National Health IT Vote Stymied
Healthcare IT News reported last week that the Johnson bill in the House of Representatives has been placed on hold. HR 4157 would:
Make permanent the Office of the National Coordinator for Health IT (ONCHIT),
Convene a panel to develop standards for health record storage and interoperability,
Mandate a study by HHS on the impact of the disparate state privacy statutes on NHIN development,
Replace the current HIPAA transaction standards with X12 5010 and NCPDP D.0 without an NPRM process.
A controversial provision that would have mandated implementation of ICD-10 by 2009 was removed from the bill before a planned vote, which now may not come. An additional concern to some is that the Johnson bill would "gut strong state privacy laws, replacing them with a weaker federal rule." The Senate version of the bill, co-sponsored by Senators Hillary Rodham Clinton (D-NY) and Bill Frist (R-TN), was passed in January.
The bill was stalled by House Republicans after a Congressional Budget Office opinion that the law would reduce federal revenues and increase spending. Two House committees (Energy and Commerce and Ways and Means) had approved versions of the bill. Ways and Means Chairman Bill Thomas stated that the bill "would remove legal barriers that currently prevent the private sector from efficiently coordinating information and technology, leveraging private -- not public -- dollars to promote health IT... This would result in better coordinated and higher quality health care."
Republican Senator Sam Brownback recently offered up the Independent Health Record Bank Act, which would establish "independent health record banks" to be formed by nonprofit organizations to maintain EHRs on behalf of patients, who, for a fee, could access them with swipe cards. Adding to the legislative churn is strong resistance to this proposal coming from the banking industry, which says there is no need to build a new national infrastructure for health records. "We're advancing a model that is much more bank-centric than the independent health record bank model," says John Casillas of the Medical Banking Project, as reported by Kansas City Business Journal and MSNBC. Cerner, of Kansas City, has chosen sides in this niche of the debate, preferring the independent model which would build a new system as proposed by Brownback in the Senate and Rep. Dennis Moore (D-KS) in the House. Both congressmen are in the Kansas delegation.
Modern Healthcare reports that
insurers are cooking up still another infrastructure. America's Health Insurance Plans (AHIP) and Blue Cross and Blue Shield announced this month that they have been working on a national EHR plan for two years. Says the magazine's Todd Sloane, "How the insurers' plan would fit into the crazy quilt of initiatives out there is anyone's guess."
The House is also considering legislation by Rep. John Shadegg (R-AZ) which would permit health insurers to sell plans across state lines.
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States Join National Health Information Privacy and Security Collaboration
A source within a related organization reports that more than 30 states have now signed the pact to address privacy and security policy questions affecting interoperable health information exchange through a new collaborative process. Managing the project is Research Triangle Institute (RTI) under a $17.23 million contract with ONCHIT. The collaboration is a public-private effort intended to reconcile widely-varying business policies and state privacy laws that are hindering development of health information exchange. RTI is working with the Agency for Healthcare Research and Quality and the Office of the National Coordinator for Health IT at HHS, as well as the National Governors Association.
A Los Angeles Times article titled "At Risk of Exposure" kicks off with the lead: "PATIENTS of the land, unite! You have nothing to lose but your privacy." Ouch! The article quotes Dr. Deborah Peel, a Texas Freudian psychoanalyst and founder of the Patient Privacy Rights Foundation http://www.patientprivacyrights.org. "I have spent 30 years seeing nothing but how people are harmed [in their] reputation or livelihoods when sensitive medical records are seen by anyone... outside of the few people you trust to actually take care of you." The privacy and security initiative may not have come a moment too soon. Despite the incendiary rhetoric, the LA Times article is a good public pulse piece on the issue. [ HITSync top ]
The New UHIN
In case you think that the UHIN miracle is a one-off, unrepeatable stroke of administrative genius (or just pure luck), consider the Other UHIN. No, we're not talking about the Utah Health Information Network. According to Kampala ("new vision"), Uganda's largest daily and Sunday newspaper, "Uganda has become the first country in the world to develop and test the functional information processing network." Alright, we know that some consulting firms have been telling everyone that there are no functioning RHIOs out there (okay, maybe two), but we seem to have uncovered Really Successful RHIO Number One: Uganda Health Information Network.
The Other UHIN recently won international awards for a project, started in October 2003, in which health workers in the remote districts of Rakai, Mbale and Manafwa were issued PDAs which they "point" at cellular-based global system for mobile (GSM) access points to transfer medical data to and from a central repository. Health workers also receive medical science updates on their palmtops. The PDAs run on solar power, and the access points cost about $600 each. [ HITSync top ]
D'oh of the Month
In a nod of agreement with CMS's chatty little note, Marty and Michael would like it to be known that, between them, they've labored nearly a century for Men's Health Prevention. Visit this link for the full original email. [ HITSync top ]
Exempt from Taxes, but Not from Duty The New York Times reports that U.S. Internal Revenue Service sent out 80-question surveys to more than 550 nonprofit hospitals as part of a probe to determine of charitable healthcare is meeting at least the minimum community service requirements to maintain their tax-exempt status. Under pressure for some time to investigate whether nonprofit hospitals are operating too much like commercial businesses, the agency may decide to conduct formal audits of some of the providers. Rules regarding the "community benefit" required of nonprofit hospitals have changed little since 1969. Sen. Charles E. Grassley (R-IA), chairman of the Senate Finance Committee, wants the IRS to update its regulations.
Critics charge that nonprofit hospitals fail to distinguish themselves from their for-profit counterparts, and that they maintain none of the rigorous standards of community service required of other kinds of nonprofit organization. Others charge that the variation between hospitals is too wide; ranging, for instance, from high levels of indigent care at some institutions to virtually none at others. Some critics believe that tax-exempt hospitals compete unfairly with for-profit providers, and must be held to a higher standard in exchange for their special tax-exempt status. Melinda Hatton of the American Hospital Association disagrees, saying that the current standards "recognize the incredible diversity of tax-exempt hospitals serving communities with different needs."
The IRS has audited 375 of the nation's 7,000 nonprofit hospitals over the past ten years. If an organization fails to prove adequate community service, the IRS can yank its tax-exempt status -- potentially worth millions of dollars annually to some large systems. Shortly before the probe was reported, an article appeared in Health Affairs which seems both to corroborate some of the critics' concerns about nonprofit hospitals' reliance on commercial revenues, and to suggest that change is already coming.
The Health Affairs article calls fundraising an "untapped potential" among nonprofit hospitals, stating that philanthropy has been a "minor funding source." Nonprofit healthcare providers are unique in the nonprofit sector, with operations financed almost exclusively by reimbursements and "patient responsibilities," in other words, earned commercial revenues. But the article goes on to note that this is changing, citing an Healthcare Financial Management Association (HFMA) survey which finds that hospital executives are prioritizing fundraising much higher than they did a few years ago. 45% of surveyed CFOs reported that they expect to be more dependent on philanthropy for future spending. [ HITSync top ]
Teeth for HIPAA?
With the IRS nipping at one heel and the Engines of Denial chewing away at the other, is it the right time to sic the Dogs of Privacy on America's healthcare providers? It's been three years now since HIPAA started protecting our medical privacy, and the White House has received thousands of complaints claiming violations. And yet, not a single civil fine has been levied, and only two criminal cases have been prosecuted. Recent high-profile data thefts (or "losses," to use the industry's preferred term) have piqued activist interest in putting some teeth into HIPAA. Just as Congress was considering the imposition of what some believe would be weaker federal privacy protections over existing state laws, the Washington Post was taking a look at the 19,420 grievances which have been received by HHS. According to the Post, "The government has 'closed' more than 73 percent of the cases – more than 14,000 -- either ruling there was no violation or allowing health plans, hospitals, doctors' offices or other entities simply to promise to fix whatever they had done wrong, escaping any penalty." Says Janlori Goldman, a healthcare privacy expert at Columbia University, "I think we’re dangerously close to having a law that is essentially meaningless." [ HITSync top ]
Countdown: Six Years to Universal Coverage?
A blue-ribbon, nonpartisan Congressional advisory panel tells its bosses the U.S. needs universal healthcare within six years, even if it means raising taxes. Before you decide that Congress didn't want to hear that, consider: Congress created the Citizens' Health Care Working Group with an interesting set of teeth. The law requires public comment from the President on the panel's recommendation (we can hear it now: "Healthcare? We're for it. Yeah.") Better still, five Congressional committees are required to hold hearings on the final report.
The final report, due in September following a public comment period, may look different from the balloon released earlier this month. Still, what a lovely balloon it was:
Immediately provide all Americans with catastrophic health crisis coverage, even if it's through a government program
Establish safety net providers: new community health centers
By 2012: All Americans are to have coverage for preventive care, doctor visits, hospitalization and prescription drugs
Pay for it through income taxes, payroll taxes, business taxes, sales taxes and taxes on alcohol and tobacco.
The panel's interim report states, in a delicious turn of sublime understatement, that its recommendations "call for actions that will require new revenues." HHS Secretary Michael Leavitt was a member of the panel, but declined to voice a position on its findings. Smart. Play it cool, Mike.
Report: Access to Prescription Records During Disasters
Following Hurricane Katrina, private and public health and information technology experts (including us) wondered why a simple medication registry couldn't be pulled together immediately. Well, it was. The HIT community created KatrinaHealth.org as a response, and that project forms the central model for recommendations in a report from the Markle Foundation.
"The nation's pharmacies and partners across the health care industry believe that we must take the outstanding work done by the KatrinaHealth initiative to the next level," said Kevin Hutchinson, a spokesperson for one of the 150 organizations participating in the KatrinaHealth.org effort. The Markle report calls for immediate implementation of a national system for sharing medical records in the event of a disaster, and for examining laws such as HIPAA "to be sure they do not hinder the delivery of medical care." [ HITSync top ]
Against the frequently heard consternations over RHIO financial performance, and against recent pundits' remarks that RHIOs haven't yet found a business model, HITTG's new report on RHIO finance flies in the face of all this conventional wisdom to state that, aucontraire, RHIOs may just have found a sustainable business model. And the report explains why it's a really good one.
The 50-page report discusses financial leadership by stakeholders, as well as contributed and earned revenue sources, at each lifecycle stage. Respondents reported on the involvement of 32 specific stakeholder entities encompassing nine stakeholder classes including Government, Providers, Health Plans and Vendors.
Nearly half of respondents self-identified as being at the startup stage, 22% were in transition, and 30% in production. The majority of respondents are operating as nonprofit organizations (NPOs); only 10% indicated that they were for-profit. Our analysis indicates that the leading participants in financial leadership are from among government and providers, followed by health plans and vendors.
Interestingly, government involvement in financial planning and management does not seem to decrease as RHIOs reach the mature stage. In fact, it seems to grow. Even more telling is that more than 80% of respondents in every stage of development still anticipate applying for grants. This includes 89% of the RHIOs that said they are now self-supporting.
The survey's discovery of not only a high percentage of contributed income, but the strong perception of reliance on it among administrators, suggested that RHIOs might be following a particular business model. A model that much of the nonprofit sector is familiar with, but which many healthcare organizations, health plans and vendors would perhaps either not recognize, or at least not be very comfortable with, since their own business models are based almost entirely on reimbursements, premiums and commercial sales, rather than public funding and philanthropy. These are the stakeholders cited by the largest number of survey respondents as the leaders in RHIO finance planning and management, along with various government entities.
We wondered if, like the many thousands of U.S. nonprofit organizations whose income was supported significantly by contributed revenue, RHIOs fit a charitably-supported NPO business model.
In examining governance, business formation strategies, stakeholder involvement and other survey data, as well as external resources, we determined that perhaps the majority of RHIOs are following a sustainable business strategy -- though they might not know it because of lack of context, especially regarding the broader contributed revenue components. We went further and provided a high-level description of the RHIO business model and discussed the evidence for it in some detail.
The Charitably-Supported NPO Model
To say that RHIOs have not found a sustainable business model is to say that the YMCA has not found a sustainable business model. The YMCA has made its charitably-supported business work for 153 years or so, and we're guessing they can carry for at least a while longer.
A business model is a good thing to have, especially if you can explore examples of successful organizations that are using it, and then adopt some of the pertinent practices. Since presenting our initial findings at the WEDI national conference, we've been doing those explorations, and we devote more than a dozen pages in the report to exploring strategies that RHIOs can adopt to take better advantage of their 501c3 status (the nonprofit form utilized by the majority of existing RHIOs).
The fact that RHIOs require periodic infusions of contributed capital to expand services or just to keep the lights on may frighten some in the commercial and reimbursements-supported healthcare worlds. But to a large portion of the 850,000 charitably-supported NPO administrators out there in the $1 trillion U.S. nonprofit sector, RHIOs' numbers look pretty good. According to the Center on Wealth and Philanthropy at Boston College, the nonprofit sector is poised for some phenomenal growth over the coming decades. It seems that as we Baby Boomers pass away ((ahem)) we'll be leaving behind the largest intergenerational transfer of wealth in the history of, well, money. $40 trillion to $70 trillion will change hands, and upwards of $12 trillion of that will find its way to nonprofit organizations. By way of perspective, the nonprofit sector currently holds combined assets of about $1.9 trillion. The wealth transfer may balloon that by 700%, representing growth at a rate much faster than the rest of the economy.
Not a bad place to go looking for a sustainable business model.
We hope the field will read and consider the findings carefully. We welcome comments.
______________________________ Michael Christopher is veteran of nineteen years in capital development, with an emphasis in the implementation of information systems. Mr. Christopher provides management, fundraising, capital development and marketing counsel to commercial and nonprofit clients.
The 50-page report discusses financial leadership by stakeholders, as well as contributed and earned revenue sources, at each lifecycle stage. Respondents reported on the involvement of 32 specific stakeholder entities encompassing nine stakeholder classes including Government, Providers, Health Plans and Vendors.
The survey's discovery of not only a high percentage of contributed income, but the strong perception of reliance on it among administrators, suggested that RHIOs might be following a particular business model. A model that much of the nonprofit sector is familiar with, but which many healthcare organizations, health plans and vendors would perhaps either not recognize, or at least not be very comfortable with, since their own business models are based almost entirely on reimbursements, premiums and commercial sales, rather than public funding and philanthropy. These are the stakeholders cited by the largest number of survey respondents as the leaders in RHIO finance planning and management, along with various government entities.
