The HIT Market Has Changed

How NextGen can Help You!

Charlie JarvisAVP Healthcare Solutions and Government Relations

NextGen Healthcare Information Systems Mission Statement

To improve patient care and reduce healthcare cost by providing industry-leading systems and services, and by achieving the Gold Standard of customer satisfaction.

Healthcare in the U.S.

• 2008 total healthcare spending in the U.S. is expected to reach $2.4 trillion, 16.6% of the GDP

• By 2016, CMS projects that healthcare spending will be over $4.1 trillion, accounting for 19.6% of GDP

• About 45% of Americans suffer from one or more chronic diseases, accounting for 75% of all healthcare spending, and 70% of deaths

*Kaiser Family Foundation

President Obama• President Barack Obama included healthcare

reform as a platform in his presidential campaign

• Examples of platform points:– Universal coverage through private and

expanded public insurance– Require insurance companies to cover pre-

existing conditions– Reform medical malpractice– Invest $50 billion toward the adoption of

EHRs and other HIT

President Obama• February 17, 2009, President signed into law the

American Recovery and Reinvestment Act of 2009 (ARRA), providing over $20 billion for HIT, referred to by many as a “foundation for healthcare reform”– $50 billion total funding available– Codification of the ONC– Establishment of two Federal Advisory

Committees– Grants and loans to foster the use of HIT– New privacy and security provisions

President Obama

• March 2009 President Obama released his Blueprint for the U.S. Budget entitled “A New Era of Responsibility: Renewing America’s Promise”

• Blueprint provides first glimpse of healthcare reform

President Obama• President’s Budget Blueprint totals $3.55 trillion• Blueprint includes $76.8 billion for the Department of

Health and Human Services• Establishes a Reserve Fund of more than $630

billion over 10 years to finance healthcare reform• “The Administration will continue efforts to further the

adoption and implementation of HIT- an essential tool to modernize the healthcare system”

• $25 billion over the next five years for the VA, to be applied to such activities as investments in IT that directly benefits veterans in the areas of both healthcare and benefits

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U.S. Congress

• In the 110th Congress (2007 – 2008), members of the House of Representatives and Senate introduced healthcare reform legislation, which addressed such areas as coverage require-ments for health plans, the expansion of federal health insurance, and applications of HIT

• In November 2008, Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee and Senator Edward Kennedy (D-MA), Chairman of the Senate HELP Committee each positioned their Committees to address healthcare reform in 2009

U.S. Congress

• Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee, released “Call to Action”, a detailed report that addressed priorities and next steps for healthcare reform:– Achieve universal coverage – Reduce health care costs – Improve the quality of care our system provides  – Individual responsibility to have health coverage –

once quality, affordable, care is accessible to all.  – Shore up the employer-based system, through a

one-stop insurance marketplace

Universal Healthcare Coverage- the

Commercial Insurers

• More than half of all private-sector health plans in the United States are applying P4P in their contracts─ More than 100 of these programs target physicians or

medical groups (Rosenthal et al., 2007; Sorbero et al., 2006)

• Public purchasers also have begun to move toward adoption of P4P/P4R in both the Medicare and Medicaid programs such as PQRI and eRX.– CMS to publicly publish 2009 PQRI reporting results

Universal Healthcare Coverage - the Commercial

Insurers• Claims data does not reflect the patients condition,

nor their quality of care─ Studies demonstrate as much as 46-75% disparities in

outcomes when comparing claims data to clinical data (Journal of Thoracic and Cardiology Surgery)

• Patient-centered medical home (PCMH) has emerged as a driving force behind health care reform─ “Key to health care reform in the long run is turbo

charging primary care" - Len Nichols, Ph.D., director of the health care policy program for the New America Foundation in Washington

Reduce Healthcare Cost - the Commercial Insurers

• More than 30 states have launched PCMH projects, according to the National Academy for State Health Policy,

• Some of the nation's largest payers have initiated PCMH pilot projects in local, regional and statewide markets.

*More than 30 states (highlighted in light blue) have launched PCMH projects and a number (shown in dark blue) already are seeing results

Patient Centered Medical Home Initiatives

Improve Quality of Care - the Commercial Insurers

• Projects are operating independently or in conjunction with state initiatives to form multi-payer collaborative.

• *Colorado, Louisiana, Maine, Minnesota, New Hampshire, Pennsylvania, Rhode Island, and Vermont - multi-payer initiatives as part of the State Children's Health Insurance Program, or SCHIP, or their state Medicaid programs

• Minnesota will start requiring private insurance plans to offer medical homes as part of their health care networks by July 1, 2010.

Schedule for Bill Completion

• Week of June 15 - bills out in committee• Week of June 22 - committee hearings• July- discussion and comment• Week of July 27- House bote• Week of August 3 – Senate bote• August Recess• September - reconciliation and passage

Key Components

• National health exchange.  Individuals and small businesses will be able to purchase from a health exchange

• Public plan.  The exchange will include a public plan option

• Individual mandate – There is a soft individual mandate

• Medicaid will be improved

More Components

• A permanent SGR fix is the goal at this time • Incentives for doctors to form Accountable

Care Organizations that coordinate care and get bonuses for quality

• Medical Home.  There will be direct payments for doctors and nurses if they demonstrate they are coordinating care.

Key Players

• Nancy Ann DeParle - White House Counsel on Health Care Reform. In office and focusing on upcoming Health Care Reform (which does include HIT).

• David Blumenthal- Director of ONCHIT- assumed office on April 20. First order of business was to put into action the plan to define meaningful use of HIT.

• Kathleen Sebelius - HHS Secretary – confirmed and is in office. HHS through CMS to be the operations arm of the Medicare and Medicaid HIT incentives.

ARRA Update• California, New York and Maryland- first three states to

propose plans for HIT infrastructure under the ARRA.• New York- has unveiled HEAL 10. $60 + million dollars

to go towards EHR adoption around PCMH care models. This will be used as their foundation for the federal money and also as a link to their Take Care NY program with the commercial insurance carriers.

• California has tapped skills of Jonah Frohlich from California Health Care Foundation to oversee the planning of the statewide HIT structure. Manatt Health Solutions has been given the contract by the state to author the plan.

• Maryland has announced $410 million to be distributed to advance HIT adoption. Still learning details.

• About 25 states have begun the process of their HIT plan development.

ARRA Update

• Federal government has released first of two of ARRA grant programs - $850 million was due June 2 and will be awarded July 1, and $200 million already awarded. HIT grant awards can go as high as $2.5 million from a “competitively selective” application process.

• Regional IT Extension Center Program out for public comment

• Comparative Effectiveness and Connectivity Programs to follow shortly

The NextGen Grants Resources Center

• Services– Match clients with appropriate funding

opportunities – Introduce grant writing services – Introductions to other NextGen clients,

insurance and quality assurance companies when appropriate to strengthen proposal

– Proposal support as needed

ARRA Update

• Discussions on the detailed definition of meaningful use are beginning to occur.

• The Electronic Health Record Vendor Association has released our statements

• The National Committee on Vital and Health Statistics held two days of open hearings taking both written and oral testimony on this subject.

• The Markle Foundation released a report last week detailing their recommendations surrounding the whole program

ARRA Healthcare Information Technology Finances

• $2B for HIT infrastructure, especially HIE• $17.2B Medicare/Medicaid incentives to doctors and

hospitals for “meaningful” use of certified HIT (net $ after government projected savings)

• $4.7B for the National Telecommunications and Information Administration's Broadband Technology Opportunities Program

• $2.5B for the U.S. Department of Agriculture's Distance Learning, Telemedicine, and Broadband Program

• $1.1B for comparative effectiveness grants from AHRQ, NIH, and HHS - does automation improve care

HITECH Finances• $2B for the community health centers through the

Health Resources and Services Administration• $500M for the Social Security Administration• $85M for the Indian Health Service• $50M for the Veterans Benefits Administration• Assorted “pockets” of HIT funding in state and

community funding allotments

$30.1B IN TOTAL (not counting local funding)

(Note: there is actually another $20 billion for Medicare Incentives before government calculations for savings. The real total for HIT is about $50 billion.)

Medicare Incentives

Year 2011 2012 2013 2014 2015 2016 Total

1-4 $18k $12k $8k $4k $2k $0k $44k

1-4 $18k $12k $8k $4k $2 $44k

1-4 $15k $12k $8k $4 $42k

2-4 $12k $8k $4 $24k

No Pay

$0k $0k $0k

No Pay

$0k $0k

Medicaid Incentives2011 25k

2012 10k 25k

2013 10k 10k 25k

2014 10k 10k 10k 25k

2015 10k 10k 10k 10k 25k

2016 10k 10k 10k 10k 25k

2017 10k 10k 10k 10k

2018 10k 10k 10k

Total 65k 65k 65k 65k 65k….

65k….

Incentives Development Schedule

(approximate dates)• June 16 - ONC releases details on

meaningful use

• August 26 - HIT Policy Committee recommends certification body

• September 15 - 2009/2010 certification process begins

Development Schedule (con’t)

• December 31 - ONC finalizes meaningful use definitions

• January 1,2010 - Federally Approved State HIT plan can be implemented

• April 15, 2011 - 2012 certification process commences

• January 1, 2011- Medicare incentive period commences

Time to Act is Today!12-17 months to be ready

• Time required activity – 1 month practice workflow analysis and review

of HIT solutions– 2 - 3 months selection of HIT solution– 3 - 6 months Implementation – 3 months accessing clinical components and

identifying data reporting requirements– 2 months collecting and reviewing data – 1- 2 months internal adjustments to improve

results/ reporting data

NextGen Healthcare Information Systems, Inc.

Value Statement

Committed to achieving the Gold Standard in customer

satisfaction

Thank You for your time.nextgen.com