EHR Data as the Missing Piece of Healthcare Reform

The cost escalation of health care in the U.S., which is outstripping the growth of the national economy and therefore taking up a larger segment of the total gross domestic product, is a concern everywhere. Policy makers have addressed the questions involved in this issue in the public arena, meanwhile private insurers are looking at this issue in their own ways.

From the perspective of private health insurers, managing the “total cost of care,” and doing it effectively, is what (in large part) drives health insurance premiums. And insurers compete with each other over premiums (as well as consumer satisfaction). Managing the population of their insured members with health care delivery approaches that try to control the total cost of health care is the central focus in this space.

The total cost of care has 4 main “buckets” of where health care costs are generated: (1) hospitals, (2) medical professionals, (3) diagnostics (labs and imaging), and (4) therapeutics (pharmaceuticals). Each of these areas of health care is complex internally, and also has relationships (often adversarial) with the others. The challenge has been to try to get the incentives all aligned with each of the 4 segments, so that reduction in the total cost of care (or at least, bending the curve of growth) can be achieved. We haven’t gotten there yet.

A variety of approaches have been tried – the old “utilization management” approach of making medical professionals jump through authorization hoops to get proposed interventions covered; the capitation (pre-payment of global care in a per-member-per-month way) approach; the delegation of care to accountable medical groups or hospital/clinician arrangements. Newer approaches include Patient Centered Medical Homes (PCMH), where care coordination and performance are incentivized; “narrow networks” of cost-efficient hospitals and medical professionals; delegated IPAs and medical groups who manage commercial HMO populations; and the emergent Accountable Care Organizations (ACOs) defined by the 2010 health reform act which are intended to manage fee-for-service Medicare beneficiaries.

All of these efforts represent different ways of managing populations, delivering “the right care at the right time in the right setting,” and creating business models that reward quality of care and outcomes, rather than simply rewarding volume (the fee-for-service problem). A great deal of effort in public policy and in private-insurance circles is being spent on how to do this. The goal is to find ways, through alignment of incentives, of reducing the total cost of care.

What role does health IT play in this transition?
In order that progress can happen in this sphere, a necessary prerequisite is a robust electronic platform for health care. Electronic Health Records (EHRs) are a part of it. Knitting health data together between healthcare settings (interoperability) is another part of it. Patient-centered permission-granting via newly-envisioned PHRs is another.

Traditionally, the kind of health data used to make policy decisions (public and private) has been claims data (billings). Institutions that have large integrated systems which collect both billing and clinical data (EHR) are starting to use their EHR-based data to identify trends more accurately than what can be gleaned from claims-data alone. Mostly, this has been hospital EHR data, since that is where such systems have been used. But ambulatory EHR data (either from satellite clinics around a hospital using a hospital’s system, or from independent clinician data using outpatient EHRs) is starting to be seen as a helpful place to understand the behavior of the healthcare system beyond the scope of the hospital.

Given how complex the healthcare delivery ecosystem is, and given that billing data has been the main source of information used in the past to understand it all, EHR data really is something quite new. It can shed new light on previously-opaque dynamics of health care. EHR data is much more detailed and much more accurate than claims data – there are pieces of information available that simply don’t exist in claims (such as blood pressure and other vital sign measurements, clinical quality measures, etc.). And now, with community docs moving in increasing numbers to electronic platforms, the full spectrum of health care can be seen – not just hospital data, but office-based data too.

A data-driven culture in health care
How to construct a healthcare delivery system where all the components (the cost centers) are aligned in the same direction, and reduction in the total cost of care can start to be achieved, has been a holy grail for some time. Absent a good understanding of what kind of care is being delivered, and measuring outcomes via validated Clinical Quality Measures, health care reform proposals that might actually work is quite hit-and-miss.

But with the emergence of the age where vast (anonymized) clinical data can be gathered and analyzed, we stand the hope of moving in a positive way. We can create high-quality care, can deliver it in the most cost-efficient way, and can measure our outcomes in order to make modifications as we go. A robust set of tools – and especially, ambulatory EHRs used by most clinicians in office-based independent practices – is necessary for this kind of vision to move forward. This has been the piece missing from the picture in the past, and we now are starting to have it at hand.