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November 2006
This report was produced by the Advisory Council on Employee Welfare
and Pension Benefit Plans, which was created by ERISA to provide advice to
the Secretary of Labor. The contents of this report do not necessarily
represent the position of the Department of Labor. |
This report was produced by the ERISA Advisory Council’s
Working Group on Health Information Technology (HIT). The ERISA Advisory
Council was created by ERISA to provide advice to the Secretary of Labor.
The contents of this report do not represent the position of the
Department of Labor (DOL). The 2006 ERISA Advisory Council formed a
Working Group (hereinafter referred to as the Working Group on HIT) to
study the widespread adoption of interoperable HIT in light of the
increasing cost of government-financed and employer-sponsored healthcare,
the emergence of consumer-driven health plans and the Department of Health
and Human Service’s (HHS) 10-year plan to transform the delivery of
healthcare by building a health information infrastructure.
Testimony to the Working Group was provided on August
8, 2006 and September 22, 2006 by 12 speakers, representing plan sponsors,
insurers, organizations that represent multi-stakeholders, third party
administrators and the federal government. The Working Group also received
one written testimony on September 29, 2006 and testimony for November 7,
2006. After careful debate and analysis of the issues and transcripts, the
Working Group submits the following recommendations to the Secretary of
Labor for consideration:
Recommendation 1: To the extent possible, the DOL
should provide guidance as to whom is a fiduciary with respect to Health
Information Technology.
Recommendation 2: To the extent that there is fiduciary
responsibility with respect to Health Information Technology, the DOL
should adopt regulations similar to the ERISA §404(c) regulations.
Recommendation 3: The DOL should organize an advocacy
forum similar to the Savers’ Summit for employers (sponsoring large,
medium and small health plans), multi-employer organizations, participants
and federal and state entities to develop standards and guidelines
relating to Health Information Technology in the context of employer
welfare plans.
Respectfully submitted,
Lynn Franzoi, Chair
Kathryn Kennedy, Vice Chair
Robert Archer
Charles Clark
Neil Gladstein
Timothy Knopp
Richard Landsberg
Edward Mollahan
Willow Prall
Christopher Rouse
Sherrie Grabot, Ex-Officio
James McCool, Ex-Officio
Introduction
Part One introduces the scope of the issues identified
and questions distributed to potential witnesses. Part Two sets forth
commonly defined terms and current requirements under the law and
regulations. Part Three provides background information on HIT and the
federal government’s HIT initiatives. Part Four summarizes plan sponsors’
issues, providers’ issues, third party administrators’ issues and the
federal government’s issues in light of the testimonies provided to the
Working Group. Part Five provides the Working Group’s observations and
discussions in the context of these varying concerns. It then sets forth
specific recommendations for the Secretary. Part Six summarizes the
witnesses’ testimonies. Part Seven lists additional information sources.
I. Scope of the Working Group’s Paper and Questions
Distributed to Potential Witnesses
The 2006 Working Group on HIT sought to identify what
is necessary in order to establish the widespread adoption of
interoperable HIT and how the federal government can work with the private
sector and industry to accomplish this result. Areas of focus included:
-
Availability of an individual’s complete medical
history in electronic form (an electronic health record or “eHR”) in a
secure data base for access by physicians, hospitals and the consumer;
-
Availability of clinical information for consumers
to assist them in choosing the physicians and hospitals that best meet
their clinical needs;
-
Legislation or government support for the
development of a more consumer-centric system with an emphasis on quality
and efficiency; and
-
Establishment of quality initiatives and
measurements of performance and quality.
The following is the list of questions (represented as
not exhaustive) distributed to potential witnesses prior to the
testimonies in August, September and November 2006:
-
Define HIT.
-
What is the best way to achieve uniformity in health
information?
-
What is state of the art web technology?
-
What lessons of success of IT in other industries
should the stakeholders focus on?
-
What incentives are needed to foster the adoption of
HIT? What safeguards should be in place to limit the liability of plan
sponsors participating in HIT?
-
Recognizing the highly fragmented efforts to date in
both the private and public sector, what is needed to develop, adopt, and
integrate HIT into healthcare?
-
What are the potential benefits to the consumer? the
employer? health plans? the government?
-
How do we define the vision and components of HIT
for employers, health plans, the government and patients (the consumer)?
-
What are some ways to encourage and enlist providers
to adopt HIT – realize its benefits, offset financing costs, etc.?
-
What mechanisms are needed to insure the security,
confidentiality and quality of HIT?
-
What are the implications of the Health Insurance
Portability and Accountability Act of 1996 (HIPAA with respect to HIT?
-
What role should the federal government have in the
development of HIT?
-
Is there a need for federal leadership and, if so,
what should it entail?
-
Should there be federal mandates?
-
Does the government have a role in defining a “pay
for outcomes” model rather than a “pay for services” model?
-
In a system where the cost is currently born by the
government and employers, how can the DOL engage the consumer, developing
awareness and responsibility?
-
What role would the government have in the
development of individual electronic health records (eHR)?
-
What will the anti-fraud benefits be, if any?
II. Applicable Definitions and Current Requirements
under the Law and Regulations
Commonly defined terms:
-
H&W Plan: A health and welfare (H&W) plan as
defined in ERISA §3(1).
-
Self-insured H&W plan: A H&W plan that
retains full obligation for plan benefits.
-
Fully-insured H&W Plan: A H&W plan whereby
health benefits are provided under an insured contract issued by an
insurance company
-
Multi-employer H&W Plan: A H&W plan that is
administered by a joint board of trustees representing employers and a
collective bargaining agent, pursuant to a collective bargaining
agreement.
-
Fiduciary: A person or entity that satisfies the
requirements of ERISA §3(21)(A). Such person or entity may be named by
the plan document or may be held to be a fiduciary due to his/her exercise
of discretion with respect to the management of the plan or disposition of
its assets.
-
Plan Administrator: The person or entity designated
by the terms of the plan or instrument under which the plan is operated.
If no such person is designated, then the plan sponsor, and if the plan
sponsor cannot be identified, the person designated by the Secretary of
Labor under the regulations. A third party administrator (TPA) is a person
or entity that the plan administrator or plan sponsor contracts with to
adjudicate claims under a plan.
-
Health Insurer (on Healthcare
Provider): An entity
that insures the delivery of healthcare benefits for a plan sponsor or a
multi-employer plan that is regulated under state insurance laws.
ERISA is the federal law that regulates covered
employee benefit plans, including H&W plans. While ERISA does not
regulate the substantive content of welfare benefit plans, it does impose
fiduciary standards on individuals or entities that have or exercise
discretionary authority over the operation and/or administration of the
plan. The DOL oversees ERISA’s fiduciary requirements applicable to plan
sponsors of H&W plans. To assure uniform regulation of employee
benefits plans, ERISA preempts state regulation of employee benefit plans,
except in the areas of insurance, banking and securities law.
H&W plans are also regulated by HIPAA. This federal
law regulates the use and disclosure of protected health information by
covered entities, which includes health plans, healthcare clearinghouses
and certain healthcare providers. These privacy rules require “covered
entities” to safeguard an individual’s identifiable health information
and to limit sharing of such information. The rules apply to all protected
health information regarding a participant or beneficiary under a health
and welfare plan, regardless of the form in which it exists (e.g.,
written, oral or electronic). HIPAA is regulated by HHS and the DOL.
Unlike ERISA, HIPAA protects state laws that can be more stringent than
the federal rules.
III. Background Information
HHS and Legislative Initiatives in the Area of HIT
Employers, physicians, hospitals and healthcare
providers are in agreement that widespread adoption of HIT will result in
dramatic efficiency savings, increased patient safety and reduced
healthcare costs. However, who shoulders the cost and the liability of
such adoption and maintenance of HIT remains problematic.
At the federal level, President Bush signed Executive
Order 13335 (EO) on April 27, 2004, announcing a commitment to the
promotion of HIT to lower costs, reduce medical error, improve quality of
care and provide better information for patients and physicians. In
addition, the EO called for widespread adoption of electronic health
records (eHRs) within 10 years so that health information will follow
patients throughout their care in a seamless and secure matter. The EO
directed the Secretary of HHS to establish within the Office of the
Secretary the position of National Coordinator for HIT (ONC), with
responsibilities for coordinating federal HIT programs with those of
relevant executive branch agencies, as well as coordinating with the
private sector on its HIT efforts.
The ONC defines HIT as “the application of
information processing involving both computer hardware and software that
deals with the storage, retrieval, sharing and use of healthcare
information, data, and knowledge for communication and decision-making.”
A key component to HIT is the eHR, a patient’s medical file stored
electronically and maintained by a healthcare provider.
On July 21, 2004, Dr. David Brailer, the National
Coordinator, delivered a Framework for Strategic Action (The Framework),
which outlined four goals and twelve strategies for national adoption of
HIT. The Framework outlined an approach toward nationwide implementation
of interoperable eHRs and identified the following four goals: 1) bring
eHRs directly into clinical practice; 2) interconnect clinicians so that
they can exchange health information using advanced and secure electronic
communications; 3) personalize care with consumer-based health records and
provide better information for consumers; and 4) improve public health
through advanced bio-surveillance methods and streamlined collection of
data for quality measurement and research.
One of the key action items in The Framework was the
establishment of a HIT Leadership Panel to examine the importance of
investing in HIT by the government and the private sector. This panel
assembled executives in widely recognized companies that purchase
healthcare for their employees. The Lewin Group, a healthcare policy
consulting firm, was retained by Dr. Brailer to convene the panel and
report its findings.
The HIT Leadership Panel identified three key
imperatives for HIT:
-
Promoting widespread adoption of interoperable HIT
as a top priority for the U.S. healthcare system;
-
Using the federal government as the nation’s
largest healthcare payer as leverage to drive the adoption of HIT; and
-
Encouraging private sector purchasers and healthcare
organizations to collaborate with the federal government to drive the
adoption of HIT.
In July 2006, the House of Representatives passed The
Health Information Technology Promotion Act of 2006 (H.R. 4157) which
directed the National Coordinator for HIT to create a plan for
implementing a nationwide interoperable health information technology
infrastructure. The bill also called for a survey of state health
information and confidentiality laws to see whether such laws were slowing
the electronic exchange of health information among states, the federal
government and the public. At the time this report was written,
Congressional negotiations had not resolved differences between the House
bill and the Senate bill (S.1418).
In response to the Leadership Panel’s report, the
Secretary of HHS has been meeting with major employers throughout the
country to engage them in an effort to empower consumers through
information. These efforts were further supported by the President’s
Executive Order 13410, issued on August 22, 2006, requiring that all
federal agencies and those who do healthcare business with the government
do the following:
-
Aggregate healthcare quality and price information
so that it is available to beneficiaries, enrollees and providers in a
readily usable manner;
-
Use interoperable HIT products in order to aggregate
and share quality and price data; and
-
Motivate participants to become consumers and
advocates of a HIT healthcare system.
HHS awarded a contract to the American National
Standards Institute, a non-profit organization that administers and
coordinates the U.S. voluntary standardization activities, to convene the
Health IT Standards Panel (HITSP). As today’s standards-setting process
is fragmented and uncoordinated, the goal of HITSP is to develop and
implement a useful set of health IT standards that will support
interoperability among healthcare software applications, including eHRs,
and be widely accepted. HITSP is finalizing recommendations on HIT
standards for three key “use cases” – (1) submission of laboratory
test results to an eHR; (2) submission of bio-surveillance data from
providers and hospitals to public health agencies; and (3) automated
patient registration information and medical history used in personal
health records (PHRs).
HHS also awarded a contract to the Certification
Commission for HIT (CCHIT) to develop criteria and evaluation processes
for certifying eHRs and the infrastructure or network components to ensure
interoperability. CCHIT has developed a process to certify eHRs and other
systems based on uniform benchmarks for privacy, security and
functionality.
HHS has awarded contracts to four consortia of
healthcare and HIT organizations to develop prototype architectures for
the Nationwide Health Information Network (NHIN). These prototypes are
being used to test specialized network functions, security protections and
monitoring, and to demonstrate feasibility of scalable models across
market settings. The four consortia will create a usable architecture for
healthcare information that can support eHRs. To ensure security and
privacy, HHS has awarded a contract to RTI International, working with the
National Governors Association Center for Best Practices to form the
Health Information Security and Privacy Collaboration (HISPC). Through
this contract, it is intended that the various business policies and state
laws that affect electronic health information exchange be examined and
practical solutions for addressing such variations be proposed to ensure
privacy and security requirements in federal and state laws and to develop
plans to implement identification solutions.
On November 17, 2006, the Business Roundtable and other
business and HHS officials will join together in a national summit to
discuss the critical role employers will play in supporting the President’s
EO on healthcare transparency. The summit will focus on how employers can
support efforts to provide patients with greater access to information
about the quality and cost of their healthcare options. The National
Quality Forum (whose members include employer groups) has proposed
hospital “safe practices” standards and the American Health
Information Community (AHIC) has proposed HIT interoperability standards.
Employers interested in enhancing health care quality and efficiency will
be discussing these standards at the summit.
ERISA AND HIPAA:
The motivation for HIT comes from the growing increase
in healthcare costs in the U.S. In a system where the cost of healthcare
is primarily delivered through the employer in the form of benefits, such
increasing costs are putting substantial burdens on employers, placing
them at a competitive disadvantage in a global economy. In addition, the
increased healthcare costs of government programs, such as Medicare and
Medicaid, have put substantial pressure on federal and state governments.
The results of a study conducted by the Rand Corporation indicate that
implementation of a universal HIT system could cost about $8 billion per
year, but annual savings in efficiency would be $77 billion.
There are numerous obstacles to universal HIT.
Relatively few providers have access to HIT, and for those that do, the
ability to share information is extremely limited. While HIT can be
maintained through computer systems, healthcare data has not been
assembled in a single coherent fashion and it is stored on a vast range of
disparate systems. HIPAA’s privacy rules also provide stumbling blocks
for the implementation of a widespread interoperable HIT system. However,
HIPAA privacy rules are not within the jurisdiction of the DOL and
therefore the Working Group makes no recommendations regarding changes to
HIPAA’s privacy rules.
The development of a national HIT system would advance
the movement towards quality improvement and quality purchasing. By
furnishing information on patient practices both for payment and quality
measurement purposes, such data (once the individual identifying
information is stripped away) will allow healthcare providers to be judged
on the quality of care in a quantifiable and documented manner that doesn’t
exist in today’s paper-based system. Should a uniform and interoperable
HIT system, with health information measurement and reporting capabilities
with national industry accreditation standards, evolve within the
marketplace, it is not clear to what extent greater transparency in
healthcare and quality information will alter the fiduciary functions of
plan sponsors.
ERISA’s fiduciary standards require that the plan
fiduciary act in the best interests of the plan participants and
beneficiaries. However, the courts have created a distinction with respect
to specific functions performed by a plan fiduciary. When the plan sponsor
acts as a “settlor” (i.e., making decisions as to the establishment,
modification or termination of the plan, or the types of benefits to offer
under the plan), such functions are not subject to ERISA’s fiduciary
standards. Once the plan has been created, the plan sponsor functions as a
fiduciary with respect to its discretionary authority to administer and
operate the plan. This would certainly be the case if the plan sponsor
self-insured the healthcare benefits under its plan. However, this
distinction between “settlor” and “fiduciary” functions is not a
bright line test. To date, plan sponsors have not been required in their
fiduciary capacity to consider quality of care in the selection and/or
evaluation of the performance of healthcare benefits and providers offered
to participants and beneficiaries. Decisions as to type of coverage,
network of providers and choice of insurers have been regarded by plan
sponsors as settlor functions.
This is further compounded in the context of H&W
plans with the intersection of ERISA’s preemption clause and fiduciary
conduct under a plan. While plaintiffs assert that non-ERISA substantive
or contractual law applies to the conduct of plan fiduciaries, such non-ERISA
law is generally preempted, creating a void that must be filled by
federally created common law. This has led to considerable litigation and
lack of clarity for plan sponsors.
The Department of Labor’s Role
The issue of universal HIT is a concern for plan
sponsors of H&W plans for two important reasons: cost and liability.
The additional costs of such systems will initially drive up the costs of
H&W plans even though future efficiencies, transparency in costs and
the use of quality measurements will eventually reduce costs. Sponsors of
such plans will have to absorb or pass along those initial costs, or
decide to reduce or eliminate coverage. In addition, if a national HIT
were in place, not only for the federal government but for all other
employers, the issues of quality of care would become more transparent,
readily documented and immediately available. This could have long-term
implications for employers that provide healthcare benefits to their
employees because these plans are governed by ERISA. This raises questions
and issues. To what extent will ERISA’s fiduciary standards require
employers to consider quality when selecting a healthcare plan, a provider
network, a prescription drug program, etc.? Will employers have a
fiduciary obligation to evaluate the plans, the networks, the formularies
and the providers? What will be the DOL’s role in providing guidance to
employers as to the significance of healthcare quality and the employer’s
role?
Given the President’s most recent Executive Order,
the DOL could certainly use this occasion to issue guidance to employers
as to the role employers should play in gathering or encouraging the
gathering of data, the development of eHRs and the determination of
quality in the selection and evaluation of the performance of healthcare
plans, healthcare providers and healthcare networks. In support of HHS’
efforts, the DOL could also encourage employers to participate in the
dialogue involving HIT, through a national summit, so that their voices
are heard early in the process and considered.
IV. Concerns of Plan Sponsors, Providers, Plan
Participants, TPAs and the Government
Plan Sponsors: Plan sponsors of H&W plans voiced significant
concern regarding the initial cost of moving over to a universal HIT, as
well as the potential fiduciary liability for a “fee for performance”
that could fall upon healthcare plan sponsors and insured healthcare
providers. In this regard, the DOL could be instrumental in developing a
“pay for performance” model of reimbursement. One plan sponsor
encouraged employers to be more vocal with vendors and TPAs regarding the
use of electronic health technology as the current “fee for service”
model was not sustainable over time.
Privacy and security of electronic health information
beyond the limits of HIPAA were also a concern for plan sponsors, as a
50-state delivery of privacy limitations would cause problems for
employers that cross inter-state lines. Advocates for single-employer
healthcare plan sponsors also noted that TPAs, healthcare insurers and
HMOs, should be named as covered entities under HIPAA’s system.
Consultants for multi-employer H&W plans cautioned
that the technology for these types of plans was out-dated or
non-existent. Data from these group health systems is not linked with
other systems. Thus, adoption of HIT should first focus on large national
funds and on large TPAs.
As federal and state regulation sometimes has
unintended consequences, one plan sponsor encouraged the DOL to review its
regulatory structure to ensure that ERISA plans would not be unduly
burdened with the adoption of HIT or the sharing of electronic data.
Plan Sponsors that were also Providers: While the federal government is providing a vital role
as an early funder and policy driver behind universal widespread adoption
of HIT, the federal adoption of open standards for healthcare diagnoses,
treatment and other core elements are still needed. The current “pay for
service” model should shift to a “pay for performance” model which
is based on outcomes and improved quality of care.
One witness urged that the end-users of HIT, rather
than the sellers of technology, be engaged in the adoption of HIT
standards. Similar to the adoption of bar codes used by retailers, plan
sponsors and providers should first identify the business problem that
they are attempting to solve and then engage in a collaborative effort
with the users of the technology.
Participants: While the Working Group did not hear testimony directly
from the participants of H&W plans, it did hear comments from plan
sponsors who are providers and multi-shareholder speakers who voiced the
concerns that they had heard from participants. In order for participants
of H&W plans to be advocates of and utilize eHRs, they must be assured
of the privacy, security and accuracy of the information contained in the
eHR. Participants have expressed concern that transfer of personal health
information be secured among authorized users and with patient control.
The electronic record should control access, track who has accessed the
information and limit who can modify the record. Participants should be
able to know what information exists about them, the purpose of its use,
who can access and use the information and where it resides. Use of eHR
should be purpose specific and personal data should not be disclosed, made
available or otherwise used for purposes other than specified. To assure
this, accountability and oversight must be in place to implement these
practices.
Providers: One provider identified four critical building blocks
in the development of HIT and eHRs: uniform HIT standards; consumer
engagement; widespread provider adoption; and assurances to consumers,
physicians and other stakeholders of the privacy, security and accuracy of
the electronic health information. The privacy rules of HIPAA must be
expanded so that everyone who handles personal health information is
covered by the federal rules.
An association of health care providers that insure or
provide administrative services for ERISA group health plans recommended
that the DOL encourage the adoption and use of HIT by group health plans.
Such adoption and use should be aligned with the on-going public and
private HIT initiatives promoted by ONC, AHIC, HITSP and CCHIT. They
testified that the HIPAA privacy and security rules were adequate and thus
the DOL need not expand current privacy protections for group health
plans. They also believed that ERISA fiduciary rules were adequate to
protect the privacy concerns of participants.
TPAs: A TPA provided written testimony, recommending that the
DOL encourage the adoption and use of health IT by group health plans
consistent with the direction taken by HHS. As HIPAA’s privacy and
security rules and other state and federal privacy requirements were
deemed to provide sufficient safeguards for health information collected,
used or disclosed by group health plans, the DOL need not impose
additional privacy protections or restrictions on the ability of group
health plans to use HIT for payment and healthcare operations. This TPA
did not believe that ERISA’s fiduciary requirements should be extended
to a TPA providing health IT information in a personal health record to
participants and beneficiaries as such function is ministerial and not
fiduciary in nature.
Multi-stakeholders: Three individuals testified on behalf of
multi-stakeholders – groups of private, public and non-for-profit
employers, providers and TPAs. One identified three barriers to the
development of HIT: the misalignment of incentives and the lack of a
sustainable business model; the lack of interoperable systems; and the
lack of data standards. In this regard, the DOL could play a pivotal role
in explaining to healthcare consumers how their healthcare information
would be handled and accessed within an interoperable electronic
healthcare infrastructure.
Another testifier advocated that the DOL become vocal
in endorsing a uniform, national process for developing HIT policy and
technical standards. The third testifier was critical of an approach which
focused on a national network through common data and application
standards. Instead, a personal health network approach – which would be
internet-based and allowed patients to directly control access to their
private data – was recommended.
Federal Government: The director of programs and coordination in NOC of HHS
provided the Working Group with the background information regarding the
federal government’s initiatives in the area of HIT.
V. Working Group’s Observations and Discussions
The widespread adoption of HIT would be welcomed by
plan sponsors of H&W plans, healthcare providers, physicians and
hospitals as it is expected to result in dramatic efficiency savings,
increased patient safety and reduced healthcare costs. However, plan
sponsors, TPAs and healthcare providers are concerned about the costs and
the liability associated with the universal maintenance of HIT. The
federal government through its initiatives with ONC within HHS has
identified four important goals for the implementation of interoperable
eHRs and three key imperatives for the universal adoption of HIT. Due to
the President’s most recent EO directive, all federal agencies,
including the DOL, are required to motivate participants to become
involved consumers and advocates of a HIT healthcare system.
A national HIT system could advance quality improvement
and quality purchasing, both in the furnishing of information on patient
health and the review of healthcare providers for their services. Such
greater transparency in healthcare and quality information will transform
how plan fiduciaries act when considering what is in the best interests of
plan participants and beneficiaries. Presently, the choices to provide
benefits, the level of benefits and the modification of termination of
benefits are regarded by plan sponsors as a settlor function, not a
fiduciary function. As greater information is provided through a national
and interoperable HIT system, the fiduciary’s capacity to consider the
quality of care in the selection and/or evaluation of the performance of
healthcare providers, networks, formularies and plans offered to
participants and beneficiaries will change. Due to the DOL’s regulatory
authority over the fiduciary requirements applicable to H&W plans, it
has the power to delineate how quality of care is to be considered by a
plan fiduciary.
The DOL’s ability to distinguish between settlor and
fiduciary functions in the context of the delivery of H&W and the
choice of healthcare providers would be most helpful to plan sponsors and
plan fiduciaries. If this distinction changes over time due to evolution
of the HIT system and the access and utilization of a personal eHR, such
functions that were once settlor in nature could become fiduciary in
nature. Plan sponsors would welcome a set of “best practices” that
would set forth how a fiduciary acts in the best interests of the
participants, how quality of care is to be considered in the delivery of
benefits and choice of healthcare providers, and how personal health
information is to be stored, accessed and shared in both a prudent fashion
and through an approach that takes the best interests of the participants
into account.
In the context of retirement plans that provide for
individual accounts and permit individual direction of investment of the
assets of those accounts, ERISA §404(c) provides a statutory exception to
the fiduciary rules. In such context, the plan fiduciary is not considered
a fiduciary with respect to the individual’s choices of plan investments
and thus is not liable under the fiduciary rules for any loss, or by
reason of any breach, which results from the participant’s exercise of
control. The statutory exception requires certain safeguards be met to
ensure that the individual truly has the power to exercise control and, in
fact, exercises such control. This exception permits the plan fiduciary to
afford participants the ability to determine the investment of their plan
assets without the plan fiduciary being liable for a loss, or for a
breach, to such investment.
The Working Group believes a similar approach, through
the issuance of guidance or legislative relief, would be helpful for plan
sponsors of H&W plans in the HIT and eHR context. If the DOL were to
set forth specific parameters which plan sponsors could follow in order to
act in a prudent fashion and in the best interests of the participants in
making H&W decisions, plan sponsors would have the guidelines of how
to act and when followed, protection from threat of fiduciary liability.
Thus, plan sponsors would then be more inclined to participate in the
dialogue involving HIT and eHRs.
This approach would also reduce the potential for
litigation which is problematic in the breach of fiduciary context due to
ERISA’s remedies and its preemption clause. As ERISA’s preemption
clause supplants state law, breach of ERISA’s fiduciary duties is
limited to the remedies under ERISA or other federal laws. Such remedies
might not be sufficient within the context of a universal HIT and personal
eHR information, thus leading to a void that may be filled by federally
created common law. Such lack of clarity is of great concern to plan
sponsors.
Due to voluntary nature of ERISA’s employee benefits
plans, plan sponsors weigh heavily the cost and potential for liability in
offering and continuing to offer H&W benefits to employees and the
various means of providing healthcare. The DOL can be instrumental in this
regard by providing clear guidance as the issues of HIT and eHR unfold.
The Working Group also heard considerable testimony
that the federal government was encouraging the various stakeholders –
employers, healthcare providers, TPAs, health insurers and physicians –
to dialogue and to create universal solutions for a universal HIT
healthcare system. The Secretary of HHS began its dialogue with large
employers and employers who were already healthcare providers or systems
providers. It is beginning to expand its outreach by joining with the
Business Roundtable and other business associations to discuss with
employers the critical role they play in HHS’ initiatives.
In the retirement savings arena, the DOL assessed its
efforts to reach employers and employees in order to help them understand
the importance of savings for a secure retirement. Events such as the
Savers’ Summits brought together various constituencies to discuss
strategies to accomplish this goal. A similar type of event, hosted by the
DOL, in the HIT context could begin bringing different constituencies
together to discuss the potential road blocks in adopting a universal HIT
system and providing for eHRs for participants and possible solutions to
such road blocks.
VI. Summaries of the Speakers and Written Testimony
Summary of Edward McCulloch – August 2006
Edward (Ned) McCulloch leads IBM’s public policy
efforts on HIT, believing that better use of information technology will
result in healthcare quality and contained costs, while still protecting
the privacy of patients and the security of their health data. IBM is
collaborating with other employers, agencies and providers to launch a
global infrastructure. IBM supports public policies that drive the
adoption of open standards, commit initial prototype funding and make
early policy choices that set the stage for the growth of health
information exchange and create incentives in Medicaid and Medicare to
reward quality of care.
In driving open standards, a health information
exchange requires interoperability, i.e., the ability for disparate health
information systems to talk to each other and share data in a safe and
secure manner. Open standards must be those that are freely available to
all and created by an open decision-making process. Better standards will
facilitate the easier exchange of health information, thereby lower costs
and improving patient safety and clinical quality and enhancing privacy.
What is still missing? Federal adoption of open
standards for healthcare diagnoses, treatments and other core elements of
medicine is still needed. The Senate and House passed HIT legislation that
included provisions to move the federal government towards national
standards. HHS Secretary Leavitt indicated the importance of electronic
reporting and suggested it be included in the forthcoming Executive Order.
The government’s role as an early funder and policy
driver is vital. HHS has awarded contracts to four companies, including
IBM, to develop a Nationwide Health Information Network (NHIN)
architectural prototype – the goal is to devise a smarter, more
connected information infrastructure for healthcare with the following
abilities: to enable secure electronic exchange of healthcare information;
to test the use of standards and interoperability; and to demonstrate how
various healthcare marketplaces can be part of this communications
network. NHIN would also empower healthcare consumers to access their
personal health records (PHRs) using the same network that allows them to
share their medical records with healthcare providers. IBM’s
architectural prototype for the NHIN system would not be a single
repository of everyone’s medical records, but rather an index that
points to information stored at the originating provider site.
Privacy and security are key requirements for the
personal health record. HIPAA privacy rules provide the bedrock for
patient privacy in the U.S. and has established a baseline for privacy and
security requirements for electronic health information. Many states have
gone further than HIPAA to ensure patient privacy.
Physicians and other healthcare providers will bear the
direct costs of implementing eHRs, as well as the indirect cost to
transform their established workflow processes to take advantages of the
new technology. A “pay for performance” model should be used to incent
the doctors and medical community to adopt HIT. The shift will reward
outcomes and improved quality of care instead of the current model of fee
for service. To make this shift, financial incentives should be
non-punitive, should prioritize improvements, should be considerate of the
critical role of primary care physicians and should be sufficient to
offset physicians’ investment in HIT.
Summary of Alissa Fox – August 2006
Alissa Fox is Vice President of Legislative and
Regulatory Policy for the Blue Cross/Blue Shield Association. Alissa is
responsible for developing the Association's policy positions. She also
counsels Blue Cross and Blue Shield plans on a wide range of policy
issues, with specific expertise in Medicare and MediGap, managed care, and
insurance-related topics.
Fox testified that Blue plans envision a HIT system
that links payers, providers and consumers nationwide so that a patient's
health information is available at the point of care, to insure that the
best possible care is given. The heart of the vision is an eHR in every
physician's office that is linked to other providers and payers.
The witness went on to say that the vision the Blues
have is that the eHR would also include key clinical decisions making the
best practices and care available to providers when they're actually
treating a patient. An eHR could alert a doctor that a diabetes patient
he's treating has not had a recent eye exam, for example. That's a
critical standard of care. If a physician were about to prescribe a drug,
there would be software that would pop up and say that drug could have
adverse consequences, because it is a problem with another drug that
patient is taking. Electronic health records would also link to payer
administrative data, so it would allow providers and consumers to know
immediately whether a deductible has been met and what co-payment for
medical services is required.
In order to reach this vision, Fox suggested that four
building blocks are critical; uniform HIT standards, consumer engagement,
widespread provider adoption, and assurances to consumers, physicians and
other stakeholders of the privacy, security and of the accuracy of the
electronic health information.
Alissa Fox stated that uniform IT standards are
absolutely critical. Standards are needed for the exchange of clinical and
administrative information across all healthcare participants. Fox
believes that all stakeholders need to be involved in this process. There
needs to be public and private collaboration. Fox stated before a standard
is adopted, it needs to be pilot tested and that credible cost benefit
analysis of any standard is critical before they're adopted.
Fox identified consumer engagement as another building
block. Consumers are seeking information to help them take charge of their
own healthcare. HIT can make it dramatically faster and easier for
consumers to access critical health information.
Fox recognized that widespread provider adoption is
needed to achieve a nationwide HIT system. Providers must see both the
clinical value and the business case for adopting HIT.
The witness stated consumers, physicians and other
stakeholders must be assured of the privacy, security and accuracy of the
electronic health information. Strong uniform protections must be in place
covering all entities that provide or manage personal health information,
not just those that are covered under HIPAA today. Today it's really the
employers, insurers and providers that are covered HIPAA entities, but the
vendors, for example, are not covered by HIPAA today. They must follow the
HIPAA privacy and security rules, so you need to make sure that everybody
who is handling the personal health information is covered by federal
rules. That's not the case today.
Summary of Ticia Gerber – August 2006
Ticia Gerber, who is the Vice President for Public
Policy and International Programs for the eHealth Initiative, presented
testimony to the Advisory Council regarding HIT, including Health
Information Exchanges. The eHealth Initiative is an independent,
not-for-profit multi-stakeholder consortium, whose mission is to drive
improvement in the quality, safety and efficiency of healthcare through
information and information technology.
Ms. Gerber testified that healthcare in the United
States is highly fragmented, largely paper-based and does not include
accessing comprehensive patient information at the point of care. She
expressed the view that Health Information Technology can play a critical
role in creating a more efficient and effective healthcare system.
She stated that despite evidence of improvements that
can be achieved through the use of information technology, adoption rates
continue to be quite low. She indicated that more than 90 percent of the
estimated 30 billion healthcare transactions each year are conducted by
phone, fax or mail. According to Ms. Gerber, those who have been the
slowest adopters generally possess limited access to capital and a lack of
ongoing financial incentives to support their adoption.
A significant part of Ms. Gerber’s testimony was
focused on Health Information Exchanges (“HIEs”) in the United States.
She defined the term “Health Information Exchange” as the “mobilization
of healthcare information electronically across organizations and
disparate information systems within a region or a community.”
According to Ms. Gerber, HIEs are designed to support
interoperability and facilitate access to and retrieval of clinical data
privately and securely to provide better patient-centered care. The
eHealth Initiative’s Foundation, with funding support from the HHS,
supports multi-stakeholder HIE collaboration through a Gulf Coast Health
Information Project and also a program called “Connecting Communities.”
These programs provide seed funding and technical assistance to HIE
efforts and produce informative research and practical tools that aid and
inform the field.
A survey conducted by the eHealth Initiative indicated
a dramatic increase in the level of interest in and activities of HIEs.
According to Ms. Gerber, perceived provider inefficiencies, healthcare
quality issues and rising healthcare costs are key drivers moving states,
regions and communities toward HIEs. Some of the common challenges cited
by HIE initiatives that were surveyed included the need for increased
funding, a realignment of incentives, and standards and interoperability
in mobilizing information electronically through the healthcare system.
She also testified that research compiled by a new
eHealth Initiative report on legislative activity reveals that HIT
planning is on the rise, with 28 states initiating or in the process of
HIT planning and implementation. She also indicated that the federal
government through both Congress and the Administration, has introduced a
myriad of policies and initiatives designed to address the barriers that
impede improving healthcare through HIT and HIE.
She also spoke on the barriers that HIT has
encountered. She cited three such barriers. The first barrier that she
discussed was the misalignment of incentives and the lack of a sustainable
business model. She testified that practicing clinicians, hospitals, and
other healthcare providers often cite the lack of up-front funding and
business models to support ongoing usage as key barriers to HIT adoption.
With respect to misalignment, she indicated that research indicates that
there is a misalignment between those who pay for the implementation and
ongoing usage of information technology and those who benefit from its
usage.
The second barrier that she discussed was a lack of
interoperable systems and data standards. She stated that the federal
government should continue to play a strong role in the development and
adoption of standards within its own programs and should provide
incentives to the private sector to promote the usage of such standards.
She testified that the federal money that is there to fund these efforts
is simply not enough and that it is going to take the public and private
sector working together and maybe a special fund.
The third barrier that she discussed was organizational
change. She indicated that a number of incentives have emerged, primarily
in the private sector, to address organizational change issues and to
facilitate the migration towards an interoperable electronic healthcare
system. She stated that private sector organizations will and should
continue to assist healthcare stakeholders as they migrate toward an
electronic healthcare system. She also indicated that the federal
government can play a critical role by leveraging the work being done and
collaborations in this area.
She also discussed privacy, confidentiality and
security issues. She indicated that these issues continue to be a
challenge at the state and local level. According to Ms. Gerber, 76
percent of the state leaders recently surveyed cited addressing privacy
and confidentiality as a very or moderately difficult challenge in the
context of HIT and HIE. She stated that for HIT and HIE implementation to
proceed to achieve better healthcare, the issues of privacy, security and
identity must be properly dealt with on a technical and policy level and
through targeted communications to healthcare consumers explaining, in
easy to understand language, how their healthcare information would be
handled and accessed within an interoperable electronic healthcare
infrastructure.
When asked whether she saw a role for the Department of
Labor in getting communications out to the general public, she indicated
that she thinks that there may be a role in four to six months. She
indicated that, at this point, a lot of work on proper messaging hasn’t
been done.
Summary of Jonathan Hare – August 2006
Jonathan Hare is the CEO and Chairman of Resilient. He
is a member of the Markle Foundation Personal Health Technology Council.
Mr. Hare is also a founding member of the Just Do It Working Group, a
public/private partnership trying to launch a patient-centric personal
health network using existing infrastructures, applications and business
practices and is capable of self-funded growth without government
subsidies.
Mr. Hare described how he spent much of the last year
trying to understand what is wrong with HIT and how can we fix it. Based
on his discussions with people from all aspects of the healthcare system,
he concluded that an alternative approach could provide a faster and
easier path to achieving the President's HIT agenda.
The current government and private initiatives were
described as being directed towards important and appropriate long-term
goals and that they have laid a useful foundation for future progress. Mr.
Hare praised their efforts, especially the development of data standards,
building awareness of the problem and creating organizations trying to
solve the problem.
The problem Mr. Hare sees is that these efforts rely
upon a brute force application-centric approach that is organized around
healthcare institutions and existing healthcare information systems rather
than a network-centric approach organized around patients and patient
data.
He criticized the current approach for trying to create
a national network through common data and application standards. Mr. Hare
described how most systems integration efforts fail and noted that failure
rates are higher the bigger and more complex a project is. He noted that
the same approach that's been adopted by the National Health Information
Network (NHIN) prototypes was tried on a much smaller scale during the
internet bubble. Mr. Hare described how although hundreds of billions were
spent to create “business to business exchanges,” that it proved
impossible to get the technology integrated and to get people to use it.
Mr. Hare explained how users adopt applications that
give them convenient access to information, resist applications that
require them to do data entry for somebody else. His concern is that the
current application-first approach to electronic health data will require
widespread adoption of new infrastructure, applications, standards and
practices across a healthcare system before those electronic health record
systems could offer significant productivity benefits. Mr. Hare also
argued that the vast majority of the cost, risk and disruption associated
with this approach will be concentrated on healthcare providers,
especially early adopters, whereas the economic benefits will be mostly
long-term, highly uncertain, and captured primarily by the payers. He
estimated that the NHIN will cost between $250 and $374 billion dollars
before participants stop losing money.
Mr. Hare also testified that the current approach will
not protect patient privacy. He argued that absent a system-wide mechanism
to document patient consent, providers will fall back on paper consent
forms and bureaucracy. Unless this privacy problem can be addressed at the
network level, Mr. Hare said that patient information will not flow
efficiently, which is the whole point of NHIN.
In his view, there are two possible paths to move
forward. The first is to try to overcome the obstacles of the current
architectural approach with massive government subsidies or a sweeping
federal mandate. The second is to find a dramatically easier
implementation approach that avoids the misaligned incentives and
minimizes the systems integration challenges. Since huge subsidies are not
likely and mandates usually fail, Mr. Hare recommended the second path. He
advocated a “personal health network” that takes a different approach
to the same problem.
He called it a personal health network because it is
focused around patients, their data and their doctors. It would be an
internet-based personal privacy service that allows patients to directly
control access to their private data across different applications and
systems no matter where they are located. This service would be able to
authenticate any doctor, patient or healthcare professional, learn their
relationships, remember the rights that the patient has directly or
indirectly branded to them and allow the patient to retain control of data
as it flows between different applications and systems. It allows covered
entities and providers to verifiably attest to existing written patient
consents that they have on file, instead requiring the patients to
directly provide electronic consent.
He said that patients could be alerted when anybody
claims to have their consent to have access to their private data. And an
audit service will record who accessed what information on whose authority
and when. Mr. Hare sees the personal health network as a data-first model
that focuses on recycling, reconnecting and reprocessing existing sources
of patient data into a personal health database controlled by the patient.
He argued that it would enable a variety of useful services that providers
and patients will use and payers will be happy to pay for on behalf of
their members.
Mr. Hare described how the initial focus should be on
nationally aggregated data that is already stored electronically,
principally claims-based data. He stated that it is possible to derive a
much more complete and useful personal health record from these sources of
electronic data than is currently available in any single existing patient
chart.
Once people start using the personal health network to
access data and provide services, Mr. Hare predicted that more patient
data will enter the network and this creates a positive feedback loop. Mr.
Hare described how the personal health network relies only upon
infrastructure and habits that are already in use: fax, phone, e-mail and
the web. It does not require adoption of new technology before early
adopters can benefit from joining the network. He sees it as a free and
open market that would invite open competition, and would reward economies
of scale, innovative business models and the first movers who establish
the valuable service. Mr. Hare argued that the personal health network is
backwards compatible with the existing healthcare system, can achieve
critical mass one patient at a time and would become self-funding through
operational efficiencies.
Mr. Hare advocated that employers can use their
leverage to create a market demand by telling insurers what they want. He
sees insurers as the ones we need to work with to solve this problem since
they are rational actors who want to drive their costs down and provide
better service, if they can.
He described a pilot project that the Just Do It group
is working on for the San Francisco Homeless Healthcare Initiative. The
goal is to take the 350 healthcare facilities that take care of the
homeless and allow them to access healthcare data. Mr. Hare described how
it would allow the creation of a continuity of care record system, which
includes prescription drugs, history, lab tests, etc.
Advice Mr. Hare thinks the Council should give the DOL
includes making sure large employers and payers are brought into a much
more active role in fixing the healthcare system, that the government can
create a market for these information services, that advice letters are
need to create a safe harbor related to electronic privacy issues and that
legislation is need to give patients more explicit rights over their data.
Summary of Mr. Mark Grushkin – September 2006
Mr. Grushkin specializes in employee benefit law,
representing large, small and mid-sized companies, non-profit
organizations and single employer plans and trusts. He opened his remarks
by providing background on ERISA and HIPAA, specifically their impact on
employers. He stated that both laws impose fiduciary responsibility and
liability on plan sponsors. As a result, plan sponsors spend much time and
money to meet their fiduciary compliance obligations.
Mr. Grushkin expressed his concern with respect to the
impact HIT could have on employers. The burden and expense of the
compliance obligations under ERISA and HIPAA have been significant. The
HIPAA Security Rule that was drafted in conjunction with the HIPAA Privacy
Rule applies to PHI that is created, maintained or transmitted
electronically, to ensure the confidentiality, integrity and availability
of electronic PHI (ePHI). Mr. Grushkin expressed concern over the
increased liability exposure employers could face if more ePHI is
available, especially if employers are required to play a role in the
development of personal health records. Greater use of HIT without
guidance and protection for employers, especially self-insured plan
sponsors, could have a negative impact on employers and possibly the
offering of health plans.
He cited the need to amend HIPAA and/or ERISA to afford
employers more protection – possibly a safe harbor that is akin to
safeguards available for legal process. He stressed the need to have the
DOL address the practical realities of HIT.
Mr. Grushkin stated that he believes that the health
data exists and that the concept of HIT and PHR’s is a good one.
However, it is important that the realities of the additional burden this
could create for employers are recognized. The DOL should do whatever
needs to be done through regulations and guidance to ensure that employers
are not faced with additional fiduciary liability. In gathering this data,
the focus should be on the third party administrators, major health
insurers and HMOs, not employers. Currently, those entities are not
covered entities for HIPAA. They are business associates. For the
self-insured employer, if something goes wrong, the employer is not
indemnified. There is the potential for legal liability for the employer.
He recommended that TPAs should be deemed to be fiduciaries for purposes
of ERISA.
With the implementation of PHRs and HIT, his closing
statement emphasized that plan sponsors, especially self-insured plan
sponsors, will face increased liability exposure under ERISA and HIPAA,
unless the appropriate safeguards are instituted.
Summary of Mark Decker – September 2006
Mark Decker is Corporate Director of Worklife Services
for St. John Health. He is also a member of the Society for Human Resource
Management (SHRM) and he serves on SHRM’s Labor Relations Special
Expertise Panel. He testified that SHRM believes that the development of
individual eHR and HIT will play a key role in the transformation of the
healthcare system. His testimony focused on the need for HIT, the
importance of privacy and security of health information, the employer’s
role in HIT and the role of the federal government in the adoption of
interoperable HIT.
The witness indicated that SHRM recommends that the
federal government establish interoperable standards that are flexible for
current users of HIT to adapt to the national HIT standards. It is
important that both the public and private sector work together in
establishing those standards. He went on to say that SHRM believes that
the adoption of electronic healthcare standards will make it easier for
employers to identify high quality/low cost providers, develop metrics to
confirm the information, identify regional areas of duplicative service
and allow for more informed consumer in a much more efficient manner.
Decker stated that SHRM suggests that the HIT eHR could
provide more safeguards than a hardcopy/paper medical record. The
electronic record can control access, track who has accessed the
information and limit who can modify the record. According to Decker, SHRM
also recommends the federal government serve as the policy and funding
driver for a national, interoperable HIT system.
Summary of Melissa Goldstein – September 2006
Melissa Goldstein testified about the work of
Connecting for Health, a public-private collaborative created in 2002 that
is made up of more than 100 organizations representing private, public and
not-for-profit groups. Ms. Goldstein described how they have worked on
defining the technical and policy challenges that stand in the way of an
interconnected healthcare system.
She described how they recently published a “Common
Framework,” consisting of seventeen documents that recommend
methodologies and policies that they believe will support their
organizations goals. Ms. Goldstein gave highlights of some of the
principles and features of the Common Framework documents, including:
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The network should provide the ability to transfer
personal health information securely among authorized users and with
patient control. An organization that holds and supplies personal health
data must have confidence that the other network participants will handle
that data appropriately.
-
To create a trustworthy information environment,
policy concerns cannot be deferred until after technological decisions
have been made and deployed.
-
Connecting for Health advocates development of a
decentralized and federated architecture – a “network of networks”
– in which patient information remains in the hands of the care
providers.
-
Consumers are wary of making their sensitive
personal information accessible over the internet and want patient consent
and patient control. Failure to employ a process that produces
transparent, trustworthy solutions could jeopardize consumers’
willingness to use the network.
-
There is a need for a universal framework for
portability of information. Connecting for Health proposes the use of nine
widely-accepted fair information principles, based upon those used in
Europe and codified in U.S. law and practice. These include:
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Openness and transparency about developments,
practices and policies with respect to personal data. Individuals should
be able to know what information exists about them, the purpose of its
use, who can access and use it and where it resides.
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Purpose specification and minimization so that the
reason for use of the data is specified at the time of collection, and the
subsequent use should be limited to those purposes or others that are
specified on each occasion of change of purpose.
-
Use and collection limitation so that personal health
information is only collected for specified purposes, is obtained by
lawful and fair means and, where possible, with the knowledge or consent
of the data subject. Personal data should not be disclosed, made available
or otherwise used for purposes other than those specified.
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Individual participation and control so that people
are able to: find out from each entity that controls personal health data
if that entity has data relating to them; they access personal data
relating to them within a reasonable time and at an affordable cost;
receive their data in a form that is readily understandable; know why a
request is denied and are able to challenge such denial; challenge data
relating to them and have it rectified, completed or amended.
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Accountability and oversight so that entities in
control of personal health data implement these information practices.
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Policy objectives can best be achieved by leveraging
technical designs that build upon existing infrastructure, separate
end-user applications from the Network, maintain decentralized data
stores, engage users in federated relationships and are flexible to
unpredictable future technologies and innovations.
Ms. Goldstein provided more details on these
highlights. For example, she testified that we should not expect
technology developers and manufacturers to come up with the answers to
these policy questions, that stakeholders are indeed eager to work
collaboratively in an effort to resolve them, that policy and technology
experts must work together in a continuous process of system refinement
and evolution and that the rapid expansion of the network depends on
applications that serve consumers and providers.
She also explained how Connecting for Health joined
twelve other major health and technology organizations in January of 2005
in submitting a Collaborative Response to a Request for Information from
the Office of the National Coordinator for Health Information Technology.
The joint response proposed a “Standards and Policy Entity” (SPE),
that would be a public-private collaboration to identify and specify the
implementation rules, technical standards, and information policies. They
predict that without such guidance and commonality, the network will not
be reliable or consistent.
Ms. Goldstein feels that the DOL should advocate for
the development of a uniform, national process for developing policy and
technical standards that address public needs and assure interoperability.
The Council and Ms. Goldstein discussed some of her
points in more detail. She emphasized that it is important to build upon
what is already out there instead of starting from scratch. The key is
figuring out how existing technology systems can talk to each other in a
secure manner.
Ms. Goldstein also stated that although the government
will have to subsidize the development of information technology, the
government cannot pay for everything. She believes that the government is
going to have to play some role, especially helping small doctors’
offices, small rural clinics, community clinics and other small entities.
Ms. Goldstein also described how providers have to view this as an
investment in their future.
Summary of James Sokol and Eileen Flick – September
2006
James Sokol, a Senior Vice President, and Eileen Flick,
a Vice President and Benefits Consultant, both from The Segal Company,
covered a number of different areas during their joint presentation on
September 22, 2006:
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With respect to multiemployer health plans, the fund
office technology is much different than in the single employer health
plan model. A large number of the fund offices and administrators use
dated technology that is mainframe or mini-computer based. Technology
departments are small or non-existent. Legacy programming languages such
as Cobol and RPG are common. Systems hold minimum data necessary to
provide current level of functionality. Hence, participant health data is
not available online. Centralization of documentation is problematic and
privacy must be maintained by the trust fund.
Due to the budgets and staffing of the fund offices,
providing more data to members would increase their support burden, with
what is perceived to be no return on investment. Outsourcing is generally
not considered because of the perceived loss of control. Also data from
group health systems is not linked with other systems.
Thus, they recommended that the adoption of HIT focus
on large national funds that are more technologically advanced and on
large third party administrators. Providing turnkey solutions that allow
fund office systems to integrate with the payer and provider systems would
be helpful, as would subsidizing fund office technology improvements.
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In adopting an interoperable HIT, there should be
national standards for transparency on cost and quality of care. Medical
information should be made available to consumers in readable and
non-clinical format. Payers should be required to report data that allows
for uniform measurement of quality providers and high performing
hospitals. A national quality scorecard of healthcare providers for use by
consumer would be helpful as it could measure outcomes and result in
efficiencies.
-
When asked what incentives the physicians had in
embracing HIT, Jim and Eileen noted that physicians would embrace the
systems if it resulted in fairer payments to the physicians.
Summary of David Merritt – September 2006
David Merritt, Project Director for the Center for
Health Transformation, The Gingrich Group, appeared before the Working
Group on September 26th. The overall purpose of Mr. Merritt’s group is
to build an intelligent health system, but it will not be possible without
the rapid adoption by health providers of HIT. There have been great
strides on the clinical side, but a step backward on the administrative
side. About one-third of hospitals use HIT and about 15% of the doctors
use HIT. Mr. Merritt has not seen a single example where HIT did not save
lives and money. For example, a doctor did a full-practice conversion to
eHRs, and after an initial set-back, administration costs went down and
care went up. Providers have no current incentive to implement HIT because
they are paid the same as those who don’t.
Governments are pushing for HIT and more private sector
companies are looking at setting up a PHR system for employees that
includes both information and education. There are several bills on the
Hill related to HIT. The President recently issued an Executive Order on
HIT. Secretary Levitt (HHS) recently signed a Rule on HIT. However,
regulations can be a barrier and have unintended consequences. While
designed to prevent corrupt relationships, they can prevent collaboration
between and among doctors, so please be careful. Many states are pushing
HIT. Mr. Merritt cited about fourteen of them. They are all looking to
help their bottom lines through HIT. President Bush’s Executive Order
calls for plans, providers and carriers to adopt an approach to
nation-wide HIT.
Mr. Merritt had four recommendations for DOL:
-
Support the President’s Executive Order by
requiring DOL healthcare providers, plans and insurance companies
implementing or changing HIT systems to meet recognized interoperability
standards;
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Support the President’s Executive Order by
implementing programs at DOL to measure the quality of services provided
by healthcare providers;
-
Leverage the Secretary’s role as head of a large
employer to implement an Electronic Health Record for all Department
employees; and
-
Don’t block plans from adopting HIT with rules
that hinder the sharing of electronic data.
HIT can/will modernize healthcare system and enhance
the lives of our citizens. In response to Sherrie Grabot’s question as
to who is driving the rules and regulations, Mr. Merritt said that a
Standards Panel funded by HHS and a Board set up by HHS have been
established. They have established 24 technical standards. There are
approximately 100 individuals on the panel, representing many
organizations.
In response to Kathryn Kennedy’s question as to why
employers would buy in, Mr. Merritt said because employees are picking up
the (healthcare) tab. The objective is better healthcare at a lower cost.
Mr. Merritt cited a Chicago-Sun-Times article he co-authored and several
studies and approaches to measuring the quality of healthcare.
In response to Lynn’s question regarding the employer’s
fiduciary liability, Mr. Merritt stated that small employers could
contract to have this done. He pointed out that there is currently no
information on the level of care. Standardizing the data will certainly
help in developing standards of care information.
In response to Sherrie’s question as to whether
outcome-based data would drive manipulation, Mr. Merritt acknowledged
there are ways to manipulate the data. He cited a Utah case with lower
costs and better outcomes, but it may reflect demographics of the area,
not the level of care. Physicians are still talking about the concept.
They don’t want to be ranked. But we are not at the level in the process
yet. He recommended we leave the assessment to the experts.
In response to Neal’s question of how to get
providers to implement HIT, Mr. Merritt said it is not a case of the
vendors and tech companies forcing them, but rather the system is to
blame. The doctors are not incented to adopt HIT. It must be consumer
driven. If this is done, physicians coming out of medical schools today
will demand HIT wherever they practice.
Summary of Carolyn Walton – September 2006
Carolyn Walton testified on behalf of Wal-Mart Stores,
Inc., the nation’s largest retailer and the largest private employer in
the United States. Her employer endorses and supports the Bush
administration’s initiatives to promote price and quality transparency,
to drive health information technology standards and to provide options
that promote quality and efficiency. She analogized the administration’s
initiatives to drive HIT standards to the evolution of standards developed
in the retail industry in adopting bar codes. Bar codes were developed for
automating the checkout process – to improve efficiencies at the point
of sale, by capturing sales data, maintaining inventory, forecasting
future sales and driving the replenishment process. Wal-Mart started with
a specific business problem to solve and then enlisted technology to solve
the problem.
Ms. Walton recommended to the Council that a similar
approach be adopted with respect to HIT – identify the business problem
that is attempting to be solved and engage the end-users, rather than the
technology companies, in the adoption of standards. She advocated
collaboration of the various stakeholders – educating and reaching out
to them as to the value of engagement. The drivers of this global HIT
initiative should not be the sellers of technology, but instead the buyers
of technology and the deliverers of healthcare.
She concluded her remarks with five observations:
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Start by identifying a compelling business problem
to be solve that ultimately affects the consumer. Do not start with the
technology;
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Start small but keep the overall roadmap in view;
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Drive speed of adoption with a multi-industry
standards organization that is led by end-users rather than technology
companies;
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Collaborate with public agencies, employers, private
entities, non-governmental organizations, major suppliers, professional
associations and consumer advocates; and
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Educate and reach out to key stakeholders to
demonstrate the value.
Summary of Kelly Cronin – September 2006
Kelly Cronin, Director of Programs and Coordination,
Office of the National Coordinator for Health Information Technology, U.S.
Department of Health and Human Services, appeared before the Working Group
on September 22, 2006. She presented written testimony and answered
questions posed by members of the Working Group. In her written testimony,
she discussed Executive Order 13335 directing the Secretary of the HHS to
establish the position of National Coordinator for Health Information
Technology, with responsibilities for coordinating federal health
information technology programs with those of relevant executive branches,
as well as coordinating with the private sector on their health
information technology efforts.
She discussed a publication entitled, “Strategic
Framework: The Decade of Health Information Technology: Delivering
Consumer-centric and Information-rich Healthcare,” that was published at
the HHH’s Health IT Summit in July of 2004. The publication outlined an
approach toward nationwide implementation of interoperable electronic
health records and identified four major goals. The goals were: 1) to
inform clinical practice by accelerating the use of eHRs; 2) interconnect
clinicians so that they can exchange health information using advanced and
secure electronic communication; 3) personalize care with consumer-based
health records and better information for consumers; and 4) improve public
health through advanced bio-surveillance methods and streamlined
collection of data for quality measure and research.
In her written testimony, Ms. Cronin stated that HIT
can save lives, improve care and reduce costs in our health system. She
indicated that the Institute of Medicine estimated five years ago that as
many as 44,000 to 98,000 deaths occur each year as a result of medical
errors. She indicated that studies have shown that adverse drug events
have been reduced by as much as 70% to 80% by targeted programs, with a
significant portion of the improvement stemming from the use of HIT. She
also mentioned a recent study that showed that clinical information is
frequently missing at the point of care, and that the missing information
can be harmful to patients. This study also showed that clinical
information was less likely to be missing in practices that had full
electronic records systems.
She advised that there are mixed signals about the
potential of HIT to reduce costs. Some researchers have estimated that the
potential savings from the implementation of HIT and corresponding changes
in care processes could range from 7.5% of healthcare costs to 30%. She
also discussed the HIT Leadership Panel that was convened for the purpose
of understanding how IT has transformed other industries and how, based
upon their experiences, it can transform the healthcare industry. The
Leadership Panel was comprised of nine CEOs from companies that purchase
large quantities of healthcare services for their employees and
dependents. The Leadership Panel concluded that investment in
interoperable health IT is urgent and vital to the broader U.S. economy
due to rising healthcare demands and business interests. According to Ms.
Cronin, the Leadership Panel identified as a key imperative that the
Federal government should act as leader, catalyst and convener of the
nation’s health information technology effort. The Panel also recognized
that widespread HIT adoption may not succeed without a buy-in from the
public as healthcare consumer.
She discussed Executive Order 13410 which is intended
to promote quality and efficient delivery of healthcare through the use of
HIT, transparency regarding healthcare quality and price and better
incentives for program beneficiaries, enrollees and providers in federally
administered or sponsored healthcare programs.
According to Ms. Cronin, HHS published a Request for
Information in November of 2004 that solicited public input about whether
and how a National Health Information Network (NHIN) could be developed.
Some themes that emerged from the responses of stakeholders included that
a NHIN should be a decentralized architecture built using the Internet
linked by uniform communications and a software framework of open
standards of policies; that a NHIN should provide sufficient safeguards to
protect the privacy of personal health information; and that incentives
may be needed to accelerate the adoption of a NHIN. Some key challenges to
developing and adopting a NHIN were the need for additional and better
refined standards; addressing privacy concerns; paying for the
development, operation and access to a NHIN; accurately verifying patient’s
identity; and addressing discordant state laws regarding health
information exchange.
She also advised that the HHS has funded major
initiatives from standards harmonization to State Information Exchange
Initiatives. The HHS awarded a contract to the American National Standards
Institute to convene the Health IT Standards Panel (“HITSP”). HITSP
brings together U.S. standards development organizations and other
stakeholders to develop, prototype and evaluate a process to harmonize
industry-wide standards development. She indicated that the standards
setting process today is fragmented and lacks coordination.
She also discussed contracts that the HHS has awarded,
including a contract to the Certification Commission for Health
Information Technology to develop criteria and evaluation processes for
certifying eHRS and the infrastructure or network components to ensure
interoperability.
Ms. Cronin indicated that there has been a significant
increase in state level Health Information Exchange (HIE) activity. During
the past several years, she indicated that more than 100 HIEs have been
established. She advised that a report was recently released that revealed
the important role states have in creating an environment for the
collaboration, coordination and sharing of critical clinical and
administrative data among key stakeholders.
She also indicated that it would probably be worthwhile
to explore more about how HHS and the DOL can work together in employer
outreach. She indicated that there is interest in trying to reach out to
the appropriate people in the DOL to make sure that they collaborate on
the transparency initiative.
When asked about the HIPAA”, she indicated that she
thinks that most people look at HIPAA as a sort of baseline law that from
a security and privacy perspective creates some needed protections. She
advised that there is another set of considerations when moving into an
electronic world where clinical data will be moving, not just
administrative data. She testified that we need to be thinking more
broadly about what the needs are and the legal requirements in that new
context.
She also indicated that for health plans in particular
it can be quite burdensome to advance rapidly and that there is now some
consideration going on around what is a reasonable timeline to implement a
whole new coding system. This system would be above and beyond any
standards implementation that would be necessary for HIPAA.
When asked about selecting providers and quality and
performance, she indicated that there are a lot of efforts underway to
standardize the development and adoption of quality measures. She
indicated there is an effort to figure out how to actually capture data,
aggregate that data and analyze that data in a fair and consistent manner,
using the right statistical procedures, in a way that can produce reliable
evidence-based measures that fairly represent the true performance of
providers.
Summary of Written Testimony from AHIP – September
29, 2006 and November 7, 2006
AHIP is a national trade association representing
nearly 1,300 member companies that provide health, long-term care, dental,
vision, disability and supplemental coverage to more than 200 million
Americans, either directly or through administrative services for ERISA
covered group health plans. AHIP has been involved in the advancement of
the adoption of health IT and supports private and public initiatives to
promote an interconnected and interoperable healthcare system. AHIP
recommends that the DOL encourage the adoption and use of health IT by
group health plans consistent with the direction taken by HHS.
AHIP asserts that HIPAA privacy and security rules, and
other state and federal privacy requirements, provide sufficient
safeguards for health information that is collected, used or disclosed by
group health plan. Hence, the DOL does not need to duplicate current
privacy protections or further restrict the ability of group health plans
to use HIT for payment and healthcare operations.
AHIP does not believe that ERISA fiduciary
responsibility should be extended to a TPA in the context of a group
health plan providing HIT information in a personal health record to plan
beneficiaries and participants. Such function should be regarded as
ministerial and not fiduciary duty under the context of ERISA. It would
also result in additional litigation that is counterproductive in the eyes
of AHIP. Hence, AHIP recommends that the Advisory Council not add
additional requirements on TPAs with respect to the adoption of HIT
solutions.
VII. Additional Information Sources
Meeting of August 10, 2006
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Agenda
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Official Transcript
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Statement by Ned McCulloch, IBM
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Statement by Alissa Fox, Blue Cross & Blue
Shield Association
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Statement by Ticia Gerber, eHealth Initiative
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Statement by Jonathan Hare, Resilient
Meeting of September 22, 2006
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Statement by Mark Decker, St. John Health, on behalf
of SHRM
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Statement by Melissa Goldstein, Markle Foundation
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Statement by Mark Grushkin, Greenberg Taurig
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Statement by Carolyn Walton, Wal-Mart Stores
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Statement by James Sokol and Eileen Flick, SEGAL
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Statement by David Merritt, Center for Health
Transformation
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Statement by Kelly Cronin, HHS
Additional Submissions
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Written submission by America’s Health Insurance
Plans (AHIP)
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A joint position statement from the American Health
Information Management Association (AHIMA) and the American Medical
Information Association (AMIA)
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