Greg Frost

Greg Frost

President George W. Bush issued an executive order in August that is designed to promote interoperability of health records, transparency of pricing and quality data, and overall quality and efficiency of care.

According to CMS, the idea is to drive the market in that direction by using the purchasing power of the federal government. There is, however, some question as to how quickly these targets will be met.

The Bush administration has set the goal of electronic health records (EHRs) for most Americans by 2014. Secretary of Health and Human Services Mike Leavitt described the administration's action as "a major step forward in giving consumers easy-to-use information about the quality and price of their healthcare. This is fundamental to achieving a healthcare system that delivers good value."

This executive order uses five federal healthcare agencies to further that goal with five new requirements:

· The agencies covered will implement interoperable systems as their systems are upgraded. Note that interoperability has the same definition as that used in the recent EHRs safe harbor and Stark exception.

· They will require providers and payers with which they contract to do the same.

· They will make available information about the prices they pay to their beneficiaries. They are also allowed to make that information available to non-beneficiaries.

· They will "in collaboration with multi-stakeholder groups … participate in the development of information regarding the overall costs of services for common episodes of care and the treatment of common chronic diseases." Note that it is not clear whether this development must necessarily lead to or include publication of that data.

· They will "develop and identify, for beneficiaries, enrollees, and providers, approaches that encourage and facilitate the provision and receipt of high-quality and efficient healthcare," such as pay-for-performance and consumer-directed healthcare insurance products.

The executive order contains an implementation date of January 1, 2007. That extremely short deadline demonstrates the objectives of the order are the processes to be implemented, not the achievement of the ultimate goal of those processes. Clearly, for example, DHHS cannot implement fully interoperable systems before the end of this year, but can, within that time, develop the plan for upgrading that will achieve that goal.

Most trade and business groups have been supportive of the order. For example, the National Association of Manufacturers observed that "greater transparency of cost and performance information will help consumers make more informed decisions regarding their healthcare. Additionally, adoption of health IT standards will further improve healthcare quality, streamline inefficient processes and reduce costs that are burdening our businesses."

There are, however, concerns that the president's order instructs the agencies to implement standards that don't yet exist. For example, the federal agencies are ordered to implement interoperable standards, but the order leaves it up to the secretary of HHS to "recognize" those standards. The UPI recently quoted Thomas Leary, director of federal affairs at the Healthcare Information and Management Systems Society, that "the most likely choice is the standards being developed by the Health Information Technology Standards Panel, also known as HITSP, a private-public collaboration charged with the task of furthering Bush's national health information network." Those standards, however, are not complete.

Change, of course, is never easy. President Bush's executive order creates the framework for incremental change. While it may not have any immediate effect on providers, it is a very clear indication that the electronic health records are, and will continue to be, a fact of life for everyone in the healthcare industry.



Greg Frost is a partner in the Health Care Law Team at Adams and Reese LLP.



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November 2006