TOPICS > Health

Extended Interview: U.S. Secretary of Health and Human Services Michael Leavitt

March 21, 2008 at 7:35 PM EDT

SUSAN DENTZER: We’re speaking here with Secretary Michael Leavitt of HHS about the subject of electronic health records and personal health records. Mr. Secretary, thank you for joining us.

SECRETARY LEAVITT: Thank you, Susan.

SUSAN DENTZER: Others have said that the US health care system, or “non-system,” if you will, is extraordinarily behind in information technology, and possibly is the single industry in the United States that is most behind in terms of its need for information technology and its use to date of HIT. In comparison to financial services or airlines or anything else, it’s just woefully behind. How would you state the problem?

SECRETARY LEAVITT: Well, I would add my voice to that chorus. I think health care is a sector of our economy that has not had the advantage of information technology, and as a result, it’s a system that is saturated with inefficiency, and it can and must change.

It’s right at the heart, I think, of so many things, not simply by making electronic things that were previously paper, but by allowing us to become far more efficient and not redoing tests, for example. That’s a big cost saver, being able to miss medical — or to prevent medical mistakes. That’s another substantial cost saver — being able to make certain that people are not taking incompatible drugs.

But it’s also a huge saver to the consumer, not having to fill out the medical clipboard every time you walk into a physician’s office; of being able to make appointments, for example, with your doctor electronically like you do an airline; being able to contact your physician by e-mail like we do everyone else in our system; being able to deal with claims and other kinds of things online as opposed to in a telephone line. Those are things that we ought to be able to enjoy.

SUSAN DENTZER: You obviously have thought a lot about this problem. What insight do you have as to why health care is so woefully behind in its use of information technology?

SECRETARY LEVITT: I would point to two things. The first is that health care as a sector is highly dispersed. There’s no such thing, for example, as a national health care market like there is banking or airlines or anything else. It tends to be a large series of regional health care markets. That’s one important thing.

Second, there are still lots of small practitioners as opposed to having a series of large providers.

And third is we’ve got a fundamental mismatch in the way we finance electronic medical records. The people that are required to make the expenditure or the investment, the doctors and the hospitals, are not the ones who always reap the benefit. So they’ve been somewhat slow to do that.

There’s also been an important lack of standards. If you compare them to railroads, for example, as I often do, if you’re going to have a national railroad, all the rail gauges need to line up. We’ve had many different people who have been developing health care systems that are electronic, but they’ve been using different standards so the computers couldn’t talk to each other.

That’s where we had to start, was making certain that health care electronic medical records systems could talk to each other.

A national information network

SUSAN DENTZER: President Bush in 2004 called for a national health information network, in effect, by 2014. Tell me how we're going on the way to reaching that target.

SECRETARY LEAVITT: We've actually made a lot of progress, particularly starting with standards, to define how electronic medical records need to be structured so that I can get records from my pharmacy, and from my doctor, and from my hospital and have them all gathered in a place where they can do me some good; to be able to have one doctor be able to import information with permission of the patient. We're obviously working through the privacy issues to make certain that we're doing that well.

It's important to point out that while health care is, I think, behind what we could and should be in the use of technology, we're not a lot unlike other countries. This is a much more decentralized industry, and other nations have struggled with this as well.

But there's a big momentum right now, and I think people can see the value of it, not just in terms of keeping records, but in being able to create quality, being able to assure that we are using the best treatment, at the right time, for the right patient. Technology can help us do that.

The President set a national goal to have the majority of Americans have access to an electronic medical record by 2014. So we've gone to work, and the first thing we have done is defined the standard so that medical records can talk to each other.

One thing we know is that in order for consumers to use this, it has to be convenient for them. They can't be required to populate their own health record on their own. It needs to happen automatically. The data need to be able to be transferred according to the privacy of requirements that we all put on the system. It needs also to be able to have economics that work so that the doctors can afford them. It becomes part of the macro-economic structure of the health care system.

SUSAN DENTZER: You announced on behalf of the government several years ago that the community, if you will -- and you actually had gathered them together as the American Health Information Community -- the community had several years to get to a common understanding on standards, on interoperability, or else the government would decide it for them. A lot of people think the deadline has passed. What do you think? Where are we?

SECRETARY LEAVITT: We've actually again made substantial progress. Two years ago, for example, there were no standards that had been uniformly accepted across the industry. Today we have a certifying process where those who produce health records are able to get a stamp of approval, if you will.

Our system is compatible and interoperable. Now more than 75 percent of all of the systems being sold in this country have that stamp of approval and are on a pathway for interoperability.

SUSAN DENTZER: So on a scale of zero to ten, ten we're completely interoperable, all the new systems being installed will be able to speak to each other and use a common set of standards -- where would you say we are?

SECRETARY LEAVITT: There are two parts to that equation. The first would be how compatible are they. If compatibility was this big, [holds hands wide] we're probably about right here [hands move half way]. Next year we'll be here, and probably within three to four years the systems will begin to have a lot of interoperability, is the word that's used.

The second question then becomes how many physicians actually have adopted them, and the news isn't quite as good there. However, we're working right now to find ways to change the macro-economics of the medical system so that doctors who make an investment can also expect to get a return on that investment, and consumers can also share in it.

This is one of those big system changes that will take some time, and the economics are going to have to adjust.

SUSAN DENTZER: What do we know about how many hospitals in the country now as well as how many physicians are using electronic health records?

SECRETARY LEAVITT:Most large hospitals will have an electronic medical record. Most medium or small hospitals will be moving into that space. The same is true for physicians. However, most of the health care in this country is provided by small or medium-sized practices, and they have not yet adopted the electronic medical records to the degree they need to.

For that reason, this month we have initiated a pilot where we are choosing 1200 small-medium sized practices, and we're going to go through a period of time to have them help us learn how to do that. The first year we're going to pay them more if they have an electronic medical record that's compatible. The second year we'll pay them more if they will actually report quality measures that consumers can then make judgments from.

And the third, fourth, and fifth year we're going to reward them if they actually use that information to increase the quality of the care to their patients.

So this is a big breakthrough not just in dealing with medicines electronically, but beginning to measure value, cost and quality where a consumer can say 'how good is this health care by comparison to health care I might get somewhere else, and which provides me with the best bang for my buck?', if you will.

That begins to change the nature of health care, and when consumers get involved they tend to drive the quality up and the cost down because to compete in the marketplace physicians have to meet that standard.

SUSAN DENTZER: And when you said we're going to pay them more, you mean through Medicare, the Medicare reimbursements will be higher.

SECRETARY LEAVITT: Yes. We're going to have Medicare pay them more. We've also invited other large insurers, who have an incentive to do this, to do something in parallel with us. They'll have to do their own program -- they can't just copy ours. But we've been very clear on what we are doing, and they have been quite aggressive in being able to say they will.

So I think we'll go through a period where small and medium size doctors will begin to adopt it. I had a very important conversation, to me, about two years ago. I was at a medical university, and I talked to a young pathologist. He said, "I heard your talk on Health IT and I believe what you. I'm off to Tennessee. I'm going to set up a pathology practice, and I just have one question for you -- which system should I buy, because I can only afford to do this one time."

Well, this was before we had established these standards where physicians were somewhat reluctant to buy because they wanted their system to be able to communicate with the rest of the system. So having these standards then allows the data to flow in a way that other systems can understand. It will allow information to flow from the pharmacy, or a lab, or a clinic, or a hospital to a person's personal health record, or to another provider, are now beginning to develop, and we're seeing adoption pick up as a result.

Possible roadblocks, remedies

SUSAN DENTZER: The administration acted to remove one potential roadblock to dissemination of these systems just last year, I believe it was, with respect to the Stark legislation and regulations. And so hospitals now are freer to actually give away this technology to physicians without being accused of violating anti-kickback or fraud and abuse statutes. But many people still think a legislative remedy is necessary to clear that up and really push that process along.

SECRETARY LEAVITT: The Congress had enacted statutes against anti-competitive practices where hospitals might be giving things of value to somehow monopolize a doctors patient flow. It became a barrier when the hospital couldn't provide information technology to the doctors who practiced there that would streamline that process. Congress gave HHS the ability to write an exception to that, which we have now done.

There are those who believe we need to have a statute. We're moving forward with, I think, a substantial amount of progress right now. When Congress acts and decides they want to do that, that will be understandable. But we are making substantial progress without it and physicians are receiving that kind of cooperative donation or investment by hospitals.

SUSAN DENTZER: You referenced other nations that have also made substantial investments in HIT, and many of them have done it under the aegis of their national health system, and by comparison, the best estimates of what the federal expenditures have been on HIT peg them at around $2 billion, $2.5 billion whereas we have countries like the UK that have invested $20 billion in HIT throughout their systems.

So that leads many people to say that if this is as important an objective as you and others deem it is, why isn't the federal government financing a lot more of the cost of this?

SECRETARY LEAVITT: I'm not deeply acquainted with the British system. I have heard that they're having a very difficult time being able to bring it up. This is a hard thing to do. I look at the Internet as an example.

In 1994-95 we had said that the Internet is something that every business will need to have, and therefore the government ought to step up and make certain that every home and every office and every business and so forth has the internet. Frankly, we'd still be in 1996 or '97 in terms of being able to give the Internet ubiquitously spread throughout the country.

The economics of health care need to change in a way that will allow electronic medical records and help IT to be built into the rates, and also built into the benefits.

Now that transition is occurring, but it isn't happening overnight, nor will it. We still have a large number of people who have not begun.

But this isn't just about expanse. It's about physicians changing the nature of their practice and changing their habits. This kind of thing is rarely held up by the technology. It's almost always sort of stalled by the sociology of this type of thing. We're having to train medical workers, for example, to use this. Even if we had health care systems that were electronic in every hospital or in every clinic, we have an entire generation of people who need to learn how to use them.

So this won't happen overnight, but it's clearly happening at a faster and faster pace, and I think we'll meet the President's goal of 2014 having every American access to an electronic medical record.

Many have them today, but there will be a sociologic change that is required for this to work.

SUSAN DENTZER: What will be the source of operating funding, though, over the long haul for regional health information exchanges, or any of the other entities that are coming about not only to have this information, but to actually make it useful in terms of being able to exchange it with public health authorities or others?

SECRETARY LEAVITT: That's part of the macro-economic shift I talked about, and we currently have four separate models that we're trying out to see which of those could best facilitate this broad exchange of data. It's one thing to have your hospital have the data, but if they can't connect that up with something that happened at your pharmacy, and if your laboratory had a specialist's office and someone that might have treated you in a different town, then we don't have this electronic system that we aspire to have.

So having a means of being able to vote facilitate technically, and then adjust the macro-economics so that they can get paid for. It's something we're experimenting with and making some progress, but there's no automatic single best way to do it. We're having to learn as we go. We're pioneering here. We're having to invent new solutions to problems we haven't dealt with before.

SUSAN DENTZER: As you know, some of the presidential candidates running this year have proposed greatly increased federal expenditures just on this question, particularly that injects some more funding into these operations of these networks. What's your response to those proposals?

SECRETARY LEAVITT: Investment in Health IT is always something I think will begin to speed it up. But if it's about simply saying let's have the government decide it all and pay for it all, frankly it will not make the right decisions. The market needs to learn from this. It needs to be a self-generating process that we use government to speed up.

A good example is what we've done on standards. We were able to bring the health information community together and say to them we're going to develop standards, and we're going to adopt them. But if we do it ourselves, we'll probably adopt the wrong ones, so we want you to help us do it. And we've developed through collaboration these standards, and now the industry is responding and they're developing their Health IT systems according to those standards.

Medicare and Medicaid and SCHP can be very important players by using our buying power, if you will, to drive that market. We have reached out to all the largest employers in the country. A hundred of the top 200 have committed to use the same standards. They're making requirements of having electronic medical records part of the negotiations they have with their health plans and with their doctors and hospitals that they pay.

This kind of momentum will ultimately move this forward, and I think not only will we have the finest system in the world, but I think we'll have this system as soon as, or sooner than anyone else in the world in terms of the major industrial powers.

Medicare and Medicaid role

SUSAN DENTZER: You mentioned the demonstration projects with respect to physicians. There's some who would argue that the government could do even more at this point to leverage this by virtue of tying more of the payments under Medicare and Medicaid to these investments.

SECRETARY LEAVITT: Well, I'm one of those actually. I'm of the view that we have advanced enough now, that it's time for us to begin linking adoption of health information technology to payments that we make through the Medicare system or through other means. For example, e-prescribing.

We know the benefits of e-prescribing. We know there's a consumer benefit in being able to have your doctor write a prescription you can read, and have it filled before you leave the parking lot to go to the drug store. We know that there's safety, and that lives would be saved.

So it's now time for us to say to the medical family, if you want to be reimbursed at the highest level, you need to have e-prescribing as part of your practice. That will motivate more people to do it. I'm of the view that we should start doing that with our Medicare reimbursements with doctors as well. And we'll have to phase into it. We don't want to do anything in a way that would be disruptive to the system we have, and that could happen in Health IT. But it is time to take that step, in my view.

SUSAN DENTZER: When would be the earliest point at which we would expect that to be in place?

SECRETARY LEAVITT: The physician reimbursement rate law was passed in December, but only for six months. They put it off, essentially, until June of this year, and I think we'll have that debate in June. And I'm hopeful that Congress will take an important step, which is to say to the medical family, this is good for health. This is good for our economy. It's good for the practice of medicine, and therefore, if you're going to have the full benefit of the payments that we give you, then we need you to be moving aggressively to adopt health information technology. And we owe it to physicians and to hospitals to recognize that that is going to take some transition. We owe it to them to recognize that the economics of this are going to have to change, and that we need to build into our rates what it's going to require to do it.

But we ought not to do this if it's only about expense. There ought to be a substantial savings here, too. So we all need to share in the cost, and we all need to share in the savings, and that's what we're trying to learn through these pilots that we're using, or these demonstration projects.

We'll be in 1200 small and medium-size practices in 12 areas around the country. As I mentioned, the first year we'll be paying people more to adopt the system. The second year we'll pay them more if they report basic quality measures, and the third and fourth and fifth year we'll pay them more if they can demonstrate that they're enhancing the quality of medicine. We know if they do there's savings. And so we're sharing the savings, if you will, with the physicians. This is, again, part of the learning process we have to go through to move into a remarkably new space in medicine as well as in the medical business.

We very clearly believe that if physicians are to be reimbursed at the highest possible rate, that it's time for them to begin adopting health information technology, because it drives quality. It reduces medical expenses. It's more convenient for everyone.

The economics are clearly there, and so we believe it's time. And we made proposals in December, and we'll renew those proposals as we move closer to June.

Frankly, I didn't see a lot of opposition in Congress to that idea. It was not acted upon in December I think primarily because they were looking for something quite clean to extend until June when they could have this broader discussion. But it's time, and I think it would drive the adoption of records in a way that they have not been before.

SUSAN DENTZER: As you know, we used in our story the case study of this community in Minnesota -- Winona, and it's obviously not unique. There are other communities that have tried to do this -- there's the Indiana Exchange and so forth. But in terms of being a kind of a small prototypical community that did this, they do look as if there are not too many that have followed that example. When I have recounted this example to you, what does it tell you about the future of HIT in America? Are we going to have to see one community after another roll this out and see some successes, or is a fire going to take off and more will be doing this in years to come?

SECRETARY LEAVITT: It's important to recognize the makeup of the medical market. It isn't one national market. It's a large number of regional health markets. And we will begin to see the measurement of quality and measurement of cost, which go hand in hand with electronic medical records, have them on a regional basis. In fact, right now I'm in the early stages of going to 40 different communities where we're inviting them to become part of one of our pilots, where they would get paid more for being able to move forward with Health IT, and also to use it to measure the quality of care and the cost of care, so that as consumers will have a basis for making judgments.

So it will likely happen one community at a time, but it will begin to spread rapidly. It's my view that within the next two years we'll begin to see these systems mature to where patients can get their records electronically. I think we'll begin to see the information used to provide cost comparisons and quality comparisons, making real consumers out of those of us who consume health care, which is all of us.

Cost savings, privacy concerns

SUSAN DENTZER: There have been a varying number of estimates about what could result from widespread use of HIT, and one estimate pegged the possible savings at close to $80 billion dollars a year net of other operating costs and net of technology costs, installation costs. Has HHS done any kind of comparable estimates, and if so or if not, what do you think the potential savings could be to the health care system?

SECRETARY LEAVITT: I've read those studies, and I'm optimistic that there are substantial savings not just in terms of the ongoing operation of medicine, but also in the quality of care that people can see. Health information technology will not only increase the quality and diminish the cost, I think it will also avoid medical mistakes, tragic circumstances that are unnecessary in people's lives, and I think it will also reduce the hassle factor a lot.

I look forward to the day when I can communicate with my doctor on email. I look forward to the day when I can make an appointment with my doctor in the same way I can make a reservation to go to a restaurant or a seat on an airline.

I look forward to the day when I get my pharmacy prescription filled that it populates my record, and I don't have to try to remember what medications I might be on, or what my medical history might be.

All of those are logical things that consumers should be able to expect, and we're not far from being at that point. It won't happen overnight, but it will happen.

SUSAN DENTZER: One more question about privacy -- as part of this process of reaching standards, it has been agreed that regional exchanges or users of this information will agree on a common privacy standard, but it basically, as I understand it, means that a given community can elect a privacy standard, opt in or opt out, and that will be standard within the community. There doesn't appear to be a national privacy standard at this point, and many people say that whereas HIPAA [the Health Insurance Portability and Accountability Act] on the federal privacy laws at baseline it perhaps does not provide the maximal degree of privacy protection that Americans might want. So do you think there is the need for a broader federal privacy statute or set of privacy regulations that would be constant throughout the country, ubiquitous throughout the country, as opposed to having it essentially be decided community by community?

SECRETARY LEAVITT: Well, the point you make is a good one. When HIPAA, which is the privacy law, passed, they gave states the ability to enact statutes of their own that were more stringent. So in a way we have a basic standard, which is HIPAA. But different states -- 34 of them, I might add, have added more stringent laws to their books.

And so one of the difficulties of being able to put together a national system is coordinating all of the different ways in which people's values have begun to play out.

The way we're dealing with that right now is to build privacy into every one of the standards that we are developing for systems. This is an issue that undoubtedly will be talked about for a long time, and I believe that there is a need for us to begin focusing on these policies, but we ought not to hold up our technological progress until we get that done. We need to do them both at the same time, and it's unfolding.

We're going through this in every aspect of our life - with our banking records, with our school records or other kinds of records that are personal and private to us. It isn't just health. We're all wrestling with this, and we're going to get better at it as we go.

SUSAN DENTZER: Isn't it true, though, that in essence one would not have true nationwide interoperability if there are going to be different privacy standards in one part of the country versus another part of the country?

SECRETARY LEAVITT: Yes, but there are undoubtedly lots of things like that now, whether there's[not uniformity throughout the country. [On the other hand, people will want to make certain that they have control over who sees their records,] that they go to this person but not this person, or I'd like this part of one part of my record to be accessible to my doctor, but I don't want them to be able to see another part of my record. I should be in control of them, I should be able to define my standard of privacy, and there should be some basic guidelines that undergird all of them.

SUSAN DENTZER: And when will we get to those new understandings or guidelines or laws?

SECRETARY LEAVITT: I don't know the answer to that. There's constant conversation about it. It's a matter that I am personally giving a lot of reflection to right now as Secretary of Health and Human Services. I've done some thinking and writing about it, but I'm not at the point of being able to say this is the point at which we'll have an omnibus privacy and health act. My guess is that will be a little time in coming.

There may be times when HHS and other important regulatory authorities may use rule-making authority to define certain parts of it. There may be ways in which the legislatures come together to devise uniform laws. There may be times that Congress will act on a piece of it. But I would be surprised, given the complexity of this, if we saw the omnibus medical privacy law that would define all of the answers.

We're still discovering some of the questions. So being able to respond to all of them will take time, and perhaps as much as a generation, to be able to figure out.