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| Background |
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| Michigan's Healthcare Crisis |
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| In 2001, Michigan hospitals were asked to identify the threats and
opportunities arising out of eHealth and eBusiness trends, and how
well they were likely to cope.1,2 The answers were not
encouraging. At a time when hospital financial pressures and budget
uncertainties have never been greater, aging and disparate technology
systems require urgent remediation or replacement. The hospitals are
not alone. All sectors of the healthcare industry, including payers
(primarily Medicaid, Medicare, and employers) and health plans face
the same fundamental financial and technological pressures. |
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| The 2003 state budget for healthcare is $9.2 billion. By 2006, if
nothing changes, Medicaid alone is projected to consume 34 percent
of the General Fund, compared to 24 percent for 2003 (see graph below).3
Given other demands on state resources, an increase of such magnitude
is probably intolerable, with the likely result that the industry
will be even worse off financially and what the Institute of Medicine
says is already a "chasm" between where the quality of healthcare
is and where it ought to be, will widen. 4 |
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| Among potential change drivers that could help bridge the gap, none
would have as big a single impact as the adoption and use of information
technologies by hospitals and doctors. Though there are a few progressive
pockets, in general healthcare providers have been notoriously slow
to adopt and use IT in their relationships among one another and with
increasingly wired, cost- and value-conscious, medically literate,
and quality-demanding consumers. |
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| Evidence abounds that IT helps cut costs while raising the quality
of products and services in all sectors of the economy. The Detroit
Regional Chamber of Commerce sees annual statewide savings exceeding
$35 million "If the health care community already using electronic
transactions were to adopt a common electronic communications infrastructure
with standard communication protocols and transaction formats."
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| But this could be just the tip of the iceberg of potential cost
savings, if the adoption were extended beyond providers, payers, and
insurers to include the consumer. The direct route to extending the
use of IT by doctors and hospitals to embrace consumers is through
electronic medical records (EMRs) to replace the unwieldy, inefficient,
and sometimes deadly paper record. |
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| Annual savings of at least $360 million are possible through
the adoption of a statewide, standardized electronic medical record.
These savings, which are based on a cost saving of at least $30,000
per practicing physician derived from an actual EMR pilot implementation,6
would accrue most directly to providers, but they would also indirectly
relieve pressure on payers, plans, and the state budget. |
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Numerous state and federal studies7 have established a clear and
compelling cost-reduction and quality-enhancement justification for
the EMR, as:
- Prerequisite to disaster preparedness,
- Virtually mandated by HIPAA, the new federal health laws going
into effect over the next two years,
- Supported by best practice evidence,
- Necessary to bridge the quality chasm and increase patient safety,
and
- Necessary to help overcome the financial crisis facing healthcare
in Michigan.
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| The full extent of these benefits, however, can only be realized
if the EMRs are standardized, so that patient medical information
can be appropriately shared with those who have a legitimate need
and right to know. |
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The Problem |
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| Physicians spend, on average, fewer than 15 minutes per patient
visit. They must be given the best, most-up-to-date patient information
in a form that is fast, easily navigable, highlights critical points,
and optimally supports the selection of treatment strategies. |
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| Unfortunately, that is not the case. The primary means by which
patient information moves between providers are mail, phone, fax and
patient self-report. Typically, each provider creates his or her own
set of records, called patient "charts" -- loose-leaf folders
often inches thick containing scribbled telephone messages, physician
notes, and radiology and lab reports. The older or sicker the patient,
the thicker the folder and the more jumbled and confusing its contents. |
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| Charts are usually incomplete, redundant across providers, narrowly
focused and frequently contain contradictory information. The primary
means by which critical information is gleaned by a doctor before
seeing a patient is by calling for and looking through the jumbled
mess. The state of that mess has been well documented (see Box).8
Electronic search and analysis tools, and other information technologies
that could provide critical treatment information to physicians, are
not widely employed. |
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| Who Will Benefit by MEMRI? |
Michigan healthcare providers: |
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Save a combined total of $360 million annually
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Cost-saving efficiencies from automated diagnostic coding, etc.
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Provide higher quality care
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More access (streamlining removes/reduces barriers)
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Fewer errors
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Michigan health policy makers:
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Help relieve budget pressures from healthcare component
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Improve state disaster preparedness capability
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Receive more timely and complete public health information/indicators
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Little or no public cost to initiate
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Indirect savings from financially healthier hospitals and physically and mentally healthier citizens and workforce
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Opportunity to provide national leadership as a model for other states to follow
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Supports LinkMichigan by stimulating investment in broadband infrastructure
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Commerce & Industry:
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Cuts businesses' healthcare costs through healthier workforce, transactional efficiencies
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Improves workforce productivity
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EMR saves lives, cuts costs even without Computerized Physician
Order Entry (CPOE) for ensuring the safe prescription and delivery
of drugs [Leapfrog]
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CPOE can be linked to the EMR, enhancing the efficacy of both
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Federal government and philanthropy:
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Create a national model
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Disaster preparation/War on Terror
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Fix the Healthcare crises
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Budget
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Access
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Quality
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Michigan healthcare consumers:
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Improved access to care
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Higher quality care
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Better health
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Lower tax/insurance costs
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