Report: Informatics Key to Healthcare Costs


Clinical informatics may hold the key to better population health and a
reduction of the healthcare costs in the United States if health
organizations can use it to engage patients in managing their own
health. A new PwC US Health Research Institute (HRI) report suggests
that health organizations view clinical informatics – the integration of
information technology into healthcare – as paramount to their financial
success and ability to effectively and affordably manage patient care
and wellness.

While improved patient care and safety is a top goal of their clinical
informatics efforts, few health organizations have found ways of using
health information to engage patients in managing their own health. A
recent PwC HRI survey of more than 600 health management professionals
across the country found:

• Only 15% of health insurers and 13% of hospitals, physicians groups
and other providers believe they have been able to successfully
influence patient behavior through their informatics efforts.
• Nearly eight in 10 providers (79%) are looking to clinical informatics
to help reduce medical errors, 61% hope to use it to improve population
health, and 52% hope it will help them reduce costs by involving
patients in preventative care routines.
• Eighty-five% of health insurers are counting on clinical informatics
to improve management of complex cases such as care for patients
diagnosed with cancer, 80% are seeking a reduction in preventable
emergency room visits and hospital readmission rates, and 56% hope that
findings from their clinical informatics programs will lead to earlier
diagnosis and prevention.

The HRI report, titled Needles in a haystack, Seeking knowledge with
clinical informatics, looks at the state of clinical informatics in the
industry and the needs, goals, barriers and opportunities that health
organizations face in expanding their informatics capabilities. To
inform its findings, PwC US surveyed health management professionals,
including those from hospitals and physician groups, health insurers,
pharmaceutical companies and life sciences companies, and conducted
in-depth interviews with 30 chief information officers, chief medical
informatics officers, and clinical leaders at health organizations
across the country.

PwC found that all of the organizations it studied are now focused on
clinical informatics capabilities, a nascent, fast-growing field that
combines technology, patient care, financial reporting and collaborative
information-sharing. While organizations have different needs,
expectations for their informatics programs, the one common informatics
goal PwC found they all share is a better understanding of medication
compliance. Billions of dollars a year in wasteful healthcare spending
can be attributed to excess hospitalizations, premature deaths and other
avoidable expenditures caused by patients who do not take medications as
prescribed.

PwC’s survey found:
• Nearly 60% of providers and 91% of insurers said that improving
patient compliance and adherence to prescribed medication is a goal of
their clinical informatics program over the next two years.
• Nearly three-quarters (71%) of pharmaceutical companies believe that
access to information in electronic health records could help them
better understand what factors lead to noncompliance as well as the
factors affecting the safety and efficacy of patients’ drug usage.

“Health organizations recognize the value of effective informatics and
analytics, but they are struggling to institutionalize the insight, make
it actionable and use it for competitive advantage,” said Daniel
Garrett, Health Information Technology practice leader, PwC. “They need
strategies for mining data, conducting and integrating evidence-based
research, translating findings into practice, and influencing patients
to participate in the process.”

The state of clinical informatics in the health industry
PwC reports that clinical informatics is likely to become even more
important in healthcare as the reimbursement landscape shifts from a
fee-for-service or volume-based model to an outcomes-based model.
Comparative effectiveness research has made it incumbent upon providers,
drug makers and medical device manufacturers to understand and
demonstrate how different treatments, tests, or procedures work compared
to others.

PwC’s research found:
• More than half (56%) of health organizations now have a formal
clinical informatics program in place.
• Six in 10 (61%) hospitals and physician groups have a formal clinical
informatics program, compared to 59% of health insurers and 33% of
pharmaceutical/life sciences companies, which have been more likely to
outsource their informatics functions.
• All health organizations – especially health insurers – have plans to
increase informatics staffing over the next two years. Nearly half
(48%) of providers plan to increase technical analysts and 35% will add
clinical informaticists. Among insurers, 70% will increase technical
staff and 30% will add clinical informaticists. Among
pharmaceutical/life sciences companies, 39% intend to add technical
staff and 38 will add clinical informaticists.
• Within the next two years, nearly two-thirds of providers will look to
clinical informatics to help them improve care delivery by better
understanding variances in performance, while 60% of health insurers
will use clinical informatics to identify lower-cost, high-quality
providers.
• Health organizations that already have formal informatics programs
have made greater progress than those that do not on business strategies
that position them to compete for patients and revenue in the new health
market. They are:
- More likely to be sharing data outside the organization and
participating in new care delivery models.
- More likely to have advanced informatics functionality needed to meet
requirements for meaningful use of electronic health records, such as
the ability to integrate and aggregate data, measure performance and
deliver information to the point of care.
- More likely to be considering new collaborative strategies to expand
informatics capabilities with other organizations and patients.

Health industry converges around clinical informatics
The nature of the once adversarial relationship among payers, providers
and pharmaceutical/life sciences companies is becoming more
collaborative in an outcomes-based reimbursement environment as health
organizations discover they need each other and access to one another’s
information and capabilities.

Clinical informatics is spurring an increase in collaborative
agreements, partnerships and deal activity among health organizations,
suppliers, private equity firms and other market participants.

PwC’s research found barriers that may slow collaboration and progress
in the use of clinical informatics.

• Fewer than half of health companies are exchanging information
externally today. Only 31% of providers, 47% of insurers and 49% of
pharmaceutical/life sciences companies participate in external data
exchange.
• Despite the need for clinical information, the two biggest challenges
health organizations face in expanding their clinical informatics
efforts is data integration and lack of industry-wide data standards,
leading to distrust in the data itself and its usage.
• Nine in 10 (90%) of pharmaceutical/life sciences respondents said that
access to the clinical data stored in electronic health records would
help with drug research and development, and 85% said it would help
clinical trial protocol design and recruitment, yet 87% also expressed
concerns in the quality of EHR data. Pharmaceutical companies, which
have historically purchased clinical information, have decreased
purchasing activity from 45% in 2009 to 24% in 2011.
• More than half (54%) of providers said they would like to provide
feedback into evidence-based protocols, yet only 20% of health insurers
are “very confident” in their ability to offer providers access to
evidence-based protocols.
• Seven in 10 providers and health insurers said that their top
technical goal is integrating data from multiple sources, and only 17%
of providers and 16% of health insurers are very confident that their
health information exchange vendor will be able to meet their analytic
and integration needs over the next two years.

Source: http://www.pwc.com/