Physicians facing down a 2015 federal deadline for upgrading to electronic health record systems are finding that many insurers are eager to help with technology and financing.
That's how as it should be, according to David Blumenthal, MD, MP, National Coordinator for Health Information Technology, "The CMS and ONC regulations establish only the parameters of the federal program. The public and private sectors can and must collaborate in furthering the goal of creating a 21st century electronic health information system in the United States," he said Thursday at a forum titled "Accelerating Electronic Health Records Adoption and Meaningful Use."
Judging by the latest batch of earnings reports, payers are flush and investing in EMRs is solid bet, backed by federal greenbacks due to physicians who meet meaningful use requirements as part of health reform legislation.
Next year, for example, some hospitals in California and Georgia may be eligible to borrow funds from WellPoint. Its Q2 earnings announced last month beat Wall Street estimates.
On Tuesday, Humana announced that it would go a step further and subsidize the implementation cost of athenahealth's EHR service for eligible physicians. A statement from Humana says, "participating physicians could realize additional revenue of 20 percent beyond their current fee-for-service base collections from Humana."
UnitedHealthcare, too, has unveiled a program that will provide outcomes-based financial incentives to physicians who have successfully adopted EHR systems that meet meaningful use criteria.
That's great news for hospitals and physicians struggling to make ends meet. But what are the downsides?
One school of though posits that taking money from payers for EHRs is a conflict of interest, since payers themselves have a keen interest in digging into patient data for the purpose of risk adjustment. i.e., analyzing it in order to forecast future wellness and calculate appropriate pricing.
Data is more likely to be analyzed in the aggregate, and in fact, HIPAA may protect individual patient records. What about questions of medical liability? Will insurer-subsidized EHRs make payers accountable for patient care or outcomes? Could payers be liable for medical decisions based on faulty software? It's doubtful.
The takeaway is that payers and providers both stand to gain from these EHR financing deals. The law has passed, and there's no escaping EHRs. Providers should direct their attention toward the many financing options emerging and start forming strategies now to put themselves into compliance by the deadline.
Health plans that have long been incented to compete on risk selection—vying for healthy enrollees and eschewing the sick—are bracing for new rules that will turn their offerings into commodities with buying decisions hinging on price above all else.
The patient Protection and Affordable care Act (PPACA) calls for the creation of exchanges where small employers and individuals may purchase qualified health plans.
Exchanges are intended to make purchasing health insurance easier by providing eligible consumers and businesses with "one-stop-shopping," a place to compare various offerings for policies. The Obama Administration expects that exchanges will give consumers and purchasers greater flexibility and information about health insurance policies before they buy.
Last week U.S. Health and Human Services Secretary Kathleen Sebelius announced $51 million in federal grants to help states set up insurance exchanges.
But where does that leave payers? Exchanges pool all comers together: the healthy, the worried well, the sick, and the sicker. Under PPACA, exchanges will prohibit payers from selecting applicants on the basis of health, and they will be restricted in their abilities to vary premiums with regard to health status.
With the current practice of mitigating costs by practicing risk selection no longer an option, payers will have to rely on their wits. They'll need to dive into the data with the best analytical tools they can get their hands on and start practicing risk adjustment rather than risk selection.
Risk adjustment means applying analytics and predictive modeling to the data presented by a group of enrollees in order to forecast its future wellness and calculate appropriate pricing.
Current exchanges, like the one in Massachusetts, illustrate the pressures payers are already experiencing.
Last month Massachusetts sent letters to four large insurance firms urging them to offer low-cost medical plans for small businesses or face legal sanctions.
The insurers balked because the state capped rates that could be charged at 2009 levels, and insurers are claiming they will lose money. While Massachusetts presses on, one thing is clear: More exchanges are coming.
Health plans, government agencies, employers, and providers all have a stake in what happens next, and its the smartest, most data-savvy players who will come out ahead.
Population health tools have been both promoted and dismissed by health plans and employers. With risk-selection off the table, population health management might be one of the few cost savings strategies that health plans have left. Data management is a big emphasis, but so is working effectively with members and employers to get real action from this information. The results could not only improve the bottom line for payers, but also enhance the health and satisfaction of members.
