The coming 12 months will be the most pressurized ever experienced in health care information management, according to industry experts. With deadlines for electronic health record meaningful use incentives, more regulations and the uncertainty of health care reform yet to come, directors and decision-makers are watching IT and project portfolios closer than ever.

When we looked at the state of HIT, business intelligence and performance management in a supplemental report one year ago, we noticed a few themes that came up consistently among providers. First and foremost was a long-term commitment to electronic health records. Another distinct trend saw many large provider organizations and some smaller ones moving to standardize on multiapplication software platforms to provide as much functionality across departments as possible. Finally, there was an industrywide push to integrate information records systems of large institutions with owned or affiliated care facilities, such as ambulatory care groups and other clinical practices.

And one year ago, the health care industry’s use of analytics and the penetration of business intelligence and performance management of the type needed to optimize operations and respond to performance benchmarks were widely lacking or mostly limited to academic or research institutions. Despite the urgency of timelines, much of that snapshot holds a year later. “I’d probably be worried if these issues had shown up and disappeared, because that would mean they were fads and not substantial change,” says John Glaser, the newly minted CEO of the Health Services Business Unit at Siemens. Glaser formerly served as CIO at Partners HealthCare and as an HIT advisor to the Obama administration.

If there is good news, Glaser says, it is that most organizations that have invested in HIT will be able to extend and leverage those investments to support requirements for meaningful use and other mandates.

And that in turn should jump-start the industry’s use of business intelligence and analytics, since the end-game of federal incentives is to create a nationwide care delivery system driven by data-supported best practices that deliver the highest quality care for the lowest possible costs.

Managing the Mix

Near-term IT focus is concentrated on the first stage of deadlines for meaningful use of EHRs. The federal government plans in May 2011 to start sending out incentive checks to providers that document meaningful EHR use. Over the course of the incentive program authorized under the HITECH Act (part of the massive American Reinvestment and Recovery Act of 2009) a typical 200-bed hospital could qualify for up $6 million in incentives, based on the number of annual discharges; physician practices could qualify for more than $40,000 per physician.

With that kind of money on the table, provider organizations are understandably rearranging their IT priorities. The 2010 HIMSS Leadership Survey, released before MU rules were finalized in July, found that 59 percent of health care IT professionals were already making additional investments to position themselves to qualify for meaningful use incentives.

For the mid- to long-term perspective, the ongoing challenge will be managing IT project portfolios and a course of specific timelines. “CIOs are all over meaningful use and the CEOs want their [incentive] dollars, but the C-suite is probably more concerned in the long haul with payment reform, accountable care organizations and cost pressures,” says Glaser, ticking off initiatives authorized by the other game-changing health care legislation, the Affordable Care Act.

“With effects of the capital market implosion still lingering, capital is tight and the bar keeps getting higher. All of this says we’ve got to do EHRs for meaningful use, but perhaps more importantly for payment reform and accountable care organizations.”

The themes this year are to keep a broad focus while measuring the impact of deadlines that might be missed, and a strong distaste for projects that exceed their budget or timeframe.

“We certainly have significant requirements arriving as result of the HITECH Act covering meaningful use and the other ARRA incentives,” says Michael Mytych, principal at Health Information Consulting, LLC. “But there are other major developments in payers and employers wanting to buy health care services on a pay-for performance basis, and the federal government’s health care reform. There is a tremendous amount of activity and planning in different areas going on all at once.”

Marc Holland, principal consultant at System Research Services, says the nature of these projects is “far more extensive and expensive” than what the government will pay to practices or institutions in incentives and support. “But we are looking at the same kinds of challenges as last year with an emphasis on IT adoption – and electronic health records remain the No. 1 priority.”

Analysts including Forrester Research’s Boris Evelson say all industries need to pursue IT strategies that mix bottom-up data projects involving massive amounts of data with a top-down, targeted approach to business intelligence in which metrics play a key part.

The bottom-up strategy has a lot of obvious issues in time, cost and complexity, Evelson says. “And in a top-down approach we talk about starting with your strategies and goals and objectives and then deciding what sort of metrics you’re going to need to support them.” The top-down approach comes with its own challenges as organizations that take time to define metrics may come to realize they don’t have supporting data to populate and calculate them, he adds.

Observers seem to agree that the best practice is probably a mix of approaches.

And generally, the combination of ongoing investment in foundational, transactional EHR information and fact that health care is or has already targeted many performance metrics that link to incentives and funding are already deciding this portfolio.

If technology is a challenge, a greater shock to the health care system will arrive in the form of culture and process change. In contrast to the seemingly smooth admission and treatment processes in medical facilities, information processes remain repetitive, underassigned and relatively uncoordinated.

Mary Griskewicz, senior director of ambulatory health information systems at HIMSS, says there are at least a couple of reasons information processes are going to undergo a shakeup.

“All hospital and physician organizations are great at billing and following up on that,” Griskewicz says. “But from a clinical perspective, there are all these gaps in care coordination because the data has not been available and because it takes money, staff and opportunity to correct them. The other issue that people don’t understand is that they don’t teach EHRs in medical school, or at least they haven’t, and the physicians we have didn’t go to school to learn computers or business.”

Skills Shortfall

Holland says the $225 million in grants given out by the Department of Health and Human Services in April to teach HIT skills to clinical workers without IT skills (and vice versa for IT counterparts) is evidence that the government is working to correct a skills shortfall of between 50,000 and 100,000 multi-skilled workers. But he has mixed feelings about the efficacy of what the programs will produce.

“This is not for somebody out of high school looking for a certificate in HIT, this is retraining or refocusing professional training,” Holland says. “While it has the potential to create jobs and the government has done its share to help, I have the feeling that the kind of skills necessary for this to happen can’t be turned out in six months, and it’s the physicians with the highest level of expertise who need to change behavior for order entry and other processes.”

But Glaser sees certification as the best remaining course of action where skills are already in short supply. “Working with community colleges on certificates gets skills in the workplace because we don’t have time to go for a baccalaureate or a master’s degree and besides, we’re dealing with people who may have been displaced in other industries and they have families and mortgages.”

While federal dollars will help, it’s likely the health care industry will experience the kind of talent poaching that takes place across the economy when particular information skills are in demand. As timelines arrive, wages and bonuses will likely go up for EHR workers, with “golden handcuff ” contracts and on-the-job training becoming more commonplace.

Training doesn’t include the internal governance process that will lead to better quality data that is owned and defined from the clinical as well as IT side of the organization. As the longtime CIO at Partners, Glaser was used to IT ownership of data, and he’s glad to see a shift to the business and care professionals.

“There will be more clinical ownership of data, which is just good business. It’s been brewing for a while as more clinical technicians have gotten comfortable with technology and the organizational experience gets higher.”

Infrastructure Needed

Just one year ago, many hospital CIOs with stretched IT staff s blanched at the thought of health information exchanges connecting owned, partnered or regional health care providers. Yet mandates are now in place to make HIEs a cornerstone of reform going forward.

This calls for existing provider, payer and government health care assets, as well as private infrastructure, to provide the EHRs, records clearinghouses and data interchange for information sharing.

While the American Medical Association, vendors and physician groups have lobbied to ease federal timelines for the adoption of EHRs, the incentive program came about in large part because of the need for collaborative information sharing among care providers.

Mytych, for example, is the lead consultant on a major HIE development project in Chicago, set up as a non-profit, tax-exempt company that will manage and operate the business. In other regions, HIEs are being set up and run by big players like Microsoft, AT&T, CSC and General Electric.

Much of this infrastructure is in the planning and/or vendor selection phases and doesn’t exist yet. Mytych’s Chicago project, for example, which started work in early February, is just entering vendor selection mode and hopes to go live early next year.

Holland sees the philosophy of the current federal administration as encouraging the uptake of the digitization of patient records in each individual provider organization, coupled with the ability to share that information to develop the analytics around delivery of care across a broad community. In these two goals, he says, there is the means to improve the health of populations and feed data suitable for research on care delivery improvements across a broad spectrum of hospitals and practices.

Payers Less Pressured

Payer organizations will undergo massive changes to their IT and business operations thanks to mandates in the Affordable Care Act that call for state insurance exchanges, medical-loss ratios and the expansion of health care insurance, among other initiatives. However, the rollouts for those programs are still a few years away, so payers right now don’t face the deadline pressures of providers to enact major changes.

Griskewicz, who’s now a director at HIMSS, grew up in the payer space working for a Blue Cross Blue Shield and a couple of other commercial payers.

Among its committees, HIMSS supports a payer roundtable split into areas of medical banking where payers are very interested in the rise of electronic transactions.

The interim meaningful use requirements for EHRs contained aggressive deadlines for industry-wide adoption of standards-based electronic claims and eligibility verification transactions.

Those were taken off the table in the final meaningful use criteria, but future stages of meaningful use are likely to be of greater value and interest to payer organizations.

“Payers have an awful lot of data on patients, and granted, it’s claims data, which means it’s based on how they’ve paid it and their interpretation of what they paid for,” Griskewicz says. “But they’re also making business models out of looking at patient data from a disease management perspective.” Payers, she says, are quite interested to see what the government does with Medicare and Medicaid payment data to see where commercial benefits can be derived.

This has left providers feeling the squeeze, federal incentives or no, to wonder whether the rest of the health care private sector is going to help. “We always hear the provider say what’s in it for me, this benefits the government and the payers, why is the squeeze on me?”

Griskewicz says. Eventually, she hopes, EHR information will be compiled at a higher level where adoption of EHRs and meaningful use will be applied to comparative effectiveness that will help improve care and contain costs.

But, she says payers overall are likely to follow proceedings more than they share the immediate burden of reform that has not been overtly controversial to payer organizations.

“That 2,000-page, monster Affordable Care Act didn’t discuss payers much, but the transaction standards for the payers did become more rigorous. Where payers had latitude around certain transaction standards for eligibility and claims, a lot of that is gone and that’s the main part they have to fix for now,” Glaser says. And like providers, payer systems now need to be certified as capable of handling standards that accommodate EHRs and will increasingly reach to clinical data to help manage payer populations for disease management.

The challenges of HIT and associated cultural/process reform can be fairly described as a very incomplete prospect that is nonetheless fairly well understood and slowly getting on track. Roadblocks to business intelligence and performance management can be met with existing tools and services, though many organizations and many more private practices are still shopping for their best solution.

Forecast: More Uncertainty

The near-term is likely to see more uncertainty as deadlines arrive and not enough resources are in place to implement or train users. And depending on whether timelines are adjusted by the government, organizations are beginning to take more of a risk management approach to rollouts.

“If I put it all in a spreadsheet and start doing a discounted cash flow on incentives or even penalties for Medicaid reimbursement, maybe it’s cheaper to take my lumps for a while until I don’t have to spend the premium to accelerate,” says Holland. “I am seeing a lot of people saying that now, and others who choose to cut corners today will rue the day they have to pay for a bad implementation all over again.”

Beyond federal mandates for both privacy and transparency, care organization will also become more savvy with HIT as a means of attracting and managing customers with branding and marketing, efforts that have been rather superficial to date. Jeff Bunting, the president and CTO of performance management product/service vendor Active Strategy, now sees about 60 percent of his business arriving from health care organizations that want to use performance metrics in a variety of ways.

“Consumers are just catching on that you can literally go out and compare your hospital to others in the area by specialties and diagnoses and quality, which makes providers even more aware of clinical quality and the need to standardize and get consistent with metrics.”

Bunting says insurers would like to move away from billing every department, service and pill toward paying one set amount for a diagnosis. “Hospitals are going to be the ones getting that payment so they have to create networks, get good working relationships with physicians and change their business model. There’s a huge opportunity for them to really get efficient, understand where their costs are and attack those across the revenue cycle so they can survive in the new world.”

There are many more complexities to sort out in the drive to standards, interoperability and collaboration that will lead to better care of populations and the way we decide to manage it as an industry and a society. But much of the trail leads back to the electronic health record and a transactional focus most industries have already confronted in supply chain, financials and operations.

Managing the transaction flow and embedding performance metrics and analytics into business processes are steps all industries confront. While the going will be slow, tedious and underskilled in clinical medicine and operations for some time going forward, it’s precisely the challenge that business intelligence, performance management and information management were created for.