The Premier Fall 2012 Economic Outlook
survey found that 43% of healthcare executives expect to increase spending on healthcare IT and telecommunications next year. With these investments on the rise, here are my predictions for anticipated health IT trends in 2013.
Cost reduction is now everyone’s problem.
Year after year, economists issue variants of the same apocalyptic warning--that our national health expenditure growth is unsustainable and this year we've reached a perfect storm that will bring our health care system to its knees.
Again, this year, the same warnings are back:
- As a share of U.S. gross domestic product (GDP), our health spending now stands at 18 percent of GDP, up from 14 percent in 2000 and 5 percent in 1960.
- On average, in comparison to industrialized nations, the U.S. spends twice as much on healthcare per capita, and 50 percent more as a percent of GDP and yet our access to care, quality, outcomes, and population health are worse.
But this year is different because of a unique convergence of three market drivers that make cost reduction everyone’s problem. First, the combination of the shift toward shared accountability and new value-based benefit designs that shift first dollar costs toward consumers is forcing every ecosystem stakeholder, now including providers and consumers, to do their part to reduce costs. Second, revenue growth is either stalling or falling for every stakeholder, from government to payer to employer to provider to consumer.
This is especially true for providers where revenues have declined to the point that controlling costs has become mission critical. Parsimonious purchasers will divert patients and payments to those organizations that are able to control—rather than merely understand—their costs. Finally, as the financial penalties for readmissions increasingly squeeze the bottom lines of providers, distance care that reduces the need for costly local in-person care and admissions is becoming as important to their bottom lines as inpatient and outpatient care. As a result, we’ll see more health and life sciences workers go mobile or go virtual—taking preventive care, care management and patient navigation services into the community where people live, work, learn and play.
Value-based benefits and care awaken value based health IT (HIT).
The cost cutting mandate for providers will begin to trickle down to their HIT solution providers. Just as value-based benefits and value-based payments have forced providers to bring proof of their superior cost-effectiveness to purchasers, providers will now demand proof from their HIT solution providers that their technology solutions will reduce providers’ costs of delivering better health, outcomes, or care.
The recent HIT spending spree fueled by the $27 billion in stimulus funding to promote the “meaningful use” (MU) of EHRs has led providers rushing to acquire and implement one of the EHR systems certified by HHS to meet criteria to avoid the 1% revenue penalty looming in 2014. But meeting Stage 1 MU requirements is proving to be harder than expected and may not be achievable for many providers, especially office-based physicians. Recently the CDC's National Center for Health Statistics reported that even though 51 percent of physicians were planning to apply for incentives, only 11 percent of all office-based doctors had EHR systems likely to meet the necessary objectives.
But the real driver of value-based HIT will be the sudden arrest in revenue growth that’s now beginning to hit hospitals as a result of the Affordable Care Act’s $716 billion in reductions
to Medicare payments and the $15 billion cut in Medicare and Medicaid payments
over the next 10 years included in last month's fiscal cliff bill. Further Medicare and Medicaid entitlement cuts from the federal budget are still on the debate table.
In the eyes of purchasers, value-based HIT solutions will need to:
- increase the productivity and ability of virtual teams to communicate, collaborate and work better together with less risk to improve the quality, safety, speed and outcomes of care for more patients at a lower cost AND
- equip consumers with the apps, devices, and personal experiences they need to proactively manage their health and their health risks in concert with their personal physicians.
CIOs look beyond their EHRs to realize much needed gains in productivity and team performance.
According to the Advisory Board Company, the cost of labor has risen to the #1 issue facing hospital finance executives, not surprising since labor costs account for roughly 50% of hospital operating expenses. But that’s about to get much worse. Today's primary care and nursing workforce shortage will seem like a surplus when the 30 million newly insured Americans under the Affordable Care Act start cascading through their doors. And these 30 million newly insured will stress the current labor shortage beyond its breaking point because, according to PwC’s Health Research Institute, this newly insured population will have lower incomes, be older, be less likely to have full-time jobs, be less likely to have a college degree, and be more likely to speak a language other than English. This explosive demand for complex care, and high socioeconomic and translation services is a perfect storm that will overwhelm a workforce already in short supply.
In the meantime, many HCOs are hitting a productivity brick wall as a result of implementing their EHRs: the HIT productivity paradox
I wrote about recently, a perplexing correlation between a rapid increase in IT use in the health industry and arrested productivity. Ironically, one of the major headwinds to clinician productivity appears to be EHR implementations since a recent UC Davis estimated that EHR implementations initially cut productivity by 25-33%
If for the last 20 years, the healthcare industry is virtually the only sector in our economy that hasn't been able to harness technology to improve productivity, then the solution to the HIT productivity paradox must lie somewhere in the answer to the question, "What technologies have other sectors leveraged to improve productivity and team performance that healthcare hasn't? The answer may be as simple as this: While other sectors have made independent investments in content, communication, collaboration and social platforms separate from their line of business (LOB) apps and loosely coupled those platforms to their LOB apps, healthcare organizations have chosen to rely almost exclusively on their clinical LOB app vendors to develop and custom code content, communication, collaboration and social functionality into their EHR LOB apps. Technology innovations that improve clinician productivity and the performance of clinical teams within and beyond the four facility walls is the only affordable remedy to this workforce shortage crisis. So in 2013, look for market leaders to pilot the next generation of mobile devices and cloud-based productivity services that loosely couple content, communications, and collaboration technologies with their EHRs to substantially improve staff productivity, team collaboration, the patient experience and clinical outcomes.
Spectacular BYOD successes & failures.
I recently wrote a blog post
on why I think the BYOD trend
(short for bring your own device) is here to stay, and how Windows 8, apps, and devices will enable healthcare organizations to embrace this trend and protect themselves from security breaches. This BYOD wave isn't about to let up any time soon because, compared to other industries, the workstyles of health professionals are so much more mobile and collaborative. And riding the BYOD wave makes perfect sense for budget-starved HCOs because it not only frees up hardware budgets for new cost reducing or revenue generating opportunities but can also boost clinician and team productivity by enabling them to use the devices they're most familiar with and already use at home. According to the Benchmark Study on Patient Privacy and Data Security
conducted by the Ponemon Institute, 81 percent of healthcare providers already allow employees to use their own mobile devices to connect to the hospital network and more than half of employees are now participating in their hospital's BYOD program.
Look for some spectacular BYOD successes by organizations which move their BYOD strategy beyond application virtualization, the process of running user apps on servers but making the app appear to be running on the device by displaying the same image that’s appearing on the server. While running apps in a virtualized state does keep protected data from being stored on the device, the clinician productivity experience with virtualized apps is second class compared to installed apps designed to run natively on the device. Resolution is often low, functionality is limited and slow, and pop-up keyboards can pose safety risks when they obscure contextual data that users should be aware of when entering data or orders.
Windows 8 tablets overcome many of the virtualization barriers to productivity and safety of the iPad
because clinicians will, for the first time, be able to use one no-compromise device to run all the apps they need on a single device, including their EHR running natively or in a virtualized state. And Windows 8 tablets with integrated keyboards will enable CIOs to avoid the safety risks
of pop-up keyboards of iPads while still allowing users to take full advantage of touch, pen, keyboard, mouse, and voice input. And even further clinician productivity gains are possible because, rather than using a tablet while mobile and a PC to get work done, they’ll now be able to use a single no-compromise tablet that’s also a fully functional PC, as Windows 8 tablets also combat limitations experienced with first generation tablets, including data capture limitations, undersized screens, unencrypted drives, no USB support, and inability to run older apps or run multiple apps side-by-side.
However, along with BYOD success stories, expect to see some spectacular BYOD failures. Hospitals and healthcare systems require a 3-prong security strategy
to manage their BYOD risks by adding encryption, anti-malware protection, and proactive mobile device management to their existing single-prong virtualization security strategy. Three reasons for this. First, malware is becoming smarter and more invisible to the point where an attack may escape detection by the user and anti-malware. Second, hospitals need an additional layer of defense to protect ePHI from a security threat that’s unique to their industry: the maverick culture of non-employed physicians that they have limited control over. Lastly, the success of ACOs increasingly requires providers to share data and collaborate more, both of which increase the attack surface area and risk of data breach, which can have brutal reputation and financial consequences, with ePHI breaches now averaging $2.4 million per incident.
The dangers of under-armored BYOD programs for the industry are sobering. Although concerns about the cyber security of healthcare organizations have been smoldering for over a decade, the BYOD trend will likely be the "last straw" as HCOs grant expanded access to ePHI over wireless networks on consumer tablets and phones that were never designed to meet enterprise-grade security and compliance requirements. Over the next several years, we could see the headlines evolve from providers perfunctorily reporting ePHI breaches due to lost or stolen unencrypted laptops or hard drives to full scale cyberattacks that shut down entire hospitals by crippling servers or corrupting data. With only a single prong security strategy, under-secured BYOD devices could serve as vectors of denial of service cyberattacks, worms, and zero day exploits that will adversely impact productivity, patient safety, and brand vastly more than unauthorized disclosures of ePHI. A loose BYOD policy, for example, that allows users to have full administrative privileges over their personal devices allows them to install any browser they want, regardless of vulnerability count
and any app they want, infected or not.
With Health & Life Science customers specifically in mind, Microsoft has made major investments in the BYOD technology infrastructure
needed for organizations to protect BYOD and owned mobile devices from data breaches, including securing their data, securing their devices, and proactively monitoring and managing the devices. And because healthcare organizations require their IT partners to offer a HIPAA Business Associate Agreement (BAA) which puts privacy and security obligations on the vendor, Microsoft, offers a BAA that covers Microsoft Office 365
, Dynamics CRM
and Windows Azure Core Services
Telehealth will be redefined and its current business model inverted.
If there's any one area in health that's the most ripe for disruptive innovation this year, it's telehealth. Traditionally, under the fee for service model, telemedicine was seen as an efficient provider-centric vehicle to connect doctors to more patients to expand their practices.
But in the emerging shared accountability health economy model, providers will begin viewing telehealth very differently. Increasingly, they'll see telehealth not as a vehicle to build their practices or drive referrals, but as a more efficient patient-centric
vehicle to connect their patients
with the resources and teams they
need to improve their care experience, their health, and reduce their need for costly care or hospitalization. This new value-based consumer-centric telehealth model will leverage commercial, off the shelf HD webcams and cloud-based software services like Skype to make "conversational telehealth" available to the masses. Think of conversational telehealth as any interaction between a health professional or a software agent and a patient that doesn't need expensive studio-grade hardware or biometric device integration, like teledermatology, telepsychology, telepsychiatry, telepharmacy, health coaching, care coordination, personal training, employee assistance, medication therapy management, customer service, and 24-hour nurse advice. Forward thinking providers like Dallas Neurosurgical & Spine
and St. Luke's
are already disrupting the traditional, provider-centric telemedicine model using Microsoft Lync Online
The growth of consumer engagement & self-care.
In 2013, both high deductible health plans and technology will play an important role in incentivizing and motivating consumers to improve and better manage their conditions and their health risks. Pew Internet’s Mobile Health 2012 report
noted that approximately 19% of smartphone owners already have at least one of the 17,288 available health or wellness apps
on their mobile phones. This number will continue to rise as consumers take advantage of the continuous influx of new health and fitness apps.
While there's a wealth of experimentation going on, no one has yet cracked the consumer engagement code, as we all know from personal experience and controlled studies that information alone does not sustainably
change behavior, nor do incentives alone change behavior. So far, what we do know
about technology is that it needs to make healthier living and condition self-management easier, more natural, fun, rewarding, and social.
In one promising example,
Microsoft and Johnson & Johnson are working collaboratively with the international community to answer those questions by piloting The Digital Health Scorecard
app for Windows 8, which aims to reverse the growing prevalence of chronic disease by helping consumers understand how they can improve their health and reduce their chances of developing common chronic diseases such as diabetes, heart or respiratory diseases or cancer.
In another example, to help get and keep kids active and engaged in their health, Microsoft is working with the Boys & Girls Clubs to combine social and full body motion gaming using Kinect
for XBox. In 2011 Microsoft donated approximately 4,000 Xbox 360 Kinects to the Boys & Girls Clubs and is seeing reductions in childhood obesity and improvements in both exercise and self-confidence. In 2013, we’ll see more and more organizations leverage gaming techniques to further engage patients and families in their health.
2013 will prove to be an exciting year for health IT as we continue to find new, innovative ways to improve population health and the quality, safety, efficiency, experience, and coordination of care at a lower cost. Where are you seeing health IT headed in 2013?