Commonwealth Fund: IT Can Rein In Medicare Costs

As the debate over how to curb Medicare costs heats up in Washington, the Commonwealth Fund's Commission on a High Performance Health System has weighed in with a reform proposal that it says could trim $2 trillion from national health spending over the next 10 years. Central to the policies that the commission advocates is the meaningful use of health information technology by high-performing healthcare organizations.

"There is a clear recognition that information technology is part of the support for this general set of policies and that, in fact, the continued spread and utility of information systems of all types will be critical to achieving this vision," said David Blumenthal, M.D., president of the Commonwealth Fund and chair of the commission, at a press conference announcing the report.

One recommendation of the report is specific in this regard, noted Blumenthal, a former national coordinator of health IT. It proposes that Meaningful Use be accelerated "to assess and compare clinical outcomes over time from alternative treatment choices and use registries to enable post-market surveillance of safety and outcomes." This information, along with data on healthcare costs, would be used to help patients choose high-value providers.

[ To see how patient engagement can help transform medical care, check out 5 Healthcare Tools To Boost Patient Involvement. ]

Data on comparative effectiveness also could help inform providers' medical decisions, the report says. But the information would have to be pooled across many providers to yield valuable insights. In addition, the report suggests that national registries be created to track the outcomes of using particular medical devices and of performing certain high-cost procedures such as joint replacements.

In addition, said Cathy Schoen, Commonwealth Fund VP and lead author of the report, the use of health IT was a key component in the modeling of payment reforms that the commission used in calculating its cost savings.

"When you pay [providers] differently—especially emphasizing team care—information systems become critical as they get used in an efficient and effective way, because people want to avoid duplication," she said. "They want real time information on where the patient is and what's going wrong. For the first time, they're doing medication reconciliation to make sure those records are accurate. So in the care systems that have achieved savings, information systems are imbedded as part of their strategy. And the way people work is changing because they have a different way to talk to each other and exchange information."

The bulk of the projected $2 trillion in savings in the proposal comes from pay-for-value reforms and from lowering insurance-related administrative costs, partly by simplifying and standardizing reporting, the report says. Most of the administrative savings would accrue to providers, it adds.

Previous attempts to reduce administrative costs, however, have not been notably successful. For example, two sets of HIPAA electronic transaction rules -- the 4010 and the 5010 -- have not eliminated the myriad variations in payer requirements for claims submission and other types of information exchange with providers. As a result, the Affordable Care Act requires the Department of Health and Human Services to implement standardized operating rules for these transactions. But last week, the Centers for Medicare and Medicaid Services delayed enforcement of the use of eligibility and claims status rules because the industry wasn't ready.

The Commonwealth Fund proposal boils down to three broad recommendations:

-- Provider payment reforms to promote value and accelerate delivery system innovation;

-- Policies to expand options and encourage high-value choices by consumers, armed with better information about quality and costs of care; and

-- System-wide action to improve how markets function, including reducing administrative costs, and setting national and regional targets for spending growth.

Although the Administration could enact some parts of this proposal, Congress would have to approve the other pieces, such as offering Medicare beneficiaries a comprehensive health plan and freezing Medicare reimbursement for providers who don't participate in value-oriented care delivery models.

What are the chances of this happening? "Over the next several months," Blumenthal responded, "we'll see some very painful proposals for reducing federal expenditures. Compared to those, our proposal will look like an escape valve that gives better value, rather than pain and suffering for physicians and patients."

Clinical, patient engagement, and consumer apps promise to re-energize healthcare. Also in the new, all-digital Mobile Power issue of InformationWeek Healthcare: Comparative effectiveness research taps the IT toolbox to compare treatments to determine which ones are most effective. (Free registration required.)