Mr. Chairman, Members of the Subcommittee: thank you for the opportunity to offer a statement regarding the identification and adoption of uniform health care information data standards.
I am William F. Decker, a Senior Health Care Policy Analyst with the American Association of Retired Persons. One of my policy specialty areas includes those issues involved with the promotion of administrative efficiencies in the health care system. I am also the Chair-Elect of the Board of Directors of the Workgroup for Electronic Data Interchange (WEDI). As you know, WEDI is presently working with the Secretary and with the National Committee on Vital and Health Statistics as we all respond to the mandate to identify, agree to, and adopt health care information data standards.
I lead with this disclaimer: my remarks this morning does not necessarily represent the official business or policy positions of AARP. This is the panel on health plans after all, and while AARP has been characterized as being many things, a health plan is not one of them.
But I, and the organizations I represent, have an interest in furthering the development of a smoothly functioning health care delivery system: in which practitioners are hardly aware of the functioning of the system's administrative backbone, the costs of operating that backbone are maintained at their lowest optimal levels, and a large part of one of the benefits of an efficient, cost effective administrative system -- widely accessible, high quality health care services -- accrues to patients.
You pose a series of questions as a framework for our remarks. I'll attempt to respond to all of them.
First, what are the expectations for the results of standards requirements? I don't think you will find any widespread disagreement that our goal here is both necessary and desired. If financial and administrative transactions in the health care system are made smoothly, easily and at the lowest possible costs to those involved, everybody who is involved will be satisfied, and patients/consumers -- as well as the system's trading partners -- will benefit.
Might there be problems? At the risk of very likely repeating the testimony of others, let me mention a few that concern me.
Costs: no entity, whether a purchaser of care or a provider of care, will be happy if they have to spend any money as a result of these mandates. At least any serious money, and the definition of serious will depend on a lot of factors that we here in Washington will be accused of either not knowing or simply ignoring. But the fact is, these mandates will be costly for most players. Retail pharmacists, for example, are quite satisfied with their dedicated pharmacy administrative standards. Migrating to mandated ANSI standards as replacements (just for example) will be technically do-able, but this particular part of the industry wants to know why they need to switch, if what they have works. And -- more importantly -- they want to know why they should adopt different standards if they don't know how much the switch will cost, and they don't know who is going to cover the costs that will be involved. I suggest that the entity that is finally responsible for identifying the sets of standards that must be used acknowledge, at least, that during the transition to new standards new spending is going to be required. It may be useful to try to identify for plans, and other trading partners, where some of the money to pay for the migration to new standards might come from. Have subsidies for those that will be most adversely affected been considered?
Time: in many cases, it will take a fair amount of time for players to install and become comfortable with new, uniform standards. The HIPAA builds in a two year window for most plans and the entities they correspond with to accomplish the transition. I think this is enough -- but I'm not sure. At this point, the planning horizon for a lot of organizations seems to extend from roughly a year to perhaps 18 months. I think that an educational or reminder process will be necessary during the first year or so after the decided-upon standards have been published, to keep on the screens of some organizations the fact that the standards now have to be adopted and used. I'm not suggesting that such a responsibility belongs to HHS or the NCVHS. That task should fall to organizations like WEDI. I am suggesting that a training-educational component be built into the regulatory or legal framework that the HIPAA requires.
To end this section, while I know the HIPAA states that the paramount goal of the adoption of uniform standards is to reduce, or at least control administrative costs, I don't want us to lose sight of the fact that the reason the health care system exists is to help patients. A major benefit of increased administrative efficiencies should be the achievement of better health care outcomes.
Regarding your second question, any concerns I might have about how HHS is meeting the HIPAA's requirements were expressed, or at least alluded to, in my previous comments. More generally, at this point in the process the variety of ways that have been made available to us in which we can interact with you are very much appreciated.
Third, you ask about problems the trading partners might be having now. It is likely that you have already heard that most purchasers of services are ordinarily satisfied with present administrative transactions. Purchasers can require adequacy of providers in the technical details of these information exchanges in order to justify the resulting financial transaction, the undertaking that is, of course, the point of these business interactions. But an impression I get from a variety of trading partners is that while one-on-one transactions now work well (even though the need to engage in a large number of separate one-on-one transactions is often quite costly), there is some concern that when a migration to uniform transaction standards is complete, some types of data now requested and collected might no longer be available. For example, some insurers or plans may have products that require knowledge of particular non-standard information; if those data can no longer be obtained, such products could be (or become) unusable. How will ongoing special information needs be accommodated in the context of uniform national standards? Will the new standards permit the simultaneous carrying of non-standard data between a set of trading partners?
Finally, you ask about methods to best achieve optimal administrative simplification while continuing to meet the business needs of all the trading partners. I think the key is to get all the business entities that will be involved completely informed and educated about this process, particularly now that the process has started. From my work with WEDI I have a very strong sense that many in the business of health care haven't yet paid a great deal of attention to the implications of the HIPAA's administrative simplification section. At this point, a pervasive attitude seems to be that whatever happens is going to happen a long time from now, well beyond that 12 to 18 month planning horizon I mentioned earlier. But that sort of thinking will very likely lead to some presently unknown amount of disorder a little way down the road. We all know that. I really think that all of us who will be affected have to raise the noise level about the ongoing identification or development of acceptable uniform national health information data standards. The potential and anticipated implications of the HIPAA's requirements in the area of health care system administration need to penetrate more deeply into the institutional infrastructure of the delivery system's trading partners. I think that we all have a part of this responsibility.
Again, thank you for the opportunity to deliver these remarks. I'll be happy to address your questions.