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December 4, 2007
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Christopher Fleming

HHS Secretary Leavitt: It’s Time For The Federal Government To Use Its Buying Power To Promote Health IT Interoperability

 In Health Affairs interview with Leonard Schaeffer, Leavitt also discusses pay-for-performance, the future of the health care sector, and his views on leadership

Bethesda, MD -- With key technical standards now in place, the time has arrived for the federal government to start using its buying power to promote the adoption of health information technology (IT), Health and Human Services Secretary Michael O. Leavitt states in a Health Affairs Web Exclusive interview published today. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.1.w52

In an October 4 conversation with Leonard Schaeffer, founding chairman and CEO, WellPoint Inc., and former administrator of HCFA (now the Centers for Medicare and Medicaid Services), Leavitt says that the Bush administration opted for setting standards through “a hard, collaborative process” using the American Health Information Community, a federal advisory panel with both public and private representation.

But once interoperability standards are developed, “the second job is to get adoption,” Leavitt says. “At some point in time, the federal government needs to say, ‘If you’re going to do business with us, you will adopt a system of your choice that will allow these standards to be met’.”

In response to Schaeffer’s questioning, Leavitt adds, “I’m saying that it’s time. I’m saying that we have in place the levels of standards and a process for its continued maturation. But you will now begin to see efforts made to connect payment policies to adoption.”

Schaeffer responds, “Well, that’s terrific, because that’s what’s going to drive adoption. Nothing else.” Leavitt cautions, however, “We can’t just go out and by fiat say, ‘By January 1, 2010, everyone must have . . . ,’ because we’re talking about a huge sociological change. Not just in systems, but in the way clinicians practice and the way people are accustomed to dealing with each other -- interfacing.”

About three weeks after this interview was conducted, HHS announced its first Medicare demonstration project using bonuses that are tied to adoption of electronic health records (EHRs). Under the demonstration, the small and medium-size physician practices that participate in the demonstration will be awarded bonuses that will correlate with the degree to which the practices use specific EHR functions to improve quality in their delivery of care.

Leavitt says that like movement toward fully interoperative health IT, progress toward more value-driven competition through pay-for-performance techniques will be incremental: “We are not very good at the basics we need to do this. But we’re getting better.” He points out that health IT adoption and value-driven competition “are interdependent. Without health IT, you cannot create the data to provide actionable decision support for physicians. On the other hand, you’ve got to have the savings that come from the quality in order to make the health IT business model work for a physician. So these have to happen together.”

Management And Leadership

Schaeffer asks Leavitt about the difference between managers -- who “set goals with quantifiable targets” and “tell people what to do to achieve those goals” -- and leaders -- who “inspire others to take action to achieve their vision of the future.” Leavitt observes, “When I became governor, I had to learn that my job was to be ‘the leader’ and to organize managers in a way that led to my goal. Now I’m obviously dealing in a much larger setting. But the skills I learned as governor were pivotal in preparing me for my current role.”

One tool Leavitt has brought from his governorship to HHS is the use of short- and long-term planning horizons. As governor, he had 1,000-day and 10,000-day horizons; at HHS, where he anticipates a shorter tenure, the horizons are 500 days and 5,000 days. “The 5,000 days -- that’s the leadership horizon. That’s where I have articulated my vision. The 500-day plan -- those are the things we do in the next 500 days to enable that vision to come about,” he explains.

The Future Of American Health Care

Leavitt sees only two possible futures for America’s health care system. One option is the decentralized push to a more value-driven system that Leavitt favors. The other option, having “the government own and operate the health care system . . . would be a disastrous failure and is the kind of thing that could ruin the country. I don’t mean that as an overstatement,” he says.

The secretary frames his role in steering the health care system toward the first option as a protracted leadership task: “These things take time. They have to be done in some order. And leading is not just deciding where you need to go. It’s persuading people that it’s the right thing to do and organizing it in a way that matches their own incentives and their own best interests.”



Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.


©2007 Project HOPE–The People-to-People Health Foundation, Inc.