[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 HEALTH INFORMATION TECHNOLOGY: IMPROVING QUALITY AND VALUE OF PATIENT 
                                  CARE

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 22, 2004

                               __________

                           Serial No. 108-132

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

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                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                   Ranking Member
MICHAEL BILIRAKIS, Florida           HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
CHRISTOPHER COX, California          SHERROD BROWN, Ohio
NATHAN DEAL, Georgia                 BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi, Vice Chairman           TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
JOHN SULLIVAN, Oklahoma

                      Bud Albright, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                         Subcommittee on Health

                  MICHAEL BILIRAKIS, Florida, Chairman

RALPH M. HALL, Texas                 SHERROD BROWN, Ohio
FRED UPTON, Michigan                   Ranking Member
JAMES C. GREENWOOD, Pennsylvania     HENRY A. WAXMAN, California
NATHAN DEAL, Georgia                 EDOLPHUS TOWNS, New York
RICHARD BURR, North Carolina         FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               BART GORDON, Tennessee
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
  Vice Chairman                      BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               GENE GREEN, Texas
HEATHER WILSON, New Mexico           TED STRICKLAND, Ohio
JOHN B. SHADEGG, Arizona             DIANA DeGETTE, Colorado
CHARLES W. ``CHIP'' PICKERING,       LOIS CAPPS, California
Mississippi                          CHRIS JOHN, Louisiana
STEVE BUYER, Indiana                 BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        JOHN D. DINGELL, Michigan,
MIKE FERGUSON, New Jersey              (Ex Officio)
MIKE ROGERS, Michigan
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Blumenthal, David, Director, Institute for Health Policy, 
      Massachusetts General Hospital/Partners Health Care System.    43
    Diamond, Carol, Managing Director, Markle Foundation.........    47
    Kolodner, Robert M., Acting Chief Health Informatics Officer 
      and Deputy Chief Information Officer for Health, U.S. 
      Department of Veterans Affairs.............................    32
    Shortliffe, Edward H., Professor and Chair, Department of 
      Biomedical Informatics, Professor of Medicine and of 
      Computer Science, Deputy Vice President for Strategic 
      Information Resources, Columbia University Medical Center, 
      Director, Medical Informatics Services, New York 
      Presbyterian Hospital......................................    55
    Thompson, Hon. Tommy G., Secretary, U.S. Department of Health 
      and Human Services.........................................     6
Material submitted for the record by:
    American Clinical Laboratory Association, prepared statement 
      of.........................................................    70
    Veterans Affairs, Department of, response for the record to 
      questions of Hon. John D. Dingell..........................    71

                                 (iii)

  

 
 HEALTH INFORMATION TECHNOLOGY: IMPROVING QUALITY AND VALUE OF PATIENT 
                                  CARE

                              ----------                              


                        THURSDAY, JULY 22, 2004

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Hall, Shimkus, 
Wilson, Shadegg, Buyer, Barton (ex officio), Eshoo, Stupak, 
Green, Capps, and Rush.
    Staff present: Chuck Clapton, majority counsel; Nandan 
Kenkeremath, majority counsel; Bill O'Brien, projects 
assistant; Eugenia Edwards, legislative clerk; Amy Hall, 
minority counsel; Bridgett Taylor, minority professional staff; 
and Purvee Kempf, minority professional staff.
    Mr. Bilirakis. Good afternoon. The hearing will now come to 
order. Today's hearing will provide the subcommittee with an 
opportunity to learn more about the issues surrounding health 
information technology and to hear about the administration's 
new strategic information technology framework, which was 
released yesterday.
    We will also have a chance to better understand the 
potential that health information technology holds for 
improving America's health care system by reducing medical 
errors and improving the quality and cost of health care. The 
witnesses we have before us today will also be able to discuss 
the barriers that have slowed the adoption of this technology 
by hospitals, doctors and other health care providers.
    I would like to first thank the Secretary of the Department 
of HHS, Mr. Tommy Thompson, who will discuss the framework for 
health information technology, and I also know that if you have 
a cause, it's usually going to find its way up toward the top. 
I applaud all of your efforts in this area.
    Since you became Secretary, I know that promoting the 
adoption of the health information technologies will provide a 
framework for allowing information technology in the health 
business processes across the Federal Government. And, again, I 
thank you for coming and look forward to your testimony.
    Developing health information technology just makes sense. 
The health care industry has been dragging its feet in this 
area, and it is progressing much slower than other sectors of 
the economy. I was pleased that the Medicare Prescription Drug 
and Modernization Act, MMA, enacted last year included a 
provision that required HHS to adopt final prescribing 
standards by 2008. Additionally, MMA provides for grants to 
physician offices to enable the purchase of need prescribing 
systems. While these are good first steps, there is so much 
more that needs to be done.
    I look forward to hearing from the rest of our witnesses as 
well. We have two panels of experts in the field of health 
information technology, and I certainly appreciate all of the 
witnesses sharing their insights with us this afternoon. Thanks 
for being here, and I would now yield to Mr. Stupak from the 
upper peninsula of Michigan. I had the real pleasure of getting 
to see that area this past weekend and it is paradise in the 
summer. And he is serving as ranking member of this 
subcommittee. Mr. Stupak, please proceed.
    Mr. Stupak. Thank you, Mr. Chairman, and you should come 
back in January or February. It is lovely then.
    Mr. Chairman, thank you for calling this hearing today to 
discuss one of the most important ways we can lower the cost of 
health care, improve quality and reduce errors: Expanding the 
use of health care information technology. Mr. Secretary, it is 
always good to see you before the committee, and I would like 
to thank all the other panelists who will be testifying here 
today.
    It is clear that we are behind the curve in what needs to 
be done when we talk about telecommunications and telemedicine. 
More than 90 percent of the about 30 million health care 
transactions each year in the United States are still conducted 
on paper, phone or fax. Fewer than 20 percent of U.S. primary 
doctors use electronic medical records. Patients are still 
paying billions more every year than they should. The 
administration estimates we can save $140 billion annually with 
upgrade.
    Industry says we can save even more. The CEO of Cisco says 
we can cut health care costs by 25 percent. We could also save 
thousands of more lives. The Institute of Medicine has called 
the development of electronic health records and other IT 
advances essential to reducing the number of medical errors. 
The Center for Information Technology Leadership found that 
more than 2 million adverse drug events could be prevented each 
year using IT and over 190,000 hospitalizations could be 
prevented each year.
    There is study after study about the benefits of health 
care IT. We need to get moving. We have an entire baby boomer 
generation increasingly using our health care system. We need 
real investments yesterday, not tomorrow. I look forward to 
hearing the details of the President's strategic plan announced 
yesterday, and I am glad the administration is talking about 
this. The Press Releases, task forces, and strategic plans 
won't mean a whole lot unless they are backed up with real 
funding and real incentives to implement upgrades.
    The President proposed $50 million in grants to hospitals 
in 2004, and he proposed $50 million in grants to States in 
2005. One hundred million over 2 years is not going to cut it. 
The State of Massachusetts alone needed more than $100 million 
to implement just electronic prescribing technology Statewide. 
The Mayo Clinic spent over $100 million in 1 year on IT 
upgrades. We need to also give incentives to providers who use 
IT. Technology doesn't do a lot of good if it isn't used. We 
should give providers of Medicare payment increases if they use 
health care IT.
    Finally, when we talk about health care technology, it is 
important that we recognize the special challenges and 
circumstances faced by rural providers. An urban-centric 
program is not going to work in rural America. Rural providers 
do not have the resources big health care systems have, and 
they may not be able to move as quickly or easily to implement 
IT. And, frankly, I am more than a little concerned that rural 
providers will be left behind.
    The administration's track record with one type of health 
IT, telemedicine, tells me I should be concerned. The 
administration's 2005 budget contains only $4 million for rural 
telemedicine grants programs. In addition, Medicare's 
reimbursement for telehealth is extremely limited to only a few 
providers for only a few procedures. As you know, rural 
providers care for more Medicare beneficiaries than their 
counterparts. HHS has said that rural providers aren't 
interested in real health; but it is not a matter of interest, 
it is a matter of affordability.
    Telemedicine isn't the only area where rural providers have 
concerns. The quality improvement organizations are supposed to 
help providers implement IT upgrades to help improve the 
quality of health care provided. But what we have found is that 
the quality improvement organizations don't work well, if at 
all, with smaller facilities. I am concerned that any health IT 
initiative could again leave rural providers behind. We need to 
make sure that doesn't happen.
    And with that, Mr. Chairman, I guess I have a minute left, 
I will yield back the balance of my time.
    Mr. Bilirakis. The Chair thanks the gentleman. Gentlelady 
from New Mexico, are you prepared for an opening statement?
    Mrs. Wilson. Thank you, Mr. Chairman. I appreciate your 
holding this hearing today. I am particularly interested in 
looking at and talking to you, Mr. Secretary, about the impact 
that technology can have on medical records and improving the 
health status and quality for those particularly low-income 
Americans who depend on some of our public programs.
    We have had several hearings on Medicaid here as well as 
round tables in the Medicaid Task Force that I Chair, asking 
various State officials about the health status and what 
indicators they look for and what systems they have, and they 
usually look at us with a perplexed look, because they don't 
really look at Medicaid that way. Medicaid is a system that 
pays claims. It is not one that is designed to improve people's 
health, and the information systems that back it up are 
generally fairly primitive.
    Putting health indicators and medical records in electronic 
format I think would make it easier for the government to 
collect data on quality and also to move toward improving the 
health of people who depend on these public programs. There are 
a lot of private hospitals and hospital systems in my district 
that have made a lot of improvements in health information 
technology, including medical records, but many of them are 
very far behind what we need nationwide.
    In many ways, the Veterans Administration seems to be ahead 
of the curve on using information systems. I have seen their 
health care records, and of course I asked, ``How did you get 
the docs to use it?'' And being the VA, they said, ``Well, we 
ordered them to.'' Not every hospital, I guess, is so 
fortunate, but if you are retired or disabled veteran in 
Albuquerque and you visit your daughter-in-law in New Jersey 
and you get ill, the VA hospital in New Jersey can call up all 
of your medical records immediately online, and the system is 
integrated with pharmacy, with medical x-ray and all kinds of 
other things.
    The Federal Government, I think, can lead the way, not only 
with the proposals that you have come forward with but also by 
encouraging and moving toward the wide-scale adoption of 
standardized health information technology systems because of 
our buying power in Medicare and Medicaid. Medicaid patients 
often get care at different points of entry. They are often 
very mobile people, and it is a very difficult population to 
serve. If hospitals can communicate better in a particular 
community but also around the country via an electronic 
network, it would cut down the cost and improve the quality of 
care for people who depend on public systems.
    So I wanted to encourage you to keep Medicaid in mind when 
you are studying these issues and creating these demonstration 
projects that link various providers and beneficiaries 
electronically. Look forward to hearing your testimony about 
health information technology, and particularly interested in 
how public health programs, such as Medicaid, can benefit from 
this new emerging area. Thank you, Mr. Chairman.
    Mr. Bilirakis. The Chair recognizes the gentlelady from 
California, Ms. Capps, for her opening statement.
    Ms. Capps. Mr. Chairman, I would prefer to waive my opening 
statement in favor of 3 more minutes for questions.
    Mr. Bilirakis. By all means. Thank you. Mr. Shimkus.
    Mr. Shimkus. Mr. Chairman, I would like to waive in respect 
to the Secretary's time. Welcome here.
    Mr. Bilirakis. Thank you, sir. Mr. Rush just came in. Do 
you have an opening statement or would you rather waive and use 
your time later on?
    Mr. Rush. Mr. Chairman, I think I will waive my statement 
and use my additional 3 minutes for questioning.
    [Additional statements submitted for the record follow:]
 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce
    Thank you, Chairman Bilirakis, for holding this important hearing 
today. Medical science in recent years has produced tremendous 
discoveries that have revolutionized how we treat diseases and care for 
patients. Unfortunately, the medical records and information 
technologies needed to take advantage of these discoveries remain 
locked in an era where cutting edge technologies were slide rules and 
computers the size of this hearing room. We should be able to do 
better.
    Physicians should not have to rely on bulky and often incomplete 
medical records. Pharmacists should not have to rely on handwritten and 
often illegible prescriptions. Most importantly, patients should not 
have to bear the increased risk of medical errors and pay the inflated 
costs that result from the use of antiquated health information 
systems. Other sectors of our economy have adopted the widespread use 
of electronic forms and records. So why hasn't the majority of the 
healthcare sector caught up? This is just one of the questions I hope 
this hearing will address.
    President Bush has called for electronic health records for most 
Americans within 10 years. I applaud the President for issuing this 
challenge. It has been estimated that if most patient records were in 
electronic form the savings could amount to about $140 billion a year. 
The potential savings offered by technology is staggering and could go 
a long way towards slowing the tremendous growth in healthcare costs 
that we've seen over the years.
    I would like to extend my thanks to the Secretary of HHS, Tommy 
Thompson, for appearing before the Committee today. Yesterday Secretary 
Thompson released the first outline of a 10-year plan to transform the 
delivery of health care by building a new health information 
infrastructure, including electronic health records and a new network 
to link health records nationwide. The system will enable physicians 
and other healthprofessionals to electronically tap into a wealth of 
treatment information as they care for patients. The proper use of 
health information technology promotes knowledge and responsibility for 
health care decisions and helps them to be smarter consumers of 
healthcare.
    In addition, Secretary Thompson has announced plans to create an 
Internet portal allowing beneficiaries to access their personal 
Medicare information. There are a number of other exciting new 
initiatives that we will learn about today. The Committee offers its 
support to these efforts and wants to work closely with the 
Administration on these efforts to help modernize the use of health 
information technology.
    I also appreciate Dr. Kolodner from the Department of Veterans 
Affairs for agreeing to testify. The VA has done extensive work in this 
area and I'm pleased that they could be here today to testify as to 
their experience using this technology.
    We would do a disservice to all Americans if we ignored the 
benefits that health information technology can offer. This technology 
can transform our healthcare system and bring it into the 21st century, 
resulting in lower costs and greater quality of care. Once again, I 
thank Chairman Bilirakis for holding this hearing.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas
    Thank you, Mr. Chairman and Ranking Member Brown for holding this 
hearing on the Administration's initiative to implement a national 
health care information technology system.
    This hearing is certainly timely, as it comes on the heels of 
Secretary Thompson's release of the Administration's outline to improve 
IT in the health care sector.
    Secretary Thompson, we are pleased to have you here today and thank 
you for appearing before us to share the details of your plan.
    Without doubt, information technology usage rates in the health 
care sector fall far behind IT usage in other cutting-edge US 
industries.
    We're all aware of the benefits that improved IT would bring the 
health care sector and the patients it serves.
    With integrated information technology, patients could manage their 
electronic health records and avoid having to haul multiple records to 
their various physicians.
    I know of a case where a woman spent years trying to manage her 
scoliosis.
    As such, she endured yearly x-rays and painful exams to determine 
whether her condition had worsened and would require surgery.
    Imagine her frustration when she recently went in for her annual 
check-up only to find that this year's x-ray was basically useless 
because the physician had lost the x-rays from previous years.
    With no records, no comparison could be made.
    And the woman had to make her health care decisions based on a 
guess, rather than conclusive proof, about whether her condition had 
worsened.
    This is just one example of a mistake that information technology 
and electronic medical records could have alleviated.
    Unfortunately, many of the mistakes have much larger consequences.
    The Institute of Medicine estimates that between 44,000 and 98,000 
Americans die each year due to medical errors.
    The same report acknowledged that electronic health records could 
prevent many of those deaths through improved health care safety.
    We all can agree that the need for health care IT solutions is 
clear.
    We must now facilitate the creation of a comprehensive system that 
operates effectively and yields significant benefits for both patients 
and providers.
    The question is, what is the best approach?
    For this system to work, it is imperative that we have uniform 
standards.
    But standards aren't worth a hill of beans if we don't have the 
infrastructure to apply them to.
    If we're going to make this a national strategy, the federal 
government is going to have to put its money where its mouth is.
    And we're going to have to devise the incentives to encourage the 
providers to get on board.
    Make no mistake, the days of paper records should be well behind 
us.
    It's a matter of efficiency and quality of care.
    But in implementing this plan, we have to take every possible 
opportunity to ensure that patient privacy is held paramount.
    Our relatively short experience with the Internet has taught us 
that information technology can be easily manipulated for mischievous 
purposes.
    I have real concerns about the consequences to the patient if 
medical records get into the wrong hands.
    And I hope that the consortium implementing the Administration's 
strategy will place tremendous weight on ensuring patient privacy.
    I thank Secretary Thompson and all of our distinguished witnesses 
for appearing before us today.
    I look forward to hearing your testimony.
    With that, Mr. Chairman, I yield back the balance of my time.

    Mr. Bilirakis. Okay. Thank you. All right. That being the 
case, I would like to welcome, the Honorable Tommy Thompson, 
who is the Secretary of the U.S. Department of Health and Human 
Services, former Governor.
    Mr. Thompson, please proceed.

      STATEMENT OF HON. TOMMY G. THOMPSON, SECRETARY, U.S. 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Mr. Thompson. Thank you very much, Mr. Chairman, and thank 
all the members of the subcommittee for being here, and I thank 
you so very much for holding this hearing. This is a topic that 
I am very passionate about. When I started as Secretary, a 
little over 3\1/2\ years ago, the media asked me what were some 
of the things I wanted to do, and I said I wanted to transform 
the practice of medicine. And the way to transform the practice 
of medicine is really start using technology to its fullest.
    I have with me David Brailer, who is the new head of the 
Office of the National Coordinator for Health Information 
Technology, who has worked extremely hard putting together a 
draft program, which we unveiled yesterday at a summit. When I 
first started talking about this about 3\1/2\ years ago, I was 
lucky to get 50 people to come to a summit. A month ago, we had 
over 500 individuals, yesterday we had 2,300 individuals from 
all over the country, representing all major technology 
companies, all health care industry, and today they are working 
on implementing the strategies that we laid out yesterday.
    I don't know how many of you read, ``The Tipping Point,'' 
the book, ``The Tipping Point,'' but I really think we are now 
at that point, that we have reached a tipping point, and, as I 
said yesterday, this is the decade of medical informatics in 
this country, and we have an opportunity to change that.
    Virtually every other sector of the economy is charging 
ahead into the 21st century except health care, and it is time 
for the health care industry to catch up. Mr. Chairman and 
members, you can use your bank card in virtually any ATM in the 
world. You can go to Bangkok. I just came back from Moscow 
where I needed some money, went to the ATM and got cash. You 
can use it any place in the city, any city in America, get your 
money and find out what your balance is in your checking 
account. But if you show up in an emergency room 20 miles from 
your home, you will have to scramble to track down your medical 
history.
    Yesterday, we had an individual who was a consumer, an 
informatics consumer, 44 years of age, he has arrhythmia, and 
the doctor put him on different medications. He overdosed and 
he passed out. He went to the hospital, they went through many 
different repeat tests, they didn't even have his current 
folder because the data wasn't shared. The cost of the 
duplicate test was more than $10,000. Now, this is an 
information that is an expert on informatics. That happens 
every single hospital, every single day in America. That just 
shows you what we need to do in order to improve it.
    If you have a dog, you get an electronic reminder to update 
your dog's shots like here when you go to the veterinary. Many 
vets even offer an electronic health record for your dog. Got 
electronic health records for dogs and cats, but we don't have 
it for humans. We can alert individuals to have their dogs come 
in for shots. What about our children? Don't you think it is 
about time to have our children be able to have this kind of 
reminder?
    Americans spend more resources on health care than people 
in any other industrialized nation. We get the right treatment, 
however, according to the RAND study, only 55 percent of the 
time. For a budget that spends $1.5 trillion, 15 percent of the 
Gross National Product, I think it is time that we get what we 
paid for. Think how much better our record will be when health 
care catches up with banking, journalism and veterinarians. Can 
you imagine the news media having to go back to typewriters or 
lenotype to put out their press or put out their newspapers? 
Some of you may think that is a good idea, but the press would 
never go there and they put it all out by computers. It is time 
for health care to get into the 21st century.
    Patients deserve advice and care from providers who are 
fully informed about their medical history, including past 
injuries, tests, diagnoses and treatments, as well as whatever 
research results and public health notifications might be 
relevant. They shouldn't have to wait for redundant tests like 
this David individual who had to yesterday, and 20 miles from 
where his hospital was he had to go through all the tests 
again. It just doesn't make any sense. Ten thousand dollars 
more he had to spend in redundant tests that he had in his home 
hospital 20 miles away.
    Doctors deserve to focus on the quality of their care, not 
the quantity of their paperwork. Both patients and doctors 
deserve systems, Mr. Chairman and members, that will prevent 
medical errors before they become medical and legal problems. 
To achieve these goals, Americans deserve a seamless and a 
secure national health information infrastructure. This system 
must provide accurate, current patient data to providers 
wherever they are in time to be useful, even in an emergency. 
It must allow the doctors to prescribe medications 
electronically, so that medications can be checked for safety 
before they are administered, and it must do all this while 
continuing to keep personally identifiable health information 
private and secure from unauthorized uses or disclosures.
    A good health information system could save our economy and 
save the medical system $131 billion a year. That is about 10 
percent of our total health care spending in America. We all 
know that a system that is safer, faster, more profitable, more 
efficient is inevitable. It is inevitable because sooner or 
later patients are going to demand it when choosing doctors, 
hospitals and pharmacies. Our health care system needs all the 
help that it possibly can get.
    Health information technology is some of the best medicine 
we have. We have taken several steps in the past few years in 
the Department in order to really start moving down the 
football field toward a touchdown for medical technology. We 
have now demanded bar coding on medicines to prevent medical 
errors. Can you imagine that until a couple years ago we didn't 
have any rules on bar coding of medicines in America? Our 
groceries, any time you go into a store right now, you go 
through a grocery store, they swipe all the groceries. Don't 
you think it is much more importantly to have that kind of 
technology for pharmacists and for drugs? That is what we are 
doing, finally.
    We have adopted standards for the electronic exchange of 
medical information. We didn't have standards in this field. 
Now we have 20 out of the 24 domains in which we have reached 
unanimous consent for standards. We have licensed a 
standardized lexicon of diagnosis and treatments called SNOMED. 
We paid for this through the Department, $14 million. We have 
got it licensed. We are now allowing it free of charge to 
hospitals and clinics and to technology companies to put it in 
their software.
    In April, President Bush identified health as one of the 
most important technology areas for America's future. He said 
that within 10 years we should have electronic health records 
for most Americans. I absolutely believe and know that we can 
do it a lot sooner, evidenced yesterday by the fact that 2,300 
people from all over this country came to Washington, D.C. to 
talk about this subject and how we can do it much faster.
    Yesterday, my Department released a framework for strategic 
action, and it is called here, ``The Decade of Health 
Information Technology,'' and it is a very good report, and we 
are very happy with it, because it sets out the guidelines, how 
we get there, how we make the touchdown. We set out four 
achieving overarching goals for the health information 
technology effort. We need to bring these information tools 
directly to each point of care.
    Some private initiatives are already underway in 
Indianapolis and Santa Barbara. Indianapolis and Santa Barbara 
are far ahead of the other ones as far as developing 
synchronized communication systems that can talk to one 
another, interoperability between those differing clinics. But 
we need them in all clinical settings across America. We need 
to then interconnect all these clinical settings across 
America.
    We need to allow patients to become informed consumers and 
participants in their care. We call this aspect the personal 
health record. We want to be able to allow individuals--we're 
setting up a portal in Indianapolis for the first time for 
Medicare people to call in. We are going to have that set up in 
order to get their records, be able to have somebody determine 
their records.
    I don't know if you have ever seen the explanation of 
benefits. I don't know if any of you have ever taken care of 
somebody on Medicare that has been in the hospital. They send 
you an explanation of benefits. I used to be a lawyer 
practicing and people would bring boxes of these in. Nobody 
could understand them, nobody can decipher them, nobody knows 
what they mean. And so we are changing that, and we are putting 
in for the first time a demonstration program in Indianapolis 
so that you are going to be able to call in and get a simple 
explanation of what the doctors and what the hospital did for 
you and what the costs are. It is a giant step forward, and we 
are hoping that this will become uniform across America so that 
a patient and all their doctors will be able to see the data 
that the others have entered.
    This is going to ensure that treatment and diagnosis 
decisions can be informed decisions. If you turn up in the 
emergency room, the staff can see not only that you have 
diabetes but what your blood sugar was the last time you 
checked it. Now, this is very important for somebody that is 
diabetic that ends up in the emergency room, and this is just 
common knowledge, common information. The technology is there 
to give it.
    Right now in America, we have upwards to 98,000 people die 
each year from medical mistakes. Most of those could be changed 
and completely stopped by new technology, and now it seems to 
me that is a huge cost to America and to the health care system 
to have that kind of mistakes in the health care delivery 
system. We need to improve population health and research with 
information technology. Health information electronic form and 
without personal identification can help us measure quality of 
care and respond much more quickly to disease outbreaks.
    We are also doing something else, members of the committee. 
All of our departments in the Department of Health and Human 
Services have set up software systems in the past that are 
different; they are not interoperable. So we have statistics 
across America on infections, on different kinds of diseases, 
on kinds of suicides and so on. We are now going to make all of 
those interoperable so that you are going to be able to call in 
and get all this information up to date on one web page. We 
also are going to try and use technology to get the treatment 
that comes out of NIH from the lab to the bedside much quicker, 
and we are going to be able to highlight that and be able to 
use technology to do it.
    Congress on both sides of the aisle has provided billions 
of dollars to improve the research out at NIH. The big problem 
we have is getting that research into therapies and treatments, 
to the bedside quicker. Technology can accomplish that. That is 
part of our plan in order to do it. Our doctors have worked in 
the dark long enough. Working together, ladies and gentleman on 
this committee, we can give them light.
    And I just would like to tell you, you know I am passionate 
about it, I believe that this is truly the thing that can 
transform health care for the better in America. It can reduce 
mistakes: It can improve the quality and improve the profits 
and improve the reductions of tax dollars. Now, to me, that is 
a wonderful plan. All we have to do on a bipartisan basis is 
come together and get it done. And so thank you very much, Mr. 
Chairman, for this opportunity for me to talk to you about 
technology, and thank you very much for holding this hearing.
    [The prepared statement of Hon. Tommy G. Thompson follows:]
Prepared Statement of Hon. Tommy G. Thompson, Secretary, Department of 
                       Health and Human Services
    Good morning Mr. Chairman and members of the subcommittee. Thank 
you for inviting me here today to discuss the Administration's efforts 
to increase the use of information technology throughout the health 
care industry. As you know this has been and continues to be a high 
priority for the President and me. The time is right to take action and 
it is the goal of this Administration and my Department to promote and 
encourage the development of a nationwide information technology 
infrastructure that will transform America's health care and improve 
quality, decrease medical errors and reduce health care costs. 
Electronic health information will provide a quantum leap in achieving 
more efficient and effective health care. We cannot wait any longer.
    The most incredible feature of this twenty-first century medicine 
is that we hold it together with nineteenth century paperwork. This is 
just inexcusable. And it has to change.
    Patients deserve advice and care from providers who are fully 
informed about their medical history, including past injuries, tests, 
diagnoses, and treatments, as well as whatever research results and 
public health notifications might be relevant. They shouldn't have to 
wait for redundant tests or calls to their previous doctors.
    Doctors deserve to focus on the quality of their care, not the 
quantity of their paperwork. And both patients and doctors deserve 
systems that will prevent medical errors.
    To achieve these aims, Americans deserve a seamless and secure 
national health information infrastructure. This system must provide 
accurate, complete patient data to providers wherever they are, in time 
to be useful-even in an emergency. It must allow doctors to prescribe 
medications electronically, so the medications can be checked for 
safety before they are administered. And, it must do all this while 
continuing to keep personally identifiable health information secure 
and safe from unauthorized uses or disclosures.
    Yesterday, my Department released a Framework for Strategic Action 
entitled, The Decade of Health Information Technology: Delivering 
Consumer-centric and Information-rich Health Care. This framework will 
guide discussion, investigation and experimentation to accelerate 
widespread adoption of health information technology in both the public 
and private sectors.

                               BACKGROUND
    On April 27, 2004, President Bush called for widespread adoption of 
interoperable electronic health records (EHR) within 10 years and also 
established the National Coordinator for Health Information Technology 
position. I appointed David Brailer, MD, to this position on May 6, 
2004. The President's Executive Order tasked the Office of the National 
Coordinator for Health Information Technology (ONCHIT) to report on its 
progress on the development and implementation of a strategic plan 
within 90 days of operation. Yesterday, ONCHIT accomplished this task.
    The benefits of information technology are evident in our everyday 
lives, from banks to grocery stores. However, the benefits of 
information technology have not been applied as effectively to the 
nation's health information systems. Transfer of information remains 
primarily a paper-based process. Hospitals' use of electronic health 
records (EHR) in 2002 was reported at 13 percent; and for physicians' 
practices at 14 percent to a possible high of 28 percent. Some reasons 
for slow health IT adoption include the following:
    The size and variety of America's health system is large and 
locally based with many stakeholders. This strategic plan is aimed at 
bringing together federal leadership along with the many stakeholders 
to take action.
    A previous lack of cohesive federal policies supporting health 
information technology has also contributed to the lack of technology 
development. Efforts have been accelerated and are a pertinent part of 
the strategic plan in which DoD, VA, and OPM have released reports as 
well to address accelerating federal action.
    Perceived lack of return on investment has played a large role in 
limiting the adoption of health IT [HIT]. The Health Information 
Technology Leadership Panel announced at yesterday's Summit will 
evaluate the costs and benefits to society and identify immediate steps 
for both the private and public sector to take to drive adoption. 
Additional steps will be taken to identify the best mechanisms to 
support training, private sector certification of EHRs, and alignment 
of incentives as well as other related issues.

         CURRENT FEDERAL HEALTH INFORMATION TECHNOLOGY PROGRAMS
    I have vigorously pursued health information technology since I 
became Secretary. Specifically, I have supported the efforts of the FHA 
to provide a framework for aligning and integrating information 
technology within the health business processes across the federal 
government. In addition, since March 2003, I have announced federal 
adoption of twenty privately developed health information standards. 
These data standards were selected through collaborative inter-agency 
work within the Consolidated Health Informatics [CHI] Presidential E-
Government Initiative. Adoption of health data standards within an 
architectural framework will allow federal agencies to share data and 
to achieve interoperability. In FY 2004, total federal spending on HIT 
will total over $ 900 million. HHS alone will obligate close to $250 
million related to HIT in FY 2004. These federal HIT initiatives range 
from supporting research in advanced HIT (e.g., high speed Internet, 
imaging, bioinformatics) to the development and use of electronic 
health record (EHR) systems.
Standards and Implementation within the Federal Health Architecture
    HHS, DoD and VA support the Federal Health Architecture (FHA), the 
goal of which is to develop a consistent and common architecture for 
HIT across all federal agencies. This architecture allows for a 
disciplined approach to information technology investment, and provides 
a framework for implementation of health data standards.
    My Department has led the government-wide effort in endorsing and 
adopting health information technology standards for government use 
through the Consolidated Health Informatics (CHI) initiative. Standards 
adoption has been a core federal initiative led by HHS, DoD, and VA, 
and has been vetted to the private sector through the National 
Committee for Vital and Health Statistics (NCVHS). Through the 
leadership of the ONCHIT, we hope our efforts will stimulate the 
industry to adopt the standards agreed upon by these large federal 
health care providers and payors. CHI is one of the 24 e-Gov 
initiatives supporting the President's Management Agenda.
    As a result of HHS's acquisition of a license for SNOMED CT, which 
I announced in May 2003, this medical vocabulary now can be downloaded 
for free by anyone in the United States through HHS's National Library 
of Medicine.HHS is also contracting with the Health Level 7 (HL7) 
standards development organization to create a standard that would 
allow interchange of complete electronic health records between any two 
systems. This is critical to achieving the interoperability we need to 
be able to ensure that patients' records are always available when and 
where they are needed. We expect this standard to be available in 2005.
E-prescribing
    The new Medicare law requires HHS to recognize or adopt initial e-
prescribing standards by September 2005, to pilot test them in 2006 as 
we roll out the new Medicare drug benefit, and to promulgate final 
standards no later than 2008. The MMA further provides for grants to 
physician offices to enable the purchase of e-prescribing systems.
Population HIT
    NIH is working to develop an information technology infrastructure 
to support clinical research. This will enable a system that can 
interface with health information exchange networks. CDC is 
facilitating the implementation of a public health information 
infrastructure and has already demonstrated results. The incident 
reporting times have dropped from an average of 30 days to 1-2 days. 
The Public Health Information Network (PHIN) supports a broad range of 
public health activities including interoperability with clinical care.
Facilitation and Support
    The Agency for Health Research and Quality (AHRQ) will spend $50 
million in FY 2004 on HIT research and demonstration projects aimed at 
improving the safety, quality, efficiency, and effectiveness of care. 
These funds will also support establishment of a Health Information 
Technology Resource Center to provide technical assistance, education 
and expert HIT support to HHS grantees.
    The Health Resources and Services Administration (HRSA) with the 
Foundation for e-Health Initiative announced $2.3 million in contracts 
to support the Connecting Communities for Better Health program. The 
program is providing seed funds to implement health information 
exchanges, including the formation of regional health information 
organizations.

                     FRAMEWORK FOR A STRATEGIC PLAN
    Yesterday, we released the Department's framework for a strategic 
plan. This is the nation's first strategic framework report on the 10-
year initiative to develop electronic health records and other 
applications of health information technology. The framework 
exemplifies our commitment to working closely with the private sector 
to bring about the enormous benefits of modern information technology 
for our health care system. Yesterday, I also held a Summit that 
provided a forum where leaders from the public and private sectors 
could provide feedback on this strategic plan to realize the 
President's vision.
    There are four major goals that will be pursued in realizing this 
vision for improved health care:

 Inform clinical practice
 Interconnect clinicians
 Personalize care
 Improve population health
Inform Clinical Practice
    This goal centers on efforts to bring electronic health records 
directly into clinical practice. Both patients and doctors deserve 
systems that will improve care and make health care delivery more 
efficient. Providing complete and useful patient information to 
clinicians when and where they need it is fundamental to achieving the 
goal of informing clinical practice. Three strategies will enable 
realization of this goal:

 Incentivize EHR adoption--The transition to safe, more consumer-
        friendly and regionally integrated care delivery will require 
        shared investments in information tools and changes to current 
        clinical practice. Options for reducing the financial 
        disincentives to electronic health records (HER) adoption 
        should meet at least the following four criteria:
      1. Business case improvement. Policy options should consider, in 
            part, the economic expense borne by a hospital or physician 
            when purchasing or using an HER.
      2. Compatibility with existing programs and regulations. Policy 
            options for HER adoption should be compatible with or 
            incrementally build on existing reimbursement and 
            regulations.
      3. Budget cost-effectiveness. Policy options should be cost-
            effective and deliver the largest impact for the smallest 
            expenditure.
      4. Stakeholder alignment. Policy options should align physicians, 
            hospitals, and other stakeholders toward a common goal of 
            improving quality and efficiency.
 Reduce risk of EHR investment--Clinicians who purchase EHRs and who 
        attempt to update their clinical practices and office 
        operations face a variety of risks that make the decision 
        unduly challenging. Low cost support systems that reduce risk, 
        failure, and partial use of EHRs are needed.
 Promote EHR diffusion in rural and underserved areas--Practices and 
        hospitals in rural and other underserved areas lag in EHR 
        adoption. Technology transfer and other support efforts are 
        needed to ensure widespread adoption. Currently, there are 
        pilot projects underway that are assessing the feasibility of 
        transferring federal applications, such as VA's computerized 
        patient record system, in rural and underserved areas.
Interconnect Clinicians
    Clinicians will be able to obtain more comprehensive health 
information quickly as they care for patients if we have an 
interoperable information infrastructure. Interconnecting clinicians 
will allow information to be more accessible by providers as consumers 
move from one point of care to another. Three strategies for realizing 
this goal are:

 Foster regional collaborations--Local oversight of health information 
        exchange that reflects the needs and goals of a population 
        should be developed.
 Develop a national health information network--A set of common 
        intercommunication tools such as mobile authentication, Web 
        services architecture, and security technologies are needed to 
        support data movement that is inexpensive and secure. Standards 
        defining a national health information network that can provide 
        low-cost and secure data movement are needed.
 Coordinate federal health information systems--There is a need for 
        federal health information systems to be interoperable and to 
        exchange data so that federal care delivery, reimbursement, and 
        oversight are more efficient and cost-effective. Through FDA 
        and CHI, these efforts are currently underway.
Personalize Care
    To fully complete interoperability, the ability to use information 
at the consumer level is essential. Consumer-centered information helps 
individuals take responsibility for their own health and more fully 
participate in making health care decisions regarding their health and 
well-being. Strategies to realize this goal include:

 Encourage use of Personal Health Records (PHRs)--Consumers are 
        increasingly seeking information about their care as a means of 
        getting better control over their health care experience, and 
        PHRs that provide customized facts and guidance to them are 
        needed.
 Enhance informed consumer choice--Consumers should have the ability 
        to select clinicians and institutions based on what they value 
        and the information to guide their choice, including the 
        quality of care providers deliver.
 Promote use of telehealth--The use of telehealth can provide access 
        to health services for consumers and clinicians in rural and 
        underserved areas.
Improve Population Health
    Population health improvement requires the collection of timely, 
accurate and detailed clinical information to allow for the evaluation 
of health care delivery and the reporting of critical findings. This 
information is important to the future of care delivery and the 
standard of living in America. Strategies to realize this goal include:

 Unify public health surveillance architectures--An interoperable 
        public health surveillance system is needed that will allow 
        exchange of information, consistent with HIPAA and other laws, 
        to identify public health threats and better protect against 
        disease. Currently, the PHIN is working in conjunction with the 
        Department of Homeland Security on the President's 
        Biosurveillance Initiative, to develop public health 
        surveillance systems that are not only interoperable within the 
        public health arena, but also with law enforcement and other 
        federal agencies.
 Streamline quality and health status monitoring--Many different state 
        and local organizations collect subsets of data for specific 
        purposes and use it in different ways. A streamlined quality-
        monitoring infrastructure that will allow for a complete look 
        at quality and other issues in real-time and at the point of 
        care is needed.
 Accelerate research and dissemination--Information tools and 
        standards are needed that can broaden the availability of 
        health data to researchers and accelerate the development of 
        scientific discoveries and their translation into clinically 
        useful products, applications, and knowledge.

                              KEY ACTIONS
    Enormous utility will be realized once a national infrastructure is 
in place. This is necessary to realize the President's vision. A range 
of actions was announced at yesterday's Summit covering initiatives 
already underway or soon to be launched. These key actions will advance 
the strategic elements of the framework.
Establishing a Health Information Technology Leadership Panel
    I will soon appoint a panel of executives and leaders to assess the 
costs and benefits of health information technology to industry and 
society, and develop options for immediate steps by both the public and 
private sector, based on their individual business experience. The 
Health Information Technology Leadership Panel will deliver a report on 
these options to me no later than Fall 2004.
Private sector certification of health information technology products
    EHRs and even specific components such as decision support software 
are unique among clinical tools in that they are not required to meet a 
set of minimal standards to be used to deliver care. To increase uptake 
of EHRs and reduce the risk of product implementation failure, the 
federal government is exploring ways to work with the private sector to 
develop minimal product standards for EHR functionality, 
interoperability, and security. A private sector ambulatory EHR 
certification task force is determining the feasibility of 
certification of EHR products based on functionality, security, and 
interoperability.
Funding community health information exchange demonstrations
    A health information exchange program through the Health Resources 
and Services Administration, Office of the Advancement of Telehealth 
(HRSA/OAT), has a cooperative agreement with the Foundation for e-
Health Initiative to administer contracts to support the Connecting 
Communities for Better Health (CCBH) Program totaling $2.3 million. 
This program is providing seed funds and support to multi-stakeholder 
collaborations within communities (both geographic and non-geographic) 
to implement health information exchanges, including the formation of 
regional health information organizations (RHIOs) to drive improvements 
in health care quality, safety, and efficiency. The specific 
communities that will receive the funding through this program were 
announced and recognized during the Summit on July 21.
Requiring standards to facilitate electronic prescribing
    CMS will be proposing a regulation to adopt the first set of widely 
used e-prescribing standards in preparation for the implementation of 
the new Medicare drug benefit in 2006. When the final standards are 
adopted, the Medicare Prescription Drug Plan (PDP) sponsors will be 
required to support e-prescribing, which will significantly drive 
adoption across the United States. Health plans and pharmacy benefit 
managers that are PDP sponsors could work with RHIOs, including 
physician offices, to implement private industry-certified 
interoperable e-prescribing tools and to train and support clinicians.
Establishing a Medicare beneficiary portal
    An immediate step in improving consumer access to personal and 
customized health information is CMS's Medicare Beneficiary Portal, 
which provides secure health information via the Internet. This portal 
will be hosted by a private company under contract with CMS, and will 
enable authorized Medicare beneficiaries to have access to their 
information online or by calling 1-800-MEDICARE. Initially the portal 
will provide access to fee-for-service claims information, which 
includes claims type, dates of service, and procedures. The pilot test 
for the portal will be conducted for the residents of Indiana. In the 
near term, CMS plans to expand the portal to include prevention 
information in the form of reminders to beneficiaries to schedule their 
Medicare-covered preventive health care services.
Adopting standards to automate clinical research
    FDA and NIH, together with the Clinical Data Interchange Standards 
Consortium (CDISC), a consortium of over 40 pharmaceutical companies 
and clinical research organizations, have developed a standard for 
representing observations made in clinical trials called the Study Data 
Tabulation Model (SDTM). This model will facilitate the automation of 
the largely paper-based clinical research process, which will lead to 
greater efficiencies in industry and government-sponsored clinical 
research. The first release of the model and associated implementation 
guide was finalized prior to the July 21 Summit and represents an 
important step by government, academia, and industry in working 
together to accelerate research through the use of standards and HIT.
Commitment to standards
    A key component of progress in interoperable health information is 
the development of technically sound and robustly specified 
interoperability standards and policies. As discussed previously, there 
have been considerable efforts by HHS, DoD, and VA to adopt health 
information standards for use by all federal health agencies as part of 
the FHA and CHI initiatives. The agencies have agreed to endorse 20 
sets of standards to make it easier for information to be shared across 
agencies and to serve as a model for the private sector. Additionally, 
the Public Health Information Network (PHIN) and the National 
Electronic Disease Surveillance System (NEDSS), under the leadership of 
the Centers for Disease Control and Prevention (CDC), have made notable 
progress in development of shared data models, data standards, and 
controlled vocabularies for electronic laboratory reporting and health 
information exchange. With HHS support, Health Level 7 (HL7) has also 
created a functional model and standards for the EHR. We hope that 
these efforts will stimulate the industry to adopt the standards agreed 
upon by these large federal health care providers and payors.

                       PUBLIC-PRIVATE PARTNERSHIP
    Leaders across the public and private sector recognize that the 
adoption and effective use of HIT requires a joint effort between 
federal, state, and local governments and the private sector. The value 
of HIT will be best realized under the conditions of a competitive 
technology industry, privately operated support services, choice among 
clinicians and provider organizations, and payers who reward clinicians 
based on quality. The Federal government has already played an active 
role in the evolution and use of HIT. In FY04, total federal spending 
on HIT was more than $900 million. Initiatives range from supporting 
research in advanced HIT to the development and use of EHR systems. 
Much of this work demonstrates that HIT can be used effectively in 
supporting health care delivery and improving quality and patient 
safety.
   role of the national coordinator for health information technology
    Executive Order 13335 directed the appointment of the National 
Coordinator for Health Information Technology to coordinate programs 
and policies regarding HIT across the federal government. The National 
Coordinator is charged with directing HIT programs within HHS and 
coordinating them with those of other relevant Executive Branch 
agencies. In fulfillment of this, the National Coordinator has taken 
responsibility for the National Health Information Infrastructure 
Initiative (NHII), the FHA, and the Consolidated Health Informatics 
Initiative (CHI), and is currently assessing other health information 
technology programs and efforts. In addition, the National Coordinator 
is charged with coordinating outreach and consultation between the 
federal government and the private sector. As part of this, the 
National Coordinator will coordinate with the National Committee on 
Vital Health Statistics (NCVHS) and other advisory committees.

                               CONCLUSION
    Transforming health care through health IT will result in better 
care--care that is higher in quality, safer, and more consumer-
responsive--and at the same time more efficient. Our national strategy 
for HIT is needed to achieve transformation. Interconnecting 
clinicians, consumer-centric customized health information and care, 
more treatment options and choices will be realized. HIT will improve 
population health so that public health risks, and clinical research 
can be enhanced.
    The time is now to meet this challenge, however the changes 
necessary are inevitable, needed and beneficial. The Administration has 
put forth the framework, we look forward to the actions that will be 
taken over the next decade to ensure Americans they will be the 
beneficiaries of the best health care that can be delivered.
    Your thoughtful leadership and that of your subcommittee toward 
achieving this goal are widely recognized. I look forward to your 
continued support and leadership that will further enable the Executive 
Branch and private sector leadership to transform our paper based 
health care system into an electronic, quality-based system that we all 
can count on. I look forward to your questions.

    Mr. Bilirakis. Thank you very much, Mr. Secretary. As 
usual, you waste no words, and your passion is----
    Mr. Thompson. I don't have much time left, Mr. Chairman. I 
want to get this done.
    Mr. Bilirakis. Well, Mr. Secretary, I guess that goes 
really to my generic generally type question, and that is why 
don't we do it? What is keeping us from doing it?
    Mr. Thompson. What has happened----
    Mr. Bilirakis. It is a no-brainer.
    Mr. Thompson. What has happened in the past, Mr. Chairman, 
is that there haven't been any standards, any standards in 
hospitals and clinics, so why invest--because technology is 
moving so rapidly, why should I invest in this system? Will it 
in fact be the kind of technology that is going to be used in 
the past?
    No. 2, we haven't at the Department or in Congress or the 
administration, we haven't demanded, we haven't pushed it. And, 
No. 3, they haven't seen, insurance companies haven't demanded 
it, and clinics haven't seen where it's in their best interest 
to do so. Doctors are also very independent. Doctors have to 
have straight As in order to get into any medical school in 
America except for one course. The one course is handwriting, 
and they still can't write legibly and so it is the one area 
that there still are a lot of mistakes. So it is important for 
us to do it.
    So what we have done? We have required bar coding. No. 2, 
we have now had a group of individuals come together and it has 
been unanimously agreed to--20 out of the 24 domains and we 
have reached unanimous consent on the standards.
    No. 3, the pathologists have come up with a way called 
SNOMED, synchronized medical terms, because some doctors use 
head, some use brain, some use skull. We put this all together, 
and it is called SNOMED. We have licensed that, and now that is 
being given out free of charge. And the technology companies 
and the software companies are going to use SNOMED as the 
common language, as the common vernacular.
    So now we are at the tipping point. We have done all this. 
We have got the standards; we have got bar coding; we have got 
the vocabulary. Now all we have to do is also say that for 
those 12 percent that are still sending paper claims into 
Medicare, you are not going to get paid as much compared to if 
you send it on the computer. So it is moving. All we have to do 
is get Congress to start helping to push it and I think we can 
accomplish it.
    Mr. Bilirakis. How would Congress do that?
    Mr. Thompson. Well, there is several ways Congress can do 
it. For instance, Congressman Stupak mentioned dollars. 
Everybody is looking for dollars. First off, let me respond by 
saying that other sectors of the economy have done it without 
the government giving them money to do so. I mean the news 
media have changed over all to high technology, banking has, 
all the grocery stores in America--grocery stores are much more 
technologically advanced than our hospitals and clinics. That 
is sad to say but they are. And they have all done it. So you 
can make the argument, ``Well, why do you have to do it?'' 
Well, sometimes you have to prime the pump, and we are putting 
in demonstration dollars in order to do that.
    There is another idea that I have had that I will throw 
out, and I think that--you know, I have got ideas, I don't know 
if you want to take them up or not, but we take in fraud and 
abuse dollars of $1 billion--we took in $1.2 billion this year 
and people say, ``You can't use that money because it is used 
for other things.'' Well, fine. Give me a cap at $1 billion and 
any fraud and abuse we get from fraudulent providers of 
services above that allow that money to go into the mini-
Bilirakis fund to be used on a one-to-one match or two-to-one 
match for people to go into high technology.
    Or number three, there is a thing that we did at the State 
level. We put up revenue bonds. The Federal Government would 
put in a small amount of money like on Fannie Mae or Freddie 
Mac or something like this, put in a small amount of money and 
then allow revenue bonds to be issued and have it like a 
revolving bank for people to use that as capital. That is one 
way that Congress could look at it. Other ways Congress could 
say in 5 years there is going to be no more payments on 
Medicare, or 3 years, no more payments on Medicare on paper. 
That is going to drive the system faster than anything.
    Number three, Congress could force the Department of 
Defense, Department of Veterans Affairs and Department of 
Health and Human Services all together. We are doing it on a 
voluntary basis, but Congress could step in and demand that we 
all have unanimity and high technology, and that is going to 
drive the system. So there are many ways Congress could help.
    Mr. Bilirakis. Well, you certainly make a good case for it, 
sir. I know our information is from the administration that 
there would be something like $140 billion per year savings. In 
your statement, you mentioned 130, 131. Bart made the comment 
that the private sector would indicate that probably as much as 
maybe 25 percent savings. My God, we are talking about big 
money here now. Obviously, there would be some costs incurred 
and we would have to have some information for our great CBO to 
try to give us some credit for those savings somewhere along 
the line, and that, as you know, is not an easy thing to do.
    Mr. Thompson. The Federal Government spends $780 billion a 
year on medical care. The total budget is $1.5 trillion for 
health care. If you just took 1 percent, it would be $7.8 
billion to put into technology and save the money, but, you 
know, CBO probably would not score it that way, and OMB will 
probably--I will probably get a nasty letter when I get back 
that I even suggested that, but I am telling you that those are 
the kinds of things--if you want to think out of the box, if 
you want to make health care more competitive, better quality 
and less expensive, these are the kinds of things that we have 
to do as a country.
    Mr. Bilirakis. Sure. I should think that we all are 
agreeable, and I should think we could have some sort of a task 
force that maybe we can add people from your office and from 
the private sector too and work up a way to do this. Shame on 
us. Shame on us. That is the kind of impression you have made 
on me, put it that way.
    Mr. Thompson. I didn't want to ever say that about you, Mr. 
Bilirakis. Other people in Congress I might, but not you, my 
friend.
    Mr. Bilirakis. Mr. Stupak to inquire.
    Mr. Thompson. Not anybody in this committee, I want to add.
    Mr. Stupak. Let me ask my questions, then you might 
reconsider that. You talk about this health care technology, 
and I agree it can be very important, I think it could improve 
the quality of health care, but I have got to go back to the 
Medicare debate we had on the Medicare drug discount card. We 
tried to put in there mandatory that doctors had to 
electronically fill out their prescriptions, and doctors 
objected, ``No, we can't do it. We don't have the money. We 
can't get up to speed,'' so it is voluntary. So the docs really 
aren't doing it in the Medicare prescription discount card that 
we have out there.
    So as we push this thing and as the chairman said, why 
don't we just go ahead and do it, you indicated that the 
insurance companies are concerned about it, there aren't enough 
standards, you have got 20 of the 24 domains out there, but it 
certainly looks like to me from listening to your testimony 
that they are waiting for the government to do it, to really 
say, ``These are the standards, they are not going to change, 
so once we get these things up and running we know what we can 
count on and we can rely upon on.''
    So I still have some hesitancy here, and I think the 
government is going to have to step up and do it. And in the 
plan that was released yesterday, I think you only had $2.3 
million in seed money. So if the docs aren't going to do it 
underneath the Medicare discount card, that is voluntary, and 
if the insurance companies are waiting, and the standards 
aren't uniform throughout the industry, how do we do it with 
only $2.3 million in seed money then, other than just say, ``Do 
it and you are going to have to eat the cost.''
    Mr. Thompson. Well, first off, I happen to like you, you 
are from Michigan, Upper Peninsula, which you stole from 
Wisconsin some time ago.
    Mr. Stupak. That was Toledo, that was Ohio.
    Mr. Thompson. The standards were created by our Department, 
Congressman Stupak, and I set up a committee and we worked on 
it with the private sector and they are unanimous agreed to, 20 
out of the 24. So the standards are there.
    Mr. Stupak. Okay.
    Mr. Thompson. We have got the uniform vocabulary called 
SNOMED. That is there right now. We have got the bar coding. So 
the government has stepped in here, and we have done it without 
any orders from Congress. The Department has just gone out and 
done that. We have set up a coordinating committee with the 
Department of Veterans Affairs, and one of the--Congresswoman 
Wilson said it best, the Veterans Affairs Department is ahead 
of us. They are doing a much better job than anybody else as 
far as technology. And we have just got to follow those kind of 
leads and get it done, and we can do it.
    The $2 million to $3 million was just for HRSA. There is an 
additional $50 million in AHRQ, which has got grants and 
setting up demonstration programs. In our budget, we are asking 
for an additional $100 million, Congressman Stupak, in order 
for demonstration plans to get these things started. 
Indianapolis clinics and Santa Barbara clinics are doing the 
best job as far as technology and connecting different clinics 
within the communities to do it. We need to take that and then 
we need to get regional things and then we need to get a 
national system. And that is what we are--we set up a task 
force yesterday to do it, and I have said I am going to be 
appointing those individuals and we are expecting to get a 
report back by October on how we can set up a national system.
    So we are starting at the national level through the 
Department of Health and Human Services, Veterans Affairs and 
Department of Defense and the local level with these regional 
things, these regional embryonic things in Indianapolis, and 
now we have got to drive both ends together.
    Mr. Stupak. In the prescription drug bill, doctors won't do 
it, it is voluntary. If you take a look at this----
    Mr. Thompson. I would have supported you on that.
    Mr. Stupak. Would you support us on doing an FSS, Federal 
Supply Service, for Veterans Administration as opposed to a 
Medicare bill, because that will drive down the cost of the 
prescriptions by 40 percent?
    Mr. Thompson. Well, that is a big difference between what 
you first said and what you are just asking me now, sir.
    Mr. Stupak. Well, since you were agreeing with me, I 
thought we could go one more.
    Mr. Thompson. Well, you don't want to push me too far.
    Mr. Stupak. Well, let me ask you this, going back to the 
financing. In my opening, I said Mayo Clinic spent over $100 
million just in 1 year to do it, and I still see small 
physicians practices are going to come up--they are not going 
to be able to come up with these big monies to do this. Even 
with free technology, they still need training and integration 
to make this work, and this all costs money.
    So while the system may be there, to actually get the docs 
to use it and small clinics, especially in rural areas, to do 
it, when you look at Mayo Clinic, which, as you know, is in 
Rochester, Minnesota, not necessarily the biggest place in the 
world, but they spent over $100 million just in 1 year to try 
to implement something like this. How do the rest of the 
clinics around the Nation do it? And the Mayo Clinic just in 
Rochester alone is pretty big to have 25,000 employees up there 
but they still spent $100 million in 1 year. So how do you get 
the rest of them to do it?
    Mr. Thompson. Well, Congressman Stupak, let me just 
respond. Every other sector of the economy has done it without 
the government's help. I mean every other sector, the 
groceries, financial, manufacturing, they have all done it. 
And, second, how expensive is it to that clinic and doctor and 
hospital to have a mistake. There are 98,000 people died last 
year, according to the Institute of Medicine, because a mistake 
is made. It is an extremely expensive thing for clinics and 
hospitals to have mistakes. Technology will prevent at least 50 
percent of that.
    I know that people say it has got to be money, but I look 
at the other side of it and say--and on the other side you are 
going to save money by having technology. If you invest in 
technology, you are going to save money. You are going to be 
faster, more efficient, more productive and safer and more 
profitable.
    Mr. Stupak. And I agree, it probably works in profit-driven 
industries like groceries, things like that. I don't see it 
working so well in service industries.
    Mr. Thompson. But even saying that, maybe you should take 
my idea about taking a cap on fraud and abuse and make the 
mini-Bilirakis law or the mini-Stupak law.
    Mr. Bilirakis. The point is there is more than one way to 
skin a cat, and I think we should open up our thinking in this 
regard, and I am sure Mr. Stupak----
    Mr. Thompson. I have got many ideas if you ever want to sit 
down and talk to me about them.
    Mr. Bilirakis. Mrs. Wilson to inquire.
    Mrs. Wilson. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for being here again. Have you done any thinking 
about how do you handle the issue of privacy as we implement a 
more electronic and more interoperable systems, because I hear 
that as a major, and it is, as a major concern of how do you 
ensure that--it is a lot easier to make sure that only the doc 
has access to the documents when they are stuck in his office 
and he can't find them anyway. When they become electronic, 
there is greater accessibility and the potential for 
inappropriate use is there.
    Mr. Thompson. Congress has passed a law, the HIPAA law, and 
we have implemented it, and I think we have done a pretty darn 
good job of implementing it in the Department. And we certainly 
want to protect privacy. Number two, your bank accounts are 
very private. I mean banks can do it, insurance companies do 
it. Why can a bank have privacy on your bank account, which is 
very private, and we can't do it for technology.
    Yesterday, we had the--2,300 people from all over America 
showed up. Every State was represented. Every technology 
company was represented. They just don't think the privacy 
thing is that problematic. We have got to demand and ensure 
that it is private, but the technology is there to continue to 
make it private. And my rejoinder to you is, isn't it less 
problematic to have it in a private number or a private 
identification of a patient in a computer than it is in a 
manila folder putting out there where everybody walks through 
and looks at it or something like this in the library? I think 
your privacy--your records are probably much more easily 
distributed or misplaced or somebody else has got a better 
chance to see in a manila folder than it does with technology.
    Mrs. Wilson. I don't disagree with you on the fact that 
this is a soluble problem, but it is one that we are concerned 
about----
    Mr. Thompson. Yes, I know it is. It is one I am concerned 
about too.
    Mrs. Wilson. [continuing] because you have bigger access to 
the system. I wondered if you would expand a little on the 
summit. We all know there is a summit going on on health 
information technology, and I wondered if you would expand 
about what some of the major outcomes were of that summit and 
what you saw.
    Mr. Thompson. Well, first off, we put out this strategic 
framework, and we are going to have, first, informed clinical 
practice, how we can encourage clinicals to start setting up 
systems. Second, interconnect the clinicians so that clinics in 
all of New York or all of Boston are able to communicate with 
one another and pass the thing. Third one, personalized care, 
how you develop a personal health record. And, fourth, how you 
are going to be able to improve population health. And this is 
what I was talking about where all of the statistics come in to 
CDC. You know how many forms and reports are filed with CDC? A 
lot of them are different, they are not interoperable. What we 
want to do is develop that system. We also want to develop in 
public health how we are able to get the therapies and 
treatment out of NIH faster from the laboratory to the bedside 
so much quicker. Some people say it takes 17 years. That is 
ridiculous in this modern age to develop a cure for a malady 
over 14 or 17 years if we could do it much faster. And so these 
are the kind of things we laid out.
    On top of that we are going to set up a Technology 
Committee that is going to report back to me in 60 days how we 
are going to implement this. And the second thing was is we are 
going to set up a Certification Committee, mostly in the 
private sector with some people from the Department of Veterans 
and Defense and Health and Human Services that is going to be 
able to certify the kind of equipment that is going to have the 
functionality plus the interoperability, because we want to 
make sure that the equipment that is being sold to software 
would have sort of a certificate in the private sector that 
this machine, this software will do what it is supposed to be 
able to do.
    And the third thing we want to do is we set up a portal and 
we are going to try something with Medicare and with the 
clinics in Indianapolis, and we are going to set it up so that 
somebody on Medicare is going to go in and be able to get their 
own records from Medicare, be able to use the web page, the 
Internet, to be able to get their own records, their own 
information, something that is badly needed. The technology is 
there, and I think it would help the person if you are able to 
get your own records, be able to determine what your illnesses 
are and get some treatments and so on and so forth. So it is an 
increase in information sharing with the individual patient 
with Medicare.
    Mrs. Wilson. One final question, and that is has the 
Department done any studies quantifying the savings or benefits 
to information technologies applies to Medicaid or Medicare?
    Mr. Thompson. We haven't done it specifically for Medicaid 
and Medicare, although I know it--being a governor, I know it 
would be tremendous if you had the technology, up-to-date 
modern technology on Medicaid. I know there would be huge 
savings. It is just bound to. But we haven't quantified it for 
Medicaid or Medicare. What we have tried to do through AHRQ, 
through our research arm at the Department of Health and Human 
Services. We tried to quantify what the savings would be for 
the total health care dollar, and that is about $131 billion to 
$140 billion. It is about 10 percent of the total health care 
dollars we think could be saved by having technology utilized 
fully.
    Mrs. Wilson. Thank you.
    Mr. Bilirakis. The gentlelady from California, Ms. Capps, 
for 8 minutes.
    Ms. Capps. Thank you, Mr. Chairman. Once again, thank you, 
Secretary Thompson, for making yourself available to this 
committee. I have been impressed with the number of times you 
have done that, and because I don't know how many more times 
there will be this occasion in this session of Congress, I 
wanted to thank you for your leadership and I think especially 
of my interest and yours in the shortage of nurses and how you 
have really demonstrated leadership in the country on that 
topic.
    Mr. Thompson. You have been a giant in that field, and I 
thank you.
    Ms. Capps. Well, the work isn't done yet, but your 
leadership has been enormous in that area. Particularly, I want 
to thank you for almost single-handedly but with a great team 
making obesity a national issue, calling it what it is--an 
epidemic. And I think we are beginning to see the fruits of 
that, and we owe you a great deal for that leadership. I 
remember visiting the Counter Bioterrorism Center you have 
developed, so you have been very busy and active during your 
time and always with such passion that it is infectious 
whenever you come in the room. It is like we have to hurry up 
and get these things done.
    All right. I want to take advantage--and also I want to 
thank you for recognizing the health initiative in Santa 
Barbara County. They came and got an award yesterday, and that 
is something that can be a model for other communities. They 
did it kind of on their own ideas, many of them, and I am a big 
champion of what they have accomplished as well.
    I want to take advantage of our subtitle and I want to use 
this time I have, if I may, to address some concerns that I 
have, because I value so much your response in helping us. Mr. 
Secretary, as you know, in May, the Food and Drug 
Administration rejected over-the-counter status for emergency 
contraception, known as Plan B. As you know, Plan B is not an 
abortion, it is not the same as methophrestone or RU-486. It is 
simply a highly concentrated dose of contraceptives. And 
experts estimate that over-the-counter availability would 
result in 150,000 fewer abortions every year.
    Over-the-counter sales would particularly help victims of 
sexual assault. In the United States, every year, about 25,000 
women become pregnant as the result of rape. An estimated 88 
percent could be prevented if sexual assault victims had timely 
access to emergency contraception. This is what I want to get 
to with you: This decision was made over the recommendation of 
the Agency's own Advisory Committee, it is my understanding, at 
least, and that this committee or committees voted 23 to 4 to 
allow over-the-counter sales and 27 to 0 that it was medically 
safe.
    But in spite of this consensus among scientific and medical 
staff at the FDA, the Agency rejected this, and some have said 
that this decision politicized the whole process, and that is 
my concern. These accusations and the controversy surrounding 
the decision for some people put into the question the 
reliability and reputation of the Food and Drug Administration 
over which you have responsibility. And so I want to take some 
time--I didn't have my opening statement so I could get your 
response to some questions I have about this.
    In the past several years, for example, or under your 
watch, how many times and for what drugs has the Director of 
Acting Director of the Center for Drug Evaluation and Research, 
CDER, rejected the recommendation of Advisory Committees of the 
FDA staff for over-the-counter drugs?
    Mr. Thompson. I don't know.
    Ms. Capps. Is it possible to find that out?
    Mr. Thompson. Sure. Absolutely. I don't know.
    Ms. Capps. I would appreciate it. And I wondered what role 
you, if any, you played or any other political appointees at 
FDA, the Department of Health and Human Services or elsewhere, 
have a role? How was this decision arrived at that you can 
share with me?
    Mr. Thompson. The decision is scientifically based, 
scientifically reviewed by peer review. I have nothing to do 
with any decisions dealing with medicines at FDA or any kind of 
treatments. That is completely outside of my bailiwick. In 
regards to this one, as I understand it, the committee and the 
individuals that are responsible for this are waiting for 
continuing scientific information as to how this would affect 
teens. So that process is continuing, as I understand it.
    Ms. Capps. So it isn't a done deal?
    Mr. Thompson. It is my understanding that they are waiting 
for some more scientific evidence from the company as to how 
this would impact on teens.
    Ms. Capps. But you nodded when I mentioned the votes.
    Mr. Thompson. Yes.
    Ms. Capps. That the Advisory Committee did make this 
recommendation. And I guess you are going to get back to us. 
Because it is customary, isn't it, for the Advisory Committee's 
recommendations to stand?
    Mr. Thompson. Yes. I think there have been examples, but I 
don't know how many, Congresswoman, but I will get that 
information to you. You should have it--it should be readily 
available, so you should have it next week.
    Ms. Capps. Okay. I appreciate that, because I would like 
to----
    Mr. Bilirakis. I would hope, Lois, that we could stick to 
the subject. I am not saying that what you are asking is 
insignificant, but----
    Ms. Capps. I know.
    Mr. Bilirakis. [continuing] certainly, it is not the 
subject matter. And on the floor debates are required to be 
germane to the subject. And I am not sure, really, what the 
committee rules are here. Ordinarily I would be leading it in 
any case, but, come on, let's go back to the subject.
    Ms. Capps. I know. Well, I appreciate it but I also have 
not been able to get answers to some of these concerns. I am 
representing now many people in my district who were quite 
upset about this, and I don't like to see the reliability of 
the Agency tarnished in any way. I think it is important that 
we have a process, and I know it is a vulnerable to 
politicization, and I just really want us to focus on----
    Mr. Thompson. I disagree with that.
    Ms. Capps. Okay.
    Mr. Thompson. It is possible, but there was no politics 
played in this at all. They are waiting for some more evidence 
on this. I am confident no political operative was involved.
    Ms. Capps. Okay. And also then you are saying that it is 
not a completely decided yet.
    Mr. Thompson. It is my understanding that it was turned 
down waiting more scientific evidence, how this would impact on 
teens.
    Ms. Capps. Well, I look forward to seeing----
    Mr. Thompson. That is my understanding, Congresswoman.
    Ms. Capps. Well, maybe when you respond as to the number of 
times in the past that you will also give us some direction as 
to where this stands.
    Mr. Thompson. Absolutely.
    Ms. Capps. And I can inquire more directly of you 
personally.
    Mr. Thompson. I just turned to my legislative person, 
Jennifer Young, and she will have an answer to you next week.
    Ms. Capps. Thank you. I want to touch on another topic, and 
I know my chairman is going to say I am stretching it, but this 
is another huge concern that I have, I only have a minute and a 
half left. This is a big topic. Among the provisions included 
in the Medicare bill last year was a change in the payments for 
cancer care. The old system was clearly broken, I will be the 
first--all of us would acknowledge that. Medicare and its 
beneficiaries paid too much for oncology medications. We had 
hearings on that right in this committee. We agreed that it 
needed to be fixed. But Medicare also paid oncologists, cancer 
centers and oncology nurses nothing, too little----
    Mr. Thompson. That is true.
    Ms. Capps. [continuing] for the care, the comprehensive 
care that cancer patients receive. The overpayment for cancer 
drugs was used to pay, and maybe it was vulnerable, but it was 
used to pay for treatments that cancer doctors provided to 
cancer patients through these auxiliary cancer center services. 
As a result of the changes in the bill, overall reimbursements 
for 2004 remained the same as in past years, but starting in 
2005, drug payments go down as payment shifts from AWP to 
average sales prices, and this will be a huge decrease in 
payments to doctors. Transitional payments designed to prevent 
disruption of cancer care are going to be cut by 29 percent in 
2005. The terror and the fear out in the community of cancer 
patients is enormous and to the oncologists as well.
    In May, Dr. Norwood and I and 68 of our colleagues on both 
sides of the aisle wrote to Administrator McClellan asking for 
release of the CMS planned payment rates for 2005. This is 
critical to ensure that the cancer community can be aware of 
what they are facing and how to avoid disruption. We haven't 
received a response yet. That is why I stretch the title of 
this hearing and ask you to see where we can find information 
that I could take back to our constituents.
    Mr. Bilirakis. Mr. Secretary, would you give us a date when 
you might respond to those questions rather than to do it here 
now?
    Mr. Thompson. Absolutely.
    Mr. Bilirakis. All right. Give us a date. When might you 
she receive it?
    Mr. Thompson. The first question she will have an answer 
next week.
    Mr. Bilirakis. All right.
    Mr. Thompson. On the cancer one, Dr. McClellan is working 
on that, so I am not sure. I can't give you a date on that, 
because he is working on that.
    Mr. Bilirakis. All right. Ms. Capps is concerned that she 
hasn't received responses in the past. I want to allay her 
fears there, but at the same time I want to keep going on the 
subject matter of the hearing.
    Mr. Thompson. We have got proposed rules all the time 
coming out on Medicare. I will get Dr. McClellan to call you.
    Ms. Capps. Thank you.
    Mr. Bilirakis. All right.
    Ms. Capps. Thank you. And thank you, Mr. Chairman.
    Mr. Bilirakis. Let's see, Mr. Shimkus, for 8 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. Mr. Secretary, it is 
great to be here. Mr. Stupak looks slender and more healthy, 
and if he stands up he can probably show you his pedometer that 
probably--you got it, Bart, today? How many steps today?
    Mr. Thompson. How many do you have?
    Mr. Shimkus. Forty-eight thirty-eight? Not bad.
    Mr. Thompson. I have only got 28.
    Mr. Shimkus. I am going to double him on the basketball 
court in about 45 minutes when we get down there. But that is a 
critical thing, leadership, and you have brought excitement and 
passion to this debate, and I just want to thank you. It is not 
an easy one. I am a part-time partner on this committee, and I 
try to shy away from this because it is so bureaucratic, 
paperwork, payment systems, line items. It just drives you 
crazy. You never hear anything positive. It is always negative. 
So I just want to continue to applaud you.
    The Health Care Leadership Council, I have gone to their 
little event they have here on the Hill and they show 
technology. They did it just yesterday, and if you didn't go 
by, you really should, because this really, with all due 
respect, it is probably more important that we see the 
technologies out there in the private sector in this than hear 
your testimony, because it is there. Bar coding of drugs, 
patient access to records online, nurse access on dosage to 
make sure that the proper dosage isn't being applied at the 
time, at the bedside of the patient. So we are not talking 
about Star Wars here, we are just talking about technology that 
is out there to move it into our governmental system for 
providing health care to Medicare and Medicaid individuals.
    I was a county treasurer my first assignment in a very 
famous country called Madison County, Illinois. Two hundred 
fifty thousand people when I took office. We collected property 
taxes. Two billings a year, we had 30 employees, and it was all 
hand ledger. This was only 15 years ago. We went to 
spreadsheets, we went to bank statements with microcodes, we 
went to a P.O. Box for the banks to do some of the billings, we 
electronically transferred payments back to the property tax 
districts, the school districts instead of cutting them a 
check. We saved the taxpayers thousands of dollars, and we 
decreased the office staff by 10 employees. We did a better 
job, we were more efficient. So it can be done. And if can't be 
done anywhere--the private sector is doing it, because they 
know they have to save money by becoming efficient. It is 
government that needs the prodding and the pushing, because we 
are not looking at the bottom line, as the private sector does.
    You mentioned some comments before, and I know the VA's 
here. We have also been successful in getting dollars to a 
telemedicine clinic in Springfield, Illinois that is now 
working with the VA hospital in Marion so that patients on just 
general views with technology and digital cameras and to be 
able to transfer records, a guy can stay home or a guy can go 
to the local clinic and be received, in essence, by a doctor 
through telemedicine, thus saving time, effort and energy. And 
for rural America, and Wisconsin has got some rural areas, 150, 
200 miles of driving at a time.
    So I would just give you an opportunity to say how else do 
you think that we can be helpful through the authorization 
process that we do or the spending? How can we help you push 
this change in the Federal bureaucracy?
    Mr. Thompson. The best thing you can do is just what you 
got done saying, Congressman, is the fact that there are many 
examples out there. The VA has got examples, our Department has 
got many examples that we have done on standards. The fact that 
you are holding this hearing is an absolute vital one because 
it is right after the technology summit yesterday. It shows 
that momentum is there.
    Number three, when you are looking at the Medicare 
reimbursement formulas, you can put in a provision that says 
that within 3 years, 4 years or 5 years, that all claims have 
got to be submitted by technology, not in writing anymore. 
Number four, you can be contacting your own individual 
hospitals and clinics and inform them of the importance of 
this, of getting into technology.
    Number five, the examples you were saying in Marion, 
Illinois, which is a good one. It needs now, of course, the 
national interoperability so that a veteran that is in your 
hometown, is it Marion or Madison or wherever it is, is going 
to be able to order drugs if he or she is on vacation or if he 
or she has an accident in Florida, that their records can be 
immediately reviewed by somebody in the emergency room so that 
they are able to treat you or that patient properly.
    These are the kind of things that are out there, and every 
other sector of the economy is there except the health policy 
and the health fields.
    Mr. Shimkus. And we have helped facilitate that, even in 
the years that I have been here, through this committee----
    Mr. Thompson. Yes.
    Mr. Shimkus. [continuing] through the Telecommunications 
Subcommittee when we passed legislation to allow the electronic 
receipt of signatures. I mean how many people now do 
refinancing--you can refinance your mortgage through faxes and 
electronically without ever going into a building anymore.
    Mr. Thompson. Isn't that great?
    Mr. Shimkus. Thank heavens, it is wonderful.
    Mr. Thompson. Yes.
    Mr. Shimkus. Especially with the busy schedule that people 
have. So thank you. Keep up the good work.
    Mr. Thompson. And what you have done as county treasurer in 
Madison County, what did you do, reduce the employees by 10?
    Mr. Shimkus. We went from 30 to 20 employees.
    Mr. Thompson. Yes, by technology. And people say, ``Where 
are we going to get the money?'' Look at the savings. Look at 
the savings. Invest in the savings.
    Mr. Shimkus. And that is always suspect if the work product 
was less, but the work product was better, because the taxing--
the school districts, the municipalities got their money faster 
because we didn't have employees writing checks, putting them 
in the mail, sending them to the taxing districts, they just 
did it electronically.
    Mr. Thompson. Can you imagine the cost to America and to 
Americans when you realize that--if the Institute of Medicine 
study is correct that 98,000 people died from medical mistakes 
last year, and a good share of those can be prevented by 
technology. Imagine what the savings would be just in that 
category alone.
    Mr. Shimkus. Well, we had the debates on medical liability, 
and of course that is why Madison County, Illinois is very 
infamous, but this whole debate a lot of times hinges around 
medical errors, and a lot of medical errors occur because of--
and I am one of those that have terrible handwriting--when you 
use technology and you have to keystroke entries on what is 
there, you will bypass a lot of those errors. The technology I 
viewed yesterday, if the doctor wanted a 20 milligram dosage 
and they----
    Mr. Thompson. Or a microgram, that is a 1,000----
    Mr. Shimkus. Yes. And it looks like an eight and then the 
nurse puts in eight and the screen pops up and says, ``Hey, 
this is 10 times more than what the doctor had prescribed.'' 
Blaring lights, sirens, and if it can save one life, it is 
worth the effort.
    So thank you for the time. I will give you back my five 
seconds, Mr. Chairman. I yield back.
    Mr. Bilirakis. Mr. Rush for 8 minutes.
    Mr. Rush. Thank you also, Mr. Secretary, and I want to join 
with others who have welcomed you here and who have applauded 
you for your leadership and for your position on various issues 
as it relates to health care. You are the governor of a 
neighboring State of my State, and it is good to know that you 
have come to Chicago on many occasions and helped us 
tremendously there, and I appreciate your eloquence and your 
passion on IT issues and how it vastly--and I agree with you, 
how it would vastly improve health care in the future.
    I want to discuss the issue right now of something that is 
presently before us. It is not in the future, it is right here, 
right now, and that is the issue of information technology and 
how it affects the 340-B Drug Pricing Program. Again, it is an 
immediate issue. And the Inspector General, in June, issued a 
report on overcharging of prescription drugs under the 340-B 
Program. The report is entitled, ``The Appropriateness of the 
340-B Drug Prices.'' In the report, the Office of the Inspector 
General recommends that HHS' Health Resources and Services 
Administration create and maintain a secure web-based system so 
providers can verify that the prices they are charged with in 
fact comply with 340-B, and this system would be accessible 
only by password.
    As you know, right now drug manufacturers are not really 
accountable to anyone and have been consistently and illegally 
charging 340-B public hospitals and community health centers 
more than they are allowed to under the law. And I wanted to 
get your response and ask you what do you think of the OIG's 
suggestion for a secure web site that would create 
accountability? And are you in the process of implementing such 
a system, and what is you overall view of that, of the system?
    Mr. Thompson. Well, first off, thank you very much for the 
question, Congressman Rush, and thank you also for your passion 
in your district. I have followed you from afar and also gotten 
to know you since I have been out here, and I have always been 
very impressed by you, and I thank you.
    In regards to 340-B, you know that anything dealing with 
community health clinics it is near and dear to me. I am very 
passionate about them. I believe so much in them. And anything 
that detracts from them I get very irritated. And so I have 
asked HRSA, which is responsible for community clinics, to do 
some research on it, to make recommendations to me. They are in 
the process of that. I just turned to my staff to find out when 
those recommendations are going to be. They don't know yet, but 
they are coming soon.
    In regards to the OIG report, I will receive suggestions 
they have to improve the system and any that I am in favor of--
I will look at that, and before I leave I will do everything I 
possibly can to implement it.
    Mr. Rush. Mr. Secretary, I really appreciate your comments, 
and I know your passion for community health centers. And since 
my question was pretty direct and you gave me a pretty direct 
answer and I have got some additional time, would you comment, 
please, on the status of school-based health clinics? Mr. 
Chairman, we are going a little bit far away from the subject 
matter, but the Secretary and I agree on so much and I just 
wanted to know that we agree of the importance of the school-
based health clinics, and what do you see the role in the 
future--how do you see the role in the future of school-based 
health clinics?
    Mr. Thompson. Well, I think school-based clinics are badly 
needed. I think any way that we can deliver health care to our 
children in an effective way it is important. That may be the 
only health care that that child or children is able to get. 
And I happen to be one of those believers that children need as 
much good quality health care as they possibly can receive. And 
if that is where they are going to get it, then I am in favor 
of it.
    Mr. Rush. Mr. Chairman, I yield back.
    Mr. Bilirakis. The Chair thanks the gentleman. Mr. Buyer to 
inquire.
    Mr. Buyer. Thank you, Mr. Secretary. Given the liberty that 
members are taking and the latitude of the chairman, I need to 
take mine. You have done a great job with regard to the drug 
discount card in signing up a lot of people----
    Mr. Thompson. Thank you.
    Mr. Buyer. [continuing] but a lot of those cards aren't 
getting in people's hands. And I know Dr. McClellan's working 
on that, but I just want you to know you can talk to any Member 
of Congress and they are having some problems even getting the 
cards and lag times. And I think you know that, but I just 
wanted to reinforce it. Thank you, Mr. Chairman, for the 
latitude.
    On the--gosh, I have to go back. In the late 1990's, I 
Chaired the Personnel Committee on Armed Services, so I had the 
military health delivery system working on IT. Now I Chair O&I 
on VA working on IT, and I get to be here with my colleagues 
here and we work on IT. The great thing is we have got all 
three, I have got experience with all three. The downside of 
that is I also have experienced great pains over the years, 
because the initiatives that we are talking about today aren't 
new initiatives.
    These things have been there from 1997. There have been 
discussions about VA, your departments and DOD and seamless 
interoperable, bi-directional, multidirectional, standards-
based, and we haven't done a very good job, I don't think, at 
the beginning. GAO, you can pull up any imaginable GAO report 
with regard to the exchange of health data and they have been 
very critical of a lot of the IT. So I was a good listener to 
your opening statement, especially in your response to Mr. 
Bilirakis' question on what can Congress can do.
    A lot of this can and should be done through the executive 
function. Coming off of a hearing yesterday on this, I just 
want you to know where I think we can be really helpful. I 
think we are going to have to change structure. In this town, 
those who have the money have the power, and if you want to 
break the bureaucracies, you give--whoever is in charge of 
information management give him the money. And that is what I 
am about prepared to do with the VA.
    And so I will take the Assistant Secretary, who is Bob 
McFarland, out at Dell Computer, who has come to help the 
country and he is getting pretty frustrated by the 
bureaucracies and the three stovepipes that we have, and I am 
prepared to change structure for the VA. And I am going to give 
him the money, and I am going to stop having the IT having to 
go beg. And I just am curious about your comment if we begin to 
change structure and give the money and let's turn the table 
here on IT. A lot of projects out there. We have funded 
billions of dollars, and there is a huge graveyard out there 
with IT projects.
    Mr. Thompson. Congressman Buyer, first, let me thank you 
for your advocacy for the cards. You have done an outstanding 
job, and I know of your passion for it and what you have done, 
and I appreciate it, and I am in your debt.
    Mr. Buyer. Thank you.
    Mr. Thompson. In regards to the mistakes being made, any 
time you start a program as large and as monumental as this, 
you are going to make some mistakes along the way. We have 
tried to fix them as soon as we see them. If you have got any 
suggestions, please give them to us. Dr. McClellan and 
everybody in the Secretary's office is very concerned, and we 
are working on all of these problems as fast as we possibly can 
and coming up, I think, with good results.
    In regards to--I sort of like your idea. Somebody suggested 
that there should be somebody over in OMB or in each one of the 
departments that is in the technology field that has the veto 
power over any budget increases in any divisions if it doesn't 
meet the technological standards, and it certainly would change 
the thinking processes, and it would certainly change the 
outcomes a great deal. And so your idea of changing the 
structures I have no difficulty with it at all and think that 
you would accomplish a great deal when you do it.
    Mr. Buyer. When Dr. Kaiser decentralized within the VA and 
we have gone to so many outpatient clinics and given more power 
to visions and we say if you get collect money, you get to keep 
money. What that has also done is create a lot of little 
kingdoms out there----
    Mr. Thompson. Yes. Right.
    Mr. Buyer. [continuing] and we don't have standardizations, 
and we have really a lot of problems, and as you try to work 
with NIH.
    Anyway, this isn't just to steambull your idea, the Marine 
Corps said, ``We're going to take control here of ourselves,'' 
and they put all the power in one person. And it has worked 
very, very well, but we don't have that across the board in our 
departments.
    Mr. Thompson. No, we don't.
    Mr. Buyer. And I just wanted to let you know that is what 
I'm thinking, and I appreciate your counsel. Thank you.
    Mr. Thompson. I would--well----
    Mr. Buyer. Go ahead.
    Mr. Thompson. I would think that the more power that you 
could give to a secretary to run his or her department, 
Congress would be much better served and the people would be--
the secretary.
    Mr. Bilirakis. Enough said. Ms. Eshoo to inquire.
    Ms. Eshoo. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary----
    Mr. Thompson. It is always a pleasure.
    Ms. Eshoo. [continuing] and thank you for your service to 
our country. It shows that you have, as everyone here has said, 
you have a passion about it, you care about it, and I think 
that whenever you decide that your tenure ends, your 
contributions----
    Mr. Thompson. In January.
    Ms. Eshoo. [continuing] will be lasting.
    Mr. Thompson. Thank you very much.
    Ms. Eshoo. Well, we all have parentheses around what we do, 
so thank you. And, Mr. Chairman, thank you for holding what I 
think is really a very important hearing. The other night I 
found myself, there must be something wrong with me that I have 
C-SPAN on even when I get back to my apartment, but I am not so 
inclined to listen to the National Governors Association 
meeting but the headline of it was, ``Health Care in the 
Digital Age.'' And the keynote speakers were Newt Gingrich, the 
former Speaker of the House, Leon Panetta, the former Chief of 
Staff at the White House, and I don't remember the gentleman's 
name but he was outstanding, the man that heads up Starbucks. 
And so much of what we have talked about here today, about the 
number of lives that are lost due to medical errors and how we 
improve our health care system so that there is a jointness, a 
sharing, an integration of technology is absolutely front and 
center in the 21st century. We are facing it across the board 
in the Federal Government. The 9/11 Commission came out with 
its report today, talked about smokestacks and within the 
intelligence community that they had a need to know but not a 
need to share.
    And I think that there are two ways to maybe draw a line 
and to two columns. One of it is private. I mean we have 
hospitals, obviously, that are public hospitals, we have 
district hospitals, we have private hospitals. And it seems to 
me that with those hospitals we have got to strike a 
partnership with them. The reason they are not doing it--why so 
many are not doing it, there is not an incentive, and there has 
to be a little bit of a carrot in this. Do I think we have 
enough money to incent all of them to pay for or do their 
systems? Of course we don't, and I don't think we are the ones 
that should be doing that. But I think that with, first of all, 
leadership from the Federal level where we say, ``This is a 
priority,'' and then they follow some kind of model.
    I think the idea, Mr. Chairman, and we can do this, is your 
idea, Mr. Secretary, about over a certain number in the abuse 
or the fraud dollars that are secured by the Department, that 
that be dedicated to this. I also think that we should be 
looking at mechanisms for very low interest loans. They will be 
able to do that. You know, in California, after the big 
earthquake, the legislature told the hospitals that they had to 
retrofit by such and such a date. Well, they never came up with 
a mechanism for this, you see, and they didn't have the money 
to retrofit. For many of them, retrofitting was tearing the 
place down and building a new hospital.
    So we have mechanisms where we can help make that happen, 
and I think that we shouldn't think of this thing as being so 
massive that it can't be done. The technologies are already out 
there. Congress doesn't have to invest this stuff.
    Now, in terms of Federal operations, we have to come up 
with some standard and how we are going to do that, but you can 
take care of that, we can take care of it in the various 
committees. It is reaching the other hospitals, the rest of the 
hospital community across the country. In my district--I mean 
we always need success stories, someone was saying so much is 
negative--El Camino Hospital in Mountain View, California--and 
before you leave if you find yourself in California, I would 
love to accompany you there.
    Mr. Thompson. I would love to go. Thank you.
    Ms. Eshoo. Exactly. They have made an investment in their 
patients, and it is the first hospital in the world to become 
paperless. They have 97 percent of all their orders by 200 of 
their doctors are done electronically. Now, they set it as a 
priority, so we can do this, and I welcome your leadership. 
This committee should pick up on these ideas and get them into 
legislative language. Again, we can incent them. We can set 
some money aside, you have got something there, but this is 
from the Secretary's Office got to bring some of the private 
hospitals together and the country hospitals, the public 
hospitals. Let them participate in it too.
    You are local, State government, and so you think in a very 
solution-oriented way, and I welcome it. I come from country 
government, so I am trying to think that way. I think we have 
the ingredients here.
    Mr. Thompson. We do.
    Ms. Eshoo. And I would be happy to work with the chairman, 
with you, with your office, with all of my colleagues. You can 
tell that you have a real bipartisan spirit here because of the 
way you have worked and conducted yourself, Mr. Secretary. So 
those are two things that I think we can do.
    Mr. Thompson. Thank you very much.
    Mr. Bilirakis. Any response?
    Mr. Thompson. Thank you for your invitation. I would be 
more than happy to come out.
    Ms. Eshoo. Yes. I would love it if you would. We would be 
thrilled.
    Mr. Thompson. And I am looking for that example where it is 
completely paperless. I am not sure it is completely paperless. 
I bet you still have a manila folder or an application come in.
    Ms. Eshoo. Maybe. This is what they told me, and when 
people talk about----
    Mr. Thompson. I want to see that hospital where you can go 
onto your computer, make your appointments, go in and go 
through all the departments, end up having your medical care, 
have your bill when you walk out and never see any paper. That 
is what I want.
    Ms. Eshoo. Absolutely.
    Mr. Bilirakis. Well, I think----
    Ms. Eshoo. Their x-rays are digital.
    Mr. Thompson. That is great.
    Ms. Eshoo. Yes. So come and see.
    Mr. Bilirakis. Mr. Secretary, again, thank you. I mean 
everybody has thanked you, and we really mean it. You have been 
here before us so many times, and you have got to be one of the 
busiest people in the world, and yet you find time for it, and 
we appreciate it so much. Thank you----
    Mr. Thompson. You are wonderful people. Thank you.
    Mr. Bilirakis. [continuing] for encouraging us and spurring 
us on on this subject.
    Mr. Thompson. Thank you very much.
    Mr. Bilirakis. Thank you very much. The next panel will 
consist of Robert M. Robert M. Kolodner, Acting Chief Health 
Informatics, Officer and Deputy Chief Information Officer for 
Health, for the U.S. Department Of Veterans Affairs; Dr. David 
Blumenthal, director for the Institute for Health Policy, 
Massachusetts General Hospital/Partners with the Health Care 
System; Dr. Carol Diamond, managing director of the Markle 
Foundation, Rockefeller Plaza, New York; and Dr. Edward H. 
Shortliffe, professor and chair of the Department Of Biomedical 
Informatics, also professor of medicine and of computer science 
and deputy vice president for Strategic Information Resources--
pretty busy person--Columbia University Medical Center.
    Welcome, Doctors, here. You have been in the room. I think 
you see a real interest and hopefully a real fire in us as far 
as this subject is concerned, and we look forward to your 
testimony. Your written statement is already a part of the 
record. We would hope in the 5 minutes that we allot you that 
you would complement it, supplement it somewhat. Hopefully, you 
can stay within about 5 minutes. If you are a minute or 2 over, 
I am not going to shut you off. But in the interest of time--
hopefully we can get through before we have to run for further 
votes.
    Dr. Kolodner--is that correct?
    Mr. Kolodner. Kolodner, sir.
    Mr. Bilirakis. Good. Kolodner. Kolodner. Dr. Kolodner, 
please proceed.

     STATEMENTS OF ROBERT M. KOLODNER, ACTING CHIEF HEALTH 
 INFORMATICS OFFICER AND DEPUTY CHIEF INFORMATION OFFICER FOR 
HEALTH, U.S. DEPARTMENT OF VETERANS AFFAIRS; DAVID BLUMENTHAL, 
 DIRECTOR, INSTITUTE FOR HEALTH POLICY, MASSACHUSETTS GENERAL 
 HOSPITAL/PARTNERS HEALTH CARE SYSTEM; CAROL DIAMOND, MANAGING 
    DIRECTOR, MARKLE FOUNDATION; AND EDWARD H. SHORTLIFFE, 
  PROFESSOR AND CHAIR, DEPARTMENT OF BIOMEDICAL INFORMATICS, 
  PROFESSOR OF MEDICINE AND OF COMPUTER SCIENCE, DEPUTY VICE 
    PRESIDENT FOR STRATEGIC INFORMATION RESOURCES, COLUMBIA 
   UNIVERSITY MEDICAL CENTER, DIRECTOR, MEDICAL INFORMATICS 
            SERVICES, NEW YORK PRESBYTERIAN HOSPITAL

    Mr. Kolodner. Thank you. And, Mr. Chairman, I just wanted 
to confirm I will be doing a statement and then a demo. I 
believe that was what the staff agreed to.
    Mr. Bilirakis. Is your mic on?
    Mr. Kolodner. Is that--that works, okay. Very good. Mr. 
Chairman and members of the subcommittee, good afternoon. I am 
Rob Kolodner, a physician in the Department of Veterans 
Affairs. I currently serve in two related roles as both the 
Acting Deputy Chief Information Officer for Health for VA and 
as the Acting Chief Health Informatics Officer within the 
Veterans Health Administration. I am pleased to be here today 
to discuss the importance of benefits of health IT and to 
underscore VA's commitment to the strategic framework released 
yesterday.
    Over the past several years, VA, through its HealthePeople 
strategy, had initiated or joined in efforts to stimulate the 
use of information technologies in health care by working with 
Federal, State and industry partners. This strategy addresses 
four key health IT components: The electronic health records, 
or EHRs, personal health records and two critical pieces 
necessary to exchange health information among them, the 
National Health Data and Communication Standards and an 
information exchange infrastructure.
    Even by themselves, EHRs can help us provide better, safer 
and more consistent care to all patients, and that better 
quality care actually costs less. VA is a recognized leader in 
the development and use of health IT to the benefit of our 
Nation's veterans. VA's VistA System is a comprehensive EHR 
system, and let me describe a few key components. VA's 
Computerized Patient Records System, or CPRS, provides a single 
integrated application used by health care providers in all VA 
medical centers, nursing homes and clinics, and I will be 
demonstrating that shortly. CPRS virtually eliminates 
medication errors caused by illegible handwriting and through 
automated allergy and alerts prevents potentially dangerous 
treatments from being ordered.
    VA's Bar Code Medication Administration System, or BCMA, 
uses bar code technology on all medications and on the 
patient's wristband to ensure that each patient receives the 
correct medication, in the correct dose, at the correct time. 
Shortly, I will also show you the VistA Imaging, which provides 
the ability to capture and display a wide variety of medical 
images.
    You may be thinking this sounds great but is it really 
being used by doctors, nurses and other health professionals. 
VA's VistA Systems now contains more than 1.1 billion orders as 
well as half a billion notes and reports, and these numbers are 
growing quickly. Daily, in VA facilities, more than 865,000 
orders and over half a million progress notes will be entered 
electronically by VA providers, and 585,000 medications will be 
administered safely using BCMA.
    Does this technology really make a difference in health 
care. As a physician, I have seen firsthand the benefits of 
EHRs in VA, including immediate access to information, 
elimination of duplicate orders and increased patient safety. 
CPRS has helped VA become one of the best performing health 
systems in the U.S. VA sets the benchmark for clinical 
performance indicators proven to save lives, such as higher use 
of beta blockers after a heart attack and higher screenings for 
cancer.
    And we have already begun to build our next generation 
standards-based interoperable EHR system to move us from being 
facility-centric to person-centric. Earlier I mentioned 
personal health records. VA's My HealtheVet is a web-based 
personal health record for all veterans. This type of 
capability will transform the way veterans participate in their 
health care experience and get information about their wellness 
and care. Version 1 contains health information resources, and 
by next year veterans will be able to have a secure copy of key 
portions of their health record from VA's VistA Systems.
    In the area of standards, VA was instrumental in the 
formation of the interagency consolidated health informatics 
initiative to foster the adoption of Federal interoperability 
health standards. In the area of information exchange 
infrastructure, VA and DOD developed a HealthePeople Federal 
Plan to ensure the development of an interoperable electronic 
virtual health record by 2005 to better serve our Nation's 
veterans.
    The Federal Health Information Exchange Phase I project 
deployed in June 2002, makes health records over 2 million 
unique veterans and servicemembers makes their DOD electronic 
records available to VA providers. Phase II, starting in late 
2005, will provide for the joint development and implementation 
of interoperability between VA's health data repository and 
DOD's clinical data repository.
    As Dr. Jon Perlin, VA's Acting Undersecretary for Health, 
announced yesterday at the Health IT Summit, VA is working with 
Centers for Medicare and Medicaid Services to release early 
next year a VistA Office EHR. And it is a version of VA's VistA 
system configured to meet the needs of community health clinics 
and office-based practices in rural and underserved areas. We 
look forward to sharing our knowledge, expertise and where 
desired our systems with our partners throughout the health 
care community to support the strategic framework for 
transforming health care to improve patient safety and quality 
of care.
    Dr. Perlin has asked me to convey an invitation to all of 
you to see VA's Electronic Health Record in action at the VA 
Medical Center just a mile away in Washington. In the interim, 
I would like to provide a brief demonstration of VA's 
Electronic Health Record so you can better appreciate the 
capabilities we think are critical for every health provider 
nationwide to have available in order to provide better, safer 
care to all patients.
    At this time, let me turn on the screens and hopefully they 
will show, and you will see on the screens up above you I will 
be opening up what we call CPRS. This is the clinicians 
interface. And by the way, the entire VistA system, that which 
can run large tertiary care hospitals in Houston or west L.A., 
all of that software is running on my laptop here in addition 
to the imaging software.
    So I click on the icon and normally in a regular system I 
would be asked for a security password and access code, and 
then I would see this screen. This is an opening screen where I 
can choose which patient I want to see. It also gives me a 
variety of alerts for patients that are mine about notes that 
are unsigned or orders that have come in, abnormal orders. By 
the way, the information you will see here is real patient 
data, but it has been scrubbed so there is no identifying data, 
but it is not made up data in terms of what you will be seeing.
    So at this point, let me select a patient, Mr. Madliff, and 
Mr. Madliff, when we select him, we get his cover sheet. At 
this time, I am also going to open up the VistA Imaging and 
have that available on the screen. This portion here that I am 
pointing to in the center is CPRS. It basically uses the 
metaphor of a chart and so you see tabs along here that look 
just like a chart that clinicians would normally be using and 
are familiar with. It also has brief summaries of the various 
diagnoses or medications. If I want to look at the person's 
blood pressure or weight, I can do that. And not only can I 
look at that, but I can also graph it. And very often in the 
examining room we actually have the terminal so we can turn it 
to the patient and show, in this case, ``Mr. Madliff, we 
noticed that your weight has been increasing recently,'' and we 
can discuss with him what has been happening as far as the diet 
or exercise and can actually engage him by having him see the 
data that we see as well.
    Now, Mr. Madliff is somebody who has a particular problem. 
He came in and we looked at his laboratories, and in fact we 
can open those here and quickly graph them. I will pull up his 
hematocrit, which is the count of his red blood cells, and we 
will take a look at all the results. And we see here that on a 
number of occasions Mr. Madliff had a very steep drop in his 
blood count. Actually, if we look very carefully, we can see 
that during these times, as we expand that data, that not only 
was there a drop, but in this case there was a sharp rise 
twice. You don't normally develop red cells that fast. That 
meant that he actually got a transfusion because of his anemia.
    So when he came in then the issue is what is cause of his 
anemia? We did a colonoscopy and fortunately we are well past 
lunch here. This is actually a picture captured from the 
colonoscopy, and so this picture would be available to all of 
his providers. It shows here that he has these structures here. 
This is diverticulosis that he has, but, more importantly, we 
actually saw during that occasion here bright red blood, so he 
was bleeding, and he had some sort of a bleed in his colon.
    Now, the question is where did that come from, and so we 
actually did something called a bleeding scan where we inject 
some dye and take an x-ray. And this particular one was done 
about 1992. It was before we had the digital systems, so this 
was done on film. The patient was in the ICU, and when they 
went to look at this film on the light box, the normal way of 
looking at an x-ray, they were simply not able to find where 
the bleeding was. So a physician's assistant took it over 
because the imaging system had just been installed there. He 
actually scanned in the x-ray and then brought it up, and this 
allowed us to use some of the digital techniques that you can 
use on x-rays to look at them. And, one of the advantages of 
this is that we can actually adjust the x-ray, and this was 
from a standard x-ray, to be able to see different parts of the 
x-ray better.
    And what we did was we looked out in this area and you will 
see right here a little hazy area, and actually, if we invert 
it, we can see a little bit better here. And this area, where 
it is not sharp but it is very hazy, is in fact where the 
bleeding was, and we were able to locate it, and they were able 
to then pass a catheter and actually stop the bleeding by 
closing off that clot. So that is Mr. Madliff. You can see 
right at the fingertips you have got all of the data. It is 
available at any place in the hospital. The images are 
available any place in the hospital.
    Let me now take you to another patient. We are going to 
select----
    Mr. Bilirakis. Doctor, forgive me for interrupting you, but 
we have three votes on the floor. The buzzing you may have 
heard was not bees, it was an indication of votes on the floor. 
So we are going to have to break, and I apologize to you, but I 
was hoping we could maybe get through before that. But as soon 
as we finish up with these three votes, we will be back, and 
hopefully we can get a few more people back here. Very 
fascinating, I might add. Thank you very much. We are going to 
recess for a few minutes. That is all I can tell you.
    [Brief recess.]
    Mr. Bilirakis. Mr. Kolodner, you weren't finished yet, 
right? You had another example for us?
    Mr. Kolodner. One more example, sir, and then I will be 
finished, so my colleagues can----
    Mr. Bilirakis. Okay. Please proceed.
    Mr. Kolodner. Thank you. This is Mr. Green, and Mr. Green 
has a cardiology problem. There is a cardiology note, as you 
see here, with a little icon next to it, so when you click on 
that it actually opens up the appropriate images. In this case, 
he had a cardiac cath, and so we see here the image itself, and 
we can in fact see why Mr. Green has been having some chest 
pain. This is coronary artery in the narrowing. In this case, 
we can show that to the individual and indicate why he is 
having the pain.
    Now, normally what we would do is during that cath we would 
actually go ahead and take care of the problem, so a little bit 
later on here we actually have the balloon in place so that it 
is opening up the area, and we can finally follow it with a 
follow-up film that we can actually show to the person to show 
that in fact that area is now wide open, and so we have taken 
care of the problem.
    And, obviously, in terms of working with somebody and 
educating them and helping them understand what their problem 
was, in this case, why it is important for him to take his 
follow-up medications, why he has to follow a diet so that this 
doesn't happen again, it is a very powerful way of engaging the 
veteran in improving their collaboration in participation in 
care.
    So at that point, I am finished my demo, Mr. Chairman.
    [The prepared statement of Robert M. Kolodner follows:]
     Prepared Statement of Robert M. Kolodner, Acting Chief Health 
  Infomatics Officer and Deputy Chief Information Officer for Health, 
                     Department of Veterans Affairs
    Mr. Chairman and Members of the Subcommittee: I am pleased to be 
here today to discuss the importance of electronic health records and 
the role of the Department of Veterans Affairs (VA) in the development, 
use, and sharing of this valuable technology.
    Recently, President Bush outlined an ambitious plan to ensure that 
most Americans have electronic health records within 10 years. The 
President noted a range of benefits possible with the expanded use of 
information technology, including improved health care quality; reduced 
frequency of medical errors; advancements in the delivery of 
appropriate, evidence-based medical care; greater coordination of care 
among different providers; and increased privacy and security 
protections for personal health information.
    In addition to these benefits, the transition from a paper-based 
medical record to an electronic health record (EHR) brings with it 
cost-saving efficiencies in how information is managed. In a paper-
based environment, a lot of time is spent simply handling paper. Entire 
jobs are devoted to filing, retrieving, copying, distributing, and 
tracking paper records and radiology films. The implementation of an 
EHR does not eliminate these activities altogether, but it does 
drastically reduce clinicians' dependence on hard-copy information. 
Clinicians are able to access the information they need without 
requesting it from the file room or searching through stacks of files 
in their offices. Medical records and radiology films can be accessed 
on-line, so that there is no need to repeat studies when test results 
or films cannot be located. With an EHR, most VA sites have been able 
to decrease the space devoted to file rooms, retrain staff members to 
perform data management tasks, and reduce the costs associated with 
printing, duplicating, and maintaining hard-copy records and films.
    For decades, VA has developed innovative IT solutions to support 
health care for veterans. Over the past several years, VA has worked 
with federal, state, and industry partners to broaden the use of 
information technology in health care. VA strives to continue the 
development of the EHR while protecting the privacy of our veteran 
population and maintaining the integrity of our systems. These efforts 
have laid the groundwork for the President's health IT initiative.
    With one of the most comprehensive electronic health record (EHR) 
systems in use today, VA is a recognized leader in the development and 
use of EHRs and other information technology tools. Beginning in the 
late 1970's--before such tools were commercially available--Veterans 
Health Administration (VHA) developed software applications for a 
variety of care settings, including inpatient, outpatient, and long-
term care. These applications form the foundation of VistA--the 
Veterans Health Information Systems and Technology Architecture, the 
automated health information system used throughout VHA.
    In the mid-1990's, VHA embarked on an ambitious effort to improve 
the coordination of care by providing integrated access to these 
applications through implementation of an electronic health record, 
known as the Computerized Patient Record System or CPRS.
    With CPRS, providers can access patient information at the point of 
care, across multiple sites and for all clinical disciplines. CPRS 
provides a single interface through which providers can update a 
patient's medical history, submit orders, review test results, review 
drug prescriptions, and perform other functions to support clinical 
care delivery and the promotion of wellness. The system has been 
implemented at all VA medical centers nationwide and at VA outpatient 
clinics, nursing homes, and other sites of care.
The Benefits of Electronic Health Records
    Electronic health records are appealing for a number of reasons. 
The most compelling reason to use information technology in health care 
is that it helps us provide better, safer, more consistent care to all 
patients. The President referred to a 1999 report in which the 
Institute of Medicine (IOM) estimated that between 44,000 and 98,000 
Americans die each year due to medical errors. Many more die or suffer 
permanent disabilities because of inappropriate or missed treatments in 
ambulatory care settings. IOM cited the development of an electronic 
health record as essential for reducing these numbers and improving the 
safety of health care. In its 2002 publication Leadership by Example, 
IOM noted that ``[c]omputerized order entry and electronic medical 
records have been found to result in measurably improved health care 
and better outcomes for patients.''
    How can EHRs improve patient safety and quality of care? First, 
with an EHR, all relevant information is available--and legible. A 
provider can quickly review information from previous visits, have 
ready access to clinical guidelines, and survey research results to 
find the most appropriate treatments and medications. All of this 
information is available wherever patients are seen--in acute settings, 
clinics, examining rooms, nursing stations, and offices. With CPRS, 
providers can quickly flip through electronic ``pages'' of a patient's 
record to review or add information. All components of a patient's 
medical record--including progress notes, referrals, orders, test 
results, images, medications, advance directives, future appointments, 
and demographic data--are readily accessible at the point of care.
    Many of us see different doctors for different medical conditions. 
How many of these physicians have access to all of the information that 
has been collected over the course of these visits? In VHA, patient 
records from multiple sites and different providers can be viewed at 
the same time at the point of care. This is simply not possible with 
paper records. Additionally, most clinicians find EHRs more convenient 
to use than traditional paper records. They are less cluttered, easier 
to read, faster and more reliable for finding items of information that 
the providers are seeking. In addition, the EHR supports enhanced views 
to help provide more information than that of a single test result, for 
example, presenting a graph of a specific type of laboratory test over 
a period of time for a single patient or for multiple patients.
    In addition to making medical records more accessible, EHRs can 
help clinicians better document the reasons a patient sought care and 
the treatment that was provided. Given the time constraints they face, 
many physicians resort to writing brief, sometimes cryptic notes in a 
patient's chart, and then write more complete documentation when they 
have time. EHRs enable clinicians to document care quickly and 
thoroughly, and provide reminders to complete any documentation that is 
overdue.
    CPRS, for example, allows clinicians to enter progress notes, 
diagnoses, and treatments for each encounter, as well as discharge 
summaries for hospitalizations. Clinicians can order lab tests, 
medications, diets, radiology tests, and procedures electronically; 
record a patient's allergies or adverse reactions to medications; or 
request and track consults with other providers.
    More information isn't always better if we can't use it. Even if we 
could transfer paper records quickly and reliably from one provider to 
another, and make sure that the information in records was complete, 
many hard-copy patient records simply contain too much information for 
a clinician to sift through effectively. There is always the 
possibility that something crucial could be missed. When health 
information is stored electronically, however, we can make use of 
software tools to analyze that information in real-time. We can target 
relevant information quickly, compare results, and use built-in order 
checks and reminders to support clinical decision-making. These 
capabilities promote safer, more complete, more systematic care.
    Consider the benefits we have seen in VHA in the area of medication 
ordering. When orders for medications are handwritten or given 
verbally, errors and mistakes inevitably occur. However, when 
physicians use computerized order-entry systems to enter medication 
orders electronically, errors caused by illegible handwriting or 
misinterpretation of dosages, strengths, or medication names are 
virtually eliminated. CPRS includes automated checks for drug-drug or 
drug-allergy interactions, alerting the prescribing physician when 
potentially dangerous combinations occur. Currently, 93% of all VHA 
medication orders are entered directly by the ordering provider.
    Information technology can also serve to reduce the number of 
errors that occur when medications are given to a patient. VHA's Bar 
Code Medication Administration system (BCMA) is designed to ensure that 
each patient receives the correct medication, in the correct dose, at 
the correct time. In addition, the system reduces reliance on human 
short-term memory by providing real-time access to medication order 
information at the patient's bedside.
    BCMA provides visual alerts--prior to administration of a 
medication--when the correct conditions are not met. For example, 
alerts signal the nurse when the software detects a wrong patient, 
wrong time, wrong medication, wrong dose, or no active medication 
order. These alerts require the nurse to review and correct the reason 
for the alert before actually administering the drug to the patient. 
Order changes are communicated instantaneously to the nurse 
administering medications eliminating the dependence on verbal or 
handwritten communication of order changes. Time delays are avoided and 
administration accuracy is improved.
    BCMA also provides a system of reports to remind clinical staff 
when medications need to be administered or have been overlooked, or 
when the effectiveness of administered doses should be assessed. The 
system also alerts staff to potential allergies, adverse reactions, and 
special instructions concerning a medication order, and order changes 
that require action.
The Importance of Standards
    The use of electronic health records and other information 
technology tools in a single medical office can improve health care 
quality, reduce medical errors, improve efficiency, and reduce costs 
for the patients treated there. However, as the President noted, the 
full benefits of IT will be realized when we have a coordinated 
approach to accelerate the broader adoption of health information 
technology.
    The National Health Information Infrastructure (NHII) initiative 
recognizes the importance of data and communications standards in 
developing a comprehensive network of interoperable health information 
systems across the public and private sectors. Interoperability is 
dependent, in large part, upon the adoption of common standards. With 
data standards, health information exchange will allow for more cross 
comparability and speed retrieval of ``like'' clinical information to 
deliver safer, higher quality care using clinical alerts and reminders.
    VA was instrumental in the formation of the interagency 
Consolidated Health Informatics (CHI) initiative, and works closely 
with the Department of Defense (DoD) and the Department of Health and 
Human Services (DHHS) on CHI and related projects. CHI, which is part 
of the President's eGov initiative, was established to foster the 
adoption of federal interoperability standards related to health care 
as part of a joint strategy for developing an electronic health record. 
To date, CHI has endorsed 20 communications and data standards, in 
areas such as laboratory, radiology, pharmacy, encounters, diagnoses, 
and nursing information.
    We have seen the value of data and communications standards within 
VHA. Like other EHRs, CPRS allows users to search for specific medical 
terms, dates of care, diagnoses, and other information quickly, without 
having to review multiple documents. Although this search feature is a 
handy tool, information retrieval can be hampered by a lack of standard 
naming conventions. Virtually all clinical documents throughout VHA are 
stored in CPRS; as a result, patient records containing hundreds, or 
even thousands, of notes are becoming common. As the volume of online 
information increases, the task of finding a specific note or report 
among them can be difficult, particularly when different clinicians and 
sites assign different names to similar documents.
    The ability to aggregate and compare information from multiple care 
sites has reinforced the importance of standardization for computable 
data as well. VHA is developing a Health Data Repository to store 
clinical information transmitted from VHA sites across the country. The 
repository will provide a central source of data for analysis, 
management reporting, performance monitoring, and research. Yet, the 
ability to aggregate these data from different sites will depend on the 
degree to which data fields are standardized.
Data Standards and Interoperability
    Our data standardization efforts have also improved our ability to 
share information with other agencies. In accordance with the various 
confidentiality statutes and regulations governing these records, 
safeguards have been implemented to ensure that the privacy of 
individuals is protected throughout these collaborative projects. These 
confidentiality statutes and regulations include the Privacy Act, the 
HIPAA Privacy Rule (which are uniform federal privacy standards 
protecting individuals' protected health information in the possession 
of covered health care providers and entities), and several agency-
specific authorities.
    I'd like to highlight our work with the Department of Defense. To 
support the transition of individuals from active-duty to veteran 
status, the optimal use of health resources through sharing agreements, 
and VA-DoD collaborations on deployment health issues and health 
conditions, we need to exchange clinically relevant health data between 
the departments--and we need to exchange it electronically.
    To this end, VA and DoD have developed a joint strategy to ensure 
the development of an interoperable electronic health record by 2005. 
The approach is described in the Joint VA/DoD Electronic Health Records 
(EHR) Plan--HealthePeople (Federal) strategy and includes three 
components: 1) joint adoption of health information standards, 2) 
collaborative software application development/acquisition, and 3) 
development of interoperable data repositories. The EHR Plan provides 
for the exchange of health data by the departments and for the 
development of a health information infrastructure and architecture 
supported by common data, communications, security, and software 
standards and high-performance health information systems.
    In May 2004, GAO reviewed the Plan and recommended that VA and DoD 
document a comprehensive joint project management plan and project 
management structure. In response to GAO recommendations, VA and DoD 
clarified the existing project management structure that provides 
executive oversight by the chief information officers of the Military 
Health System and the Veterans Health Administration. This project-
management structure ensures day-to-day joint accountability and 
decision-making authority. Additional oversight comes through the VA/
DoD Health Executive Council, co-chaired by the Assistant Secretary of 
Defense for Health Affairs and VA's Under Secretary for Health. The two 
Departments are finalizing an updated joint project management plan.
    The EHR Plan will guide VA and DoD in the joint development of 
interoperable electronic health records to enable access to health 
information by authorized users throughout DoD and VA. This will be 
achieved through the transparent interaction of health systems or 
applications between DoD and VA. Providers of care in both departments 
will be able to access relevant medical information to aid them in 
patient care for shared patients.
    In support of the President's Management Agenda, the President's 
Task Force (PTF) to Improve Health Care Delivery For Our Nation's 
Veterans provided recommendations for the departments' goals to provide 
a seamless transition from military to veteran status, including inter-
operable, bi-directional, and standards-based health records. Primary 
governance of these joint efforts is the responsibility of the 
Congressionally-mandated VA/DoD Health Executive Council (HEC) and 
Joint Executive Council (JEC).
    The first phase of the plan, the Federal Health Information 
Exchange (FHIE), was deployed July 2002. FHIE provides historical data 
on separated and retired military personnel and beneficiaries from 
DoD's Composite Health Care System (CHCS) to the FHIE framework; the 
information is then accessible in VA through CPRS. Currently, there are 
over two million unique DoD electronic records available for retrieval 
from the FHIE repository, and the volume of information available 
through FHIE continues to grow as individuals are discharged to veteran 
status.
    The next phase of the EHR Plan is the joint development and 
acquisition of interoperable data repositories by the departments. The 
departments have formed an active working integrated project team to 
implement the exchange of clinical data between the VA Health Data 
Repository (HDR) and the DoD Clinical Data Repository (CDR). By linking 
these two systems, the departments will achieve interoperability of 
health information between DoD's CHCS II and VA's HealtheVet-VistA. 
Using clinical decision support applications, providers in both 
departments will be able to access and use relevant health information 
to aid them in making medication decisions for their patients, 
regardless of whether that information resides in VA's or DoD's 
information systems.
    Other examples of VA-DoD work include the DoD/VA Interagency 
Virtual Private Network (VPN), which allows for the secure exchange of 
clinical data between the two departments, and the Laboratory Data 
Sharing and Interoperability Project (LDSI), which allows DoD to act as 
a reference lab for chemistry tests performed for the VA. VA orders are 
entered electronically in CPRS and are transferred to CHCS via a secure 
VPN connection; results are returned electronically to VA. Turnaround 
times are much quicker and patient safety is enhanced because manual 
entry of the results into CPRS is eliminated. The LDSI application is 
currently uni-directional and is being enhanced to support the bi-
directional exchange of orders and results between VA and DoD, so that 
each agency can serve as a reference lab for the other.
    Another collaborative project is the DoD/VA Consolidated Mail-out 
Pharmacy (CMOP) Interface. In this project, military beneficiaries 
treated at Naval Base Coronado, Naval Air Station, San Diego, 
California, and Kirtland Air Force Base, Albuquerque, New Mexico, can 
choose to have their outpatient prescriptions filled by the CMOP at 
Fort Leavenworth, Kansas, and mailed to them rather than having to wait 
and pick up prescriptions at the pharmacies in the military treatment 
facility. The VA fills an average of 8,000 orders and 10,000 
prescriptions per week for the two military treatment facilities.
    VA and DoD will be better positioned to evaluate health problems 
among service members after they leave military service, veterans, and 
shared beneficiary patients; to address short- and long-term post-
deployment health questions; and to document any changes in health 
status that may be relevant for determining disability.
VistA-Office EHR
    As a physician, I have seen first-hand the benefits of electronic 
health records in VHA: immediate access to information, elimination of 
duplicate orders, increased patient safety, improved information-
sharing, more advanced tracking and reporting tools, and reduced costs. 
CPRS has been enhanced and refined continuously since its initial 
implementation, and has been recognized by IOM and in the mainstream 
press as one of the most sophisticated EHR systems in the world. 
Although VistA and CPRS were developed specifically to support the VA 
model of care, they were designed with flexibility and adaptability in 
mind. As VA has shifted its focus from inpatient, institutional care to 
an ambulatory, primary care model in recent years, we have updated and 
enhanced our information systems to support different care settings, 
adding new ``smart'' software features, incorporating new technologies, 
and developing better methods of coordinating data from multiple sites. 
In fact, an early version of VA's EHR was altered for use in both DoD 
and Indian Health Service. By the mid 1990's the three largest federal 
systems providing direct health care were using derivatives of VA's 
EHR, although only VA was using the current and more robust version 
including CPRS.
    VistA and CPRS are in the public domain. They have been adopted for 
use in the District of Columbia's Department of Health, American Samoa, 
and several state health departments and state veterans homes. A number 
of countries, including Germany, Finland, Great Britain, Mexico, and 
Ireland, have either implemented VistA or expressed an interest in 
acquiring the technology.
    VHA is now working with the Centers for Medicare and Medicaid 
Services (CMS) to make the benefits of electronic health records 
available to other providers. VA and CMS are collaborating on the 
development of a ``VistA-Office EHR'' version of VA's VistA system. 
VistA-Office EHR will be designed specifically for use in clinics and 
physician offices. In developing VistA-Office EHR, VHA and CMS hope to 
stimulate the broader adoption and effective use of electronic health 
records by making a robust, flexible EHR product available in the 
public domain.
    VistA-Office EHR will be based on VistA, but will be streamlined 
and enhanced to make it appropriate and affordable for use outside VA. 
For example, patient registration features of VistA will be modified to 
reflect the requirements of smaller medical practices. Specialty 
components, such as OB/GYN and Pediatrics, will be enhanced. The VistA 
operating environment will be streamlined so that installation and 
maintenance are simplified. VistA-Office EHR can be adopted directly by 
physician offices, used by vendors who provide administrative support 
services to physician offices, or used by commercial software 
developers to make competitively priced products with similar 
functionality. Private developers, physician organizations, and health 
care purchasers have been made aware of the VistA-Office EHR project 
and the response has been favorable.
    The VistA-Office EHR project is co-managed by CMS and VHA, and is 
coordinated with other federal agencies, including the Indian Health 
Service, Health Resources and Services Administration, the Centers for 
Disease Control (CDC), and the Food and Drug Administration (FDA). The 
project is funded by CMS. The first version of the VistA-Office EHR 
system is expected to be available in November. Subsequent releases 
will reflect changes and improvements made to the core VistA system and 
will be developed in conjunction with participating agencies.
    Many providers and communities are eager to use EHR technology, but 
don't know where to start. For providers who have not used an EHR 
before, it is difficult to determine which capabilities are needed in a 
particular setting. To assist health organizations in the comparison 
and selection of EHRs, Health Level Seven (HL7 '), an 
international standards development organization, has established an 
industry-wide initiative to define a set of standard functions for 
electronic health records, and to recommend the high-level, care-
related functions appropriate for different care settings. VHA worked 
with HHS to commission the development of the standard, and a VHA nurse 
informaticist co-chairs the HL7 ' EHR Technical Committee, 
which manages this initiative.
    The HL7 ' EHR standard is intended to set the benchmark 
for electronic health records, through broad public- and private-sector 
participation and consensus on required EHR functionality. This 
approach promotes a common industry EHR focus, but allows sufficient 
latitude for commercial product differentiation, fostering competition 
and innovation among developers of EHR systems. The HL7 ' 
EHR model will enable HHS and others to qualify EHR systems in terms of 
completeness and readiness for adoption.
EHR Availability to Rural and Medically Underserved Communities
    By Executive Order, the President directed that the Secretaries of 
the Departments of Veterans Affairs (VA) and Defense (DoD) develop a 
joint approach to work with the private sector to make their health 
information systems available as an affordable option for providers in 
rural and medically underserved communities. This approach provides 
coordinated VA/DoD recommendations that focus on the capture of 
lessons-learned, technology and knowledge transfers from data exchange 
initiatives, the adoption of common standards and terminologies, and 
the development of telehealth technologies.
    In cooperation with HHS, and as also mandated by the President's 
Executive Order, VA contributed to the development of a national 
Strategic Plan that will address a coordinated strategy to improve the 
delivery of health care by evaluating and recommending technologies 
that are available across the federal government. VA is providing input 
on collaborative approaches, public and private, being taken to 
transform clinical practice and health care delivery using the EHR. 
Emphasis for collaboration has focused on these areas:
Knowledge Transfer of Information
    VA already has realized the target benefits of adopting EHRs and is 
ready to share our experience to expand the use of the EHR, and related 
information technologies, to the larger health community. Much of VA's 
VistA system was developed by VA government resources and therefore, 
the software exists in the public domain. Through on-going and active 
collaborations with a number of government and private-sector 
resources, VA encourages the proliferation of public domain 
technologies based on VistA code. This approach reduces expensive 
development costs associated with software and human capital 
requirements, and makes proven EHR technology an affordable and direct-
transfer option to rural and medically underserved communities.
Adoption of Common Standards and Terminologies
    VA and DoD have achieved the common adoption of an initial set of 
standards through the Consolidated Health Informatics (CHI) initiative. 
In partnership with HHS, VA and DoD are lead partners in the CHI 
project, one of the 24 eGov initiatives supporting the President's 
Management Agenda. The goal of the CHI initiative is to establish 
federal health information interoperability standards as the basis for 
electronic health data transfer in federal health activities and 
projects.
TeleHealth Technologies Used for Long Distance Consultations
    Telehealth makes up a significant component in how VA intends to 
fulfill its mission to care for veteran patients. Telehealth involves 
the provision of health care services when patient and provider are 
separated in time and/or place, and take place using electronic media. 
Telemedicine is included within the broader rubric of telehealth. 
Within VA, telehealth transactions most often involve care between all 
professional groups and patients, not just physicians. The expansion of 
telehealth is an important part of the mission of VA, and directly 
supports coordinated delivery of care.
    The computerized medical record is a critical component to VA's 
strategy for the expansion of telehealth. For example, using 
videoconferencing to connect a patient with a provider situated many 
hundreds of miles away could not take place safely and effectively 
without having the patient's health record, laboratory results and 
clinical images available. VA is working to expand the concept of the 
multi-media record into the home using home-telehealth technologies and 
My HealtheVet. In VA, technology is not the driver; rather, technology 
is supportive of the way in which VA meets the changing nature of the 
health needs of veteran patients.
Personal Health Records and My HealtheVet
    The development of personal health records is another area of focus 
in health information technology. Personal health records are an 
adjunct to the electronic health records used in a clinical setting, 
providing patients a secure means of maintaining copies of their 
medical records and other personal health information they deem 
important. Information in a personal health record is the property of 
the patient; it is the patient who controls what information is stored 
and what information is accessible by others. Personal health records 
enable patients to consolidate information from multiple providers 
without having to track down, compile, and carry around copies of paper 
records. By simplifying the collection and maintenance of health 
information, personal health records encourage patients to become more 
involved in the health care decisions that affect them. VA maintains 
the integrity and security of the systems containing protected health 
information while simplifying the collection and maintenance of health 
information. Systems are fully compliant with both the Privacy Act and 
HIPPA rules.
    Last year, VHA responded to more than 1 million requests from 
veterans for paper copies of their health information. Such requests 
are processed through Release of Information offices at VA Medical 
Centers. As the use of personal computers among veterans has increased, 
so has the interest in electronic access to medical information.
    The VHA My HealtheVet project was conceived as a way to help 
veterans manage their personal health data. My HealtheVet is a secure, 
web-based personal health record system designed to provide veterans 
key parts of their VHA health record and to let them enter, view, and 
update their own health information. Patients who take over-the-counter 
medications or dietary supplements, or who monitor their own blood 
pressure, blood glucose, or weight, for example, can enter this 
information in their personal health records.
    The implications of My HealtheVet are far-reaching. Clinicians will 
be able to communicate and collaborate with veterans much more easily. 
With My HealtheVet, veterans are able to consolidate and monitor their 
own health records and share this information with non-VA clinicians 
and others involved in their care. Patients who take a more active role 
in their health care have been found to have improved clinical outcomes 
and treatment adherence, as well as increased satisfaction with their 
care.
    The first version of the national My HealtheVet, released last 
fall, includes a library of information on medical conditions, 
medications, health news, and preventive health. Veterans will be able 
to use the system to explore health topics, research diseases and 
conditions, learn about veteran-specific conditions, understand 
medication and treatment options, assess and improve their wellness, 
view seasonal health reminders, and more. Subsequent releases will 
provide additional capabilities, enabling veterans to request 
prescription refills on-line, view upcoming appointments, and see co-
payment balances. The My HealtheVet pilot, which includes personal 
health data, has been piloted at 9 VA medical centers for nearly two 
years. Protecting patient health data has been a key focus in 
developing the system. The pilot guarantees that all patient data is 
encrypted for storage, not directly readable, and not identifiable by 
name. A security penetration study conducted by an independent 
contractor was very positive. The system also meets all the 
requirements for security as established by the VA Office of Cyber 
Security.
    In the future, veterans will be able to request and maintain a copy 
of key portions of their health records from VistA and to grant 
authority to view that information to family members, veterans' service 
officers, and VA and non-VA clinicians involved in their care. VA is 
also working with DoD and other partner organizations to develop a 
longitudinal health record that will incorporate information from DoD, 
VA, and private-sector health providers from whom the veteran has 
sought care.
Summary
    In announcing his plan to transform health care through the use of 
information technology, the President noted our country's long and 
distinguished history of innovation--as well as our failure to use 
health information technology consistently as an integral part of 
medical care in America. Health care is often compared unfavorably to 
other professions and industries in its use of information technology. 
Grocery stores, for example, are frequently mentioned as being ``more 
automated'' than hospitals. At first, this seems outrageous, yet it is 
not really surprising--treating patients is far more complex than 
grocery shopping.
    We clearly have a long way to go in optimizing our use of 
information technology in health care; yet, we are not starting from 
scratch. Electronic health records, personal health records, data and 
communication standards, and sophisticated analytical tools--the 
building blocks of a comprehensive, national health information 
infrastructure--have already been implemented in some communities and 
settings and are maturing quickly. Our challenge is to create a 
technology infrastructure that will revolutionize health care without 
interfering with the human interaction between providers and patients 
that is at the core of the art of medicine.
    The President recognized America's health care professionals and 
the skill they have shown in providing high-quality health care despite 
our reliance on an outdated, paper-based system. At VHA, we know that 
the support of clinicians is essential to the successful implementation 
of electronic health records and new IT tools. Clinicians, while often 
the greatest proponents of health information technology, can also be 
the greatest critics. At VHA, physicians, nurses, and other providers 
are actively involved in defining requirements and business rules for 
systems, prioritizing enhancements, and conducting end-user testing. 
This involvement increases user acceptance, minimizes disruption during 
upgrades, and most importantly, enables us to tailor systems to the 
needs of the health care community.
    In VHA, the electronic health record is no longer a novelty--it is 
accepted as a standard tool in the provision of health care. Our focus 
is now moving from technical implementation issues to those involving 
data quality, content, standardization, and greater interaction with 
other providers and systems. As VHA refines and expands its use of 
information technology, we look forward to sharing our systems and 
expertise with our partners throughout the health care community to 
support the President's plan for transforming health care--and the 
health of our veterans.
    Mr. Chairman, this completes my statement. I will now be happy to 
answer any questions that you or other members of the Subcommittee 
might have.

    Mr. Bilirakis. Thank you so very much, Doctor. Fascinating, 
really.
    Dr. Blumenthal, please proceed, sir.

                  STATEMENT OF DAVID BLUMENTHAL

    Mr. Blumenthal. Thank you, Mr. Chairman, for inviting me to 
participate here today. My name is David Blumenthal, and I am a 
professor of Medicine and Health Policy at Harvard Medical 
School, also a practicing primary care physician. And just for 
the record, I would love to have that medical record, that 
electronic technology to work with. I do work with an 
electronic health record, but it doesn't have nearly the power 
that the VA system does.
    It is difficult, I think, for experts in this field to make 
concrete the power of this set of technologies, and I think two 
analogies may be useful, although they are not perfect, in 
trying to think about the importance of health IT. And the 
first is a really powerful intervention that we know by the 
name antibiotics, and the second is our Nation's transportation 
system. I think that health IT has every bit as much capacity 
to improve the health of our population, perhaps more, than 
antibiotics do, and in fact health IT would enable us to use 
antibiotics more effectively by making sure that we use them 
when they were appropriate, use them in the right does, use 
them at the right time.
    If we had antibiotics sitting around on the shelves unused 
and waiting to be used, the protests from the American public 
would shake the roofs of this great body and every legislature 
around the country, yet that is exactly the situation in which 
we find ourselves.
    The other point I wanted to make is about the 
transportation system. Our means of transportation are largely 
privately owned, and people decide what kind of transportation 
they want to take. The cars that they use and the buses are 
privately owned, the airplanes are privately owned. But they 
wouldn't be very useful if we didn't have superhighways to let 
them travel from State to State, and they wouldn't be very 
useful if we didn't have air traffic controllers to keep them 
moving in an orderly way and in a safe way. And to some degree, 
the lack of a transportation system, lack of information 
superstructure is what makes us--one of the things that 
prevents health IT from being used as efficiently as it could 
be.
    There is enormous bipartisan support obviously for health 
IT. I think the difficulty will come when we get to talking 
about precisely what to do. I think we need to do four kinds of 
things, all of which were discussed to some degree this 
afternoon already. The first is that the Federal Government 
needs to lead in the development of standards for 
communication, that information highway that I mentioned. I 
think that is what interoperability through uniform standards 
really comes down to. The second is that we need financial 
support and incentives to hasten the adoption of health IT and 
especially to hasten it for cash-strapped small providers of 
care and for rural and for providers and hospitals that serve 
indigent and rural populations.
    We need a lot of research and development to continue the 
progress that we have seen in the development of health IT, and 
we shouldn't forget that we have a lot to learn still to 
improve how it is used and to improve the products that are out 
there and understand its positive and its negative effects. And 
then I think we need the relaxation of certain fraud and abuse 
statutes that inhibit the development of health IT.
    Let me just say a little bit more about a couple of these 
points. First, the provision of financial support or 
incentives. The Secretary referred, I think, to the use of 
Medicare as a lever or Medicare payment, and I think that it is 
not unreasonable to think in the future, not right away, but in 
the future of requiring as a condition of participation in 
Medicare that hospitals and doctors have access to and use 
electronic health records. That is not something you would want 
to do tomorrow, but with due warning I think it is possible.
    The second point I would like to make is that there are in 
fact very important financial disincentives to adopt health 
information technology, especially for individual physicians 
and small groups. There is good evidence that the process of 
adoption reduces productivity for physicians by 10 to 20 
percent, which means that they get a 10 to 20 percent loss of 
income in the short term associated with the--and that is on 
top of the cost of purchasing the equipment. And that is a lot 
to take in a time of constrained incomes, and we need to find 
some way to get them over that hump. And 60 percent of American 
physicians still practice in groups of less than 5.
    The other point I would like to make is that institutions 
in poor and rural areas have trouble accumulating capital to 
expend the kind of money that we have been talking about, and 
they will need help to get access to that capital.
    The options for providing this kind of--in addition to 
conditions of Medicare payment, you have heard discussed some 
of the options for providing the support. It could include 
loans or grants or increased payments through reimbursement 
mechanisms under Medicare or Medicaid. All I think should be on 
the table and looked at closely.
    We clearly need a multifaceted, comprehensive approach with 
multiple points of attack in order to get this antibiotic 
equivalent out to the American people at this point, and I am 
sure that all of us here today look forward to working with you 
on that project. And I want to thank you again for giving me 
the opportunity to appear before you today.
    [The prepared statement of David Blumenthal follows:]
Prepared Statement of David Blumenthal, Director, Institute for Health 
 Policy, Massachusetts General Hospital and Partners HealthCare System
    Mr. Chairman, members of the Committee, thank you for the 
opportunity to appear before you today to discuss our nation's approach 
to realizing the benefits of health care information systems. My name 
is David Blumenthal. I am a primary care physician practicing medicine 
in Boston, Massachusetts. I am also Director of the Institute for 
Health Policy at Massachusetts General Hospital and Partners HealthCare 
System in Boston, and Samuel O. Thier Professor of Medicine and 
Professor of Health Care Policy at Harvard Medical. My responsibilities 
further include directing the Harvard Program on Health Systems 
Improvement, which is a university-wide program designed to develop and 
encourage innovative approaches to delivering health care to the 
American people.
    Though I am not personally as expert on clinical information 
systems as the other distinguished members of this panel, it is 
impossible for anyone who studies our health care system today to avoid 
the issue of health information technology or HIT as it is commonly 
known. The reason is that the set of technologies and capabilities 
embodied in HIT is so powerful and so important that they must be 
factored into any decisions facing public officials and private 
managers who desire to improve the health of the American people or to 
improve the quality and efficiency of health service delivery.
    It is difficult sometimes, even for experts, to make concrete the 
potential value of IT systems in health care, so let me use two 
analogies--admittedly imperfect--to try to capture the importance of 
health IT. The first is to antibiotics. The second to our nation-wide 
transportation system.
    If a discovery with the life-saving potential of antibiotics were 
sitting unused on warehouse shelves around America, while thousands 
upon thousands of Americans were suffering and dying untreated, there 
would be an outcry that would shake the roof of this great legislative 
body, and every other legislature throughout the U.S. I believe that 
clinical IT has the power to save as many or more lives than 
antibiotics--indeed, clinical IT has the power to make sure that 
antibiotics themselves are used more effectively, to save more lives 
and prevent more suffering. But clinical IT systems are sitting unused, 
and will not be employed to their full potential unless we act 
collectively to assure this will happen.
    The analogy to the nation's transportation system speaks to a 
slightly different issue: the importance of coordinated public and 
private action to unleash the power of clinical IT. The means of 
transportation in our country are, for the most part, privately owned 
and operated. Airlines, trucks, most railroads, and millions upon 
millions of automobiles are owned and operated by private companies and 
individuals who decide what equipment to use, where to go and when, the 
color of the seats and whether they should be leather or vinyl. That is 
clearly the way the American people want it.
    But how useful would our private means of transportation be if we 
didn't have highways to travel on, or air traffic controllers to assure 
that airplanes can move safely and securely from one city to another 
and land in an orderly (if not always timely) manner? Even if every 
doctor, hospital and nursing home in the country had the best available 
computers and software to manage clinical information, it would still 
be essential to have a means of moving that information from one place 
to another in a reliable, secure fashion, so that patients and their 
doctors could take advantage of it wherever they go. In other words, we 
need a secure, modern national information superhighway that criss-
crosses our country, just as we have a national transportation 
infrastructure. To get that information highway will require public-
private partnerships in which government plays a leadership role.
    In recent months, a remarkable consensus, bridging partisan, 
ideological and professional divides, has emerged in support of the 
propagation of health information technology in the U.S. The question 
is what precisely government should do and over what time frame. I 
think a consensus is emerging in this regard as well, though I suspect 
much hard work remains to reach agreement on the specifics. The core 
required elements are captured in the excellent document released today 
by Secretary Thompson, but their details need to be rapidly defined and 
put into policy. I would personally emphasize the following particular 
actions as critical:

1. Federal leadership in the development of standards for communication 
        between IT systems that will enable interoperability.
2. The provision of some financial support and/or incentives to hasten 
        the adoption of IT and its life-saving potential, especially 
        for small, cash strapped providers of care, like small 
        physician groups, and for hospitals that serve indigent and 
        rural populations.
3. Continued research and development to refine the uses of IT, and 
        especially, to demonstrate and disseminate approaches to 
        creating seamless community wide information networks.
4. Relaxation of certain fraud and abuse restrictions that inhibit 
        collaboration between doctors and hospitals in the development 
        of IT systems.
    The first, third and fourth of these proposals are critical to 
creating the information superhighway of which I spoke earlier. They 
are equivalent to designing the interstates and the air traffic grid, 
demonstrating how they work, and clearing away critical obstacles.
    The second policy direction, the provision of financial support, is 
likely to be particularly difficult to agree upon during a time when 
federal deficits are skyrocketing and health care spending is also 
about to balloon as the new Medicare prescription drug benefit comes on 
line. It is also clear that there are many health care providers in 
this country, including large integrated health care systems and 
powerful, prestigious hospitals, that do not need any external 
financial support to plug into the modern world of health IT. 
Nevertheless, help is needed for the following specific groups:

1. Physicians in solo practice and small groups who still constitute 60 
        percent of practicing physicians in the U.S. These doctors 
        often do not have the expertise or the money to purchase, 
        learn, maintain and trouble-shoot new health IT systems. 
        Furthermore, even in organized health systems such as HMOs, the 
        adoption of IT systems reduces productivity in the short term 
        by 10 to 20 percent or more. For physicians in fee-for-service 
        practice, a 10 percent reduction in revenue is a high price to 
        pay for health IT at a time when their incomes are often 
        falling.
2. Many health care institutions serving disproportionate numbers of 
        indigent patients lack the capital to maintain their physical 
        plants, much less spend tens of millions of dollars to put in 
        place new IT systems. If we are not careful, populations served 
        by these institutions will fall further behind mainstream 
        America in the care that is available to them. Not only that, 
        but these institutions will fail to realize the efficiencies 
        that IT can bring in the long term.
    The options for providing financial assistance to providers who 
need it are several. They include revolving loans, grants, and 
increased payments to providers who adopt IT systems with basic 
capabilities. Whatever particular approach we take, we should be 
prepared to invest significant resources over a long period of time. 
The cost of implementing a 21st century health IT system in the U.S. 
will be measured in billions of dollars, not millions. But I, for one, 
believe it will pay off handsomely for patients, doctors, employers, 
insurers and all the other key stakeholders in the American health care 
system.
    Mr. Chairman, thank you again for the opportunity to appear before 
you today. I am happy to answer any questions you may have.

    Mr. Bilirakis. Thank you so very much, Dr. Blumenthal.
    Dr. Diamond?

                   STATEMENT OF CAROL DIAMOND

    Ms. Diamond. Thank you, Mr. Chairman and other 
distinguished--well, there are no other distinguished members 
here. Thank you for having me here today. For the last few 
years, I have had the privilege of Chairing the committee, the 
Connecting for Health initiative, which is an initiative of the 
Markle Foundation. We operate and fund Connecting for Health 
and receive additional support from the Robert Wood Johnson 
Foundation. Connecting for Health is really a truly unique 
public-private collaborative. It involves over 100 leaders from 
health care. They are broad-based and multi-stakeholder-based. 
They include physicians, consumer organizations, privacy 
advocates, the vendors of systems, hospital representatives, 
employers, payers, accreditors and government agencies.
    For the last few years, we have rallied around tackling 
some of the barriers that stand in the way of information 
technology being more widely adopted, and as we have heard many 
times today, this is a vital agenda to improve health care 
quality, reduce medical error and lower the costs, as well as 
empower patients.
    I am delighted to inform you on some of the progress that 
we have made most recently. As you heard, momentum is growing, 
and much good work is underway, but while progress has been 
made, we have a lot to still accomplish. It is important to 
keep in mind that the real difficulties that patients face 
every day in an uncoordinated paper-based system are very 
significant.
    As our report describes, there is no more compelling 
description of the gaps in information than the stories as 
described by the patients themselves and their families who use 
the health care system. Patients and families who know how 
important their medical information is to receiving the best 
possible care often feel like human medical records, carrying 
around records for their children each time information for 
life-changing decisions are made and each time treatment 
decisions are being decided upon. They, of course, cannot be 
expected to carry around their medical records, and we must do 
better.
    As I am sure the committee knows, modernizing the health 
care system is fraught with challenges. They are technical, 
financial and policy related. Many of these challenges do not 
have easy answers, and the industry has grappled with many of 
them for more than a decade. And I want to emphasize that 
grappling with some of the challenges in IT is really the 
reason, I think we heard multiple times today, that this has 
been a very slow agenda. The call to action and the call for 
the adoption of IT is at least a decade old, maybe more, and 
yet it hasn't happened, and I think it has forced us to look 
very carefully at what the barriers are.
    Last week, we released a report, which we submitted here 
too, called, ``A preliminary Road Map for Achieving Electronic 
Connectivity.'' And the report grew from the impatience and the 
desire of some of the Nation's most foremost health care 
leaders to chart a path forward. Our report offers clarity 
about how to efficiently create a decentralized standards-based 
network that is effective for health care and effective for 
patients. I want to emphasize that the path forward did not 
start with agreement. We worked hard in the process to come out 
with a series of recommendations and next steps that are near 
term and specific.
    The key recommendations represent agreement by our group as 
well as the input of some of the best minds in the country on 
health care and information technology. And they fall into 
three categories. The first is creating a technical framework 
for connectivity. We do not want silo'd information systems. In 
order to provide a majority of their benefits, electronic 
records must connect with other clinical systems--pharmacies, 
laboratories, hospitals and other doctors. The potential to 
avoid medical errors and drug interactions and to deliver real-
time prompts and reminders, both to patients and physicians, 
depends on having a highly connected network that exchanges 
data between clinical systems, such as personal health records. 
Unless we pay attention to the requirements at the local, 
regional and national level, it is unlikely that piecemeal 
technology adoption will result in the connected network 
necessary to realize the quality gains in health care, and it 
has not to date.
    This network requires connectivity that will arise from 
trust, safeguards for privacy and security, a strategy that 
minimizes risks of patient data misuse. We believe the approach 
has to be built on the premise of patient control and 
authorization. It must conform to a common set of open 
standards for information flow and consist of a decentralized 
network of networks that is built on the Internet. And we also 
believe it can and should be done without a national health ID.
    Second, we have some recommendations in the area of 
financial barriers. As has just been stated, the current system 
does not provide incentives for the investment in high-quality 
health care that would be achieved through interoperable 
information systems, and therefore incentives need to be 
realigned. We think that the realignment of these incentives to 
promote health care quality can only be achieved through the 
adoption of applications that are capable of exchanging 
information based on standards. Incentives should include IT 
adoption with supportive interoperability among data sources 
outside of the physician's office and with an emphasis on 
interoperability. We think without this we will not achieve the 
quality gains in health care.
    I do want to emphasize that in the earlier discussion the 
comment was made that IT can produce a better product, yet the 
system we have is piecemeal and volume-based in its incentive 
model, and therefore investing in systems that allow us to 
reduce unnecessary doctor visits or that require us to spend a 
lot of time looking for medical records are not in the interest 
of the way the current incentive model works, and I think that 
they do go unattended.
    Finally, our recommendations are in the area of engaging 
the American public. Our own research has found that members of 
the public do not fully understand this problem that we are 
trying to solve. While they understand the inefficiencies in 
the system, they are not aware that information technology can 
help to solve it. However, they are very interested in having 
access to their medical record and being able to email their 
physicians and being able to see their own medical records and 
their laboratory tests online, from home. So we encourage the 
path forward to include a set of strategies that engages the 
public in this agenda. The electronic personal health record is 
an essential tool for integrating the delivery of care and 
putting each patient at the center of this model.
    So while we do not offer a prescription for which 
innovations will be most effective, we do know that most of 
them cannot be realized without the rapid, accurate and secure 
exchange of personal health information among authorized users. 
And we believe that the greatest improvements in health care 
leading to the most profound opportunities will occur when 
Americans can access and control and see their medical records 
in partnership with their care team. Thank you.
    [The prepared statement of Carol Diamond follows:]
    Prepared Statement of Carold Diamond, Managing Director, Markle 
                Foundation; Chair, Connecting for Health
    Chairman Bilirakis, Congressman Brown and distinguished members of 
the Subcommittee on Health, thank you for inviting me to meet with you 
today.
    For the last two years, I have had the privilege of chairing 
Connecting for Health (see www.connectingforhealth.org), an initiative 
established and operated by the Markle Foundation, with additional 
funding and support from the Robert Wood Johnson Foundation. Connecting 
for Health is committed to accelerating actions on a national basis to 
tackle the barriers that prevent us from bringing healthcare into the 
information age to improve the quality of healthcare, reduce medical 
errors, lower costs and empower patients.
    Connecting for Health is based on the belief that the development 
of an interconnected health information infrastructure will depend upon 
close cooperation between the public and private sectors in a way that 
maximizes the benefits of their complementary expertise and experience. 
Today, Connecting for Health is a truly unique public-private sector 
initiative, consisting of over 100 broad-based stakeholders 
representing providers, patients, payers, accreditors, government 
agencies, researchers and healthcare information systems manufacturers 
and vendors (see the appendix for the list of current Steering and 
Working Group members). I am delighted to have this opportunity to 
inform this Committee on progress made within the context of Connecting 
for Health and on what we believe the conditions to be to accelerate 
the adoption and use of Information Technology to improve the quality 
of health care in the United States.
Momentum is growing . . .
    Last year, this Committee showed true leadership by introducing 
groundbreaking and innovative Health Information Technology initiatives 
in the Medicare Modernization Act including a process to create 
standards for electronic prescribing that physicians and pharmacists 
can use; the development of a safe harbor in the Stark and Anti-
Kickback Acts that would allow hospitals to disseminate technology to 
physicians; the authorization of various grants to accelerate e-
prescribing; the development of a chronic care improvement program that 
will test disease management strategies and the call for the use of 
monitoring technologies to exchange clinical information (among other 
things).
    In addition to the work in this Committee, other notable recent 
developments include: the President's call for the creation of 
electronic health records for all Americans in ten years; the 
establishment by the Department of Health and Human Services of the 
National Health Information Technology Coordinator and the appointment 
of Dr. David Brailer to the position; the release announced by Dr. 
Brailer of the report on the nation's first strategic framework to 
develop electronic health records; the various legislative bills 
proposed and introduced by Senator Ted Kennedy, Senator Hilary Rodham 
Clinton and Representative Nancy Johnson, Senator Judd Gregg, among 
others; and the creation of a ``21st Century Healthcare Caucus'' within 
the House of Representatives focused on IT and Healthcare (of which 
some members of this Committee are part of), all showing a bipartisan 
recognition of the importance of addressing these issues promptly. 
Furthermore, the Defense Department and the Veterans Administration 
have been building and implementing very sophisticated health IT 
systems. HHS agencies, including the CDC, CMS, AHRQ, the Health 
Resources and Services Administration and others are conducting 
demonstration projects, grant programs and other developmental 
activities.
    This momentum is a result of the growing understanding and 
evidence, produced by various studies, groups and pilot projects, that 
smart investments in health care information technology can rein in 
costs, eliminate waste and improve patient safety and health care 
quality
    However, while progress has been made, we have not yet accomplished 
all that we need to. It is important to keep in mind the real and 
constant difficulties patients face in today's uncoordinated, paper-
based system. Every one of us is touched by the U.S. health system--
from before birth until death. During our lives, we experience both 
predictable and unpredictable needs for health care assistance. Every 
time we encounter the healthcare system, information about our 
background, medical history, health status, and insurance are 
immediately required. And every medical encounter produces its own 
trail of documentation.
The stakes are high . . .
    There are hundreds of millions of doctor office visits alone every 
year in the United States. A complex patchwork of healthcare 
practitioners and payers process information for each one of those 
visits. The records are either on paper or in separate computer systems 
that typically have limited, if any, ability to exchange data 
electronically (except for purposes of reimbursement). In all those 
files of paper and streams of data, no one has a bigger stake in the 
information from a particular clinical encounter than the patient who 
needed it. And, in nearly all circumstances, no one in the system can 
know more about the patient's life than that patient. Health 
professionals have no way of accessing all of the important information 
about our health, and we have no way of compiling and managing the 
information about ourselves.
    In our fragmented and pluralistic delivery system, the electronic 
personal health record is an essential tool for integrating the 
delivery of health care and putting each patient at the center of their 
care. It can support the shift from episodic and acute care toward 
continuous healing relationships with physicians and healthcare 
professionals. It represents a transition from a patient record that is 
physician-centered, retrospective and incomplete to one that is 
patient-centered, prospective, interactive and complete.
    Throughout the course of our work a number of individuals have 
agreed to share their stories with us, and in our attempt to bring the 
private and public sectors together we have explored the deficiencies 
of our paper-based healthcare system through these real-life stories (a 
selection of testimonies is available at our website, 
www.connectingforhealth.org). For instance, a Michigan father and his 
young daughter, who has a rare and complicated leukemia, told us about 
the pile of files he has to carry every time he joins his daughter to 
see a specialist, fearing that she would not get the best care without 
every clinician understanding the complexities of her disease or 
knowing what worked best for her in the past. His story is supplemented 
by the stories of other patients who went out of their way to have 
access to their medical information, and use it to receive the best 
possible care for themselves and their families. These stories remind 
us how patients and their families struggle to overcome preventable 
information gaps in healthcare each and every day. They have made us 
even more determined to break open the logjam blocking the flow of 
vital healthcare information, which is required to improve healthcare 
quality, safety, and efficiency.
Connecting for Health's Preliminary Roadmap
    Since its creation, Connecting for Health has demonstrated that 
blending together the knowledge and experience of the public and 
private sectors can provide a highly effective formula for progress. 
Early in its inception, Connecting for Health led the national debate 
on electronic clinical data standards. The group drove consensus on the 
adoption of an initial set of standards, developed case studies on 
privacy and security, and helped define the electronic personal health 
record.
    While we do not offer a prescription for which innovations in care 
will be most effective in improving healthcare quality or reducing 
medical error, we do know that most of them cannot be realized without 
the rapid, accurate, and secure exchange of personal health information 
among authorized users. And we believe that the greatest improvements 
in healthcare--leading to the most profound opportunities for better 
health--will occur when each American can access, control, and make use 
of their own health information in partnership with their care team.
    Just last week, Connecting for Health released its second report: a 
Preliminary Roadmap for Achieving Electronic Connectivity in Healthcare 
(available at http://www.connectingforhealth.org/resources/
cfh_roadmap_final_0714.pdf). The report aims to facilitate broad 
agreement on a set of immediate actions that can be taken by all 
healthcare stakeholders over the next several years in order to 
efficiently create a decentralized and standards-based network that is 
effective for healthcare and patients.
    Our report is meant to build a realistic path forward and we do not 
call for whole-scale revision to the current system. Such an approach 
would be dangerously disruptive and prohibitively expensive. Instead we 
have brought a diverse group of stakeholders together to offer an 
incremental path forward that builds on two important concepts.
    First, we accept, with appreciation, the good work already done in 
developing specific electronic health record (EHR) and personal health 
record (PHR) applications. Medication management tools are offered by 
pharmacies and pharmacy benefit managers; chronic disease tools are 
optimized for congestive heart failure or diabetes sufferers; secure e-
mail and results reporting systems are being integrated with both 
hospital and ambulatory EHRs. Connecting for Health does not say that 
one approach is right and another wrong, but that the national 
infrastructure must support and accommodate connectivity among all of 
these--and that they must all conform to a small set of common 
principles, including use of an agreed upon set of standards. This goal 
manifests in our recommendation for creating a technical framework that 
is required to take our fragmented healthcare system and make 
investments that can lead to a more integrated, high quality patient 
care experience.
    Second, the model we envision allows individuals and their 
authorized health professionals to construct the health record 
appropriate to their needs exactly when and how it is needed. The most 
innovative aspect the Preliminary Roadmap is the recommendations on how 
to develop a national health infrastructure through the creation of a 
``network of networks,'' based on open standards, which can be created 
without a central database of health records or a National Health ID--
both long-time barriers that have prevented bringing the benefits of 
information technology to the field of healthcare.
    In order to be accepted by patients and providers, the network must 
safeguard the privacy of health information. Among the important 
implications of our proposed system for a network of networks, is that 
personal health information would continue to reside where it does now, 
primarily with hospitals and healthcare providers. According to the 
patient's preferences, relevant health data could be assembled from 
numerous sources at the point of care, enabling decision making to be 
informed by past treatment successes and failures and medication 
history. Both the patient and the clinician could have direct access to 
this vital information.
    The secure and confidential treatment of patient information is a 
fundamental design criterion of the health information infrastructure 
we endorse. We recommend the inclusion of architectural, technical, and 
policy safeguards within the ``Common Framework,'' to safeguard the 
privacy and security of patient data while at the same time permitting 
the rapid and accurate exchange of information among authorized users. 
Proposed steps for safeguarding privacy and security are embedded in 
the fabric of all of the Preliminary Roadmap recommendation areas.
    Information about an individual's health is usually stored in many 
different places by a variety of healthcare providers. According to the 
system we propose, information would be accessible only to authorized 
users and aggregated at the individual patient level when and where it 
is needed. This would preclude the need to create large central stores 
of information.
    Regardless, a set of standards and secure networks would allow 
information such as lab results, x-rays and medical history as well as 
clinical guidelines, drug labeling and current research findings to 
move where it is needed, immediately and securely. Regardless of where 
a beneficiary is receiving care, health information exchange networks 
would allow for information about medication history and potentially 
serious drug interactions to be available in real-time, along with out 
of pocket costs and therapeutic alternatives, before the physician 
transmits a prescription to a pharmacy.
Key Recommendations
    The key recommendations fall into three broad categories:

 Creating a Technical Framework for Connectivity: A non-proprietary 
        ``network of networks'' built on the Internet is essential to 
        support the rapid acceleration of electronic connectivity that 
        will enable the flow of information to support patient care. 
        Such a network should be based on a ``Common Framework.'' Only 
        by conforming to a ``Common Framework'' can we ensure that data 
        exchange pilots, personal health records, and regional systems 
        will be able to interoperate across and with other regional 
        systems. The network should be decentralized, based on 
        interoperable standards, define standards for secure Internet 
        transport, safeguard patient privacy and be built 
        incrementally, without the use of a unique National Health ID 
        or a centralized database of records.
 Addressing Financial Barriers: The current system does not provide 
        incentives for the investment in high-quality healthcare 
        achieved through interoperable information systems, and 
        therefore incentives need to be redirected. Financial and other 
        incentives and related processes must be designed to promote 
        improvements in healthcare quality through the adoption of 
        clinical applications and information exchange based on 
        standards.
 Engaging the American Public: The public must be informed with a 
        consistent set of messages to be used by government, 
        healthcare, and consumer leaders to promote how patients can 
        improve their own health and healthcare through the benefits of 
        electronic connectivity and to encourage patients and consumers 
        to access their own health information.
1. Creating a Technical Framework for Connectivity
    In order to provide a majority of their benefits, clinical 
applications must interconnect with other clinical systems. The 
potential to avoid medical errors and drug interactions, to deliver 
real-time prompts and reminders at the point of care and directly to 
the patient or caregiver, and to improve the ability to conduct 
clinical research depend on a highly connected network of regional 
healthcare communities that exchange data between effectively used 
clinical systems such as personal health records.
    Unless there is purposeful attention paid to infrastructure 
requirements at the local, regional and national level, it is unlikely 
that piecemeal technology adoption will result in the connected 
infrastructure necessary to realize the quality of care and economic 
efficiency gains promised by IT. The network requires a high degree of 
connectivity that arises from trust, safeguards for privacy and 
security and a strategy that minimizes risks of patient data misuse. 
With that said, the approach must be voluntary and built on the premise 
of patient control and authorization.
    In order to accelerate electronic connectivity, a non-proprietary 
``network of networks'' built on the Internet that is based on 
standards and a decentralized and federated architecture should be 
developed, building upon local and regional networks. In addition, our 
proposed network is designed to be flexible to accommodate the various 
electronic health record (EHR) and personal health record (PHR) models 
that are already being developed. And in order to support the creation 
of the network where national standards are implemented locally and 
regionally, we have determined that a ``Common Framework'' is needed.
    This ``Common Framework'' is comprised of standards, policies and 
methodologies that can be replicated quickly to ensure connectivity, 
reliable authentication; it would also include a minimum suite of 
standards that work together to support information exchange. We 
recommend that the common framework be tested and evaluated through a 
``reference implementation or pilot project'' within the next 12 
months. Because our incremental approach is designed to leverage 
existing infrastructure, it dictates that secure connectivity be built 
on the Internet and its communication protocols.
2. Addressing Financial Barriers
    Among the most often cited barriers to the adoption of information 
technology in healthcare are misaligned financial incentives. Because 
of the way the payment system is structured, for many providers, 
especially in the small practice primary care setting, the acquisition 
or use of IT results in a net financial loss. Ambulatory care practices 
are on the front line for the treatment of patients in the United 
States today, specifically the chronically ill, yet have the lowest 
adoption rates of healthcare IT. One of the main reasons physicians and 
hospitals are not adopting clinical information technology at a rapid 
rate is due to the poor financial case. Despite these financial 
barriers, however, the promise of EHRs and other clinical information 
technology remain formidable. As several studies have shown, EHRs can 
advance the quality and efficiency of care, resulting in reduced 
medical errors, reduced utilization, and improved ability to manage 
chronic disease, the improved longevity and health status, among other 
potential benefits.
    This gap between the potential of clinical information technology 
and the willingness to adopt these technologies raises the question of 
whether the market appropriately supports technology purchasers in 
society's efforts to realize value.
    We recommend that incentives for IT--including applications, 
electronic connectivity and information exchange--include the 
requirement of use of standards and interoperability, since the 
majority of the benefits of IT accrue only when systems can talk to 
each other. Failure to encourage interoperability could lead to the 
growth of technologically sophisticated islands or silos of 
information, which would decrease the potential value of the investment 
in IT dramatically.
    Our recommendations include the results of our insights regarding 
the level of incentives that would require ``tilt'' or cause 
significant change in the number of small and ambulatory private 
practices that begin to adopt electronic health records as a result.
3. Engaging the American Public
    Our own research found that most members of the public do not fully 
understand the problem we are trying to solve. Many are unaware, except 
for a general perception that costs are high, of the inadequacy of our 
healthcare system, and the high volume of medical errors. In addition, 
the majority of Americans assume that their doctors use information 
technology far more than is actually the case. In fact, according to 
our own survey, more than half believe their own doctors are far more 
``wired'' than is actually the case. Given these gaps in knowledge, it 
is not surprising that most people have not thought about how better 
use of technology within the system might improve healthcare quality.
    Our research further shows that most patients or consumers have not 
fully conceived how they could benefit from their own access to and 
control of personal health information. This is in part because 
patients are in general used to being somewhat peripheral players in 
the traditional pattern of care. Many assume that their care is 
primarily the responsibility of the professionals. However, our 
research indicates that the vast majority of patients, when presented 
with a description of services that would enable them to participate 
more fully and conveniently in self-care, such as the ability to view 
test results or e-mail doctors directly, show a significant level of 
interest. We believe that it is essential to increase public awareness 
of the avoidable problems with healthcare delivery and of the potential 
of technology, and therefore recommend a large public education effort 
towards that end.
    In order to support implementation of its recommendations, 
Connecting for Health will release a final version of the Roadmap and 
detailed reports by individual Working Groups that contributed to it by 
September. The final Roadmap will provide additional detailed 
recommendations for action and commitments from Connecting for Health's 
Steering Group members, and I would be delighted to share these with 
the members of this Committee in due course.
    Finally: Robert Frost famously finished his poem, ``The Road Not 
Taken,'' by writing that he chose the road ``less traveled by,/And that 
has made all the difference.'' We believe that the Connecting for 
Health Collaborative is, in its own way, also on a journey. We invite 
all stakeholders in healthcare to examine the choices presented in this 
Preliminary Roadmap and then join with us, on behalf of those whose 
lives and health are at stake, in finding those paths that will make 
the greatest positive difference.
    The steps forward described in the Connecting for Health 
Preliminary Roadmap will permit such innovations in care and patient 
engagement to occur. We believe that they will allow clinicians, 
entrepreneurs, and families to develop new and better ways to deliver 
services, to monitor health, and to manage care. They will also enhance 
the quality of research and public health. A system that provides an 
abundance of complete, reliable information to the point of care--and 
to the home--can reduce waste, error, and frustration while improving 
diagnostic accuracy, the quality of communications, and even the 
ability of family members to care for each other.
    Thank you. I will be pleased to try to answer any questions members 
may wish to ask.
     Appendix : Connecting for Health, Steering Group Participants
                         steering group leaders
    Carol Diamond, MD, MPH, Managing Director, Health, Markle 
Foundation; Daniel Garrett, Vice President and Managing Director of 
Computer Sciences Corporation's Global Health Solutions Practice; John 
R. Lumpkin, MD, MPH, Senior Vice President, Robert Wood Johnson 
Foundation and Chair, National Committee on Vital and Health 
Statistics; Janet M. Marchibroda, Executive Officer of the eHealth 
Initiative and the Foundation for eHealth Initiative; and Herbert 
Pardes, MD, President and CEO, New York-Presbyterian Hospital
                         steering group members
    James Bradley, Chief Executive Officer, RxHub; Claire Broome, MD, 
Sr. Advisor, Integrated Health Information Systems, Centers for Disease 
Control and Prevention; Gwendolyn A. Brown, Director, Healthcare 
Policy, EDS, Global Government Affairs; Nancy Brown, Senior Vice 
President of Strategic Planning, McKesson Corporation; Garry Carneal, 
President and Chief Executive Officer, URAC; Gary Christopherson, 
Senior Advisor to the Under Secretary, Veterans Health Administration, 
Department of Veterans Affairs; Carolyn Clancy, MD, Director, Agency 
for Healthcare Research and Quality; Nathaniel Clarke, MD, Medical 
Director, American Diabetes Association; Richard A. Correll, President, 
College of Healthcare Information Management Executives; Janet 
Corrigan, PhD, Division Director, Institute of Medicine; Molly J. Coye, 
MD, MPH, Chief Executive Officer and Founder, Health Technology Center; 
Kelly Cronin, Executive Director, Council on the Application of Health 
Information Technology, Department of Health and Human Services; Mike 
Cummins, Chief Information Officer, VHA Inc.; Francois de Brantes, 
Program Leader, Healthcare Initiatives, General Electric Corporation; 
Mary Jo Deering, PhD, Special Expert for Informatics Dissemination and 
Coordination, U. S. Department of Health and Human Services; Carol 
Diamond, MD, MPH, Managing Director, Health, Markle Foundation; Robert 
Dickler, Sr. VP Division of Healthcare Affairs, Association of American 
Medical Colleges; Craig Fuller, Chief Executive Officer, National 
Association Of Chain Drug Stores; Daniel Garrett, Vice President, 
Managing Partner, Global Healthcare Leader, Computer Sciences 
Corporation; Peter Geerlofs, MD, Chief Medical Officer, Allscripts 
Healthcare Solutions; John Glaser, PhD, Vice President and Chief 
Information Officer, Partners Healthcare System, Chair, Working Group 
on Financial, Organizational and Legal Sustainability; Paul Gorup, Vice 
President and Co-Founder, Cerner Corporation; John Halamka, MD, Chief 
Information Officer, CareGroup Healthcare System; Chief Information 
Officer, Harvard Medical School; W. Edward Hammond, PhD, Professor, 
Community and Family Medicine Duke University; Linda Harris, PhD, 
Senior Health Communication Scientist, National Cancer Institute; C. 
Martin Harris, MD, Chief Information Officer, Cleveland Clinic; Douglas 
Henley, MD, Executive Vice President, American Academy of Family 
Physicians; Joseph Heyman, MD, Trustee, American Medical Association, 
American Medical Association; Yin Ho, MD, Director eBusiness, Pfizer, 
Inc; Kevin Hutchinson, Chief Executive Officer, SureScripts; Michael 
Jackman, Chief Technology Officer Health Imaging Group, Eastman Kodak 
Company; William F. Jessee, MD, President and Chief Executive Officer 
Medical Group Management Association; Brian Keaton, MD, FACEP, 
Attending Physician/EM Informatics Director and Summa Health System, 
Board Member, American College of Emergency Physicians; Kenneth W. 
Kizer, MD, MPH, President and Chief Executive Officer, National Quality 
Forum; Linda Kloss, Executive Vice President and Chief Executive 
Officer American Health Information Management Association; David 
Lansky, PhD, President, Foundation for Accountability; Chair, Working 
Group on Policies for Electronic Information Sharing Between Doctors 
and Patients; Mark Leavitt, MD, PhD, FHIMSS, Medical Director and 
Director of Ambulatory Care, Health Care Information and Management 
Systems Society; Randy Levin, MD, Associate Director for Electronic 
Submissions Food and Drug Administration; Jack Lewin, MD, President, 
California Medical Association; Stephen Lieber, President, Healthcare 
Information and Management Systems Society; Donald Lindberg, MD, 
Director, National Library of Medicine; John R. Lumpkin, MD, MPH, Sr. 
Vice President, Director, Healthcare Group, Robert Wood Johnson 
Foundation and Chair, National Committee Vital and Health Statistics; 
Janet M. Marchibroda, Executive Director, Foundation for eHealth 
Initiative; Chief Executive Officer, eHealth Initiative; Clement 
McDonald, MD, Director of Regenstrief Institute; Distinguished 
Professor of Medicine, Indiana University School of Medicine; Arnold 
Milstein, MD, MPH, Medical Director, Pacific Business Group on Health, 
The Leapfrog Group; Thomas Murray, PhD, President, The Hastings Center; 
Margaret O'Kane, President, National Committee for Quality Assurance; 
Dennis S. O'Leary, MD, President, Joint Commission on Accreditation of 
Healthcare Organizations; J. Marc Overhage, MD, PhD, Associate 
Professor of Medicine, Indiana University of Medicine Senior 
Investigator, Regenstrief Institute; Herbert Pardes, MD, Chief 
Executive Officer, New York-Presbyterian Hospitals, University 
Hospitals of Columbia and Cornell; James Reardon, Chief Information 
Officer, Tricare Management Activity, Department of Defense; Russell J. 
Ricci, MD, Chief Medical and Strategy Officer, HealthSTAR 
Communications; Craig Richardson, Vice President Health Care 
Connectivity and Alliances, Johnson & Johnson Pharmaceutical Services; 
Wes Rishel, Vice President, Gartner Research; William Rollow, MD, 
Deputy Director, Quality Improvement Group Office of Clinical Standards 
and Quality Centers for Medicare and Medicaid Services; James Schuping, 
Vice President, Workgroup for Electronic Data Interchange; Clay Shirky, 
Adjunct Professor, NYU Interactive Telecommunications Program, Chair, 
Working Group on Accurately Linking Health Information; Steve Skerry , 
Vice President Interoperability, IDX Systems Corporation; Steve Sleigh, 
PhD, Director Strategic Resources, International Association of Machine 
and Aerospace Workers; Ellen Stovall, President, National Coalition for 
Cancer Survivorship; Thomas Sullivan, MD, Past President, Massachusetts 
Medical Society, Women's Health Center Cardiology; Paul Tang, MD, Chief 
Medical Information Officer, Palo Alto Medical Foundation; Robin 
Thomashauer, Executive Director, Council for Affordable Quality 
Healthcare; John Tooker, MD, MBA, FACP, Executive Vice President 
American College of Physicians; Scott Wallace, President and Chief 
Executive Officer, The National Alliance for Health Information 
Technology; Andrew Wiesenthal, MD, Associate Executive Director, The 
Permanente Federation; Robert B. Williams, MD, MIS, Partner Healthcare, 
IBM Business Consulting Services; William Yasnoff, MD, PhD, Senior 
Advisor, National Health Information Infrastructure Department of 
Health and Human Services, Office of Assistant Secretary for Planning 
and Evaluation; and Jon Zimmerman, Vice President, Health Connections, 
Siemens Health Services

    Mr. Bilirakis. Thank you, Doctor. Doctor Shortliffe, 
please. Is that correct? Am I----
    Mr. Shortliffe. Yes.
    Mr. Bilirakis. Shortliffe.

                STATEMENT OF EDWARD H. SHORTLIFFE

    Mr. Shortliffe. Thank you very much. I come to you both as 
a physician who has taught and practiced in academic hospitals 
and clinics and as a biomedical computer scientist with 
extensive experience in the design and the development and the 
implementation of clinical information systems. So I really do 
bridge these two fields we are talking about today, as does Dr. 
Kolodner.
    Those of us who have worked with health care information 
technology are really pleased by the recent attention, such as 
today's hearings, that have been directed at this topic, and 
Secretary Thompson's enthusiasm. The unfulfilled promise of 
information technology in support of health and health care has 
been really clear to some of us for many years, more years, 
maybe even more than 10 that Dr. Diamond mentioned. Some of us 
have been doing this 30 years and have felt strongly about this 
subject that long. And we have been dismayed to see a widening 
gap, if anything, between the implementation of information 
technology solutions to pressing problems in other segments of 
society when you contrast that with their limited penetration 
in health care settings.
    On the other hand, a variety of factors have recently 
combined to heighten our awareness of what is possible and of 
the need for active intervention and promotion of solutions. 
And I know I speak for others in the health care computing 
community when I say that we are grateful for the recognition 
recently and we are eager to help in any way that we can. 
Seldom have I seen more consensus on the need for action and 
the promise that awaits us if we do this right. But, as always, 
the devil is in the details, and that is the challenge faced by 
all groups with a stake in enhancing the use of information 
technology in health care, including the Congress as it 
considers the role that it might play.
    Now, there are so many things one could talk about, and in 
my brief time I guessed what my colleagues would say since I 
knew I was coming last and we in this small community do know 
each other well. So I decided that I would highlight for you 
the perspective of the individual physician who practices in 
this country. I recognize that they are an important element in 
any solution that we propose but that their ability to 
participate effectively is highly constrained. So I am going to 
put on a physician's hat for a moment, set aside my activist 
interests as a health computing professional, and I believe 
that there are a variety of important issues that really need 
to be understood and considered in formulating any incentive 
programs or implementation plans for health care IT.
    And by way of anecdote, I, as a health computer scientist 
working on a medical school faculty, scratched my head for many 
years trying to understand how it was that I could be working 
on the cutting edge of research on health care computing for 70 
or 80 percent of my time and then for the other 20 percent 
enjoined to the clinic or to the in-patient hospital wards of 
one of the best hospitals in the United States where the 
computing support was vastly different from what I knew was 
possible and what I had available to me in my research 
laboratory, trying to understand this disconnect and why it was 
so hard to bring what was possible into settings such as that.
    Well, first, bear in the mind that the vast majority of 
health care in this country is provided by physicians in 
ambulatory settings and most commonly in relatively small 
offices, not in medical schools and VA hospitals. Our view of 
what is needed cannot be overly skewed by the perspectives of 
those who practice in large multispecialty practices or in 
clinics associated with academic medical centers. Although 
well-implemented IT in a single institution can provide major 
quality and cost benefits for that entity, as it has for the VA 
as a whole, it is in the integrated penetration of health care 
IT throughout essentially all practice settings that the 
Nation's health stands to gain the most.
    And this means creating an infrastructure, both regional 
and national, into which all practice settings can tie, but 
also helping the individual practices that need to tie into 
that infrastructure to make wise decisions and investments. 
Now, I believe it is really too easy to simply say that 
physicians are resistant to change or overly committed to 
antiquated approaches to data management. We see many examples, 
in fact, where clinicians have embraced new technologies rather 
quickly. But information technology presents some special 
problems for practitioners.
    It is not their way of expertise, and they are really 
uncertain how to evaluate the options that are provided to 
them. It is not a part of their education. That is something we 
could address. And it seems foreign to the major thrust of 
their professional interests. System implementations are often 
disruptive to operations, at least in transition, and too often 
the physicians find that major investments have resulted in 
inadequate system solutions that fail to meet their 
expectations, they integrate poorly with the other systems they 
happen to have in their offices, they are difficult to adapt to 
the special needs of a particular practice.
    Many physicians tell me that they have no innate objection 
to electronic medical records, the decision support software or 
other aspects of office automation, but they don't know where 
to start and they are not sure they can justify the expense 
with the benefits that are gained by them. There is no 
certification process, for example, although the Secretary 
addressed this issue, that allows them to be sure that a 
product that is offered is compliant with the emerging national 
standards for connectivity, for data storage and exchange, for 
privacy and for security. Indeed, such standards are still 
evolving, and there is as yet no coherent and well accepted 
process for bringing such standards to a broad consensus that 
allows all stakeholders to adopt and comply with them.
    Consultants often seem as confused, frankly, by the options 
as the physicians are. This is not an area where you can just 
get a consultant and expect to have a good result. There are 
expensive failures of recommended systems that are legendary, 
and it is small wonder that clinicians are looking elsewhere 
for assistance.
    In addition, the arguments for implementation of health 
care IT are too often viewed by clinicians as being primarily 
directed at health systems and payers and patients with much 
less direct benefit appreciated by the physicians themselves. 
They understandably ask why in a financial environment that is 
characterized by significant regulatory and reimbursement 
challenges for physicians in practice that doctors should be 
asked to invest in medical records systems whose primary 
systemic beneficiaries are elsewhere than in their offices. 
This misalignment of fiscal incentives is often cited as a 
major barrier to widespread dissemination of information 
technology in the practice settings where, ironically, the 
primary data are being gathered and where decision support 
capabilities could most beneficially be utilized.
    Solutions need to recognize that physician offices are not 
only sources of key information that we want centrally--the 
payers, the health policy makers, the researchers, the large 
institutions--but that those offices are vitally important 
users of information, that a robust information infrastructure 
could be delivering back to them directly to their practice 
settings rural, suburban, inner city, academic, across all that 
spectrum. When physicians experience clear benefits from their 
IT investments and see efficiencies and cost savings as well as 
enhancements to information access, then a major barrier to 
suitable investments will have been overcome.
    The problems being discussed today and the exciting 
opportunities that will accompany their solution are clearly 
much broader than the single issue of how best to distribute 
information technologies in individual practices. I mean 
hospitals and other topics are equally as important. Yet when 
we focus on physicians, I believe there are several steps that 
Federal agencies could take in facilitating solutions to the 
issues I have identified, and many of these in fact were 
addressed in Secretary Thompson's remarks.
    First, there has to be a suitable alignment of the 
financial incentives so that those who most benefit from the 
investment in health care IT are the ones who are expected to 
invest most heavily in its dissemination and implementation. 
Second, federally facilitated programs to enhance the process 
for setting and adopting standards, which needs to be a shared 
public-private effort, are sorely needed. And this too was 
addressed in yesterday's summit. Third, a mechanism for 
assuring rigorous certification of vendor-provided solutions is 
required so that the individual purchasers, these doctors in 
offices, for example, can be assured that a given product is 
compliant with the emerging requirements of a national health 
information infrastructure. And, fourth, we have to recognize 
that expertise in health care information technology is more 
than expertise in information technology itself. And many of 
the people who build the systems that are used by doctors today 
are experts in information technology but know nothing about 
the culture and the practice of medicine or are brought to it 
as a secondary activity much later in their careers.
    So there is an important unique discipline at the 
intersection of health care and computer systems, and we need 
to nurture the training of experts who can be the researchers 
and the designers and the developers and the implementers and 
the evaluators of health information technology in the future.
    So I am pleased to have had an opportunity to share some of 
these thoughts with you today, and I am sure I and all the 
others on the panel would be happy to answer any questions you 
have.
    [The prepared statement of Edward H. Shortliffe follows:]
 Prepared Statement of Edward H. Shortliffe, Deputy Vice President for 
  Strategic Information Resources, Professor and Chair, Department of 
Biomedical Informatics, Professor of Medicine and of Computer Science, 
    Director of Medical Informatics Services, NewYork-Presbyterian 
              Hospital, Columbia University Medical Center
    I would like to thank Chairman Bilirakis, Representatives Barton 
and Dingell, and the other members of the Subcommittee on Health for 
this opportunity to address you regarding Health Information Technology 
and the role that the federal government can play in facilitating its 
efficient and effective deployment in this country. I come to you both 
as a physician who has taught and practiced in academic hospitals and 
clinics and as a biomedical computer scientist with extensive 
experience in the design, development, and implementation of clinical 
information systems. A fellow of the American College of Medical 
Informatics, I have served on the Board of Regents of the American 
College of Physicians and on a variety of government advisory groups, 
including the President's Information Technology Advisory Committee and 
the National Committee for Vital and Health Statistics. After spending 
30 years at Stanford University, I currently am at Columbia 
University's medical school where I chair a department of biomedical 
informatics. Our faculty members have built, and continue to be 
responsible for, the management of a variety of successful and heavily 
used clinical systems at the NewYork Presbyterian Hospital.
    Those of us who have worked with health care information technology 
are pleased by the recent attention that has been directed at this 
topic, both within government and in the private sector. The 
unfulfilled promise of information technology in support of health and 
health care has been clear to some of us for many years, and those in 
the field have often been dismayed to see a widening gap between the 
implementation of information technology solutions to pressing problems 
in other segments of society contrasted with their limited penetration 
into health care settings. On the other hand, a variety of factors have 
recently combined to heighten our awareness of what is possible and of 
the need for active intervention and promotion of solutions. I know I 
speak for others in the health care computing community when I say that 
we are grateful for that recognition and eager to help in any way that 
we can.
    As I reflect on the past five years, I see a number of forces that 
have come together to create the current enthusiasm for health 
information technology solutions. Simply stated, these are safety and 
quality, costs, and privacy. Although the health care community has 
long been concerned with all three of these issues, certain recent 
landmarks events greatly broadened our awareness of their dependence on 
information technology solutions:

 A series of three influential reports from the Institute of Medicine 
        (``To Err is Human,'' ``Crossing the Quality Chasm,'' and 
        ``Patient Safety: Achieving a New Standard of Care''), all of 
        which made strong cases for the role of IT in addressing 
        problems with medical errors and enhancing patient safety
 Federal advisory activities, including seminal contributions from the 
        Workgroup on the Health Information Infrastructure from the 
        National Committee on Vital and Health Statistics (NCVHS) and 
        two important sets of recommendations (first in 2001, then 
        again this year) from the subcommittees on health within the 
        President's Information Technology Advisory Committee (PITAC)
 Employer concerns regarding the burgeoning costs of health care, 
        leading to the creation of the Leapfrog Group and its active 
        promotion of more effective implementation and use of 
        information technology in health care settings
 The privacy, security, and transaction rules that were announced by 
        DHHS in response to the requirements of the 1996 Health 
        Insurance Portability and Accountability Act (HIPAA) and that 
        in many respects require informed technological solutions in 
        order to be compliant
 The influence of the Internet and the World Wide Web, which has 
        greatly increased the access to health information by the 
        public and transformed their familiarity with, and expectations 
        of, health information technology in the settings where they 
        seek care.
    The list could be much longer, and would certainly include the 
large number of recent reports, from a variety of public and private 
sources, that reiterate and refine the recommendations that have come 
before. Seldom have I seen more consensus on the need for action and 
the promise that awaits us if we do this right.
    But, as always, the devil is in the details, and that is the 
challenge faced by all groups with a stake in enhancing the use of 
information technology in health care: Dr. Brailer in his new role as 
National Health Information Technology Coordinator, hospitals and other 
provider organizations, payers, and individual health professionals. I 
realize that the Congress is particularly concerned with what role the 
federal government can and should play in encouraging more effective 
and efficient implementation and use of the technologies that we 
discuss today. My colleagues on this panel will have addressed this 
issue in some detail, illuminating for you both the promise and the 
challenges that face us and the opportunities for effective federal and 
other governmental action.
    I would like to highlight the perspective of the individual 
physician who practices in this country, recognizing that they are an 
important element in any solution that we propose but that their 
ability to participate effectively is highly constrained. If I may, 
then, don my physician's hat for a moment, setting aside my activist 
interests as a health computing professional, I believe that there a 
variety of important issues that need to be understood and considered 
in formulating any incentive programs or implementation plans for 
health care IT. Recommendations for federal action follow in part from 
these observations.
    First bear in mind that the vast majority of health care in this 
country is provided by physicians in ambulatory settings, and most 
commonly in relatively small offices. Our view of what is needed cannot 
be overly skewed by the perspectives of those who practice in large, 
multispecialty practices or in clinics associated with academic medical 
centers. Although well implemented IT in a single institution can 
provide major quality and cost benefits for that entity, it is in the 
integrated penetration of health care IT throughout essentially all 
practice settings that the nation's health stands to gain the most. 
This means creating an infrastructure, both regional and national, into 
which all practice settings can tie, but also helping the individual 
practices to make wise decisions and investments.
    Viewed from the perspective of a clinician in a small office, the 
issues we discuss today are overwhelming in many respects. It is too 
easy to say that physicians are simply resistant to change or overly 
committed to antiquated approaches to data management. We see many 
examples, in fact, where clinicians have embraced new technologies 
rather quickly. But information technology presents some special 
problems for practitioners. It is not their area of expertise, and they 
are uncertain how to evaluate the options that are provided to them. It 
is not a part of their education, and seems foreign to the major 
thrusts of their professional interests. System implementations are 
often disruptive to office operations, at least in transition, and too 
often physicians find that major investments have resulted in 
inadequate systems solutions that fail to meet expectations, integrate 
poorly with other systems, or are difficult to adapt to the special 
needs of a particular practice.
    Physicians need help in making informed choices and in dealing with 
the logistical and financial hurdles that have until now often made it 
unattractive for them to invest in IT solutions. Many physicians tell 
me that they have no innate objection to electronic medical records, 
decision support technologies, or other aspects of office automation, 
but they do not know where to start and are not sure that they can 
justify the expense for the benefits gained. There is no certification 
process that allows them to be sure that a product that is offered is 
compliant with emerging national standards for connectivity, data 
storage and exchange, privacy, and security. Indeed, such standards are 
still evolving and there is as yet no coherent and well-accepted 
process for bringing such standards to a broad consensus that allows 
all stakeholders to adopt and comply with them. Consultants often seem 
as confused by the options as the physicians are, and the expensive 
failures of ``recommended systems'' are legendary. It is small wonder 
that clinicians are looking elsewhere for assistance.
    In addition, the arguments for implementation of health care IT are 
too often viewed by clinicians as being primarily directed at health 
systems, payers, and patients, with much less direct benefit 
appreciated by the physicians themselves. They understandably ask why, 
in a financial environment characterized by significant regulatory and 
reimbursement challenges for physicians in practice, the doctor should 
be asked to invest in medical record systems whose primary systemic 
beneficiaries are elsewhere. This misalignment of fiscal incentives is 
often cited as a major barrier to widespread dissemination of 
information technology into the practice settings where, ironically, 
the primary data are gathered and where decision-support capabilities 
could most beneficially be utilized. Solutions need to recognize that 
physician offices are not only sources of key information (required by 
payers, health policy makers, researchers, and large institutions), but 
also vitally important users of information that a robust information 
infrastructure could be delivering directly to their practice 
settings--rural, suburban, inner-city, or academic. When physicians 
experience clear benefits from their IT investments, and see 
efficiencies and cost savings as well as enhancements to information 
access, a major barrier to suitable investments will have been 
overcome.
    The problems being discussed today, and the exciting opportunities 
that will accompany their solution, are clearly much broader than the 
single issue of how best to distribute information technologies into 
individual practice settings. Yet there are several steps that federal 
agencies could take in facilitating solutions to the issues I have 
identified.
    First, there must be a suitable alignment of financial incentives 
so that those who most benefit from the investment in health care IT 
are the ones who are expected to invest most heavily in its 
dissemination and implementation.
    Second, federally facilitated programs to enhance the process for 
setting and adopting standards (a shared public-private effort) are 
sorely needed.
    Third, a mechanism for assuring rigorous certification of vendor-
provided solutions is required so that individual purchasers can be 
assured that a given product is compliant with the emerging 
requirements of a National Health Information Infrastructure.
    Fourth, we must recognize that expertise in health care information 
technology is more than expertise in information technology itself. 
There is an important, unique discipline at the intersection of health 
care and computer systems, and we need to nurture the training of 
experts who can be the researchers, designers, developers, 
implementers, and evaluators of health information technology in the 
future. Short-term programs to enhance the production of such 
individuals are needed, as well as increased support for academic 
training programs and well-defined career pathways. The National 
Library of Medicine has been a leader in this area, but its resources 
for training are limited and the nation's need far exceeds the ability 
of current NLM programs to produce the people who can provide the 
leadership we need in this burgeoning area.
    Members of the subcommittee, I am pleased to have had a chance to 
share some of these thoughts with you today and welcome the opportunity 
to answer any questions you may have regarding my testimony.

    Mr. Bilirakis. Thank you very much, Doctor. We have been 
joined by Joe Barton, the chairman of the full committee. He 
has to cover all of the committee hearings and what not, as 
well as other things, so it is a real compliment to this 
subject, quite frankly, that he is even willing to sit in on a 
few minutes of it. Joe, I am going to yield to you at this 
point and see----
    Chairman Barton. Mr. Chairman, I am not going to have any 
formal questions. I have actually read the testimony, I read 
the staff memo. I appreciate the Secretary of HHS appearing on 
the panel before these gentlemen. I appreciate all you folks 
are doing. It is obvious that there is a lot to be done and a 
lot of money that can be saved, and while it is not in the 
testimony, it is obvious that there is quite a bit of 
institutional opposition to it by groups out in the country 
that for whatever reason oppose some of the initiatives that 
are being put forward.
    So this is something that we are going to work on certainly 
in the next Congress. I doubt we will be able to implement much 
in this Congress, but Chairman Bilirakis has got a passion for 
this, and it is a passion that is going to be rewarded 
hopefully in the next Congress. So I appreciate you all being 
here.
    Mr. Bilirakis. Thank you.
    Chairman Barton. With that, Mr. Chairman, I am going to 
yield back.
    Mr. Bilirakis. Well, thank you, Mr. Chairman. You know, we 
have found out that there is a lot of money that can be saved, 
but I think we have also found out that with better 
incentives--with better efficiency that would be available as a 
result of doing something like this, we would save an awful lot 
of lives. I guess that also translates into money in a way. But 
someone, I think it was the Secretary, made the comment about--
someone made the comment of 98,000 lives lost a year as a 
result of medical errors. And if you can cut that down into 
maybe even half of that, for crying out loud, as a result of 
this, that is enough of a reason for us--I mean after all we 
are here representing the public regarding quality of medicine, 
medical care and what not, and hopefully that will, if nothing 
else--and then when you add the money to it too, I think that 
should give us enough incentive.
    Dr. Blumenthal, you said you are a primary care physician? 
Do you have a practice?
    Mr. Blumenthal. Yes, a small practice, sir.
    Mr. Bilirakis. And you are an internist?
    Mr. Blumenthal. I am an internist.
    Mr. Bilirakis. An internist.
    Mr. Blumenthal. Practice in the out-patient department of a 
large hospital in Boston.
    Mr. Bilirakis. In Boston. My oldest son is an internist, 
and I haven't talked with him about this, but I will. I will.
    Probably this weekend. What is going to be his reaction?
    Mr. Blumenthal. Well, I think that most physicians favor 
this in principle but are concerned about its impact on their 
daily lives. I think that Dr. Shortliffe began to get at that, 
and one of the things that I think does occur when you 
introduce these systems is that in the short term they take 
time. There is time required to put in patient information 
before it is in the computer, available to be accessed. There 
is time--every time a patient comes into my office, I go 
through the medications and make sure that they are the right 
medications and the right dosage, and I have to enter that data 
manually. That adds to the length of a patient visit at a time 
when there is a lot of pressure on patient visits to make them 
shorter. And, therefore, it has fairly reliably been 
demonstrated, I think, that you see fewer patients because your 
visits get longer at the introduction point of the electronic 
health record.
    Mr. Bilirakis. Which is what period of time, would you say?
    Mr. Blumenthal. Well, a couple years, I would say.
    Mr. Bilirakis. A couple years?
    Mr. Blumenthal. And likelihood is that you save a lot of 
money elsewhere in your practice. You may need fewer people to 
file records, you may need fewer receptionists, your time may 
be saved on other things. But in the short term, there is this 
hit to your bottom line that I think constitutes one of the 
most compelling reasons for a loan or some kind of assistance 
program to the average physician so that when you ask your son 
what he thinks about it, if he doesn't have one already and if 
he is in independent practice, he will likely say----
    Mr. Bilirakis. He is by himself.
    Mr. Blumenthal. He will say, ``Dad, that is a great idea.''
    Mr. Bilirakis. Some people say it is impossible for 
particularly a family doctor, primarily care physician to be 
able to make it being alone. Well, so far, so good, but it is 
killing him, I think.
    Mr. Blumenthal. So imagine if his income were down 20 
percent in a year. How would he feel about something----
    Mr. Bilirakis. Do you all agree there that there is that 
period of time there, transition period, that is going to 
cost--so when we talk about incentives, you are not really 
talking about a reward for doing this, you are talking about 
basically making the physician whole, the office whole, the 
expenses, the additional equipment, et cetera, and then the 
time that you indicate that would be taking additional time.
    Mr. Blumenthal. There is an ongoing thing as well, and I 
practice in a big system, and when I don't know what--when 
something goes wrong with my software, I can pick up a phone 
and call the help desk that is run by my health care system. 
And if you are in private practice and you suddenly find that 
your software has a glitch and you have to get the information 
out of it in order to be useful to your patients, well, you 
need help right away. You can't wait three or four days. So 
finding a way to make sure the physicians can weather that 
challenge is also, I think, a big issue that needs some 
attention.
    Mr. Bilirakis. Anything you would like to add, any of you?
    Mr. Shortliffe. I would be surprised if you showed your son 
in solo practice the VA demo that we just saw or one of the 
many other fine, more solo practice oriented systems that do 
exist, that he wouldn't see the advantages of having that at 
the end point. If it only could like appear and be working 
perfectly overnight. It is the ``how do I get from here to 
there'' question that is the dominant one that I think prevents 
people from making that move.
    Too often they have heard about failed experiments by 
colleagues and others that haven't worked well. They don't 
really have the expertise to make that decision, and so it is, 
``Help me to make sure that I don't make a mistake, that I 
don't lose a fortune doing this, and then at the end of the day 
I can really then take advantage of these kinds of 
facilities.'' And they just don't know how to do it.
    Ms. Diamond. I just wanted to add that I think the 
incentives you need to be thought about is something to get 
them over that period of adoption and acquisition of the 
system, but I also think one thing that we know is that those 
systems don't deliver all the benefits they could deliver if 
they connect to other systems. In other words, just having 
something in your practice that doesn't talk to the pharmacy or 
to the laboratory or to other physicians doesn't have the 
ability to, as you said, save lives and reduce medical errors. 
And I think that is something we need to think carefully about, 
because if we only incent the adoption of the technology and we 
don't incent that technologies need to talk to other things and 
improve the outcomes of care, which the current model does not 
do, we will end up with silos, and I don't think it will return 
the investment we are hoping for.
    Mr. Bilirakis. Sure. You want to add anything, VA?
    Mr. Kolodner. The connectivity really magnifies the 
benefits by orders of magnitude. The equivalent would be if you 
think about the PCs that you had 15 years ago before the 
Internet and you could do word processing, you could do some 
spreadsheets, you could do some taxes, rudimentary then, and it 
was of some use. But the connectivity that the Internet has 
provided and the availability of information now is just 
tremendous, and I think that is the kind of leverage you get 
when you----
    Mr. Bilirakis. Well, that is what kind of really gets to me 
is the availability and we are just not taking advantage of it. 
The entire profession is just not taking advantage of it. The 
government is not taking advantage--although we should be able 
to do it, for crying out loud, in so far as tying in HHS with 
the Veterans Administration, with CDC, et cetera, et cetera, 
NIH and whatnot. It would sure be an awful lot of easier, and 
yet we are not doing it. So shame on us in that regard.
    Dr. Kolodner showed us the videos, the slides, whatever, 
and they were really, I think, impacting, but I can see a 
veteran coming into a facility, let's say--I should use Bay 
Pines with the problems that they have had with their 
computers--I will use James Haley in Tampa. There is a 
snowbird, lovingingly we call them, coming down from Michigan--
but not from Texas, they don't come from Texas to Florida or 
vice versa--coming down from Michigan in the winter and being a 
patient in one of the medical facilities up there, the VA 
facilities. So it is easy enough to interact. But you go into 
the private sector, now that is more of a problem, isn't it?
    Mr. Blumenthal. Mr. Chairman, I have lots of patients who 
are snowbirds, and I have one I am thinking of right now who 
has had a heart transplant who goes to Florida in the winters, 
and he usually comes back on different medicines and with 
different regimens, and I never know why. And if I could find 
out why, it would certainly help me care for him better. And 
that is a very common experience. You don't have to go to 
Florida to have that disconnect. You can go right across town 
to one of the other excellent hospitals in my community, and I 
am dependent on getting letters from specialists from around 
town, which often arrive but not always, to find out what their 
care consisted of or I am dependent on their information, what 
they can recall.
    Mr. Bilirakis. Well, yes. That brings up the point really 
that, again, the emphasis on Dr. Kolodner's exhibition was the 
x-rays and whatnot that took place and how they were being 
used, even how they took place. Now, when you get into the 
private sector and considering the litigious society that we 
are in, medical malpractice and everything of that nature, 
would a doctor in Michigan, and I am not talking about VA now 
but private practice, a doctor in Michigan basically depend 
upon an x-ray that was taken in Tampa, Florida before he 
would--would he do that or is there--you think he would? Okay. 
I mean that could be a big savings right there in terms of----
    Mr. Blumenthal. In my situation, I would probably want one 
of our radiologists to bring it up on the screen and look at 
it, look at the technical quality, but the likelihood is, given 
the proficiency of the technologies that we have available, 
that that technical quality would be good.
    Mr. Bilirakis. Well, that is good to hear that. How do we 
compare on this with the rest of the world?
    Mr. Shortliffe. I think it is clear that we are struggling 
to keep up with the rest of the world in this area largely 
because in many other countries health care systems are more 
like the VA. They have centralized single pair environments 
where the decisions about how to handle this technology and how 
to instill into practices and the like are determined centrally 
and without the kind of fragmentation.
    So here we are very dependent right now on will a 
grassroots activity--that is what I have been watching for 30 
years--will a grassroots activity create something that is 
truly national and comprehensive and standardized? And 
increasingly I think we are aware that the answer is no, that 
the organizations that manage to pull this off are those that 
have more central authority and decision making, and the VA has 
I think proven that in this country. So we have examples in 
other countries of much more consistent and standardized 
exchange of data simply because there is a national health 
service or other standardized approach.
    Mr. Bilirakis. Yes, something like the VA, in other words, 
which makes it a little less complex. Should this be a part of 
their education, their being the providers?
    Mr. Shortliffe. Well, this is what I do much of my time is 
educate people in this area, and I must say I think the 
difficulty we have in making traditional medical schools 
believe that this is an important topic for medical education 
is challenging for us.
    Mr. Bilirakis. Is that right? That difficult.
    Mr. Shortliffe. It is not part of medical education right 
now. You could argue that maybe all people need to do is be 
exposed to good systems while they are in training so that they 
know how the other half can live and then they can hopefully 
take some of those lessons into the practice settings that they 
move on to when they are through with their house staff years, 
but to be quite honest, I think there is more to this field 
than just being an informed user. To be a good selector of 
systems, you need to have some understanding of some of the 
underlying concepts. So many of us feel that there is a body of 
knowledge that goes beyond use that should be conveyed to 
future physicians as well.
    Mr. Bilirakis. Well, I have taken up----
    Mr. Kolodner. Mr. Chairman?
    Mr. Bilirakis. Oh, I'm sorry.
    Mr. Kolodner. One thing about that, and I think Dr. 
Shortliffe is correct, that it is more than just exposure, 
although it is useful to at least have that experience. One of 
the things about the VA is because it is so widespread and 
affiliated with about 107 of the 127 medical schools, that 
about 70 percent of the doctors and over 50 percent of other 
allied health professionals do rotate through VA as some part 
of their training. So they at least get to----
    Mr. Bilirakis. So they pick that up then.
    Mr. Kolodner. But still have the misalignment of the 
incentives once they get out of that experience and go into 
practice, and that still needs to be addressed.
    Mr. Bilirakis. Okay.
    Mr. Shortliffe. If I can make a quick comment about this 
because Dr. Kolodner might not, I can tell you that in my own 
experience in my former institution in California where our 
medical students and house officers rotated both through an 
academic medical center, private hospital environment and 
through the VA, I watched this fascinating transformation over 
the last 30 years where about 30 years ago you sort of dreaded 
your VA rotations. Things were not well organized, they were 
more backwards, and people then went off to the university 
environment, and they would rotate between these two 
environments and be exposed to both.
    Today, it is very much the opposite at that institution. 
People know that their lives are easier at the VA when they are 
a house officer or an intern or a resident because of the 
quality of the information technology that is available to 
them, and they look forward to their VA rotations. It has 
changed their perceptions a great deal just in the years I have 
been observing medicine.
    Mr. Bilirakis. That is quite a compliment. I have taken up 
an awful lot of time. I am going to yield to Mr. Green, 
gentleman from Texas, who has just come in to join us.
    Mr. Green. Thank you, Mr. Chairman, and I apologize for not 
being here earlier, because this is an important issue. And it 
is just that we have different committees, in fact I would give 
up the committee I was in, my Ethics Committee, for easily 
sitting here because of the importance of the information IT 
for health care.
    I want to follow up on your questions about incentivize 
because that is one of my concerns is how do we incentivize it 
for the individual doctor. I know loans. One of the ways I was 
thinking here because talking with a lot of my practitioners, 
professional liability. I represent a very urban district in 
Houston; in fact, our VA facility is really a great facility, 
and having dealt with it in the private sector as an attorney 
doing psychiatric work, I could tell the difference over the 
last 20 years, and we have a new facility from the early 
nineties, but, again, the professionalism at the VA is just so 
much better than it was 15 or 20 years ago. In fact, a few 
years ago, if you remember my neck brace, the same surgeon that 
did my fifth and sixth at Baylor College of Medicine Methodist 
Hospital in Houston did surgery at VA two days a week, and he 
was a top neurosurgeon and a great guy. So the professionalism 
is there and the quality is there, because I know I follow that 
too with my constituents too.
    And what I have seen at our local VA, and I know it is 
elsewhere, that the technology and the use of the information 
is so much better than a lot of my private hospitals, for-
profit and non-profit. But is there a way that we could 
encourage--for example, I know businesses in my district have 
to go through to get a lower workers' comp rate, they have to 
do certain things. Is there a way that professional liability 
could be lowered because you can actually show that the 
insurance companies will pay less claims by using IT and 
quality using it. I mean I know on the Federal level, because 
most of that is State regulation, but I know using the 
information it seems like it would--and the concern of the 
chairman and all of us have, and I know you at that table do, 
about the errors issue and if that would help. Has that been 
explored by any of the private sector? I know VA doesn't have 
that worry.
    By the way, I have a daughter who has finished her second 
year of residency at UTM in Galveston and there her and her 
husband are at a huge facility, so they don't have to worry 
about professional liability, but I have a lot of physicians 
who do.
    Mr. Blumenthal. Congressman, our medical malpractice system 
is so broken that I am not sure reducing errors would result in 
reducing premiums. And the reason I say that is because so many 
times the people who are the victim of errors don't sue, and 
people who aren't the victim of any errors do sue. And so it is 
a very messy system. I don't know of any studies, but I haven't 
looked at this literature, that show a relationship between the 
adoption of electronic records and rates of malpractice claims, 
which is different from rates of safety problems. And so I 
think that there is not necessarily one-to-one feedback. I 
think it is an interesting thing to pursue, but I think there 
are probably many more direct positive feedback mechanisms that 
flow than the malpractice.
    Mr. Bilirakis. Could that be an incentive, some sort of 
legislation that would tie the two in in some way?
    Mr. Blumenthal. If you want to get in the business of 
regulating malpractice premiums, I am sure that that would be a 
good lever to use.
    Mr. Green. Having served 20 years in the legislature, and I 
know that is supposed to be done on the State level, I don't 
know if we want to regulate medical malpractice on the Federal 
level, but I would hope our States would do it, because I don't 
want to regulate auto insurance either.
    Next question I have is concerning both the SARS and 
anthrax and the need for some type of integrated health 
information system. Frankly, I think we dodged a big bullet 
with SARS. I mean aggressively on both an international level, 
in our own country, very lucky too. What is the story, I would 
rather be lucky than good. But my concern is because of our 
lack of that information sharing, even with CDC doing the best 
they can, is there on the Federal, State and local levels, 
using the electronic records and the information sharing--and, 
again, if we can share it, then we ought to be able to do it 
with our neighbor in Canada, which was the next concern. And I 
know there was some coordination, but, again, I don't feel 
comfortable with--I would rather be good than just lucky, and I 
think we were lucky with SARS. Could anybody on the panel talk 
about that?
    Mr. Shortliffe. The issue of connectivity that Dr. Diamond 
was mentioning a moment ago is at the heart of the use of 
information technology to solve or at least help support 
solutions to problems such as that kind of public health 
threat. And you may have heard prior testimony before this 
committee in the last few years about the problems of the 
public health infrastructure, which, frankly, is the 
infrastructure that supports all the things we are talking 
about today. It is the same infrastructure. So that as we build 
up a structure that supports public health and the connectivity 
of public health departments into regional and national 
networks, the ability to gather data from multiple sources and 
so forth, we are building the same network that can also allow 
medical records to move with a patient from one emergency room 
to another, et cetera.
    So these are highly linked issues, but I would totally 
agree that those kinds of public health concerns, like SARS or 
any kind of rapid detection of infectious threats, biological 
threats in particular, is absolutely dependent upon getting in 
place a national health information infrastructure that is more 
effective than what we have now.
    This has been an area where I would argue, because I know 
people in the public health service, there has been abysmal 
support financially for the development of the technology over 
the years, and the public health departments until very 
recently were sometimes dependent upon a 2,400 baud modem to 
call into some local node with 1 computer shared by 5 
operatives in a local area. And, fortunately, I think we are 
seeing some improvement in that, but it was pretty dismal only 
a decade ago.
    Mr. Green. I have noticed in Houston, because we have an 
immunization project, our office does every year, it comes up 
in August, a couple weeks before school starts, and because of 
it, our immunization rates are lower than some of our 
neighboring cities and other urban areas. But dealing with the 
groups that provide it, Mr. Chairman, I don't know if you have 
this problem in Florida, but we have a city of Houston health 
department and county, our Harris County, who will provide the 
immunizations. And up until a couple of years ago, there wasn't 
any communication. They actually used different systems to have 
immunizations, and that is a State issue. In fact, we have 
gotten money to our State health commissioner to be able to try 
and coordinate that between these two local agencies. Again, 
there is so much we can do, provide them resources to do it, 
but that is just a symbol, I guess, of some of the problems we 
are having.
    Mr. Shortliffe. It is a really great example, though, 
because you have tried to solve it by coming up with an 
immunization solution, but if the infrastructure were in place, 
you would have used that for this kind of connectivity in 
sharing.
    Ms. Diamond. I was just going to add that that is really at 
the heart of, I think, prior testimony today of the importance 
of standards and interoperability as we think about these 
incentives, because short of that it is not just getting the 
system in place in an office or public health department, it is 
about getting a system that will talk to other things in place, 
and that all has to be tied to together or we do end up with 
stovepipes or silos or whatever you want to talk about that get 
in the way of doing the job and improving quality and improving 
public health.
    Mr. Green. And to follow up one more time, Mr. Chairman, on 
the effort, is there any Federal money available to deal with 
that information sharing? Is there money that we have 
authorized that would provide for that?
    Mr. Bilirakis. Well, the Secretary told us that there are a 
few million dollars out there, but he did refer to the 
possibility of using a certain amount of the waste, fraud and 
abuse savings and allocate it to something like this, so it 
wouldn't be necessarily new money. The problem that we have, 
Mr. Green knows very well and we all do up here, is the 
Congressional Budget Office. And even if you could show, geez, 
$140 billion savings every year, even if you can show much more 
than that, Mr. Stupak indicated about 25 percent of health care 
costs could be saved, the Congressional Budget Office wouldn't 
give you any credit for it, and they would only hit you with 
the expenses, these incentive expenses and whatnot, as we call 
them. So that is the problem that we have, obviously.
    But I feel we can work around it. And if we can work 
together as a Congress, the majority and minority, and if we--
if, and I would like to say when, we create a task force or 
whatever we want to call it, to work on this subject and feel 
that we need to, as part of that group, the private sector, who 
would represent--Dr. Diamond, who would represent the public? 
Who would you suggest would----
    Ms. Diamond. That is a very good question. We have been, as 
you said, trying to pull together all the stakeholders from the 
health care industry, and it is often difficult to find people 
who represent the public. There are consumer groups out there 
who try to represent public interests, and we work with several 
of them in Connecting for Health. One of the reasons I like to 
think that both of our foundations, both the Markle Foundation 
and the Robert Wood Johnson Foundation, got into this is 
because the public interest is our objective as well.
    And I think there is an opportunity to represent the 
public. How much of the public you represent, I imagine that 
Congress' job, but I do think the public voice does need to be 
in the dialogue and in the debate as this agenda moves forward.
    Mr. Bilirakis. Yes, I agree.
    Ms. Diamond. I think without that, we will miss a huge 
opportunity.
    Mr. Bilirakis. I agree. I didn't mean to take away from 
you, Gene.
    Mr. Green. Oh, no. I was just going to follow up, and one 
of the other issues is that for an individual practitioner to 
buy this to the standards so they don't just get sold something 
that, like you said, is just worthless, and it has to have some 
standards, maybe using Medicare, for example, because----
    Mr. Bilirakis. Yes, the Secretary mentioned that.
    Mr. Green. Yes, that we could use--that Medicare could have 
certain standards for the informational health sharing. So a 
physician, a solo practitioner who really doesn't have time to 
go learn about the computers would have some kind of ability to 
be able to say, ``Yes, I will make this investment to go with 
it.'' Thank you, Mr. Chairman.
    Mr. Bilirakis. The VA, do they somehow interact with the 
private sector in terms of availability of software and 
whatnot?
    Mr. Kolodner. Yes, sir. First of all, VA participates in a 
lot of public-private forums, so we are working very closely, 
for example, with Connecting for Health and other activities. 
With an estimated 40 percent of our veterans getting some care 
in the private sector each year, it is very important for us to 
see the private sector actually use these technologies so that 
we can exchange back and forth and provide our data to the 
providers who are caring for them in the community and vice 
versa.
    In terms of software, one of the things is that there are 
some very good companies out there, some very good vendors, 
though there are the incentive issues, as we have seen. And so 
it is very important for us to focus in terms of our software 
on the rural and underserved areas where with our initiative 
with CMS the software is really being configured to try and 
meet the needs of that particular community. But even before 
that, we have had some entities, the D.C. Department of Health 
and a couple of States, that have indicated that they are going 
with the VistA software and have found some companies to 
provide support to them. And, in fact, just last week, the 
country of Mexico, in one of their public health systems, has 
decided to go with VistA and have made a 3-year commitment to 
start putting it up in three hospitals with the intent to go 
very widespread, but that particular portion accounts for about 
60 percent of all of the population of Mexico.
    Mr. Bilirakis. You wanted to add----
    Mr. Blumenthal. Mr. Chairman, if I could add a couple of 
points to questions that have been raised in the past. One 
concerns money, and it seems as though the Congress has not 
been unwilling to add expenditures to the Medicare program 
where it felt that they had a real return for the beneficiaries 
of the program. It strikes me that this is one such area. 
Whether CBO marks it as an additional expenditure or not, it 
certainly marked the prescription drug benefit as an additional 
expenditure, and yet the prescription drug benefit was passed.
    The second point, I guess, has to do with----
    Mr. Bilirakis. But there is not an unlimited pool out 
there. Somewhere along the line----
    Mr. Blumenthal. I understand that.
    Mr. Green. Particularly in that pool you are not sure how 
much it is.
    Mr. Bilirakis. Well, since when have you even cared?
    Mr. Green. I have only been here 6 terms. You are training 
me.
    Mr. Bilirakis. All of a sudden--who are the fiscal 
conservatives--all of a sudden. But any case.
    Mr. Green. I am good lawyer, I can argue either way.
    Mr. Blumenthal. The other point I guess I wanted to make 
was that it seems to me that these information technologies are 
core to our national security when it comes to bioterrorism and 
health care security. And there is no reason, I think, why some 
of the funds that have been available for homeland security 
couldn't and shouldn't be used for the shoring up of the 
ability of front-line providers of care in emergency rooms 
around the country, for example, to provide prompt information 
on atypical disease patterns that could represent terrorist 
activity.
    Mr. Bilirakis. Well, you have been terrific, and you have 
been patient, and I apologize for the delay. You know, you sit 
there and you listen to our opening statements. Thank God there 
weren't too many here today for that. If Gene had been here, it 
would have added another----
    Mr. Green. You only give me minutes, Mr. Chairman, and I 
talk slow.
    Mr. Bilirakis. But anyhow you are very patient, and we 
appreciate that very much. I would say that the opening 
statements of all members of the subcommittee are made a part 
of the record, without objection. We will have additional 
questions to you in writing, as we always do, and we appreciate 
a timely response to those. And, additionally, I invite you to 
furnish us whatever it is you please, anything that might be 
helpful to us.
    I am hopeful that in the fall that we can at least get 
started talking about this. No, we are not going to come up 
with anything until the next Congress and hopefully even then, 
but hopefully we can start at least talking, maybe we can start 
meeting.
    But there are all kinds of obstacles out there. You have 
mentioned them, Dr. Diamond. There is a lot that you haven't 
even mentioned, but lots of those obstacles coming in our 
minds, I think, and that is why these things don't get done. 
But hopefully we will be open-minded enough to get together and 
try to do something about this. It is a shame. What a resource 
that is out there that--talk about malpractice. What a resource 
we are not taking advantage of.
    Well, thank you very much. Hearing is adjourned.
    [Whereupon, at 5:07 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]
     Prepared Statement of American Clinical Laboratory Association
    The American Clinical Laboratory Association (ACLA) congratulates 
Chairman Bilirakis and the Subcommittee on Health for holding this 
hearing on health care information technology (IT). ACLA is an 
association representing independent clinical laboratories throughout 
the United States including local, regional and national laboratories.
    Increasingly, clinical laboratories are using IT innovations to 
improve patient care, as well as to promote the highest level of 
efficiency and affordability. Implemented properly, IT will provide 
ready access to timely, relevant, reliable and secure information 
through an interconnected infrastructure affording better health and 
health care.
    ACLA wants to make sure that the laboratory industry is an active 
participant as IT becomes a more important part of health care 
delivery. Specifically, we want to avoid the problems that the 
laboratory industry experienced with the implementation of the HIPAA 
standard transaction requirements in which requirements did always not 
match the operational realities of providing laboratory services and 
billing for these services. Accordingly, ACLA is taking a more active 
role in the IT issue by joining the private sector coalition on health 
care IT, the E-Health Initiative (E-Hi).
    ACLA is currently working with various agencies within the Federal 
Government on the issue of health information technology--including the 
Centers for Disease Control and Prevention (CDC), the Agency for 
Healthcare Research and Quality (AHRQ), and the Centers for Medicare 
and Medicaid Services (CMS). Most notably, ACLA is working with CMS' 
Office of Research, Development, and Information on the development of 
standards for clinical laboratory data reporting. This demonstration 
project seeks to investigate the potential benefit of linking existing 
data streams including laboratory, pharmaceutical, and radiological 
data through the Doctor's Office Quality--Information Technology (DOQ-
IT) project. ACLA is committed to helping the Administration move from 
paper to electronic health records. ACLA is pleased CMS sought the 
clinical expertise of the association and its members since 
laboratories have been utilizing this means of information sharing for 
many years.
    Again, congratulations to Chairman Bilirakis and the entire 
Subcommittee on Health for holding this hearing. ACLA looks forward to 
working with the Committee to facilitate the adoption of IT throughout 
the health care sector.
                                 ______
                                 
  Response for the Record from the Department of Veterans Affairs to 
             Questions from Ranking Member John D. Dingell
    Question: To help assess the type of financial commitment necessary 
to implement a health information technology strategy, please itemize 
the funding the Department of Veterans Affairs has spent on each VA 
information technology advance such as electronic medical records, 
imaging of patient labs, patient access to records, telehealth and 
other aspects of VA's health information technology infrastructure 
including maintenance and updates year by year over the past 10 years. 
For each health information technology advance, can you state where the 
funding originated?
    Response:
VA's Health Information System
    The Department of Veterans Affairs' (VA) Health Information System 
is a compilation of more than 100 highly integrated clinical and 
administrative applications that support care delivery. VA began to 
develop component clinical applications such as laboratory, radiology, 
pharmacy, imaging, etc. in the early 1980's. Subsequently, the same 
development and operational infrastructure was used for administrative 
and financial applications such as employee timekeeping, patient 
accounts and VA's billing and accounts receivable financial systems. 
These applications, initially known as the Decentralized Hospital 
Computing Program (DHCP) and later as the Veterans Health Information 
Systems and Technology Architecture (VistA), represent both VA's 
Electronic Medical Record (EMR) and non-EMR applications needed to run 
the VA hospital information system.
    Funding for the development and maintenance of all information 
technology efforts came from the Medical Care, Research and MAMOE 
appropriations for FY 1995 through FY 2003 and from the Medical 
Administration appropriation in FY 2004. This funding supports the 
development, deployment, operations and maintenance of applications 
software; acquisition and operation of commercial software; 
acquisition, operation and maintenance of hardware in support of 
healthcare delivery; acquisition of information technology (IT) 
services; and salaries and benefits for VA IT employees.
    VA does not break down its budget documentation by an EMR category. 
Expenditures in support of health information technology/efforts such 
as Medical Imaging (including cardiology, laboratory, pathology, 
radiology, etc.), Blood Bank, Bar Code Medication Administration, 
Laboratory and patient access to medical records are funded through the 
health IT budget. Applications that comprise the EMR, as well as the 
expenditures for infrastructure, support, and operating expenses are 
contained in broader categories in VA's budget documentation. For 
example, in FY 1997, IT projects included clinical EMR applications 
such as pharmacy, clinical laboratory, radiology, nursing, surgery, 
mental health, dietetics, medical records tracking, as well as, 
administrative/financial applications, including enrollment, 
telecommunications infrastructure, and universal billing. These 
initiatives were mentioned in the budget narrative; however, the 
historical specific cost information is not available.
    The available historical or estimated obligation data are displayed 
on Attachment A for FY 1995-FY 2004. The funds specified were and are 
used to support development and operations of VA's EMR nationally. 
Obligations for financial information systems, telecommunications 
services, phone bills, web operations, desktop computing, and 
administrative staffing support are also included in these totals.
    Based on the FY 2003 health IT budget, the average annual cost of 
operating and maintaining VA's EMR, VistA, was $62 dollars per enrollee 
per year (based on 7.2 million enrollees). This figure included field 
costs for hardware, software and support personnel.
    The accounting processes for Information Technology (IT) spending 
have changed significantly over the course of 10 years. Project-
specific information is available for the current fiscal year. 
Implementation and training costs are also included in the figures 
below: FY 2004 program spending for VA's; VistA Imaging, My HealtheVet, 
etc., follows:
    VistA (includes Computerized Patient Record System CPRS)--$353.6 
million
    My HealtheVet (including patient access to medical records)--$5.9 
million
    VistA Imaging (displays images from various VistA applications)--
$70.2 million
    VHA Computing Infrastructure (required to run VistA systems)--$84.7 
million
Telehealth
    Telehealth development in the Veterans Health Administration (VHA) 
began during the early 1990's. This work built on the VA's existing and 
emerging information technology infrastructure, including network 
connectivity, video conferencing, and use of clinical applications. 
Early foundational work also involved testing the use of new 
technologies, e.g., use of the Internet as a tool to communicate with 
veterans, audio/ video streaming through the web, on-line submission of 
forms, use of Public Key Infrastructure to securely identify 
individuals, etc. Funding for this foundational work was part of VA's 
health IT budget; however, it was displayed in the budget under capital 
expenditures for infrastructure and/or development for clinical VistA 
applications and not broken out specifically for Telehealth.
    In 1997 a Telemedicine Strategic Health Care Group (SHG) was formed 
in the Office of Patient Care Services in VHA to develop the clinical 
processes necessary to develop and sustain Telehealth in VHA. The 
expenditures presented below, and in the accompanying spreadsheet 
(under Telehealth obligation data) therefore reflect the clinical 
processes necessary to make Telehealth a part of mainstream healthcare 
delivery in VHA. There are specific technologies e.g., teleradiology 
that have been purchased for the direct provision of services at the 
VISN and facility level, are contained within the medical equipment 
budget, and have not been separately itemized to Telehealth. The direct 
clinical consultation/care provided via Telehealth is not separately 
itemized. These clinicians are employed to deliver care and the 
proportion of time devoted to Telehealth is variable and not separately 
itemized. In July 2004, the Telehealth SHG was incorporated into a new 
Office of Care Coordination.
    Attachment B provides VHA Telehealth expenditures and funding 
sources for FY 1995-2004. Home Telehealth IT infrastructure support 
funding in the amount of $2,098,000 for FY 2003-2004, is not included 
in the total Telehealth program support expenditures.
[GRAPHIC] [TIFF OMITTED] T5460.001

                                 
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