By John Reichard, CQ HealthBeat Editor

October 11, 2006 -- Only about 9 percent of doctors use comprehensive electronic health record systems, according to a public–private study commissioned to establish a benchmark to measure U.S. progress toward adoption of the technology.

The findings show that "we are pitifully behind where we should be," study co-author Dr. David Blumenthal told a press briefing Wednesday. Blumenthal said current rates of adoption would mean that about half of doctors would have use of electronic health record systems, or EHRs, by 2014—below President Bush's goal for dissemination, "but you might argue 'not bad' based on geologic time."

Billed by its sponsors as the most rigorous analysis yet of the extent to which the nation has adopted health information technology, the study should help spur policies that "close important gaps and disparities" in IT adoption, said Dr. John Lumpkin, a senior vice president at the Robert Wood Johnson Foundation, which funded the study along with the federal government.

Conducted by researchers at Boston's Massachusetts General Hospital and George Washington University, the study also found that no reliable data exist on the percentage of hospitals that have adopted EHRs. However, it found that about 5 percent of hospitals have installed computerized physician order entry (CPOE) systems used by doctors in hospitals to order drugs from hospital pharmacies. Boosters of the systems say they can sharply reduce medication errors, in turn saving lives and preventing costly adverse reactions.

CPOE is only one component of a hospital-based EHR system. Members of a panel convened to assess the findings expressed uncertainty at the briefing about how soon the pace of IT adoption might accelerate. Allowing hospital and insurer donations of the technology to doctors could help, but would only be a partial answer, they said. Some form of grant program will be needed, as will efforts to prod patients to press their doctors to use the technology, panelists said.

"To be very honest, [the low adoption rate] doesn't surprise us," said Dr. Karen M. Bell, director of the office of Health IT Adoption in the Office of the National Coordinator for Health Information Technology. "We know that there has been an issue with the adoption of electronic health records for some time and that the adoption gap is very prevalent as well," she added.

Bell indicated that without action on issues such as reimbursement to promote health IT adoption, the ease of technology use and its compatibility with other IT systems, "we really are not going to be able to move the adoption agenda forward in time to meet the president's hope" that adoption of electronic health records will be widespread by 2014.

The study found that overall, 23.9 percent of physicians providing care to non-hospitalized patients use electronic health records in some form. But only about one of 10 are using "fully operational" electronic health record systems that collect patient information, display test results, allow providers to enter medical orders and prescriptions, and help doctors make treatment decisions, the study said.

To better measure progress toward health IT adoption, the study provides standard definitions of what is meant by an "electronic health record system" and what constitutes "adoption." Simply ordering the technology or taking delivery of it isn't the same as adopting it, said Blumenthal, a physician at Mass General and a professor at Harvard Medical School.

The study added that "for policy makers to understand the effectiveness of efforts to improve EHR adoption, we will need ongoing tracking with high-quality surveys." Lumpkin said the researchers would report again a year from now on the extent to which adoption of the technology has increased.

Sponsors of the study expressed concern that Americans with limited access to care won't benefit from the higher quality, safer care that can result from use of the technology. Although they reported no evidence yet of a "digital divide," they did find that doctors who treat large numbers of Medicaid patients are half as likely to have electronic health records.

"Where you practice has a huge impact on whether you use an electronic health record or not," Blumenthal added. Doctors in cities are more likely to have EHRs than those in rural areas, as are doctors in larger practices and in larger health care facilities, he said.

Dr. Ashish K. Jha, an assistant professor of health policy at Harvard, said use of EHRs can help eliminate disparities in access to quality care based on race and economic factors. A "decision support" feature of the records that reminds doctors of treatment procedures and what to check for in the patient will help even out such differences, he said.

Patient awareness of the benefits of electronic health records could be a key factor in accelerating adoption of health IT, said Myrl Weinberg, president of the National Health Council. "That will be the most important element of the tipping point," she said. "As they become familiar with the advantages to them, they start talking with their friends," she said.

"If you get to a certain point, it might really take off," Blumenthal said. "But we just don't know where we are with respect to that tipping point," he added.

The council and America's Health Insurance Plans are in the final stages of planning a pilot program in northern California and Massachusetts to motivate grassroots activists to push for electronic records, Weinberg said. "Based on our experience with similar programs we expect to have great success," she said.

While House- and Senate-passed IT legislation could be helpful in establishing national leadership by creating the framework for a grant program and perhaps fostering IT donations, the fate of the measures in the upcoming lame-duck session of Congress is uncertain. If Democrats do well in the midterm elections, they may push to delay legislation until next year in hopes of strengthening privacy protections and beefing up any grant program.

By John Reichard, CQ HealthBeat Editor

October 13, 2006 -- In the last speech of a tenure marked by a focus on improving the value of Medicare spending, CMS Administrator Mark B. McClellan took stock this week of the recent proliferation of public–private efforts to develop quality-of-care measures—and promised much more to come. Those measures eventually might be as much a part of his legacy as his efforts in overseeing the implementation of the Medicare prescription drug benefit, or so he hopes.

Reporters and politicians grumbled during McClellan's tenure about his penchant for enumerating the dry details of dozen of policies and for dodging many more questions than his predecessors to stay out of political trouble with his bosses. Yet he connected strongly with wonkier audiences who appreciated his mastery of the technical details involved in developing complex new programs to promote the quality and efficiency of care.

McClellan's farewell speech Thursday to professionals involved in the technical aspects of improving quality of care drew a standing ovation, and his Sept. 25 address to information technology professionals was greeted with similarly strong emotion.

Behind the dry detail was a vision of health care that had bipartisan appeal despite its private sector focus, because it embraced quality improvement rather than budget cuts as a tactic to cope with rising spending—at least in the Medicare program. Revisions to Medicaid championed by McClellan drew much harsher criticism from groups who lobby for broader government funding to increase access to health care.

More than implementing the Medicare prescription drug benefit, McClellan cited his efforts to improve quality of care as his biggest accomplishment at Centers for Medicare and Medicaid Services. "What's more important for the program is . . . moving away from a focus on just paying bills," he told a breakfast meeting of reporters on Friday, his last day on the job.

"If we want to get the best possible care for our beneficiaries at the lowest possible cost to them and the taxpayers, we've got to be more proactive in supporting quality care and paying for what we want," he said.

McClellan defined that objective as "better-coordinated, prevention-oriented, personalized care at a lower overall cost." The goal is critical for the entire health care system, he said. "We've got to keep in this kind of direction to have a sustainable, innovative, and affordable health care system."

Public–private alliances have sprung up in recent months to develop a variety of measures, the outgrowth of a voluntary consensus development process that had its origins in the Clinton administration.

That process is poised to expand sharply in coming years under initiatives undertaken by the Bush administration. By bringing together consumers, providers, insurers, as well as government and business health care buyers in a voluntary effort to reach consensus on quality-of-care measures, the process, led by the public–private National Quality Forum, so far has avoided the political gridlock that easily could befall efforts to reshape U.S. health care.

"Thanks to your efforts, we have been able to make a lot of progress and we are on the cusp of much more," McClellan told a meeting sponsored by the forum Thursday.

The Hospital Quality Alliance already has developed measures to assess quality in Medicare, and the Ambulatory Care Quality Alliance has developed such measures for physician care, which are expected to be the basis of a pay-for-performance system. Similar alliances have been formed for pharmacy care, kidney care, and cancer care, McClellan noted.

And a joint committee of the hospital and ambulatory care alliances—called the Quality Alliance Steering Committee—is developing a plan for implementing the measures around the country through local "collaboratives" that bring together Medicare, Medicaid, private insurers, consumers, providers, and employers.

Initial plans announced last March call for six pilot projects that for the first time combine government and commercial insurance data to report on the quality and efficiency of local physician practices. After visiting the six sites, which build on existing local quality measurement collaboratives, Department of Health and Human Services Secretary Michael O. Leavitt announced that the number of projects would be expanded to 60 sites around the U.S. The current six sites are in California, Indiana, Massachusetts, Minnesota, Wisconsin, and the Phoenix region.

The effort will allow local consumers and employers to use the data to select providers and the providers themselves to establish benchmarks to improve care in the local region. McClellan said Thursday that the "Quality Improvement Organizations" that contract with Medicare will work with the local projects to assist efforts by physicians to improve care broadly in the local community.

McClellan said the eventual goal is for the 60 local collaboratives to use more sophisticated "episode-based measures" to find higher quality care and root out inefficiency.

Current measures assess care provided by one element of the health care system, such as the doctor's office or the hospital, but not the whole spectrum of care a patient receives when going through treatment for a particular condition—such as a heart attack.

What patients really care about is the cost and quality of care they receive throughout the whole spectrum of treatment, not just a piece of it, McClellan said. "The hospital staff, the surgeon, the rehab staff, we want to promote all of them working together, not just doing well on each of their individual measures."

That kind of measure could be key to wringing inefficiency out of the U.S. health system, Dartmouth researcher Elliott Fisher told the same audience. Fisher is famous for his involvement in research suggesting that regions of the country with far higher per capita costs of treating Medicare patients show no advantages in quality of care—in fact outcomes may be worse, he says.

About half of the higher expense can be explained by "capacity"—the fact that a region has larger supplies of certain services and providers, he says. But different "clinical cultures" from one medical center to another, for example, also explain cost variations. He argues that "organizational accountability" for long-term costs and quality is key to improving efficiency.

While McClellan appears to have done much to create the framework for such measures, whether his work will lead to a more efficient system remains to be seen, of course. Critics contend that the private plans he touts as a tool for better-coordinated, more efficient care are overpaid relative to traditional Medicare.

And much work remains to be done to create the system of quality-based payment that he has espoused. Congress, for example, has yet to pass legislation that would block Medicare payment cuts to physicians next year and to lay the foundation for payments based on quality of care.

But McClellan expressed confidence Friday that Congress will act. "This is a very serious issue, and Congress is going to revisit this I think in the lame-duck session," he said. "Our staff is working very closely with staff on the Hill on technical issues involving how you can move to a better payment system."

And after directing the implementation of the drug benefit and other parts of the massive Medicare overhaul law (PL 108-173), McClellan's own efficiency is an unquestioned part of his legacy. But even the seemingly tireless McClellan finally showed signs of fatigue on Friday. Asked how he planned to celebrate the completion of his tenure Friday evening, McClellan said, "I'll probably just go home and collapse."

By Mary Agnes Carey, CQ HealthBeat Associate Editor

October 13, 2004 -- As Medicare officials detailed new tools to help beneficiaries enroll in the program's drug benefit, outside groups said Medicare pays private insurers too much to provide drug and health care coverage. They also challenged the accuracy of the answers private plans provided to Medicare beneficiaries.

Centers for Medicare and Medicaid Services Administrator Mark B. McClellan said Friday that cost and coverage information on 95 percent of plans being offered to Medicare beneficiaries was available on www.medicare.gov, the official Web site of the Medicare drug benefit. Information for the remaining 5 percent of plans will be posted Monday, he said.

During a conference call with reporters on his last day as CMS administrator, McClellan also discussed a variety of changes to Medicare's "Drug Plan Finder," such as a new feature to help beneficiaries determine the monthly cost of drug coverage. Enrollment for the 2007 Medicare drug benefit begins Nov. 15.

Beneficiaries can purchase standalone prescription drug plans or enroll in "Medicare Advantage" coverage, which offers both drug and other health care benefits. About 6 million of Medicare's more than 42 million elderly and disabled beneficiaries are enrolled in Medicare Advantage plans.

A CMS analysis of the drug benefit released Friday found that, compared with those without drug coverage, beneficiaries in standalone drug plans will save an average of 53 percent off the cost of drugs and up to a maximum of 68 percent through the lowest-cost plans available. Beneficiaries in lowest-cost plans who switch to generics could see an 87 percent savings over brand-name prices, according to the CMS analysis, which was based on medications most often used by beneficiaries for conditions such as high blood pressure, high cholesterol, and heart failure.

Separately, a report released Thursday by the Medicare Rights Center and the California Health Advocates said CMS should require Medicare drug plans to provide "timely and accurate" answers to beneficiaries who call about Medicare drug coverage.

"Too often a call to one of the private drug plans does more to mislead than to help," Medicare Rights Center President Robert M. Hayes said in a statement. The report urges CMS to give the drug plans detailed requirements for the plan's information customer service representatives in areas such as the enrollment process, gaps in coverage, and which drugs are covered.

CMS spokesman Jeff Nelligan said the agency closely monitors Part D drug plans and sends compliance letters when necessary.

A separate study from the consumers group Families USA said Medicare is overpaying the drug and insurance industries for products and services that Medicare could provide for far less. Medicare Advantage plans, in particular, cost taxpayers an extra $2.7 billion in 2005 and $4.6 billion in 2006, the report concluded.

McClellan said he had not read the Families USA report but said "they've been saying things like that for a while."

McClellan said higher payment rates for Medicare Advantage plans offered in rural areas have helped expand Medicare choices for millions of beneficiaries and that Congress made the decision to increase those payment rates. He also said that starting in 2007 Medicare Advantage plans would be "risk adjusted" so plans caring for the sickest beneficiaries would be paid the highest rates. Families USA said its figures reflected that accounting for health care status.

By CQ Staff

October 13, 2006 -- The Centers for Medicare and Medicaid Services (CMS) announced late Friday that it will propose a regulation allowing researchers access to Medicare prescription drug data to improve the quality and efficiency of health care.

CMS Administrator Mark B. McClellan called the data an "unprecedented resource" to help seniors get the most benefit from prescription drugs. Studies could provide the Food and Drug Administration with more timely and complete data on drug side effects, CMS noted in a press release. Allowing access to the data also could identify potential ways to save money through more effective adherence to instructions for taking drugs for chronic disease, the agency added. Other research also could identify and help close disparities in the use of pharmaceuticals based on race, for example.

CMS also said drugs could be studied to determine whether they reduce or increase use of certain types of health care services. Asked whether the data could be used to compare treatment outcomes associated with competing pharmaceuticals, CMS spokesman Peter Ashkenaz said that's the kind of question on which the agency would like to receive comment. The press release invites comment on whether special safeguards are needed "against the potential misuse of data for non-research commercial purposes."

CMS will publish the proposed regulation in the Federal Register Oct. 17 and take comments until Dec. 18.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

October 10, 2006 -- An improved economy, combined with the Medicare drug benefit, contributed to the lowest rate of Medicaid spending growth in a decade, according to a survey released Tuesday by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured.

The 50-state survey of Medicaid officials found that state revenues increased faster than Medicaid spending for the first time since 1998. According to the survey, Medicaid spending growth rates on average increased 2.8 percent for state fiscal 2006—the fourth consecutive year in which Medicaid spending growth has slowed—while state tax revenues on average increased 3.7 percent.

The survey also says that Medicaid's fiscal 2006 1.6 percent enrollment increase is the lowest rate since 1999—nearly half the 3 percent growth that Medicaid officials predicted for the year. According to the survey, positive economic conditions contributed to the slowdown in Medicaid enrollment growth.

Diane Rowland, the commission's executive director, said the report provides evidence that states not only know how to control Medicaid spending, but are also willing to revisit those changes when economic conditions improve.

"This news that the revenues are up a little and that spending is down does not mean that states are going to give up on cost containment," Rowland said in an interview. "But it does allow states to take stock of what they've done when they were squeezing the program and see if there are places where they really need to make some fixes," such as such as increasing provider rates.

The survey found that for fiscal 2007 five states plan to restrict eligibility while 26 plan to restore cuts from previous years, expand coverage to new populations, or make positive changes to Medicaid's application enrollment process.

States are contemplating the new options and implementing new requirements created by a budget-savings bill (PL 109-171) that President Bush signed into law earlier this year. Few states, however, have used the flexibility granted by the bill to change benefits and cost-sharing requirements for fiscal 2007, according to the Kaiser report.

The budget survey of state officials also found that the spending growth of 2.8 percent would have been even lower—1.7 percent—if states had not been required to help finance a portion of the new Medicare drug benefit, known as the "clawback" provision. The Medicare drug benefit requires the Medicare program to pay prescription costs for people in Medicaid who had previously been partially covered by the states. In turn, states are required to pay back to the government a smaller contribution—known as a "clawback"—from some of the money they save.

State Medicaid officials predict that growing health care costs and erosion of employer-sponsored health coverage will continue to put pressure on states to constrain Medicaid costs. For state budgets adopted for fiscal 2007, Medicaid spending growth is projected to increase 5 percent.

The survey also found that state Medicaid officials appear to have moved away from a primary focus on cost containment to a range of policies including expansion or restoration of eligibility and benefits, improving quality and changing the way long-term care services are delivered.

States are focusing on three particular areas for change in their Medicaid programs: disease management and quality initiatives to provide better long-term value for program dollars and improve health care for beneficiaries—especially high-cost cases—and reorienting long-term care services away from institutional settings, such as nursing homes, into home and community settings.

Other highlights of the report include:

• Over half of states expect new citizenship documentation requirements that became effective in July to cause a decline in Medicaid enrollment. Most states also expect the impact of the budget-savings bill's asset-transfer provisions for Medicaid nursing home eligibility to be moderate or significant for beneficiaries, but the fiscal impact on the Medicaid program will be limited.
• Kentucky, West Virginia, and Idaho—states that had been seeking Medicaid waivers before passage of the budget-savings bill—have used the new law to change benefits. Kentucky also implemented new cost-sharing options.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

October 12, 2006 -- Medicare officials' recent estimate of what beneficiaries would pay for drug coverage in 2007 is "misleading and disguises significant cost increases" for Part D coverage, according to a report Rep. Henry A. Waxman (D-Calif.), released Thursday.

Last month, Medicare officials said beneficiaries would be able to choose from a wider selection of prescription drug plans in 2007 that on average will cost about $24 a month, the same as this year. Department of Health and Human Services (HHS) Secretary Michael O. Leavitt said more than 80 percent of Medicare beneficiaries will have access to premiums lower than what they paid in the program's first year, with many plans having monthly premiums of $20 or less.

But in a letter sent Thursday to Leavitt, Waxman said his staff's analysis of the 2007 Medicare plan premiums found they will increase on average by more than 10 percent—to about $29 per month—with premiums for the lowest-priced plans increasing over 40 percent.

The difference between the administration's estimates and Waxman's is in how they were calculated. The administration's estimates include premiums charged by both stand-alone prescription drug plans as well as Medicare Advantage plans, which include both health care and drug coverage. Waxman's staff only looked at prices and benefits for the stand-alone drug plans, which are available to the 90 percent of beneficiaries who have remained in traditional Medicare program.

"Combining the actual premiums for drug plans with these estimates in managed care plans is mixing 'apples' and 'oranges' with the average price of 'fruit,'" Waxman wrote. "It is not merely confusing arithmetic, it is deceptive advertising."

Centers for Medicare and Medicaid Services Administrator Mark B. McClellan labeled Waxman's analysis "incomplete and misleading" because it measured just one way that Medicare beneficiaries could receive drug coverage.

"The average premium of the basic Part D coverage, which is delivered by two methods . . . is $24, an average premium raise of 0.1 percent" for 2007, McClellan said.

In his statement, McClellan also said that 83 percent of beneficiaries now in a prescription drug plan will have access to at least one plan with a lower premium than what they were paying in 2006.

Waxman, who is the ranking member of the House Government Reform Committee, said his staff's review of the data found that the average premiums across all Medicare drug plans are increasing 13.2 percent in 2007 and that average premiums for Medicare drug plans with the same deductible and same coverage gap in 2006 and 2007 are increasing 11.1 percent next year.

Beneficiaries who choose the lowest-priced plan will face premium increases of more than 44 percent in 2007, Waxman wrote, with some plans decreasing benefits while premiums rise.