be more than happy to get into a paperless world, but the physicians control what goes on in health care,” says O’Loughlin, whose Austin, Texas-based firm provides secure document-sharing over the Internet.

“At the end of the day, health care will move into new technology when physicians adopt new technology,” he says.

The government will try to begin that process with its new EHR software, called the VistA-Office system. Intended to provide support for disease management, the software would also include interface specs for practice management in patient registration and billing systems, which should improve office workflow and access to clinical records. If the system catches on — according to reports it will be offered at minimal cost — it could go a long way toward convincing the docs to move away from paper-based health records.

What Should You Be Doing Right Now?

But another obstacle to eHealth, some say, is the same federal government that is now beating the drum for full automation. Olivares of Aircare says the progress toward paperless HME is held back, in part, by providers’ fears that they will not have the right paper documents on hand if an audit comes up. “They need to clear up the rules,” Olivares says of government agencies.

Privacy issues centering on patient medical data are also a roadblock.

And Lose, for one, sounds skeptical that the new federal push for automation will change things much. She says the funds are too scant and that the feds set the bar too high by asking that pilot projects lead to an improved clinical outcome.

But automation initiatives from big technology companies might be a much different story. Lose suggests that eHealth might really take off when a Microsoft or an IBM decides it can make money by setting up a network linking health care providers and enabling them to share data — among each other and with consumers, who might be eager to buy in.

“Would you be willing to pay $15 to $20 a month for complete access to all your health information? I would,” she says.

So how soon will the necessary eHealth elements — technology, regulations, data-sharing agreements, product standardization, physician business practices and much else — come together to reach critical mass? That’s anyone’s guess, but O’Loughlin says “we’re at a critical catalytic moment.”

He notes that nearly all physicians have e-mail, hospital systems are automating, large clinics are moving toward electronic medical records and support for health care automation is bipartisan, even uniting old foes from past health care wars: “Who would ever have thought you’d have Hillary Clinton and Newt Gingrich talking to each other?” He expects to see dramatic change in the next three to five years.

Before then, there’s plenty that HME providers can do without waiting for Microsoft or Washington to usher in a new electronic age. Whatever happens on the national or global scale, HME companies will still need more automation to maintain their level of service in the face of growing patient demand and tighter reimbursement.

Each provider has a different situation and different set of needs, but Redmond, Wash.-based HME consultant Rebecca Domos suggests an IT priority list:

• First, if you haven’t already done so, investigate, and invest in, a package that “does a lot more than just bill.” Many handle marketing, inventory management and other tasks, she says.
• Second, invest in reimbursement management tools.
• Third, Domos recommends document-imaging software/service. You will still have to retain some documents for auditing, but the paper versions can be warehoused off-site, she says. As for eCMNs, Domos says providers may not be able to rely on them until more physicians get tech-savvy. It’s worth noting, though, that a number of leading HME firms, including Apria, Rotech Healthcare, American HomePatient, Praxair and Air Products Healthcare, have signed up for TracMed’s eCMN service.
• And, say Domos and other HME consultants, don’t forget your current IT. You may be ignoring its full potential, and it costs nothing (except perhaps for some training) to get more out of it.

“What I find amazing,” notes Apter, “is the number of people who are not automatically posting their payments through the billing software that they have.”

In other words, you may already have a foothold in the eHealth world and not even know it.

Wired for Health Care

Last month, two separate Senate bills on health IT were combined into the Wired for Health Care Quality Act (S.1418), which draws from portions of bills originally sponsored by two different bipartisan Senate teams: Senate Majority Leader Bill Frist, R-Tenn., and Sen. Hillary Rodham Clinton, D-N.Y.; and Sen. Mike Enzi, R-Wyo., and Sen. Edward Kennedy, D-Mass.

The four senators’ compromise legislation, which was unanimously approved by the Senate Health, Education, Labor and Pensions Committee, establishes the office of the National Coordinator for Health Information Technology to oversee creation of a national health IT infrastructure and create a process for adopting health care IT standards. Under the legislation, a public/private panel called the American Health Information Collaboration would be charged with making health IT recommendations to Health and Human Services within a year of the measure’s enactment.

The bill authorizes grants of $125 million next year and $155 million in 2007 to providers to increase their use of health IT, and would also establish a quality measurement system that would award higher payments to health care providers who improve the quality of care that patients receive.

To view the Wired for Health Care Quality Act, visit http://thomas.loc.gov, and enter S.1418 in the search bar.

PHRs vs. EHRs

In July, CMS held a special Open Door forum to discuss the development and adoption of personalized electronic health records. According to a panel of health industry professionals at the session, there could be significant benefits in allowing patients to control their own health information. At the same time, the panelists registered concerns about the importance of maintaining privacy with such records — and the current lack of effective procedures to do so.

A personal health record (PHR), which is a collection of a patient’s individual electronic health information, is different from an electronic health record (EHR) because the information is owned by the individual instead of by a provider. Past basic medical history, the file might contain information similar to that in a personal medical journal.

According to Simon P. Cohn, Workgroup on National Health Information Infrastructure chairman at the National Committee on Vital Health and Statistics, the public advisory body to the Secretary of Health and Human Services, PHRs could improve a patient’s management of chronic disease, provide timely access to health information and help a patient better communicate with a physician.

One big issue with PHRs, however, is the potential risk to privacy. Cohn also said there could be problems with regulatory control over such records because the Health Insurance Portability and Accountability Act was not designed to cover PHRs.

For more information, visit http://www.cms.hhs.gov/opendoor/.

Keeping Score

These days it takes a scorecard to keep up with new proposals for health care IT legislation, so the Healthcare Information and Management Systems Society (HIMSS) has developed a tracking tool called the HIMSS National Legislation Crosswalk that offers regular updates on the measures Congress is considering.

Current bills summarized on the Crosswalk include:

• National Health Information Incentive Act of 2005
• 21st Century Health Information Act of 2005
• Affordable Health Care Act
• Medicare Value Purchasing Act of 2005
• Patient Safety and Quality Improvement Act of 2005
• Information Technology for Health Care Quality Act
• The Health Information Technology Act of 2005
• Wired for Quality Health Care Act

To access the HIMSS National Legislation Crosswalk, visit http://www.himss.org/advocacy/cross_walk.asp.