Emergencies validate e-records
Ready access to health care history Ωould speed recovery efforts<@VM>Feds to write multiple technology prescription<@VM>Hurricanes fuel asset and disease-tracking systems
- By Ethan Butterfield
- Oct 08, 2005
The back-to-back hurricanes that struck the Gulf Coast this season are an object lesson on the importance of electronic medical records. Having electronic medical records might have cut the time needed to deliver health services to hurricane victims, and even reduced the cost of delivering those services, analysts and industry officials said.
But the nation is still two or three years away from being able to transfer those records electronically, they said.
Making health records electronic will allow for more efficient business practices and cost reductions, said Richard Wheeler, a health and life sciences partner with Accenture Ltd. of Hamilton, Bermuda.
"Twenty percent of the health care costs in this country could be eliminated by reducing redundancy and having that information available [electronically] when a patient shows up in a care center," he said.
The devastation that hurricanes Katrina and Rita wrought on Alabama, Louisiana, Mississippi and Texas demonstrated the need to computerize health records, most of which are kept on paper with no electronic backup, Wheeler said.
The demand for electronic medical records, combined with the continuing need to revamp Medicaid management information systems should offer plenty of new project opportunities for the next five years to large systems integrators focused heavily on the government health care IT market.
The market opportunity for electronic records still is several years out. However, the dominant health care integrators, such as Affiliated Computer Services Inc., Accenture, Computer Sciences Corp., Deloitte Touche Tohmatsu, EDS Corp., Maximus Inc. and Unisys Corp., will still have plenty of business opportunities. They will include upgrading Medicaid systems and processing benefits, as well as building and deploying associated systems that manage pharmacy benefits, detect fraud and abuse, and determine identity and eligibility, analysts and industry officials said.
The robust pipeline for Medicaid Management Information Systems business can be attributed primarily to the improving financial condition of state governments, following a prolonged spell of budget shortfalls at the beginning of the decade, said Barbara Anderson, EDS' vice president of state and local government solutions.
"We're seeing [states] pick up with projects that had been delayed because of budget issues, she said.
Medicaid was established 40 years ago to offer medical assistance to families and people with low income. It covers more than 50 million Americans, and states and the federal government share the program's cost.
The estimated cost of Medicaid will be $500 billion annually over the next 10 years, analysts and industry officials said. As the cost of public health care keeps rising, and available funds keep dwindling, more states are planning or embarking on projects to upgrade technology and efficiency while reducing Medicaid costs over the long term, they said.
Fueled primarily by a need to update aging Medicaid systems and deploy associated systems that cut costs, state and local health care spending will grow dramatically over the next three to five years.
The size of the market varies depending on the methodology used. State and local spending on health care IT is expected to grow at an annual rate of 13.2 percent from $6.7 billion in 2005 to $12.5 billion in 2010, according to market research firm Input Inc. of Reston, Va. But Gartner Inc., a market research firm in Stamford, Conn., pins the annual growth rate at 9 percent from $4.7 billion in 2005 to $6.1 billion in 2008.
More people are getting their primary care through state-run Medicaid systems these days, fueling the hike in costs, said Rishi Sood, a research vice president with Gartner Dataquest Inc. of Mountain View, Calif. Many states are focused on efficiency and cost reduction strategies, he said.
Over the past two years, more than a dozen states, including California, New Jersey and Texas, have spent heavily on upgrading their Medicaid programs. Industry officials and analysts said they expect that trend to continue for at least another 18 months.
Between 10 and 15 states either are recompeting Medicaid contracts or are coming out with new bids for opportunities worth more than $1 billion to systems integrators, said Holli Ploog, vice president and general managing partner of global public sector with Unisys of Blue Bell, Pa. These states include Georgia, Mississippi, Montana, Nebraska, New York, Ohio along with the District of Columbia, according to market research data.
States are looking to replace aging systems with flexible, open-standards systems to become more efficient and cut costs, Ploog said. Medicaid costs average more than 25 percent of a state's budget, she said.
"If you look at the United States, we spend more per capita on health care than any other country, yet by numerous measures, the quality of patient satisfaction, we're not rated No. 1," Ploog said.
Anderson agreed. EDS, which has Medicaid contracts in 19 states, sees a fundamental shift in how states view Medicaid, she said.
"They want to make sure the right service is provided to the right recipient by the right type of provider in the right setting for the right cost," she said. "They want much more focus on the analytical side, to make sure their dollars are spent in the right place."
In the years ahead, large systems integrators can look forward to a significant number of opportunities, helping all levels of government connect disparate systems that house electronic medical records and assisting them in protecting the privacy and confidentiality of those records, said Edward Sondik. He is director of the National Center for Health Statistics and acting director of the National Center for Public Health Informatics, both within the Health and Human Services Department's Centers for Disease Control and Prevention.
"The application in the health care area is going to be tremendous. If I were a company in the defense technology arena, I would see this as a major opportunity," he said.
Having a person's entire medical history available electronically will cut down on errors, such as drug interaction complications and improper procedures being performed, which will save money, Unisys' Ploog said.
Industry officials also see centralized and electronic records improving the cost of caring for the most expensive Medicare patients, the 20 percent who require 80 percent of the spending. These people tend to have certain diseases, such as diabetes, or are in certain age groups, such as the elderly, Ploog said.
"When you view them holistically, you can help them get better quality care and reduce a lot of the cost," Ploog said.
But electronic medical record opportunities and the broader goal of regional health information organizations, which would link medical records across a network, are limited. The federal government hasn't yet developed standards and regulations to guide adoption and implementation, Sood said.
Electronic medical records should become "a real opportunity in the government marketplace no sooner than 2008," he said. He declined to estimate the market's size, saying it was too early to predict.
But Deloitte's state segment leader John Skowron said he sees work beginning on electronic medical records sooner than later.
"There are a number of progressive states that are talking about that in strategy sessions at this time," Skowron said. "How long that actually takes to turn into an RFP, my guess is that in 12 to 18 months we'll start to see those en masse.
"But we're already starting to see some states issue RFPs around regional health information network strategies and planning sessions," he said. "It's closer than some may think."
Staff Writer Ethan Butterfield can be reached at email@example.com.
With Medicare reform in full swing, and the federal government promoting information interoperability and emergency preparedness, the federal health care IT market is brimming with opportunities, industry officials said.
One of the bigger ones is Medicare Part D, President Bush's new prescription drug program that goes into effect Jan. 1.
Computer Sciences Corp. has done work for the Centers for Medicare and Medicaid Services (CMS) preparing a prescription drug discount card for Part D, a contract worth $384 million over eight years.
"Our offering was called CCRx, and we partnered with MemberHealth and the National Community Pharmacy Association," said Marcia Kim, vice president of citizen's services with CSC's federal sector, of a pilot program the company operated. "That positioned us for Part D, and in Part D, CCRx will be a national offering."
Cathy McGrane, vice president of U.S. government solutions for federal health programs at EDS Corp., said the company likely will see an increase in the volume of claims processing work that it already does for CMS, but is unlikely to get any new contracts from the program.
Health IT architecture is another federal government goal creating opportunities for systems integrators.
"That's going to be on top of the agenda for the next 10 years," said Susan Penfield, vice president of global health care at Booz Allen Hamilton Inc. in McLean, Va. "It may be slow at first in terms of dollars, but the strategy will come first, then longer-term demonstration projects and implementation."
Booz Allen also has an information-sharing project with the National Cancer Institute that Penfield said has implications across national and international lines. The company has received orders on the project that total $35 million.
"We are a partner on developing the cancer Biomedical Informatics Grid initiative, the tenet of which is to share research data with cancer institutes across the nation," she said. "There are a lot of applications to share data ultimately with industry, and then from a global perspective, we've had interest from the United Kingdom Cancer Grid as well as the German Cancer Research Institute."
Consolidating information into fewer but larger data centers to take advantage of cost savings is another opportunity, said EDS' McGrane. She said EDS is doing just such a job for CMS.
Emergency preparedness is another major opportunity, Penfield said. Booz Allen applies its war-gaming technology to host strategic simulations that can model disasters. They have done simulations for the Centers for Disease Control and Prevention and the Food and Drug Administration, Penfield said.
"For CDC, it's around preparing for flu season and what to do in light of a major flu crisis," she said. "At FDA, it's around the response to a bioterrorism event."
FDA wants to ensure that any drugs required could be approved and available for treatment in a short period of time, she said.By William Welsh
Less than a week after Hurricane Katrina struck the Gulf Coast, officials with the Arkansas Department of Health were on the phone lining up a software solution to track available hospital beds. It was a job they used to do by hand, but it had become too big to handle in Katrina's wake.
They turned to EMSystem LLC of West Allis, Wis., a Web-based communications and resource management solutions provider for public health and emergency medical services.
"When Katrina hit, we could see right away what we needed. I called them and asked how we could put it on the fast track," said Bruce Thomasson, coordinator for hospital preparedness with the Arkansas Department of Health.
Since there wasn't time to get a contract in place that quickly, the company offered to activate the system for the department with the understanding that a contract would be signed later in the year, Thomasson said. Within seven to 10 days, the system was up and running in Arkansas, and about 40 percent of the hospitals throughout the state were using it, he said.
While Arkansas is using only one software application, Thomasson said it eventually wants to use other applications developed by EMSystem to track immunizations, vaccine stockpiles and other health care-related supplies and equipment.
"Their software will enable us to do a minute-by-minute inventory of our resources and equipment," he said.
Katrina has created a boon for niche companies, such as EMSystem, that provide bioterrorism and emergency preparedness products and solutions, according to bioterrorism experts and industry observers.
For a market that didn't exist four years ago before the terrorist attacks of Sept. 11, 2001, bioterrorism preparedness has further cemented itself as a significant technology opportunity at the state and local level following Hurricane Katrina.
Disease surveillance, also known as syndromic surveillance, is a related opportunity. It is the process of monitoring illnesses and medical events to determine if there has been an outbreak of an infectious disease or a chemical or biological attack. Data is collected from doctor's offices, public health clinics and hospital emergency rooms and divided according to categories covering everything from respiratory and gastrointestinal ailments to dog bites and skin rashes.
One of EMSystem's three units focuses on hospital management and emergency resource management systems, said Andrew Nunemaker, EMSystem's president. The unit offers systems that connect hospital emergency rooms, public health agencies and ambulance services, so hospital and public health officials can monitor resources and track syndromes that would indicate disease outbreaks.
The company's Critical Infrastructure Data System is being used in about 30 percent of the nation, including Arizona, Colorado, Hawaii, Kansas, Kentucky, Missouri, New Mexico, Nevada and Texas, he said. About 20 percent of the states have systems they developed themselves, and the other 50 percent lack automation altogether, Nunemaker said.
Some of the company's customers have tapped federal bioterrorism preparedness grants for their projects, he said.
Jurisdictions in the National Capital Region surrounding Washington use a disease surveillance system known as Essence, developed by Johns Hopkins University through a grant from the Defense Advanced Research Projects Agency. The northern and eastern regions of Virginia are using the system, said Michael Colletta, bioterrorism surveillance coordinator with the Virginia Department of Health.
Like EMSystem's hospital and emergency management systems, Essence automates syndromic surveillance processes and procedures that were once done by hand, said Holly Clifton, an epidemiologist with Fairfax County, Va., one of the largest jurisdictions in the National Capital Region.
The county has tracked infectious disease outbreaks and related phenomena since Sept. 11, but automated the process last spring, she said. Automation reduces the time to compile the information from two hours to 30 minutes, she said.
The system enhances tracking of incidents that were once poorly reported and offers better surveillance around public events that draw large crowds, regional officials said.
Arkansas chose to go with EMSystem because several neighboring states were using it, and it can tie easily to their data repositories, Thomasson said. He believes that is a better option for Arkansas than working with states that have homegrown systems.
"If you wanted 50 different systems and a patchwork quilt, you could have everyone do it in-house," he said. "But it's important to have it knit together in the same framework, so everyone is on the same page and there is some semblance of order."
Deputy Editor William Welsh can be reached at firstname.lastname@example.org.