Federal Government Leading March to Universal EMR

Labs should heed announcements: healthcare needs to go fully digital

CEO SUMMARY: On April 26, 2004, President George W. Bush announced a new goal for the nation: an electronic medical record (EMR) for every patient within ten years. Last July, THE DARK REPORT predicted that the federal government would take the lead role in pushing healthcare to adopt a universal electronic medical record. Introduction of the universal EMR will create new winners and losers among the nation’s laboratories.

EVERY LABORATORY AND PATHOLOGY group practice should closely track the drive to convert the American healthcare system to a universal electronic medical record (EMR).

The declaration on April 26, 2004 by President George W. Bush that the United States should achieve, within ten years, an electronic medical record for every patient is a significant event. Although it was relatively ignored by the media, it should not go unnoticed by the laboratory industry.

Feds Will Lead The Way

It means that the federal government will take the leadership role in pushing and tugging the American healthcare system to adopt a universal patient electronic medical record. It also validates a prediction made by THE DARK REPORT almost one year ago.

The primary product produced by every clinical laboratory is information. Thus, anything which changes or improves the way physicians, hospitals, and payers use information will have profound impact on laboratories. What President Bush proposes to be a national goal of this country will radically restructure long-standing relationships between laboratories, physicians, and payers.

For example, the gap in access to lab test data on the same patient’s hospital inpatient record and his/her physician office file has allowed many hospital laboratory outreach programs to compete successfully against the Two Blood Brothers. Those hospital labs keep the patient’s inpatient test results and outpatient test results in a data base accessible by physicians.

A universal EMR requires that all laboratory data be formatted to populate the patient’s primary EMR repository. This eliminates any competitive advantage that once accrued to laboratories capable of giving physicians access to fuller sets of patient test data than a competing laboratory. It is one example of how a universal EMR alters the competitive status quo between laboratories. But the universal EMR may affect the competitive lab marketplace in other ways which may be equally profound.

President Bush Declares 10-Year Goal of Universal EMR: Media Goes “Ho Hum!”

IT WAS AN ANNOUNCEMENT that generated two surprises. First, that President Bush would declare a goal that all patients should have an electronic medical record (EMR) within ten years. Second, that the media would totally ignore this major pronouncement.

President Bush announced this major health initiative on Monday, April 26, 2004. This was during Executive War College week. Participants were surprised to find no mention of this announcement in major newspapers such as the Wall Street Journal and the New York Times in the days which followed the President’s remarks. President Bush is urging four steps to accomplish 100% conversion to an electronic patient medical record within ten years.

STEP ONE: is to complete and adopt “standards that will allow medical information to be stored and shared electronically while assuring privacy and security.” He noted that the Department of Health and Human Services (HSS) has collaborated with other federal agencies and private entities to establish voluntary standards. These efforts are accelerating the use of EMR-compatible standards by federal agencies. Standards are already available for transmitting X-Rays over the Internet, electronically reporting laboratory results and automatically entering the data into a patient’s EMR, if it exists, and electronic prescription ordering.

STEP TWO: is to double federal funding of demonstration projects dealing with healthcare information technology. President Bush wants to increase this amount in the next budget. He proposes to spend $100 million during fiscal year (FY) 2005. Funding in this area was $50 million in FY 2004.

STEP THREE: is for the federal government‘s existing healthcare programs—each a major purchaser of healthcare—to “create incentives and opportunities for healthcare providers to use electronic records.” In his announcement, President Bush directed federal agencies such as Medicare, Medicaid, Federal Health Benefits Program, Veteran’s administration, and the Department of Defense to propose modifications and new actions and submit these recommendations to his office within 90 days.

STEP FOUR: is the creation of a new government position, the National Health Information Technology Coordinator. This will be a sub-Cabinet level post within HHS. This Coordinator is to guide development work on universal electronic formats in healthcare and guide partnerships “between government agencies and private sector stakeholders to speed the adoption of health information technology.”

The following week, on May 6, 2004, HHS announced the new position would be filled by David J. Brailer, M.D., Ph.D., who is currently a senior fellow at Health Technology Center in San Francisco, California. Previously he spent a decade as Chairman and CEO of CareScience Inc., a healthcare management company based in Englewood, Colorado.

For these reasons, THE DARK REPORT recommends that laboratory executives and pathologists include this topic in strategic planning efforts undertaken by their laboratory. There is plenty of evidence to support the conclusion that the drive to a universal patient EMR will happen with dramatic speed.

First, the goal of a universal EMR is supported by large corporations, private health insurers, and the federal Medicare and Medicaid programs. If there is any dissent in the goal, it is about the speed with which healthcare providers should be pushed to achieve this outcome. The validity of the goal itself—that all patients have an electronic medical record in a format that can be universally accessed by any legitimate provider or payer—has no visible opposition.

Second, there is consensus that a universal EMR will improve patient safety and patient outcomes. It is the right thing to do for ethical reasons.

Third, the universal EMR will reduce healthcare costs in a variety of ways. By reducing errors and gaps in care, it lowers the cost per healthcare encounter. Because data can be collected, stored, accessed, analyzed, and shared electronically, administrative costs will decline.

Last year, THE DARK REPORT was first to identify that the federal government will be the primary driver in the move to adopt a universal EMR.

Fourth, the ability to perform clinical research is greatly aided by a universal electronic medical record. It will be possible to identify patients with the ideal characteristics to be part of a clinical study. It will also be feasible to use blind data from large populations of patients and mine that data for patterns that yield clinically-relevant knowledge. Both activities are literally impossible to accomplish in today’s healthcare environment.

Last year, THE DARK REPORT was first to identify that the federal government will be the primary driver in the move to adopt a universal EMR. That prediction was made following a day in July 2003 when HHS made two important announcements. One, HHS had licensed SNOMED-CT from the College of American Pathology (CAP). The five-year contract will pay CAP $32.4 million and make SNOMED-CT available to any healthcare provider in the United States at no charge.

IOM’s Universal EMR Format

The second announcement was that HHS had chartered the Institute of Medicine (IOM) to develop a template for the universal medical record. It is to incorporate the HL-7 language. IOM is to make public the product of its work this fall. (See TDR, July 7, 2003.)

It is also important to know that the National Health Service (NHS) in the United Kingdom is also pursuing the same goal. England is the first country within the U.K. to sign contracts with healthcare IT vendors to accomplish a universal EMR and a central healthcare repository. Lessons learned in both countries will be valuable. THE DARK REPORT is tracking progress in the U.K. through its activities in producing the Frontiers in Laboratory Management (FiLM) conference in England each February.

New Lab Winners & Losers

Laboratories, which are primarily information factories, need to track the development of this trend. THE DARK REPORT reiterates its belief that widespread introduction of the universal EMR will trigger radical shifts in longstanding relationships between laboratories, client physicians, and payers.

Among laboratories, there will be new winners and new losers because of this process. The most vulnerable will be small anatomic pathology group practices. By failing to invest in their business capabilities, and by failing to under- stand the ramifications of the universal EMR to their immediate situation, they will become dinosaurs. Failure to evolve with the new climate will cede the market to those laboratories which do


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