Establishing a Foundation for Medicaid’s Role in the Adoption of HIT Jay Himmelstein MD, MPH Michael Tutty MHA, Shaun Alfreds MBA, CPHIT UMass Center for Health Policy and Research November 8, 2005

Page 1 Medicaid, HIT, and the “Safety Net” In 2004, the UMASS Center for Health Policy and Research (CHPR) was asked by the Massachusetts’ Executive Office of Health and Human Services (EOHHS) to help develop a plan for enhancing the capability of essential community providers (ECPs) to improve access, reduce care variation, and improve the quality of care delivered to Medicaid (MassHealth) members –Community Health Centers are key ECPs in Massachusetts CHCs serve as primary care providers for over 150,000 Medicaid managed care members (28% of total) Recommendations were based upon a series of discussion forums and interviews with key stakeholders in the Massachusetts health care community A major recommendation was to support the adoption of health care information technology, namely electronic health records How does a State and it’s Medicaid program support the adoption of HIT/EHRs in the provider community, particularly for those providers serving Medicaid, underinsured, and uninsured populations?

Page 2 Benefits and Challenges of HIT adoption for Medicaid Agencies Benefits of HIT AdoptionChallenges to HIT Adoption Improved tracking and care coordination for Medicaid members and uninsured among healthcare providers Support for the integration of physical, behavioral health, and other specialty services Prevent duplication of care and tests Improved quality of care through the use of tools such as evidence-based practice guidelines and e-prescribing Improved efficiency/lower cost of care provided? $$$$$$$$$$$$$$$ Where does the $ come from? What mechanism? Medicaid, state laws, HIPAA, or other regulations that act as barriers to information sharing, interoperability, security, authentication and penalties for non-compliance Complex data standards Interoperability with Medicaid IT systems Intricacies of Medicaid health reform Special needs of ECPs

Page 3 Estimated Use of Health Information Technology in Massachusetts Provider TypeState Providers Estimated Use of EHR Total Hospitals11519% Group Practice/Solo Physicians~7, % Community Health Centers5144% Total Patient Care Office Based (16,256 physicians) ~7, % Medicaid involvement must take into account the needs of the provider community. How many providers are there? What level of HIT adoption are they at?

Page 4 Estimated Costs and Benefits of EHR Implementation in MA Estimated CostsTotal 1st YearCumulative 5 Year Estimated Ambulatory EHR Costs($802.1 M)($1,241.2 M) Estimated Interoperability Interface Costs($220.1 M) Total EHR and Interoperability Interface Costs($1,022.2 M)($1,461.3 M) Estimated Savings (Benefits)Total 1st YearCumulative 5 Year Hospitals$21.2 M$505.2 M CHCs/Groups/Independent Physicians$7.3 M$174.6 M Payers/Purchasers$76.5 M$1,820.6 M EHR and Interoperability Savings$105.0 M$2,500.5 M Estimated Net Benefit of EHR and Interoperability($917.2 M)$ M Costs and benefits are not equally distributed. Medicaid involvement needs to be viewed through realistic time frames based on current HIT adoption and likely rates of adoption.

Page 5 Estimated Percentage Diffusion of Ambulatory EHR to all MA Providers Most cost and benefit analyses assume a 1- time investment to connect 100% of providers, this does not accurately represent the diffusion of new technologies. CHPR, based on the work by RAND, applied diffusion curves to the MA specific cost/benefit assumptions

Page 6 Including a 30% failure rate reduces adoption rates significantly, increasing the time required to reach 80% adoption from 10 years to 18 years. Any investments made by public entities need to ensure the appropriate level of support in the planning, research, purchasing, implementation, and sustainability of all HIT systems. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Year Percentage Diffusion (Adoption) Expected3-yr $50M Infusion30% Failure Rate Estimated Ambulatory EHR Diffusion in MA Diffusion and Failure According to some researchers there has been a 30-40% failure rate of EHR implementations These failures are a result of: –Lack of implementation planning –Inadequate research and expectations of technology –Incomplete training of staff –Mismanagement of workflow and staffing changes –Reluctance of providers to take on additional burden

Page 7 State Data Sharing Example MedsInfo-ED The InitiativeState Involvement Source: Mass Health Data Consortium and various interviews with MassHealth staff Description A patient safety initiative to automate the transmission and communication of medication history to emergency departments. The project is a "proof of concept" designed to demonstrate the value of making patient medication history accessible to clinicians at the time of treatment The State has been an important participating data source for medication history to the project Public employees Group Insurance Commission (GIC) and MassHealth interface and connection completed pilot project in Fall 2004 Technologically not difficult Navigating the laws and regulations, including specific rules on Medicaid, is challenging Participation from various staff Program staff IT Legal

Page 8 State Data Sharing Example MedsInfo-ED Note: Neighborhood Health Plan is one of the Medicaid HMOs. Source: Mass Health Data Consortium/MA-Share State Involvement

Page 9 State Data Sharing Example MedsInfo-ED The OpportunitiesThe Challenges More streamlined & efficient process to obtain medication history More complete & accurate medication history More complete & accurate medication orders for patients admitted Decreased “errors” in diagnosis and treatment Improved outcomes and lowered costs of care Better outcomes and efficiency should be good for patients and State payers Technology was not a major challenge Gaining consensus/understanding of the various state and federal privacy and security standards and requirements Pilot project had to screen-out “sensitive” classes of medications for treatment of HIV/AIDs, mental health, substance abuse for MA law compliance Fair Information Practices Act governs data held by MassHealth and GIC Medicaid has additional regulations that must be considered Limited use of tool Not all payers involved (e.g. Medicare) Need for medication knowledge varies Filtered-out restricted drugs Inactive/terminated members not available

Page 10 Where do State Medicaid Programs Fit? Incentives for Adoption (P4P, grants, tech assistance, regulations, other?) Medicaid Other Payers Medicaid MCOs Patients Physicians Clinical Data Repository Health Ctr. HIE Portal Resultse-PrescribingEHRBilling & Scheduling HospitalPharmacyGroupsRef. Labs

Page 11 What We’ve Learned So Far Significant opportunities exist for Medicaid to enhance HIT infrastructure to support evidence based practice, care coordination, quality improvement, and cost/operational efficiencies –Medicaid, as the largest payer for safety net providers, has an important role and stake in supporting HIT adoption by CHCs and the ‘safety net’. To take advantage of these opportunities State Medicaid agencies need to understand the complexities and opportunities related to HIT adoption, utilization, and interoperability, including: –Targeted financial and non-financial incentives for HIT adoption Potentially unique opportunities for financing IT implementation for CHCs –Consideration of unique legal constraints of Medicaid when appropriate –Participating in standard setting: Address the unique needs of their members, providers and communities Alignment of standards from Feds (CMS, HRSA), states, and commercial payers –Leveraging clinical data from HIT to achieve operational efficiencies within Medicaid: e.g. prior approval processes for drugs and devices, quality monitoring and improvement Participation in HI collaboratives which include both public and private systems

Page 12 Current Project: Establishing a Foundation for Medicaid’s Role in the Adoption of HIT CHPR is working in collaboration with AHRQ and NRC to define the challenges and opportunities that Medicaid programs face in relation to the adoption of clinical HIT –Define the range of roles that state agencies might play in leveraging HIT developments to improve the quality and efficiency of care received by Medicaid members –Identify current Medicaid best practices and policies relating to HIT The deliverables will identify knowledge gaps, lessons learned, and key prioritization areas for federal and state policy makers as Medicaid agencies participate in the development of state and regional health information networks –Develop series of relevant policy papers in collaboration with key thought leaders. –Arrange for and facilitate an expert meeting of HIT experts and policy makers at the state and federal level This information will provide the foundation for assisting Medicaid agencies in planning and supporting HIT dissemination and its use in order to increase the quality of health care

Page 13 For Further Information Jay Himmelstein MD, MPH Director UMass Center for Health Policy and Research Michael Tutty MHA Senior Project Director Shaun Alfreds MBA, CPHIT Project Director University of Massachusetts Medical School 222 Maple Avenue Shrewsbury, MA Phone: Fax: Web: