MASSACHUSETTS eHEALTH COLLABORATIVE AHRQ Annual Meeting

1. MASSACHUSETTS eHEALTH COLLABORATIVEAHRQ Annual Meeting September 26, 2007

2. Company launched September 2004 • Non-profit registered in the State of Massachusetts • CEO on board January 2005 • Backed by broad array of 34 MA health care stakeholders MAeHC ROOTS ARE IN MOVEMENT TO IMPROVE QUALITY, SAFETY, EFFICIENCY OF CARE • Universal adoption of electronic health records • MA-SAFE • $50M commitment to heath information infrastructure • Recognition of “systems” problem

3. MAeHC BOARD OF DIRECTORS • Health plans and payer organizations • Blue Cross Blue Shield of Massachusetts • Fallon Community Health Plan • Harvard Pilgrim Health Care • Massachusetts Association of Health Plans • Tufts Associated Health Maintenance Organization • Healthcare purchaser organizations • Associated Industries of Massachusetts • Massachusetts Business Roundtable • Massachusetts Group Insurance Commission • Non-voting members • Center for Medicare & Medicaid Services • Healthcare professional associations • American College of Physicians • Massachusetts League of Community Health Centers • Massachusetts Medical Society • Massachusetts Nurses Association • Consumer, public interest, and at-large • Health Care for All • Massachusetts Coalition for the Prevention of Medical Errors • Massachusetts Health Data Consortium • Massachusetts Taxpayers Foundation • Massachusetts Technology Collaborative • MassPRO, Inc. • New England Healthcare Institute • Massachusetts Health Quality Partners • Tufts University Medical School • UMass Medical School • Hospitals and hospital associations • Baystate Health System • Beth Israel Deaconess Medical Center • Boston Medical Center • Caritas Christi • Fallon Clinic, Inc. • Lahey Clinic Medical Center • Massachusetts Hospital Association • Massachusetts Council of Community Hospitals • Partners Healthcare • Tufts-New England Medical Center • University of Massachusetts Memorial Medical Center Governmental agencies • Executive Office of Health and Human Services

4. PILOT SELECTION

5. Outcomes analysis MAeHC-level: Analysis • Benchmarking • Reports to plans • P4P • Chart review MAeHC-level: QDW Community-level: HIE • Brockton • Newburyport • North Adams MAeHC ARCHITECTURE AND DATA FLOWS Provider-level: EHR

6. FRAMEWORK What do we want to create and why? • Market dynamics • Definition of business concept • Economic model Business concept development • Infrastructure build • Stakeholder acquisition • Customer acquisition • Performance metrics How are we going to build it? Business creation How do we plan to implement our strategy? • Organization model • Resource identification • Launch plan Implementation planning

7. – 1 Physician offices REVENUES Impact on ROI Main driver Revenue category Description One-time or ongoing • Lower patient volume during implementation • Higher patient volume • Higher charge capture • Better receivables management • Better ability to benefit from existing incentives or P4P • Reduced schedule during implementation period • Redeployment of staff time from administrative tasks (e.g., chart-chasing) to patient interactions and/or conversion of paper medical records space to exam room • More efficient scheduling – better ability to track and fill missed appointments • More complete coding and documentation • Lower claim rejection due to filing errors • Better tracking of accounts receivable (or elimination of need for billing service) • Better benchmarking and ability to document metrics required for incentives Medical charges Medical charges Medical charges Medical charges Medical charges • One-time • Ongoing • Ongoing • Ongoing • Ongoing + + + +

8. – – – – 1 Physician offices COST (I) Impact on ROI Main driver Cost category Description One-time or ongoing • IT investment and installation • IT maintenance • Higher physician and staff training time • Lower transcription costs • Lower postage, fax, copier costs • Lower staff medical records handling time • Higher staff scanning time • Hardware, software, network, broadband • Workflow design • IT system design, setup, integration • Support, maintenance, upgrades of hardware, software, and network • Broadband service • Training time for workflow design and system usage • Direct entry into EHR (typing, template, voice recognition) • Referral letters, reports, diagnostic results entered and sent electronically (scanned, fax server, electronic data exchange) • No chart search, pull, re-file time • Scanning hard copy information for inclusion in patient record • Information technology • Information technology • Physician/ staff time • Staff time • Admin supplies • Staff time • Staff time • One-time • Ongoing • One-time • Ongoing • Ongoing • Ongoing • Ongoing • Ongoing + + +

9. 1 Physician offices COST (II) Impact on ROI Main driver Cost category Description One-time or ongoing • Lower staff prescription refill process time • Lower staff order and results management time • Lower coding time • Better quality of life • Lower premiums • E-prescribing solution streamlines refill process • Orders sent directly to diagnostic facility • Results imported directly into record • Automated orders-results reconciliation • ICD-9 codes linked from clinical record • Less time, lower frustration, from more streamlined administrative tasks • Lower liability exposure due to lower error rates, better documentation, better ability to track & follow-up patients, and other factors • Staff time • Staff time • Staff time • Staff time • Malpractice insurance • Ongoing • Ongoing • Ongoing • Ongoing • Ongoing + + + + +

10. SET PRIORITIES AND LAY OUT THE ROADMAP Revenue potential

11. THE BIG PICTURE IS AS MURKY AS IT EVER WAS... • The message on quality and measurement is starting to sink in, but there is no sense of urgency • Large groups and hospital-employed moving faster, but small practice penetration is lethargic • Small practices don’t see this as a “competitive advantage” • Current reimbursement model doesn’t provide enough focused incentives to accelerate adoption, largely because of upfront capital and technical capacity hurdles • Supply- and demand-side too fragmented • P4P without EHRs too shallow to make a difference • Even if adoption increased on its own, the market won’t implement these systems to deliver value • Bad systems and/or bad implementations offer little, if any, value • Failure in retail market is on the order of 30% • EHRs don’t spontaneously generate meaningful clinical data – required behavior and process changes are rarely implemented by practices on their own • Physicians don’t capture (or understand) the full benefit of connectivity, so they won’t invest in it on their own • Not clear how to develop interoperable network in laissez-faire model – medical trading areas not formally organized in a way that facilitates definition of local network business

12. ...AND THE CLOSER YOU GET....THE MURKIER IT GETS • The economists are right – public goods problems are real • Physicians aren’t clambering for this • They want some business functions – like document transfer and lab results – but not pounding the table for shared patient information • Inter-operability isn’t as hard as people say it is.......it’s much worse • Highly variable degree of sophistication among even the best vendors • Just because they told the CCHIT they can do something doesn’t mean that they’ve done it before, or that it won’t require a large amount of $$$ development, or that they’re willing to do it • No one has really done this before, regardless of what they or their references told you • Capacity constraints of health care organizations (both hospitals and physician offices) and vendors, and coordination requirements among the many players, is an enormous challenge • Everyone’s not ready when you are.....and vice versa • Everyone’s not ready to work on the same weekends that you need them to

13. SOME OBSERVATIONS FOR THE WEARY (OR SOON TO BE WEARY) • There is no secret sauce, silver bullet, cookie cutter, or shortcut – each market is different • Who’s got the market power? Physicians, hospitals, or insurers • If you don’t have the CEO, you don’t have the organization • The vision will get you going, but it won’t keep you going • It takes business people to create businesses • Businesses are mercenary • Most physician offices are businesses – they’re just not very good ones • What you’re trying to sell is only as valuable as someone is willing to pay for it • Everything has competition • No one will pay to be a guinea pig • Those with “deep pockets” despise being approached just because they “deep pockets” • Assume that a grant is a gift that will keep on costing