A history of Computing in Medicine


Policy Issues in Computerized Health Care



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Policy Issues in Computerized Health Care

Demand for a Health Information Technology (HIT) Policy


In light of the potential benefits of ubiquitous health information technologies, many have called for a greater role for government and public policy in promoting their development and diffusion. Only within the last several years has the issue gained political traction. In 2004, President Bush called for the development of a national health information infrastructure. This infrastructure would include interoperable EMRs for most Americans by 2014. He established (by Executive Order 13335) a national health information technology coordinator (“health-IT czar”) position in the Department of Health and Human Services (HHS) to oversee its development and implementation, and appointed Dr. David Brailer to the post. Bush and his former HHS secretary Tommy Thompson have spoken out on the need to computerize health care, characterizing today's system as “twenty-first century medicine [held] together with nineteenth-century paperwork”39. The Bush administration doubled funding for the effort in fiscal year (FY) 2005 and then made further increases in FY 2006, and it enjoys broad bipartisan backing.
If health information technologies have been in use for over three decades, why has there only now been a major policy push?

  • Recent high profile reports have exposed the prevalence of preventable fatal medical errors and the potential for HIT, including electronic records, computerized physician order entry and decision support systems, to reduce errors and improve the quality of care. In 2000, the Institute of Medicine (IOM) estimated that between 44,000 to 98,000 people die in the hospital each year as a result of medical errors such as prescribing errors, misinterpretation of orders, and diagnostic errors40. Many of these could be prevented through HIT. A 2001 IOM report called for HIT as part of national efforts in quality improvement in patient care and disease management41. Studies42 have shown that efforts like the VA Veterans Health Information Systems and Technology Architecture (VistA) for HIT have resulted in a reduction in prescribing errors.

  • HIT has a potential role in helping to contain escalating health care costs. National health care spending grew to $1.96 trillion in 2004, with government spending accounting for $888 billion (or 45 percent)43. The estimated cost savings from complete implementation of EMR is in the billions, and the financial costs of preventable errors have been estimated at $17 billion per yearError: Reference source not found. A 2005 RAND Corporation study commissioned by the HIT industry put the figure at $500 billion in savings in direct costs over the next 15 yearsError: Reference source not found.

  • Finally, there is empirical evidence of substantial labor productivity gains in other business sectors in the 1990s that have not yet been seen in health care44.

The convergence of these facts has brought the long ignored issue of a national health information infrastructure to the fore.

A Broken Record?


Commentators in medicine and computer science have lamented the slow spread of health information systems (HIS) almost since their introduction. Public policy is often cited as a critical factor. In 1974, computer scientist Anthony Wasserman commented, “The development of information systems in health care has proceeded more slowly than expected ten years ago”. He posed questions about privacy, information security and legal liability arising from the use of decision support systems and patient monitoring technologies.45 Dr. Donald Lindberg, a pathologist and medical computing expert who became Director of the National Library of Medicine (NLM) of the National Institutes of Health (NIH), remarks in the introduction to his interestingly titled 1977 book The Growth of Medical Information Systems in the United States:

“The United States health care system has become subject to increasing public criticism. At the same time, computing systems are ever more ubiquitous and successfully used in nonhealth fields to increase management capability and labor productivity. It is natural to wonder why health system management has not also benefited from dosing with the remedy of computer systems. It is this overriding question which makes this case of interest. Why has medicine not been able to use computer systems to solve its information processing problems?”46



Lindberg’s question remains today, as do some of the policy questions surrounding the adoption of widespread interoperable HITs that he raised. These include both standards (such as terminology, record format, content, etc.) and the issue of Medicare reimbursement of HIT-related activitiesError: Reference source not found.
The following sections highlight the government’s role in promoting medical computing, beginning with a brief overview of government sponsorship of research that started in the 1950s. The federal government has fed the HIT research pipeline and invested in agency systems, most notably the VA’s Veterans Health Information Systems and Technology Architecture, whose recent experience has shown the value of widespread use of EMRs. While extra funding, federal coordination, and goal setting by the current administration is seen as an important policy shift even within the medical computing community47, there are enduring factors that may continue to slow the adoption of HITs. At the end of this section we highlight the most important factors, namely 1) problems of collective action, 2) network externalities and standard-setting, 3) economic organization of the health care industry, and 4) concerns about privacy and security.

History of Government Involvement in Medical Computing


Not surprisingly, government labs were early users and innovators in medical computing. Government purchases of large mainframe computers in the 1950s enabled the development of early applications of medical computing, then called “bioengineering.” The first use of computers for use in health is credited to Robert Ledley, a dentist at the National Bureau of Standards, who used them in dental projects48. He would go on to invent the full-body CT scan in 1974. Ledley and Lee Lusted, a NIH radiologist, published a series of articles, including an influential piece in Science in 1959 about their early work in CDSS using computers and patient information data to conduct Bayesian diagnosis and decision making.
As in other areas of science and technology after World War II, the federal government became the primary funder of medical research. Medical informatics gained a foothold in 1960 as a legitimate field for basic research with the establishment of the NIH Advisory Committee on Computers in Research, first headed by LustedError: Reference source not found. This opened up the field to extramural funding. The first academic treatments of the subject came in the mid-1960s as did the “oft-repeated policy recommendations for fostering medical computer use”.49
Several of the early advances in medical information systems were sponsored by government research. Massachusetts General Hospital’s MUMPS programming language was supported by a 1966 NIH grantError: Reference source not found. The NLM also became involved as a major supporter of medical informatics. In the early 1960s they digitized the Index Medicus which would eventually become the Medline database. Beginning in the early 1970s and continuing today, the NLM has helped to build capacity in universities by funding extramural grants and training programs in medical informaticsError: Reference source not found.
In the late 1960s and 70s, the establishment of Medicare and Medicaid and the rising costs of health care led to a new emphasis in medical computing beyond strictly research purposes, that of systems that emphasized the ability to reduce costs and improve communication in the delivery system. In particular, the need to process vast numbers of Medicare claims for reimbursement created incentives for hospitals to develop systems for medical billing, perhaps at the expense of patient care applicationsError: Reference source not found.
Hospital information systems (HIS)50 developed in this era combined patient records with financial systems for fee-for-service billing. The National Center for Health Services Research (NCHSR), which was the precursor to the Agency for the Healthcare Research and Quality (AHRQ)51, funded both the Technicon system, developed in 1965 with Lockheed and then commercialized, and the open source MUMPS-based COSTAR (1968). Both of these systems were successfully transferred to hundreds of other sites52. In the mid 1960sError: Reference source not found, NCHSR funded systems that combined patient records and decision support, such as the LDS Hospital's HELP system and the University of Vermont’s PROMIS. Many of these systems were models for systems that would be developed in the 1970s and 1980s. Early work in decision support and expert systems in medical computing also received government support during this period, notably MYCIN which was funded initially by the NIH and later by the Defense Advanced Research Projects Agency, the US Navy Office of Naval Research, and the National Science Foundation53.
The failure of Medicare reform and other efforts by the federal government to constrain costs lead to a “rationalization” of the health care system. This included critiques of the cost effectiveness of computing applications in medicine, such as overspending on CT scanningError: Reference source not found. This period marked a further shift of the use of computers in medicine away from patient care and towards cost reduction, business management, and administrationError: Reference source not found. Some experts in this era, such as Kaiser-Permanente founder Sidney GarfieldError: Reference source not found, emphasized the ability of computers to make medicine more effective and humane. They could make “a whole new kind of medicine possible”. These ideas have come full circle in today’s policy debate.
Rising out of this early work in medical computing, much of which was government sponsored, medical informatics established itself in the 1980s as a discipline concerned with all applications of computing to biomedicine and health. The American Informatics Association, founded in 1990, has served in a leadership role and has been active in U.S. policyError: Reference source not found.
Another notable outgrowth is the development of VistA, the VA Medical System’s scalable information system that runs the largest health system in the U.S. It has over 4.2 million patients and over 1000 care sites in its network. VistA is a MUMPS-based system first introduced in 1996, but its origins date back to 1974 with the VA’s predecessor, the Decentralized Hospital Computer Program (DHCP). The system is credited with demonstrated productivity and performance increases in the VA system, in addition to reduced errors. Since 1996, while health care costs per capita in the U.S. have shot up 60 percent to $6300, the VA has maintained at $5000 over the same period, ostensibly due to the introduction of the system54. Under the Freedom of Information Act, the federal government has released the source code for VistA. The several available open source versions of VistA, such as WorldVistA, present low cost options for small practices.
At the macro level, most of the prototyping for the National Health Information Network is being conducted in the private sector. Experts doubt whether private practices will be able to utilize the VistA system, however, “at a minimum, design decisions that make such systems successful in terms of functionality, workflow support, decision-support protocols, and data definitions would be useful input into the national standard setting process”55. Perhaps the most fundamental importance of the VistA system is that it makes a strong “v-c” case for a national HIT network.
Through basic research and continued and direct development of systems such as VistA, the federal government and has played an integral role in fostering the development of health informatics tools that can and have been applied in other care settings. While private sector software developers will have a critical role to play in commercializing EMR systems, ongoing barriers to interoperable EMRs remain that may require policy action. Four major sets of issues are summarized below:

  • The Collective Action Problem. The principal strength of the U.S. health care system in promoting competition between providers, which has contributed to innovation in cutting edge treatments and diagnostics and greater consumer choice for patients, has also created a patchwork of public/private care providers, payers, and insurers. Given this competition, individual providers have little incentive to share systems or patient information across providers especially given the high fixed costs of implementing EMR systemsError: Reference source not found. However, recent exemptions offered by the Center for Medicare and Medicaid Services (CMS) to the Stark anti-kickback regulation, which prevents cross-subsidization of HIT, have spurred some hospitals to begin purchasing information technology systems for their off-site doctors56.

  • The “New Economy” Problems: Network Externalities and Standards. Just as with the Internet, network externalities are at play in the EMR story. The value of the health information network, where different actors (hospitals, physicians, pharmacists, insurers, government, etc.) in the system can communicate directly, increases as more people join. Similarly, as in the Betamax/VHS case, private markets may not converge on universally accepted standards, terminology, record formats, record interfaces, and network exchanged platforms, which will cause fence sitting on EMRs to continue. The role of the national health information technology coordinator and standards organizations such as Health Level Seven (HL7) will be crucial; however, these issues will take years to unravel.

  • Making Economic Sense. In the fee-for-service system, care that is unnecessary or redundant generates revenue for the provider. Additionally, doctors and hospitals would only receive a small fraction of HIT’s potential economic benefits. An estimated 90 percent would go to insurers and purchasers of care, including the federal government, in the form of lower premiums and enhanced worker productivity57.

  • Security and Privacy Issues and the Health Insurance Portability and Accountability Act (HIPAA). There are widespread concerns about protecting and securing patients’ protected health information (PHI) in a national health information network, especially one that is based on the Internet. However, the 1996 HIPAA provisions have set into motion the regulatory mechanisms for vendors and providers to supply secure private data exchange within a national EMR system. While HIPAA rules are still in flux with respect to EMR, the framework and many of the safeguards to facilitate such a system are already in place58.

Given the policy momentum along with the current mood in the administration and Congress, there is an impetus for the government to take action to address many of these issues and to hasten the adoption of EMR systems. If history is any indication, the complex incentives and technology and policy choices involved in creating a robust national health information infrastructure portend a steep uphill battle.


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