Kerry Weems

The health IT journey has been long and arduous, but the future can be a superb success-or a spectacular failure.

At a Glance

  • As healthcare financial executives plan their health IT investments, they should evaluate not only the technology, but also the governance model.
  • Hospitals need health-centric collaboration of stakeholders and a sustainable business model to ensure the success of their IT investment.
  • The whole enterprise of health IT should be about improving the health delivery system and reducing its cost.

Recently, a local restaurant critic taken with a newly opened eatery dedicated to ersatz sybarites and cosmopolitan wannabes gushed that "everything is perfect, except for the food." For those of us more concerned with what's in the freezer and less concerned with the composition of the frieze, this was a telling comment. However, it does put me in mind of the risks that we run with the current health IT rush. It would be a shame and waste if some years hence the recent efforts on health IT were to be judged "perfect, except for the health."

In 2003, a national goal was set for most Americans to have an electronic health record (EHR) by 2014. Work began slowly, but in the past five years, substantial progress has been made in standards harmonization and product certification. To be sure, work was measured, frustrating, and, in many cases, not immediately observable. The sweat equity investment was substantial, but the dollar investment was miniscule until 2009.

Over a year ago, President Obama and the Congress made a substantial investment in health IT-more than $30 billion-in the HITECH Act, a part of the stimulus bill. This investment has produced an explosion of health IT products and "solutions," ranging from the well-known EHR vendors to garage-based start-ups with niche add-ons or features. The various offerings are still bounded by the harmonized standards and product certification and, importantly, by the "meaningful use" criteria, which incorporate patient-centric measures of care into the reimbursement formula for EHRs.

Shiny Objects

At a recent trade show, the exhibition floor was a vertigo-inducing tsunami of inpatient EHRs, outpatient EHRs, "thin" EHRs, add-on devices, consulting services, health information exchanges (HIEs), and personal health records. For those of us who have long labored in the health IT vineyard, it was a welcome and gratifying sight. It signaled that we have reached that moment when providers, patients, and payers can each have the expectation of an encounter based on 21st century technology, not 19th century tradition. We should celebrate that. For legitimate reasons, there will still be those who will criticize the proliferation of health IT products and the various "shiny object" add-ons and "nice to haves." However, I have no doubt that the individual business cases faced by the various providers will soon sort out the necessary and significant from the unnecessary and silly.

It is well known that the real power of health IT is in mobilizing data in a secure and private manner. If all we've done is recreate paper filing cabinets with a sterile ecology of electronic filing cabinets unable to share information with one another, we will have failed. The HITECH Act foresaw this possibility and made provision for it through a series of loans and grants to provide connections-exchange of health information-within communities, to other communities, and ultimately to the National Health Information Network (NHIN). HIEs are the emerging solution to the data mobilization problem.

Particularly striking at the trade show was the proliferation of HIE vendors. Only exaggerating slightly, it seemed every other booth had an HIE "solution." Equally striking, and more worrisome, is that only a handful of HIEs are viably functioning today, meaning many, if not most, of the HIE vendors were marketing products untested in the "real world."

Sociology 101

I was one year old when Sputnik was launched, and as a child of that generation, I was socialized to a strong belief in the problem-solving capability of modernity and its handmaiden, technology. However, after 28 years in the federal government, I came to understand the equal and sometimes contrary weight of sociology. HIEs are both a technology and an institution. The wide variety of "solutions" suggests that the HIE technology is well characterized and rapidly maturing. Not so for the institution that must make the technology work.

The rapid pace of health IT has given rise to a host of new institutions. This young century began with no Office of the National Coordinator for Health Information Technology in the Department of Health and Human Services (HHS), no chief technology officer at the Office of Management and Budget (OMB), and few, if any, offices of health IT in the states. Indeed, as the millennium dawned, it had been only four short years since the Food and Drug Administration closed its Tea Tasting Board. New institutions, even with considerable political and financial support, are difficult to stand up and to sustain. Indeed, though it had strong support from the president and the HHS secretary, the Office of the National Coordinator had several budgetary near-death experiences at OMB and the Congress-simply because it was new and competing with other existing institutions for resources and attention.

Especially fragile are the "state-designated entities" (SDEs) and the nascent HIEs themselves. The history of HIEs, to date, is mixed. Some have worked through some very difficult problems and are still functioning today. Others failed: some with a bang and some with a whimper. Nonetheless, whether success, bang, or whimper, there was a lesson to be learned in each. Anyone looking to stand up an HIE today should be a student of those that have gone before.

The HITECH Act also created a cooperative agreement (grant) program to assist states in developing mechanisms to share health information within states. The SDEs are those charged to hold the cooperative agreement and to stand up the HIE.

As one might expect, some SDEs have started strong, moving from start-up to a reasonable level of functioning in just a few months. Others have struggled. The struggles have been over governance, funding, internecine matters, and in some cases, just plain state politics. It is the SDEs that will form the sociology around the technology.

Across the United States, the SDEs are moving quickly to begin to procure the technology because they have only a short time to spend the grant funding. Technology vendors abound. At one state's conference for vendors, more than 120 vendors attended. That number suggests many things, including:

  • There's a lot of interest.
  • With only 50 states, there are going to be many more disappointed vendors than happy ones.
  • The "demo version" of the technical solution just isn't that hard to build.

Now and through the summer, other states are similarly entertaining the same hoard of software salespeople. Frankly, this isn't an ideal situation: new institutions with a short time to spend millions of dollars on solutions with few market-tested discriminators.

Investing in Success

Just in the technology alone, the future holds some spectacular failures. Only actual implementations will test performance, reliability, and scalability. Predictably, some solutions will cave in, trapping millions of dollars of taxpayer money in the rubble. In other cases, the technology will perform superbly, but the project will fail due to poor governance, an unsustainable business model, low participation from key stakeholders, or any of the many other manifestations of botched human interactions.

Of importance for you, the readers of this publication, the HIE will not come to you with money; it will come to you for your money. You have little incentive to invest in failure. So how will you know you are investing in success, and is there a successful pathway for the $30 billion investment of taxpayer money? I think so.

It will be important to ensure that the HIE has a sustainable business model (subscription, transactions, per capita charges). Sustainment will become an acute problem as the grants expire, and the HIE will have to rely on funding from those using it. There's little doubt that your financial due diligence will be able to sort out the weak from the strong business models, but remember the true reason to have an HIE as you perform the diligence. Successful HIEs will be characterized by business models that are lashed up to achievable, measurable health objectives. The performance measures won't be limited to purely pecuniary goals, but will also incorporate improvements in clinical and health outcomes. Without those improvements in health, the HIE might as well be an e-mail packet router.

Perhaps more important, prospective HIE members need to assure themselves that the governance model will succeed. As of today, there's not enough money or sufficient regulatory compulsion to force meaningful HIE participation, and "build it and they will come" will not be enough. In the end, "HIE-The Institution" will survive only if it is a successful collaboration of stakeholders.

Collaboration: The Hardest Part

There have been a number of studies of successful collaborations. Mike Leavitt, former HHS secretary and Utah governor, has made a lifelong study of large-scale collaborations. He holds that the successful ones have common attributes. The guidelines below come from his work, and I believe they are an excellent framework for evaluating the strength of an HIE.

A convener of stature. The SDEs themselves are the convener by fiat. The real test is one of stature. SDEs that have standing in the community and command the attention of stakeholders will be more successful than those that are perceived as just another bureaucratic appendage of the state's health system.

A clearly defined purpose. HIEs run the risk of being poorly defined. Some HIEs seem to lack a strong sense of mission and don't know what problem they are trying to solve. A strong HIE will have a clearly defined and unmistakably stated purpose and won't diverge from it.

A formal charter. Although all might agree on the purpose, a true charter-specifying purpose and direction, and requiring the signatory prestige of the participants-is a demonstration of commitment to purpose and effort. Beware of the "we're all friends here" approach.

Common pain or incentives. This is not to be mistaken for the same degree of pain or incentives. It is the common pain or common incentives that brings everyone to the table. Without this element, there's nothing to animate serious collaboration.

Transparent rules and a common information base. As in many collaborations, HIEs must solve the problem of asymmetric ROIs. Inevitably, some will pay more and get less than others at the table. Clear rules and shared information create the trusted relationships that provide the foundations of multiparty agreement. "Siloed" information will only create winners and losers, which is untenable in a collaborative.

The only game in town. The HIE, while it might have its critics and its competitors, must be seen as the "horse to ride."

Health first. Finally, and most important to HIEs, "health" has to continue to be its first name. The whole enterprise of health IT must be about improving the health delivery system and reducing its cost. The HIE must exist for that purpose. An HIE that serves a master other than health will surely fail and deserves to.

The Road to Success

Although this may have seemed a dour assessment of where we are with respect to health IT, I believe that there is a road map to success. Choosing the right technology may prove to be simpler than building a sustainable business model. The models exist, but depend on taking an honest and unflinching look at the sustainment problem. Finally, the hardest part may be getting the sociology right, which will require investing in a true health-centric collaboration to govern the technology and the business case.

As you are asked to participate and invest in an HIE, consider carefully the road map for success, and do not be distracted by the technology. Instead, carefully examine the governance model, and make sure they have everything right, especially the health.


Kerry Weems is senior vice president and general manager at Vangent, Inc., Arlington, Va. In January 2009, he ended a 28-year career with the federal government, holding the title of administrator of the Centers for Medicare & Medicaid Services and vice chairman of the American Health Information Community. In those capacities, Weems implemented the Medicare e-prescribing program, began pilot projects for electronic health records and personal health records, and instituted a number of landmark payment reforms, including nonpayment for certain medical errors.

Prior to that, Weems served in a number of senior positions at the Department of Health and Human Services (HHS), including deputy chief of staff, CFO, and chief budget officer, overseeing a budget exceeding $700 billion. While at HHS, he led the implementation of the largest and most successful automated financial management system in government, the Unified Financial Management System.

Weems has served both Republican and Democratic administrations and received the highest award for civilian employees, the Presidential Rank award, from Presidents Clinton and Bush.

Publication Date: Tuesday, June 01, 2010

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