Skip Navigation

United States Department of Health & Human Services

Print Print    Download Reader PDF


Mike Leavitt, Secretary of Health and Human Services


Health Information and Management Systems Society Conference, New York


Monday, June 6, 2005

Health Information and Management Systems Society Conference

Thank you Steve for that kind introduction. (H. Stephen Lieber, President & CEO of HIMSS)

I'm delighted to be here at this conference with so many of the key leaders in health information technology. I commend you for the work you do to advance the best use of information and management systems to improve our healthcare system.

When President Bush asked me to become Secretary of Health and Human Services, he charged me with helping Americans live longer, healthier lives and do so in a way that will maintain our economic health as a nation.

In 1960, 5.1% of our GDP was spent on health care. In 2003, that rate had tripled to 15%. Estimates are it could be close to 19% of GDP by 2014.

Some of that increase results from new technology that adds to our nation�s health and productivity. Too much isn�t. Health care is saturated with inefficiency.

Economists believe that up to a third of health care spending � more than half a trillion dollars a year � is wasted because of wrong or redundant care or other problems.

And it's not just a matter of dollars � it�s a matter of human lives. Today, medical errors kill 44,000 to 98,000 Americans every year in hospitals. Every day we delay, lives are unnecessarily lost � children, parents, grandparents, neighbors, co-workers, and friends.

We have a moral responsibility to find ways to better protect human lives.

Our nation has an economic and humanitarian imperative: get more efficient or face losing our economic prosperity and precious human lives.

Nothing short of transformation of our health care system will do.

To illustrate how this transformation can take place, let me tell you a story.

The Utah Governor's mansion had a big grandfather clock. It didn't work perfectly so we hired an old Austrian clockmaker. He opened the door of the clock, and showed my daughter and me the clockwork. It had lots of interconnected gears that started about the size of a dime and then progressed in size.

The biggest gear was about the size of a bicycle sprocket. The clockmaker asked my daughter to turn a tiny gear. It wouldn�t budge.

Then he pointed to the biggest gear. She stood on a chair, grabbed it with both hands and moved it left and then right. All the gears begin to spin in unison.

Think of that clock as the American health care system; each gear is a different component.

One gear is prescription drug costs; others represent medical mistakes, or gaps in health insurance, etc.

What are the big gears of health care transformation? I think there are three.

Perhaps the biggest gear is a change in the way we think about health care.

When I was Administrator of EPA, I learned that it is much easier and less costly to prevent pollution than to clean it up.

The same principle can be applied to health care. We need to become a society that thinks of staying healthy rather than simply being treated after we�re sick. That�s the reason the President fought so hard for a prescription drug benefit and other preventive benefits for seniors.

That�s the reason he is pressing hard for progress on obesity and emphasizing the importance of exercise and eating healthy. It helps prevent the onset of chronic diseases, such as Type 2 diabetes and heart disease. An increasing amount of our total health care costs as a nation are from preventable and manageable chronic diseases. Progress on those two alone would not only reduce suffering, but it also would change the economic equation of our nation.

The second big gear is realigning health care incentives.

The incentives in our health care system are just wrong - wrong for providers, wrong for payers, wrong for patients. Providers get paid on the basis of the quantity of the care they provide, not the quality of outcomes.

Until this changes, we cannot transform health care.

I am determined to see pay-for-performance become part of the way we compensate health care providers.

We are already starting to implement these changes in the Medicare program.

Likewise, current consumer incentives are counterproductive. If a person is sent into a store and told they can buy all they want and the price doesn�t matter, the outcome is predictable.

Too often, that�s how our health care system works. Transformation will not occur until we change these incentives.

That is why the President feels so passionately about tax-free health savings accounts. Owners of HSAs have an incentive to become more cost-conscious consumers of health care.

The third big gear is the widespread adoption of interoperable health information technology.

That�s why all of us are here today.

In the 1850s, another technology transformed our nation. Railroads offered a significant advance in transportation, and several railroad companies began laying track and competing for business. President Abraham Lincoln made building a railroad that linked the United States a national goal. That dream was realized on May 10, 1869 when the golden spike was driven at Promontory Point, Utah.

It is a well-documented story of engineering complexity and courage that included laying rails through mountain passes and across rivers.

One major challenge that is not well known today was that different railroad companies were building rails to different standards.

The distance between the rails, called the gauge, varied. Some rails were 4 feet 8 ½ inches apart. Some were 5 feet. Some were 5 feet 3 inches. All three gauges are good, but they�re incompatible. Most trains couldn�t switch from one network to another.

The continent had multiple, incompatible networks instead of one interoperable network.

Fortunately, in the late nineteenth century, thanks to some extraordinary leadership, the industry finally settled on a gauge of 4 feet 8 ½ inches. We benefit from a single interoperable rail network to this day.

More than a century later, the Australian rail industry has still not settled on a standard. If you go to a search engine and type in "Australia" "rail" and "gauge", you�ll discover that Australia is crisscrossed by incompatible networks.

In fact, the last time I looked, the Australian government was considering a proposal to spend $1.7 billion�not to solve it, but to conduct a feasibility study.

We solved our rail problem long ago, but now we face a similar hurdle with health IT.

I visited a major city in the U.S. recently where an academic medical center, county hospital and a children�s hospital existed within blocks of each other. Each had invested over a hundred million dollars in health IT but with different vendors. The hospitals had common physicians, but incompatible systems.

The rail gauges don't line up. We cannot let that continue in our health care system.

The spirit of the transcontinental railroad is alive in health IT. People want to build it, and there is a sense of urgency. We are spending lots of time building elaborate railcars, but not enough in lining up the tracks.

It is the powers of a competitive free market that will make this happen, and we are blessed to have innovators and entrepreneurs that are capable of making miracles happen.

But the promise of health IT will only be realized when all this power is channeled into creating a standardized system that is open, adaptable, interoperable, and predictable.

People need certainty.

Abraham Lincoln transformed transportation in America. George Bush is resolved to do the same thing for health care.

Last year, the President set an aggressive goal of making electronic health records available to a majority of Americans within ten years.

The goal can be met, but it requires a concentrated national effort to achieve interoperability.

In that regard, I want to acknowledge David Brailer, the National Coordinator of Health Information Technology. Dr. Brailer left the private sector at the request of President Bush and Secretary Thompson to take on this problem. In just eleven months he has generated enormous interest and prepared us for the next steps. He is doing a remarkable job. Thank you, David.

I also want to thank all of you for the work you are doing.

There is a strong grass-roots health IT effort in our country, and this energy and widespread activity is positive.

I can assure you that the steps I am announcing today will build on the extensive work that has gone on during the past year.

Today, we move into a new phase of the work. I want to outline in broad terms a pathway to interoperability of the health care system.

I'm persuaded there are only three ways standards emerge. The federal government can choose a standard and mandate it. That sounds easy, but it almost never works because it ignores a lot of good ideas in the private sector, and people instinctively fight it.

The second way is to let vendors fight it out. I call that method the �last vendor standing.� It works for some things, but not railroads or national frameworks for interoperability. The inevitable result is multiple standards and incompatibility.

The third method and the only real alternative is a guided collaboration. Let's face it: collaboration is hard, and private sector technology competitors are not hard wired to do it; but it's also absolutely indispensable, and it works.

Some of the most important innovations of the last two decades have been produced with guided collaborations. The unification of UNIX and the development of the World Wide Web are prominent examples that come to mind.

Today, I am announcing the formation of a national collaboration and four requests for proposals that will dramatically intensify the pace of progress in health information technology.

In the coming weeks, I will file the charter of the American Health Information Community (AHIC) under the auspices of the Federal Advisory Committee Act or FACA. The President intends AHIC to be the place where major government players such as the Centers for Medicare and Medicaid Services, the Veterans Administration, and the Department of Defense, join with America�s private payers, provider groups, employers, vendors and consumer organizations, as well as state and local government interests, to unify behind a common framework that achieves interoperability.

The AHIC will be an open, transparent and inclusive collaboration that involves the critical mass necessary to get things done. Or, if we were to continue our railroad analogy, "this is the northbound train."

Because of its extensive health mission, the President has given the Department of Health and Human Services the responsibility to lead this effort. HHS will solicit nominations for people to serve on the AHIC, and as Secretary I will appoint up to 17 commission members. It will include an advisor system as a means for wide participation and involvement, drawing vision and input from a broad range of stakeholders.

This is of such importance to the transformation of health care in America that I have concluded that as Secretary of Health and Human Services, I should serve as AHIC�s initial chairman.

After independently consulting with many of the nation�s private payers, providers, technology vendors, consumer organizations and privacy advocates, leaders in Congress, and state leaders, it was clear to me that the challenge of health IT interoperability is a compelling national problem and that it will require an extraordinary measure to achieve it. It requires an effort that goes beyond a private effort--beyond a federal effort. This requires a national effort, harnessing the best of every sector.

I want to be clear, AHIC will not be an entity that builds infrastructure or writes software code, but it will be a standards and policy advisory body with the mission of reaching recommendations necessary to achieve a common interoperable framework.

The existence of this conference and hundreds of other organizations serves as clear evidence that an enormous amount of progress is being made. We�re not going to reinvent anything. AHIC will build on the vast amount of standardization already achieved inside and outside the healthcare industry. This is about giving shape to the mass of things that are already happening, filling in the gaps and having the ability to reach conclusions.

Once formed AHIC will have five specific tasks:

  1. Make recommendations on how to protect privacy and security.

  2. Identify and make recommendations for prioritizing health information technology achievements that will provide immediate benefits to consumers of health care (e.g., drug safety, lab results, bio-terrorism surveillance, etc.).

  3. Make recommendations regarding the creation of a private-sector, consensus-based, standard-setting and harmonization process, and a separate product certification process.

  4. Make recommendations for a nationwide architecture that uses the Internet to share health information in a secure and timely manner.

  5. Make recommendations on how the AHIC can be succeeded by a private-sector health information community initiative within five years. The sunset of the AHIC, after no more than five years, will be written into the charter.

To get this started, tomorrow, HHS will issue four requests for proposals (RFPs). These RFPs will invite the private sector to offer methods of creating a non-governmental standards harmonization process, and a product-compliance certification process. In addition an RFP will invite groups to propose an internet-based architecture for a nationwide health information exchange, as well as an RFP to assess variations in patient privacy and security policies. David will detail these RFPs in his speech tomorrow, after they are published.

We will propose an aggressive timetable so that we can begin to see deliverables in a matter of months.

In total, HHS will spend $86.5 million on health IT in FY05, and President Bush has requested another $125 million for health IT in FY06.

As we move toward a health IT environment, we can also expect to leverage the more than half a trillion dollars the federal government, including HHS, spends on health care every year, as well as untold investments from the private sector.

While we are on the subject of money, let me anticipate another question.

We all know that standards are only part of the formula. It will also include investment. There will be lots of discussion about who benefits and who pays. That conversation will be ongoing.

HHS will support AHIC and the seed projects that are required to develop the standards. However, AHIC isn't the place where the money question will be answered. AHIC is about standards for interoperability.

The golden spike that linked up the railroads in this country was a transformational milestone. With a few driving blows the network was made complete. Someday soon, may it be said, that with one thunderous click of the mouse this generation transformed American healthcare.

The time has come to put the medical clipboard out of business and replace it with the computer. In doing so, we can transform our health care system so that we achieve fewer medical mistakes, lower costs, better care, and less hassle. We all agree transformation must take place; now let�s all agree to work together to do it.

An entrepreneur I admire said, "There are three ways to handle change. You can fight it and die; accept it and survive; or, lead it and prosper."

This is the United States of America. I say, let's lead and prosper.

Last revised: June 6, 2005


HHS Home | Questions? | Contact HHS | Accessibility | Privacy Policy | FOIA | Disclaimers

The White House | | Helping America's Youth