Thank you, Mr. Chairman and members of the committee. I am pleased to be with you today to discuss Ford Motor Company’s interest in the standardization of personal medical record information. I am Gary Radtke, the manager of information systems within Ford’s Division of Healthcare Management. The topic we are discussing today is of particular importance to Ford Motor Company and me, as I am overseeing the implementation of Ford Quality Medical Management, QM2—a computerized patient medical record system within Ford’s medical facilities. I am also overseeing the construction of the Ford Healthcare Data Warehouse, a future repository for all Ford employee health care claims. Both of these projects testify to the need and value of standardized patient medical information.
Before I begin to discuss today’s topic, I must emphasize the importance of a topic not being discussed today, the assured privacy, security and confidentiality of personal medical information, whether in paper or computerized form. As we discuss the vast opportunities for improving health care services and the health status of individuals that arise from computerized medical information, our highest priority must always be to protect the confidentiality of personal medical information and to assure that it is only used for appropriate purposes. So while I may not mention the importance of security, privacy and confidentiality of personal medical information throughout this testimony, I know that its importance is completely intertwined with all of our activities in this area.
Employers in particular are often used as an example of actors who have more of an interest in misusing information, rather than using it for the benefit of their employees. Ford Motor Company is dedicated to using this information only for improving the health of our workers, retirees and their families, and in improving our employees' working environment. In many instances, Ford has demonstrated in the manufacturing environment that while improving quality may increase costs in the short-term, it can reduce total costs over time. For this reason, Ford can and will improve the quality of health care provided to our employees while reducing total costs over time.
When Henry Ford made the first Model A in 1903, he employed about ten people in a converted Detroit wagon shop. Today, Ford Motor Company is ranked second on the Fortune 500 list of the largest U.S. industrial corporations. Ford's primary goal is to build the best performing, safest, and most environmentally-friendly cars and trucks in the world. Ford’s most important asset, and the key to achieving its goal, is its employees.
Ford has a tremendous responsibility and vested interest in protecting and improving the health of its employees. Our approach to achieve these goals is multi-pronged: through safe working environments; ergonomically designed work processes; access to high quality health care services through one of the most generous health care benefit programs in the U.S.; on-site medical clinics; and targeted initiatives aimed at improving the care chosen by and delivered to our employees, retirees and their dependents.
Ford provides health insurance coverage for nearly 640,000 U.S. employees, retirees and dependents. Ford's health care costs in the U.S. total nearly $2 billion per year, which is more than is spent on steel in most years. But Ford’s role is not just as a payer, it is also a provider and health services researcher. Standardization of personal medical record information would add value to all of these roles.
As I just mentioned, Ford is not just a payer of health services, it is a provider. Ford operates over 150 on-site medical clinics in 29 countries. There are over 100 full-time physicians, 150 full-time nurses and 50 part-time nurses caring exclusively for Ford patients at their work site. These clinical personnel handle most medical needs for employees that arise during work hours. Services can be related to occupational health, such as treatment for on-site injuries and monitoring exposure to hazardous materials, or personal health, such as vaccinations or non-work related illnesses.
Each of these clinics maintains medical records for all employees for state-mandated medical documentation purposes as well as to fulfill OSHA and other agencies' requirements for recording occupational injuries and illnesses. In the U.S., we developed and have been using a computerized medical record system for all locations since 1993. This past year we began to implement an improved computerized medical record system, known as the Ford Medical Management System or Ford QM2, for all of Ford’s company medical facilities—both U.S. and non-U.S. locations. It will contain an online medical record and provide reports to meet each country’s regulatory requirements and provide data to safety engineers so that processes that have the potential to cause injury to our employees can be identified and modified to reduce the health risks.
The value of standardization of this system is two-fold: economies of scale can best be realized when doing business one way, and Ford needs to have uniform data sources from around the globe to obtain consistent measurements to direct our efforts to improve the quality of care provided and the health of our employees.
While Ford’s interest in managing and monitoring employee health care during work hours may be obvious, we have an equal, if not larger, interest in helping our employees stay healthy off-site as well. At Ford, three percent of workers are off on medical absences on any given day. This number represents not only a cost to Ford, but a reduction in quality of life for affected employees and their families.
Furthermore, Ford’s ability to maintain its generous level of benefits to its employees, retirees and their dependents depends largely upon its ability to keep these benefits affordable for the Company. As a self-insured plan, Ford is entirely at risk for these costs for most enrollees. Even where our employees are enrolled in capitated HMO's, the costs are eventually passed back to Ford. While there are many potential strategies for addressing cost issues, we in Ford Healthcare Management believe one of the most effective is to improve quality of care and the health of our employees.
To that end, we are undertaking some exciting new initiatives for improving the quality of health care delivered to our employees, retirees and their dependents. First, we are in the process of building the Ford Healthcare Data Warehouse. This Warehouse will be the recipient of health care information from all internal and external sources that create or collect medical information on Ford employees, retirees and dependents. There will be approximately 270 separate feeds into the Warehouse, resulting in an accumulation of 12 million claims per year. Most of this information will be claims information from our carriers and medical plans, but it will also contain medical records from Ford's in-house occupational medical centers, demographic information on the Ford population, Worker's Compensation and Ford's Short-Term Disability program information.
The Ford Healthcare Data Warehouse will be the key to many of our future initiatives. In order to take advantage of this valuable resource, Ford created the Healthcare Quality Consortium. This Quality Consortium is a partnership between Ford and its key clinical and health services research partners. It will capitalize on the opportunities for population-based analyses provided by using the Data Warehouse. The objective of the research is not simply theoretical, but as a first step towards potential targeted healthcare interventions, educational programs, and other means of favorably impacting employee health.
By providing health care coverage to over 640,000 people, Ford has a covered population that is larger than that of several states, including Alaska, North Dakota, Vermont, and Wyoming, and the District of Columbia. The size and stability of this population offers us the opportunity to utilize aggregate information to evaluate the effectiveness of long-term treatment efforts. With enrollment turnover rates at most insurance plans of 35 percent a year, these critical studies are simply not possible at most healthcare organizations, insurance plans or medical centers. With compatible standardized data (mostly claims at this point, but linked across company and personal health services) for all of our health providers, the Quality Consortium represents a unique opportunity to improve delivery of services to our employees, retirees and dependents. These same lessons could be translated to other U.S. population segments, if standardized medical record data is available for those segments.
As a starting point, I would like to suggest how my comments fit in with your Congressional mandate to assist and advise the Secretary and to “study the issues related to the adoption of uniform data standards for patient medical record information and the electronic exchange of such information.” With the passage of HIPAA, Congress clearly indicated it believes in the power of electronic health information to improve the health care system and generate savings, administrative and quality-based. I believe it delayed mandating standards for computerized medical information because the issues involving medical records are quite complex and, as yet, have not been used or addressed to a broad extent in the industry, as opposed to computerized claims administration. Not only are privacy and confidentiality issues of the utmost importance, but the cost of mandating standards may be enormous, for business and government alike. Consequently, I believe Congress is looking for advice on how to use its mandate for standardization most-cost effectively, that is, to use its power (possibly mandates) in those areas that will truly be useful and create value for the health care system. I hope that my testimony today not only assures you that there is value in mandated standards, but that it is not necessary for all health care information to be standardized.
Standards are relatively easy to develop. In fact, standards are so easy to develop that the industry is faced with a proliferation of non-integrated standards. Uniform standards are more difficult to implement. The health care industry has embraced uniform standards, especially when financial incentives were strongly in place. Billing and claim format standards are two examples. Since proprietary billing and claims standards do not provide individual vendors or companies with a competitive advantage, and since they all need to be paid, the industry has been more supportive of standards in these areas.
However, since there appears to be significant variation in how care is delivered by hospitals, providers and clinics, the corresponding medical records are implemented with a large variation in elements captured and datatypes utilized. In manufacturing, large and unpredictable variation is one of the primary causes of poor quality and improper cost. Likewise, the large variation in medical records formats causes poor quality and high cost when trying to integrate data from many sources. If we can improve quality by reducing variation and lower inappropriate costs by standardizing data formats, we can decrease the costs of doing business, and thus make a contribution to the competitive position of American industry.
The vendor market for electronic medical records is relatively immature, so there has not been sufficient time for a clear de facto “winner” to emerge. Vendors in this market have created medical records standards within their software as a competitive advantage. Hospitals and others who have created in-house standards would have significant re-work in integrating a new medical record, even if it was substantially better than the standard they currently use. So, the incentives for collaboration among medical record vendors, and with providers, have been weak.
Due to the current weak incentive structure for collaboration, the private sector will continue to proliferate standards. Unless current conditions change, it will take ten to twenty years for one set of standards to emerge.
I believe the government's role is to help facilitate a more rapid and orderly transition to a uniform standard. Faced with a similar situation in the area of claims standards, the government developed a set of standards that eliminated the need for local and regional standards. At that point, it became much easier to get the industry to agree on how to transmit that data electronically, and not worry about the specific formats that were required.
Similarly, if the government can provide the impetus for moving to a uniform medical record standard quickly, more attention will be paid to how to develop efficient electronic transmission methods, and less time, money and energy will be spent on integrating new medical record standards into old systems.
We have some concerns that the government will mandate an inflexible standard. Business conditions are changing more rapidly than ever. Technology has been advancing and will continue to advance at a high pace. The standards adopted must be designed within this framework of rapid business and technology change.
Rather than specify a single existing conventional standard, Ford suggests that the government develop a standard that is more generic and extensible than those currently in use. The generic approach is highly flexible in adapting to the changing information needs for health care organizations. Given the changes occurring in information systems technology, a generic and robust system will provide many years of low cost service while providing the capability for low cost expansion.
Instead of multiple standards, a more inclusive approach to standards should be adopted. Standards for medical records should focus on both data storage (the medical record itself) and data transmission. These do not have be developed simultaneously, but the time lag between the development of these components should be relatively short.
The importance of both features can be understood with the following example. In Southeastern Michigan, a coalition called the Michigan Health Management Information Systems, MHMIS, a division of the Greater Detroit Area Health Council (GDAHC), has been facilitating the use of ANSI standards for enrollment and eligibility. This group has done an excellent job in getting providers, carriers and employers together to implement standards. The problem is, that due to all of the different proprietary systems that are in use, the implementation guides require customization. Other coalitions and consortiums throughout the country are involved in similar efforts. Eventually, there will be multiple regional standards, and we may be no closer to a uniform standard.
If medical records standards are established, coalitions will spring up to support the development for electronic transmission standards so that this data can be exchanged when appropriate. The industry will then be faced with the problem of multiple transmission standards, with all of the integration and issues of inertia that follow.
Furthermore, by itself, automating these records is not enough. Medical records do contain some key, clinical information elements, but in the present system, there are other sources of information – financial information on claims (HCFA 1500, UB92), and APACHE key elements for ICU patients, for example—that are also important. Any new standards that are developed will ultimately be most useful when used within an integrated framework of key elements: cost and use data, key physiological data, demographic data, and patient-submitted data where applicable (e.g., health status assessments, functional status assessments).
In general, Ford agrees that these four areas are important.
We must reiterate the need for two other items. While confidentiality and security of information are not a focus for this testimony, these concepts are integrally linked with medical records standards and medical records standards must contemplate and accommodate any rule changes that may be put into place. Also, if uniform transmission standards are not implemented, then a variety of integration issues will arise needlessly.
Ford encourages the development of uniform standards. We support the efforts of MHMIS and other coalitions in their efforts to reduce administrative cost in the health care industry, but the private sector is looking to the government to take the lead in facilitating the development and use of uniform national standards for patient medical records. Ford is committed to supporting and assisting the government in designing and developing standards for patient medical records.
One only has to look at the Internet to observe what a good standard can do. The Department of Defense many years ago adopted a standard protocol for electronic communications known as TCP/IP. Through the early nineties, many independent networking standards existed, much like health care standards, as every manufacturer had their own standard. Many years of high cost and incompatible software existed before a single standard, the Internet, replaced the cluttered set of independent protocols with a single protocol. All companies not using TCP/IP had to go through very expensive rework to begin using the new standard. Had TCP/IP been adopted as a standard sooner, the rework cost would have been avoided. By developing health care standards now, the industry will be positioned to move quicker in areas of integrating and transmitting medical record data. There will also be lower cost for rework.
A flexible, generic medical record standard that includes both the data structure, and the means of transmitting information electronically, will result in lower administrative cost. Hospitals, providers and clinics can spend an increasing share of their resources on improving the quality of the health care services they provide, and less on developing proprietary data models that result in integration and compatibility issues.