[This Trnascript is Unedited]



Workgroup on the National Health Information Infrastructure

April 27, 2005

Holiday Inn Capitol
550 C Street, SW
Washington, DC 20024

Proceedings By:
CASET Associates, Ltd.
10201 Lee Highway, Suite 180
Fairfax, Virginia 22030
(703) 352-0091


P R O C E E D I N G S [8:40 a.m.]

Agenda Item: Call to Order, Welcome, Introductions and
Recap of Day One Testimony – Dr. Cohn

DR. COHN: Well good morning everyone, we’re going to get started. I want to
call this meeting to order, this is the second day of meetings of the Workgroup
on the National Health Information Infrastructure of the National Committee on
Vital and Health Statistics. The national committee is the main public advisory
committee to the U.S. Department of Health and Human Services on national
health information policy. I’m Simon Cohn, I’m the executive associate director
for health information policy for Kaiser Permanente and chair of both the
committee and this workgroup.

I want to welcome committee members, HHS staff, and others here in person,
and of course as always welcome those listening in on the internet. I want to
remind everyone to speak clearly and into the microphone, and I just want to
remind everybody that these microphones do require that we get very close to be

Let’s now have introductions around the table and then around the room. For
those on the national committee I would ask if you have any conflicts of
interest on any of the issues or testimony coming before us today would you so
please publicly state during your introductions. Mary Jo?

DR. DEERING: Mary Jo Deering, the National Cancer Institute and lead staff
to the workgroup.

DR. TANG: Paul Tang, Palo Alto Medical Foundation, member of the committee
and workgroup and no conflicts.

MR. KAMBIC: I’m Bob Kambic, I’m with CMS, Center for Medicare and Medicaid
Services, and I’m going to talk about research related to the personal health
record at about 12:00 today.

MR. WETZELL: Steve Wetzell with the Consumer Purchaser Disclosure Project
and I am a member of the first panel this morning.

MR. SCHERB: Dave Scherb, I’m vice president of PepsiCo for compensation and
benefits and I’m on the first panel also.

DR. KELLEY: Mark Kelley from Henry Ford Health Systems, executive vice
president and CEO of the Henry Ford Medical Group, and I’m also on the panel

MS. WILLIAMSON: Michelle Williamson, National Center for Health Statistics,
CDC, and staff to the workgroup.

MR. SCANLON: Bill Scanlon from Health Policy R&D and a member of the
committee and I have no conflicts.

DR. STEUERLE: Gene Steuerle from the Urban Institute, a member of the
committee and of this subcommittee and I have no conflicts that I know of.

DR. STEINDEL: Steve Steindel, Centers for Disease Control and Prevention,
staff to the workgroup and liaison to the full committee.

MR. BLAIR: Jeff Blair, Medical Records Institute, member of the committee,
no conflicts that I know of.

MR. HUNGATE: Bob Hungate, principal of Physician Patient Partnerships for
Health, member of the committee and workgroup, no conflicts that I know of.

MR. DUSETT(?): Dale Dusett, I headed USA, the United States Air Force study
on health records 30 years ago, I’ll be interested to see how far along you’ve

MR. PAULY: I’m Mark Pauly, I’m a professor at the Wharton School at the
University of Pennsylvania in the Department of Health Care Systems and I’ll be
on the second panel.

DR. KILE: Frank Kile, American Dental Association.

MS. ZIGMAN-LUKE: Marilyn Zigman-Luke, America’s Health Insurance Plans.

MR. MORGAN: John Morgan, Health Right.

MR. ESMONGA(?): Don Esmonga, American Health Information Management

DR. COHN: Okay, well I want to thank everyone for joining us, oh, John Paul,
are you there? Please, introduce yourself and disclose any conflicts.

MR. HOUSTON: John Houston with the University of Pittsburg Medical Center,
member of the committee as well as this workgroup and I do not have any

DR. COHN: Okay, well thank you. This morning we have two panels, I think we
start with an employers and quality advocacy organization panel which we have
here now which we will start in just a second, that will be followed with a
panel on general overview of economic and market forces. As I mentioned
yesterday I do want to thank Mary Jo Deering for her assistance and leadership
in terms of helping us put these sessions together, we really do want to thank
you for I think what’s been a very stimulating and thought provoking set of
sessions so far. I also want to thank Gene Steuerle who I know has been very
involved in trying to put together our economic panel, or economist panel for
later on this morning as we continue really to have this sort of question about
what is the business case for this thing that we sort of loosely call personal
health records or the personal health dimension.

Now at the end of the morning, and I think as you all realize we’re not
going to break for lunch, we’ll be taking a period from 12:00 to 1:00 to sort
of reflect on where we are as well as talk about what next steps will now be
taken for the workgroup as I think we drive towards some advisories for the
Secretary for later on this year.

Now the meeting will adjourn as I think as previously announced at 1:00,
everybody okay with that? Okay. Has anyone else joined in on the phone?

MS. POKER: Anna Poker from AHRQ.

DR. COHN: Thank you for joining us. Okay, well with that why don’t we start
our first panel, Mark Kelley I think you’re up first and thank you for joining

Agenda Item: Panel V: Employers and Quality Advocacy
Organizations – Dr. Kelley

DR. KELLEY: Thank you very much, good morning everyone. My name is Mark
Kelley, I’m EVP for the Henry Ford Health System in Detroit and I’m also the
CEO of the Henry Ford Medical Group. And I’m going to be giving a perspective
from our delivery system, our experience with patients, and frankly my own
personal experience as a practicing physician.

So today very briefly I want to give you just a quick view of our system,
some of you are familiar with us but just to ground you, who we are and where
we come from. Talk a little bit about our electronic medical record, called
Careplus which is one of the older medical records in the country continuing to
be updated, and that will give you a framework for what our patients and our
physicians are used to dealing with. Some of the innovations that we have put
in place, not dissimilar to some of the discussions I’m sure you’ve had with
other health systems about the provider/patient interface. And then some
finally some comments on the personal health record derived from these

In brief our system is a hospital based health system, 90 years old, founded
by Henry Ford, located in the city of Detroit and its surrounding suburbs. We
have four hospitals anchored by our flagship university hospital, that’s
actually university hospital without a university but a very large teaching
hospital called Henry Ford Hospital in downtown Detroit. Part of our
corporation includes the Health Alliance Plan, a large HMO in the state of
Michigan, has about 500,000 HMO members, very much serving the manufacturing
industry historically. And finally our practice is a closed group staff model
of employed physicians 800 strong throughout our system.

In terms of the demographics we have about two million outpatient visits
annually, take care of about 500,000 patients including 170,000 fully capitated
lives. We have 22 satellite locations in about a 30 mile radius of Detroit, we
are a local delivery system, we are not outside the state of Michigan. Very
large training center with about 700 graduate medical education trainees, one
of the largest centers in the Midwest. We do $53 million dollars in peer
reviewed research, modest by some standards but actually in the top six percent
of NIH funded institutions in the country, including four program projects. And
we’re affiliated with the Wayne State School of Medicine which is down the
street in Detroit.

Now our system has had, has enjoyed this electronic medical record called
Careplus for over a decade and a half or so, it was a home grown product
developed in the 1980s really in response to the HMO imperative that
characterized the manufacturing industry during that time and of course
propelled by our large HMO population. I should just add as a footnote that in
the late ‘90s we had approximately 350,000 capitated HMO lives, that’s now
gone down to 170,000, the degradation of that is about five to seven percent
per year which is exactly what parallels the national phenomena so clearly the
manufacturing industry is going away from the HMO product.

The record is ambulatory focused, I’ll come back to that in a second,
largely because of the HMO imperative as I said. And the goals are really
results reporting to improve efficiency and reduce costs, a fairly typical
fashion, and includes archiving, laboratory imaging results, written
consultations and discharge summaries. It’s very interesting that our system
chose to develop this on the ambulatory side when all the attention as you know
right now is on the inpatient side in hospitals, so this was kind of the
reverse trend as I’ll show you in just a second. But from where the consumer or
the patient rests this is where most of the action occurs so this why that was
developed in that fashion.

We have continued to enhance Careplus, we put in a picture activating or
archival system in 2002 basically allowing radiology images to be stored, again
having, that’s been done in a lot of systems now but it’s been quite an
impressive array of services for our patients who actually are quite amazed
that they don’t have to carry X-rays around anymore. I’m a chest physician by
background, I can show a CAT scan or a chest film to my patients right away,
actually as soon as the film is taken I can read the film because it’s in
cyberspace immediately, and that is a real advantage for patients, they can
appreciate that immediately.

We put on what I called bolt-on features, a patient registry for disease
management, we have a very active disease management program, we don’t have
time to get into that but that is a very important feature. Our physicians have
workflow reminders and in boxes, I’ll show you that in just a second, to tell
them kind of what’s going on. And we now recently have fax capability so we can
send instant messages to outside referring physicians.

We also include fairly typical measures such as practice guidelines,
pharmacy information, we’re able to do template notes and letters out to our
patients and to other providers. And we can also customize a dashboard of
results so that you can have a heads up panel to see the results on any patient
that you desire. Again, we won’t have time to get into that but I just want to
give you a feel for the kind of services we offer.

Now the strengths that we have of our EMR right now is it clearly reduces
redundancy and error. Instantly we know anywhere in our system which is quite
geographically diverse what’s happened, as a consulting physician the role that
I serve clinically, I really know why the primary care physician referred the
patient, I know what the image looked like, I can see the whole history and can
view that in about four minutes. For patients it’s very convenient for them to
have this common information system, that see that there’s no waste and no
redundancy that has to occur. In fact I was just saying earlier, before the
session, that the patients who actually somehow trip outside our system want to
come back in because they see that a lot of physicians don’t know what’s
happened with them and they feel uncomfortable with that.

I talked about the radiology images, a great time saver, and it also allows
the radiologists to read films anywhere in the system so you can have your
downtown radiologist reading the films from 30 miles away. I told you about the
workflow processes, we have a very aggressive diabetes care management program
which wouldn’t be able to happen without these sorts of reminders. And very
importantly having this EMR up for such a long time has mandated the computer
literacy of our clinical staff. If you cannot work in this system you cannot
work for us, so that’s a little different then the average physicians who
struggle sometimes with that.

The weaknesses, ironically enough we have no order entry, that’s what’s kind
of driving CPOE right now, we’re working on that so again we’re kind of
backwards I suppose. It was not designed for the inpatient record, we basically
get discharge summaries and have those imbedded in the record. Our template
charting is somewhat primitive, we still have to dictate everything, we spend
in our practice group, again 800 strong, we have a dictation budget of $4
million dollars, we’d like to drop that down with template charting. And we
have decision support but it’s still primitive for what we need. Sum of
substance of this is we will have a new product coming out, a home grown
product called Careplus Next Generation that will happen we hope within the
next two to three years.

So that gives you a little background about what we are and how we operate.
Now we have two, relevant to the discussion today we have two new features that
we’ve implemented that I just want to spend a little time talking about, which
really has been a great hit with the patients. The first is e-prescribing, this
is to reduce escalating drug costs, I’ll spend a little bit of time talking
about that. And the second is an e-web portal, very similar to I think what you
may have heard already from other systems, basically to allow convenience on
both sides of the encounter, both for the patients and for the physicians.

Electronic prescribing was designed in collaboration with the auto industry
who as you know are facing soaring health care costs largely driven by high
pharmacy costs in their seniors, and that’s frankly what the patients see as
well, so they’re seeing very high co-pays and so on. So there’s a lot of wasted
inefficiency there and the goals were to eliminate that waste and errors, to
improve the efficiency for the doctors and for the patients, and to behind the
scenes line up the prescribing activity of physicians with the pharmacy benefit
systems that are imbedded behind all these prescriptions, and to reduce the
cost and importantly to drive the use of generics, which we think is, in our
system we think that’s a social mandate our physicians must do because that
certainly saves everybody money.

This system is a web based system, we now have this, it’s early yet, we have
this in about six or our practice sites, we prescribe as of this moment about
40,000 prescriptions and we have about 35, 40 physicians up on this. It’s
spreading wildfire for reasons I’ll mention in just a second, we think that
across our 22 satellites or 800 physicians we will have this fully up and
running by the end of the year.

It’s web based, it’s pretty easy to use, it basically has a smart system
behind it which prompts the MD to do the best practice for the individual
patient. Very briefly if I prescribe a series of medications for a patient the
system will tell me whether it’s in the formulary, whether there’s an allergy,
and if there is some sort of prompt will prompt me for an alternative
recommendation. As soon as that is approved and it’s done electronically, it
goes directly to the pharmacy, no in between stops, and if the pharmacy is in
the building they can pick it up as soon as they leave the office.

It’s had a very high physician satisfaction because it saves time and
trouble, it’s very easy to use, so that the docs are using it very avidly. The
patients love it because it eliminates a lot of errors that they see and also
the co-pays are reduced because it’s deriving sort of the best practice with
the best value, and the convenience to the pharmacy is an obvious point. So
this is something that I think will work, there’s been a lot of work done on
this other places but I think this design has been quite satisfactory to us.

We’re developing or have developed an e-portal so that the patients can get
into our system, get into their medical record and save a lot of time that both
bothers them and the physicians. An important statistics is that 60 percent of
Metro Detroit adults are computer literate which is actually a pretty high
figure, the reason for that is again we’re driven heavily by the auto industry,
you can’t work in the auto industry unless you know how to use a computer
basically because a lot of their technology is computer based. Consumerism as
you know is shifting to computer based technology, phone systems are a problem,
people are used to making airline reservations online and so on.

So the idea was to provide convenience for patients, access to health
information, lab results and so on, we’re getting to the point of e-visits,
we’re not quite there in e-visit consultations, some issues around lots of
things including payment and so on. We think it provides a market advantage if
you can do this clearly and we think we can also derive information out to
patients and marketing information and so on.

I wanted to just you very briefly, I hope this projects, I think it does,
very quickly kind of how this looks. This is our portal and if you look over
here, the user name, you would log in with your user name and password, you
must be a patient in our system to get into this, so that’s kind of the hook,
you have to have a medical record number. And once you get in this is your
personal site, so these are the messages you’re getting from your physicians,
there’s some health news here that we drive out to you, you have pretty, much
through a series of questions that we’ve asked you you’ve pretty much
customized what you’re interested in, this particular example is brain cancer,
and here you can request your lab results, you can renew your prescriptions
online, you can see the dialogue around that.

I’ll just quickly show you how you’d renew a prescription, there’s a bunch
of verbiage here about disclaims and so on. So you’d, there’s a drop down menu
here, you have your pharmacy, you have to put in your, so you have to be
literate here, that’s an issue, you have to actually write this in but most
patients can do this. And then this will come in this way and you can see some
of the demographics here and so on. If you want another prescription you can
enter that in as well. So then I send the request and this is what the
physician sees, this is the in box that we all have so this hits us right away
as soon as we open up Careplus, it tells us what we’re supposed to do.

I’ll just review a couple of things here, there’s a series of prescription
renewals, there’s a prompt here for an anticoagulation result that this
physician has to see, a few other things. So this is our work flow engine
basically that prompts the patient what to do. So anyway, I’ve seen that this
patient wants a prescription renewal and I’m going to authorize this, I see
what it is, I’ve looked at the record, I’ll then authorize it, that goes into
the record and this document. I’ll also send a message to the patient, they
know that this has been filled.

So that’s worked pretty well, it’s still early yet, we have about 30,000
patient enrollees, we hope to have about 100,000 up this year. Not a lot of
transactions yet, a lot of this depends on demographics of the population as
you might expect, this is a stunning figure, 16 hours it will take the
transaction, this doesn’t happen immediately because there are behind this to
actually doing this. But most patients don’t care about that, they just want to
know it’s going to be done. It does save time and reduce the phone load a lot
for busy front desk staff, and the convenience factor is very high. So we’re
still working on this, it’s in its early stages but we think this is something
that we’re going to push pretty hard.

Now I’m going to finish up here very quickly with sort of some observations
about both what happens in our system and I think some issues around your task
here on the portable personal health record. The advantages of our electronic
medical record I’ve sort of cited before, the patients see that the doctors
have the same information, avoids error, needless tests. There’s assurance of
standardization, so if an x-ray is done one place it’s going to be the x-ray
that’s going to be in record. They don’t need to carry information around
themselves, it’s there in cyberspace. And to them it looks like a lot of other
service industries, they’re banking and so on. Now remember, we are providing
their care, that’s a different scenario then one you may be looking at.

Security and privacy have rarely been questioned about this electronic
medical record, I’ve actually asked patients about that, they are nonplussed by
this and the potential reasons I think, this is very speculative on my part,
some of them don’t know they have an electronic medical record, as nice as it
sounds sometimes they’re surprised that we have it. They also see the providers
in their system I think as trusted agents, these are their physicians, this is
their record, this is what the doctors need to take care of them in their
environment. They are somewhat of a captive audience, we don’t have all HMO
patients but we have a very large percentage of them, so to some extent they’re

Importantly, this is an automotive town, there’s fairly secure employment
from a union vantage point, there may not be secure employment for other
reasons obviously with the distressed industry there but that’s all, and our
system, our health alliance plan was originally founded by the UAW so there may
be something under current in that. And I think a lot of the privacy issues
which I know you’re dealing with probably are related to fear of challenges to
employability and insurability among other things. And in our system most of
our patients are protected from these concerns because of other things in the
industry, I believe, that’s pure speculation on my part.

Now I think the work you’re doing here is terrific and I’d just like to just
mention a few personal observation of what I think the tipping points are here.
Again, I’m sure these are issues you’ve wrestled with already. In our system
people are not very geographically mobile, they’re saying in Detroit with the
exception of the Florida snowbirds, the retirees who tend to go down south. But
nationally it’s very much more common for workers to change locations,
especially for service industries, you’re seeing more and more of this now
especially among the white collar workers in our town. It is more common for
seniors to relocate at the time of life when issues are more complex. Even in
our town we’re seeing this, people will retire to other locations, they don’t
like the snow in Michigan. Interestingly enough they’ll come back often after
about ten years because they’re very senior and they need the help of their
family so this becomes a challenge so the seniors are the biggest growing part
of our population as they are in most places, they’re going to be probably much
more mobile particularly as the baby boomers come through and they’re going to
want this I believe.

Consumerism we’ve talked about, if we really are going to go to consumer
directed health care and personal liability for the cost of health care
patients will want this information, it will become of value to them because
they will shop their services so they’ll feel much more personally owners of
their own data I think. And finally an obvious point, the generation X and Y or
as I was coached by Mr. Scherb the millennium generation we’re supposed to call
them, spend a lot of time in cyberspace now, they’re very comfortable with the
issues, they loathe slow methods of communication and of course they accept IT
security as a way of life so I think this becomes less of a concern as time
goes on perhaps.

Now I’d like to finish off with as a practicing physician what I think needs
to go in the record, and as I say in my title here it’s not as much as you may
think. Basically what we need, and I have been in the Henry Ford Health System
for about five years and I practiced previously in Philadelphia at the
University of Pennsylvania where we did not have such a robust record, so I’ve
played in both fields if you will. And what we need as physicians to take care
of a patient we’ve never seen before is some background history of what’s been
done to them such as surgeries and other interventions, what they’ve been
hospitalized for and what procedure results they’ve had. Their allergies, their
risk factors, such as lipids and smoking and family history, and what active
medical problems do they have now and the complications thereof. Finally we
need a current medication list, drug reactions, allergies, things like that,
and very helpful to us as practicing physicians are the results of recent
diagnostic tests, routine laboratory work, images that are relevant such as
x-rays, radiology studies of various sorts, and an electrocardiogram.

That’s not a lot as robust as that sounds and every physician who does a
consultation of a patient basically looks for all these factors in a very quick
fashion. Most of this in my opinion can be template charted and summarized in
one page for probably 90 percent of patients, it may be even less then one
page, many seniors particularly are not that sick.

The issue of sensitivity is a real one, there are sensitive issues such as
past background of psychiatric illness, substance abuse, HIV status, and soon
to be genetic profiles perhaps. They can be segregated or put in an ultra
sensitive location, none of those things are absolutely necessary to take care
of a patient in the immediate concern and those patients can actually tell the
physician themselves about those histories. So I think there’s a way of dealing
with that and actually in our medical record some of these things such as the
behavior health things are super protected anyway so there are already ways to
deal with that.

So why has, I know you’ll have experts and economics talk about this, why
has the portable health record not been successfully commercialized, I’ve
actually had a little experience with this myself before I came to Detroit. I
don’t think there’s a clear consumer value yet, I don’t think the service does
not provide health care delivery, I think that’s the difference in our system,
we’re actually delivering the care, therefore the medical record is of value.
And whoever it is in a commercial sense, no disrespect to them, but they may
not viewed as a trusted agent, who are they. For example, would you higher
somebody to store your financial information for you? Well, you have trusted
agents in various locations that have that information for you. And of course
the fear of security is an issue.

However, I think there are some elephants in the room that are probably very
obvious to this group but maybe not to others, even if you wanted to do this
what’s the standard reporting platform, what is it, I mentioned what I thought
should go in the record but does everybody agree with that. And how would I get
the information into the record anyway, if I’m a physician in practice who does
not have an electronic medical record what am I supposed to do, am I supposed
to enter this myself. And how do you know as a consumer that that’s accurate,
so this may be the elephant in the room, the actual practicalities of

And finally, what’s the incentive for providers to deal with this? If I have
patients who are snowbirds who go back and forth to Florida and they want a
personal health record and I don’t have an electronic medical record how am I
supposed to deal with that. Probably the biggest elephant in the room is that
everybody needs to be dialed in to some common platform, I know you’ve talked
about that a lot, such as electronic medical record, it seems to come up in
every conversation about health care but that is the problem, so data entry,
common platform, portability and so on.

So anyway, that’s our perspective of Henry Ford, I appreciate the
opportunity to dialogue with you and be happy to answer any questions. Thank

DR. COHN: Mark, thank you very much and we’ll discussion after everybody has
testified. David Scherb, you’re on next.

Agenda Item: Panel V: Employers and Quality Advocacy
Organizations – Mr. Scherb

MR. SCHERB: Well, thank you very much for inviting me here, my name is Dave
Scherb, as I earlier I’m vice president of compensation and benefits for
PepsiCo, most people I think know the name PepsiCo, we’re a $30 billion dollar
company with 160,000 employees. We are in the consumer products business, well
known names include Pepsi, Frito, Tropicana, Quaker, Gatorade and many more so
I won’t spend a whole lot more time talking about the company itself, but what
I want to talk about today is give you an employer perspective as a company
that’s provided a personal health record to our employees, I’m going to talk
about how it fits into the broader benefit program we have. PepsiCo has been
pretty progressive and an innovator for many years in the area of employee
health, employee wellness, going all the way back to the ‘70s, we were one
of the first companies to put in flexible benefits and fitness centers. So
that’s our background on our company.

Now let me just start off by giving you a little summary of what I want to
talk about. First, PepsiCo has made a major commitment to wellness recently,
last year, through a program we call HealthRoads, and it uses a state of the
art technology, incentives for positive behavior, it includes fitness,
nutrition, consumer tools, one on one coaching, and indeed we plan to make it
global, not just U.S. And it does include personal health records, available to
all our employees.

PHRs are not why we put the program in place but they are an integral part
of PepsiCo’s goal, which is to make our employees empowered health care
consumers. We believe the need for an empowered health care consumer is great,
strategically we believe PHRs are a critical missing component in the U.S.
health care system for controlling medical costs and improving quality. And
indeed we feel that EHRs cannot provide the needed functionality, EHRs are not
available to me as a patient, they’re not portable, they’re not available in
emergencies, they’re quickly dated if they’re local and each doctor’s office
and if you’re not a system, I think it works very well of course in a system
where you have all the patients that are very stable, don’t move around, but
there are difficulties. EHR is a fabulous tool, very much needed and valuable
for doctors and for patient’s safety but we believe PHRs are also important and
there’s some barriers that are keeping us from getting there and so that’s what
I’m going to talk about today.

But first I want to give you a bit of a context about how we approach
wellness and prevention, I think it’s important to realize that when we look at
wellness and prevention we look at it as more then just something that reduces
or lowers our medical claims, we look at something that can impact long term
absenteeism, LTD, increase our productivity of our employees, improve their
well being and their feelings about us, the organizational health, recruiting,
retention, that sort of thing, even occupational safety. Now if you are not
convinced of the importance of wellness and prevention you may be less likely
to be focused on PHRs as a priority. EHRs for example are very focused on the
acute care system, PHRs marry that, not only data from the acute care system
but also data that’s self reported, preventive data, and other items and that’s
what I’ll talk about in a minute when I show you our program.

HealthRoads is the name of our program, we launched it in September 1, 2004.
Because it’s internet based we are going to be going, we already went to Canada
the first month of this year, we’re going before the end of the year to UK,
Mexico and Australia, so we have very ambitious goals to take this program even
beyond the United States.

Our goal is to encourage healthy lifestyles and good care decisions among
employees and their families and we’ve partnered with some well known names. I
know the panel has already met with WebMD, they’ve come and testified here, and
indeed we use them as our web master, the Hub of our program. We also use
Harris Health as a triage provider when we identify high health risks to do one
on one coaching with a national sponsor of America on the Move, we’re involved
with Weight Watchers, there’s a number of different groups that are part of our

The program generally treats wellness in a much broader sense then
traditional programs. The Hub as I said is a customized website that’s
available 24/7 with a top priority of confidentiality and includes adults,
kids, spouses, family members. And the reason our program is more broad is
typical programs have fitness and nutrition as their main components, ours also
includes as a main goal consumerism, tools to help our employees make smart
decisions which is where the personal health record is so important. Also
health promotion, we are actually looking to change behavior, we want to
actually get people to change their lifestyle and lead more healthy lives and
so we have a very proactive incented program.

Now, let’s talk a little bit about, I’m going to give you a few slides of
the program, I’m not going to spend too much time on it but I think to get a
feel for it, you’ve seen probably the WebMD program, this is our own home page,
it’s customized. You’ll notice first off that up in the right hand side it
talks about personal health risk assessment, we incent people to fill out a
health risk assessment that asks them questions about exercise, nutrition,
history of their family, lab test results, it’s a critical baseline that starts
off providing something that you can build off of and you can make changes to
in terms of your health. And this personal health assessment is available to
every employee.

Then the second item on the list if you look down that left hand column
you’ll see personal health record, it’s under My Health. We have a personal
health record for yourself, for your spouse, children, that personal health
record has trackers for cholesterol, for weight, for blood sugar, that will
graph and follow those things over time. It has things like a calendar that
will remind you of appointments, it will either call you or it will email you
at home and remind you that you have doctor’s appointments or you should be
making a doctor’s appointment. It has a fairly significant robust
functionality, I’ll show you a few more things in a minute.

Obviously we also have, as most wellness programs we have a lot of fitness
programs, nutrition, smoking cessation, eat smart, exercise programs. Down on
the bottom you’ll see a box that says consumer information and advice, it’s our
belief that we have really got to do a whole lot to help our employees navigate
the health care system better, be better consumers if we’re going to have a
real impact, have them help themselves in terms of cost and quality. So you’ll
see there finding a network provider, finding a physician, your company health
benefits, talk to a nurse 24/7, your health, pregnancy, health news. I think
you get the point that we’re talking here to our employees about how to best
access and take advantage of the health care system, how to talk to your
doctor, and I think that’s positive for both the physician community and for
our employees.

Lastly you’ll notice over on the right Peeke Performance, Dr. Pam Peeke,
this is a constantly changing part of the program where we have different
people come in and speak. She helped us put this program together, future
people that will be featured on the website is Ken Cooper, Dr. Ken Cooper, Dr.
Dean Ornish, Dr. Susan Love, they’re all part of a committee that we have had
help us put this program together. So we have a very good representation in the
medical community to help us figure out how this program should work best.

I’ll go through just a couple web pages, this is the first click if you go
down the health record, you’ll see that it has things like automatic alerts,
it’s a tool that automatically will scan for potentially harmful interactions
among your medications or with herbs, vitamins, or any allergies that you might
have. You see that it also has common questions like how is my information kept
private, you’ll see down at the bottom if you clicked on family health files
you would move from your health file to your family’s health file. If you
clicked down again for example on medications you can see that this individual
is taking Lipitor, it talks about the amount, when it’s taken, but you can see
there’s also other things you can click on from surgeries and immunizations,
test results, various histories.

So if you click down again on Lipitor you would see for example medical
details, here you can see this allows you to, you should think in terms of this
medical record not as static. We have a little bit of a different view then I
think the idea of just taking some paper and moving it to electronic record.
This is a very interactive medical record, it’s dynamic, it links to related
articles and products, it checks for drug interaction, by the year end we will
start importing data from our third parties, from claim data, from both medical
and drug data. So we look at this medical record as something that’s much more
dynamic and interactive where the individual enters things and it’s also third
parties enter information.

And then of course one of the outputs is a health record summary, our
employees can go in and of course this is all, they each of their own security
code, they completely control this file. Nobody in the company has any access
at all except on an aggregate basis to data. The employee controls it, they can
choose information to print out, they can literally fax it or email to a
provider if they want to, they can decide what they’re going to put in their
history or what not to.

I find, I have a physician visit myself next week and I was going through my
own record, I find one of the big advantages is that this record walks an
employee through a lot of questions and a lot of information before a doctor’s
visits, asks questions, and if you go down and it says do you have back pain
and you say you have lower back pain it then asks you another series of
questions and you answer those. And at the end it will summarize sort of your
responses, help you focus on how to talk to the doctor and what to bring to the
doctor’s attention. It’s my observation that doctor’s have less and less time
they have to spend with you and this is a hugely valuable tool for employees as
a consumer to help focus before they go into a doctor visit what questions they
want to ask, many people are nervous about that when they go into a doctor’s
office, they even forget what they wanted to ask about, this helps them really
prepare and focus for a doctor visit and get a lot more out of it. So that’s
just another advantage of the personal medical record.

A little bit about our experience in the first seven months, we’re pretty
pleased with the responses so far, we have 27,000 or so people that have
registered for our HealthRoads program, 25,000 of them have completed a
personal health assessment. And you can see about 8,000 actually are involved
in one on one coaching, they were identified as having high risk, either
because of family conditions, whatever, and actually have coaching. You’ll also
notice the medical record usage, about 8,000 people have used the medical
record so far, again the program is only seven months old. I will tell you that
those 7,000 do not have a robust medical record, maybe 2,000 out of that group
have really, really used it and have a robust, a lot of people are still
learning to use it so we have a long way to go but we also haven’t pushed it
and publicized it that much yet so we’re going to be working on that later.
There’s only so much that people can accept in seven months but we’re making a
lot of progress. And this just represents the U.S. of course, it doesn’t
represent outside the U.S. yet.

So let me get to a couple points about the business case. I tried to list
here some points where I think PHRs will be invaluable and where they
complement or do not duplicate what EHRs do, where EHRs would not be
sufficient. First, only individuals in my view are primarily and ultimately
accountable for their own health information. Not doctor’s, not hospitals, not
the health care system, and not the government. In our society where people
move around, change doctors, don’t go to a doctor for a while, then come back
to a doctor, ultimately what’s the first question that always happens when you
walk in any doctor’s office or any hospital, they start asking you questions
about your history, about your health care, how you feel.

You are ultimately the one who is responsible for your health care and your
health care management. With all good intention nobody is following me around
asking me how my health status is and making sure that I have my appointments
up to date in my records, so I think it matters a lot over time whether or not
you have a personal record and as I look out into the future things are going
to get more complicated, we’re going to have new developments, new kind of
drugs, new kinds of treatments, and if people don’t have the tools in which to
manage it’s going to be very hard for them to make the choices.

Secondly I think PHR does support consumer engagement and actually improves
the way they interface with their doctor, I mentioned my example of preparing
for a doctor visit, I think it’s critical that you have an interactive system
that can profile and ask questions of people and help them think about what
they need to be doing with their health.

Another point I think that’s important is that the personal health record
increases the value of aggregate data reporting. I think Jack Welch(?) said you
can’t manage what you can’t measure and how without all the information, the
robust information that includes from all providers self reported information,
family history and everything else, how are we ever going to have a good
outcome, outcome data on which to measure cost and quality. So for example at
PepsiCo in the not too distant future I will have comparable data on exercise,
weight loss, and claim data, both acute care data and lifestyle data, that can
be merged together to do an analysis on an aggregate basis, I’ll have that.
That is something we need to have not just as one employer, we need to have
that broadly.

From emergency room to doctor offices I think this information needs to be
available on a timely basis. If you think about elderly people with six
medications going in an ambulance to an emergency room in the middle of the
night and someone asking what you take, what’s your history, what’s your
background, they’re confused, they’re nervous, the inability for an ER to be
able to go directly to a web based or some other source for information about a
patient is a huge disadvantage. My wife is an emergency medical technician, she
goes out 400 times a year on calls and invariably almost none of those calls is
she informed or is the ER informed when they get there, it happens from a care
accident and sometimes it’s the middle of the night, it’s an old person and
they don’t have their record with them. This is a huge advantage and it can
only be I think accomplished if you have a centralized personal medical record
where people can have that information available, provide it if they want to.

So what are the barriers? I think some of the barriers that we need to get
our head around, whose system is it, whether it is consumer centric, and the
reason we need to empower consumers are the many reasons I mentioned including
what the future will hold in terms of complexity. I think there’s plenty of
concerns about privacy, we really have to seriously deal with that, although
what I would say is that we can’t let the lapses in privacy or the occasional
horror stories stop us from doing something that’s for the betterment of all
and that’s much bigger then that.

I think we need to have more enthusiasm in the provider community, I think
there’s good reason for why everyone is talking so much about electronic
medical records, we do need that, it’s very important, but I have concerns that
one of the barriers to a personal health record is that everyone is so focused
on tools for the physician that they’re forgetting about the tools for the
person that actually owns this data and I do believe that people own their
data, they paid for it, they paid both in dollars and hard work, they are the
ones that are footing the bill for the health care system, and they also paid
in some cases in pain, they have every right to every bit of that data and they
have the right if they want it on a timely basis and to be imported in an easy
way to their personal health record.

So what do we need? A compelling national vision, we need to leverage the
private sector, we have a lot of companies out there with a lot of expertise in
this area, for example General Motors has just in time and Ford has just in
time parts inventory for example, we should tap into some of the systems and
how they do it. Federal Express, packaging tracking, retail barcode technology,
we have all the technology you could possibly need to be able to create these
records and to exchange information between EHR and PHR, we need to leverage
that private expertise. We need to ask and leverage doctors to help us
understand what is important to put on a record, what should not be on a
record, and how to use that information, they’re the only ones that can really
give us that kind of advice.

And we need the federal government to use its purchasing power as the big
spender in this country on health care to make this happen with incentives. So
I would ask that this group provide the advice to the federal government to
help us get the common standards, the interoperability, and the incentives we
need to reach that tipping point so we have personal health records.

Thank you very much for your time.

DR. COHN: David, thank you for a very useful and thought provoking
presentation. Steve Wetzell, I think you’re on last and then we’ll get into the

Agenda Item: Panel V: Employers and Quality Advocacy
Organizations – Mr. Wetzell

MR. WETZELL: Thank you and actually I believe the panel and the guests have
a hard copy of my slides and rather then play chair shuffle I’ll just forego
the Power Point projector, we can just walk along on the paper if that’s okay,
I don’t have anything that fancy to look at anyway.

It’s a pleasure to be here and when I saw the kind of talent that was
preceding me on the panel I was nervous there’d be nothing meaningful left for
me to say and I think that’s pretty much it, I agree with everything these two
have said, so we’ll take questions. I do have to justify my time here so I’ll
offer a few thoughts.

I’m here representing a group called the Consumer Purchaser Discloser
Project, a name that may not be particularly well known to a number of you.
It’s an interesting group that’s been around for about three years now, it’s a
collaborative effort of many of the nation’s leading employer, labor, and
consumer advocacy groups which a pretty straightforward objective that is
directly related to the topic of the day. Our goals are, we have a pretty
humble goal and that’s to have a national report card by January 1, 2007, that
will report quality, safety, efficiency, equity measures, among America’s
physicians and hospitals for comparative purposes for use by consumers and
employers. And I think this audience knows its subject well enough to know that
the obvious advantages or benefits of an electronic medical record and a
personal health record to support the objective of having a much more robust
public reporting system on health care quality and efficiency in America.

I work for both purchasers and consumers in my role as strategic director
for the Consumer Purchaser Disclosure Project but given that Dave has so
eloquently presented the employer perspective I’m going to focus on the
consumer side of it today and just speak from that side and try to represent
that to some adequacy. If you go to slide number four of my deck, when we talk
about consumers I think the golden rule that we all have to keep in mind is we
are not talking about a monolithic population. But I think we can put them into
three basic buckets for purposes of electronic health records, especially as
the federal government tries to take on a pretty touchy subject around data
privacy issues in particular.

We have first a group of consumers that are data privacy advocates and as we
move ahead in both the public and private sector to try to create standards for
a personal health record I don’t think we want to estimate the degree the data
privacy experts will engage in this debate and raise concerns about whether the
American public is adequately protected. For those of us who have been involved
in the HIPAA debate I think that’s an illustration of the kind of resistance
we’re going to see from data privacy advocates around a concept that I think a
lot of us here think would really benefit consumers.

The other group we have are other professional consumer advocates and they
come with many labels, AARP, AFL-CIO, National Partnership for Women and
Families which is a host organization for the Disclosure Project, and I think
as we try to advance this concept we have to think very carefully about the
politics and the reality of the public’s concern about data privacy and how we
can rally public support to counter some legitimate and some quite frankly
exaggerated concerns from data privacy advocacy groups and balance that with
other advocacy groups that may see the benefits of this and may balance some of
the politics to be very frank.

And then the third bucket we’ve got is everyone else, the American public
that ultimately is going to benefit from what we’re trying to advance here. And
the American public on slide five I am convinced will benefit dramatically from
a mature and national standardized personal health record. First and foremost I
think or at least among the major benefits are coordination of care and I’m
going to share a personal story, I have a 72 year old mother whose undergone a
health crisis the last eight month and her experience I think illustrates the
dramatic opportunities that are presented by personal health records combined
with an electronic medical record.

She started suffering severe back pain last September and being someone that
doesn’t like to go to the medical system unless she absolutely has to she kind
of laid around for about three weeks hoping it would go away, progressively got
worse, finally scheduled an appointment with an orthopedic specialist assuming
it was some kind of orthopedic problem with her spine given where the pain was.
About two weeks later she got in with an appointment because of scheduling
difficulties, they took images, about ten days later they came back with the
images and said well, it looks like it might be something around the third or
fourth vertebrae, it looks like we have an old injury, so we think we should
just fuse those vertebrae and we’ll have you come back in in about another
three or four weeks when we have time. We’re now about six to eight weeks into
this episode of care.

In the meantime while she was waiting for that appointment her pain got so
severe that my father took her to the emergency room on a weekend at a large
another multi-specialty group and hospital in Southeastern Minnesota that shall
remain unnamed, they employ about 26,000 doctors I think, but I don’t want to
name names. And of course they didn’t have the images when she went in at the
emergency room so they said well, we don’t know what’s going on, we’re going to
put you on morphine and send you home and we can get you back in in about two
weeks, bring your images, we can reexamine them here.

So another two week delay and she brought her images in two weeks later and
she was diagnosed with stage four malignant myeloma. Ten week delay with a
ranging cancer in body due to scheduling and image transfer problems. So that’s
a real life example, pardon me for getting a bit emotional, this is my mother,
of how this can benefit the public. That’s just coordination of care, that’s
one benefit out of this technology.

So obviously this is going to improve patient safety and it’s going to
improve quality. It’s going to improve efficiency and care delivery, the thing
that’s amazing is that there wasn’t a complete second set of images taken, they
actually had her bring her images to Mayo’s credit, whoops, excuse me, rather
then have them reproduce that diagnosis and run up the bill. Administrative
simplification, insurance eligibility is another example where there’s benefits
to this, and improved public reporting.

And I’ll tell another personal family story on the public reporting side
which kind of got me involved as a consumer advocate. The same mother I just
talked about gave me my first lesson in focusing on what’s important to
consumers, about eight years ago when I had a sister-in-law who was diagnosed
with ovarian cancer and at that time I was running a group called the Buyer’s
Health Care Action Group, a coalition in Minneapolis, we were doing direct
contracting and getting a lot of attention for this, it was one of the early
consumer directed health plan efforts through a direct contracting approach.
And we were in the Wall Street Journal, the New York Times, and NBC Nightly
News featured us, it was pretty heady stuff.

And one day I’m sitting in my office feeling pretty self important and I got
a call from my brother saying we’re so glad we have an expert in the family
because your sister-in-law has just been diagnosed with stage three ovarian
cancer, so we need to make two decisions, we need to pick a cancer specialist,
he didn’t say oncologist because this is a real person, and we all need to know
if she should have a bone marrow transplant and high dose chemotherapy, or a
more traditional treatment. He was asking for outcomes data, again he didn’t
say that because this was a real person.

And I think this audience probably knows how much information I could share
eight to ten years ago, to this gentlemen’s point over here who’s been working
on it 30 years, I can’t share any more today then I could ten years ago. And
that’s another direct benefit of this kind of electronic data capture, both on
the patient record side and the great work that systems like Henry Ford are
doing inside their system with electronic medical records, it could accelerate
reporting on outcomes data and efficiency, especially as consumer health plan,
direct the health plans directly, and both pieces of the electronic record
puzzle fit into that, the personal health record and the electronic medical

There is a funny end to that story about my sister-in-law by the way, that
Thanksgiving I was sitting down for my pumpkin pie with my family and mom said
Steve, I’d like to talk to you about what you do for a living and why you
couldn’t help your brother. So I tried to explain HEDIS to her, for those of
you who know what HEDIS is, health employer data information set, which was
comparing mammography rates between health plans, my mother didn’t find that
particularly useful to my family’s needs and after about 15 minutes of
explaining what I did for a living she said I don’t understand it, all I know
is you’re overpaid. So my passion is around transparency as well and I think we
were talking earlier about Mr. George Elverson(?), CEO of Kaiser Permanente
who’s a very passionate advocate for outcomes data, and I don’t think we can
emphasize enough the role that electronic medical records have in giving the
American public what they deserve which is reliable data on quality care and
who’s doing the best job, not as a way to attack physicians or hospitals but as
a way to support informed decision making.

So the bottom line, there’s a lot of advantages but the American public
doesn’t fully understand how this is going to benefit them and I don’t think we
underestimate this because this is going to become a data privacy debate, at
least that’s my opinion as we try to advance this concept. And it will become a
largely political debate and I think we need to on slide seven be very
thoughtful about it, we address both legitimate concerns about data privacy
associated with electronic health records or personal health records, recognize
that some advocates are going to overboard, at least in my opinion, and it’s
going to create some challenges for those of us, especially those of us in the
public sector. And it’s pretty easy to generate public fear around this whole
concept, especially when the American public doesn’t understand why it’s good
for them.

So I think what we need to do is be very thoughtful about how we inform
America about why this is in their interest or we may lose the battle before we
start no matter how much all of us experts agree on why this is such a good
idea assuming we can figure out how to pay for it which is another issue. So I
think we need to engage in a public education campaign, I’m not sure how to do
that, I’m not a PR expert, but I think we need to do that or we may lose the
battle before we get started or at least it’s going to be delayed. We need to
engage the progressive consumer advocates and labor leaders to be advocates for
this and I think there is, or are a number of very intelligent and well
organized consumer advocacy and labor advocacy groups that understand why this
is to the benefit of their constituency if there’s adequate protections on
legitimate privacy concerns, and I wouldn’t ignore the benefit they could bring
to this debate if we can get them supporting our efforts.

And I always bring this back to my mom whose ultimately probably been my
best educator in health policy over the course of my lifetime and we need to
tell this story in terms that I can sit down at the dinner table with my mother
at Thanksgiving and say this is why this is to your benefit and to the benefit
of your grandchildren. And if we can’t do that I think we’re going to have a
hard time selling this idea no matter how much we think it’s a good idea as a
group of experts. And we to celebrate and promote early successes.

There are some non-negotiable principles, I think Dave stated this very
eloquently, consumers own their data. This doesn’t belong to the medical group
du jour that they’re seeing on a given day, it doesn’t belong to their
insurance company, it doesn’t belong to their employer and it doesn’t belong to
the government, it belongs to the individual. And I think we’ve got to make
that an ironclad contract with the American public.

And the balancing act we’ve got is how do we create appropriate restrictions
on access to especially personally identifiable health records but still have
the aggregate data available for a variety of very useful purposes. And this is
really tricky and I think we’ve learned a lot of lessons from the HIPAA debate
about the subtleties of how you protect personal health records while still
making aggregate data available to the people that really need to have it. And
that’s a message we have to kind of craft for America because I think the
aggregate information that can come from personal health records can certainly
help with care delivery, just basic health services research and advancing the
science of medicine, what’s the relationship between exercise and well,
whatever, I’m not going to define it but you get the point.

It’s also very useful for payment eligibility, I live in Minnesota and just
like Michigan, anybody who’s wealthy and intelligent enough heads to Texas,
Florida, or Arizona during the winter months, and their insurance eligibility
transfers with that so obviously having that kind of information on electronic
record that’s portable would be very useful, performance measurement we already
talked about and basic research.

So what I think we need are national standards, what I don’t think makes
sense is having each insurer do their own thing, each employer doing their own
thing, or each physician doing their own thing, especially if you think about
portability and this is belonging to the individual, there needs to be a single
national standard, what data goes into a personal health record and how those
data elements get transferred across the system as patients do what they’re
going to do more and more which is be very portable in this society.

We need incentives for providers and plans to adopt personal health records
and integrate it with their electronic medical record, that’s utopia in my
mind. I think one way to do that is to measure and publicly report physician
and hospital of electronic medical records, which is a complementary part of
this. I’m proud to say I’m a founding member of Leapfrog and I’ve been a
shameless promoter of CPOE for about five years as one component of that. And I
don’t think we should be shy about public reporting that and pushing the
provider community hard to adopt their side of it. And we need to link it to
financial and non-financial incentives, recognize the systems like Henry Ford
that are doing advanced and exemplary work, and challenge the provider systems
that aren’t getting on board with this quite frankly and hopefully link it to
especially Medicare reimbursement reform and private insurance reimbursement

And of course firewalls to protect confidentiality, there has to be an
absolute firewall so that folks can’t get a hold of individually identifiable
records unless they’re involved in the actual care for that individual or just
this isn’t going to sell.

So that’s my two bits and speaking as a proxy for my mother in rural
Minnesota, her two bits as well. If you have questions my contact information
is on the last slide and I look forward to the dialogue.

DR. COHN: Steve, thank you very much and obviously our sympathies are
extended to your family and your mother though, she gives us some good lessons.

MR. WETZELL: I would guess there’s probably about 150 million other stories
like that floating around.

DR. COHN: Well, thank you all for some I think fascinating and as I comment
thought provoking questions, does anybody from the subcommittee want to lead
off with questions? Jeff, are you raising your hand?

DR. STEINDEL: Simon, I will.

DR. COHN: Okay, Steve, why don’t you start off.

DR. STEINDEL: Thank you, Simon, I’m trying to put my thoughts together, this
was a very, very interesting and thought provoking panel, I think each one of
you hit on a lot of high points that we have been discussing both in the
context of the PHR, the EHR, Dr. David Brailer’s Health IT initiative, etc.,
and in one sense I don’t know where to start but I will start. Mark, you
touched on the accuracy issue and the transfer, the assurance of the accuracy
of the data, and we’ve heard multiple times over many years about the question
of physician’s knowledge of the accuracy of the data entered by someone else.
And this doesn’t necessarily just mean a person, I think the accuracy of a
person’s data is even questioned further but we’ve even heard them say that
they will question the accuracy of data entered by another physician. And I’d
like you to kind of expand on what we can do about assuring the accuracy of the
data and does this come down somewhat to liability questions as well.

DR. KELLEY: Interesting question. I think the accuracy comes down to, I’ll
duck the liability issue for a second but dial that back in in a minute. I
think the accuracy issue boils down to a couple of things and I’ll just give
you sort of how we tend to think about these things particularly as
consultants. The piece of data that we most feel comfortable with are things
that are measured or seen, that we can see, so if your blood tests, your
hemoglobin, your liver function test or something is done somewhere in a lab
that is certified and you can see the number you can count on that, that’s a
pretty basic concept.

Imaging is a different story, imaging requires not only the image but also a
visual cortex of somebody who interprets it to tell you what it looks like, so
that’s where that can fall off. So somebody who interprets a CAT scan for
example of an organ may or may not have the correct interpretation and so
that’s why I think images are something that should be portable because that
could be very much a diagnostic problem. Good group practices, good hospitals,
are only as good as the infrastructure of the support departments that they
have and those tend to be in radiology, in pathology, in anesthesia, you never
see these folks but they do a tremendous amount of work. So that’s one set of
data, that’s why I think that information probably has to be visible.

The next step is what you do with that information and so where some of this
reliability gets into, aside from the imaging and the lab test issues that I
talked about, tends to be what a doctor has done with that information to
arrive at a diagnosis or a matter of judgment. So what physicians usually do is
in viewing the records will look at the data themselves primarily, hear some of
the history, and conclude pretty quickly whether that was a reasonable
diagnosis or a reasonable therapy. That’s not that hard actually, most of those
things kind of tend together and really the patient’s clinical course will
often determine that. So I think that a lot of the accuracy issues probably
tends to be more grounded on hardcore information then it was actually done.

Now if somebody had a coronary event ten years ago and they have an
electrocardiogram that looks normal and they never had a catheterization, that
sort of doesn’t matter to me. On the other hand if they said they had a
coronary event ten years ago and they have a scar on their electrocardiogram I
know they had that, or had a catheterization which said they probably had
coronary disease, it’s probably pretty good, probably pretty good.

So I think in the main, I think a lot of people are dealing with incomplete
databases, they hear it from a patient, they get a little report, they don’t
have all the things in front of them so they kind of guess whether it’s
accurate or not. So I think there are, again, I think if the data were put
somewhere, I was just trying to think a minute ago kind of how would you
actually do this, for example how would you actually get to David’s point, get
to a personal health record that the patient owned, how would the patient know
that I put the right thing in there.

And I think it boils down to some of the credible data I mentioned before,
what they were hospitalized with, what their discharge diagnoses were, and then
you begin to see a pattern of events that tend to give you a feel as a
clinician what’s going on. So we look at pattern recognition and sort of what
sits together as corny as that may sound and also one of the things that’s very
useful clinically in terms of pattern recognition is the course of history of
the patient’s outcomes. So if I’m dealing with a patient in the emergency room
who says they had emphysema and I see they’ve been repetitively hospitalized
for that and I know what their x-ray looks like and I know what their lung
function tests looks like, that’s probably what they have, I mean that’s
probably not going to be too hard to figure hard. But I think most of the
physicians are dealing with incomplete information so that’s what the
defensiveness is about.

In terms of liability, again, I think that’s probably true where you
inherited somebody else’s bad diagnosis and then therefore are you as culpable
as they are, I suppose that’s true and therefore only my pathologist can look
at the pathology slide and only my radiologist can look at the radiology
images. So I think there’s a little bit of that, yeah, I think that’s true.

DR. STEINDEL: Thank you. As a matter of disclosure the head of pathology at
Henry Ford is a good friend of mine so I know you get good work from there. And
second as another matter of disclosure because I’m going to turn my question to
David, my wife’s a retiree from the health benefits department of Coca Cola.
I’ll be careful with my questions.

MR. SCHERB: Just like the Yankees respect the Boston Red Sox.

DR. STEINDEL: But thank you for your really fascinating talk on what PepsiCo
is doing in this area, I found it very enlightening from a lot of points of
view. But one question I did want to ask you and that has to do with the
development of a consume centric health care system and we’ve had a lot of talk
and we’ve had a lot of presentations and in the July framework for the Strategy
for Health Care by Dr. David Brailer that he came out with, I think while he
talks about patient oriented data and patient oriented systems, primarily what
he’s talking about is a health IT system that’s provider centric. Do you think
we should think about refocusing that?

MR. SCHERB: I’m not sure I would agree with your characterization because I
don’t know that he is primarily focused on a provider centric system, that I
can’t comment on. What I can comment on is that I think the focus should be
shifted to a patient centric system. And I’m surprised that it hasn’t gotten
there by now, I look at every other part of our society from my business, where
consumers rule, to the business of politics where voters rule, and I am
absolutely amazed that we haven’t through the Ralph Nader of health care or
whatever got a consumer centric health care system. We will, it’s just a matter
of time, it’s just a matter of some of it’s generational, I can guarantee my
son and his generation will not have the same attitude about how they are
treated as consumers when they get health care, they will have a very different
disposition and point of view then my parents. So I think you have to evolve
there a bit, I think people themselves aren’t sure about how to act as
consumers and so we need to help them a little.

But if you go right back just to your prior question on accuracy, I
absolutely agree with everything Mark Kelley said, I think it was a great
answer to your question, but another part of that answer is part of the
accuracy is people, who cares more about their health then you, who knows more
about their body then you, and who’s going to be more interested in checking
something then you, you’re the one that’s sick. And if I think about
unfortunately today the amount of time that a doctor has to spend with you when
you go into the office, one of the greatest checks of accuracy is a long
discussion and a lot of questions of you about how you and what’s this and
that, let me tell you, I have a doctor that’s an internist that does that, and
he asks me the same questions every time I go see him even though he’s heard
them before, well you know he always catches something by asking these
questions and he takes a half hour to do it, and I appreciate it like heck. I
go to my oncologist, who’s a great doctor and a famous doctor, but he doesn’t
have time to sit there and ask me the 20 questions so I go in with a list and I
make sure that I ask him the questions because there’s nobody who’s going to
worry more about my situation then me.

So I think it’s from a patient safety standpoint, from an improvement of
health standpoint, if we don’t get this around to consumers worrying about it
I’m just not sure who’s going, Marcus Welby isn’t here anymore and we don’t
have that luxury and I don’t blame the doctors, they don’t have the time and
the luxury to follow your case, make sure and check on you and make sure you’ve
gone and made your appointments, it’s just not going to happen.

I don’t know that Dr. Brailer is out of sync with that, my personal view,
I’ve spent some time with him, is that he’s very aware of the need of patients
and patients having, being empowered. I think maybe he’s focused EHR, eHealth
records as a necessary feeder into that system but I don’t think he exclusively
looks at it as just that. You may be more familiar with how his thinking is
then I am, so I just can’t characterize it that way.

MR. WETZELL: I wonder if I could offer perspectives on the data integrity
and malpractice issues from the consumer side if that’s okay. The data
integrity you hear constantly whether it’s wrong performance measurement or
adoption of electronic medical records and I think we have to be careful about
not suffering of the tyranny of the pursuit of perfection. When I look at
personal health records and electronic medical records basically what we have
is the equivalent of an abacus and we’re trying to move to a computer. But if
we can put a calculator in as an interim step I don’t think we sit there and
keep playing with our abacus while we wait for a computer that’s got a perfect
solution. So I think we’re better of adopting electronic medical records and
personal health records that may have some data integrity problems, it’s a
given as a relatively new technology, but in my view it’s an incremental, a
dramatic incremental improvement over what we’ve got now which is a paper based
system, where the paper records don’t have integrity and they don’t transfer.
So I don’t think that’s an excuse for not proceeding and I don’t think that was
the intent of the question.

Malpractice is another example, if more transparency increases the risk of
more robust data collection to document medical errors I don’t think that’s a
bad thing if it’s done fairly and appropriately. And I’ll use my mother’s story
as an example, I think there’s more likelihood of a risk of malpractice, my
family has no intent of doing anything with the course of that whole episode,
it’s more of a diagnosis of the system then individuals. I think having a
robust transfer of information that flows with the patient is likely to reduce
errors and solve malpractice problems at the root cause. And in the meantime
you’re going to have more transparency which is going to increase the medical
risk but I think we’ve got to kind of look at the benefits of this which is a
freer flow of information with the patient, is going to make for better care
coordination and better care delivery and it’s going to reduce medical errors
and it will be, it’s kind of like preventive medicine for malpractice,
eliminating errors in the first place.

DR. STEINDEL: Thank you, that kind of touched on the question I was going to
ask of you which was how can we get your message out better.

MR. WETZELL: Well, I think there are any number of people that can tell
stories like I told this morning and that’s probably the most compelling
argument in my view for mainstream America is talk about the real world and why
this could benefit patients. And I think we need to be wise to the politics of
this, I think that’s my primary message, because there’s going to be a lot of
scare tactics around this subject as we try to advance it. And this city has a
lot of very sophisticated and very smart advocacy groups that speak for
consumers that understand the benefits of this and I think it would be wise to
engage them early on as we try to advance this science and get them putting the
message out on our behalf.

DR. COHN: Just to let people know in the ordering here, I have Paul Tang
next, Bob Hungate, I have a question, Jeff Blair, and I see Gene has a question
also. Did I miss anybody? Paul.

DR. TANG: I thought this was really an outstanding panel, thanks Mary Jo, it
spans the spectrum and I think the perspectives were just really truly great.
It starts with the Henry Ford system whose been exemplary for a number of years
and did this before it was fashionable and did it at provider expense
basically. I thought there was an interesting sort of analysis you provided and
why is it working so well so quickly at Henry Ford, your PHR, and one of the
things you pointed out was the privacy issue, which everyone has pointed out as
a risk area, is sort of not there in your environment because there’s the
secure employability and insurability and that’s actually a fascinating

Then in the PepsiCo area, I mean if all of the VPs of comp and benefits were
as eloquent as you in speaking to the benefit, not to be a pun, but benefits of
this, I think that’s what would get this moving. How industry says when asked
why don’t you do such and such, well, if my customer asked me to do it I would
do it. And in a sense providers are saying the same thing, if the customer, the
employers, the employees, asked this of them or demanded it of them I think the
world would change.

So question would be how could we organize employers to be the advocate and
speak as eloquently as you do on behalf of why this is important to the
business of America and its health care?

MR. SCHERB: How can we organize employers to speak out on this issue —

DR. TANG: And basically demand it.

MR. SCHERB: Well, I’m not sure that employers are the lead, I think there’s
plenty of forums to reach out to employers, I think I’ve been, I was chairman
of the National Business Group on Health for ten years in the ‘90s, it’s
very robust right now, Helen Darling(?) who’s currently the president has done
a great job of pulling together all kinds of groups of employers who are now
very active, not just in subjects like this but in obesity, in health care cost
control, so I think first off you reach out to groups like that that represent
employers, where employers come together who really care about this and we’ve
got a very robust situation going there right now, just a lot of employers are
excited and they’re participating, they’d be happy to be part of it.

In terms of leading it, the thing you have to recognize I think is that the
business of employers is not health care, okay, the business of PepsiCo is not
health care. Just like everyone else, we have shareholders, we have things to
do, our whole job is not to lead this medical health record as our main thing.
Now we happen to feel that it’s very beneficial to us in many ways so we’re
going to spend time and energy on it. But I would focus you right back on the
government, the federal government pays what, 40 cents, 45 cents on a dollar of
health care in this country. Between Medicare, Medicaid, the Army, federal
employees, I mean my goodness, it’s a single payer, so first I think if you, if
we had the federal government leading by example taking a real strong position
on that we need this and that we’re going to create incentives for it, I think
in a New York minute if you’ll excuse the term, you could get the Fortune 100
companies to line right up and participate in that but I think it’s going to
have to be both, I don’t think it’s going to be the kind of thing where you can
just sort of look outside and say you guys are responsible, I think it’s going
to have to be a partnership. So I think that would work, I think taking a
strong lead from the government, given the clout they have, and soliciting and
bringing in leaders, our company, and there’s plenty of others, it would not be
that hard to do, that would work.

DR. TANG: Yesterday Cynthia Baur was asking what can your government do for
you I think this panel is also talked about vision, public education, and the
need for privacy policies that would help mitigate the risks, the perceived
risks there. I think my question to Steve was sort of the same thing as Steve
was talking about in the sense of it’s the vision, it’s this making the
benefits clear to the public, and what means can we, how can we bring that on
the road in a tangible way that your mom can understand and that reaches her in
time. Who is best to deliver that message and how do we deliver it?

MR. WETZELL: Well, I think again we have to put it in terms that a lay
person can understand on why this is good for me. And what that means is some
pretty blunt and painful messaging about the state of record keeping science
today. If I were to grade us on our progress the last 30 years, if we were at a
D minus 30 years ago, we’re at a D now, maybe a D plus. So the challenge we’ve
got, and we need to do this without putting off the medical community because
we can’t fault them for this, it’s all about incentives, why we haven’t had the
advances we’d like to have.

We have to be pretty frank with the public on just what the state of the
record keeping system is today and why it creates failures that can effect
literally any American on any given day given what happens with their health
and we have to be pretty frank about that. And then talk in very, I don’t want
to say simple but terms that lay people can understand on why having your
health information on a computer is not a bad idea and how we’re going to
protect you from the concerns you’ve got.

Beyond that it’s kind of a PR expert that we really need to get that message
out there, make the case on why the system isn’t currently as set up is not
safe for you, and not in your interest, and why the new system is going to
serve you much better. And just boil it down into almost like a national ad
campaign for consumerism and how electronic records fit into that vision.

DR. TANG: Let me give Mark a chance and maybe you could ask Mr. Employer and
Mr. Consumer, at least they’re both Mr.’s in this panel, what could they do, or
just comment, whatever.

DR. KELLEY: Could I deflect that because I had another thought that just
kind of came up in conversation back in Detroit about something else because I
was struggling a little bit, how would you actually do this, given the fact
that we don’t have an electronic medical record nationally, and where would the
tipping point be and where do we have the biggest problem in health care policy
and it’s with Medicare. And right now for example, our health plan is one of
the few that stayed in the capitated system in Medicare and what Medicare is
trying to figure out right now is kind of what their disease burden is in a
capitated population and they’re getting it off claims data right now which is
fraught with all sorts of problems as you know.

So we kind of divined this fairly simple minded solution that maybe every
primary care physician who’s assigned to the individual would do a
comprehensive physical once a year and actually put in a problem list that was
actually quite credible and data driven and all that sort of stuff, so somebody
would know. It’s the easiest thing you could do and you would incent the
primary care physician to do that, you’d pay them a comprehensive physical
exam, maybe above what you’re ordinarily pay.

And so I was thinking to myself who are the people that are most worried,
they are the seniors right now, seniors are very, very worried and so on and
they’re also, there’s a lot of advocacy position in seniors but if you could
get the AARP to do something that might help.

What I was thinking about is wouldn’t a well intentioned primary care
physician be able to populate a database, maybe not with the images but you
could imagine that you could incent somebody who once a year would do that. And
that would be your database, and that would be portable somewhere, it would be
in cyberspace, and maybe you’d tell everybody who was a Medicare provider that
every image and every CAT scan, every radiology image went to a central
database. That might be all you’d need and the seniors would see that, the
snowbirds would see that as a wonderful outcome, things like that.

So anyway, back to David’s position as the employers, I think a lot of what
Pepsi is doing is terrific because it’s getting into sort of managing your own
health and I do agree with the personal health record being yours. The problem
we see in our system is we have a wonderfully diverse population in terms of
demographics, ethnicity, race, economics, language, and despite the fact that
many people are computer literate it’s an interesting concept, how many people
do take control of their health care and that’s a big issue as to what ones
responsibility is.

So I think you ought to be able to do both, there aren’t to be sort of a
minimum information and there ought to be empowerment as you suggested, but at
least a backbone there. So I think it kind of works a couple of different ways,
so I think for example, GM, the auto industry, they are very proactive in their
health care despite all the problems they’re having in terms of work hardening
and obesity reduction and things like that, so I think they have taken that but
that doesn’t translate into a portable health record so I’m not sure it’s seen
as a value right now. And they do rely on, at times do rely on the intermediary
such as the HMOs to do that for them as opposed to doing it primarily which
Pepsi has taken that on directly.

So I don’t know, I guess thinking about public policy I realize this may be
swimming up Niagara Falls but the Medicare population is where the action is
right now it seems to me and I think the seniors, particularly the boomers as
they get through in the next ten years, I must admit I am one of them, are
going to be pretty upset if they can’t do something like this and may be very
ready for it.

DR. COHN: Thank you. Paul, can we move on? Thank you. Bob?

MR. HUNGATE: Along the same line, I’m struck by the growing prevalence of
discussion around disease management as a concept, as an approach to dealing
with ambulatory care and especially those people that would most benefit by it
it seems to me, both the aggregation of data, the personal record itself, do
you see differences in your populations in those population’s adoption of the
tools that you’ve made available, can you tell for instance at PepsiCo whether
the people that could most benefit by personal management are the ones that
sign up, or is it the ones who most worry about it, what’s the distinction
between who does it and who doesn’t? Because that makes a difference in where
this might go.

DR. SCHERB: The honest answer is I don’t have that, I don’t know, we haven’t
had time to, it’s been nine months, we’ve got a lot of data, a lot of things,
and so that’s not a road we’ve gone down to try to figure it out. And with our
privacy it’s something we’d have to be very careful on how we’d figure it out

What I will say on the subject of chronic versus, or disease management if
you will, is as someone who put in a lot of “disease management
programs” I’ve sort of got a different, I’ve sort of changed my view a
bit, I don’t even like the term anymore to some extent. I’ll give you an
example, I was talking earlier about my son who’s a juvenile diabetic and I
don’t think he looks at what he does as disease management and also he doesn’t
I don’t think particularly care to have a disease management firm call him. He
happens to be an iron man that’s going to Hawaii for the national championship
this October, he’s probably in better shape then 99.9 percent of the population
and he does a great job of managing his condition.

So I’ve come to think of disease management or chronic conditions as
probably the most eligible for wellness programs, not just acute care, of any I
can think of, who can benefit more from a wellness program then somebody with a
heart condition whose had cancer or who’s a diabetic. So I have a taken a sort
of different view of that and so my view on the medical record of people who
have need of “disease management” versus normal people is it’s equal,
because the whole idea of a personal, I think the whole idea of a personal
medical record where you also self enter, if you think about the preventive
things I talked about in our program and you marry together sort of the carrier
again but also with the prevention idea that it’s going to, that record is
going to queue you to do things and to go to the doctor preventively, I think
you can start looking at it is as maybe it’s not just for one group or another
and by the way today’s healthy person is tomorrow’s person who unfortunately
has cancer like your mother.

So to me I don’t, I think we have to do more analysis to figure out who’s
using it, Bob, but I think, my view is this is probably equally important in a
lifetime for you have to a personal health record no matter what your physical
condition is because it changes.

MR. WETZELL: I think there’s an opportunity to on the disease management or
to re-label it and Dave I think that’s a good point, there’s an opportunity to
engage a whole other sector of advocacy groups like the American Cancer
Society, American Lung Association, and basically say here’s how an electronic
or personal health record combined with an electronic medical record could
improve the health status of the group you advocate for and we want your help
selling them on the benefits of this. With specific examples, I mean you could
take my mother as a case study, take that to the American Cancer Society or any
other number of thousands of case studies and say here’s an example where freer
transfer of electronic records would have expedited the diagnosis of this
condition and maybe or maybe not made a difference in the ultimate outcome. So
I think that’s another group we can think out, almost condition specific
scenarios or disease specific scenarios on how this can help both with disease
management and approved diagnosis and all the other pieces associated with the
specific health condition working with the advocacy group.

DR. KELLEY: We’ve had a lot of experience with disease management, have some
interesting initiatives going on right now, and I think it’s an interesting
question because chronic disease management involves a couple of things, one is
coordination of care and that’s where the ball often gets dropped and that is
an IT issue often, mismanage medications.

The other thing is patient education, most patients, there are some patients
who actually will not participate, that was your question, and we find in our
diabetes management program about 20 percent of diabetics out of control will
not, even if you go out and grab them, will not sort of take control of their
disease at least in our experience, about 80 percent will. And I think patients
who get education and also have access to IT will actually take over their
care, sort of what Dave was implying.

And it’s going to be interesting because if that turns out to be the case
and that’s a national phenomenon and the population becomes more portable, as
people move around they’re not going to want to just want results reporting,
they’re going to want an interactive program that’s probably national that they
can tag into wherever they are, that will tell them what their diabetic control
is, that will give them relevant information and so on. So as patients get more
intelligent about taking control of their conditions that may actually propel
this much faster then we thought.

DR. COHN: Thank you. Jeff, I’ll let you be next and I’ll finish at the end

MR. BLAIR: One of the areas that’s received a lot of attention in the last
several years has been patient safety and quality as a vehicle for getting the
benefits, one was the side effect of lowering costs and controlling costs. And
as many, as we look at many of those systems the area that yields the greatest
benefits, potential benefits, is often decision support. A lot of folks, like
myself over the last number of years, have focused on clinical specificity in
terms of clinically specific terminologies as an infrastructure tool to help us
to get better decision support. I’d just like to know your thoughts and views
as to, when I say decision support, drug to drug interaction, drug to allergy,
drug to lab, clinical guidelines and protocols, all of the things that would
provide information at the point of care in an accurate manner. So I’d like to
know your thoughts about just the area of clinical decision support on
improving safety and quality and cost, what experiences have you had.

DR. KELLEY: I’m Mark Kelley, I’ll start off. I think it’s imperative, I was
just reading something the other day by David Cutler(?) the economist who I
think hit the name on the head which is that medical information now, both in
terms of discovery and appropriateness of care, is coming at the providers so
fast you can’t keep up with it, you cannot keep up with it, anymore then a
pilot coming out of Reagan Airport can keep up with air traffic control,
everything is smartly managed behind the system to tell him or her what to do.
I think in our world it comes up with just what you said, Jeff, which is
several things, what is the right thing to do with that patient at the time and
that’s changing all the time but also what is commonly accepted as evidence
based. And I think physicians right now are not afraid of evidence based
medicine, I think the fear of litigation, all sorts of other things, doctors
are actually more steerable then you may think, they want to be, they want to
know the right thing to do and if it s the right thing they will generally do
it, particularly in the fast paced environment we have right now.

I think the area that right now as you suggested in quality and safety that
probably is the most obvious point is in prescribing, whether it’s order entry
on the inpatient side or really what’s a bigger problem, pharmacy management
and order entry on the outpatient side. In our e-prescribing project which I
mentioned earlier we made this very similar to air traffic control if you were
a pilot, basically you don’t have to know anything, I mean you do have to know
something but you don’t have to know anything about the, too much about the
pharmacopoeia behind this, it will just tell you if there’s a drug/drug
interaction, you may be curious and find out why that is but you don’t really
need to know about that in terms of decision making you make at that time, the
allergies, and so on and so forth. The physician doesn’t have time or have the
knowledge often to be able to figure that out, so I think that’s, decision
support behind all these systems is enormously helpful —

MR. BLAIR: Do you feel as if you’ve gotten the benefits that you had hoped

DR. KELLEY: Yes, but I’m going to give you my little metric that, I tell
other groups this and I’m going to publish this someday but little ditty about,
it’s never failed me so I hope to leave this with you. Physicians basically
respond to three, the three Ts as I call them, time, trouble, and treasure.
Whatever you do, and you must, whatever you do with physicians, it works for
other professionals too but physicians are very, we’re trained that way, we’re
trained to work really quickly and efficiently, the trouble part is everybody
who became an MD would like to think got As, the MDs in the room got As right.

So trouble is when you don’t get an A, so you don’t want to be average,
getting a B or a C has never been a good thing, so you want to get an A. And
treasure is obvious, there’s a lot of deferred compensation and everything else
but time is money and everything else. Now, in our e-prescribing system when it
was first proposed I said look, this has to save time, it can’t be a lot of
trouble and it can’t cost anything, I mean to the individual in time and
trouble, so it has to be pretty idiot proof, it has to be able, the physician
is going to say wow, this really helps, it helps the patient, obviously that’s
a very good thing. And they would do it if it helped the patient and it was a
neutral encounter.

But it actually saves time, the usual upgrade of three weeks or so to learn
it is a pain in the neck but it saves time so decision support, that’s back to
your point, helps that tremendously. And the trouble piece is in an order entry
system if you got somebody going down, imbedded in the order entry system, a
guideline, and they follow the pathway like an airline pilot they’re safe. If
they decide to veer away from it for whatever reason they have to go through
some hoops to do that. They can do that but they have to go through, they have
to take over the controls of the plane and go out of bounds. And a system that
warns somebody that they’re doing that but that’s okay but they got to document
it, is something that physicians would do but not if it’s not something they
firmly believe in so they’ll steer back on course is my point.

So I think that’s enormously helpful and I think physicians have changed now
from the idea that they have to know everything and defend everything to
accepting the fact that teamwork is part of, that’s what we’re dealing with
now, is teamwork is very much a part of medicine. So I think that’s one of the
things we’re lacking right now in medicine so I’m very much in favor of that,
I’ve seen that work, I’m an intensive care physician as well and one of the
problems that we have in intensive care medicine there’s some of this going on
but it’s very hard work, very labor intensive with tons of data coming at you
all the time in a very time sensitive fashion and we need IT systems that
basically tell us what to do next. You cannot fly a jet fighter aircraft or any
aircraft right now without massive computer support, just can’t, so I think
health care is becoming that way right now so I really approve of industry in
that regard.

MR. SCHERB: Dave Scherb, I’d like to follow a comment. On the drug
interaction I think it’s critical, we have a program, we use Merck MedCo, you
order online, it automatically checks. It doesn’t do you much good if you go to
a pharmacy on vacation somewhere, doesn’t do you much good if you’re in an
emergency room or if you’re in a hospital somewhere and they’re dispensing
drugs. So as a tool unless you have a centralized medical record, something
that I can bring with me or something that can check essentially because it’s
online and it’s centralized like a WebMD kind of thing, I don’t know how you’re
really going to completely capture that. When you ask me what I’m allergic to
as a patient and I walk into your office and I’m trying to remember was that
Percoset or Vicodin, it’s important which one it was, don’t give me the wrong

So I think it’s a great example of how a personal health record can help
doctors, for example print this out, okay, print out sort of my medical history
when I go to a doctor visit and let me show you, or when I go to a hospital,
let me have that right there and right handy and in a standard format, that’s
the thing, to make it efficient it needs to be standardized in its format and
its content, we need to agree what’s in there but given a standard format so a
doctor can easily go right to it, and he’s going down, and doctors are very
specialized, they don’t have the time necessarily to ask everything but they go
down and they say well what’s this, that’s interesting, you’ve had some pain in
the right side, you hadn’t mentioned that to me.

I mean this is the kind of thing I think that is also decision support, not
just sort of electronic how do things work but the more practical wow, just in
scanning down your personal medical record that you printed out when you came
to me, wow, tell me a little bit about that pain you’ve been having in the
lower left hand back above your kidney. I think those kind of decision support
things help doctors tremendously too and that’s one of the advantages of what
you would have if you can follow through and put together what we’re talking
about here.

DR. COHN: Of course I’m always reminded that the first level of decision
support is having the data. Gene, do you want, you’re up next and then Bob.

DR. STEUERLE: I’m a little worried about time so I’ll try to keep my
question short, maybe just ask, I’ve got three questions, maybe I’ll just ask
one of each one of you as opposed to getting three answers and maybe I can make
them quick.

David, you mentioned something about trying to enter data from third parties
and my very specific question to you is are you going to at some level pay
these third parties to provide this information in a format that is useful to
you, for instance if you’re dealing with pharmacists, I don’t think you
necessarily want to get a fax from them that you have to totally reenter all
the data.

Mark, to you the question I have is since, especially in your community,
you’re an employer who’s heavily involved in the community and you’re
developing these various tools, is there some sense of reaching out to the
physician, I mean is there some way of taking what you’re doing and actually,
maybe this is a general question, is there any thought among employers like
yourself of actually taking some of the stuff you’re developing and sort of
selling it or pulling in other physicians who might not be in your network or
other groups and selling to them?

And Steve, for you I’ve got the toughest one which is, and any of you can
answer it, is there, I keep struggling with this, is there any financial
incentive that the government should pay, of course with employers it’s
probably the hardest place to think of it because the government is mainly
involved in Medicare and Medicaid but nonetheless there must be a number of
interactions between your employer groups and the government. Is there ways
government should be paying a financial incentive or a differential if
information that goes back and forth between the employer and the government,
Medicare and Medicaid, I don’t know, that could make a difference in advancing
this world, for instance certain data be provided in a certain format or that,
I’m not quite sure what it is but I’m trying to think of some very specific
financial incentives that might be involved.

MR. SCHERB: Am I importing data question, what I was referring to is that we
will be, by the end of the year we’re going to be importing claims data into
the personal health record which means medical claims data from our providers,
Blue Cross/Blue Shield, United Health Care, and also drug information data from
Merck MedCo. We don’t have the ability right now which is one of the things
that we would really hope that this effort would change to get direct inputted
data from providers, that would be the goal, without that I think your
potential for this tool, this private personal health record is tremendously
limited but we import what we can.

In terms of paying for it relatively speaking it’s not that expensive, we
use right now, we already get giant data dumps for aggregate data from all our
providers and all our claims do a whole bunch of things including self insuring
and running our sort of little insurance company that we have, so we’ll pay for
that, it pales by comparison with the value of it given we’re paying on a $100
million dollars a year for the claims, you’re not worrying about a couple
million dollars or a million dollars of data.

DR. KELLEY: Your question about sharing this outside our network to other
physicians, a very good question, very briefly our electronic medical record is
available to practicing physicians who are not in our group but our independent
physicians within our health system, practice in our community hospital so they
can do this. We have not migrated some of the disease management out yet to
them until we understand exactly how our group practice does on it and that’s
the point we’ve made, if you can’t, and this is probably part of Kaiser as
well, if you can’t do it within Henry Ford or Kaiser in a kind of a point staff
model it’s going to be much harder to get into the private physician offices.

So that’s kind of work in progress right now, the other thing I must say
that we think our electronic medical record is a market advantage for us too so
we don’t want to sort of give all that away, but it’s interesting, if we had a
sort of a portable record of sort of the nature that I mentioned that would be
something that would be worthwhile I think for the whole region, maybe even the
whole state. So we’re kind of working a transition with that.

MR. WETZELL: Your question was easy, the answer is yes. First, the way I
think about the data exchange piece of this is that there’s a retail and a
wholesale data exchange component and then we’ve got to think about how we
incent people to play ball in those two worlds. The retail data exchange, the
analogy is what the banking industry did with ATMs, and I was, I used to have a
real job, I was in the banking industry in the ‘80s doing what Dave does,
well trying to, and that’s when we started standardizing the ability of our
ATMs to talk to each other.

And that’s part of what we need to do with both the personal health record
and the electronic medical record is portray this to society as doing what the
banking industry did with ATMs 20 years ago so that you can kind of take your
information to any provider you want and you can plug and play it but you own
your records. So that’s kind of the retail piece, the wholesale piece is the
data aggregation side, how do we aggregate this data for public policy use and
performance measurement and reporting, that’s a little trickier thing to kind
of incent and figure out how to convince the public that’s in their value, but
just a framework I think might be useful on how to think about this compared to
other industries.

As far as incentives, I don’t think, and no offense to the employers, but
they’re really not the key cog in this wheel, they’re kind of starting to talk
about walking away from this and playing a less active role, correct me if you
think I’m wrong, Dave, but I think that’s kind of trend at least from my point
of view. So I think the incentives have to be more at the consumer level and
the provider level to stimulate the data exchange and the adoption of
standards. At the provider level I think we need to reform Medicare
reimbursement and link pay for performance through adoption of this technology,
period, it’s not even debatable in my mind. All the devil’s in the details but
that’s how I’d incent the supply side is through, I’ll let Medicare lead with
revision on pay for performance, I think MedPac has sent some pretty clear
messages on that recently.

And on the consumer side there isn’t any reason you couldn’t offer for
example Medicare beneficiaries an enhanced benefit if they agreed to be part of
the group that’s going to be first to agree to have a personal health record,
incent the consumer side as well, because I think we’re all convinced the ROI
is clear, we’re going to get the return and offer them a carrot, on both sides,
the provider side and the consumer side. I mean I don’t think the employers are
really the piece here where you need to draw them in in any real significant
way unless I’m missing something, Dave.

MR. SCHERB: I wouldn’t characterize it that the employers are walking away,
that has a sort of a negative connotation. They might like to if there was an
alternative, there isn’t one, you don’t get to walk away from your employee’s
health care —

MR. WETZELL: Thanks for stating that better then I did.

MR. SCHERB: — it’s just not a choice. So that’s not a choice but I would
agree with you that it’s more and more difficult, this is a $1.3 trillion
dollar business, it’s not the business we’re in, right, it’s a provider
business, it’s like somebody coming to me and I mean we do barcodes, we invent
barcodes, we’ve invented a lot of things to help do our business, we’re not
medical experts. So to that extent looking to employers to solve these problems
is a limited. On the other hand we do have a great opportunity because we’re
the entity that employers are with every day, we’re the ones that employ them,
we deduct from their paychecks, there’s a whole bunch of reasons why employers
can be hugely helpful so I think looking then to solve issues completely, I
think that is a difficulty and they’re frustrated because of the difficulty of
impacting such a huge system of which they are just a part.

DR. COHN: Thank you. Robert and then I will wrap up.

MR. KAMBIC: Hopefully a few quick answers. Dr. Kelley, your e-prescribing,
is it available to every pharmacist or pharmacy in your catchment area?

DR. KELLEY: It’s available to every pharmacy in the country.

MR. KAMBIC: Okay. How did you do that?

DR. KELLEY: Actually we didn’t do it alone obviously, we did this with some
of the PBMs that work with the auto industry.

MR. KAMBIC: But I don’t think it’s every pharmacy because some of the small
mom and pop pharmacies around the country —

DR. KELLEY: That’s true, you’re right, that’s probably true, the small mom
and pops would be in there wherever those rare instances occurred —

MR. KAMBIC: That’s one of the things we’re looking at at CMS is in fact how
to incentivize pharmacists to adopt the technology so that these networks can
work. Now it’s not clear to me, so I’m with you but now I’m going to be going
down to Wayne State and none of this is transferable electronically, when will
it be?

DR. KELLEY: Good question. The way it works in our system is the relevant
information, actually a couple pieces that I left out that are important. This
is only for Health Alliance Plan, our HMO insurance right now because we have a
very good database interaction between their system and our EMR, so it’s
limited to those patients. It will eventually be migrated out to other patients
who are imbedded in CarePlus. The tricky part is going to be kind of how,
exactly as you said, how is it going to go outside of CarePlus, our medical
record out to this prescribing thing. The smart intelligence behind it is in
terms of allergies and drug/drug interactions would be generic across the base
obviously, provided somebody put the allergies in there. So we’re not quite
there yet but theoretically the reason that it was used in our practice first
is because we had the set up already there with the EMR.

I think in terms of how it works in the main is it’s pretty much drug/drug
interaction, allergies, and an accurate database of what the prescriptions that
have been filled are. It’s not driving a lot of workflow other then what you
saw in terms of coming into our in box in terms of CarePlus. So I think it’s
probably going to be able to go outside this and we’re working with the autos
to do that but I can’t give you all the technical details but it will be going
outside our system because obviously we’re —

MR. KAMBIC: 2008, 2009?

DR. KELLEY: Oh, I think it will go out probably next year, this is moving
very fast in our system and obviously the big bang for the buck for the
industry is to move this to all their insureds everywhere. I can get you more
details if you like.

MR. KAMBIC: I just wanted to get a sense. Mr. Scherb, I smoke, bad diet, bad
exercise, so I have a computer screen. How does this influence me to change my
behavior in some way? I have a personal health record and I may or may not use
it and now it’s going to make me change my behavior?

MR. SCHERB: The record itself isn’t, the fact that the record is integrated
with personal health risk assessment, which you have completed because we’ve
incented you to by knocking something off your health care costs that we charge
you, so the two of them are integrated, so that you can now literally track and
enter something in your health record and it will go over and track with a
tracker that shows you where you’re going, that sort of thing. So you have ways
first off for managing and tracking what you’re doing, but secondly when you
fill out this health risk assessment it’s going to, an algorithm within the
WebMD system is going to take a look and it’s going to come back and give you
an immediate wellness, sort of list of priority programs of things you can do

MR. KAMBIC: I’m not that interested anyway, I mean my doc tells me to do
this, I mean what is, my costs are going to be less maybe so that would be an
incentive for me personally, but I mean I’ve already heard this stuff, I hear
it on the news, I read it and stuff —

MR. SCHERB: So your question is how do you motivate people to do something
about their health, is that what your question is?

MR. KAMBIC: Yeah, how does the —

MR. SCHERB: A medical record is not going to motivate you. What it is it’s
an important tool, if I’m going to motivate you, once I can get you excited
about doing it and then, once I get you excited about doing it it is an
integral tool for you to get involved, keep it going and so it supports that.
The way I get you involved is for example in our case, and I was surprised at
this, I showed you some data, we had 27,000 people sign up, 8,000 of them are
in one on one coaching with Harris Health. Harris Health is a group that we
hired that said if that health risk appraisal says you have two major health
risks, history of diabetes and obesity, we want you to call that person, we’re
supporting it with employee communications internally, we’re having America on
the Move walks, everything else to get people excited about it, but we want you
to call that person and we found 8,000 people signed up for a one on one
telephone coaching, that means once a week coming back, because what we found
is that when you have somebody that’s a coach that’s calling you, that’s going
to be expecting you to make progress, people just like with personal workout
coaches, they feel obligated to satisfy that coach, there’s actually a
psychology about it.

And in terms of education to get people to move, for example we have this
whole obesity issue in America, I talk to the folks up at Jossyln(?), they said
80 percent, there’s a cure for obesity, there’s a cure for diabetes, excuse me,
80 percent, for Type II Diabetes, 80 percent of people that are Type II
Diabetics, if they were at a recommended weight instead of overweight wouldn’t
have diabetes. Well, you’ve got to get that information out and let people know
that there is a way to avoid these issues. So there’s a very complex set of
things and that’s why I was pointing out that this health medical record, the
private health, personal health medical record, once you have it electronic you
can put it as part of a more holistic and robust system to get people moving
and doing other things, it’s the same thing that doctors are trying to do when
you go in there, there’s no magic bullet.

MR. KAMBIC: That’s sort of what I was looking for, it’s not just the record
itself, it’s the system.

MR. WETZELL: I could offer one real quick point because I know we’re running
late, this is I think one of the subtleties on how we market this to Main
Street America is you’ve got to say personal health records are going to help
you stay well if you decide you care about that, and a lot of people won’t, and
then are going to help you when you get sick. And ultimately whether, some of
us are more in denial then others, but all of us will eventually face that in
some form or another so that’s how I would, there’s a separate set of questions
around incentives but in terms of how we market this to the public you got to
talk in terms of different target audiences, if you care about staying well
it’s certainly going to help you and if you care about making sure you get the
best care when you get sick it’s going to help you there too and then people
can kind of pick what they think is going to be to their benefit. That’s the
reality of all the diversity out in the public and how they’re going to view

DR. COHN: Thank you. Actually I will make a comment but I really first of
all want to thank the panel for what’s been a very stimulating, interesting set
of discussions and insights. I mean from my view as I look at this when I’m
reminded of how overlapping sort of our vision of sort the provider health
dimensions versus the patient health dimension is really as we talk, I mean
we’ve talked about outcomes, what is the role of the patient versus the
provider in all of that. We’ve talked about excellent health care and I think
Steve brought that to our attention, and the question is exactly how do we help
best assure that. These I thought were fascinating, had to do with this issue
of probability and I really, as I think about the concept of these regional
health information organizations that pretend in some ways to offer that sort
of portability versus personal health records, the question is is what approach
will really turn out to be the most durable and the most portable which is I
think really a key piece that we need to have moving forward.

And of course there’s the issue which I think David really focused the light
on which is this issue of patient empowerment and at the end of the day what
sort of tools, what sort of approaches will really help empower patients to
best help take care of their health and indeed at the end of the day we’re all
patients, I mean it may be financial incentives, or it may be other incentives,
but obviously I want to live until I’m 100 at least and be healthy as long as
possible which is sort of a common view that everyone has and how is this all
going to play out. Clearly I don’t think we have the answers but I think this
begins to at least give us information for which to begin to advise the

So I want to thank all of you, we are running a little late, we will take a
ten minute break and then come back, ten minute break and then we will come
back, and go on to our next session.

[Brief break.]

DR. COHN: Okay, our next session is really focused one economic and market
forces. Gene, I’m actually going to hand it over to you to let you sort of,
since you’ve been so intimately involved in setting this up I thought you might
want to give some introductory comments as well as introduce our presenters.

DR. STEUERLE: Well, I mainly made the suggestions and as usual Mary Jo did
all the work so you’re giving me a little more credit then I deserve but I
should mention that that the two economists you have here are the two I put at
the very top of my list as to people I would invite in this area. It wasn’t
necessarily that I knew whether they had thought a lot about them, about the
issue of personal health records or even employee health records. In fact Mark
tells me that he hadn’t actually spent a great deal of time devoted to it. But
the reason I wanted to invite these two is I think of these two gentlemen as
two of the most thoughtful and engaging people in this area, they don’t stop
with simplistic answers, they’re always willing to sort of dig deeper and
deeper and deeper into the problems and they’re also very research oriented in
the sense that they’re very open to new evidence and what it presents and so I
can’t think of two finer people to help us engage this issue.

DR. COHN: Okay. Well, we’re really pleased to have Mark Pauly from the
University of Pennsylvania joining us and Alain Enthoven and so obviously Mark
I think we’re going to let you lead off.

Agenda Item: Panel VI: General Overview of
Economic/Market Forces – Mr. Pauly

MR. PAULY: Okay, well one of the things my mother told me was never to start
off a talk with an apology but I’m afraid I’m not going to not do what mom
said, Gene’s already made some of it. I am not an expert on personal health
records but I also then need to say quickly I’m not total naïve either, I
have tried to do a crash course in understanding how they might work and I’ll
mention a bit of that. And then I might as well mention this now because I’ll
probably drop the name later, Dave Brailer was, I was actually on his, one of
his PhD supervisors and we’ve co-authored some papers, and anything that David
is enthusiastic about I’m inclined very much to give the benefit of the doubt.
So those two things are important to say.

Well, the thing that I thought that I would try to talk about, are personal
health records or portable electronic medical records I guess or some
permutation and combination of those terms, and this definition I think is from
one of the Markle Foundation studies, a single person centered system to track
and support lifetime health activities. Listening this morning I thought maybe
that my approach is a little too narrow, what I’ve been asking myself is what
would that kind of system or device, what would it add to what otherwise might
be available, sort of the marginal impact of personal health records.

And I guess why that comes into play is because as we all know and as we’ve
discussed this morning, the kinds of information that are currently available
for most of us in a medical care encounter are almost always incomplete and
imprecise. And so the question that I’ve been asking myself is well what value
might there be to a personal health record that would rearrange or make more
easily available that imprecise and incomplete information. I think there’s a
broader and in some ways more exciting question of well if we had really good
and a really large quantity of information that was very accurate and general
what good would that do.

So I’m not quite sure, I guess to kind of come to the end of this musing
whether we’re talking about the tail of the dog here, but that’s kind of what I
gave myself the assignment because the business case for a personal health
record will depend on what it can add given the current state of the art and
current state of the world in terms of the fundamental raw materials in terms
of the data. So that’s sort of how I looked at it.

Now you can of course look toward the future and imagine that if there is
going to be as we certainly heard earlier this morning substantial improvements
in the quality and quantity of the data, maybe that makes a strong case for
personal health record. It does raise a kind of interesting business strategy
question though, if I was interested in this as a business would I want to jump
into it now and put up the best steam powered personal health record that I
could, or might I be smarter to wait five years when the raw materials and the
technology are a lot better. Of course go that too often and you’ll wait
forever but that’s sort of one of the dilemmas.

So anyway, I will take as an axiom this idea does pass the basic test of
potential utility, more information is usually better then less information,
whether you’re a consumer or a physician or anybody else. I’ll give a few,
economics come up with some counter examples where more information can be
worse but they’re not very common but I will give a few of them a little bit
later on, so this is not a pet rock idea, this is clearly something that would
be valuable and then there’s my disclaimer.

The basics of a business case is obviously just very much ABCs, but I think
it’s worthwhile to say, and I thought listening this morning it’s probably
worthwhile even to stand up and say it or at least sit down and say it, there’s
a case for any useful product if it can be sold cheaply enough, at least to an
economist, or for that matter to a business person. It’s not is this a great
product or not but can I sell it at a price at which I can make a profit.

And here’s where my homework assignment didn’t get quite completed, I was
not able to find any business plans or that sort of thing for personal health
records that would give me some sense of what the numbers might look like here
so I thought I’d just pose them as rhetorical questions but they’re still worth
thinking about. And the fundamental question is as the second dot point says,
will enough people be willing to pay a price for a personal health record that
will cover the cost and maybe even a little extra for the capitalists that
would be incurred at that level of volume. And this last, the third point
actually from what I’ve heard does characterize personal health records, that
they are likely to have quite high fixed costs, and the product can be defined
in many different ways and in fact the product is changing as we speak. So that
tends to pose a bigger challenge for the business case for something then if
these things weren’t true.

Another way to say it is this seems like the kind of product where you’re
going to have to, if you’re going to make a case for it, enter in a large scale
to spread out those fixed costs. You probably can’t start with ten people in
Peoria or wherever McDonald’s first started, suburbs of Chicago I guess, and
build on 15 cent hamburgers from there. Not that you have to be huge and
nationwide to begin with although as we heard one of the primary advantages of
personal health records would be for the people who trot all over the nation
and get sick while they’re doing it. But more generally there seems to me to be
a kind cost or economies of scale issue here. The case of course for personal
health records will get stronger if costs are dropping or demand is rising, we
heard something about that this morning.

MR. HOUSTON: This is John Houston, could he get a little closer to the
microphone please?

MR. PAULY: Sure. Some benchmark numbers, one number I did find in some of
the surveys is that 15 percent of people according to this estimate would be
interested in a personal health record. 15 percent is a wonderful number, it’s
almost a natural law constant in health economics, I tell my students the
answer to almost any quantitative question in health economics is 15 percent.
So what proportion of people are interested in personal health records, 15
percent, how much money do HMOs save compared to conventional insurance, 15
percent, what proportion of a doctor’s patients need to have a particular kind
of health insurance plan before the doctor will pay attention, research
actually discovered the answer was 15 percent. So not to be too silly about it
but I think it does, it is a useful benchmark and it probably also tells you
that almost anything in health care, any single intervention is not going to be
a panacea, it’s going to potentially improve things but the limit of
improvement is probably 15 percent.

So multiplying that number by the average, by a rough guess at the average
number of patients per physician, at least to help me think about this, I came
to the conclusion that if about 50 to 75 of a doctor’s patients would be
carrying around personal health records if this survey was right, so I’ll just
pose the rhetorical question here, would that be enough to make a difference,
would that be enough to matter. I’m not sure it’s right at that margin of
whether it would cause the doctor to behave any differently or not, it’s kind
of a close call and that will be kind of my message.

And then the other part is well, what is the price, the surveys didn’t ask
people what would you be willing to pay, it just said do you like the idea of a
personal health record. And I’d probably like it for $10 dollars a month but I
don’t think as computer literate as I am I would want, be all that enthusiastic
about it for $100 dollars a month. So those kinds of demand questions I think
are important to think about and to try to get at least some rough order of
magnitude estimate.

The uses of personal health records, you know better then I having heard a
lot more experts then I, store data, retrieve data, and communicate with
experts. My personal observation based partly on introspection but also based
on some research is that the value, data doesn’t speak for itself, that’s the
problem, and the data in your personal health record won’t speak for itself and
to at least it seems to me to get the largest value out of that data it would
be very helpful to have somebody or some entity, even if it’s Julie the Amtrak
scheduler, who’s a mechanical person but some way to communicate and verify and
validate and ask questions about what do these different test results mean. I
mean we know after all if we give a given test to 20 people one of them will be
all healthy, one of them will be in the abnormal range, and those are the kinds
of questions that people probably ought to be told to ask, whether they will or
not I don’t know but it can certainly be reassuring to be told somebody’s, as I
told my boys when they lost their first swim meet and came in last somebody has
to come in last, somebody has to be in the tail of the distribution. Eventually
they started winning prizes I need to say but nevertheless. So that’s the point

How often will timely and accurate information matter, and I’m going to
emphasize that in what I say next, and then partly as an economist I feel
predisposed to say this, it seems to me this personal health record ought to
contain economic data, and partly out of personal frustration, especially as we
get on in years. My wife and I spend a great deal of time talking about our
encounters with the health system but most of what we find that we lack data on
is not so much our clinical information but our dealings with the insurance
company, the woefully misnamed explanation of benefits that arrives is
something that you would very much like to be able to ask some questions about
again without having to punch through a lot of numbers on a telephone and find
out that they can’t really tell you much.

There is some economic theory that I thought I’d mention here briefly, I’m
not sure I can do this in 25 words or less but I’ll give it a shot. So it seems
like this is a device which is going to bring information, put information in
front of the consumer, so what’s the value of that information. Well, what is
the value of information? At least in economic theory it’s basically tells, and
we try to explain this to MBA students although it takes a whole class for
them, think of all the possible things that could happen and attach
probabilities to them. Think of if something happened to you, if you got a pain
in your lower right quadrant, what kinds of information might be useful, think
of all the possible values the information might take on. Then think about what
differences that would make in the decisions that would be made and if the
decisions would be different with information then without and if when you
multiply that by the probability that you’d be in that situation then you have
to attach a value to the difference in outcome that’s based on the different
decisions. And if that value is high enough the information is worthwhile.

So to kind of get to the main points that I wanted to make here, the key
things that make information valuable, I’ll kind of put it into positive spin,
is if the information that would be available in this record would cause
decisions to be different then if the information were absent. And then the
second is, if the decisions that are different really matter all that much. And
my examples here are supposed to be kind of negative, as economists we’re sort
of trained to be skeptics, an exuberant economist, even a rationally exuberant
economist is sort of a contradiction in terms.

But so if you go to the doctor with a new condition and I was really happy
that Dr. Kelley talked about this this morning because I only play doctor on TV
but you will be asked for your history, so you do carry a personal health
record around, it’s up here and battery power is getting lower for some of us
but still we do carry around a lot of personal health information. And so the
question would be if you could access your personal health record and look up
some numbers or some data would that add all that much that would cause a
different decision to be made. I guess my prejudice here is in most encounters
I can think of and in most that I know of it probably wouldn’t but there would
always be the exception.

And then the other thing is, when was your last tetanus shot, at least why I
would want a personal health record if I wasn’t an economist and just a normal
human being, is it’s so embarrassing to be asked these questions when you can’t
remember. And I’m a weekend warrior so at least twice in the summer I’ll show
up in the emergency room with something, some kind of laceration, and they’ll
always ask that and I can never remember. I once though decided to look up the
number of people who die from tetanus in the United States and I think it’s
about 42 a year so I kind of convinced myself that having a tetanus shot up to
date wasn’t the most important thing in the world. So even though a decision
would definitely be different depending on whether you said you recently had
one or you needed a booster shot.

So I’ve kind of already said this a bit, answering this question of one,
does this make a difference, does information make a difference in the action,
you can give a negative answer, the information in the personal medical record
will matter if it’s not easily available from another source. If it’s available
from your memory or if it’s available from records your doctor already has, the
data presumably that we’re after here does exist somewhere, it’s just a matter
of how easy or difficult it is to retrieve. And so the comparative cost of
retrieving it from a personal health record that the person might have brought
in with them versus the alternatives seem to me to be the key issue here.

Of course, and here I guess I get to one of my swimming up stream economist
propositions, sometimes a ton of data is not the world’s greatest thing because
it can kind of, to mix metaphors, can kind of swamp the medical decision.
There’s an awful lot of irrelevant information, all of us of course think that
our own personal history is endlessly fascinating but not all of that
information is particularly relevant to medical decision and some of it’s
outdated, much of it is outdated and most care is not immediate. So if you
wanted to be negative about this you could say all of this solid gold that’s in
my personal health record when I go in with my lower right quadrant pain, 99
percent of it is probably not going to matter.

And then the marginal cost of information in principle is small, phone up
the other doctor or line them up. Event he marginal cost for tests, even though
the price may be high sometimes the marginal costs of tests is not all that
high, so that’s the negative.

So here’s the positive, and you heard some moving examples of this this
morning, some information for some people may be hard to find, I guess I’ll
pick up with the second one. People with chronic conditions or serious
conditions may need up to date information right away so we have these
anecdotes as we heard one this morning of where the piece of information would
have made a difference. I guess my interpretation of that, I apologize if I’m
wrong, is the information was there, it was just misinterpreted the first time,
so it had to be seen a second time to be correctly interpreted. But
nevertheless, sometimes there’s a key piece of information that matters.

And to go back to the first one now, for people who move around a lot their
information may be hard to find. For a person who doesn’t move around a lot,
who stays within a health care system, and again the exact proportions here
would be useful to know, something I don’t know, but for those people who stay
within a system that information is potentially easily available so there are
exceptions to the rule. For some people who need to ask for their records to be
transferred, their physicians may not take the time to ask for information to
be transferred from other physicians and there are some, even some competitive
fears that can rear their ugly head there but those are all potential
impediments that could be avoided by the personal health record.

Drug interactions are especially important as are allergies, those were the
two things on Dr. Kelley’s list so as soon as he said that I thought maybe I
could be a doctor on TV. And people with conditions requiring immediate care
which we also heard a good bit about this morning.

How about does the information make a difference? Well, I think I’ve already
mentioned this but a lot of information will not effect medical decisions and
there can be overload or distortion. Decision tools for doctors sometimes
hinder as well as help. This is actually a brief summary of a paper that I did
with David Brailer about ten years ago where we looked at computer assisted EKG
interpretations and I’ll take a second here to describe this. So we basically
compared computer assisted EKG interpretations with ordinary doctor EKG
interpretations and the gold standard was a set of crackerjack cardiologists
interpreting them. And it turned out that the computer was better then the
regular docs in avoiding stupid mistakes, this kind, the why didn’t I see that
it was right in front of my eyes. It was much worse then regular docs in
interpreting little wiggles that required a good bit of nuance and so forth so
it works both ways. And important decisions, really important decisions,
usually do lead to a recheck of information.

Answering question two positively, well this I think is the main thing that
we’ve heard a good bit about, sometimes a key piece of information is the clue,
is the important thing, and there’s a lot of anecdotes about that, economists
say the plural of anecdotes is not data, and so you’d like to know what is the
frequency of those situations in real life.

A second reason why it may be useful to retain your personal records is that
medical decisions sometimes depend not only on an individual piece of
information but a trend over time, which may be much easier to establish like
the trajectory of your PSA my urologist tells me. And an issue that was raised
this morning, if the storage can be more accurate then what people would do on
their own that can be an improvement.

This I guess is what I was mostly supposed to talk about, about market
forces. First of all is the idea of a PHR, we heard that a bit this morning, is
it buzz worthy and I think the answer there is yes, at least there is some
segment of the population for which this sounds like a totally sweet thing to
have, along with computerized everything else why not have your own personal
data that you can call up and explore because you find yourself endlessly

And I’ll say a little bit more about these other two, do they help with
health savings account, catastrophic health plans, consumer directed health
care, maybe, is that insurance type going anywhere, maybe, I’ll give you my
views on that in a little more detail in a moment. The third one, the three
bottom ones are more negative, what I am worried about is that they may assist
adverse selection, and I can give quite a long sermonette on this subject, if
you are the sort of person who’s worried about rising health care spending,
risking health care spending, I’m not, I don’t lay awake nights worrying about
that myself because I’ve read David Cutler’s book and I guess I actually knew
it even before, a lot of that rising health care spending has gone for
improvements in the quality of health care that are almost surely worth it to
individuals and to society.

But if you are worried about rising health care spending and you think
that’s job number one to do something about it it doesn’t seem to me that
personal health records are very direct, very targeted at that. And if we look
at kind of what’s been driving health care spending according to the most
recent data, drugs are down, I guess everybody knows that who had the
misfortune of owning drug stock, try to avoid that to avoid conflict of
interest, but nevertheless, and outpatient services are up, I don’t know what’s
going on there but it’s not obvious that personal health records would do much
with those sort of immediate clouds on the spending growth horizon.

Many people are enthusiastic about consumer directed health care including a
lot of my friends for whom I have great respect. But still actually much less
then a five percent share at the moment but growing rapidly, the trajectory is
growing rapidly. You may have seen the recent survey, I think it was of medium
and large employers where 60 percent of them said they’d probably offer this is
an option, consumer directed health care in I think it’s 2006. We actually did
a survey about four years ago when these things were still called medical
savings accounts and everybody was down on them, asking medium and large
employers, and about 45 percent of them at that point said they would offer, so
it seems like that’s about the right number to me.

However, on the other hand as economists are wont to say, the rate of
take-up of those things, just because they’re offered doesn’t mean that a lot
of people will take them, and I guess the other thing I need to say here
although probably Alain will say it more eloquently, what the rate of take-up
is and whether it’s kind of the right rate or not depends not only on whether
or not consumer directed health care is intrinsically a good or bad idea, it
depends on how the employer sets the relative premium contribution so I could
if I was an employer and wanted, or even by oversight, set the financial reward
for taking the consumer directed health care at a much higher level relative to
my alternative, low deductible PPO, I could get a lot of my employees sign up.
But exactly what strategies employers either will or should follow there is an
open question.

I guess the main, would a personal health record help with this growing,
although if you ask me to predict where this market share of consumer directed
health care will end up, I’ve already given you the answer, 15 percent, but
when it gets there would a personal health record help. Well, I think it
certainly would to some extent, I think it would help a lot if it can provide
economic data, what did my doctor charge me the last time, and also if I could
plug it into my computer and have it bring up what do other doctors in town
charge. And not just what do they charge but what is the total price for
treatment of an illness such as mine, it’s not just the unit price but
typically does this doctor prescribe a lot more follow-up visits, which is
going to cost me $100 bucks a pop compared to that doctor who prescribes fewer,
and then it’s also important to say insofar as there is information on relative
outcomes that would also be important.

One issue here, I’ll kind of come back to this as well in a general sense,
is whether the vision of consumer directed health care will involve people
acting really as a kind of do it yourself HMO, moving themselves around from
doctor to doctor and hospital to hospital. Or, as some of the most recent data
are suggesting, what they tend to do is plug into an integrated delivery
system, or into some kind of network that gets discounts anyway, and more or
less stay within that network. So many of them are starting to look much more
like PPO plans with big deductibles as opposed to a complete self contained and
self directed system.

And personal health records are going to be more important for people who
think that they will frequently be moving from places where they have their
data to places where they don’t have their data. If all I’m going to be doing
with my consumer directed health plan is moving within a PPO network, and if
the network is up to snuff, my data ought to be in the network and so it ought
to, I don’t necessarily have to carry it around with myself. So in some
integrated health care delivery, which we keep wondering why Americans are so
unenthusiastic about, but if it ever does come to be, to take the field, in
some ways it obviates the need for a personal health record because if the
system is really integrated your data is all there whenever you show up.

The market forces minuses, well, the main market force minus that I can
think of is if it allows people to have good and private information they may
be able to actually figure out which health plan or which doctor will pay the
best for them, they may be able to engage in adverse selection, and that can be
a bad thing for efficiency and also a bad thing for equity. I don’t want to say
too much more about that but information can be a bad thing if it allows you to
guess better then the actuaries what your expected expense is going to be and
to some extent personal health records and a lot of other things that otherwise
I’d be in favor about, of like better information about HMO benefits and these
calculators plug in your medical conditions and see whether you’re going to win
or lose from this health plan compared to that plan, seemed like a bad idea.

The real issue I think, there was some general discussion of this this
morning, I guess we’re all asking it, how much do consumers, most of them,
really want to be involved really and truly, do they want to be their own
primary care and epidemiologist physicians or do they want to let the world
take care of themselves.

Some addition issues, privacy, it’s hard to believe that a personal medical
record will help but it may allow correction of inaccuracies. I believe that if
what is going to be required is bullet proof protection of privacy that’s going
to add enormously to the cost of these things. Here I get to play a lawyer I
guess, but if the legal question is I can sue somebody if my private data
becomes public, the cost of preventing that from happening seems to me very
likely to price these things out of the range of economic feasibility. If I can
only sue when my data became public and I can show that I suffered real harm,
not psychological harm worrying about whose seeing my personal record, there’d
be less of a problem, but this seems to me to be a potential deal breaker.

And again as was discussed a good bit this morning but I’ll say it one last
time, the personal medical records are only as good as the overall medical data
system they’re linked to, assume a great medical data system and personal
medical records make a great deal of sense, assume a clunky one which is what
we have at the moment, they’re kind of clunky too, they are more feasible but
less needed in an integrated system, an integrated health care system has got
all the data there and maybe it’s reasonably accurate but then you don’t really
need to carry your own data around necessarily, it will always be in the

And this is what I already said, we need in our family a computerized
reimbursement counselor and advocate, I’d need this even more if I had a health
savings account.

Research if you wanted to do it, well it would be interesting to see if
people with free but randomly assigned PMRs, let’s do a randomized controlled
trial here, of better health outcomes and lower costs, then those who do not,
would the FDA approve them as effective. A demand study would be useful, what
would people really be willing to pay for this, would they lower or raise the
cost of care, that would be important to know, and the cost of the full system,
by that I mean not just the PMR itself but the full electronic medical record
system that would support it, what is that cost and whether the degree of
returns to scale are important.

So here are my conclusions, the idea is still from my point of view very far
from slam dunk. The cost issue I think is important and I think I’ve more or
less said everything I have on this overhead about that. And also likewise
integration, it’s not obvious to me these are tuned to where the market is
going. If the market is going in the direction of integrated medical care it
may not be so necessary for people to have their own personal and portable data
and they seem most useful for a kind of slice of the population which may not
be all that large, the middle class with complex to managed conditions.

This last line actually was the tip of another iceberg, a though which I’ll
just mention, which has to do with if this is a good idea or not what should
appropriate public policy be and I guess I’m kind of programmed to think that
if this is really a great idea, at least for people under age 65, this seems
like an ideal question for the private market to settle. And I guess I am sort
of genetically programmed to have, feel itchy when people start talking about
government having a vision, I just see a potential for an ethanol kind of
syndrome here and so at least the caution I’d leave you with is to worry about
an appropriate role, not for that idealized government run by angels come down
to earth but the real world government in dealing with this kind of situation.

Network externalities, which is what David Brailer talks to me about
sometimes, or I talk to him about, do make the case for the rejection of the
view that the competitive market can handle everything. But still I’d kind of
be inclined to take the point of view at this moment that the best thing the
government could do would be to maybe say a few kind words about this sort of
thing and then let the market settle whether these are, whether there really is
a business case for personal health records or not.

Thank you.

DR. COHN: Mark, thank you very much for a very interesting presentation.
Alain, why don’t we let you go and then we can sort of talk about all of this.

Agenda Item: Panel VI: General Overview of
Economic/Market Forces – Mr. Enthoven

MR. ENTHOVEN: First I want to thank you very much for this invitation, I’m
very happy to be here. The last time that Mark and I shared a platform was in
Dublin, we flew all the way over there and learned that we were each allocated
30 minutes to say our thing, which I thought was a long way to fly for that,
but it was a pleasure to share the platform with Mark and of course there a lot
of students at Wharton that cheerfully pay tens of thousands of dollars for the
privilege of hearing him so I figured preparing a 20 minute talk was a pretty
small price to pay for the chance to hear Mark on this subject, as well as to
see him again.

I am as will become obvious to you, I am clearly not an expert on this so
I’m just offering my personal take, perhaps more as a patient then as an
economist because I will be using anecdotes to illustrate points. I’m very much
influenced by the fact that I live and work in a service area that is served by
two excellent first class integrated delivery system, so in the culture that I
live in that’s kind of pretty much expected, like what would you do, and both
of them are rolling out epic systems, I’m very glad that Paul Tang is here
because he’s building the data systems, the IT system that has already improved
my life a good deal.

I think everyone should have a complete, accurate longitudinal electronic
health record conveniently available to all of their providers. Why? Well, I
think it leads to better and better informed care, less waste, less errors, and
the electronic health record should be coupled with reminders, care giver
support tools, when your doctor sees you it’s just so important to know what’s
been doing on. In addition to the electronic health record, I sometimes
analogize that to that’s the nervous system, I think you also have to have
brains who are looking at the data, people scanning and analyzing the data, and
feeding it back into better care. That could and should be the primary care
physician doing it for the individual but also epidemiologists and others for
the whole group or system that’s being covered.

Why? Well, here are just a few examples. First, back in ’03 Beth McGlynn(?)
published an article that I thought was very important, measuring how much of
recommended care were people getting. They assembled a lot of non-controversial
recommendations, I think generally research validated, if you have a heart
attack you should have beta blockers and so forth. And then what she found was
that patients on the average in America were getting 55 percent of recommended
care and it was a lot worse for some like diabetics. And I think a lot of
opportunities to improve care, perhaps to reduce downstream costs are missed,
primary care physicians reviewing the records might spot many of these errors
of omission and I think electronic reminders could help. A lot of these
recommendations are if/then so it could stand and say if heart attack then beta
blocker, this person hasn’t been given their beta blocker.

A few months ago Robbie Pearle(?), physician and chief for Permanente in
Northern California gave a talk to my class, and talked about his father who
was in his ‘90s living in New York and he had ten doctors and Robbie said
when we he was back there sometimes he’d go with his father who would write his
relevant history on a little back of an envelope thing. And then eventually his
father died from pneumonia and none of the doctors knew but he had not received
a pneumonia vaccine because none of the doctors were on top of the situation,
so you’ve got all of these ologists who have pieces of it but nobody’s, and
apparently he was a healthy person in his ‘90s and might have had some
more years of good life. So the system, expensive as it was, missed what killed

Just in the past year or two I had a new primary care physician and she
reviewed the record and saw that I didn’t have this vaccine and should have, so
before I could even blink my eyes there was a nurse in there jabbing me with a
needle. After I heard Robbie’s story I came to appreciate this is a good thing.

I think that it’s an opportunity for improved efficiency, a conveniently
informed well informed provider can be more productive, less time wasted in
visits. Early returns from Kaiser Permanente, and these are still early and not
published and so forth but from a briefing that Louise Liang(?) who’s the
physician rolling it out, that it showed a ten percent drop in demand for
doctor office visits, which doesn’t surprise me when I think of, that would be
data to go with these anecdotes, I think you can be sure to get more done on a
well informed visit.

I recently experienced a wasted visit because the doctor didn’t have
diagnostic test results that I thought she was going to have and we were going
to discuss, it wasn’t all of the clinics, it happened I had something done at
Stanford Hospital and they hadn’t sent the records. And the doctor said I’m
going to have to write them a letter and it’s also they’re not eager to this,
it just made me regret that, it wasn’t optional, regret that I didn’t have
these tests at the Palo Alto Clinic. I remember a year or so ago my doctor said
to me, let’s see, when did you have your last colonoscopy, I kind of shrugged,
beats me, and I kind of motioned toward the computer. And she said oh yes, she
scrolled down, oh I see yes, you had one in 2003, so you don’t need one for
another few years. And I thought well I’m very glad to hear that, I would not
like to undergo another colonoscopy, that would be considerable savings.

And then human memory is fallible, it was probably a couple years ago or so,
I went in to the doctor and I was with the nurse and she was turning on the
computer to pull up my screen, my record, and kind of getting me ready for the
visit and she was asking me questions and she looked at the screen and said
how’s your neck. I said how’s my neck, it’s just fine, why do you ask a
question like that. And she said well it says here that you were having some
big problems, oh, it wasn’t very long ago I was on sabbatical in ’98, ’99, and
went to London and I wrote a book on the national health service on my laptop
computer and I came back with these big pains in my neck and arms and so forth,
and I had completely forgotten about it because I am not endlessly fascinated
by my health history, I want to forget my health history and get on with life.
But she was absolutely right, I had to, they sent me over to the physical
therapy department and now I have an ergonomic keyboard and I have all these
exercises to make sure that doesn’t come back. So that’s just a little example,
hadn’t been all that long ago but just the fallibility of human memory, you
don’t want to remember whatever it is.

I was telling this story to a friend of mind at dinner last night and she
broke out laughing and she said Alain, what it said there is Alain Enthoven is
a pain in the neck.

Now I think that electronic health records can be used to follow-up the
results of all kinds of care. One thing is surgeons generally do not keep
records other then for the visits to their office, they don’t know what’s
happened in the longer term which I think is a very serious shame. Electronic
health records can be used to screen for persistent and unsolved problems at a
stipulated interval, after every operation patients ought to be asked did the
procedure meet your expectations, did it solve the problem, it’s something
they’re not asked, there’s no systematic way of doing that. And this
information should be in the record, that could serve as some kind of a basis
for outcomes evaluations of surgeons and procedures, did this, well, just did
this meet your expectations or not, that’s something we ought to know.

A few years ago I had surgery at Stanford University Hospital and a few
weeks later the hospital sent me a thing asking me how I liked the food. They
never asked me was the operation a success from my point of view, did it
accomplish what I hoped for.

Mark raised the question what are people willing to pay for it, I pay $60
dollars a year to be on the Palo Alto Clinic’s electronic service so I can
email for appointments and all this kind of stuff, and know that a prescription
it will go by email to the pharmacist and miss all those screw ups and so
forth. I don’t want to say to you how much more I would be willing to pay then
$60 dollars a year because Paul Tang is here and he might raise the price, but
I’ll guarantee you it has saved me a lot more then the $60 dollars worth of
time, I’d much rather ask for appointments by email, don’t have to go through
the maze and be hung up and everything else. Recently I said I want an
appointment on Friday morning and I got back an email, I got an appointment on
Friday morning. That was the one that was a wasted visit because Standard
hadn’t properly sent the records.

Electronic health records can be used to review practice patterns such as
for example some years ago in Permanente they noticed that in some of their
medical centers patients having TURP were getting out in two days out of the
hospital and others five days, and this was from a review of paper records, but
it was at a time when competition was pretty intense and they were looking for
ways of improving efficiency and so forth. So they clearly reviewed all the
records of all the people and they could find no indication at all that the two
day patients were any the worse for wear compared with the five day patients
and having a comprehensive longitudinal record of course it meant that if
patients were having problems they’d at least call and probably come to see the
doctor and there would be some indication.

So then the physician and chief, Robbie’s predecessor, went around to all
the medical centers, to the five day centers, and said I’d really appreciate it
if you doctors would go and talk to your partners in the medical centers that
they’re getting them out and two days and consider adopting their records
because we’re under a lot of competitive pressure right now and we might be
able to pay doctors more if we can really improve efficiency.

I think especially electronics that they’re easily surveyed, questioned.
Large scale post market surveillance and drugs, like Vioxx or Celebrex, doctors
ought to want to know and in fact I don’t know whether you had, did you have
Jay Crossen(?), anybody from Permanente come and talk to you?

DR. COHN: I’m one of the associate executive directors for Permanente
Federation, I work for Jay.

MR. ENTHOVEN: Oh, you work for Jay, well, I apologize, I should have known

DR. COHN: And that’s a disclaimer actually, Alain, you keep on saying nice
things about Kaiser Permanente.

MR. ENTHOVEN: Okay, well anyway they spotted the Cox-2(?) problems early
through their data system because they knew what was happening to their
patients which patients that don’t have this, there’s no reason to expect
anybody to know. Some people die from arthroscopic surgery of the knee from
blood clots, one of my Stanford medical school faculty colleagues in fact was
considerably injured from blood clots from such surgery. Well, that ought to be
measured, tracked, analyzed and used to inform patients, track complications,
feed back data to surgeons.

Electronic health records can be used to monitor adherence to quality
guidelines like Beth McGlynn’s study, we’re all looking for pay for
performance, how to measure and so forth, in a kind of a dream world looking
ahead I’d like to see that the Beth McGlynn type studies would just be a
constant product of searching the records. So I think that electronic health
records can save on lost and duplicated tests, the tests ought to be sent right
to the electronic health record and stored for all to see.

Then there is the proverbial remove emergency room where we all show up
hundreds of miles from home where it would have to be enormously valuable for
the attending physicians to be able to get a complete accurate record and this
argues for interoperability or for the patient to be able to carry his record
on a smart card or something or else the ER, here’s my card and dial in and get
the record from wherever.

So pay for performance is gaining in salience and whatever one might think
of it in this day of accountability and transparency I think it’s likely to be
here to stay. And accessible electronic health records for everyone would
certainly facilitate studies.

As to patient use of the information, I mean so far what I’ve been talking
about is I want my delivery system to be integrated and to be using this
information for my benefit. I think patients should have access to their
records, they have a right to it, and systems should be developed to facilitate
that like how is my cholesterol responding to my new lifestyle or diet, that’s
something I can get pictures and graphs of trends and Mark mentioned trends,
what’s happening to my PSA.

Electronic health records can inform non-MD care givers to whom the MD can
delegate, if this then that to the pharmacist.

So why are electronic health records so hard to get? Well, the technology
hasn’t been there for a long time and it hasn’t been easy to get, I mean
Permanente, Kaiser Permanente and IBM tried and they wrote off billions of
dollars so it’s not a slam dunk, it’s a hard thing to get. The cost is pretty
high, I gather Kaiser Permanente will be spending some $3 billion on this which
I think will be, if it all works, will be money very well spent.

Electronic health records are rolling out in large multi-specialty group
practices now and I think they’ve saved money and they see the business case.
Even there there is a problem of out of group care, what if you happen to get
your care from somebody else. So there needs to be interoperability, there
needs to be a system so that the patient can designate that his or her records
be sent to his record repository and that’s not at all easy now.

Should patients have their records not tethered to their delivery system?
Shouldn’t they be able to download records from their clinic at whatever the
cost is if any? If their delivery system is doing a good job wouldn’t the
records be prepared by and for professionals be better then what most non-MDs
could do on their own? I was talking to a friend yesterday who was
commiserating or complaining that where she lives they don’t have an integrated
delivery system and lots of personal anecdotes as to why that was a very bad
thing. And so she’s telling me she keeps files with paper and so forth and
films and so that’s difficult and inconvenient. The unfortunate reality today
is that most patients do not get their care from a core data integrated
delivery system.

So the question is why is that? I think it is not that people don’t like
them, or that people don’t like managed care, for example at Stanford
University, at the University of California, at Wells Fargo Bank in California,
we all do a good thing which is we offer our employees a range of choices and
the employer says we will pay for the low price plan so nobody is subject to
personal hardship or anything, you can have the low price plan for free and
it’s a good high quality plan. But if you want something that costs more then
you have to pay for it.

The experience in these groups is at Stanford now three quarters of our
faculty and staff are in integrated delivery systems, in Permanente or Palo
Alto. At the University of California 80 percent of the faculty and staff have
chosen HMOs, most of which are either Permanente or a California delegated
models based on multi-specialty group practices. At Wells Fargo Bank it’s 78
percent. So I believe when given a responsible choice most people choose them,
then I always hear oh well they’re not, they’re not in existence in Cucamonga
or someplace else, well they probably are in Cucamonga but there are places
that don’t have multi-specialty group practices. Well, actually there are more
multi-specialty group practices then you might think and if the employers did
what I am recommending I think they would gradually convert to capitation and
grow and take over a lot of the market.

The big problem is that few people are offered a responsible choice. The
employers of 77 percent of employee insured Americans don’t offer a choice at
all and most of them are locked into the wide access PPO which I think is the
most expensive form of care known to man. And so the employees are not offered
the opportunity to save money by joining an economical delivery system. Of
those employers that do offer choices most of them pay like 80 percent, or a
flat 80 percent or 100 percent or some high percent of the premium of the plan
of your choice. And of course that is in effect a tax on efficiency. The
Federal Employee’s Health Benefits Program is an exception and so is CAL

I think those of you who are federal employees don’t realize how bad it is
out in the private sector, again dinner table conversation last night, my host
was saying people always believe the government can’t do anything right and the
private sector always does it better, so I said well let me talk to you about
employee health insurance where it’s absolutely black and white and the private
sector is black and the federal government has got it right. I mean I could
recommend a few ways to tune up the federal employee’s plan, I think they ought
to have a genuine fixed dollar contribution but basically it’s the right idea.
And by the way the integrated delivery systems do very well, Federal Employee’s
Health Benefits Program is Kaiser Permanente’s number one customer followed in
California closely by CAL PRS which has a similar model.

With all due respect to Dave Scherb, with whom I have the highest regard for
his excellent work at PepsiCo, employers, Dave was saying well he didn’t think
employers could back out of this. Well, I think what employers could do is to
form regional exchanges like CAL PRS. In California more then a thousand local
government agencies that are not part of the state government, they’re just
free standing local government agencies, belong to CAL PRS and get their health
insurance through this regional exchange, which is a wonderful thing because
the administrative costs are very low and every employee has a wide range of
choices including HMOs and PPOs.

And I recommend to employers what they ought to do is get together, create
their own CAL PRS, make sure that it has a good board of directors set up
properly and then they can kind of back off and let the market work where
people have their own responsible choices. So I think that for employers to do
that they would have to give up on the idea that somehow they can manipulate
health benefits to their advantage in the labor market. Well, I think by now
that’s clearly blown up in their face and this would be a better avenue. And
there are other approaches to offering employees choice, responsible choices of
integrated delivery systems, even without creating a regional exchange, but one
way or another I think, I think outside of integrated delivery systems
selective networks can save money and we need to let people who choose them
keep the savings.

If patients want their own tethered record it will take a lot of work.
Errors are likely to come from lack of expertise but it’s good to encourage
people to take an informed interest in their health. I think it would be of
great value if there could be a system to facilitate patients building their
personal health records or having access to them, perhaps one to which all
physicians and hospitals in that they consult that could be asked or upon
request required to enter this and attribute information to the system. I
really don’t know how to do that but my impression was that that was what RHIOs
were all about and so if RHIOs are the vehicle for making that happen then I
think that’d be a good idea.

Thank you.

DR. COHN: I see hands coming up, this is good. Actually I want to thank you
both for some very interesting presentations and Alain as I said, I guess I’m,
both Paul and I want to thank you for saying such nice things about the people
we work with and our employers, I think we can still ask you questions but I
just obviously as you well know we work for two of the organizations that you
mentioned so thank you.

Now I think Robert you want to start out and Cynthia you wanted to go next,
John Paul you have one too?


DR. COHN: Okay.

MR. KAMBIC: thank you both for interesting and informative presentations on
the economics of all this stuff. Now I’m going to ask a really very general
question, the service economy based on computers, we really having banking,
investments, shopping, bill paying, our jobs we’re using computers, it involves
basically the shifting of work from the corporations to customers. Is there an
overall saving in GDP and before you answer consider the computer based
problems, you’ve told stories, just let me tell a quick story, that somehow or
other I was, I got a traffic ticket in Baltimore that was in error and we went
to the, it showed up on the computer somehow, they tagged two of my cars which
ended up giving me a traffic ticket, two work days I had to spend straightening
this out, it still isn’t straightened out because the court system when I went
to court had more computer errors. So is there, without computers is there
overall savings and then how do we deal with this issue of once errors get into
these computer systems they’ve going to be very difficult to get out and make
people in fact mistrust these systems that we’re talking about setting up.

DR. STEUERLE: Just so you know just as a side light, the Bureau of Economic
Analysis measures the services the government provides at the wages spent so
your computer error is added to GDP by that measure.

MR. ENTHOVEN: Well, with respect to your troubles with the courts I think
of, I just read a book by my friend Charles Rosati(?) who was commissioner of
the IRS that I think was particularly good and it’s turning around the IRS and
when he got there they’d already put out an RFP for new computer systems and he
did everything he could to put that on hold and said the first thing we have to
do is reorganize this thing properly so it is a focused, customer focused and
responsible, get the organization right and the processes right, then we can
come in and computerize the best processes. And I think your problems with the
court at least in my limited experience which is courts are very user
unfriendly as has happened when I’ve been summoned for jury duty, they’re just
amazingly unfriendly, I think that it’s not the fault of the computer, I think
it’s the fault of just badly designed work processes and unfortunately they’re
not subject to competition so they don’t have to improve. I think enough of us
complained in San Mateo County that they did install a few things like you can
call in the night before to see if they need you on the jury. It used to make
me mad as hell that I give up the whole day, come in in the morning and then
they’d say oh, we’ve just settled the case so you don’t need to be here, etc.,
and a few other little changes like that.

So I think you got to get the incentives right and the organization right
but certainly in my experience computers don’t do that, the electronic systems
allow me to pull into gas stations, pump the gas and get out of there faster
so, and I don’t know if the GDP measures that saving of my time, how would
that, I suppose to capture that they’d have to charge more for the gasoline
when you can pay for it electronically. How does that —

DR. STEUERLE: If you save time and then the assumption was that that meant
you devoted more to producing other output it might end up showing GDP —

MR. PAULY: My take on that is at least with what we’re talking about here,
the personal health record, I don’t see as that shifting much cost to the
consumer, I mean you’re not going to have patients enter their own test
results. But more generally I think the vision of this is that whatever is the
distribution of the work, the total amount of time that’s taken to maintain
your banking information or whatever it is is reduced. And then I guess
ultimately there’s a market test, if I want to deal with a bank that still has
tellers and has no computers versus one that does require me to punch in my PIN
and if I want to check my balance give the last four digits of my Social
Security Number and then the computer will answer me, there’s a market test and
so far obviously for the survivors they’ve passed the market test, there have
certainly been some examples, some of which Alain mentioned, where firms and
health organizations have stubbed their toes on computerized systems and as I
said my personal anecdotal experience with both insurers and I just got a bill
for a doctor office visit in April 2003 from the UPEN(?) health system, things
don’t always work that well but I think you can, at least I’d be inclined to
rely on a pretty much of a market test to settle that.

DR. COHN: Cynthia?

DR. BAUR: My question is for Mark, at the end of your comments it seemed
that you were recommending that we treat PHRs as sort of an ordinary consumer
good, something equivalent to like a DVD or a digital camera or something, just
a regular consumer good, and that it be subject to market forces whether it
survives or fails as a good. And my question to you is given that there’s
hardly anything else in the health care sector that’s fully subject to market
forces in that way why would we want to think about treating PHRs in that way
especially in light of the fact that we’ve heard lots of testimony from people
about the transformative power of PHRs as a tool, I mean so there may be policy
reasons to think about it otherwise. So I’d just like to hear a little bit more
about why treat PHRs that way.

MR. PAULY: Well, I’m always leery of people who talk about transformative
powers, or any other kind of super power, but that’s one answer, that’s not a
serious answer. I think part of the reason is I was thinking of this in terms
of the consumer directed health care model where consumers are supposed to
direct and the model of that, whether you buy it or not, and I do every other
Thursday but not some other days, is that consumer would act with regard to
health care as consumers of any other product of course buttressed by much
better information which this could be an example of a device to do it. But
that the old model of the health care system, the old more paternalistic model
is under this approach to be replaced by a view that consumers can make their
own decisions and they would make at least some of those choices with skin in
the game, I hate that phrase but you know what I mean, being induced to
consider the prices as well as the benefits of the various things they do.

And as I said I think I am still looking, let me put it in a positive way,
looking for the argument as to what it is that the market would miss in this
particular enterprise. There may be some network externalities that may be
possible but beyond just invocation of that as a kind of ritual invocation I
haven’t seen strong evidence that the market won’t work all that well.

There is a debate amongst economists actually whether those network
externalities are all that important and not only sort of in theory but whether
real world governments that might step in and try to somehow organize these
things would really do better, you could certainly imagine that in some
parallel universe there might be a government rule requiring all personal music
reproduction devices to accommodate eight track tapes, things like that, and I
guess it goes along with the general skeptical frame of mind but if this is a
good enough idea I guess I’d be willing to rely on the market to do it and if
the market isn’t going to succeed I would like to hear a much stronger argument
then I’ve heard at the moment as to what the glitch would be.

DR. BAUR: So you don’t see it as an important policy tool then?

MR. PAULY: For government.

DR. BAUR: Yes.

MR. PAULY: I’m not convinced, no. I mean I guess I need to back up for
Medicare, obviously since the government is a big buyer of health care, just as
any other buyer, it may want to pay attention but for the under 65 population
which I did mention, I don’t see a big, I’m not sure what the government’s
either policy interest is in this or what its powers are that somehow it has
that the market wouldn’t have to make things come out better.

MR. ENTHOVEN: Where I live and work we do have some, a pretty competitive
situation I guess and I think of IT(?), Palo Alto and Permanente as being kind
of like banks, I think they both figured out that they’ll attract and keep more
customers if they can relieve them of a lot of the hassles that electronic
access does.

MR. PAULY: It does seem to me again, I come to you not as an expert on this
subject but it does seem like this is going to make, not going to make very
much sense as a kind of stand alone consumer product that you’d buy and slip in
your pocket, it seems more likely that it’d be packaged with something. And I
think the dilemma is then what to package it with, if you package it with your
integrated health care delivery system at least the consumer directed health
care people would be worried about that because you’d be locked into that
delivery system. It seems most plausible to me that it would be packaged with
your health insurance, which could be an integrated health plan like Kaiser or
it could be a disintegrated health plan like Medicare, but it could be
packaged. That probably makes the most sense but I think exactly what, where
this would come and how it would be paid for is it seems to be really
interesting but far from settled kind of question.

DR. COHN: Thank you. John Paul I think you’re next.

MR. HOUSTON: I hate to tell you this guys but for the last five minutes we
were cut off of the telephone so as soon as they reconnected your voice came

DR. COHN: Well, if you ask the same question that Cynthia asked we’ll let
you know but I presume —

MR. HOUSTON: Okay, that’s fine. I was particularly interested about the
comment about the 15 percent threshold, I think Mark Pauly indicated that, and
I was sort of verbally thinking here but I’d like his thoughts on ways to raise
that threshold and I know for example in my organization one of the ways that
they got people to do a health survey was to say that they would waive a
certain portion of a co-pay for this coming year if we would partake in that
type of a program. What’s your thoughts on, assuming everything is driven by
dollars if nothing else, is that a viable strategy to try to improve adoption
of PHRs as well as other type of e-tools in health care?

MR. PAULY: Well, I’m not quite sure what the motivation needs to be here, if
my health insurer which I’ve now switched to a better one provided personal
health record, sent me a diskette or whatever, a CD and I could plus in as part
of my enrollment package, I’d be inclined to accept it and some people would
use it and others not. So I’m not sure that that’s the decision we need to
motivate. If there was in addition a financial reward for actually using it
that could certainly be built in, I guess that seems to me to be a business
decision, what would be the cost of waiving the co-pay, that’d be fairly easy
to figure out, and then what would be the benefit to the insurer of having
people actually turn on their personal health record, that is a question that
could be answered but I don’t think it has been answered at the moment. So that
would be how a business would look at it and I think in the great laboratory
that’s the American economy we could imagine that the businesses would be
trying to figure that out and some of them would give it a shot and see how it

MR. HOUSTON: I guess I’m sort of of the basic opinion that the most likely
people to actually interact with a PHR would be those who have chronic —

MR. PAULY: I agree with that.

MR. HOUSTON: — things of that sort and the question I guess in my mind then
is do you really have that critical mass that you described, was I correct that
it was 15 percent sort of?

MR. PAULY: Well, that was from one of the surveys that I saw, yeah, I don’t
know what the critical mass would be in terms of what it would take to cover
the fixed costs because I’m not an expert on what the fixed costs would be.

MR. ENTHOVEN: I think the logical home is the delivery system because I
think of people —

MR. PAULY: I think Alain though that you clash with the philosophical view
which I know you don’t agree with and I’m not, as I said I’m not sure I do
either, but that people shouldn’t be locked into even a good delivery system.
But yeah, I think if you just looked at it from a technological point of view
that certainly seems like the sensible place.

MR. HOUSTON: Thank you.

DR. COHN: Bill Scanlon?

MR. SCANLON: This comment is actually motivated by something Mark said about
that the costs matter a lot in terms of the business case here and if the costs
are low enough it changes the consideration dramatically. And what that
triggered for me was the idea of what is it that we’re talking about because I
think we at times engaged in the full sweep of IT supported medical care down
to the personal health record and portability and so the issue is what is at
the margin because that’s the cost that’s going to matter. I think and I’d be
interested in your advice for the committee in terms of how we need to be
precise because the general case of IT in health care I think is potentially a
lot stronger then something like the portability of a personal health record, I
mean your example of the pneumonia vaccine is one. 30 years ago I heard about
research on an electronic medical office and they talked about strep tests
coming back positive and double digit numbers of them never being followed-up
on and that kind of thing is what we’re talking about in terms of introducing
sort of IT to the provider sector.

MR. PAULY: That was exactly the question I was asking myself as well, I
would I think agree with Alain that what we’d most like is to be in a delivery
system where all of our data would be available to the physician or whoever was
making a decision or a recommendation and the consumer’s ability to look over
the shoulder of the doctor, not that it’s of no use but it would, or more
proactively to be reminded would be of some value but the question is of what
value. And as I worried in my own mind, letting those records fly all over the
country in the ether raising the privacy issues might kind of be the deal
breaker here for letting it out. So yeah, I think trying to, I mean in some
ways this is the cosmic question of what’s the optimal design of the whole
system and how should consumers and patients be engaged in it and to what
extent and in what way and I think my caution here would be not to assume that
the vision of the patient knowing everything is necessarily the way to go, the
cost of doing that may be high and the benefits may not be all that much

Certainly actually as preparation for this shadowed a physician who works at
the VA where they have an electronic medical system which is reputed to be and
is quite a good one and I found myself looking over his shoulder and saying
that test reading looks a little funny, what about that, and of course he knew
that didn’t matter but I could imagine if I was the patient and got that test
reading then I’d want to know why it looks a little funny and there could be an
awful lot of cost added tracking down those normal/abnormal results.

MR. SCANLON: I’m just thinking that we want to keep our considerations sort
of on the right sort of level and the idea of what is the value of the patient
being able to look over the doctor’s shoulder, should not be equated with the
billion, several billion dollars that Kaiser has had to invest in terms of
trying to bring their system up to speed because it has a whole different sort
of purpose and set of benefits then just what might come from having the
patient being able to follow.

DR. COHN: Gene?

DR. STEUERLE: Again, Alain and Mark, thank you both for being here. One of
the debates that this committee has had actually is reflected in both of your
comments and that is when we talk about the business case, or the term the
business case for PHRs or EHRs, there’s a sense that partly from the types of
anecdotes that especially you, Alain, used, that there’s just, there are just a
lot of efficiency gains that are probably out there if we could figure out how
to capture them. And a lot of work is going on in areas where we do think
there’s pretty clearly externality issues such as the setting of standards
although even there there’s a reluctance for government to sort of often set a
final standard as much as try to convene people to agree upon a standard so
that that market itself can evolve to the extent it can, that’s actually a
tough issue, we didn’t talk much about standards.

But I want to take you to an area where I think there would be agreement,
the government does have 55 percent of the market in some sense between
Medicare and Medicaid and subsidies that it provides to the tax system so it
does have a lot of money in this issue. And it seems that there may be ways
where, I keep struggling with whether the government should be setting more
financial incentives for the way that it exchanges information and that setting
those up might actually help as well in the area of PHRs, I’m being a little
vague here because I don’t really know the answer but for instance should
Medicare require somehow or another that data come in in a very clear
electronic format that would make it very easy for them to identify, much
easier when there’s duplicate prescriptions and should they pay, should they
pay providers to do this, and are there other incentives they should have,
there has to be, and maybe you know more about this then I do Alain, but with
CAL PRS and Kaiser, there has to be very massive exchanges of information over
who pays when they get into these debates where for elderly, either workers or
people that are in these systems and you’ve got sort of this duplicate
insurance or Medicare’s paying or CAL PRS is paying, and I’m just wondering
whether the government should be a little more practice in setting

I’m also wondering actually whether CDC should actually be paying certain
providers if they provide data in some sort of an electronic format to them to
be able to do more quick sort of national test on when there’s certain
outbreaks of, rather then doing surveys but actually have stuff provided
electronically. And if all this took place whether that very process might not
inevitably set forth sort of force much more quickly to the fore the setting of
standards, the development of information within these systems that then could
be fed back to PHRs and EHRs.

So I’m being a little vague here but I’m just trying to struggle with
whether there are some financial incentives is sort of the broad question, the
government should be setting in place that either of you would be comfortable
with is not necessarily disrupting the market but actually helping it to grow
for legitimate reasons and dealing with the true externalities.

MR. PAULY: Well, no, I certainly don’t know the answer but I know the
government could, or any large insurer, in this case, and this was how I
rationalized my years of service on the Physician Payment Review Commission, I
was not a price setter, I was just helping to administer an unusually large
insurance plan. But so the government could, and as a matter of fact actually
currently does, have all sorts of rules as to how claims have to be submitted
and what data has to be submitted and so forth.

So here’s the missing fact, if there was some new information or a new way
to collect information that would provide an enormous benefit, either in terms
of cost reduction or quality improvement, it ought to do it obviously but you
need to identify what that is and then you need to worry, on the other hand the
more onerous or demanding you make the task on the provider, you may have some
providers doing what they’re threatening to do which is to stop taking Medicare
patients and so forth. You can of course prevent that from happening by instead
of requiring it as a mandate just pay extra for, or give some kind of extra
bonus to people who send in the kinds of information you want in the form in
which you want it.

I think there’s a lot of opportunities in principle to be creative there, I
think the challenge is to identify them in a concrete setting as to what they
are but in terms of offering the general advice that the dedicated public
servants who work for CMS ought to go out and figure out betters ways to
collect better data in a less costly way that will do much more good —

PARTICIPANT: We’re doing that.

MR. PAULY: You’re doing it, so I’m in favor of that. But I don’t want to
trivialize this, I think that is a serious consideration and to some extent of
course the universal nature of physician, virtually universal nature of
physician and hospital participation in Medicare is kind of the main impediment
to moving forward because politicians don’t want, get complaints that my doctor
is not taking Medicare but that tends to limit the power of the Medicare, of
the traditional Medicare plan in moving forward with those sorts of things
where there’s bound to be a bit of breakage.

MR. ENTHOVEN: I think it makes sense for the government and Medicare and
Medicaid to be a smart buyer and to ask for and pay for data of the sort that
Permanente and Palo Alto have and then they can start looking at what’s coming
in and do Windberg(?) type studies on variations and so forth and start working
up strategies for how to moderate cost growth. I think the data would be of
value, it’s not just the data, you have to have some brains back there that are
examining the data and analyzing it and figuring out strategies to feed back
into better care patterns.

Something that I just read the other day, I’m serving on an advisory
committee for the American Medical Group Association on pay for performance and
part of our homework was what the British National Health Service has done for
their new contract with primary care physicians where they pay them more with
what can be quite a substantial bonus, they get points for a lot of things and
some of the points they get for having an electronic system that can report
back to them and then they get more points if they know what the hypertensive
status of their patients is and they get more points if they get, improve the
outcomes, so it’s a way of kind of leading the providers through the process of
getting set up with infrastructures so that they have the data which enables
them to do better care and so forth.

DR. STEUERLE: And I presume they transfer that data electronically for the
most part.

MR. ENTHOVEN: Yeah, that’s right, definitely, it is electronic. And so it is
a reward, they can hold out their, doctor, you can make quite a bit more money
if you make the investment in this system and even more money if you show that
you are using it to improve care and even more money still if you have used it
and have improved care. I really like that, I thought this is appealing.

DR. STEUERLE: Just a very quick follow-up, would the government for instance
as it goes into Part D providing prescriptions, should it consider things such
as paying a quarter more if the prescription is e-prescribed under the theory
that if it’s e-prescribed the pharmacists is more likely to catch duplicative
or bad prescriptions? Should it consider incentives like this? I’m not saying

MR. ENTHOVEN: I don’t know what they’re planning with respect to PBMs, I
mean it’d be crazy not to use the existing PBM infrastructure.

DR. COHN: And I think, Gene, actually I think there’s provision in the MMA
to be able to do that I believe.

DR. STEUERLE: That they’re going to pay a differential.

DR. COHN: Well, they can’t, they don’t have to.

MR. PAULY: State law in New Jersey forbids using email to prescribe, so
there’s some impediments.

MR. SCANLON: The drug plans are going to be paid on the basis of their bid
so it’s their job to figure out how much it’s going to cost to deliver the
service and they are going to require e-prescribing as a part of this. I just
wanted to note, I mean I think that its come up a couple of times today about
the issue of if Medicare only would do something and we have to sort of not
underestimate the resistance to having Medicare doing anything more then it
does. There already are considerable amounts of data that Medicare does collect
and in my former had to sort of report upon the burden that this created for
providers because there’s a lot of resistance to some of that information
coming in —

MR. PAULY: Probably doesn’t exist but the computer illiterate physicians
association would probably come and testify against it.

DR. COHN: I just wanted to stop for just a second because we have like four
people who have questions. I just want to tell you we have about ten minutes
more for questions and then we need to wrap up this section and move into sort
of a general discussion and all this so we’ll make it through as many of you as
we can, I would urge people to ask short questions that are well thought out, I
just want to sort of set expectations and then we will cut people off in ten
minutes. Now with that, Mary Jo you are next.

DR. DEERING: Thank you very much for coming, it was wonderful to have you
here. And I actually wanted to set aside the issue of technology right now and
we all agree technology is a tool, is an enabler, and get at what has all along
been the underlying principle for the NHII, the RHIOs or any of the quality
improvement which is the actual exchange of information, the flow of
information, and across plans and providers and time given the benefits that
have been established by testimony throughout quite a while as to why those
information flows are needed. Now I come from the prevention world where we
talk a lot about how difficult it is to get people to stop smoking or to start
exercising or anything like that but I always say that professional
institutional behavior change is even more addictive and harder to change.

And what the technology can do is even if you give incentives for people to
buy technology and you give incentives and they’re market incentives for that
technology to permit the exchange of information because the standards are in
which is a big enough challenge. The issue is the provider and plan behaviors
of not sharing information because they see it as a commercial value, a
proprietary interest, I mean I’ve had, well that’s a stated fact.

So what are, are there any different kinds of economic considerations that
need to be brought into play over and above incenting for technology to
actually incent the providers and the plans to permit and to willingly engage
in information exchange?

MR. ENTHOVEN: That’s something that I’ve thought about when I hear all the
enthusiasm about RHIOs is I just wonder and ask my friends who are enthusiastic
about RHIOs, within the integrated delivery system it is understood that all
the partners are going to share data to produce a better product but how are
you going to get that to happen elsewhere. And I can see various kinds of
business interests, some doctors just not wanting to throw their information
into the model and then let other doctors see how many visits they take for
some common condition or whatever it is, that may be a problem. And I don’t
know what the answer to that is.

MR. PAULY: I think there’s a dilemma here and to some extent I’ll blame
Alain for this, I mean one vision of how the health care system could work that
would look great to an economist would be have a set of competing integrated
delivery systems where there’s perfect information sharing within and zero
information sharing across, and people should pick the good delivery system and
stick with it. And obviously you can see the dilemma then, that means that
people who do try to move across systems may run into problems but the
alternative of having everybody share the same information makes it much harder
to harness the force of competition to lower costs and improve quality.

So somebody mentioned this morning about not making the perfect the enemy of
the good, I think there’s an issue here and I mean it’s an interesting question
of how public the information needs to be, how kind of large a circle you need
to draw to get as good a set of outcomes as we’re going to be able to get in
this real world, the world in which everybody cooperates. I guess economists
are programmed to believe, it’s not one that’s reasonable to think about so we
need some incentives and some force of competition but I think we can certainly
get a lot more of an improvement over what we have now and I’d be willing to
settle for that.

But I do think there’s a substantive question here which is what would be
the structure and even what would be the quantitative parameters of an
integrated delivery system that’s kind of big enough to spread these costs
around to, it’s much harder to imagine it existing in Utah or Montana, probably
Montana a better example then Utah, then it is in a more densely populated area
but there are ways to get around too but I think those are all the dilemmas
that are part of this.

DR. DEERING: I only wanted to add that we’ve heard several times including
this morning from Mark Kelley that the actual amount of information that should
be readily available to be traded is relatively small, the information that
would be most useful most of the time is relatively small, and it should be
that kind of information that might not be perceived to have a competitive
value to it. So if people could get away from talking all the time about oh,
you have to put all your information online, you have to share all your
information all the time, and focus instead on well, let’s share useful
information that doesn’t have a market value but it does have a quality of care
value, then maybe you could get further faster.

MR. PAULY: Although what I’m told a lot of times by people who don’t want to
share data with me is that to get the programmer with the ponytail to go to our
dataset and just pick off the ones you need is actually harder, it’d be cheaper
just to give you the whole data but we’re not going to do that. Maybe that’s
just their excuse.

MR. ENTHOVEN: I wonder what will happen if, let’s say if one of our Stanford
employees wants to switch between Permanente and Palo Alto or vice versa, have
you thought about that? Will you make it available or very difficult or how is
that going to work? Anyway, I just think it’s worth —

DR. TANG: So it turns out we both have the same record system vendor and
it’s intentions, I think it’s our intention to share, the vendor actually
doesn’t have a way to exchange that in a meaningful way right now but that’s
being worked upon so I think by the time they go live we’ll be able to do that,
with our without a RHIO, I mean just to do that.

DR. COHN: Paul, I think it’s your turn.

DR. TANG: Okay, Alain I want to thank you for the kind comments, Palo Alto
Medical Foundation as well. Although you, I’d like to clarify the charging
model since it bears on the business model and although you weren’t, you didn’t
share your price sensitivity with me I’m going to tell you that you could save
yourself $60 bucks. And that is basically that everything is free in our PHR
except for messaging with the physician and the reason that was put in place
was in recognition of the professional services. And the reason I mention about
the saving $60 dollars, you brought up the making appointment and that can be
done for free.

But that brings up —

MR. ENTHOVEN: I like the messaging so I think I’ll stick with that, I want
to warn the doctor ahead of time, this is what I’m coming to talk to you about,
please be ready for that.

DR. TANG: So how much more do you like that?


DR. TANG: But actually that does bring up the point that I wanted to ask,
neither of you actually addressed the substitution of more expensive resource
intensive activities, utilization like office visit, you actually mentioned the
visit, the unnecessary visit you had, for something that could be more cheaply
done and possibly even better done when you have a more continuous flow and
access to your health care team, that is basically electronic visits. Aren’t
there societal economic implications that would beg the question about a
policy, making this a policy, even beyond the government as the largest health
care insurer? And if so are there incentives, well, is that desirable and if so
are there incentives to move the country in that direction? So it is a societal
good that there exists a technology whose burden of the cost of implementing it
and the effort of implementing lies on the provider and the risk and the
financial benefits, there was a study that measured this, sort of quantified
this, 11 percent of the benefits of electronic health record systems for
example accrue to the provider, 89 percent to the payer/patient community, how
do we sort of rationalize, economically incent the provider to bear the cost of
these systems.

MR. ENTHOVEN: Well, it’s an economic, it’s an improvement in the quality of
the product and so it’s a competitive, then it’s like Mark was saying with
banks and ATMs, when people realize that’s there, I think they’re going to
figure it out and value it.

MR. PAULY: This partly is a philosophical point of view but also partly a
matter of how economists are brought up that say for contagious disease,
obviously there is a societal interest because there’s an externality but for
other things, so everything that’s good for society isn’t necessarily a
societal good and I guess we’re better off if in any industry production is
more efficient, but for reasons that I kind of exposed my prejudices on, I’m
somewhat reluctant to believe there’s a whole lot government can do to improve
efficiency more then would have already been discovered if it were that great
an idea by the people who have much stronger incentives to discover those
improvements. And then I guess that is I think one of the things, now I’ll
sound professorial a bit, that I think confuses thinking about it when it comes
to health care, of course it’s important for people to be healthy but there
tends to be much looser use of a societal benefit and those kind of
terminologies then I think I’d be comfortable with.

MR. ENTHOVEN: I guess any producer of any service who improves the product
and reduces the cost is producing a societal benefit if you want —

MR. PAULY: But that’s what the market is supposed to do.

DR. COHN: Jeff, I think you have the last question and we’ll wrap up this

MR. BLAIR: Paul has kind of touched on my question but I’ll just ask if it
could be expanded slightly. As you probably are aware this committee has really
worked with the health care informatics community quite a bit to be able to put
in place the information infrastructure to facilitate pay for performance. And
Alain you’ve made a number of comments about it in terms of the incentives and
the benefits of moving to pay for performance and mentioned that you worked
with the National Health System on this. Is there any additional guidance or
suggestions you could give to us about things we should consider about the
transition other then we’re looking at the information technology difficulties
with the transition but from an economist’s standpoint it is disruptive to move
from the models that we have now to pay for performance and yes the incentives
are there to try to get people there, but what are the barriers and impediments
and other things we should consider as we make that change?

MR. ENTHOVEN: Well, I think Gene Steuerle kind of put his finger on an
important part of is, is the government as purchaser in Medicare and Medicaid,
if they got records for their patients comparable to what Permanente and Palo
Alto have and then put smart people to work on studying them they could find
patterns of inappropriate care, opportunities for saving and so forth. Now I
realize Medicare’s ability to act on that information is pretty inhibited by
politics and so forth but I hope they’re not that inhibited, I mean I’m
thinking of the Windberg studies of what is it in Florida, Medicare patients in
the last six months of their lives have many, many times more visits then they
do in Minnesota. Now can they feed back that information to doctors, if they
keep putting it out there maybe the Congress after a while will get the idea
they ought to be able to act on it.

The other part of the transition I would like to see of course is in the
non-Medicare sector or just generally is find some way to open the markets and
level the playing field for integrated delivery systems. And that would, that
could move this, pretty soon everybody in America would look like Wells Fargo
or University of California and then we wouldn’t have to worry about this
because they would be served by integrated delivery systems that have this, are
using this technology.

MR. PAULY: Well, I guess what you’d worry about, what I would worry about,
one would be cartel like behavior on the part of providers, trying to somehow
resist this in some fashion or another. A second would be something we have
some evidence about that there may be ways that a provider can adjust their
behavior to make performance look better that can’t be detected by the systems
in terms of the selection of types of patients that are treated and so forth,
there’s been some research on report cards that suggests that that goes on. I
think in a way, I don’t want to sound super critical here especially since I
married a doctor’s daughter, I think if physicians behaved like ordinary human
being behaved but in terms of the design of the system you do need to worry
that it won’t, paying for performance is only as good as your definition of
performance and your ability to measure it. So in a sense it’s Medicare’s
problem and I’d rather blame them in this case then blame doctors for
responding in normal human ways.

MR. ENTHOVEN: I think pay for performance is incredibly difficult and
complicated by the way —

MR. PAULY: It’s a very powerful tool on the one hand, on the other hand if
you get it wrong it can be just as powerful in the wrong direction.

DR. STEINDEL: Simon, can I ask a follow-up?

DR. COHN: If it’s brief.

DR. STEINDEL: It’s brief. Mark, you mentioned something in our presentation
about the inability to calculate the actuarial risk under the new system.

MR. PAULY: Well, I didn’t say that very clearly and what I’m worried about,
this was more of what would be a potential downside for consumers having all of
their health data, they could do what I guess the Washington Checkbook does or
some of these systems do, they could look over different health plans and
calculate based on their private knowledge what health plan would pay them the
best and at least economists worry that’s sort of a gold plated invitation to
adverse selection. If the insurer either, the insurer either doesn’t have all
that data or the insurer is not allowed to pay attention to the same
information that consumers are using and personally I don’t believe at the
moment that adverse selection is that serious a problem in the American health
insurance system but I could see and I guess I felt duty bound to warn you that
if we really made consumers into really terrific little actuaries that could
actually make running a competitive health insurance system even more difficult
then it already is.

MR. ENTHOVEN: Except wouldn’t all this information serve as the basis for
better and better risk adjustment models?

MR. PAULY: If it could, if it could, yeah, as long as you can stay in a
sense one step ahead of them.

DR. COHN: And I think Bob Hungate has a comment —

MR. HUNGATE: I have to make one comment, on the range of risk adjusted DCG
plan rated risk within the Massachusetts Group Insurance spectrum of plans, the
range of risk is from .87 to 1.39, that’s a pretty big difference in the risk
within plans. And so I would —

MR. PAULY: Well, you have modified community rating in Massachusetts, right?

MR. HUNGATE: We manage that group ourselves.

MR. PAULY: Or you can produce adverse selection certainly by regulation.

MR. ENTHOVEN: Well, do you risk adjust?

MR. HUNGATE: We are now risk adjusting our payment to plans, we have not
taken the next step of risk adjusting to the individual themselves so that it’s
not transparent to the individual. I don’t mean, I mean to say that we haven’t
the most expensive plan be appropriately more expensive, it’s a longer subject.

But I’m disappointed in a sense in the economic discussion because risk
adjustment is a key piece of the system which is underused, cost effectiveness
is a critical economic variable which is almost ignored, and so I don’t see how
we can have an economic discussion without getting into the broader, you can’t
isolate the PHR from the major system when the PHR might add information which
physicians don’t have the time to take. There’s a lot of pieces here that
relate to information that you touched on but we didn’t get into the content
of. So that bothers me in this discussion.

MR. ENTHOVEN: I think state of the art risk adjustment is absolutely
fundamental, just critical, and it’s so obvious to me I probably neglected to
start by giving a little talk about risk adjustment.

MR. PAULY: Well, I was worried about the world where, as is true in the real
world, that there is a lot of, not always, the use of state of the art risk
adjustment and then introducing better information for consumers may actually
help the system, or cause it to unravel —

MR. HUNGATE: To think that we have a working market is imagination.

MR. PAULY: So part of the problem here is we have the bowl of spaghetti
problem, you can’t just pick up piece out and improve it, you actually need the
whole system.

DR. COHN: And that obviously continues to be the conundrum in all of this
stuff. I mean risk adjustment obviously is a whole other topic, probably having
people, Medicare is doing one of the great social experiments for Medicare
Advantage and I know Bill Scanlon could speak at length about that in terms of
risk adjustment and probably it will be something as we begin to talk more pay
for performance we’ll be reflecting on —

MR. ENTHOVEN: And it’s not unrelated to IT of course.

DR. COHN: No, no, I mean I think the piece that I think you, I really want
to thank both of you for coming, I think it’s been a fascinating conversation.
I’m sort of sorry we didn’t give you eight hours rather then and an hour and a
half for this panel. I mean I think you constantly sort of come back to the
fact that IT is a tool and it’s sort of the business, the economic conversation
is for what and so we just need to keep that, I mean I think for a long time
years ago we used to just sort of talk about how IT would transform everything,
and it isn’t, IT is a tool if one wants to transform but in and of itself
without some stronger vision or something else going on it is just a thing.

MR. ENTHOVEN: Right, you got to get the basic organization right.

DR. COHN: And the incentives aligned and everything else and I think this
has been sort of a helpful reminder of that, I mean what’s again I’m not an
economist as you all know but this is in some way what the American market
forces are all about, at least having one set of forces aligned.

Anyway, I want to thank you both, what we’ll do is take a five minute break
and then come in for sort of our final discussion before we adjourn at 1:00,
and there’s one person who does want to make an open comment so we’ll do all
that but really I want to thank both of you, it’s really been a wonderful set
of conversations so thank you.

[Brief break.]

DR. COHN: Okay, we’ll get started.

PARTICIPANT: Don Esmonga, director of government relations for the American
Health Information Management Association. I’d like to thank the committee for
two great days of just wonderful testimony, very education and really in line
with many things that AHIMA is working on. And two threads that I personally
saw throughout this hearing that were really central to what we do were privacy
and consumer education, and especially this morning with regard to consumer
education in the employer panel that came up was interesting from the gentlemen
from the consumer project.

Consumer education is critical from our viewpoint because it does a number
of things, you have one issue of privacy, we’re going to have to deal with
privacy at some time in the future and educated consumers about the use of
their health information is critical to moving forward with a National Health
Information Network, RHIOs, and personal health records. Also consumer
education fits into the business model because it has to deal with demand,
creating demand for the use of electronic health records, creating demand for
the use of personal health records, and so forth. And also this is a public
good from our viewpoint, we want to educate the consumers on the public good.

Some of you may be aware of what we are doing with regard to consumer
education, you’ve heard of MYPHR.com, the website we have set up to show what
is in a personal health record, why your health information is important. But
we have also embarked on a national campaign to educate consumers called Your
Health Information, how to access, manage and protect it. What we have done, in
March we educate 40 of our members to go out and give both one, presentations
to the public and also educating other AHIMA members how to give this
presentation to the public where they can go out and speak to Rotary Clubs,
church groups, chambers of commerce, patients in hospitals, about their patient
information, personal health records, why it’s so important to be aware of your
information and how it’s used.

This presentation itself, it starts out with a three minute video, it’s an
animated video that shows how the information flows through the health care
system, who has access to it, why they have access to it, it’s used for
research, used for public health reporting and so forth. And then it gets into
how to maintain your personal health information and why it’s accessed by
others. Now I just wanted to offer whether offline or during a future hearing
that we would love to show that presentation to you all and what we are doing
and give you some in depth information on what we’re doing nationwide with
regard to educating consumers.

What we are doing now is reaching out to other organizations, some of the
disease groups that were talked about this morning, to work with them to speak
to their members about the use of health information and this we think can help
spur some of that demand for the use of personal health records and people
maintaining their own care and having the consumer centric health care system.
So I just wanted to put that offer on the table and let you know where we are
and what we’re doing with regard to educating the public on personal health
records and health information.

Thank you.

DR. COHN: Okay, thank you. Now Bob, I think we’re going to give this over to
you for the next several minutes and then I’ll do a wrap-up and I’m sure we’re
going to wind up scheduling some conference calls.

Agenda Item: Workgroup Meeting – Personal Health
Tools/PHR Research Agenda – Mr. Kambic

MR. KAMBIC: Many of you remember at the last meeting Mary Jo asked if
Eduardo and I would be willing to come up with some issues about research and
we were able to put together this top level committee of experts, Dr. Agarwal
we heard last time and she contributed, Gary Christopherson, many of you know
works at CMS with me, and we go round and round on these issues, Mary Jo,
myself, Harold Lehmann is a physician and PhD in the informatics at Hopkins, he
has an NLM grant for training and of course Eduardo Ortiz.

One of the interesting things Gary and I have gone around on is the issue of
the PHR as just the personal health data alone and then you add all kinds of
information, messaging, tele-health, downloads from the web and so on to it and
we have agreed, and I have a written report here that I’ll submit to the
committee, that there would be, we would call something a PHR that would be the
data alone and a PHS, or the personal health system, that implies that there’s
more then just the data to what we’re discussing.

I myself am a demographer and epidemiologist and we’ve heard and continue to
hear a lot of clinical observations, anecdotal evidence, I trust but verify. So
I want to see the data and what do I want to see the data about. Well, we’re
going to promote discussions about the PHRs as we have been doing, we’re going
to look at the broad categories, Steve sent an email out and he says who’s
going to fund this, right now we don’t know, we’re just raising these as
questions. So we’re going to look at the overall scope and perhaps in this
ensuing discussion see if we want to get down into some of the very detailed
types of issues.

I’m just going to speak very briefly about focusing on the PHR from patient,
provider, payer, purchaser’s perspective, intermediary, some design issues for
our research, and then overall society and the evaluation issues. And I think
we all know these questions so I’m not going to spend a lot of time on it, what
information do people want, how are they going to use it, when do they need it,
what is the temporal aspects, is this just a one time things, no it’s something
that continues over time and is constantly changing, some information is needed
immediately, some just sits in the background. Variances and differences, we’re
talking about racial differences, ethnic differences, age differences, the
boomers, I’m on the leading edge of the boomers and so on. How are all these
different groups going to use their PHR information.

PHR/PHS is structured to improve personal health behaviors and I asked that
pointed question this morning, you all heard it, Mary Jo said we shouldn’t give
answers but I think one of my continuing questions is if you just have this
stuff in the computer how is that going to change behavior. And I don’t think
it is unless it’s part of an overall structure that we heard about. Of course
we all know, we have looked at medical information and we know the lay American
public isn’t going to be able to understand this stuff, many of them, how does
it need to be repurposed for them. Just some of the basic questions about

The use cases for providers and giving this information to their patients,
what are some of the key use cases, chronic disease, we’ve heard about
diabetes, perhaps cancer, end of life care and so on, we’ve heard a lot of
personal stories. I have six grandchildren actually and some of them have
asthma and my kids, their parents, are very worried about them and actually
track the kid’s records using the computer, so that’s a very important use case
from my perspective.

Under what circumstances, and I don’t know if we have really dealt with this
question at all, do providers need or value patient initiated information, I
don’t think that I’ve heard a lot about that. What are the effects of
progressive disclosure, do you want to give the patient everything at once or
should they get everything at once, or is there a series of steps over which
people will have access to their records.

From a payer perspective payers have been giving beneficiary information,
why are they interested in it, what is their experience of sharing such data,
and again we heard from our economists friends here, here are your benefits and
you try to read some of these things and you can’t make heads or tail out of
them and I’m pretty good with data and I look at these things and I can’t
figure them out so maybe we need to either do some research on human factors,
how to make this stuff easier. At CMS we have a website up where we’re giving
some benefit information and we’re actually collecting some data on that, it’s
not publicly available yet, I haven’t seen this data, so that would be some of
the types of things we might want to see from the payer perspective.

And then finally why might payers be interested in having patient initiated
data as part of their records. Again, all questions, we heard a very good
perspective from the employers today, purchasing health information, and we
heard it also I think in November from the folks who were running the meat
packing industry, how having PHR actually lowered their costs, I think we need
more such studies, more such information. Kinds of information that the
purchasers want their employees to have, and so on. We’ve covered that.

I think this is an interesting issue and I was actually, I visited a vendor
a couple of months ago out here past Rockville and there was sort of a third
party intermediary and they have a couple of million records that they actually
provide to providers in a PDF file so they’re not actually electronic records,
so it’s a pass through paid for by insurance plans and they’re using the
aggregate data to do risk adjustments. My question was do the patients get, are
they paid for the use of their data or are they actually, is there more of a
burden put on them if they’re at higher risk. Interesting questions and I think
we heard from the economists and Robert those things that we really need to
look at.

Also banks, banks are getting into this. There’s a group down in I think
Kentucky or Tennessee, the Medical Banking Project that’s suggesting that banks
have a lot of experience in data and information transfer and there may be some
income for them down there.

Issues about who owns EHR and the PHR and the PHRs, I know a lot of people
are involved in I think AHIMA is studying this, right, you guys have your
committee going, I’m on the HL7 PHR list serve and we’ve been discussing that a
little bit. What does this mean, if you own it do you really have control of it
if it’s sitting on somebody else’s system. Some people think that every time a
PHR is touched or an EHR is touched it should be logged because there’s
potential for liability down the road and you want to have a good record of
that. And who’s going to pay for it. Design, how are these things going to be
structured, is it really a CCR or a CCR+.

I like the market solution that we heard, David Lansky I think told the HL7
EHR list that they have a list of 100 vendors now, I don’t know if he told you
that yesterday, he did, okay, so there’s all kinds of different variations of

Human factors for PHR, if I go from one vendor to another am I going to see
the same thing or have to completely relearn a system. What about the semantic
web, an enormous issue that’s coming down the pike.

Finally these are issues that I think are really interesting, the metrics,
as far as I’m concerned we really have no good metrics for health information
technology at all so the PHR is a small part of that. Incentives,
disincentives, is it going to impact health care costs and quality, my question
to the economists was are we really going to see health savings. From an
epidemiological perspective is there any impact on morbidity and mortality, how
do we measure that, and that’s what we’re really after is improved health,
longevity, is it going to make a difference or not, we don’t know.

Steve’s comment early on, the quality of the data, the validity,
reliability, does the patient enter data, is there some concordance with the
provider entered data, is that interesting at all. And here’s an issue that I
thought, I don’t know if this is important or not and then I heard it from both
panels, the aggregate PHR/PHS data, does this have regional or national
relevance depending upon how the PHR and PHS is structured, are public health
people and risk adjusters going to be looking at that data or whether they just
look at provider data.

So these are all kinds of very I think interesting questions that our expert
panel came up with and because of shortage of time I’m willing to just say
that’s where we are now and move to open discussion.

DR. COHN: And let me sort of suggest this given that we’re rapidly running
out of time here, first of all, Bob, thank you very much for the presentation,
I think you’ve actually hit many of the right issues. I am still struggling,
since I don’t know what the personal health record is it makes it hard to do
research on something which, I mean I’m still sort of seeking, and I’m hoping
Cynthia and Linda Fischetti and all this may be able to at least get us to a
point over the next couple of months where we can sort of talk about the pieces
and I don’t know whether it’s the personal health record, I don’t know whether
it’s personal health tools, I don’t know whether it’s personal health
dimensions, it’s a something out there and if we can sort of agree with the
operate concept, only because each time we talk about this one people, I mean
as you commented it’s sort of a vague concept and so there’s like a zillion
different ways that people have to slice and dice all of this.

But I mean I think the research ideas are good, I do think, I think I’m
going to have a couple of suggestions here which are sort of for the full
committee. Number one is is that I think we’re going to need to do a conference
call, at least one, in probably the next four to six weeks and I’ll ask Mary Jo
to schedule that for everybody so that we can A, review this, also I think
reflect on next steps, that’s number one.

Number two is is that, now once again it’s my observation, remember I’m the
new chair of this workgroup, I was a member before, this was sort of John’s,
these are John’s things, but sort of he was moving things forward. What I have
been observing as we’ve been talking for the last day and a half is is that
we’ve been spending about 40 to 45 percent of our time talking about PHR or
personal health dimension or whatever, and then everybody else has all of these
other things that they want to talk about. Now there’s nothing wrong with that,
I mean be it incentives, be it overall NHII issues, be it provider health
record issues, but what it tells me is is that we need to begin to get off into
some of those issues because clearly there are issues that people have that are
really beyond personal health record. Which I think is very appropriate, I mean
this is not a one issue workgroup, and so what I’m going to be trying to do
over, working with you obviously assuming you all agree, part of the
conversation during the conference call is beginning to sort of see if we can
sort of begin to put things together for either a letter or a report or a
something on this issue.

And once again I don’t know whether it’s going to be the September meeting
that this will come forward or the November meeting, but that we can sort of
begin to sort of bring this to an end so we can get onto to other issues.
Because I’m hearing incentives being an issue, certainly from my view the whole
issue of RHIOs which will begin, if we’re talking about portability which seems
to be sort of an underlying theme we keep coming to on whether it’s a PHR
providing the portability or a RHIO providing portability, I mean RHIOs come up
as an issue here and certainly that’s a hot topic out there and we probably
need to sort of see where these groups are, sort of where they are. So we can
sort of think about what the other issues are sort of as we begin to move

Now so far the issues that it seems to me that may be appropriate for a
letter might be, and once again we will talk more about these but the ones I
just jotted down and I’m sure there are others have to do with getting some
clarity about what exactly we’re talking about given that we’ve been struggling
with terminology, taxonomy, whatever. The issue of privacy which I think we’re
going to need to take a harder look at and come up with some recommendations
around what we mean by that and what general recommendation, how the Secretary
ought to think about this stuff as all of this stuff moves forward in the
private industry. The issue of standards, and once again not necessarily a
litany of the standards but that I think the importance of standards and if we
have some further views on that. And finally I think Bob you, this was very
appropriate, an issue of a research agenda because clearly I don’t think we’re
going to be, I mean whatever is going on here is vague enough that it would be
helped by more research.

Now there would be other pieces that we all have but I mean those are sort
of low hanging fruit that were sort of sticking right in front of my face as
we’ve been talking for the last day and a half. And are probably things that we
would want to address to the Secretary and might be helpful.

Now as I say that is sort of the steps of moving forward, does this make
sense? I mean it sounds to me, I mean are we in agreement that we would like to
delve a little more into sort of these privacy/security or whatever issues
relating to personal health records before we complete a letter?

MR. HOUSTON: Simon? What’s the role of the Privacy Subcommittee, though, I
thought some of that was going to try to be coordinated through the Privacy
Subcommittee rather then directly through NHII?

DR. COHN: Well, I think it might be joint hearings on that topic or we might
defer to them.

DR. TANG: Well actually I’m on the privacy group and they actually deferred
to us.

DR. COHN: And so we will discuss that with Mark in a conference call we have
that starts three minutes ago.

DR. BAUR: Well, and the calendar says that both Privacy and NHII are
supposed to be meeting in August, tentatively in San Francisco, so there’s —

MR. HOUSTON: Right, exactly.

DR. COHN: And so that might be an occasion where some of that gets heard, at
least some overlapping sessions. So John Paul it may mean the answer is
everybody will be happy at the end of the day.

MR. HUNGATE: My question related to that is how much more do you need to

DR. COHN: On privacy?

MR. HUNGATE: On privacy. The message has seemed very consistent, I sat in
the privacy hearing, what I hear here is consistent —

DR. BAUR: From a qualitative researchers perspective what you look for are
patterns and repetitiveness in the data and I hear lots of repetitiveness —

MR. HUNGATE: It just doesn’t change.

DR. BAUR: That’s what I’m saying, you’re hearing the same themes and issues
and whatever over and over again so as a research I would stop, I would say
okay, I think I’ve got a tentative set of answers to this set of issues and
then I’d go on to the next thing.

MR. HOUSTON: I would agree with that and frankly the part of the issue I
think is that there isn’t even a recommendation in there, it’s just a lot of

MR. BLAIR: Well, I thought there was one recommendation but that a number of
us agreed on.

MR. HOUSTON: There’s probably one but there’s just a lot of consideration.

DR. TANG: So couldn’t the two workgroups meet together and craft draft
recommendations? I mean I agree with you that we’ve heard it but we still
haven’t rendered an opinion and I think there are things that came up yesterday
that can be actionable. It bears on, and actually that hasn’t come up in
testimony that much, bears on this informed choices and how to do it, we either
have testimony on how to do it, what their proposition is, or we also come up
with a draft ourselves.

DR. COHN: As well as is that the, is that the right model or whether, I mean
I think we’re hearing there’s an issue, informed choices is one model, fair
information practices is another model, I mean I think, there actually are
different tools, sort of different approaches that one could take —

MR. BLAIR: Actually, at least my thought was that because there are so many
different models the one that seemed to be common across all of the different
models was the need for informed choice to the consumers.

DR. COHN: Okay, and I didn’t want to solve the problem right now, I was just
bringing up that we need to do something but if during the conference call we
all think that we come to a consensus on that or if we need to hear something
else we can arrange that.

Now once again I am going to reflect a little bit about when we need to have
this letter, I’m just worried that when we start projecting six months ahead as
opposed to three or four months ahead and so we may try to push a little faster
on this one. There may also be a need to, I mean once again depending on what
we say in the conference call there is time I believe after the Standards and
Security meeting in July that if we needed to get together for a day or a day
and a half to talk about things, deal with any other issue or whatever there is
an opportunity.

DR. TANG: Or your interim letter can just give a heads up on this is an
important issue that we’ve heard and we plan to address it in whatever it is,
September, second letter.

DR. COHN: Potentially, potentially, I think a September to a November letter
is sort of a hard one to get a heads up, there would be a month and a half
break, but we can sort of figure that one out.

Now are people okay generally with this sort of, I mean once again I may not
have the right four items, I think we will send those around as areas that
potentially should be things that we should be talking about in a letter, and
as you all reflect there may be additional pieces that I’m really missing, so
Bob’s conversation and presentation couldn’t have come at a better time to put
all this together but I would have you all sort of reflect on that.

MR. HOUSTON: Simon, you said there’s four, correct?

DR. COHN: Yes, I said four, one was terminology, in other words what in the
heck this is and what are we talking about. Next one was privacy, next one was
standards, and it may not be the standards, it may be the need for standards.
And the fourth one was research.

DR. TANG: You’re talking about your June letter, right?

DR. COHN: No, I’m talking about a September letter.

DR. TANG: A September letter, and you wanted to have answers for that, you
wanted to have comments and recommendations for that September letter on these
four things.

DR. COHN: I would like to if we can do that.

MR. HOUSTON: And can I confirm one thing from you Simon? When you talk about
privacy also, are we also talking about, because we talked about this, does
that also wrap up the issue of sort of domain and control of the record?

DR. COHN: You know since I don’t know what we’re talking about it’s hard for
me to, let me think about that one.

MR. HOUSTON: Do you know what I’m saying?

DR. COHN: I mean we could certainly go into that one, I guess I’m, yeah.

MR. KAMBIC: Simon, I think this is going to be solved in the long term by
laws, by regulation and by case law, I mean these things are going to go to
court and I don’t know if we can sit here and say we think this is how the
control is going to be exercised.

DR. STEINDEL: Simon, I would be leery of going further then just noting it
as an issue because as Bob pointed out right now it’s very, very complex and if
we want to get a letter in the fall timeframe that would be impossible and I
think even if we wanted to get it a year from now in the fall it would be

DR. COHN: I will say that Linda Fischetti’s notes about how, some comments
made by AHIMA about well, yes but this is still the legal document are maybe
something we need to look back at, without trying to answer that issue of

DR. DEERING: I just wanted to add into the issue of standards and it may be
true in privacy as well that I hope it’s not just broadly that we need
standards but maybe that we can do some reflection about how to shape
priorities in the next standards efforts very specifically, if we believe it’s
worthwhile, I mean where is the general standards development effort moving,
given how slow that process is does any new prioritization need to be suggested
or not.

DR. COHN: Well, I think that would be based on what this thing is, and once
again I think we’d all have to reflect on given our schedules how many more
hearings we want to have to update us on those aspects, and once again my
observation was is that we at some point want to cut off new hearings, new
topics for exploration, and take what we have and develop them into something.
But once again I’m open during a conference call for us to bring those issues
up, it’s just one of those things of, I mean if we indeed decide we want to
cover something and can come up with some time for example in July to review an
aspect of this, that’s additional information and everybody says yes that’s
great, I don’t think we want to have this be like some other reports that I’ve
seen where it takes years for the report to come out because we’re always
looking at the next item. Well, once again, I certainly think that your
standards issue is a good one, if we have time in July and we decide we want to
meet then then that might be an absolutely perfect time for that conversation.

As I said Mary Jo you should expect over the next week to receive some notes
about possible dates and times for a conference call. Okay? Are we okay? I
really would have preferred to have an hour for us to talk about this. John

MR. HOUSTON: I’m fine with it.

DR. COHN: Okay, so we have a process, next step, at least a straw man of
what we might do though, whether it be September or November, we’re talking
about probably August, maybe also July if there’s an additional issue or two we
want to focus on with the idea that we will have a deliverable and we’ll start
talking about next steps and other items to talk about.

DR. BAUR: So what you’re talking about in a few minutes is whether or not
there would continue to be another set of hearings in August around the PHR or
the topic is sort of up for grab of what those hearings might be? I thought you
just said you’re having a call with the Privacy —

DR. COHN: Yes, I’m having a call to talk about the August hearings.

DR. BAUR: Right, so the August, are the topics up for grab or it’s assume
that it would be something jointly with the Privacy Subcommittee on PHRs? Or
you don’t know yet?

DR. COHN: Yes, we don’t know yet.

MS. BERNSTEIN: This is Maya Bernstein, my idea was that since there’s some
cross interest in the privacy group and this group that if we’re meeting in
California in August, various people are going to be in California in August,
we could take advantage of our location and the fact that there will be people
from both groups there, either by, I mean the subject matter of those hearings
was supposedly going to be IT kind of things and research things the last time
we talked, it’s still sort of up in the air. But the other point is that we’re
in California, we should take advantage of the fact that we are in California
to hear from whoever it is in California that can show up and that we want to
hear from. And so that may, it may not matter what the subject is if we can get
somebody from, who’s in California in that area to talk to us then we should
take advantage of the fact that we’re there.

DR. COHN: I think without trying to presuppose it, I think we’re just in the
early stages of planning and discussion, something I was hoping that we would
talk more about during that conference call that we have in a couple of weeks,
so I mean once again I’m not in to, since we haven’t had the conversation with
Mark it’s a little hard to presuppose what’s going to make sense for that yet
though we may know a little later.

Okay, now I know Paul needs to leave, I will apologize to everybody because
we’re running 13 minutes behind and I try to make sure the trains do run on
time, that’s one of my roles, so what I’m going to do is to adjourn this
meeting and as I said expect a notice for a conference call. Thank you.

[Whereupon at 1:15 p.m. the meeting was adjourned.]