=============================================================== EPRESCRIBING PERSPECTIVES
February 2, 2004 Edition http://www.pocp.com
=============================================================== IN THIS WEEK'S ISSUE:
1. Health Leaders Gather to Debate Health Care Changes, Share Ideas 2. Health Policy Begins to Address Greatest ePrescribing Challenge 3. What does ZixCorp’s Acquisition of MyDocOnline Mean? 4. The Inside Scoop on the Wellpoint Announcement
5. Lundie Affiliates with Point-of-Care Partners LLC
1. Health Leaders Gather to Debate Health Care Changes, Share Ideas
by Tony Schueth, Managing Partner
What do you get when you gather many of the leaders in public- and private-sector health care to debate ideology, share ideas and exchange lessons learned? Time will tell.
This was the profile of attendees at the first annual World Health Congress, held in Washington, DC on January 26 and 27. Speakers included Tommy G. Thompson, secretary, US Department of Health and Human Services; Senate majority leader Bill Frist, R-TN; Sen. Hillary Clinton, D-NY; Milton Friedman, PhD, senior research fellow, Hoover Institute and recipient of the 1976 Nobel Memorial Prize for Economic Science; a bevy of health care CEOs; and a wide variety of other health care experts.
Despite inclement weather, 1,100 professionals attended the meeting, many of whom were senior members of their respective organization. Attendees represented providers, government, health plans, pharmaceutical manufacturers, consortiums, software vendors and technology companies – all of the stakeholders involved in electronic prescribing.
Many of the speakers cited the current manual, antiquated prescribing process as an example of what is wrong with health care today. The solution offered was electronic prescribing; however, with a few minor exceptions (see 2. Health Policy Begins to Address Greatest ePrescribing Challenge, below), little new was proposed relative to increasing adoption and utilization, the consensus challenges. According to a January 23 story in iHealthBeat, fewer than 5% of physicians are using electronic prescribing solutions.
Examples of how the system is broken were offered, and there were interesting debates about how to fix it. The call was for revolution, not evolution.
While some participants advocated increased consumer involvement in payments and care itself, others were quick to remind the audience that health care is different from other segments of the US economy and there are other means of addressing out-of-control costs. No one’s proposals, however, went as far as the Clinton administration in 1994, not even Senator Clinton, herself.
One of the issues for which consensus was reached concerned the need to improve health care information technology, specifically by fostering interoperability, encouraging continued competitive innovation and ensuring equity of access. Taking the lead from President Bush’s State of the Union address, there was a great deal of discussion about standardizing electronic medical records (EMRs). According to a January 23 article in iHealthBeat, roughly 20% of hospitals and 5% of physicians currently utilize electronic medical records
(EMRs).
The Medicare Prescription and Modernization Act of 2003 set aside monies to be invested in technology. The amount for 2004 is being debated and won’t be known until the federal budget is released next month. Health care IT spending increased 9.3% in 2003 to $23.6 billion and is expected to grow at about 9% annually for the next three years, according to Sheldon Dornfest & Associates.
While 2003 was a watershed year for health care, 2004 may be even bigger. In 2003, government passed health care policy and pledged money. In 2004, companies will be responding. Time will tell whether it’s the beginning of a revolution or just more change. Point-of-Care Partners will help keep you informed.
At the same time, don’t forget about our growing group to help you formulate or execute on your strategies and tactics.
2. Health Policy Begins to Address Greatest ePrescribing Challenge
While a great deal has been written about “adoption” of electronic prescribing technologies, those who work every day trying to implement these programs understand that getting physicians to sign up is the easy part. The more difficult challenge is getting them to use the technology once they have it, and to stick with it. Without use, no stakeholder’s return on investment (ROI) is realized.
With the Medicare Prescription and Modernization Act of 2003, there was an attempt to address this at the policy level. After both houses of Congress passed differing bills, the committee charged with sorting out the differences between the bills debated mandating that physicians write Medicare prescriptions electronically or encouraging them to do so.
In the end, the more market-driven, supportive approach won the day. After the Health Insurance Portability and Accountability Act (HIPAA), the idea of unfunded mandates just didn’t have “legs” in Washington. The physicians’ lobby successfully argued that such requirements would “place an additional costly unfunded mandate on physicians, forcing them to rush to purchase an expensive, untested technology.”
So, as a compromise, the authors of the bill opted to allow prescription drug plans to pay an additional fee to doctors who reduce medical errors, improve formulary compliance or reduce adverse drug events (ADEs). There is a precedent for paying physicians to write prescriptions, although not for Medicare plans.
These programs are not widely publicized, either because they haven’t been outrageously successful or it hasn’t been in the plans’ best interest to communicate them beyond their client base. Some executives believe it’s a “slippery slope” to begin paying physicians to write prescriptions, not only because of what it might do to an already thin margin, but for the principle of the matter. Numerous studies have shown that prescribers benefit as much or more from electronic prescribing solutions as the plans.
What’s new is aligning payments to reductions in medical errors, decreases in ADEs and improved formulary compliance. Plans will save more with the former two, although they’re more difficult to measure. The latter is the easiest to quantify, so it is likely that plans are focusing on this in the short term; that is, if they are ready to step down the aforementioned “slippery slope.” In our view, it has become inevitable, so it’s a question of whether they want to be leaders or followers.
In the spirit of market-driven solutions, an interesting idea emerged from the World Health Congress. In a conversation following her presentation, Leslie Norwalk, deputy administrator of the Centers for Medicare and Medicaid Services (CMS) proposed giving physicians a “safe harbor” from fraud and abuse on
prescriptions they have written electronically. She noted that there is no current legislation to support this – it would have to be drafted.
We think this is a great idea! This truly market-driven approach would provide another compelling reason for prescribers to use their EMR or ePrescribing device to write prescriptions. While many of you will have an opinion about such legislation, we can’t imagine any constituency opposing it (with the possible exception of trial lawyers, but they don’t get this eNewsletter, anyway). Since CMS doesn’t write legislation, you’ll have to get your lobby working on this.
If you have any other ideas you want to pose to the industry, let us know and we’d be happy to publish them. If you want ideas on utilization or lessons learned, contact Point-of-Care Partners.
3. What does ZixCorp’s Acquisition of MyDocOnline Mean?
On Friday, Zix Corporation acquired the assets and business of MyDocOnline from Aventis Pharmaceuticals. ZixCorp is the secure eMail company who acquired ePrescribing leader PocketScript in August 2003.
With the transaction, ZixCorp acquired MyDocOnline’s online visit, disease management and laboratory ordering/reporting capabilities, in addition to a three-year contract with Aventis for various services, initially consisting of patient education services in various disease classes. The agreement represents a minimum commitment of $4 million with ZixCorp.
What does this mean? From Zix’s perspective, it means the addition of a suite of products that complement PocketScript and their core business of secure eMail. According to John A Ryan, CEO of ZixCorp, "These solutions, combined with our existing ePrescribing and compliance solutions provide us with a complete portfolio of solutions that are not only attractive to patients and physicians, but also provide significant benefits to providers, pharmacy benefit managers, pharmacies, and pharmaceutical companies. It enables ZixCorp to be uniquely positioned to capitalize on current trends in health care for improved care, improved service and reduced cost.” We agree.
Time has shown that electronic prescribing alone does not provide enough positive ROI to support the
technical and human resource infrastructure required. The value is in the channel and electronic prescribing is a powerful use of it, but not the only one. ZixCorp has acquired functionality that needs to be integrated – not built – with existing functionality. The vision of multi-value functionality via one channel is not unique to ZixCorp, but the organization took a giant leap toward realizing it. Good for them.
The domino effect could be interesting, as well. What will its competitors do in response? How will Aventis’ pharma competitors react to the three-year contract for patient education service? Stay tuned.
4. The Inside Scoop on the Wellpoint Announcement
On January 15, Wellpoint announced in the Wall Street Journal that it would spend $30 million on computers and handheld devices for 19,000 network physicians to support automatic claims submission or electronic prescriptions. The vendors included Microsoft, Dell, Cisco and Cap Gemini Ernst & Young, but no clinical software companies were identified.
Apparently Wellpoint is working with Microsoft to choose its clinical software partners, and will be
leveraging Cap Gemini Ernst & Young (CGE&Y) to implement. The short list of clinical software companies includes Health Ramp, with whom Wellpoint has been involved for years including having a board seat at one
time. We understand companies being considered are minimally Allscripts, HealthVision and NextGen. In our view, it’s wise to choose at least two solution providers, and we understand that Wellpoint has said they would do that. Smart solution providers are evolving their product so that they are maximally flexible. Nevertheless, different physician offices have unique needs, and CGE&Y would be wise to first understand those needs, and then match the appropriate company with respective offices. Having a menu of solutions will allow them to make the right match.
In addition, 19,000 is a lot of physicians, especially when you consider that these providers are probably affiliated with others who do not treat a heavy enough suite of Wellpoint lives to qualify for the free software but still could get a discount. In our experience, this could mean they will be reaching as many as 50,000 physicians – quite a challenge for even the larger of the clinical software providers.
Like the Aventis-ZixCorp announcement, this could also have a domino effect. What will this do for the companies who win the contract? What will Wellpoint’s competitors do?
Depending on your respective role and organization, either stay tuned or get to work. If your inclination is toward the latter, don’t forget about Point-of-Care Partners if you want help devoping or implementing strategies. Why not benefit from the lessons learned over more than 10 years?
5. Lundie Affiliates with Point-of-Care Partners, LLC
Point-of-Care Partners, LLC, a growing eHealth consulting firm focused on electronic prescribing, recently announced the affiliation of Michael Lundie, an independent health care consultant. Mr. Lundie is a
technology leader and health care specialist with more than 26 years’ experience in the computing industry. “I am delighted to have Mike join our team,” said Tony Schueth, managing partner of POCP. “He not only fits the profile of the type of professional we want affiliated with Point-of-Care Partners, he brings
information technology skills and experience that complement our team.”
Prior to becoming an independent consultant, Mr. Lundie was director of health care information systems implementations for Centene Corporation, a managed care services provider focused on the management of Medicaid programs in several states. Prior to that, he worked for two startup companies – Empath
Technologies, a firm focused on health data security and privacy, and Cyclone Commerce, a B2B
infrastructure company providing secure data transport and scalable community management facilities for Internet-based eCommerce initiatives.
His active involvement in electronic prescribing originated at National Data Corporation, where he was employed between 1992 and 2000 in a variety of roles, including vice president of advanced technology. Besides being chief strategist and developer of the company’s Internet strategy, Mr. Lundie developed the first Internet-based, real-time, interactive healthcare EDI transaction processing site, known as NDC
Connect.com, a point-of-care application that supports electronic prescribing, multi-payer eligibility, all-payor claims, claims status and referrals. He also developed and introduced new Internet-based decision-support products, including an ePrescribing application.
For more information about Mr. Lundie visit the Point-of-Care Partners Web site (www.pocp.com), and click on the “team” button.
Point-of-Care Partners is a growing consulting firm focused on eHealth and ePrescribing. We help organizations develop and execute winning strategies based on lessons learned, current trends and key drivers.
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