While provider organizations continue the spending frenzy on their health information technology capabilities, not all are pleased with their purchases.
As the healthcare industry continues to move toward population health management and value-based reimbursement models, it's not surprising to see major investments being made in health information technology.
In order to achieve the kinds of operational efficiencies and clinical best practices that will be required for providers to remain financially stable in a payment environment that rewards high-quality, outcomes-driven care, hospitals and health systems need reliable, real-time data, and senior leaders know it.
EHR Investments Create Challenges
In the HealthLeaders Media 2014 Industry Survey: Forging Healthcare's New Financial Foundation, 54% of respondents cited data analytics as an area where their organizations will begin or increase investments over the next three years, while 52% cited EHR.
These number are in line with the recent Premier Economic Outlook, Spring 2014 survey of healthcare C-suite executives, which indicates that 49% of respondents expect to make their largest capital investments over the next year in health information technology, specifically EHR, advanced data analytics, and telecommunications. This category was most often cited for the second consecutive year, up from 46% in spring 2013.
Yet, while provider organizations continue the spending frenzy on their IT capabilities, not all are pleased with their purchases. In the Premier survey, 41% of respondents say they are dissatisfied or indifferent in regards to their current EHR systems.
"We're hearing directly from providers every day that they still lack the ability to easily access data in EHRs. This is because each EHR system is closed behind a proprietary wall. As a result, providers are both spending millions on one-off applications, and missing innovation opportunities because the proprietary nature of today's EHRs makes it challenging for them to access their own data," explains Michael J. Alkire, Premier's chief operating officer.
Having a robust EHR is important for enhancing clinical protocols and decreasing the overall cost of care, but it's an expensive upfront investment that presents substantial operational challenges, agrees Becky Sykes, chief information officer and senior vice president of resource management at Catholic Health Partners, a $6 billion, 23-hospital system based in Cincinnati, OH.
"We're well into the process of rolling out a system-wide EHR, which we began in 2010. All told, we expect to spend upwards of $300 million on our EHR system, and we have achieved some significant successes in areas such as patient and nurse satisfaction and harm and cost reduction," Sykes says.
"But it's still quite a challenge to pool the information we receive from across our acute and non-acute sites, payers and other entities into one place and quickly make it actionable."
Reducing Clinical Variation
In order to make its vast collection of data more meaningful, CHP is also investing in advanced analytics tools, which will allow it to get at additional cost savings and clinical improvements.
"We'll continue to invest in our HIT capabilities—our EHR and advanced analytics—to provide more connected, efficient patient care," Sykes says, noting that CHP is particularly focused on using its data to reduce clinical variation.
"We identified more than $22 million in clinical variation and achieved a savings of about $9 million in 2013," Sykes says.
"Some of the areas where we saw successes include a significant decrease in blood transfusions, a reduction in patient days in intensive care settings, such as ICU and telemetry beds, and a better understanding among our physicians of how their role in choosing orthopedic and cardiovascular implants can significantly improve costs and outcomes."
Reining in PPI Costs
Standardizing supplies and targeting physician preference items, such as knee and hip implants, are strategies many provider organizations are using to cut supply chain costs without hampering quality. In the Premier survey, 42% of respondents cite product standardization and nearly one in three cite PPI cost cuts as key ways they plan to improve supply chain performance.
However, successfully persuading physicians to give up a product or vendor they have used for years—sometimes decades—takes data, which is another reason why HIT investments are so important to providers despite the high price tag and functional challenges.
Chris Torres, vice president of supply chain management at Main Line Health, a 1,295-licensed-bed health system with $1.4 billion in annual operating revenue based in Bryn Mawr, PA, says she relies on data around cost and outcomes to encourage physicians to select the most cost-efficient products. She meets monthly with clinician advisory groups in orthopedics and cardiology—two of the areas where the most money is spent on supplies and where some of the biggest opportunities for savings exist.
"The first thing you go in with is data, but it has to be actionable, and it has to be accurate," Torres says. "The last thing you want to do is go to a group of physicians with inaccurate data."
When presented with trustworthy data, physicians often willingly begin using a lower-cost item, Torres says. "Our physicians don't want to use the most expensive thing. They want to use the product that has the best outcomes for their patients."
Through this approach, MLH has been able to meet its goal of reducing its supply chain spend by at least 5% annually, Torres adds.
Although health systems and hospitals may not be thrilled yet with the EHR bang they are getting for their buck, it's clear that health information technology will continue to represent a big chunk of most providers' capital investing. Without the ability to collect and analyze data to cut spending and improve clinical outcomes, providers will have a tough time surviving the transition from fee-for-service to value-based reimbursements.