[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




IS THERE A DOCTOR IN THE MOUSE? USING INFORMATION TECHNOLOGY TO IMPROVE 
                              HEALTH CARE

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON THE FEDERAL WORKFORCE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 27, 2005

                               __________

                           Serial No. 109-127

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform

                                 _____


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                             WASHINGTON: 2006        

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on the Federal Workforce and Agency Organization

                    JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida                DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia                  MAJOR R. OWENS, New York
DARRELL E. ISSA, California          ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas                    Columbia
PATRICK T. McHENRY, North Carolina   ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   CHRIS VAN HOLLEN, Maryland

                               Ex Officio
                      HENRY A. WAXMAN, California

                     Ron Martinson, Staff Director
                  Chad Bungard, Deputy Staff Director
                       Chad Christofferson, Clerk
            Tania Shand, Minority Professional Staff Member



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 27, 2005....................................     1
Statement of:
    Brailer, David, M.D., Ph.D., National Health Information 
      Technology Coordinator, Department of Health and Human 
      Services; and Carolyn M. Clancy, M.D., Director for the 
      Agency for Health Care Research and Quality, Department of 
      Health and Human Services..................................    30
        Brailer, David...........................................    30
        Clancy, Carolyn M........................................    45
    Fineburg, Harvey, M.D., Ph.D., president, Institute of 
      Medicine; David St. Clair, founder and CEO, MEDecision, 
      Inc.; and Jan Walker, RN, MBA, executive director, Center 
      for Information Technology Leadership [CITL]...............    65
        Fineburg, Harvey.........................................    65
        St. Clair, David.........................................    75
        Walker, Jan..............................................    81
    Kennedy, Hon. Patrick, a Representative in Congress from the 
      State of Rhode Island......................................     8
    Springer, Linda M., Director, Office of Personnel Management.    23
Letters, statements, etc., submitted for the record by:
    Brailer, David, M.D., Ph.D., National Health Information 
      Technology Coordinator, Department of Health and Human 
      Services, prepared statement of............................    33
    Clancy, Carolyn M., M.D., Director for the Agency for Health 
      Care Research and Quality, Department of Health and Human 
      Services, prepared statement of............................    48
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    91
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................    22
    Fineburg, Harvey, M.D., Ph.D., president, Institute of 
      Medicine, prepared statement of............................    67
    Kennedy, Hon. Patrick, a Representative in Congress from the 
      State of Rhode Island, prepared statement of...............     9
    Murphy, Hon. Tim, a Representative in Congress from the State 
      of Pennsylvania, prepared statement of.....................    13
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................     5
    Springer, Linda M., Director, Office of Personnel Management, 
      prepared statement of......................................    26
    St. Clair, David, founder and CEO, MEDecision, Inc., prepared 
      statement of...............................................    77
    Walker, Jan, RN, MBA, executive director, Center for 
      Information Technology Leadership [CITL], prepared 
      statement of...............................................    83

 
IS THERE A DOCTOR IN THE MOUSE? USING INFORMATION TECHNOLOGY TO IMPROVE 
                              HEALTH CARE

                              ----------                              


                        WEDNESDAY, JULY 27, 2005

                  House of Representatives,
      Subcommittee on Federal Workforce and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:02 p.m. in 
room 2154, Rayburn House Office Building, Hon. John C. Porter 
(chairman of the subcommittee) presiding.
    Present: Representatives Porter, Davis of Illinois, and 
Norton.
    Staff present: Chad Bungard, assistant staff director, 
chief counsel; Ronald Martinson, staff director; Chad 
Christofferson, clerk; Patrick Jennings, detailee from OPM 
serving as senior counsel; and Tania Shand, minority 
professional staff member.
    Mr. Porter. A quorum being present, the Subcommittee on the 
Federal Workforce and Agency Organization will come to order.
    Good afternoon. I would like to thank everyone for being 
here today, especially our witnesses. The issue before us is an 
important one and something to which we can all relate. Every 
single one of us has gone to the doctor's office or the 
hospital or knows someone that has made such visits.
    With both legislative jurisdiction over the Federal 
Employees Health Benefits [FEHB], program and oversight 
jurisdiction over health care policy, this subcommittee is 
poised to examine ways to achieve President Bush's goal for the 
majority of Americans to have electronic health records within 
10 years.
    Notwithstanding the fact that the United States is a world 
leader in health care science, its delivery and management of 
health care is often outmoded and inefficient. Over 90 percent 
of the activities that go into the delivery of health care are 
centered on information and information exchange. If this 
component is flawed in any way, the optimal delivery of care 
will not be achieved.
    Health care costs are increasing at an alarming rate, 
rising 70 percent since 2000. The quality of care is riddled 
with preventable medical and administrative errors and burdened 
with inefficiency.
    Information technology can help cure these ills. With the 
deployment of health information technology in a global 
fashion, no longer will patients have to be held captive to the 
brown padded envelopes in the bottom of their chest of drawers 
full of incomplete medical records. No longer will patients 
have to track down personal health information from across the 
country.
    No longer will a pharmacist misread a doctor's handwriting 
and prescribe the wrong medicine. No longer will medical errors 
occur caused by the lack of or incomplete health information. 
And, as Dr. David Brailer noted at a technology summit last 
year, ``no longer will we spend up to $300 billion a year on 
inappropriate treatment or up to $150 billion on administrative 
waste.''
    The use of information technology has enormous potential to 
improve the quality of health care and is key to overall 
improved performance of the U.S. health system. Health care 
organizations are only beginning to apply technological 
advances. Patient information typically is dispersed in a 
collection of paper records, which often are poorly organized, 
illegible, and not easy to retrieve, making it nearly 
impossible to manage various chronic illnesses that require 
frequent monitoring and ongoing patient support.
    In a world where our cars, our pets, our checking accounts 
have their own computerized record, is not it time for every 
American to benefit from the same technology? And I must 
emphasize the benefits are innumerable. The Institute of 
Medicine estimates that medical errors account for 
approximately 45,000 to 98,000 deaths each year in the United 
States, and 770,000 injuries due to adverse drug events, many 
of which could have been prevented through the use of health 
information technology.
    In fact, more people die each year in the United States 
from medical errors than from highway accidents, breast cancer, 
or even AIDS. If death by medical errors were listed among the 
most deadly diseases, it would be among the top 10 leading 
causes of death in the United States each year.
    The use of technology will reduce medical errors by making 
health information more accessible to both patients and 
providers, no matter where the patient is receiving that care. 
For example, the Boston Globe recently reported on the 
senseless, preventable death of a 79 year old retired chemist 
who died after doctors at the Massachusetts General Hospital 
treated him for a stroke when he really was having an insulin 
reaction. Tragic. It is easy to see how an electronic medical 
record could have assisted the physicians in correctly 
diagnosing this patient.
    In addition, the use of automated medication order entry 
systems can reduce errors in prescribing drugs, and 
computerized reminders can help both patients and clinicians to 
identify needed services. The Journal of the American Medical 
Association reported in a recent study that computerized 
prescriptions resulted in an 81 percent decrease in errors. The 
National Center for Vital and Health Statistics reports that 20 
percent of handwritten medical documents are illegible, and 24 
percent are incomplete. Prescription errors can result in real 
catastrophes that easily could be prevented.
    Recently, a 42-year-old male patient died 2 weeks after 
taking the wrong prescription drug. In that case the doctor who 
wrote the prescription wrote it for the wrong amount. It was 
actually eight times higher than what he should have been 
receiving.
    The Department of Health and Human Services also reports 
that health information technology can significantly reduce 
cost by saving time, reducing duplication and waste, and 
improving efficiency. The Center for Information Technology 
Leadership estimates that a national health information 
technology system will result in annual savings of $132 
billion. With national health care spending at a 15.6 percent 
share of the GDP, this is welcome news.
    The benefits of computerizing health records are 
substantial. Health information technology will improve the 
quality of care, reduce the redundancy of testing and 
paperwork, virtually eliminating prescription errors, prevent 
adverse effects from conflicting courses of treatment, and 
significantly reduce medical errors and administrative costs.
    In announcing his 10 year goal, the President admonished 
the Federal Government to take the lead. The FEHB program is no 
exception and should leverage its buying power of about 8\1/2\ 
million participants to support President Bush's goal and lead 
by example.
    As the Institute of Medicine's president, Dr. Harvey 
Fineburg, stressed in testimony before this subcommittee this 
past March, the FEHB program could promote data standards and 
appropriate deployment of information technology providers. And 
since that hearing I am pleased to see that the Office of 
Personnel Management emphasized the importance of increase of 
health information technology for the first time in its April 
2005, program carrier letter, offering guidance to insurance 
carriers for negotiating with the OPM.
    The FEHB program can enhance its service to Federal 
employees and serve as a model for improving the performance of 
U.S. health care systems as a whole.
    Progress is also being made on the national front. In June 
of this year HHS Secretary Mike Leavitt announced new efforts 
to help speed the President's 10-year proposal, stating that 
the HHS will establish a national health information 
infrastructure that will effectively be taken over by the 
public and private health sectors, eventually eliminating the 
need for extensive Federal involvement.
    No one can claim that moving information technology into 
the health care industry is going to be easy. There are many 
challenges of implementing information technology, including 
financial, technical, cultural, turf. These are but a few of 
the challenges that we have.
    As chairman of this subcommittee, I am committed to 
supporting the President's goal and guiding the implementation 
of health information technology in both the FEHB program and 
throughout the Nation. This subcommittee will hold additional 
hearings over the next several months to face the challenges 
head on and achieve meaningful improvement in America's health 
care system.
    The individuals before the subcommittee today are vital 
players and leaders in achieving our goal and the President's 
goal, and I look forward to discussion from all the witnesses 
this afternoon.
    I have had the opportunity to spend time in Nevada 
hospitals. I have had a chance to see first-hand. And yes, I 
have been sick in the hospitals before, but I have been very 
specific in spending time in the emergency rooms to see what I 
could do as a Member of Congress. University Medical Center, a 
major facility in southern Nevada, I have spent a couple of 
days just working hand in hand with the doctors--of course, 
staying out of the way--trying to see what we could do. I am 
amazed at how well our delivery system does work, even in spite 
of some of the technological challenges. But I saw first-hand 
how technology could be such a lifesaver in many respects 
around the country, not only in Nevada but in every community 
across this great country.
    Having said that, I would like to now recognize our ranking 
minority member of the subcommittee, Mr. Danny Davis. Mr. 
Davis.
    [The prepared statement of Hon. Jon C. Porter follows:]
    [GRAPHIC] [TIFF OMITTED] 
    
    [GRAPHIC] [TIFF OMITTED] 
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Davis of Illinois. Mr. Chairman, I do not know what 
Representative Kennedy's time piece is, but if he would have a 
problem returning after the votes then I would defer to him and 
let him give his testimony. If not, then I will go ahead.
    Mr. Kennedy. No problem. That would be appreciated. If you 
are having another hearing down the road, I would be willing to 
testify at that, as well. If you want me to make brief comments 
now, I would be happy to come back at the next hearing.
    Mr. Porter. Without objection.
    Mr. Davis of Illinois. I am prepared to yield to the 
Representative.
    Mr. Porter. Thank you. Without objection, please. Welcome.

STATEMENT OF HON. PATRICK KENNEDY, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF RHODE ISLAND

    Mr. Kennedy. Thank you. Thanks, Mr. Chairman, 
Representative Davis.
    Mr. Chairman, you just outlined essentially the problem and 
possibly the direction for us to go in terms of the solution. 
But I think what is important here is that this is not a 
hearing about technology. This is a hearing about saving lives.
    You hit it on the head at the outset, Mr. Chairman, when 
you said that roughly 48,000 to 100,000 people in this country 
die of medical errors. It is the equivalent of a jumbo jet 
crashing every 3 days in this country. If the American people 
really understood the degree to which they are in jeopardy of 
being a victim of a medical error when they go to the hospital, 
Mr. Chairman, I know this Capitol would be awash with people 
from all over the country demanding that we would do something.
    Mr. Chairman, I think people are learning about this and 
they are expecting us to begin to reform this system. 
Technology can be a big part of that. Mr. Chairman, 
Representative Murphy and myself have offered a piece of 
legislation that suggests a way to go about implementing IT in 
our medical system in this country. Everybody has recognized 
the need to do this, but now we have to actually do it, Mr. 
Chairman. That I think is our challenge here.
    As you all are able to do this through showing how 
Government can be a model for the rest of the country, I think 
it is an important role that you will play in this debate, 
because the Federal Employees Health Benefits program is going 
to be a program that will be looked to as a model. And so I 
encourage you to continue to talk about how you are intending 
to do that. I look forward to coming back when you have 
successive hearings to be able to comment further about ways 
that you might do that.
    I thank you for holding this hearing and focusing the 
attention that you are focusing on this very important subject.
    [The prepared statements of Hon. Patrick Kennedy And Hon. 
Tim Murphy follow:]
[GRAPHIC] [TIFF OMITTED] 

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    Mr. Porter. Thank you, Congressman. We appreciate your 
leadership in a bipartisan nature with Congressman Murphy, who 
is sick today.
    Mr. Kennedy. That is right.
    Mr. Porter. Here we are talking about health care, and my 
friend Tim decides to be ill. But certainly we appreciate what 
you are doing and we look forward to working with you and 
applaud you for your leadership. Thank you very much.
    Mr. Kennedy. Thank you very much, Mr. Chairman.
    Mr. Porter. We will now go into recess until our votes are 
concluded.
    Thank you.
    [Recess.]
    Mr. Porter. I would like to bring the meeting back to 
order.
    For those that have attended a few of our subcommittee 
hearings in the past, I have been promising to hold our 
hearings in Las Vegas. Well, I think I am not sure whether it 
is cooler here or in Las Vegas today. We will be having a 
hearing in Las Vegas some time in August, so you are welcome to 
join us around the 12th. If you are looking for a reason to 
come to Nevada, we are going to be having a hearing in the dry, 
wonderful southwest.
    Thank you for your patience. We will bring the meeting back 
to order.
    I would like to turn to Mr. Davis for any opening comments.
    Mr. Davis of Illinois. Thank you very kindly, Mr. Chairman. 
Let me thank you for calling this hearing. This is a very 
timely subject for the subcommittee to be considering.
    The utilization of information technology to improve the 
Nation's health care system has gained a great deal of momentum 
since the Institute of Medicine released its 1996 report on 
health IT: ``To Err Is Human: Building a Safer Health System.''
    As a matter of fact, health IT is featured in the August 1, 
2005, issue of Health and Medicine section of U.S. News and 
World Report. One of the articles in the magazine, ``Can High 
Tech Save Your Life?,'' listed 47 hospitals that earn two 
impressive distinctions: first, the hospitals were listed among 
America's best hospitals, U.S. News and World Report's ranking 
of hospitals that is based on expertise, ability to save lives, 
reputation among specialists, commitment to nursing excellence, 
and several other factors.
    Those hospitals also made the 100 Most Wired List compiled 
by hospitals and health networks and published by the American 
Hospital Association. It is a list that identifies the 
hospitals and health systems that have the most complete 
information technology. It would appear that those hospitals 
have successfully used health IT, the technology used to 
collect, store, retrieve, and transfer health information 
electronically to improve the quality and safety of health care 
for their patients.
    When compared to other institutions, the mortality rate of 
the 100 Most Wired Hospitals was 7.2 percent lower on average. 
While there seemed to be a connection between improved patient 
outcomes and health IT, matters of patient privacy, continued 
human care, and the accessibility of online medical data should 
be addressed by health care providers as they adopt IT policies 
and systems.
    I might just add, Mr. Chairman, that you really appreciate 
our looking into this matter. I have had a long and intimate 
association with health care, representing more hospital beds 
than any other Member of Congress in the United States, having 
many of the finest hospitals in the country and medical schools 
in my Congressional District. As a matter of fact, there are 
four of them--Northwestern University, University of Illinois 
at Chicago, Rush Presbyterian, St. Luke's Medical Center, 
Loyola University--as well as a number of smaller community 
hospitals threaded throughout the area.
    I have also spent a great deal of my personal career 
involved in health care. As a matter of fact, I have sat on the 
boards of hospitals, I have worked in community health centers, 
I have been an active member of the American Public Health 
Association. As a matter of fact, I wrote my doctoral 
dissertation on the health care needs of black Chicago. I have 
worked with doctors and hospitals and been on a couple of 
Federal commissions that I was appointed to, one by President 
Carter and some other people. So health has been pretty much my 
life, and the most exciting part of my life.
    So as we try and find ways to improve the quality of care 
and find new ways to protect our public, it is exciting and 
challenging, and so I certainly thank you for delving into this 
arena and look forward to the testimony of our witnesses.
    I yield back.
    Mr. Porter. Thank you, Mr. Davis.
    Mr. Davis of Illinois. And the medical center that you are 
talking about out in Vegas, my good friend is the director, a 
fellow named Lacy Thomas, who used to work for me.
    Mr. Porter. You trained him very well. He is doing a great 
job.
    Mr. Davis of Illinois. I am glad to know that he is doing 
well.
    Mr. Porter. He is doing real well. So maybe when you are 
out for the meeting in August we can stop and see him.
    Mr. Davis of Illinois. Absolutely.
    [The prepared statement of Hon. Danny K. Davis follows:]
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Porter. With that, I ask unanimous consent that all 
Members have 5 legislative days to submit written statements 
and questions for the record, and the answers to written 
questions provided by the witnesses also be included in the 
record.
    Without objection, so ordered.
    I ask unanimous consent that all exhibits, documents, other 
materials referred to by Members and witnesses may be included 
in the hearing record and that all Members be permitted to 
revise and extend their remarks.
    Without objection, so ordered.
    It is also the practice of this subcommittee to administer 
the oath to all witnesses. If all witnesses would please stand, 
I would like to administer the oath.
    [Witnesses sworn.]
    Mr. Porter. Let the record show that the witnesses have 
answered in the affirmative.
    We have four panels today. As you know, we started with 
one, which was very brief for politicians. We appreciate 
Congressman Kennedy for his leadership and we certainly will 
have him a part of our additional hearings and will also have 
Congressman Murphy joining us.
    So what I would like to do now is move into our second 
panel. Our second panel, we will hear from Linda Springer, the 
Director for Office of Personnel Management. In fairness, Ms. 
Springer and I have met numerous times over the past month or 
so, but we note that this is her first hearing with our 
committee. We are honored to have her.
    I know that in the brief amount of time that you have had 
on the job you have been getting a lot of things together, and 
I know that even prior to being in a new position you were 
aware of a lot of these issues. We welcome you and understand 
that, in your long term of serving the business community and 
the public sector, you have had a very distinguished career, 
and we appreciate your being here today.
    You have 5 minutes. We look forward to having you come 
back.

 STATEMENT OF LINDA M. SPRINGER, DIRECTOR, OFFICE OF PERSONNEL 
                           MANAGEMENT

    Ms. Springer. Thank you, Mr. Chairman. It is a privilege to 
be here with this committee today with you and Representative 
Davis on what we consider at OPM to be a very important issue, 
and that is the efforts of OPM particularly in helping the 
community to adopt the provisions of the health information 
technology, particularly in the FEHB program.
    I want to provide a little context for my remarks about 
that adoption and in the way of background of the FEHB program 
and OPM's role as the administrator.
    There are approximately 8 million Federal employees, 
retirees, and dependents who are covered by that program. The 
program allows OPM to offer competitive health benefits for 
Federal workers in a similar fashion that large employers are 
able to procure that in the private sector.
    We administer the program by contracting directly with 
private sector providers, but not with the doctors, themselves, 
so we do not have specific oversight there, but indirectly we 
do through the health programs.
    Now, with that background I would like to talk a little bit 
about the direct subject of this hearing and our related 
activities with the FEHB program.
    Under the Executive order issued by President Bush related 
to the health information technology, there were several areas 
where OPM was directed to provide information and to work 
closely to promote its enactment. The order underscored really 
the importance that the President places on the development of 
this type of capability nationwide and to have health 
information technology infrastructures in place that will 
improve quality, safety, and efficiency of health care.
    In order to help fulfill the President's vision, OPM, 
working also with the Veterans Affairs Department and also 
Department of Defense, was directed to submit a report within 
90 days of the Executive order on various options and 
incentives that we could put into place in the FEHB program to 
try and promote adoption of these health information technology 
opportunities.
    In July 2004 OPM fulfilled that requirement and issued a 
report to the President outlining various options to provide 
incentives in the FEHB program. Among those options were the 
following: Encouraging health plans to provide incentives for 
the adoption of interoperable health information technology 
systems under the FEHB contracts. Consider basing part of the 
service charge or profit for the fee for service plans and 
other experience rated plans and consider introducing 
performance goals for health maintenance organizations--this is 
where you really are putting your money where your mouth is 
when you start talking about their service fees. Introducing 
incentives and other performance goals for plans that contract 
with networks of providers to make records accessible through 
secure--and I want to underscore secure--and other HIPPA 
compliant interoperable HIT systems. Introducing incentives and 
performance goals for plans that integrate their provider 
networks with local and national health information 
infrastructure initiatives. Also encouraging and rewarding 
carriers that contract with pharmacy benefit managers that are 
providing incentives for e-prescribing and health information 
technology linkages.
    Earlier this year OPM staff met with Dr. Brailer, HHS' 
national health information technology coordinator, and his 
staff on how we could work closely with them to help promote 
and to move forward the agenda that they have. In April 2005, 
Dr. Brailer was the keynote speaker at our annual FEHB carrier 
conference. His staff also had a followup workshop at the 
conference to provide more in-depth information for the plans 
that are participating in the FEHB program. Again, the idea 
there was to have direct contact without any intermediary for 
the members of the FEHB program and Dr. Brailer.
    Following this conference, OPM issued the annual Call 
Letter to the carriers that are in the FEHB. This carrier 
letter provides guidance and negotiation objectives for benefit 
and rate proposals for the FEHB program for the next contract 
term. I have a copy of that Call Letter here, but if you look 
at the Letter you will find that about a page, a solid page of 
this is in the Letter this year that would not have been here 
in the past were it not for the new initiatives on HIT. So 
clearly OPM is taking some very concrete actions with respect 
to our carriers.
    The Call Letter requested that plans describe their HIT 
initiatives, including any currently in place for the doctors 
and pharmacies to use e-prescribing and for contracting 
hospitals to use electronic registries, electronic records, and 
e-prescribing. We have received responses from the FEHB plans, 
and we are in the process of reviewing them right now to 
establish a baseline from which we can measure progress on how 
they are doing.
    OPM's Web site is another important vehicle for 
communicating with all of the members of the FEHB program. On 
that Web site page for participating plans there are links to 
HIT-related information such as regional health organizations, 
and the focus on HHS' HIT initiatives and technology groups.
    OPM has affiliated itself with a variety of other 
organizations so that we can stay current on the efforts that 
are undertaken to again develop this technology capability. We 
are members of the e-health initiative, Employer and Purchaser 
Advisory Board, and we are on other various public/private 
partnership organizations that are focused on quality assurance 
and quality forums that are focused on patient safety, health 
care quality, and privacy issues.
    With regard to current privacy protections, FEHB enrollees 
have the same privacy protections as all Americans do in their 
private plans. All program contracts require health plans to be 
in complete compliance with HIPPA requirements, and as new 
interoperable systems are developed OPM will ensure that FEHB 
plans comply with any Federal requirements with respect to 
privacy of health information.
    We look forward to continuing to work with HHS and with our 
FEHB participating health plans on our initiatives. We are 
strongly committed to working forward alongside of the industry 
and private partners in accomplishing this important objective.
    This concludes my testimony, but I appreciate the 
opportunity to answer any questions that you may have, Mr. 
Chairman.
    Mr. Porter. Thank you very much.
    [The prepared statement of Ms. Springer follows:]
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    Mr. Porter. I am going to forego my questions at this time 
because the element of time is limited. I know we communicate 
frequently, so I will save my questions.
    Mr. Davis, do you have any questions?
    Mr. Davis of Illinois. I only have one question.
    How do you see patient privacy being handled with the 
development of the centralized data base?
    Ms. Springer. I think that patient privacy, first of all, 
is really the key to acceptance of this type of thing. If we 
could have all the technology in the world and all the 
information in the world, but if the privacy is not there we 
are really wasting our time because it will not be usable. 
People will not accept it. All of these things require, as I 
understand it, permission from the patient. They are optional. 
They are not a mandatory type of thing.
    So we have to show that the privacy safeguards are in 
place, similar to any other type of thing where personal, 
private information is used electronically. I think, as the 
chairman mentioned in his opening statement, there are any 
number of capabilities that are in place today where 
information is available. Health care is one of the last 
frontiers, if you will.
    So we have to look to those areas to find out what they are 
doing to ensure privacy and to make sure that it is there, 
whether it is technologically or the kind of oversight 
certification possibly that might be required. But I think it 
is clear that without the privacy protections these efforts 
will not be successful.
    Mr. Davis of Illinois. Thank you.
    Mr. Porter. Thank you. Thank you, Ms. Springer. We 
appreciate it and look forward to working with you.
    Ms. Springer. Thank you.
    Mr. Porter. On panel three we have Dr. David Brailer, our 
newly appointed National Health Information Technology 
Coordinator at HHS; Dr. Carolyn Clancy, the Director for the 
Agency for Health Care Research and Quality, also a division of 
HHS. Thank you very much for being here.
    It is going to help the subcommittee as well as Congress as 
we move forward. You each will have 5 minutes. We start with 
Dr. Brailer.

   STATEMENTS OF DAVID BRAILER, M.D., PH.D., NATIONAL HEALTH 
 INFORMATION TECHNOLOGY COORDINATOR, DEPARTMENT OF HEALTH AND 
 HUMAN SERVICES; AND CAROLYN M. CLANCY, M.D., DIRECTOR FOR THE 
  AGENCY FOR HEALTH CARE RESEARCH AND QUALITY, DEPARTMENT OF 
                   HEALTH AND HUMAN SERVICES

                   STATEMENT OF DAVID BRAILER

    Dr. Brailer. Thank you, Chairman Porter and Ranking Member 
Davis.
    I have submitted my testimony in advance, and with your 
consent I will just give brief remarks and then answer any of 
your questions.
    Efforts are well underway to advance health information 
technology. There are numerous initiatives across the United 
States in the Administration, which I will detail today, in 
many States driven by Governors and legislatures, in local and 
regional grassroots projects, and in the private sector. We 
certainly welcome the interest of health IT in this 
subcommittee and elsewhere in Congress.
    We have set the foundation for health information 
technology that is long-term, market-based, non-regulatory, and 
with a primary focus on attributes that America's consumers 
need: safety and quality, cost effectiveness, consumer 
management, and threat preparedness.
    Briefly, the foundations of our efforts fall into three 
categories. First, clinically, we want to ensure that 
clinicians have access to the kinds of information they need to 
prevent errors and deaths, to make evidence-based treatment 
decisions, and to reduce redundant treatments and unnecessary 
treatments.
    We want to bring disparate clinicians together because of 
the overwhelming evidence that team-based care and 
collaborative care improve patient's health status. We want to 
get information to consumers so they can make their own 
treatment decisions, be involved in critical management of 
their own health, and choose providers who suit their own 
needs.
    There is a business foundation, as well, that arises from 
strong support in the private sector for the use of health 
information technology to improve the competitiveness of our 
industry, to improve health status of employees, and to bring 
productivity to the U.S. health care industry that is not 
unlike productivity improvements we have seen in other sectors 
of the economy, and, as an added benefit, to develop high-
technology jobs in the health care industry across our 
providers in the United States.
    The Federal Government has been called upon by private 
sector leaders to be a catalyst and convener of this change--
and our actions reflect this orientation--and ultimately to use 
our purchasing power to drive results. To that end, we have had 
a very collaborative and positive relationship with OPM to be 
able to accomplish that goal.
    The technology foundations have been set by a recent RFI 
that we have published which asks how do we accomplish the 
goals of the Administration. Some of the key findings were: it 
should be collaborative, with public and private players 
involved; information should ultimately be patient centric, 
about the patient, not about the doctor or the hospital; there 
should be very strong privacy safeguards; the information 
should be decentralized and regionally governed; and there 
should be a nationwide communication, architecture, and 
standards.
    There are two fundamental aspects of our strategy. One is 
interoperability and the other is electronic health record 
adoption.
    Interoperability is ultimately about getting information 
where it is needed and when it is needed. Most of the clinical 
value that we discuss is tied up in the ability to get 
information to clinicians when they need it and have it be 
full, complete, and accurate; yet, today there is very little 
sharing of information and most of it that is done is patchy 
and proprietary. There is very little portability of health 
information toward consumers, and we cannot empower them 
without getting their information together in a useful way.
    The other component of our strategy is about electronic 
health record adoption, and later the adoption of other health 
information technology. There is a large gap in adoption 
between large health care systems, large hospitals large 
physician offices, and small ones. Large providers have the 
know-how and resources to buy, develop, invest, implement, and 
use advanced health information technology, and they are 
driving most of the reported adoption. Smaller providers, small 
physician offices, small hospitals have substantial barriers to 
the adoption and use of health information technology. They are 
lagging behind.
    We are placing our primary efforts on ensuring that health 
information is interoperable so that it can be seamlessly 
following the patient. We are doing this because many 
scientists and clinicians view that this is a key component of 
the health care of the future, and it is something that we 
believe has very strong support from the nearly unanimous 
recommendations from the respondents to our RFI.
    There are several other reasons for this approach, however. 
It is a one-time chance. Before there is large-scale adoption 
of electronic health records in the United States, we have a 
chance today to put in the foundations for information sharing 
so we can overcome fragmentation of health care. We can enable 
portable health information and personal health records for our 
consumers, we can stimulate electronic health record adoption 
without subsidies, because interoperability lowers the cost and 
increases the benefits of electronic health records.
    We can increase the industry's capacity to implement these 
tools by eliminating the labor-intensive and risky components 
of implementation to make products more plug and play. And we 
can promote innovation and fundamental research by developing 
new areas where technology can have promise for our clinicians.
    We have allocated $86\1/2\ million to achieve these goals 
in fiscal year 2005, and we have requested $125 million to 
advance this work further in 2006.
    I appreciate your interest in the topic and I look forward 
to further discussion and answering your questions. Thank you.
    Mr. Porter. Thank you, Doctor. We appreciate it.
    [The prepared statement of Dr. Brailer follows:]
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    Mr. Porter. Dr. Clancy, please.

                 STATEMENT OF CAROLYN M. CLANCY

    Dr. Clancy. Good afternoon, Mr. Chairman. I am delighted to 
outline the ways in which the Agency for Health Care Research 
and Quality [AHRQ], is advancing the adoption, implementation, 
and effective use of health information technology.
    I have asked that my written testimony be submitted for the 
record.
    AHRQ's research portfolio will help the Nation meet three 
vital objectives: reducing medical errors, improving the 
quality of patient care, and reducing the cost of health care. 
For nearly three decades AHRQ has funded the basic science of 
health IT by supporting the pioneers and innovators so that 
many of the Nation's leading health IT systems have actually 
been established from AHRQ-supported research. Our task now is 
to spread the knowledge and experience that we have gained more 
broadly throughout the health care system, and we also need to 
support research targeted to address some critical gaps.
    In fiscal year 2004, AHRQ announced an investment of $139 
million over 5 years to achieve these goals. This national 
initiative is now supporting 108 grants and contracts in 43 
States with over half of the projects based in rural and small 
hospitals and clinics. All told, this investment will affect 
more than 40 million Americans. My written statement details 
extensively these projects, but I would like to provide some 
highlights now.
    First, I would like to note briefly the important role that 
consumers can play in improving health care. Informed and 
engaged consumers who work in partnership with clinicians I 
think are an untapped resource. We need to make sure that they 
have the tools they need to make choices using evidence-based 
information. We have made it a priority to develop evidence-
based information for consumers and are very pleased that our 
partner, OPM, is the leading edge of making this information 
available for its customers.
    Mr. Chairman, as a Federal employee you can go to the FEHB 
Web site and use an AHRQ-developed tool called CAPS, which 
stands for the consumer assessment of health plan survey, to 
help you choose your plan.
    So we are now looking to the power of health IT to 
customize evidence and information about treatment choices, 
diagnostic options, and to put that into the hands of consumers 
and providers.
    Under the Medicare Modernization Act, section 1013, AHRQ is 
working with other Federal agencies to create a program to 
evaluate the comparative effectiveness of products and 
procedures. The results of those evaluations will be made 
available to the Medicare and Medicaid progress, as well as to 
other Federal programs, such as the FEHB and the general 
public. Our goal here is to organize the information so 
consumers can get it in a timely manner and use it to make 
informed decisions about their health care.
    We are also exploring new technologies that allow consumers 
to gain access to their personal health information securely 
over the Internet, such as their medicine lists. Access to 
trusted information like this on the Web, particularly if it is 
delivered in a timely fashion, will revolutionize health care.
    For providers, as you have pointed out, health IT offers 
great intermediate potential to improve patient safety by 
reducing medicine errors. The value, as you have noted, seems 
obvious: reducing handwriting errors, cross-checking 
prescribing errors, and identifying dangerous interactions 
before they occur.
    Health IT can also greatly improve the overall quality of 
care by making the right thing to do the easy thing to do.
    As a doctor, when I see a patient who is coughing and has a 
fever I can now use an AHRQ-funded electronic tool to help 
decide whether to hospitalize that patient. I used to have to 
leave the exam room, go look up the information to make 
treatment decisions. So it is an amazing innovation to have 
that information available at your fingertips when it is 
needed.
    We have also taken health IT into settings where 
traditionally it has not been available, including nursing 
homes, pharmacies, waiting rooms, schools, and patients' homes.
    The potential for cost savings from systematic use of 
health IT results from removing inefficiencies, improving 
physician decisionmaking, enhancing communication, and reducing 
followup care due to medical errors, use of inappropriate 
services.
    A survey we fielded last fall found that approximately one-
third of patients reported that they have to go back for a 
second visit because the relevant information was not available 
with their clinician at the time of their first visit.
    Our research has also demonstrated that computerized 
reminders can reduce hospital charges per admission by 
approximately 13 percent, and with your support we will 
continue our efforts to provide sound evidence on the financial 
benefits of health IT.
    Mr. Chairman, I cannot overemphasize how important 
practical technical assistance is to the successful adoption 
and implementation of health IT, and to that end we have 
created the AHRQ National Resource Center, the largest single 
commitment to technical assistance that we have made in our 
history.
    This resource center leverages our investments in health IT 
by offering help where it is needed in real-world clinical 
settings that may be ill-equipped to meet the health IT 
challenge. We do this by facilitating expert and peer-to-peer 
collaborative learning and fostering the growth of online 
communities that are planning, implementing, and researching 
technology. As one of our grantees has told us, transition to 
health IT is one part technical and two parts culture and work 
process change.
    This was designed initially to meet the needs of our 
grantees, and we have recently opened this up to the Nation's 
community health centers, and we will also be making it 
available to providers working with the quality improvement 
organizations.
    So I would like to conclude by making a couple of brief 
observations.
    First is that health IT alone cannot provide the 
improvements needed in our health care system. It has to be 
integrated into individual clinical practices in an 
interoperable system, as Dr. Brailer noted.
    Second, for most health care settings, health IT is not yet 
an out-of-the-box or, as Dr. Brailer said, a plug and play 
solution. It is very important to remember that health IT 
applications need to meet the needs of clinicians and patients 
rather than the other way around.
    A third important point is that the financial exposure for 
providers, when added to concerns about doing it right, 
increases the overall risk of making these investments. In 
order to accelerate the pace of adoption and implementation, we 
are committed to making sure that best practices and new 
knowledge and experience are disseminated widely in order to 
maximize the potential for quality improvement and reduce 
economic risk.
    We look forward to working with Secretary Leavitt, Dr. 
Brailer, and our other partners to making health care for all 
Americans better through health IT.
    Thank you. I would be happy to take any questions.
    Mr. Porter. Thank you, Doctor. We appreciate it.
    [The prepared statement of Dr. Clancy follows:]
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    Mr. Porter. I am concerned to a point where I felt today 
was a critical hearing to start the process as my chairmanship 
in this area. I think it is truly the future of health care in 
America. But I am also concerned. Government does not always do 
things very well. There are some things we do extremely well 
and some things we do not do very well. But I believe, from a 
health care perspective, we can do a lot of things right 
because of some of the sizes of our employees, the quantity of 
our employees, and the size of the market that we could use as 
a term now to work with.
    But I am concerned outside with the private sector because, 
as you have mentioned, there are the small providers and there 
are the mid-size and the large. But I have seen so many of the 
small providers that are accustomed to doing things the way 
they have always done things.
    Let me talk about doctors for a second. I know there are a 
lot of doctors in this room and some of my best friends are 
doctors. They do not always make good business people. They 
certainly are practicing medicine and their specialty and they 
are independent and they certainly--the bulk are very, very 
good and some of the best in the world. But I am concerned that 
many of them are not going to be receptive to this change in 
the way of doing business.
    Again, from the Federal perspective I think there are a lot 
of things that we can do. But in the private sector what can we 
do to help especially the small--I would think that the smaller 
providers might have a bigger challenge even than the larger 
ones because of the cost and the change. What can we do from a 
market-based approach to help give incentives to these 
providers, the doctors, the health care professionals to get 
them to step up to the plate? I truly believe this is the 
future of health care. I guess I ask that of both of you.
    Dr. Brailer. I think your concerns are accurately placed. 
There are certainly many large providers today that have the 
capital, the know-how, and the capacity to go through this very 
long-term process of changing their businesses to be more 
oriented around their customers, less error-prone, and more 
efficient. One of the good things about health IT is we have 
all those success stories, which began making, I think, this a 
very real phenomenon. And we are leaving behind a large share 
of providers, and it is not just capital, it is know-how or 
human capital.
    I think the question comes down to: how do we make sure 
that they have the capacity to finance this and they have the 
human capital to make it succeed, because it is ultimately not 
about software, it is about changing the way their practices 
operate.
    Unfortunately, this is probably one case where physicians 
are being good business people. It is not in their financial 
interest to put these tools in place. They do not get paid for 
better quality. They do not get paid for more efficiency. In 
fact, when they are more efficient they have less revenue. So 
for the standard physician the implementation of the electronic 
health record is a losing proposition.
    So we view this as a three-part equation. How do we 
increase the benefits of the electronic health record by 
allowing them to monetize better quality? I think the efforts 
that CMS has underway in pay for performance that are being 
followed and matched by various parts of the private sector are 
very encouraging. And, by the way, most of those efforts have 
up to 20 percent of their program aimed at health IT subsidies 
through those efforts.
    Second, how do we lower the cost of the technology? One of 
the implications of interoperability is that prices become more 
modular, products become more modular, and prices I think go 
down. But beyond that, one of our initiatives is around 
certification so you can compare two electronic health records 
on their features and know if they are the same and then ask, 
if they are the same, why does one cost more than the other.
    Third is lowering the risk, and I think this is where the 
human capital equation comes in. How do we make sure that these 
practices are not just buying software but they are changing 
the way decisions are made and communications occur and they 
engage with their patients. The QIOs have done a lot with this, 
the Health IT Resource Center from AHRQ has done a lot with 
this. There is a burgeoning movement of regional projects, 
local projects, where providers come together to be able to 
help provide those resources through medical societies or 
hospitals.
    One thing that we can certainly do is to remove regulations 
that prevent those kinds of collaborations between hospitals 
and physicians around developing an integrated model of care 
for their patients with health IT.
    So there is a lot we can do, but I think the fundamentals 
are moving in the right way and the question is how do we now 
accelerate it and be able to make sure that it delivers the 
kind of result not just for doctors but for consumers.
    Dr. Clancy. Just to add to those points, with which I agree 
completely, it is incredibly important because something like 
60 percent of the Nation's physicians practice in groups of 
five or less, so this is not a problem that can be ignored or 
that we can envision will somehow mysteriously transition away.
    Many of these small practices provide very high-quality 
care. I would agree with David completely that I think 
consistent demands for quality are likely to set the stage for 
greater interest among physicians in small practices.
    Recently there has been a collaboration that involves both 
the public and private sectors to select and prioritize metrics 
for reporting on quality and ambulatory care. Private sector 
organizations are going to be writing these into their 
contracts in 2006, and these are also the same metrics that CMS 
will use, so that reduces the burden of reporting at the same 
time that IT is ultimately going to make it easier for them to 
do that, so I think that is going to be a powerful incentive, 
in addition to the growing interest in pay for performance.
    And I would echo what Dr. Brailer had to say about practice 
strategies. It has been observed by some people that one of the 
reasons that physicians have been slower to adopt, in addition 
to the economic ones, is that there has not been a so-called 
``killer application'' for them in private practice. Yesterday 
I heard about one from a small practice. If you are a doctor 
and you have a patient for whom you have to get authorization 
for selective prescriptions this often involves a 10 to 12-
minute wait on the phone. It is a little bit hard to be seeing 
another patient while you are waiting online here.
    So a physician whose four-person practice has gone through 
this transformation and is very excited about it told me that 
their nurse quit last week and this nurse used to actually sit 
on the phone, and he figured out a way to automate this using 
their electronic health record system, and suddenly, all of his 
partners were newly re-excited about this. I think that is 
likely to happen, but I think all of the efforts that we are 
talking about here to make it easier to shorten this transition 
phase from moving from paper to electronic records is going to 
make it easy for small practices.
    Mr. Porter. I know the doctors, and I am fortunate my 
doctor I have been seeing for 20 some years is small practice 
and he has stayed ahead of the technology curve, but I just see 
so many that are overloaded with paperwork, and the file 
cabinet gestapo comes in if it is not locked properly, and 
doctors were getting frustrated, and many of those that want to 
change even are having a hard time paying their medical 
liability costs and staffing and they are not encouraging young 
folks or even those that are changing careers to get into the 
profession. I see this domino thing happening in health care.
    But two points. One, I look forward to continued 
discussion. I hope we can sit down and have a round table 
discussion some time that involves some give and take in the 
future. But it seems to me in the medical liability end that is 
the one thing that has brought doctors together across the 
country, and especially in Nevada, or the cost of medical 
liability insurance has brought doctors together. We have had a 
serious crisis in Nevada where you will see a for rent sign on 
OB/GYN offices throughout the State because they cannot afford 
medical liability insurance. I know Nevada is not isolated. It 
is happening all over the country. So we are looking at 
liability caps and different ways to help the doctors.
    But maybe something we could consider is finding some 
incentives for the medical liability carriers to provide some 
assistance to the medical doctors and providers that fall into 
using this new technology. There is no question the numbers 
show that there is life savings and far fewer risk involved 
with technology, so maybe that is something we can talk about 
at some point, incentive for insurance carriers, because I know 
they are having trouble even staying in business.
    But the other thing I touched upon earlier, as a group of 
Federal employees we have an opportunity to change culture 
across this country because of the massive size of the group, 
and I would think some of the things that you are working on 
and that we are working on to put in place for Federal 
employees will help create a new culture because of just the 
pure size of our group. And we touch most every major insurance 
carrier across the country and we touch families and doctors in 
most communities. So I look forward to working with you both as 
we look at both of those avenues.
    I know we now have another Member with us. Any questions or 
comments at this point?
    Ms. Norton. Mr. Chairman, I want to apologize because this 
is a hearing that I very much wanted to attend. In this last 
week of Congress we seem to be chasing our tails, as I think 
committees justifiably try to get in under the August wire but 
are not leaving us all of the time to get where we must.
    I just want to say one of the things we have to ask 
ourselves is why what would appear to help save lives, correct 
errors in a huge industry like this has been as slow as it has 
been to do the IT conversion that others have been quicker to 
move to. I am led time and again back to cost. Maybe this is 
overly simplistic, but if it was all that much to it you would 
have thought that the cost/benefit would have been done and the 
results would have been in health care what you see in other 
places.
    The chairman mentioned one reason why, I think, and you add 
on to that others. He talked about the cost, for example, 
physicians, particularly in a city like this or any big city, 
have with liability insurance. You talk about the out-of-
control cost of health care, period, outstripping inflation 
year after year no matter what is done. There are huge 
structural problems built into the way we deliver health care, 
paying more for health care than anybody else and providing 
less health care than any G8 or any advanced nation.
    I think one of the concerns in the system that should be 
the model, the FEHBP, will be for the average Federal worker or 
Federal organization will be it is going to cost some money and 
who is going to pay for it. The cost of doing what it seems to 
me inevitably must be done anyway and could have been done far 
more cost efficiently had it been done a little at a time 
beginning some years ago, but the cost of doing it--and you 
have to do it now just to keep up with everything that 
practitioners and health care organizations, just to keep up 
with--I mean, just to keep in touch with those people you are 
going to have to do it, so the inevitability of it is clear.
    But when it really gets down to it, you are going to find 
thoughtful people in the Federal work force are asking who will 
pay for this, who will they pass the cost on to. Insurance 
companies? Well, anybody who has seen the rise even in what we 
have flattered ourselves to believe is the most efficient of 
the health care systems in the country will have to simply 
snarl at that one.
    So I think your major problem or the major problem of the 
Federal Government is going to be how to accomplish this in a 
way that does not result in what almost everybody thinks it 
will--that the cost of premiums are going to go up, that when 
the buck gets passed it finally gets down to the family who is 
middle income, cannot afford the health care they have, happen 
to be in the Federal work force, and now, on top of rising 
premiums, have the cost of the transition, the transaction 
cost, if you will, into the IT that is inevitable and now is 
beginning to occur and beginning to pay for it.
    Have you thought through the--and perhaps I missed 
everything important because I am just getting here. Have you 
thought through whether that is the basic problem in this 
entire sector, and, if it is, how we might begin to get around 
that obstacle?
    Dr. Brailer. I appreciate your question, and certainly 
right here in the District are some leaders in health 
information technology who are showing how to do this, but all 
report the same challenge you raise. It is quite expensive, and 
every business person outside of health care that we explain 
this to says essentially the same thing: it does not make 
sense. IT makes the bottom line better for most organizations, 
so why not do it? And then we explain how DRGs work and fee for 
service payments and various discounts and all the other 
pieces, and if they are still following at that point they 
begin to realize that it is not a very clean slate.
    A large health care system can work through that and 
largely will make an investment in health IT for strategic 
reasons, to be out where they can be in the future. But the 
standard doctor's office, small doctor office, small hospital 
faces significant challenges. And the challenges I think come 
down to being able to have what the doctor does and how they 
get paid be aligned with how they produce better care.
    This is why I think some of the efforts in pay for 
performance, to be able to pay for better health status that is 
seen by patients, is something that also incents health IT 
because it is hard to do those over the long term without 
having the information tools in place, and it is hard to report 
them and to demonstrate what you have done without having the 
tools to document.
    There are also a lot of ideas about how to lower the cost 
of these technologies, and there are a variety of proposals in 
this area, but the simplest and most accessible ones are 
letting the physicians have better access to market forces, to 
use their negotiating power and the tools that they can use to 
get better tools for their demand.
    There is one area where I think we are concerned about, and 
that is for very small physician practices, between one and 
five physicians, that they do not have the kinds of tools 
available to them at a good price. This is the area where we 
have targeted the Medicare's Vista Office DHR product, which is 
a much lower-cost solution for those practices.
    So I think there is a lot that can be done, but I think 
your comments are directly in the spirit of thism it is a very 
long-term change, and no matter how fast we go it is going to 
be a series of hopefully radically incremental steps, but 
certainly incremental steps in their own right.
    Ms. Norton. Finally, let me say if your view is as mine is, 
if anybody can afford to be the model it is the FEHBP, it is 
the Federal Government, then the first thing you want to erase 
from your vocabulary is the word ``radical.'' Government does 
not operate in that way. And what it seems to me can be most 
useful to us is for those of you--is this Mr. Clancy?
    Dr. Brailer. It is Dr. Brailer.
    Ms. Norton. Dr. Brailer, I am sorry. It is Dr. Clancy. 
Those of you who have been thinking this through can, for a 
moment, posit the real world in which we live. We do not live 
in a world in which market forces determine health care. See? 
You are all waiting for that. You are going to have to wait 
perhaps longer than any transformation to IT occurs. There are 
too many competing interests and views about health care.
    The Federal Government has, in fact, led the way in doing a 
lot of things, but it has never taken huge steps. We have been 
willing to take steps using agencies, parts of agencies. We 
have been willing to do pilots. So if you want to frame this 
issue the way you did in answering my question about how we 
have to let physicians have more access to market forces and we 
have to understand that people, in order for people's insurance 
to be based on the state of their health care, which lots of 
younger people want, that you are going to have to have 
information to the data.
    If that is the way, if that is the futuristic way in which 
you want to frame it, then I can guarantee you that the 
incremental steps--and the words ``radical'' and 
``incremental'' is very good for the private sector, does not 
work over here.
    The kinds of tough thinking we need is how to hook us up. 
It might be through those parts of the health care system that 
we have some control over. That is why I mentioned FEHBP. But 
you could also mention parts of the Medicaid system, you could 
mention parts of the Medicare system. You could take parts of 
that system where you do not put democrats against republicans 
by having coming out of your mouth ``market forces.''
    If you are going to talk that way, you are going to get 
people like me to say, what are you going to do about 43 
percent of the people that do not have any health care? You are 
going to get people like me to say, and I can give you another 
40 percent who have it, cannot afford it, and are giving it up 
every day.
    You need to help us think through a way to move the health 
care sector gradually here by having Uncle Sam, who is in the 
best position to take a giant step, prove that it can work by 
carving out so that we can see how to make it work, what works, 
and what does not work, carving out some part of what we have 
some control over and then going ahead to doing it.
    So I am just asking you not to put all of your ideas on the 
table in one point, because all you do is divide us then. You 
have terrible, terrible divisions here on health care. If what 
we are talking about is what brings us all together is what 
Newt and Hillary are talking about, that IT'ing all of this can 
help save lives and even ultimately reduce cost, then you have 
a huge laboratory over here.
    Find parts of it, recommend to the chairman an agency, part 
of the health care systems that we operate for Medicare to 
Medicaid to FEHBP. I would be most open to working with the 
chairman and to any others who are interested in bringing the 
Federal Government as a pathbreaker into IT, saving lives and 
saving money.
    Dr. Brailer. Thank you. Congresswoman Holmes Norton is my 
Congresswoman and the point is well taken. Thank you. I look 
forward to working with you.
    Ms. Norton. Obviously he lives in D.C. and he knows he had 
better not cross me. [Laughter.]
    Mr. Porter. Again, we thank you and we will conclude this 
portion.
    Dr. Clancy, Dr. Brailer, we appreciate it. I have another 
hundred questions, but I will save those for some other time. I 
look forward to working with you in the future.
    Thank you.
    Our fourth panel, we will hear from Dr. Harvey Fineburg, 
president of the Institute of Medicine; David St. Clair, 
founder and CEO of MEDecision, Inc., and Jan Walker, the 
executive director for the Center for Information Technology 
Leadership.
    Welcome. We appreciate your being here today. If you would, 
keep your comments to about 5 minutes.
    We will start with Dr. Fineburg. Thank you for being here.

    STATEMENTS OF HARVEY FINEBURG, M.D., PH.D., PRESIDENT, 
   INSTITUTE OF MEDICINE; DAVID ST. CLAIR, FOUNDER AND CEO, 
MEDECISION, INC.; AND JAN WALKER, RN, MBA, EXECUTIVE DIRECTOR, 
      CENTER FOR INFORMATION TECHNOLOGY LEADERSHIP [CITL]

                  STATEMENT OF HARVEY FINEBURG

    Dr. Fineburg. Good afternoon. It is a pleasure for me to be 
here. I am delighted to be here this afternoon, Mr. Chairman. I 
thank you for the privilege of testifying before the committee 
today.
    You have a very important subject that you are tackling, 
and I would like to just offer a few observations orally. I 
have submitted my written testimony to the committee.
    The first point I would like to make, Mr. Chairman, is to 
reiterate a point that came up earlier, that when we are 
talking here about the quality of health care and the safety of 
individuals, information technology is a tool, but it is a tool 
that has to be embedded in a complete system dedicated to 
higher quality and greater safety of care.
    Rather than thinking about devising a training program that 
can prepare physicians and other health professionals who are 
capable of delivering high quality care that is safe, doing the 
right thing, we ought to be designing systems of care that are 
incapable of doing the wrong thing. If you want a fail safe 
health care system, information at the time you need it that is 
accurate and relevant to the decisions that are being taken is 
an essential part of that puzzle.
    So information technology in its own right has a great deal 
to contribute to making the system a safer and a high quality 
system.
    The second point that I would like to suggest is that, as 
you look at the opportunities for the Federal Employees Health 
Benefits Program, both for the welfare of those employees who 
are entrusted to this committee and also as a model for the 
Nation, there are many opportunities, I believe, that you can 
extend on the important initiatives that were described earlier 
today by Director Springer and others.
    For example, the FEHBP can make a commitment to recognize 
only certified IT products at the time national certification 
comes online. It can hasten, in other words, the adoption and 
reliance upon products that meet common standards.
    Second, the FEHBP can do more to insist upon the collection 
and reporting of quality measures using data that is 
electronically available and demonstrate improved performance 
for the members of FEHBP. It can do this in a way that also 
utilizes pay for performance that depend upon the success of 
interventions to meet standards of quality.
    The health informatics available through the FEHBP can be 
applied to deliver the best quality care for the patients in 
the program, regardless of whether they are in acute care 
hospitals, in chronic care facilities, in ambulatory settings. 
It can encourage those data systems that can also be used to 
reduce the likelihood and to increase the detection of fraud 
and abuse in the system. And the particular advantage that is 
has, Mr. Chairman, is that the FEHBP, while a Federal program 
for Federal employees, is embedded nationwide in the private 
sector and the private insurance system, and therefore it is a 
perfect case in point where initiatives of this type can 
encourage and can hasten the adoption of appropriate 
information technology.
    I would like to conclude by saying that it will take more 
than information technology to accomplish what information 
technology, itself, is aimed to accomplish: the high quality 
care. It will take change on the part of those physician 
practices and the payers of care, as well as those who are 
involved in the service and support functions. But there is a 
great deal of ingenuity and willingness in the community all 
over this country, and putting the incentives in the right way 
through FEHBP I believe will encourage the right decisions at 
the right time for all of our patients.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Dr. Fineburg follows:]
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    Mr. Porter. Thank you.
    Mr. St. Clair.

                  STATEMENT OF DAVID ST. CLAIR

    Mr. St. Clair. Thank you, Mr. Chairman. Thank you for 
having me here.
    I guess I would like to start by echoing something that Dr. 
Brailer said. As the CEO of a technology company, I would like 
to simply state that I agree with his assessment that this is 
not about technology. This really is ultimately about improving 
the quality of care and managing the cost of care so that it 
can be available to more and more of our citizens in the coming 
years.
    Having said that, a lot of the advances that we can make 
are, in fact, based in technology, but those are a means to an 
end, not the end, itself.
    One of the things that I think is important--my testimony 
has been submitted in writing and I am going to just sort of 
make a half dozen points--conversations about the electronic 
health record, the EHR, are not synonymous with talk about 
electronic medical records systems. The EMR, the information 
that is available in hospitals and doctors' offices is not the 
totality of the EHR.
    Frankly, discussions as to how and when we should start 
getting value from clinical data in terms of clinical 
decisionmaking at the point of care should be separated as 
quickly as possible from discussions about how to explicitly 
expand the use of EMRs, per se, because I believe in the near 
term--in fact, in production today--are systems that can take 
clinical data and deliver them to the point of care to improve 
patient care, to improve the quality of care, and reduce cost 
without the presence of EMRs, without the presence of high-cost 
technology in the doctor's office.
    We are, for instance, today in production with systems that 
take paid claims data and care management data and pharmacy 
data and lab data that are available to the large regional 
payers, highly processing that information into what we call a 
patient clinical summary, which looks remarkably like an 
electronic health record and, in fact, I would argue is the 
most complete picture of a patient's health available today.
    We are able to deliver that over the Internet in printable 
form to a physician's office, and we are today delivering it to 
emergency rooms in the State of Delaware to allow physicians to 
get a more complete picture of their patient's history than 
would otherwise be available to them.
    This particular approach we believe is particularly 
important for the FEHBP because of the fact that it is a step 
that you can take essentially immediately to start getting the 
health care system accustomed to using new sources of 
information, new sources of data in the treatment of their 
patients, and it does not require anything more than an 
Internet connection and a printer in any particular physician's 
office.
    Furthermore, I think that it is important for us to 
recognize that the infrastructure for any national health 
information system is going to be paid for ultimately by us 
being able to take better care of the 10 percent of the 
population that is the sickest, that is consuming 80 percent of 
the resources.
    It is by achieving some substantial return on investment 
with that particular population by improving their quality of 
care, by reducing the amount of duplicative care in their 
lives, that we are going to afford to pay for the 
infrastructure that will support transactions for those of us 
who are fortunately far less sick.
    So there are strategies that are at work today in this 
country that allow those folks who essentially are responsible 
for the payment of care to get healthy returns on their 
investment in systems that start to disseminate information to 
the point of care with very, very little expense on the 
provider side. Those tend to work through emergency 
departments, through the sickest of the case and disease 
management patients, but there are strategies that are being 
employed today in the State of Delaware and in other States 
that essentially follow that model.
    The good news is that those strategies are not in any way 
inconsistent with Dr. Brailer's strategy for the national 
health information network. In fact, the availability of those 
data sets early on in the process will help drive adoption of 
the peer-to-peer networks and the regional health information 
networks he wants to see by giving early users of those 
networks access to data from the first day.
    Ultimately, we think that we can help share the benefits of 
HIT across the breadth of the population without waiting for 
universal adoption of EMRs and other technologies in the 
provider setting. I believe that technology needs to be 
available for an extended period of time, because there is 
going to be some period of delay between the adoption of EMRs 
by, in effect, the richest provider groups, and it will slowly 
then be adopted in the others. We need to have multiple ways of 
delivering and gathering information from the provider setting.
    Thank you very much.
    [The prepared statement of Mr. St. Clair follows:]
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    Mr. Porter. Thank you, Mr. St. Clair.
    Dr. Walker, welcome.

                    STATEMENT OF JAN WALKER

    Ms. Walker. Thank you and good afternoon.
    I am a nurse from Boston with a longstanding interest in 
understanding patients' experiences with our health care 
system. I am currently executive director of the Center for IT 
Leadership, which is a leadership group at Partners Health Care 
System, and I am a member of the Health Information and 
Management System Society [HIMSS]. You invited me today to 
provide my views on how the Federal Government can use its 
buying power to influence the use of technology in health care.
    I brought a written statement to include in the record, and 
I would like to make just a few remarks.
    Professionally, I believe that information technology will 
transform care in this country. But I am also a nurse and a 
private citizen with a family and I would like to tell a 
personal story.
    A few months ago my nephew was diagnosed with thyroid 
cancer. He lives in a small town in Kansas and goes to a State 
university about 300 miles away. He needed surgery and he was 
referred to a surgeon in a neighboring city. His parents called 
me for advice. Should they send their son to this surgeon?
    Of course, I wanted to know how many of these types of 
cases the surgeon had done and how his patients had fared. To 
paraphrase Dr. Clancy, I wanted to make an evidence-based 
decision. But I could find no information to answer any of 
these questions, and in the end we decided to bring my nephew 
to Boston where I could depend on my local contacts to find the 
most experienced doctors.
    It sounds simple enough, but it required a barrage of phone 
calls, signatures, and faxes to get information from his Kansas 
workup. Scans were mailed to the wrong place and had to be sent 
again. Results from several lab tests never did arrive and had 
to be redone. A Boston pharmacist could not fill a prescription 
because he could not reach the Kansas pharmacist by phone until 
the next day.
    Our studies at the Center for IT Leadership have analyzed 
how information technology would address inefficiencies like 
these, transforming the cost as well as the delivery of care.
    As an example, we found that if all clinics and 
laboratories ordered and reported lab tests electronically in a 
standardized way, we could avoid $4 billion in unnecessary, 
redundant tests, and $27 billion in paper handling and phone 
costs every year.
    If every clinic in the country adopted computerized order 
entry with advanced decision support, we could save $44 billion 
and avoid 136,000 life-threatening, adverse drug events every 
year.
    If the main stakeholders in patient care, doctors and 
hospitals, labs and radiology centers, pharmacies, public 
health departments, and payers, all adopted systems that 
allowed them to exchange electronic information in a 
standardized way, we could save $77.8 billion every year.
    I will close with three thoughts. First, as we have seen in 
multiple studies, the return on investment from HIT is 
overwhelmingly positive. It has the potential to save billions 
of dollars and dramatically improve the quality of care for all 
Americans.
    Second, HIT costs money. We must prime the pump by giving 
providers incentives to invest. The costs of HIT are a huge 
barrier to adoption, especially for small offices and small 
hospitals. A combination of low-interest loans, tax credits, 
and rewards for using HIT could help providers make this 
transition.
    Third, none of this can happen without national standards 
that allow computers to talk to each other. Most of the dollars 
we spend on systems that do not adhere to such standards will 
go down the drain. If the Federal Government can use its buying 
power to support standards development and implementation, to 
facilitate availability of capital for providers, and to reward 
providers who use HIT, we will move closer to transforming 
care.
    This week my nephew returned home to Kansas. I am crossing 
my fingers that his Kansas doctors will hear from his Boston 
doctors. In the end, these inconveniences did not compromise 
his care, and I would even say they were relatively minor 
glitches. Many patients are less fortunate. We feel very lucky.
    On behalf of HIMSS, I thank you for this opportunity to 
speak with you today. Both HIMSS and the Center for IT 
Leadership stand prepared to help you in any way we can.
    Thank you.
    [The prepared statement of Ms. Walker follows:]
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    Mr. Porter. Thank you very much, Dr. Walker.
    I would like to ask all three of you a question. I think it 
will help jump start as this committee moves forward.
    Right now there are a lot of ideas, a lot of suggestions, 
but we keep coming back to having to have what I believe is a 
plan, a strategy, and certainly an outcome, and that is to 
provide the best health care in the world and to make sure that 
single mom or that dad or that senior, no matter their income 
level, they have the best in the world.
    What would you suggest, or how would you suggest we start 
this cultural change? I know that we are really limited on time 
and we are going to have additional meetings, but today what 
would your message be to this Congress as we try to move 
forward rapidly but also thoughtfully in this process of 
changing our culture in the Federal Government? What would you 
suggest, Dr. Fineburg?
    Dr. Fineburg. Mr. Chairman, there are many ways to begin. 
In fact, I think that the first one I would say is that there 
is not a single magic bullet to transform health care in the 
United States, so that we should not strive to solve the whole 
thing with one fell swoop. But I would say that there are 
significant opportunities that you have before you with the 
tool that you are responsible for--namely, the Federal 
Employees Health Benefits Program--to improve care for those 
beneficiaries and thereby demonstrate what can be done.
    For example, if Director Springer were to be the first to 
adopt and insist upon the kind of certification standards that 
virtually every witness has testified to, that would be an 
enormous message of the importance of high-quality care across 
the whole country.
    Second, looking at ways to align the reimbursement and 
payment systems with the kind of behavior that we are seeking 
on the parts of patients as well as our care system, to 
eliminate the advantages of doing the wrong thing by having 
more resources given to you, and instead reverse that so that 
you are reimbursed for doing the right thing and having 
patients better off, that is, I think, a very important 
opportunity which comes out of this pay for performance set of 
strategies.
    And, by the way, no one is absolutely clear what the best 
way to do that is, so having in mind that you are going to try 
different ways and learn from the experience I think would be a 
wonderful frame of mind for the FEHBP, because that would 
suggest that you are acting and also committed to improving 
over time.
    Those are two things I would suggest. You have turned to 
others.
    Mr. Porter. Mr. St. Clair.
    Mr. St. Clair. While I would agree that there are many, 
many places to start, I guess that I would also like to caution 
that there are many places not to start. There is the common 
statement these days about boiling the ocean. We cannot try to 
solve every problem all at the same time, which is why I think 
it is useful to try to break the problem down into its 
component parts.
    I believe that a place to start is with technology that is 
available today broadly across the market to take data that 
already exists in electronic form and begin to share it now. 
What we want to do to start is start. There is information that 
is available that is tremendously valuable in different 
settings, like emergency rooms and things of that nature, that 
we could start doing quite literally tomorrow because it is 
being done today, but to do it more broadly.
    And the FEHBP, it is a redundant program, is a tremendous 
opportunity because you can influence that sort of pilot 
process across dozens and dozens of health plans all over the 
country by getting them to essentially involve your members 
within theirs, and that is essentially going to start drawing 
in their own participation in that same program. I happen to 
like that as one of the places to start.
    But, to your point, without pay for performance you are 
going to start and you are going to start to slow down because 
you are going to start getting resistance from the provider 
sector once you get past the early adopters and their side. So 
there really are those two avenues that I would say to move 
down.
    Mr. Porter. Dr. Walker.
    Ms. Walker. I certainly agree with those points. I guess in 
a sense we have already started, and there are a lot of success 
stories out there. I think it will help to publicize the 
success stories. Providers became providers because they want 
to provide good care. They are humanitarians at heart. They are 
really busy, and sometimes I think they do not have time to see 
the possibilities of HIT, and I believe publicizing some of the 
good work that has already happened might help them get over 
that conceptual hump, which we need to accomplish.
    Mr. Porter. Very good. As we have mentioned throughout the 
hearing today, we still have the best system in the world, some 
of the best doctors. And yes, we really need to recognize those 
that are being successful.
    Mr. St. Clair, I concur. There are some things we can do 
right away. My kids, our kids, we have a lot of folks that 
understand technology far better than I do, and there are young 
folks, senior folks that could get up to speed really quick on 
some of the things that you are suggesting as far as the 
patients and understanding. And I agree with what you are 
saying by separating these areas. I think that is important.
    Mr. Fineburg, I concur wholly with you that the steps have 
to be taken as soon as possible, but what I am going to suggest 
is that we are going to move forward. I think we, as a Federal 
Government delivery system, we have some of the most advanced 
technologically businesses in the world that are providing 
health care insurance to our employees. They are the most 
sophisticated when it comes to investment, they are 
sophisticated in delivery, they are sophisticated in the 
product that they provide because they have been forced to by a 
market that is demanding better and better service.
    I have no doubt that we can take some of your ideas, and I 
hope that you will join me as we compile some possible 
legislation. But I think we have the best and the brightest, of 
course, in the health care field, but also in the business 
community. If we can provide some incentives that will force 
some changes in a culture, I think we can help expedite in 
technology.
    And I say this because I used to work for an insurance 
company for 20 years. It is not in the health care. It is 
property and casualty company. But I know that it is one of the 
largest in the country. We had to make changes because the 
market demanded it, and to be competitive and to provide the 
best property and casualty insurance we had to do it. We were 
stuck with having one of the best computer systems in the 
1970's in the world, and then we threw bandaids on it through 
the 1980's, and all of the sudden we were so far behind the 
curve we were forced to make some major changes.
    I think that the Federal employees, as being the largest 
customer base in the world, probably, we can provide some 
incentives to make sure that the best and the brightest in our 
partners, the carriers, can help work with the doctors and our 
employees, which will set the standard and create a whole new 
culture for the country.
    So, having said all that, we are going to have to conclude 
the hearing. I want to thank you all very much for being here. 
I am very excited to be a part of this and plan on being very 
active and look forward to working with all of you. Thank you 
all for being here today. I appreciate it.
    [Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

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