How Can Health IT Lead to a More Sustainable Health Care System?

Pierce Graham-Jones | February 3, 2012

Across the country, health care providers are making significant investments to redesign care processes and strengthen their health information technology (health IT) capabilities with the goal of achieving better care, better health, and lower costs. For the American health care system as a whole, the simultaneous pursuit of all three of these aims is essential to sustaining any one of them.

Over the years, economists and health IT experts have projected a wide range of cost savings from health IT implementation. These kinds of analyses are challenging because they require experts to predict how health IT will influence changes in provider and consumer behavior, and how those changes in behavior in turn influence quality and financial outcomes.

Yet it is still important to understand how health IT can support the nation’s efforts to “bend the cost curve” and ultimately slow the growth of health care spending, while improving outcomes and the health of the population. Within this context, a single health care health IT-enabled intervention that achieves the goal of improving health care quality may be more likely to spread if that intervention has also demonstrated measurable net reductions in health care expenditures.

Roundtable to Promote Value in America’s Health Care System

On October 28, 2011, the Engelberg Center for Health Care Reform at the Brookings Institution and the Office of the National Coordinator for Health Information Technology (ONC) convened a small group of national experts—economists, actuaries, and health IT experts from the private sector and government—to discuss common approaches for understanding the financial impact of clinical interventions that make use of health IT.  At the meeting, entitled the “Roundtable to Promote Value in Health Care,” the expert panelists analyzed the potential financial impacts of health IT-enabled interventions being implemented in three Beacon Communities (in central Pennsylvania, Tulsa, and western Colorado) and considered lessons for other communities and care delivery organizations embarking on similar care innovations.

“Developing tools for measuring cost impact from multiple perspectives has been an objective for the Engelberg Center for some time,” said Mark McClellan, director of the Engelberg Center for Health Care Reform. “I thought the meeting was hugely productive, and we look forward to sharing the output.”

One of the Problems

The organizations that implement innovative interventions that result in quality improvements and cost reductions are often not the sole beneficiaries of these interventions’ cost savings. Providers often touch patients covered by multiple insurers (such as Medicare, Medicaid, private insurers, and employer-owned health plans), each with its own strategic and financial imperatives. Encounter-based claims data and other information needed to measure holistic cost impact can be inaccessible, leading implementing organizations to take a “wait and see” approach. For example, they may hope that clinical improvements such as reduced readmissions will convince payers or other stakeholders to work with them to sustain the intervention, even though the impact on costs may not be fully demonstrated.

How the Beacon Communities Fit In

The Beacon Community Program funded 17 communities with average three-year awards of $15 million each to demonstrate replicable health IT-enabled interventions that achieve the three-part aim. In many ways, these communities are no different from delivery systems and their partnering organizations that are working on health IT-enabled transformations across the country. However, by participating in the Beacon Program, they have agreed to openly share their processes of change, including their processes for engaging payers in conversations about financial impact and sustainability. Part of our job at ONC is to ensure we learn as much as possible from these innovative communities, and share their lessons effectively with the rest of the country.

What We Accomplished

The Engelberg Center’s roundtable discussion was not intended to serve as a formal evaluation meeting that would render a final evaluation of the Beacon Communities’ current efforts. Rather, the output of this meeting made it easier for Beacon Communities and others engaged in similar work around the country to prospectively study the impact of promising IT-supported care improvement initiatives on overall health care spending.

“This meeting was overdue,” said Aaron McKethan, former director of the Beacon Community Program. “While some of the Beacon Communities are advanced in their payer relationships and in measuring cost savings, there are many implementers out there who are not yet able to show the payer community that claims about the cost effects of their interventions are credible. This creates noise, and it is hard to differentiate between what will have a real sustainable impact, and what will only increase health care spending in the long run.”

George Schneider, chief financial officer at Geisinger Health System, Keystone Beacon Community, added:

“As a health plan as well as a delivery system, Geisinger is a strong believer in the idea that high quality care is efficient care. Providers are partners with insurers in developing innovations in the care delivery process supported by innovations in reimbursement approaches that include payments for quality. We were very pleased to have an opportunity to share our experience in cost measurement with the Roundtable and to learn how other Beacons are addressing critical measurement and partnership issues around paying for quality in their own communities.”

What Are These Beacons doing?

  • The Keystone Beacon Community is using health IT to support chronic disease management for persons with frailty and multiple chronic conditions, aiming to reduce avoidable hospital admissions and other preventable forms of health care utilization while improving quality of life for patients;
  • The Colorado Beacon Community is training physician practices how to most effectively take advantage of making meaningful use of health IT to improve care;
  • The Tulsa Beacon Community is using health IT in new and exciting ways to help doctors in different clinical settings involved in a patient’s care to communicate more effectively about how best to support the patient and his caregiver in receiving optimal care.

These efforts are representative of Beacon Communities more broadly and are similar to initiatives cropping up across the country.

We Want to Hear From You!

We look forward to sharing additional outputs of this meeting and ongoing efforts to learn from all of our Beacon Communities. Stay tuned and please share your comments!


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