Private Insurers Getting on the EHR Train

[Greenbeard]

For years the adoption of electronic health records has been hampered by a well-known misalignment of incentives: the people who have to pay for it are generally different from the people who benefit from it.

Doctors and hospitals (i.e. providers) have to pay to install and maintain health information technology systems, they have to put in the time to learn to use it (and train staff to use it), they're the ones that potentially have to trouble shoot or seek technical assistance. But the benefits generally accrue to payers like insurance companies. If an HIT system reduces medical errors, or helps providers to avoid doing unnecessary procedures, or prevents a re-hospitalization, that's a savings for the insurance company that would be reimbursing for that extraneous care (and, ultimately, for you the consumer). But providers get paid for all that stuff so they may actually lose money in the deal. They bear the costs for HIT systems and the benefits are enjoyed by somebody else.

Now that stalemate seems to be on the verge of being broken and the American health care system is getting ready to take a big step into the 21st century. In our system, the public payers--Medicare and especially Medicaid--are often the innovators driving system change (and, yes, there is a significant private presence in many state Medicaid programs). That's what's happening in this case.

As explained in this thread, the public payers are offering bonus payments to any of their doctors or hospitals who adopt and start using electronic health records. Now, in the wake of the final meaningful use regulations, a number of private payers are lining up behind the federal efforts and coming up with some EHR adoption incentives/assistance of their own to encourage meaningful use:

A broad array of healthcare plans, providers and professional licensing bodies on Thursday announced a slew of initiatives aimed at getting hospitals and physicians' offices to adopt electronic health records.

These include: zero interest financing and other financial incentives for physician practices to purchase records systems; training and education to put them in place; recognizing providers who have adopted electronic health records through premium designations; and eventually requiring that providers shift to paperless records in order to stay in insurance networks and retain their certification. The new initiatives were announced at a meeting organized by the policy journal Health Affairs and the Health Industry Forum at Brandeis University.

[...]

"When we saw this before, yes some of the physicians adopted the tool, but they didn't necessarily use it in the routine practice of medicine," said Charles Kennedy, vice-president for Health Information Technology at WellPoint Inc. "And so the importance of aligning our programs behind the federal programs is that we now are all saying the same thing."

The Obama administration applauded the commitments in a joint statement by David Blumenthal, the National Coordinator for Health Information Technology, and Marilyn Tavenner, principal deputy administrator at the Centers for Medicare and Medicaid Services.

"The public and private sectors can and must collaborate in furthering the goal of creating a 21st century electronic health information system in the United States," they said. "For that reason we are pleased and encouraged by today's announcement of significant initial steps by organizations across the spectrum of health care to support [the] goal of furthering the meaningful use of certified [electronic health records]."

There's an unprecedented effort going on in every state in the country right now and now some big players are bringing additional resources to the table. Exciting times.

And if you want a bit more detail:

Federal incentive payments for meaningful use of electronic health records became more meaningful on Aug. 5 as four major commercial insurers announced programs that could result in additional private sector incentives.

The payers are Aetna Inc., Highmark Inc., UnitedHealth Group and WellPoint Inc. All four insurers, at minimum, will align their pay-for-performance programs with federal meaningful use criteria. In some cases, physicians who meet a payer's P4P criteria and demonstrate meaningful use will receive a higher P4P payment; in other cases the payment won't rise but demonstrating meaningful use will become a criteria for getting the P4P payment.

Aetna will offer additional financial incentives for demonstrating meaningful use but whether the payments come from a separate incentive program or an increased P4P payment has not yet been determined.

UnitedHealth now will tie part of its P4P payments to demonstrating meaningful use. It is not yet clear if meeting meaningful use will result in a higher P4P payment. UnitedHealth has P4P programs in several regions across the nation. Now, it will rollout a single, uniform P4P program nationwide.

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At WellPoint, physicians in a P4P program will have to demonstrate meaningful use to get a payment, but meaningful use won't increase the payment. WellPoint also will offer millions of dollars in low-interest loans to assist hospitals in rural, critical access or medically underserved areas to purchase and adopt EHRs. The loans will start in California and Georgia in 2011, and WellPoint will use results from those programs to evaluate expansion to other states.

Details on Highmark's incentive program were not available.