Health Care Information Systems A Practical Approach for Health

Health Care Information Systems

Health Care Information Systems A Practical Approach for Health

Care Management

Fourth Edition

Karen A. Wager

Frances Wickham Lee

John P. Glaser

Cover design by Wiley

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Tables, Figures, and Exhibits …………………………………………………………………….. xi Preface …………………………………………………………………………………………………. xv Acknowledgments ……………………………………………………………………………….. xxiii The Authors ………………………………………………………………………………………… xxv

Part 1 Major Environmental Forces That Shape the National Health Information System Landscape ………………………………………………. 1

1 The National Health Information Technology Landscape …………………………………………………………… 3 Learning Objectives 1990s: The Call for HIT 2000–2010: The Arrival of HIT 2010–Present: Health Care Reform and the Growth of HIT Summary Key Terms Learning Activities References

2 Health Care Data …………………………………………………………………. 21 Learning Objectives Health Care Data and Information Defi ned Health Care Data and Information Sources Health Care Data Uses Health Care Data Quality Summary Key Terms Learning Activities References

3 Health Care Information Systems …………………………………………. 65 Learning Objectives Review of Key Terms Major Health Care Information Systems History and Evolution Electronic Health Records Personal Health Records Key Issues and Challenges


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Summary Key Terms Learning Activities References

4 Information Systems to Support Population Health Management ……………………………………………………………. 99 Learning Objectives PHM: Key to Success Accountable Care Core Processes Data, Analytics, and Health IT Capabilities and Tools Transitioning from the Record to the Plan Summary Key Terms Learning Activities References

Part 2 Selection, Implementation, Evaluation, and Management of Health Care Information Systems ………………………………………………………….. 139 5 System Acquisition …………………………………………………………….. 141

Learning Objectives System Acquisition: A Defi nition Systems Development Life Cycle System Acquisition Process Project Management Tools Things That Can Go Wrong Information Technology Architecture Summary Key Terms Learning Activities References

6 System Implementation and Support …………………………………. 179 Learning Objectives System Implementation Process Managing Change and the Organizational Aspects System Support and Evaluation Summary Key Terms Learning Activities References

7 Assessing and Achieving Value in Health Care Information Systems ………………………………………………………….. 215 Learning Objectives Definition of IT-Enabled Value

C O N T E N T S · vii

The IT Project Proposal Ensuring the Delivery of Value Analyses of the IT Value Challenge Summary Key Terms Learning Activities References

8 Organizing Information Technology Services ………………………. 251 Learning Objectives Information Technology Functions Organizing IT Staff Members and Services In-House versus Outsourced IT Evaluating IT Effectiveness Summary Key Terms Learning Activities References

Part 3 Laws, Regulations, and Standards That Affect Health Care Information Systems ………….. 285

9 Privacy and Security …………………………………………………………… 287 Learning Objectives Privacy, Confidentiality, and Security Defi ned Legal Protection of Health Information Threats to Health Care Information The Health Care Organization’s Security Program Beyond HIPAA: Cybersecurity for Today’s Wired Environment Summary Key Terms Learning Activities References

10 Performance Standards and Measures ………………………………… 323 Learning Objectives Licensure, Certification, and Accreditation Measuring the Quality of Care Federal Quality Improvement Initiatives Summary Key Terms Learning Activities References

11 Health Care Information System Standards ………………………… 357 Learning Objectives HCIS Standards Overview Standards Development Process

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Federal Initiatives Affecting Health Care IT Standards Other Organizations Influencing Health Care IT Standards Health IT Standards Vocabulary and Terminology Standards Data Exchange and Messaging Standards Health Record Content and Functional Standards Summary Key Terms Learning Activities References

Part 4 Senior-Level Management Issues Related to Health Care Information Systems Management ………………………………………………….. 393 12 IT Alignment and Strategic Planning ………………………………….. 395

Learning Objectives IT Planning Objectives Overview of Strategy The IT Assest A Normative Approach to Developing Alignment and IT Strategy IT Strategy and Alignment Challenges Summary Key Terms Learning Activities References

13 IT Governance and Management ……………………………………….. 427 Learning Objectives IT Governance IT Budget Management Role in Major IT Initiatives IT Effectiveness The Competitive Value of IT Summary Key Terms Learning Activities Notes References

14 Health IT Leadership Case Studies ………………………………………. 467 Case 1: Population Health Management in Action Case 2: Registries and Disease Management in the PCMH Case 3: Implementing a Capacity Management

Information System Case 4: Implementing a Telemedicine Solution Case 5: Selecting an EHR For Dermatology Practice Case 6: Watson’s Ambulatory EHR Transition

C O N T E N T S · ix

Case 7: Concerns and Workarounds with a Clinical Documentation System

Case 8: Conversion to an EHR Messaging System Case 9: Strategies for Implementing CPOE Case 10: Implementing a Syndromic Surveillance System Case 11: Planning an EHR Implementation Case 12: Replacing a Practice Management System Case 13: Implementing Tele-psychiatry in a Community Hospital

Emergency Department Case 14: Assessing the Value and Impact of CPOE Case 15: Assessing the Value of Health IT Investment Case 16: The Admitting System Crashes Case 17: Breaching The Security of an Internet Patient Portal Case 18: The Decision to Develop an IT Strategic Plan Case 19: Selection of a Patient Safety Strategy Case 20: Strategic IS Planning for the Hospital ED Case 21: Board Support for a Capital Project Supplemental Listing of Related Case Studies and Webinars

Appendixes A. Overview of the Health Care IT Industry …………………………….. 525

The Health Care IT Industry Sources of Industry Information Health Care IT Associations Summary Learning Activities References

B. Sample Project Charter, Sample Job Descriptions, and Sample User Satisfaction Survey ………………………………….. 539 Sample Project Charter Sample Job Descriptions Sample User Satisfaction Survey

Index ………………………………………………………………………………………………….. 559

Tables, Figures, and Exhibits


1.1 Stages of Meaningful Use ……………………………………………………….. 9 1.2 Differences between Medicare and Medicaid EHR

incentive programs ……………………………………………………………….. 11 1.3 MIPS performance categories…………………………………………………..13 2.1 Ten common hospital statistical measures ………………………………….47 2.2 Terms used in the literature to describe the fi ve common

dimensions of data quality ……………………………………………………..52 2.3 Excerpt from data dictionary used by AHRQ surgical site infection

risk stratifi cation/outcome detection …………………………………………56 3.1 Common types of administrative and clinical information systems ….68

3.2 Functions defining the use of EHRs ………………………………………….76 3.3 Sociotechnical dimensions ………………………………………………………92 4.1 Key attributes and broad results of current ACO models …………….. 106 5.1 Sample criteria for evaluation of RFP responses ……………………….. 161 7.1 Financial analysis of a patient accounting document

imaging system …………………………………………………………………..227 7.2 Requests for new information system projects ………………………….. 230 9.1 HIPAA violation categories …………………………………………………… 302 9.2 Top ten largest fines levied for HIPAA violations as of

August 2016 ………………………………………………………………………. 303 9.3 Resources for conducting a comprehensive risk analysis …………….. 309 9.4 Common examples of vulnerabilities and mitigation strategies …….. 310

10.1 2015 approved CMS accrediting organizations …………………………..329 10.2 Major types of quality measures …………………………………………….336 10.3 Excerpt of CQMs for 2014 EHR Incentive Programs ……………………338 10.4 MIPS performance categories…………………………………………………349 11.1 Relationships among standards-setting organizations …………………. 361 11.2 Excerpt from CVX (clinical vaccines administered) …………………….374 11.3 Excerpt from NCPDP data dictionary ……………………………………… 380 11.4 X12 TG2 work groups …………………………………………………………. 381 11.5 Excerpt from the HL7 EHR-S Functional Model …………………………386


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12.1 IT initiatives linked to organizational goals ………………………………397 12.2 Summary of the scope of outpatient care problems …………………… 402 12.3 Assessment of telehealth strategic opportunities ……………………….. 413 12.4 Summary of IT strategic planning ………………………………………….. 414 13.1 Target increases in an IT operating budget ……………………………….442 14.1 List of cases and corresponding chapters …………………………………469 A.1 IT interests of different health care organizations ………………………526 A.2 Health care provider market: NAICS taxonomy …………………………527 A.3 Changes in application focus resulting from changes

in the health care business model ………………………………………….528 A.4 Major health care IT vendors, ranked by revenue ……………………… 530 B.1 Revision history …………………………………………………………………. 541 B.2 Issue management ………………………………………………………………549


1.1 Milestones for a supportive payment and regulatory environment ….15 2.1 Health care data to health care knowledge …………………………………23 2.2 Sample EHR information screen ………………………………………………33 2.3 Sample EHR problem list ……………………………………………………….34 2.4 Sample EHR progress notes …………………………………………………….34

2.5 Sample EHR lab report …………………………………………………………..35 2.6 Sample heart failure and hypertension query screen …………………….45

3.1 History and evolution of health care information systems (1960s to today) …………………………………………………………………..70

3.2 Sample drug alert screen ………………………………………………………..73 3.3 Sample patient portal …………………………………………………………….74 3.4 Percent of non-federal acute care hospitals with adoption of at

least a basic EHR with notes system and position of a certifi ed EHR: 2008–2015 ……………………………………………………………………75

3.5 Office-based physician practice EHR adoption since 2004 ……………..77 3.6 The ONC’s roadmap to interoperability ……………………………………..84 4.1 Percent of nonfederal acute care hospitals that electronically

exchanged laboratory results, radiology reports, clinical care summaries, or medication lists with ambulatory care providers or hospitals outside their organization: 2008–2015 ……………………. 118

5.1 Systems development life cycle ………………………………………………144 5.2 System usability scale questionnaire ……………………………………….163

5.3 Cost-benefi t analysis ……………………………………………………………164 5.4 Example of a simple Gantt chart ……………………………………………167

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6.1 Project timeline with project phases ……………………………………….189 7.1 IT investment portfolio …………………………………………………………237 7.2 Days in accounts receivable ………………………………………………….239 7.3 Digital intensity versus transformation intensity ………………………..246 8.1 IT organizational chart: Large health system …………………………….257

10.1 Screenshot from NQF ………………………………………………………….. 341 10.2 Projected timetable for implementation of MACRA ……………………. 350 12.1 Overview of IT strategy development ……………………………………… 400 12.2 IT initiative priorities ………………………………………………………….. 415 12.3 IT plan timetable and budget ……………………………………………….. 416 12.4 Hype cycle for emerging technologies, 2014 …………………………….. 422 13.1 IT budget decision-making process …………………………………………443 13.2 Gross margin performance differences in high IT–use industries ….. 461 13.3 Singles and grand slams ……………………………………………………….463


2.1 Excerpt from ICD-10-CM 2016 ………………………………………………….38 2.2 Excerpt from ICD-10 PCS 2017 OCW …………………………………………40 2.3 Patient encounter form coding standards …………………………………..41 5.1 Overview of System Acquisition Process …………………………………. 147 9.1 Sample release of information form ………………………………………..294 9.2 Cybersecurity framework core ………………………………………………. 318

10.1 Medical Record Content: Excerpt from South Carolina Standards for Licensing Hospitals and Institutional General Infi rmaries ……….326

10.2 Medical Record Content: Excerpt from the Conditions of Participation for Hospitals …………………………………………………….328

11.1 Excerpt from ONC 2016 Interoperability Standards Advisory ………..366 11.2 X12 5010 professional claim standard……………………………………… 382 12.1 IT initiatives necessary to support a strategic goal for a provider …. 410 12.2 IT initiatives necessary to support a strategic goal for a

health plan ……………………………………………………………………….. 411 12.3 System support of nursing documentation ………………………………. 412

In memory of our colleague Andy Pasternack


Health care delivery is in the early stages of a profound shift in its core strat­ egies, organization, financing, and operational and care processes.

Reactive sick care is being replaced by proactive efforts to keep people well and out of the hospital. Fragmented care delivery capabilities are being supplanted by initiatives to create and manage cross-continuum systems of care. Providers that were rewarded for volume are increasingly being rewarded for quality and effi ciency.

New forms of reimbursement, such as bundles and various types of cap­ itation, are causing this shift. To thrive in the new era of health care delivery, providers are creating health systems, such as accountable care organizations, that include venues along the care spectrum.

In addition providers are introducing new processes to support the need to manage care between encounters, keep people healthy, and ensure that utilization is appropriate. Moreover, as reimbursement shifts to incent- improved provider performance these organizations will have a common need to optimize operational efficiency, improve financial management, and effectively engage consumers in managing their health and care.

These changes in business models and processes follow on the heels of the extraordinary increase in electronic health record adoption spurred by the Meaningful Use program of the US federal government.

On top of a foundation of electronic health records, the industry will add population health management applications, systems that support extensive patient engagement, broader interoperability, and more significant use of analytics. Providers involved in patient care will need immediate access to electronic decision-support tools, the latest relevant research findings on a given topic, and patient-specific reminders and alerts. Health care executives will need to be able to devise strategic initiatives that take advantage of access to real-time, relevant administrative and clinical information.

In parallel with the changes in health care, information technology (IT) innovation continues at a remarkable pace. The Internet of Things is creating a reality of intelligent homes, cars, and equipment, such as environmental sensors and devices attached to patients. Social media use continues to grow


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and become more sophisticated and capable. Mobile personal devices have become the device of choice for personal and professional activities. Big data has exceptional potential to help identify new diagnostic and therapeutic algorithms, conduct most market surveillance, and assess the comparative effectiveness of treatments.

For providers to prosper in this new era they must be very effective in developing IT strategies, implementing the technology, and leveraging the technology to improve organizational performance. They must understand the nature of health care data and the challenges of privacy and security. Clinicians and managers must appreciate the breadth of health care IT and emerging health care IT trends.

The transformation of the health care industry means that IT is no longer a necessary back-office evil—it is an essential foundation if an organization is to survive. That has not been true in the past; provider organizations could do quite well in a fee-for-service world without computerized physician order entry and other advanced IT applications.

Having ready access to timely, complete, accurate, legible, and rele­ vant information is critical to health care organizations, providers, and the patients they serve. Whether it is a nurse administering medication to a comatose patient, a physician advising a patient on the latest research findings for a specific cancer treatment, a billing clerk filing an electronic claim, a chief executive officer justifying to the board the need for build­ ing a new emergency department, or a health policy analyst reporting on the cost-effectiveness of a new prevention program to the state’s Medicaid program, each individual needs access to high-quality information with which to effectively perform his or her job.

The need for quality information in health care, already strong, has never been greater, particularly as this sector of our society strives to provide quality care, contain costs, and ensure adequate access.


The purpose of this book is to prepare future health care executives with the knowledge and skills they need to manage information and information systems technology effectively in this new environment. We wrote this book with the graduate student (or upper-level undergraduate student) enrolled in a health care management program in mind.

Our definition of health care management is fairly broad and includes a range of academic programs from health administration, health infor­ mation management, and public health programs to master of business

P R E F A C E · xvii

administration (MBA) programs with an emphasis in health to nursing administration and physician executive educational programs. This book may also serve as an introductory text in health informatics programs.

The first (2005), second (2009), and third (2013) editions have been widely used by a variety of health care management and health information systems programs throughout the United States and abroad. Although we have maintained the majority of the chapters from the third edition, this edition has gone through significant changes in composition and structure reflecting feedback from educators and students and the need to discuss topics such as population health and recent changes in payment reform ini­ tiatives. We have removed the section on the international perspective on health care information technology and updated the case studies of organi­ zations experiencing management-related information system challenges. We also added a new chapter on the role of information systems in managing population health.


The chapters in this book are organized into four major parts:

• Part One: “Major Environmental Forces That Shape the National Health Information System Landscape” (Chapters One through Four)

• Part Two: “Selection, Implementation, Evaluation, and Management of Health Care Information Systems” (Chapters Five through Eight)

• Part Three: “Laws, Regulations, and Standards That Affect Health Care Information Systems” (Chapters Nine through Eleven)

• Part Four: “Senior-Level Management Issues Related to Health Care Information Systems Management” (Chapters Twelve through Fourteen)

In addition Appendix A provides an overview of the health care IT indus­ try. Appendix B provides a compendium of a sample project charter, sample job descriptions, and a sample user satisfaction survey.

The purpose of Part One (“Major Environmental Forces That Shape the National Health Information System Landscape”) is to provide the reader with the foundation needed for the rest of the book. This foun­ dation includes an overview of the major environmental forces that are shaping the national health IT landscape, such as Medicare’s alternative payment programs. The reader will gain insight into the different types of clinical, administrative, and external data used by health care provider

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organizations. Additionally, the reader will gain an understanding of the adoption, use, and functionality of health care information systems with focus on electronic health records (EHRs), personal health records (PHRs), and systems need to support population health management (e.g., data analytics, telehealth).

Specifically Part One has four chapters:

• Chapter One: National Health Information Technology Landscape. This chapter discusses the various forces and activities that are shaping health information systems nationally. The chapter reviews the HITECH Act, the Affordable Care Act, HIPAA, and national efforts to advance interoperability.

• Chapter Two: Health Care Data. This chapter examines the range of health care data and issues with data quality and capture. This examination is conducted from a cross-continuum, health system perspective.

• Chapter Three: Health Care Information Systems. This chapter provides an overview of clinical and administrative information systems. The chapter focuses on the electronic health record and personal health record and describes in greater detail the major initiatives that have led to current adoption and use of EHRs by hospitals and physician practices (e.g., Meaningful Use and health information exchanges). The chapter also includes discussion on the state of EHRs in settings across the care continuum (e.g., behavioral health, community care, long-term care). It concludes with a discussion on important health care information system issues including interoperability, usability, and health IT safety.

• Chapter Four: Information Systems to Support Population Health Management. This is a new chapter. Its purpose is to focus on the key data and information needs of health systems to effectively manage population health. Key topics include population health, telehealth, patient engagement (including social media), data analytics, and health information exchange (HIE).

The purpose of Part Two (“Selection, Implementation, Evaluation, and Management of Health Care Information Systems”) is to provide the reader with an overview of what is needed to effectively select, implement, evaluate, and manage health care information systems. This section discusses issues mid- and senior-level managers are likely to encounter related to managing

P R E F A C E · xix

change and managing projects. The reader will also gain insight into the role and functions of the IT organization or department.

Specifically Part Two has four chapters:

• Chapter Five: System Acquisition. This chapter discusses the processes that organizations use to select information systems. We have included a discussion on the importance of system architecture.

• Chapter Six: System Implementation and Support. This chapter reviews the processes and activities need to implement and support health care information systems. We have included an examination of change management and project management.

• Chapter Seven: Assessing and Achieving Value in Health Care Information Systems. This chapter discusses the nature of the value that can be obtained from health care information systems and the approaches to achieving that value.

• Chapter Eight: Organizing Information Technology Services. This chapter reviews the structure and responsibilities of the IT organization. This chapter discusses IT senior management roles such as the chief information offi cer and the chief medical information offi cer.

The purpose of Part Three (“Laws, Regulations, and Standards That Affect Health Care Information Systems”) is to provide the reader with an overview of the laws, regulations, and standards that affect health care infor­ mation systems. Emphasis is given to system security.

Specifically Part Three has three chapters:

• Chapter Nine: Privacy and Security. This chapter examines privacy and security regulations and practices.

• Chapter Ten: Performance Standards and Measures. This chapter discusses the wide range of regulations that affect health care information systems, with an emphasis on new regulations related to the focus on the continuum of care.

• Chapter Eleven: Health Care Information Systems Standards. This chapter reviews the new and emerging standards that govern health care data, transactions, and quality measures.

The purpose of Part Four (“Senior-Level Management Issues Related to Health Care Information Systems Management”) is to provide the reader with

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an understanding of senior-level management responsibilities and activities related to IT management.

Specifically Part Four has three chapters:

• Chapter Twelve: IT Alignment and Strategic Planning. This chapter discusses the processes used by organizations to develop an IT strategic plan. The chapter reviews the challenges faced in developing these plans.

• Chapter Thirteen: IT Governance and Management. This chapter discusses several topics that must be addressed by senior leadership if IT is to be leveraged effectively: establishing IT governance, developing the IT budget, and ensuring that projects are successful.

• Chapter Fourteen: Health IT Leadership Case Studies. This chapter comprises case studies that provide real-world situations that touch on the content of this textbook.

Each chapter in the book (except Chapter Fourteen) begins with a set of chapter learning objectives and an overview and concludes with a summary of the material presented and a set of learning activities. These activities are designed to give students an opportunity to explore more fully the concepts intro­ duced in the chapter and to gain hands-on experience by visiting and talking with IT and management professionals in a variety of health care settings.

Two appendixes offer supplemental information. Appendix A presents an overview of the health care IT industry: the companies that provide IT hard­ ware, software, and a wide range of services to health care organizations. Appendix B contains a sample project charter, sample job descriptions, and a sample user satisfaction survey: documents referenced throughout the book.

Depending on the nature and interests of the students, various chapters are worth emphasizing. Students and courses that are targeted for current or aspiring senior executive positions may want to emphasize Chapter One (National Health Care IT Landscape), Chapter Four (Population Health), Chapter Seven (IT Value), Chapter Twelve (IT Strategy), and Chapter Thirteen (IT Governance and Management). For classes focused on mid-level man­ agement, Chapter One (National Health Care IT Landscape), Chapter Five (System Selection), Chapter Six (System Implementation), and Chapter Seven (IT Value) will merit attention.

Regardless of role, Chapter Two (Health Care Data), Chapter Three (Health Care Information Systems), Chapter Eight (IT Organization), and Part Three (Laws, Regulations, and Standards) provide important founda­ tional knowledge.

P R E F A C E · xxi

One final comment. Two terms, health information technology (HIT) and health care information systems (HCIS), are frequently used throughout the text. Although it may seem that these terms are interchangeable, they are, in fact, related but different. As used in this text, HIT encompasses the technol­ ogies (hardware, software, networks, etc.) used in the management of health information. HCIS describes a broader concept that not only encompasses HIT but also the processes and people that the HIT must support. HCIS delivers value to individual health care organizations, patients, and providers, as well as across the continuum of care and for entire communities of individuals. HIT delivers little value on its own. Both HCIS and HIT must be managed, but the management of HCIS is significantly more difficult and diverse.

Health care and health care information technology are in the early stages of a profound transformation. We hope you find this textbook helpful as we prepare our students for the challenges that lie ahead.


We wish to extend a special thanks to Juli Wilt for her dedication and assis­ tance in preparing the fi nal manuscript for this book. We also wish to thank the following MUSC students in the doctoral program in health administra­ tion, who contributed information systems management stories and expe­ riences to us for use as case studies: Penney Burlingame, Barbara Chelton, Stuart Fine, David Freed, David Gehant, Patricia Givens, Shirley Harkey, Victoria Harkins, Randall Jones, Michael Moran, Catrin Jones-Nazar, Ronald Kintz, Lauren Lent, George Mikatarian, Lorie Shoemaker, and Gary Wilde.

To all of our students whom we have learned from over the years, we thank you.

Finally, we wish to extend a very special thanks to Molly Shane Grasso for her many contributions to Chapter Four, “Information Systems to Support Population Health Management.”


The Authors

Karen A. Wager is professor and associate dean for student affairs in the College of Health Professions at the Medical University of South Carolina (MUSC), where she teaches management and health information systems courses to graduate students. She has more than thirty years of professional and academic experience in the health information management profession and has published numerous articles, case studies, and book chapters. Recog­ nized for her excellence in interprofessional education and in bringing prac­ tical research to the classroom, Wager received the 2016 College Teacher of the Year award and the 2008 MUSC outstanding teaching award in the educa­ tor-lecturer category and the 2008 Governor’s Distinguished Professor Award. She currently serves as the chair of the Accreditation Council for the Com­ mission on Accreditation of Healthcare Management Education (CAHME), is a member of the CAHME board of directors, and is a past fellow of CAHME. Wager previously served as a member of the HIMSS-AUPHA-CAHME Task Force responsible for the development of a model curriculum in health information systems appropriate for educating graduate students in health administration programs. She is past president of the South Carolina chapter of the Healthcare Information and Management Systems Society (HIMSS) and past president of the South Carolina Health Information Management Association. Wager holds a doctor of business administration (DBA) degree with an emphasis in information systems from the University of Sarasota.

Frances Wickham Lee is professor and director of instructional operations for Healthcare Simulation South Carolina at the Medical University of South Carolina (MUSC). She recently joined the faculty at Walden University to teach in the Master of Healthcare Administration program. Lee has more than thirty years of professional and academic experience in the health information management, including publication of numerous articles and book chapters related to the field. She is past president of the North Carolina Health Information Management Association and South Carolina chapter of the Healthcare Information and Management Systems Society (HIMSS). Since 2007, Lee has broadened her expertise as a health care educator through her membership in a pioneering team charged with bringing health care


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simulation to students and practicing professionals across the state of South Carolina. She holds a DBA degree with an emphasis in information systems from the University of Sarasota.

John P. Glaser currently serves as the senior vice president of population health for Cerner. He joined Cerner in 2015 as part of the Siemens Health Services acquisition, where he was CEO. Prior to Siemens, Glaser was vice president and CIO at Partners HealthCare. He also previously served as vice president of information systems at Brigham and Women’s Hospital.

Glaser was the founding chair of the College of Healthcare Informa­ tion Management Executives (CHIME) and the past president of the Health- care Information and Management Systems Society (HIMSS). He has served on numerous boards including eHealth Initiative, the American Telemedi­ cine Association (ATA), and the American Medical Informatics Association (AMIA). He is a fellow of CHIME, HIMSS, and the American College of Health Informatics. He is a former senior advisor to the Office of the National Coor­ dinator for Health Information Technology (ONC).

Glaser has published more than two hundred articles, three books on the strategic application of information technology in health care. Glaser holds a PhD in health care information systems from the University of Minnesota.

Health Care Information Systems

Major Environmental Forces That Shape

the National Health Information System





The National Health Information Technology



• To be able to discuss some of the most signifi cant infl uences shaping the current and future health information technology landscapes in the United States.

• To understand the roles national private sector and government initiatives have played in the advancement of health information technology in the United States.

• To be able to describe major events since the 1990s that have infl uenced the adoption of health information technologies and systems.


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Since the early 1990s, the use of health information technology (HIT) across all aspects of the US health care delivery system has been increasing. Electronic health records (EHRs), telehealth, social media, mobile applica­ tions, and so on are becoming the norm—even commonplace—today. Today’s health care providers and organizations across the continuum of care have come to depend on reliable HIT to aid in managing population health effec­ tively while reducing costs and improving quality patient care. Chapter One will explore some of the most signifi cant influences shaping the current and future HIT landscapes in the United States. Certainly, advances in infor­ mation technology affect HIT development, but national private sector and government initiatives have played key roles in the adoption and application of the technologies in health care. This chapter will provide a chronologi­ cal overview of the significant government and private sector actions that have directly or indirectly affected the adoption of HIT since the Institute of Medicine landmark report, The Computer-Based Patient Record: An Essential Technology for Health Care, authored by Dick and Steen and published in 1991. Knowledge of these initiatives and mandates shaping the current HIT national landscape provides the background for understanding the importance of the health information systems that are used to promote excellent, cost-effective patient care.


Institute of Medicine CPR Report

The Institute of Medicine (IOM) report The Computer-Based Patient Record: An Essential Technology for Health Care (Dick & Steen, 1991) brought international attention to the numerous problems inherent in paper-based medical records and called for the adoption of the computer-based patient record (CPR) as the standard by the year 2001. The IOM defi ned the CPR as “an electronic patient record that resides in a system specifi ­ cally designed to support users by providing accessibility to complete and accurate data, alerts, reminders, clinical decision support systems, links to medical knowledge, and other aids” (Dick & Steen, 1991, p. 11). This vision of a patient’s record offered far more than an electronic version of existing paper records—the IOM report viewed the CPR as a tool to assist the clinician in caring for the patient by providing him or her with remind­ ers, alerts, clinical decision–support capabilities, and access to the latest research findings on a particular diagnosis or treatment modality. CPR systems and related applications, such as EHRs, will be further discussed

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in Chapter Three. At this point, it is important to understand the IOM report’s impact on the vendor community and health care organizations. Leading vendors and health care organizations saw this report as an impetus toward radically changing the ways in which patient information would be managed and patient care delivered. During the 1990s, a number of vendors developed CPR systems. However, despite the fact that these systems were, for the most part, reliable and technically mature by the end of the decade, only 10 percent of hospitals and less than 15 percent of physician practices had implemented them (Goldsmith, 2003). Needless to say, the IOM goal of widespread CPR adoption by 2001 was not met. The report alone was not enough to entice organizations and individual providers to commit to the required investment of resources to make the switch from predominantly paper records.

Health Insurance Portability and Accountability Act (HIPAA)

Five years after the IOM report advocating CPRs was published, President Clinton signed into law the Health Insurance Portability and Account­ ability Act (HIPAA) of 1996 (which is discussed in detail in Chapter Nine). HIPAA was designed primarily to make health insurance more affordable and accessible, but it included important provisions to simplify adminis­ trative processes and to protect the security and confi dentiality of personal health information. HIPAA was part of a larger health care reform effort and a federal interest in HIT for purposes beyond reimbursement. HIPAA also brought national attention to the issues surrounding the use of personal health information in electronic form. The Internet had revolutionized the way that consumers, providers, and health care organizations accessed health information, communicated with each other, and conducted business, creat­ ing new risks to patient privacy and security.


IOM Patient Safety Reports

A second IOM report, To Err Is Human: Building a Safer Health Care System (Kohn, Corrigan, & Donaldson, 2000), brought national attention to research estimating that 44,000 to 98,000 patients die each year because of medical errors. A subsequent related report by the IOM Committee on Data Stan­ dards for Patient Safety, Patient Safety: Achieving a New Standard for Care (Aspden, 2004), called for health care organizations to adopt information

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technology capable of collecting and sharing essential health information on patients and their care. This IOM committee examined the status of stan­ dards, including standards for health data interchange, terminologies, and medical knowledge representation. Here is an example of the committee’s conclusions:

• As concerns about patient safety have grown, the health care sector has looked to other industries that have confronted similar challenges, in particular, the airline industry. This industry learned long ago that information and clear communications are critical to the safe navigation of an airplane. To perform their jobs well and guide their plane safely to its destination, pilots must communicate with the airport controller concerning their destination and current circumstances (e.g., mechanical or other problems), their fl ight plan, and environmental factors (e.g., weather conditions) that could necessitate a change in course. Information must also pass seamlessly from one controller to another to ensure a safe and smooth journey for planes fl ying long distances, provide notifi cation of airport delays or closures because of weather conditions, and enable rapid alert and response to extenuating circumstance, such as a terrorist attack.

• Information is as critical to the provision of safe health care—which is free of errors of commission and omission—as it is to the safe operation of aircraft. To develop a treatment plan, a doctor must have access to complete patient information (e.g., diagnoses, medications, current test results, and available social supports) and to the most current science base (Aspden, 2004).

Whereas To Err Is Human focused primarily on errors that occur in hospi­ tals, the 2004 report examined the incidence of serious safety issues in other settings as well, including ambulatory care facilities and nursing homes. Its authors point out that earlier research on patient safety focused on errors of commission, such as prescribing a medication that has a potentially fatal interaction with another medication the patient is taking, and they argue that errors of omission are equally important. An example of an error of omission is failing to prescribe a medication from which the patient would likely have benefited (Institute of Medicine, Committee on Data Standards for Patient Safety, 2003). A significant contributing factor to the unacceptably high rate of medical errors reported in these two reports and many others is poor information management practices. Illegible prescriptions, unconfi rmed

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verbal orders, unanswered telephone calls, and lost medical records could all place patients at risk.

Transparency and Patient Safety

The federal government also responded to quality of care concerns by pro­ moting health care transparency (for example, making quality and price information available to consumers) and furthering the adoption of HIT. In 2003, the Medicare Modernization Act was passed, which expanded the program to include prescription drugs and mandated the use of electronic prescribing (e-prescribing) among health plans providing prescription drug coverage to Medicare beneficiaries. A year later (2004), President Bush called for the widespread adoption of EHR systems within the decade to improve efficiency, reduce medical errors, and improve quality of care. By 2006, he had issued an executive order directing federal agencies that administer or sponsor health insurance programs to make information about prices paid to health care providers for procedures and information on the quality of services provided by physicians, hospitals, and other health care providers publicly available. This executive order also encouraged adoption of HIT standards to facilitate the rapid exchange of health information (The White House, 2006).

During this period significant changes in reimbursement practices also materialized in an effort to address patient safety, health care quality, and cost concerns. Historically, health care providers and organizations had been paid for services rendered regardless of patient quality or outcome. Nearing the end of the decade, payment reform became a hot item. For example, pay for performance (P4P) or value-based purchasing pilot programs became more widespread. P4P reimburses providers based on meeting predefined quality measures and thus is intended to promote and reward quality. The Centers for Medicare and Medicaid Services (CMS) notified hospitals and physicians that future increases in payment would be linked to improvements in clinical performance. Medicare also announced it would no longer pay hospitals for the costs of treating certain conditions that could reasonably have been prevented—such as bedsores, injuries caused by falls, and infections resulting from the prolonged use of catheters in blood vessels or the bladder—or for treating “serious prevent­ able” events—such as leaving a sponge or other object in a patient during surgery or providing the patient with incompatible blood or blood prod­ ucts. Private health plans also followed Medicare’s lead and began denying payment for such mishaps. Providers began to recognize the importance

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of adopting improved HIT to collect and transmit the data needed under these payment reforms.

Office of the National Coordinator for Health Information Technology

In April 2004, President Bush signed Executive Order No. 13335, 3 C.F.R., establishing the Office of the National Coordinator for Health Information Technology (ONC) and charged the office with providing “leadership for the development and nationwide implementation of an interoperable health information technology infrastructure to improve the quality and effi ciency of health care.” In 2009, the role of the ONC (organizationally located within the US Department of Health and Human Services) was strengthened when the Health Information Technology for Economic and Clinical Health (HITECH) Act legislatively mandated it to provide leadership and oversight of the national efforts to support the adoption of EHRs and health informa­ tion exchange (HIE) (ONC, 2015).

In spite of the various national initiatives and changes to reimbursement during the first decade of the twenty-first century, by the end of the decade only 25 percent of physician practices (Hsiao, Hing, Socey, & Cai, 2011) and 12 percent of hospitals (Jha, 2010) had implemented “basic” EHR systems. The far majority of solo and small physician practices continued to use paper- based medical record systems. Studies show that the relatively low adoption rates among solo and small physician practices were because of the cost of HIT and the misalignment of incentives (Jha et al., 2009). Patients, payers, and purchasers had the most to gain from physician use of EHR systems, yet it was the physician who was expected to bear the total cost. To address this misalignment of incentives issue, to provide health care organizations and providers with some funding for the adoption and Meaningful Use of EHRs, and to promote a national agenda for HIE, the HITECH Act was passed as a part of the American Recovery and Reinvestment Act in 2009.


HITECH and Meaningful Use

An important component of HITECH was the establishment of the Medicare and Medicaid EHR Incentive Programs. Eligible professionals and hospitals that adopt, implement, or upgrade to a certified EHR received incentive pay­ ments. After the first year of adoption, the providers had to prove successfully

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that they were “demonstrating Meaningful Use” of certified EHRs to receive additional incentive payments. The criteria, objectives, and measures for demonstrating Meaningful Use evolved over a five-year period from 2011 to 2016. The first stage of Meaningful Use criteria was implemented in 2011–2012 and focused on data capturing and sharing. Stage 2 (2014) criteria are intended to advance clinical processes, and Stage 3 (2016) criteria aim to show improved outcomes. Table 1.1 provides a broad overview of the Meaningful Use criteria by stage.

Through the Medicare EHR Incentive Program, each eligible professional who adopted and achieved meaningful EHR use in 2011 or 2012 was able to earn up to $44,000 over a five-year period. The amount decreased over the period, creating incentives to providers to start sooner rather than later.

Table 1.1 Stages of Meaningful Use

Stage 1: Stage 2: Stage 3: Meaningful Use criteria Meaningful Use criteria Meaningful Use criteria focus focus focus

Electronically capturing health information in a standardized format

Using that information to track key clinical conditions

Communicating that information for care coordination processes

Initiating the reporting of clinical quality measures and public health information

Using information to engage patients and their families in their care

More rigorous HIE

Increased requirements for e-prescribing and incorporating lab results

Electronic transmission of patient summaries across multiple settings

More patient-controlled data

Improving quality, safety, and effi ciency leading to improved health outcomes

Decision support for national high-priority conditions

Patient access to self- management tools

Access to comprehensive patient data through patient-centered HIE

Improving population health

Source: ONC (n.d.a.).

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Eligible hospitals could earn over $2 million through the Medicare EHR Incentive Program, and the Medicaid program made available up to $63,500 for each eligible professional (through 2021) and over $2 million to each eligible hospital. As of December 2015, more than 482,000 health care pro­ viders received a total of over $31 billion in payments for participating in the Medicare and Medicaid EHR Incentive Programs (CMS, n.d.). See Table 1.2 for primary differences between the two incentive programs.

Within the ONC, the Office of Interoperability and Standards oversees certification programs for HIT. The purpose of certification is to provide assurance to EHR purchasers and other users that their EHR system has the technological capability, functionality, and security needed to assist them in meeting Meaningful Use criteria. Eligible providers who apply for the EHR Medicare and Medicaid Incentive Programs are required to use certifi ed EHR technology. The ONC has authorized certain organizations to perform the actual testing and certification of EHR systems.

Other HITECH Programs

Many small physician practices and rural hospitals do not have the in-house expertise to select, implement, and support EHR systems that meet certifi ca­ tion standards. To address these needs, HITECH funded sixty-two regional extension centers (RECs) throughout the nation to support providers in adopt­ ing and becoming meaningful users of EHRs. The RECs are primarily intended to provide advice and technical assistance to primary care providers, espe­ cially those in small practices, and to small rural hospitals, which often do not have information technology (IT) expertise. Furthermore, HITECH provided funding for various workforce training programs to support the education of HIT professionals. The education-based programs included curriculum development, community college consortia, competency examination, and university-based training programs, with the overarching goal of training an additional forty-five thousand HIT professionals. Funding was also made avail­ able to seventeen Beacon communities and Strategic Health IT Advanced Research Projects (SHARP) across the nation. The Beacon programs are leading organizations that are demonstrating how HIT can be used in innova­ tive ways to target specific health problems within communities (, 2012). These programs are illustrating HIT’s role in improving individual and population health outcomes and in overcoming barriers such as coordination of care, which plagues our nation’s health care system (McKethan et al., 2011).

Achieving Meaningful Use requires that health care providers are able to share health information electronically with others using a secure network for HIE. To this end, HITECH provided state grants to help build the HIE
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Table 1.2 Differences between Medicare and Medicaid EHR incentive programs

Medicare EHR Incentive Program Medicaid EHR Incentive Program

Federally implemented and available nationally

Medicare Advantage professionals have special eligibility accommodations.

Open to physicians, subsection (d) hospitals, and critical access hospitals

Same definition of Meaningful Use applied to all participants nationally

Must demonstrate Meaningful Use in fi rst year

Maximum incentive for eligible professionals is $44,000; 10 percent for HPSA (health professional shortage area).

2014 is the last year in which a professional can initiate participation.

Payments over fi ve years

In 2015 fee reductions (penalties) begin for those who do not demonstrate Meaningful Use of a certifi ed HER.

2016 is the last incentive payment year.

No Medicare patient population minimum is required.

Implemented voluntarily by states

Medicaid managed care professionals must meet regular eligibility requirements.

Open to fi ve types of professionals and three types of hospitals

States can adopt a more rigorous definition of Meaningful Use.

Adopt, implement, or upgrade option in fi rst year

Maximum incentive for eligible professionals is $63,750.

2016 is the last year in which a professional can initiate participation.

Payments over six years

No fee reductions (penalties)

2021 is the last incentive payment year.

Eligible professionals must have a 30 percent Medicaid population (20 percent for pediatricians) to participate; this must be demonstrated annually.

Source: Carson, Garr, Goforth, and Forkner (2010).

infrastructure for exchange of electronic health information among provid­ ers and between providers and consumers. Nearly all states have approved strategic and operational plans for moving forward with implementation of their HIE cooperative agreement programs.

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Affordable Care Act

In addition to the increased efforts to promote HIT through legislated pro­ grams, the early 2010s brought dramatic change to the health care sector as a whole with the passage of significant health care reform legislation. Amer­ icans have grappled for decades with some type of “health care reform” in an attempt to achieve the simultaneous “triple aims” for the US health care delivery system:

• Improve the patient experience of care

• Improve the health of populations

• Reduce per capita cost of health care (IHI, n.d.)

Full achievement of these aims has been challenging within a health care delivery system managed by different stakeholders—payers, providers, and patients—whose goals are frequently not well aligned. The latest attempt at reform occurred in 2010, when President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), now known as the Affordable Care Act (ACA).

Along with mandating that individuals have health insurance and expanding Medicaid programs, the ACA created the structure for health insurance exchanges, including a greater role for states, and imposed changes to private insurance, such as prohibiting health plans from placing lifetime limits on the dollar value of coverage and prohibiting preexisting condition exclusions. Numerous changes were to be made to the Medicare program, including continued reductions in Medicare pay­ ments to certain hospitals for hospital-acquired conditions and excessive preventable hospital readmissions. Additionally, the CMS established an innovation center to test, evaluate, and expand different payment struc­ tures and methodologies to reduce program expenditures while main­ taining or improving quality of care. Through the innovation center and other means, CMS has been aggressively pursuing implementation of value-based payment methods and exploring the viability of alternative models of care and payment.

The final assessment of the success of ACA is still unknown; however, what is certain is that its various programs will rely heavily on quality HIT to achieve their goals. A greater emphasis than ever is placed on facilitating patient engagement in their own care through the use of technology. On the other end of the spectrum, new models of care and payment include improved health for populations as an explicit goal, requiring HIT to manage the sheer volume and complexity of data needed.

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Value-Based Payment Programs

Shortly after the ACA was passed, CMS implemented several value-based payment programs in an effort to reward health care providers with incentive payments for the quality of care they provide to Medicare patients. In 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law. Among other things, MACRA outlines a timetable for the 2019 implementation of a merit-based incentive payment system (MIPS) that will replace other value-based payment programs, including the EHR Incentive Programs. MIPS will use a set of performance measures, divided into catego­ ries, to calculate a score (between 0 and 100) for eligible professionals. Each category of performance will be weighted as shown in Table 1.3.

Health care providers meeting the established threshold score will receive no adjustment to payment; those scoring below will receive a negative adjust­ ment, and those above, a positive adjustment. Exceptional performers may receive bonus payments (CMS, n.d.).

Alternate Payment Methods

Providers who meet the criteria to provide an alternate payment method (APM) will receive bonus payments and will be exempt from the MIPS. Although there are likely to be other APMs identified over time, three types are receiving a great deal of attention currently: accountable care organi­ zations (ACOs), bundled payments, and patient-centered medical homes (PCMHs). ACOs are “networks of . . . health care providers that share respon­ sibility for coordinating care and meeting health care quality and cost metrics for a defined patient population” (Breakaway Policy Strategies for FasterCures, 2015, p. 2). Bundled payments aim to incentivize providers to improve care coordination, promote teamwork, and lower costs. Payers will compensate

Table 1.3 MIPS performance categories

Category Weight (%)

Quality 50

Advancing care information 25

Clinical practice improvement activities 15

Resource use 10

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providers with a single payment for an episode of care. PCMHs are APMs that are rooted in the private sector. In 2007, four physician societies pub­ lished a joint statement of principles emphasizing a personal physician–led coordination of care. All of the APMs rely heavily on HIT. ACOs and PCMHs, in particular, require that HIT support the organization and its providers in the carrying out the following functions:

• Manage and coordinate integrated care.

• Identify, manage, and reduce or contain costs.

• Adhere to evidence-based practice guidelines and standards of care; ensure quality and safety.

• Manage population health.

• Engage patients and their families and caregivers in their own care.

• Report on quality outcomes.

HIT Interoperability Efforts

Despite efforts dating back to the first reports on the need for adoption of computerized patient records, complete interoperability among HIT systems, which is key to supporting an integrated health care delivery system that provides improved care to individuals and populations while managing costs, remains elusive. The federal government, along with other provider, vendor, and professional organizations, however, recognize this need for interopera­ bility. The ONC defines interoperability as “the ability of a system to exchange electronic health information with and use electronic health information from other systems without special effort on the part of the user” (ONC, n.d.a). Interoperability among HIT encompasses far more than just connected EHRs across systems. Home health monitoring systems are becoming common­ place, telehealth is on the rise, and large public health databases exist at state and national levels. True interoperability will encompass any electronic sources with information needed to provide the best possible health care.

Some of the more notable efforts toward HIT interoperability include the efforts by the government under the direction of the ONC and several other national public and private organizations. In 2015, the ONC published “Connecting Health and Care for the Nation: A Shared Nationwide Interop­ erability Roadmap,” a ten-year plan for achieving HIT interoperability in the United States. Figure 1.1 summarizes the key milestones identified in the ONC road map. The ultimate goal for 2024 is “a learning health system enabled by nationwide interoperability.” The goal of the learning health system is to

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Figure 1.1 Milestones for a supportive payment and regulatory environment

Source: ONC (2015).

improve the health of individuals and populations by “generating information and knowledge from data captured and updated over time . . . and sharing and disseminating what is learned in timely and actionable forms that directly enable individuals, clinicians, and public health entities to . . . make informed decisions” (ONC, 2015, p. 18).

Health Level Seven International (HL7), a not-for-profi t, ANSI (American National Standards Institute)–accredited, standards-developing organization, is focused on technical standards for HIE. The HL7 Fast Healthcare Interop­ erability Resources (FHIR) standards were introduced in 2012 and are under development to improve the exchange of EHR data. About this same time Healtheway, now the Sequoia Project, was chartered as a nonprofi t organi­ zation to “advance the implementation of secure, interoperable nationwide health information exchange” (Sequoia Project, n.d.a). The Sequoia Project supports several initiatives, including the eHealth Exchange, a group of government and nongovernment organizations devoted to improving patient care through “interoperable health information exchange” (Sequoia Project, n.d.a). Unlike HL7, which focuses on technical standards, eHealth Exchange’s primary focus is on the legal and policy barriers associated with nationwide interoperability. Another Sequoia initiative, Carequality, strives to connect private HIE networks. Another private endeavor, Commonwell Health Alli­ ance, is a consortium of HIT vendors and other organizations that are com­ mitted to achieving interoperability. Commonwell began in 2013 with six EHR vendors. In 2015, their membership represented 70 percent of hospitals. Provider members of Commonwell register their patients in order to exchange easily information with other member providers (Jacob, 2015).

Although HIT has become commonplace across the continuum of care, seamless interoperability among the nation’s HIT systems has not yet been realized. One author describes the movement toward HIT interoperability in the United States not as a straight path but rather as a jigsaw puzzle with multiple public and private organizations “working on different pieces”

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(Jacob, 2015). Interoperability requires not only technical standards but also a national health information infrastructure, along with an effective gov­ erning system. Concerns about the misalignment of incentives for achiev­ ing interoperability remain. Most experts agree that technology is not the barrier to interoperability. Governance and alignment of agendas among disparate organizations are cited as the most daunting barriers. Because of its potential to affect seriously the progress of interoperability, in 2015, the ONC reported to Congress on the phenomenon of health information block­ ing, which is defined as occurring “when persons or entities knowingly and unreasonably interfere with the exchange or use of electronic health infor­ mation” (ONC, 2015). The report charged that current economic incentives were not supportive of information exchange and that some of the current market practices actually discouraged sharing health information (DeSalvo & Daniel, 2015).


Chapter One provides a brief chronological overview of the some of the most significant national drivers in the development, growth, and use of HIT in the United States. Since the 1990s and the publication of The Computer-Based Patient Record: An Essential Technology for Health Care, the national HIT landscape has certainly evolved, and it will continue to do so. Challenges to realizing an integrated national HIT infrastructure are numerous, but the need for one has never been greater. Recognizing that the technology is not the major barrier to the national infrastructure, the government, through legislation, CMS incentive programs, the ONC, and other programs, will continue to play a significant role in the Meaningful Use of HIT, pushing for the alignment of incentives within the health care delivery system.

In a 2016 speech, CMS acting chief Andy Slavitt summed up the govern­ ment’s role in achieving its HIT vision with the following statements:

The focus will move away from rewarding providers for the use of tech­ nology and towards the outcome they achieve with their patients.

Second, providers will be able to customize their goals so tech compa­ nies can build around the individual practice needs, not the needs of the government. Technology must be user-centered and support physicians, not distract them.

Third, one way to aid this is by leveling the technology playing fi eld for start-ups and new entrants. We are requiring open APIs . . . that allow apps, analytic tools, and connected technologies to get data in and out of an EHR securely.

K E Y T E R M S · 17

We are deadly serious about interoperability. We will begin initiatives . . . pointing technology to fill critical use cases like closing referral loops and engaging a patient in their care.

Technology companies that look for ways to practice “data blocking” in oppo­ sition to new regulations will find that it won’t be tolerated. (Nerney, 2016)

Many of the initiatives discussed in Chapter One will be explored more fully in subsequent chapters of this book. The purpose of Chapter One is to provide the reader with a snapshot of the national HIT landscape and enough historical background to set the stage for why health care managers and leaders must understand and actively engage in the implementation of effective health information systems to achieve better health for individuals and populations while managing costs.

KEY TERMS Accountable Care Organizations (ACOs) Affordable Care Act (ACA) Alternate payment methods (APM) American Recovery and Reinvestment

Act ANSI (American National Standards

Institute) Beacon communities Bundled payments Centers for Medicare and Medicaid

Services (CMS) Commonwell Health Alliance Computer-based patient record (CPR) Coordination of care eHealth Exchange Electronic health records (EHRs) e-prescribing Fast Healthcare Interoperability

Resources (FHIR) standards Health information blocking Health information exchange (HIE) Health information technology (HIT) Health Information Technology for

Economic and Clinical Health (HITECH) Act

Health Insurance Portability and Accountability Act (HIPAA)

Health Level Seven International (HL7)

HIT interoperability Meaningful Use of EHR Medicare Access and CHIP

Reauthorization Act (MACRA) Medicare Modernization Act Merit-based incentive payment system

(MIPS) Nationwide Interoperability

Roadmap Office of the National Coordinator

for Health Information Technology (ONC)

Patient-centered medical homes (PCMHs)

Patient safety Pay for performance (P4P) Regional extension centers (RECs) Strategic Health IT Advanced

Research Projects (SHARP) The Sequoia Project Value-based payment

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1. Investigate the latest Meaningful Use criteria for eligible professionals or eligible hospitals. Visit either a physician practice or hospital in your community. Have they participated in the Medicare or Medicaid EHR Incentive Program? Why or why not? If the organization or provider has participated in the program, what has the experience been like? What lessons have they learned? Find out the degree to which the facility uses EHRs and what issues or challenges they have had in achieving Meaningful Use.

2. Evaluate different models of care within your local community or state. Did you find any examples of accountable care organizations or patient-centered medical homes? Explain. Working as a team, visit or interview a leader from a site that uses an innovative model of care. Describe the model, its use, challenges, and degree of patient coordination and integration. How is HIT used to support the delivery of care and reporting of outcomes?

3. Investigate one of the Beacon communities to find out how they are using HIT to improve quality of care and access to care within their region. Be prepared to share with the class a summary of your findings. Do you think the work that this Beacon community has done could be replicated in your community? Why or why not?

4. Explore the extent to which health information exchange is occurring within your community, region, or state. Who are the key players? What types of models of health information exchange exist? To what extent is information being exchanged across organizations for patient care purposes?

5. Investigate the CMS website to determine their current and proposed value-based or pay-for-performance programs. Compare one or more of the programs to the traditional fee-for-service payment method. What are the advantages and disadvantages of each to a physician provider in a small practice?


Aspden, P. (2004). Patient safety: Achieving a new standard for care. Washington, DC: National Academies Press.

Breakaway Policy Strategies for FasterCures. (2015). A closer look at alternative payment models. FasterCures value and coverage issue brief. Retrieved August 4, 2016, from PaymentModels.pdf

R E F E R E N C E S · 19

Carson, D. D., Garr, D. R., Goforth, G. A., & Forkner, E. (2010). The time to hesitate has passed: The age of electronic health records is here (pp. 2–11). Columbia, SC: South Carolina Medical Association.

Centers for Medicare & Medicaid Services (CMS). (n.d.). The merit-based incen­ tive payment system: MIPS scoring methodology overview. Retrieved August 4, 2016, from Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/ MIPS-Scoring-Methodology-slide-deck.pdf

DeSalvo, K., & Daniel, J. (2015, April 10). Blocking of health information undermines health system interoperability and delivery reform. HealthIT Buzz. Retrieved August 4, 2016, from health-information-blocking-undermines-interoperability-delivery-reform/

Dick, R. S., & Steen, E. B. (1991). The computer-based patient record: An essential technology for health care. Washington, DC: National Academy Press.

Goldsmith, J. C. (2003). Digital medicine: Implications for healthcare leaders. Chicago, IL: Health Administration Press. (2012). The Beacon community program improving health through health information technology [Brochure]. Retrieved August 3, 2016, from les/beacon-communities- lessons­ learned.pdf

Hsiao, C., Hing, E., Socey, T., & Cai, B. (2011, Nov.). Electronic medical record/ electronic health record systems of office-based physicians: United States, 2009 and preliminary 2010 state estimates. NCHS Data Brief (79). Washington, DC: US Department of Health and Human Services, National Center for Health Statistics, Division of Health Care Statistics.

Institute for Healthcare Improvement (IHI). (n.d.). The IHI triple aim. Retrieved September 22, 2016, from Pages/default.aspx

Institute of Medicine, Committee on Data Standards for Patient Safety. (2003). Reducing medical errors requires national computerized information systems: Data standards are crucial to improving patient safety. Retrieved from http://

Jacob, J. A. (2015). On the road to interoperability, public and private organizations work to connect health care data. JAMA, 314(12), 1213.

Jha, A. K. (2010). Meaningful use of electronic health records. JAMA, 304(15), 1709. doi:10.1001/jama.2010.1497

Jha, A. K., Desroches, C. M., Campbell, E. G., Donelan, K., Rao, S. R., Ferris, T. G. . . . Blumenthal, D. (2009). Use of electronic health records in US hos­ pitals. New England Journal of Medicine, 360(16), 1628–1638. doi:10.1056/ nejmsa0900592

Kohn, L. T., Corrigan, J., & Donaldson, M. S. (2000). To err is human: Building a safer health system. Washington, DC: National Academy Press. Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MIPS-Scoring-Methodology-slide-deck.pdf Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MIPS-Scoring-Methodology-slide-deck.pdf Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MIPS-Scoring-Methodology-slide-deck.pdf

Blocking of health information undermines health system interoperability and delivery reform

Blocking of health information undermines health system interoperability and delivery reform lessons-learned.pdf lessons-learned.pdf
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McKethan, A., Brammer, C., Fatemi, P., Kim, M., Kirtane, J., Kunzman, J. . . . Jain, S. H. (2011). An early status report on the Beacon Communities’ plans for transformation via health information technology. Health Affairs, 30(4), 782–788. doi:10.1377/hlthaff.2011.0166

Nerney, C. (2016, January). CMS acting chief Slavitt on interoperabil­ ity. Retrieved August 3, 2016, from cms-acting-chief-slavitt-interoperability

Office of the National Coordinator for Health Information Technology (ONC). (2015). Connecting health and care for the nation: A shared nationwide interop­ erability roadmap. Retrieved August 3, 2016, from sites/default/fi les/nationwide-interoperability-roadmap-draft-version-1.0.pdf

Office of the National Coordinator for Health Information Technology (ONC). (n.d.a). EHR incentives & certifi cation. Retrieved September 21, 2016, from

Office of the National Coordinator for Health Information Technology (ONC). (n.d.b). Interoperability. Retrieved September 21, 2016, from https://www

The Sequoia Project. (n.d.a). About the Sequoia Project. Retrieved August 4, 2016, from

The Sequoia Project. (n.d.b). What is eHealth exchange. Retrieved from http://

The White House. (2006, August). Fact sheet: Health care transparency: Empowering consumers to save on quality care. Retrieved September 22, 2016, from https://

Health Care Data


• To be able to define health care data and information.

• To be able to understand the major purposes for maintaining patient records.

• To be able to discuss basic patient health record and claims content.

• To be able to discuss basic uses of health care data, including big and small data and analytics.

• To be able to identify common issues related to health care data quality.


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Central to health care information systems is the actual health care data that is collected and subsequently transformed into useful health care infor­ mation. In this chapter we will examine key aspects of health care data. In particular, this chapter is divided into four main sections:

• Health care data and information defined (What are health data and health information?)

• Health care data and information sources (Where does health data originate and why? When does health care data become health care information?)

• Health care data uses (How do health care organizations use data? What is the impact of the trend toward analytics and big data on health care data?)

• Health care data quality (How does the quality of health data affect its use?)


Often the terms health care data and health care information are used inter­ changeably. However, there is a distinction, if somewhat blurred in current use. What, then, is the difference between health data and health informa­ tion? The simple answer is that health information is processed health data. (We interpret processing broadly to cover everything from formal analysis to explanations supplied by the individual decision maker’s brain.) Health care data are raw health care facts, generally stored as characters, words, symbols, measurements, or statistics. One thing apparent about health care data is that they are generally not very useful for decision making. Health care data may describe a particular event, but alone and unprocessed they are not particu­ larly helpful. Take, for example, this figure: 79 percent. By itself, what does it mean? If we process this datum further by indicating that it represents the average bed occupancy for a hospital for the month of January, it takes on more meaning. With the additional facts attached, is this figure now infor­ mation? That depends. If all a health care executive wants or needs to know is the bed occupancy rate for January, this could be considered information. However, for the hospital executive who is interested in knowing the trend of the bed occupancy rate over time or how the facility’s bed occupancy rate compares to that of other, similar facilities, this is not yet the information he needs. A clinical example of raw data would be the lab value, hematocrit (HCT) = 32 or a diagnosis, such as diabetes. These are single facts, data at the most granular level. They take on meaning when assigned to particular

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patients in the context of their health Figure 2.1 Health care data to care status or analyzed as components health care knowledge of population studies.

Knowledge is seen by some as the highest level in a hierarchy with data at the bottom and information in the middle (Figure 2.1). Knowledge is defined by Johns (1997, p. 53) as “a combination of rules, relationships, ideas, and experience.” Another way of thinking about knowledge is that it is information applied to rules, expe­ riences, and relationships with the result that it can be used for decision making. Data analytics applied to health care information and research studies based on health care information are examples of transforming health care information into new knowledge. To carry out our example from previ­ ous paragraphs, the 79 percent occupancy rate could be related to additional information to lead to knowledge that the health care facility’s referral strat­ egy is working.

Where do health care data end and where does health care information begin? Information is an extremely valuable asset at all levels of the health care community. Health care executives, clinical staff members, and others rely on information to get their jobs accomplished. The goal of this discussion is not to pinpoint where data end and information begins but rather to further an understanding of the relationship between health care data and information— health care data are the beginnings of health care information. You cannot create information without data. Through the rest of this chapter the terms health care data and health care information will be used to describe either the most granular components of health care information or data that have been processed, respectively (Lee, 2002).

The first several sections of this chapter focus primarily on the health care data and information levels, but the content of the section on health care data quality takes on new importance when applied to processes for seeking knowledge from health care data. We will begin the chapter exploring where some of the most common health care data originate and describe some of the most common organizational and provider uses of health care information, including patient care, billing and reimbursement, and basic health care statistics. Please note there are many other uses for health information that go beyond these basics that will be explored throughout this text.

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The majority of health care information created and used in health care information systems within and across organizations can be found as an entry in a patient’s health record or claim, and this information is readily matched to a specifi c, identifi able patient.

The Health Insurance Portability and Accountability Act (HIPAA), the federal legislation that includes provisions to protect patients’ health informa­ tion from unauthorized disclosure, defi nes health information as any information, whether oral or recorded in any form or medium, that does the following:

• Is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse

• Relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual

HIPAA refers to this type of identifiable information as protected health information (PHI).

The Joint Commission, the major accrediting agency for many types of health care organizations in the United States, has adopted the HIPAA defi ni­ tion of protected health information as the definition of “health information” listed in their accreditation manuals’ glossary of terms (The Joint Commis­ sion, 2016). Creating, maintaining, and managing quality health information is a significant factor in health care organizations, such as hospitals, nursing homes, rehabilitation centers, and others, who want to achieve Joint Commis­ sion accreditation. The accreditation manuals for each type of facility contain dozens of standards that are devoted to the creation and management of health information. For example, the hospital accreditation manual contains two specific chapters, Record of Care, Treatment, and Services (RC) and Infor­ mation Management (IM). The RC chapter outlines specifi c standards govern­ ing the components of a complete medical record, and the IM chapter outlines standards for managing information as an important organizational resource.

Medical Record versus Health Record

The terms medical record and health record are often used interchangeably to describe a patient’s clinical record. However, with the advent and subse­ quent evolution of electronic versions of patient records these terms actually describe different entities. The Office of the National Coordinator for Health

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Information Technology (ONC) distinguishes the electronic medical record and the electronic health record as follows.

Electronic medical records (EMRs) are a digital version of the paper charts. An EMR contains the medical and treatment history of the patients in one practice (or organization). EMRs have advantages over paper records. For example, EMRs enable clinicians (and others) to do the following:

• Track data over time

• Easily identify which patients are due for preventive screenings or checkups

• Check how their patients are doing on certain parameters—such as blood pressure readings or vaccinations

• Monitor and improve overall quality of care within the practice

But the information in EMRs doesn’t travel easily out of the practice (or organization). In fact, the patient’s record might even have to be printed out and delivered by mail to specialists and other members of the care team. In that regard, EMRs are not much better than a paper record.

Electronic health records (EHRs) do all those things—and more. EHRs focus on the total health of the patient—going beyond standard clinical data collected in the provider’s office (or during episodes of care)—and is inclusive of a broader view on a patient’s care. EHRs are designed to reach out beyond the health organization that originally collects and compiles the information. They are built to share information with other health care providers (and organizations), such as laboratories and specialists, so they contain information from all the clinicians involved in the patient’s care (Garrett & Seidman, 2011). Another distinguishing feature of the EHR (dis­ cussed in more detail in Chapter Three) is the inclusion of decision-support capabilities beyond those of the EMR.

Patient Record Purposes

Health care organizations maintain patient clinical records for several key purposes. As we move into the discussion on clinical information systems in subsequent chapters, it will be important to remember these purposes, which remain constant regardless of the format or infrastructure supporting the records. In considering the purposes listed, the scope of care is also important. Records support not only managing a single episode of care but also a patient’s continuum of care and population health. Episode of care generally refers to the services provided to a patient with a specific condition for a specifi c period

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of time. Continuum of care, as defined by HIMSS (2014), is a concept involving a system that guides and tracks patients over time through a comprehensive array of health services spanning all levels and intensity of care. Population health is a relatively new term and definitions vary. However, the concept behind managing population health is to improve health outcomes within defined communities (Stoto, 2013). The following list comprises the most commonly recognized purposes for creating and maintaining patient records.

1. Patient care. Patient records provide the documented basis for planning patient care and treatment, for a single episode of care and across the care continuum. This purpose is considered the number- one reason for maintaining patient records. As our health care delivery system moves toward true population health management and patient-focused care, the patient record becomes a critical tool for documenting each provider’s contribution to that care.

2. Communication. Patient records are an important means by which physicians, nurses, and others, whether within a single organization or across organizations, can communicate with one another about patient needs. The members of the health care team generally interact with patients at different times during the day, week, or even month or year. Information from the patient’s record plays an important role in facilitating communication among providers across the continuum of care. The patient record may be the only means of communication among various providers. It is important to note that patients also have a right to access their records, and their engagement in their own care is often reflected in today’s records.

3. Legal documentation. Patient records, because they describe and document care and treatment, are also legal records. In the event of a lawsuit or other legal action involving patient care, the record becomes the primary evidence for what actually took place during the care. An old but absolutely true adage about the legal importance of patient records says, “If it was not documented, it was not done.”

4. Billing and reimbursement. Patient records provide the documentation patients and payers use to verify billed services. Insurance companies and other third-party payers insist on clear documentation to support any claims submitted. The federal programs Medicare and Medicaid have oversight and review processes in place that use patient records to confirm the accuracy of claims filed. Filing a claim for a service that is not clearly documented in the patient record may be construed as fraud.

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5. Research and quality management. Patient records are used in many facilities for research purposes and for monitoring the quality of care provided. Patient records can serve as source documents from which information about certain diseases or procedures can be taken, for example. Although research is most prevalent in large academic medical centers, studies are conducted in other types of health care organizations as well.

6. Population health. Information from patient records is used to monitor population health, assess health status, measure utilization of services, track quality outcomes, and evaluate adherence to evidence- based practice guidelines. Health care payers and consumers are increasingly demanding to know the cost-effectiveness and effi cacy of different treatment options and modalities. Population health focuses on prevention as a means of achieving cost-effective care.

7. Public health. Federal and state public health agencies use information from patient records to inform policies and procedures to ensure that they protect citizens from unhealthy conditions.

Patient Records as Legal Documents

The importance of maintaining complete and accurate patient records cannot be underestimated. They serve not only as a basis for planning patient care but also as the legal record documenting the care that was provided to patients. The data captured in a patient record become a permanent record of that patient’s diagnoses, treatments, response to treatments, and case management. Patient records provide much of the source data for health care information that is created, maintained, and managed within and across health care organizations.

When the patient record was a file folder full of paper housed in the health information management department of the hospital, identifying the legal health record (LHR) was fairly straightforward. Records kept in the usual course of business (in this case, providing care to patients) represent an exception to the hearsay rule, are generally admissible in a court, and there­ fore can be subpoenaed—they are legal documentation of the care provided to the patients. With the implementation of comprehensive EHR systems the definition of an LHR remains the same, but the identification of the boundaries for it may be harder to determine. In 2013, the ONC’s National Learning Consortium published the Legal Health Record Policy Template to guide health care organizations and providers in defi ning which records and record sets constitute their legal health record for administrative, business, or

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evidentiary purposes. The media on which the records are maintained does not determine the legal status; rather, it is the purpose for which the record was created and is maintained. The complete template can be found at www les/legal_health_policy_template.docx.

Because of the legal nature of patient records, the majority of states have specific retention requirements for information contained within them. These state requirements should be the basis for the health care organiza­ tion’s formal retention policy. (The Joint Commission and other accrediting agencies also address retention but generally refer organizations back to their own state regulations for specifics.) When no specific retention requirement is made by the state, all patient information that is a part of the LHR should be maintained for at least as long as the state’s statute of limitations or other regulation requires. In the case of minor children the LHR should be retained until the child reaches the age of majority as defined by state law, usually eighteen or twenty-one. Health care executives should be aware that stat­ utes of limitations may allow a patient to bring a case as long as ten years after the patient learns that his or her care caused an injury (Lee, 2002). Although some specific retention requirements and general guidelines exist, it is becoming increasingly popular for health care organizations to keep all LHR information indefinitely, particularly if the information is stored in an electronic format. If an organization does decide to destroy LHR information, this destruction must be carried out in accordance with all applicable laws and regulations.

Another important aspect related to the legal nature of patient records is the need for them to be authenticated. State and federal laws and accredita­ tion standards require that medical record entries be authenticated to ensure that the legal document shows the person or persons responsible for the care provided. Generally, authentication of an LHR entry is accomplished when the physician or other health care professional signs it, either with a hand­ written signature or an electronic signature.

Personal Health Records

An increasingly common type of patient record is maintained by the indi­ vidual to track personal health care information: the personal health record (PHR). According to the American Health Information Management Associ­ ation (AHIMA, 2016), a PHR “is a tool . . . to collect, track and share past and current information about your health or the health of someone in your care.” A PHR is not the same as a health record managed by a health care organization or provider, and it does not constitute a legal document of care, but it should contain all pertinent health care information contained in an
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individual’s health records. PHRs are an effective tool enabling patients to be active members of their own health care teams (AHIMA, 2016).

Patient Record Content

The following components are common to most patient records, regardless of facility type or record system (AHIMA, 2016). Specific patient record content is determined to a large extent by external requirements, standards, and regulations (discussed in Chapter Nine). Keep in mind, a patient record may contain some or all of the documentation listed. Depending on the patient’s illness or injury and the type of treatment facility, he or she may need addi­ tional specialized health care services. These services may require specifi c documentation. For example, long-term care facilities and behavioral health facilities have special documentation requirements. Our list is intended to introduce the common components of patient records, not to provide a com­ prehensive list of all possible components. The following provides a general overview of record content and the person or persons responsible for cap­ turing the content during a single episode of care. It reveals that the patient record is a repository for a variety of health care data and information that is captured by many different individuals involved in the care of the patient.

• Identifi cation screen. Information found on the identifi cation screen of a health or medical record originates at the time of registration or admission. The identifi cation data generally includes at least the patient name, address, telephone number, insurance carrier, and policy number, as well as the patient’s diagnoses and disposition at discharge. These diagnoses are recorded by the physicians and coded by administrative personnel. (Diagnosis coding is discussed following in this chapter.) The identifi cation component of the data is used as a clinical and an administrative document. It provides a quick view of the diagnoses that required care during the encounter. The codes and other demographic information are used for reimbursement and planning purposes.

• Problem list. Patient records frequently contain a comprehensive problem list, which identifi es signifi cant illnesses and operations the patient has experienced. This list is generally maintained over time. It is not specifi c to a single episode of care and may be maintained by the attending or primary care physician or collectively by all the health care providers involved in the patient’s care.

• Medication record. Sometimes called a medication administration record (MAR), this record lists medicines prescribed for and subsequently administered to the patient. It often also lists any medication allergies

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the patient may have. Nursing personnel are generally responsible for documenting and maintaining medication information in acute care settings, because they are responsible for administering medications according to physicians’ written or verbal orders.

• History and physical. The history component of the report describes any major illnesses and surgeries the patient has had, any signifi cant family history of disease, patient health habits, and current medications. The information for the history is provided by the patient (or someone acting on his or her behalf) and is documented by the attending physician or other care provider at the beginning of or immediately prior to an encounter or treatment episode. The physical component of this report states what the physician found when he or she performed a hands-on examination of the patient. The history and physical together document the initial assessment of the patient for the particular care episode and provide the basis for diagnosis and subsequent treatment. They also provide a framework within which physicians and other care providers can document signifi cant findings. Although obtaining the initial history and physical is a one­ time activity during an episode of care, continued reassessment and documentation of that reassessment during the patient’s course of treatment is critical. Results of reassessments are generally recorded in progress notes.

• Progress notes. Progress notes are made by the physicians, nurses, therapists, social workers, and other staff members caring for the patient. Each provider is responsible for the content of his or her notes. Progress notes should refl ect the patient’s response to treatment along with the provider’s observations and plans for continued treatment. There are many formats for progress notes. In some organizations all care providers use the same note format; in others each provider type uses a customized format. A commonly used format for a progress note is the SOAP format. Providers are expected to enter notes divided into four components:

o Subjective fi ndings

o Objective fi ndings

o Assessment

o Plan

• Consultation. A consultation note or report records opinions about the patient’s condition made by another health care provider at the request of the attending physician or primary care provider.

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Consultation reports may come from physicians and others inside or outside a particular health care organization, but this information is maintained as part of the patient record.

• Physician’s orders. Physician’s orders are a physician’s directions, instructions, or prescriptions given to other members of the health care team regarding the patient’s medications, tests, diets, treatments, and so forth. In the current US health care system, procedures and treatments must be ordered by the appropriate licensed practitioner; in most cases this will be a physician.

• Imaging and X-ray reports. The radiologist is responsible for interpreting images produced through X-rays, mammograms, ultrasounds, scans, and the like and for documenting his or her interpretations or findings in the patient’s record. These fi ndings should be documented in a timely manner so they are available to the appropriate provider to facilitate the appropriate treatment. The actual digital images are generally maintained in the radiology or imaging departments in specialized computer systems. These images are typically not considered part of the legal patient record, per se, but in modern EHRs they are available through the same interface.

• Laboratory reports. Laboratory reports contain the results of tests conducted on body fl uids, cells, and tissues. For example, a medical lab might perform a throat culture, urinalysis, cholesterol level, or complete blood count. There are hundreds of specifi c lab tests that can be run by health care organizations or specialized labs. Lab personnel are responsible for documenting the lab results into the patient record. Results of the lab work become part of the permanent patient record. However, lab results must also be available during treatment. Health care providers rely on accurate lab results in making clinical decisions, so there is a need for timely reporting of lab results and a system for ensuring that physicians and other appropriate care providers receive the results. Physicians or other primary care providers are responsible for documenting any findings and treatment plans based on the lab results.

• Consent and authorization forms. Copies of consents to admission, treatment, surgery, and release of information are an important component of the patient record related to its use as a legal document. The practitioner who actually provides the treatment must obtain informed consent for the treatment. Patients must sign informed consent documents before treatment takes place. Forms authorizing release of information must also be signed by patients before any

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patient-specifi c health care information is released to parties not directly involved in the care of the patient.

• Operative report. Operative reports describe any surgery performed and list the names of surgeons and assistants. The surgeon is responsible for documenting the information found in the operative report.

• Pathology report. Pathology reports describe tissue removed during any surgical procedure and the diagnosis based on examination of that tissue. The pathologist is responsible for documenting the information contained within the pathology report.

• Discharge summary. Each acute care patient record contains a discharge summary. The discharge summary summarizes the hospital stay, including the reason for admission, signifi cant fi ndings from tests, procedures performed, therapies provided, responses to treatments, condition at discharge, and instructions for medications, activity, diet, and follow-up care. The attending physician is responsible for documenting the discharge summary at the conclusion of the patient’s stay in the hospital.

With the passage of the Accountable Care Act (ACA) and other health care payment reform measures, organizations and communities have begun to shift focus from episodic care to population health. By defi nition, pop­ ulation health focuses on maintaining health and managing health care utilization for a defined population of patients or community with the goal of decreasing costs. Along with other key components, successful popula­ tion health will require extensive care coordination across care providers and community organizations. Care managers are needed to interact with patients on a regular basis during and in between clinical encounters (Insti­ tute for Health Technology Transformation, 2012). Needless to say, this will have a significant impact on the form and structure of the future EHRs. These care managers will document all plan findings, clinical and social, within the patient’s record and rely on other providers’ notes and fi ndings to effectively coordinate care. Baker, Cronin, Conway, DeSalvo, Rajkumar, and Press (2016), for example, describes a new tool to support “person-cen­ tered care by a multidisciplinary team,” the comprehensive shared care plan (CSCP), which will rely on HIT to enable collaboration across settings. A stakeholder group organized by the US Department of Health and Human Services developed key goals for the CSCP as they envision it:

• It should enable a clinician to electronically view information that is directly relevant to his or her role in the care of the person, to easily

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identify which clinician is doing what, and to update other members of an interdisciplinary team on new developments.

• It should put the person’s goals (captured in his or her own words) at the center of decision making and give that individual direct access to his or her information in the CSCP.

• It should be holistic and describe clinical and nonclinical (including home- and community-based) needs and services.

• It should follow the person through high-need episodes (e.g., acute illness) as well as periods of health improvement and maintenance (Baker et al., 2016).

Figures 2.2 through 2.5 display screens from one organization’s EHR.

Claims Content

As we have seen in the previous section, health care information is captured and stored as a part of the patient record. However, there is more to the story: health care organizations and providers must be paid for the care they provide. Generally, the health care organization’s accounting or billing

Figure 2.2 Sample EHR information screen

Source: Medical University of South Carolina; Epic.

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Figure 2.3 Sample EHR problem list

Source: Medical University of South Carolina; Epic.

Figure 2.4 Sample EHR progress notes

Source: Medical University of South Carolina; Epic.

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Figure 2.5 Sample EHR lab report

Source: Medical University of South Carolina; Epic.

department is responsible for processing claims, an activity that includes verifying insurance coverage; billing third-party payers (private insurance companies, Medicare, or Medicaid); and processing the payments as they are received. Centers for Medicare and Medicaid Services (CMS) currently requires health care providers to submit claims electronically using a set of standard elements. As early as the 1970s the health care community strived to develop standard insurance claim forms to facilitate payment collection. With the nearly universal adoption of electronic billing and government-mandated transaction standards, standard claims content has become essential.

Depending on the type of service provided to the patient, one of two standard data sets will be submitted to the third-party payer. The UB-04, or CMS-1450, is submitted for inpatient, hospital-based outpatient, home health care, and long-term care services. The CMS-1500 is submitted for health care provider services, such as those provided by a physician’s office. It is also used for billing by some Medicaid state agencies. The standard requirements for the parallel electronic counterparts to the CMS-1450 and CMS-1500 are defined by ANSI ASC X12N 837I (Institutional) and ANSI ASC X12N 837P (Professional), respectively. Therefore, the claims standards are frequently referred to as 837I and 837P.


In 1975, the American Hospital Association (AHA) formed the National Uniform Billing Committee (NUBC), bringing the major national provider and

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payer organizations together for the purpose of developing a single billing form and standard data set that could be used for processing health care claims by institutions nationwide. The first uniform bill was the UB-82. It has since been modified and improved on, resulting, first, in the UB-92 data set and now in the currently used UB-04, also known as CMS-1450. UB-04 is the de facto institutional provider claim standard. Its content is required by CMS and has been widely adopted by other government and private insurers. In addition to hospitals, UB-04 or 837I is used by skilled nursing facilities, end stage renal disease providers, home health agencies, hospices, rehabilitation clinics and facilities, community mental health centers, critical access hospitals, federally qualified health centers, and others to bill their third-party payers. The NUBC is responsible for maintaining and updating the specifications for the data elements and codes that are used for the UB-04/CMS-1450 and 837I. A full description of the elements required and the specifications manual can be found on the NUBC website, (CMS 2016a; NUBC, 2016).


The National Uniform Claim Committee (NUCC) was created by the Amer­ ican Medical Association (AMA) to develop a standardized data set for the noninstitutional or “professional” health care community to use in the sub­ mission of claims (much as the NUBC has done for institutional providers). Members of this committee represent key provider and payer organizations, with the AMA appointing the committee chair. The standardized claim form developed and overseen by NUCC is the CMS-1500 and its electronic coun­ terpart is the 837P. This standard has been adopted by CMS to bill Medicare fee-for-service, and similar to UB-04 and 837I for institutional care, it has become the de facto standard for all types of noninstitutional provider claims, such as those for private physician services. NUCC maintains a crosswalk between the 837P and CMS-1500 explaining the specific data elements, which can be found on their website at (CMS, 2013; NUCC, 2016).

It is important to recognize that the UB-04 and the CMS-1500 and their electronic counterparts incorporate standardized data sets. Regardless of a health care organization’s location or a patient’s insurance coverage, the same data elements are collected. In many states UB-04 data and CMS-1500 data must be reported to a central state agency responsible for aggregating and analyzing the state’s health data. At the federal level the CMS aggregates the data from these claims forms for analyzing national health care reimburse­ ment and clinical and population trends. Having uniform data sets means that data can be compared not only within organizations but also within states and across the country.
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Diagnostic and Procedural Codes

Diagnostic and procedural codes are captured during the patient encounter, not only to track clinical progress but also for billing, reimbursement, and other administrative purposes. This diagnostic and procedural information is initially captured in narrative form through physicians’ and other health care providers’ documentation in the patient record. This documentation is subsequently translated into numerical codes. Coding facilitates the classi­ fication of diagnoses and procedures for reimbursement purposes, clinical research, and comparative studies.

Two major coding systems are employed by health care providers today:

• ICD-10 (International Classification of Diseases)

• CPT (Current Procedural Terminology), published by the American Medical Association

Use of these systems is required by the federal government for reimburse­ ment, and they are recognized by health care agencies nationally and inter­ nationally. The UB-04 and CMS-1500 have very specific coding requirements for claim submission, which include use of these coding sets.


The ICD-10 classification system used to code diseases and other health statuses in the United States is derived from the International Classifi ca­ tion of Diseases, Tenth Revision, which was developed by the World Health Organization (WHO) (CDC, 2016) to capture disease data. The precursors to the current ICD system were developed to enable comparison of morbidity (illness) and mortality (death) statistics across nations. Over the years this basic purpose has evolved and today ICD-10-CM (Clinical Modifi cation) coding plays major role in reimbursement to hospitals and other health care institutions. ICD-10-CM codes used for determining the diagnosis related group (DRG) into which a patient is assigned. DRGs are in turn the basis for determining appropriate inpatient reimbursements for Medicare, Medicaid, and many other health care insurance benefi ciaries. Accurate ICD coding has, as a consequence, become vital to accurate institutional reimbursement.

The National Center of Health Statistics (NVHS) is the federal agency responsible for publishing ICD-10-CM (Clinical Modification) in the United States. Procedure information is similarly coded using the ICD-10-PCS (Pro­ cedural Coding System). ICD-10-PCS was developed by CMS for US inpatient

– –

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Exhibit 2.1 Excerpt from ICD 10 CM 2016

Malignant neoplasms (C00-C96) Malignant neoplasms, stated or presumed to be primary (of specifi ed sites), and certain specified histologies, except neuroendocrine, and of lymphoid, hematopoietic, and related tissue (C00-C75)

Malignant neoplasms of lip, oral cavity, and pharynx (C00-C14)

C00 Malignant neoplasm of lip

Use additional code to identify:

alcohol abuse and dependence (F10.-)

history of tobacco use (Z87.891)

tobacco dependence (F17.-)

tobacco use (Z72.0)

Excludes 1: malignant melanoma of lip (C43.0)

Merkel cell carcinoma of lip (C4A.0)

other and unspecifi ed malignant neoplasm of skin of lip (C44.0-)

C00.0 Malignant neoplasm of external upper lip

Malignant neoplasm of lipstick area of upper lip

Malignant neoplasm of upper lip NOS

Malignant neoplasm of vermilion border of upper lip

C00.1 Malignant neoplasm of external lower lip

Malignant neoplasm of lower lip NOS

Malignant neoplasm of lipstick area of lower lip

Malignant neoplasm of vermilion border of lower lip

hospital settings only. The ICD-10-CM and ICD-10-PCS publications are considered federal government documents whose contents may be used freely by others. However, multiple companies republish this government document in easier-to-use, annotated, formally copyrighted versions. In general, the ICD-10-CM and ICD-10-PCS are updated on an annual basis (CMS, 2015, 2016b).

Exhibits 2.1 and 2.2 are excerpts from the ICD-10-CM and ICD-10-PCS classification systems. They show the system in its text form, but large health care organizations generally use encoders, computer applications that facil­ itate accurate coding. Whether a book or text file or encoder is used, the classification system follows the same structure.

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C00.2 Malignant neoplasm of external lip, unspecifi ed

Malignant neoplasm of vermilion border of lip NOS

C00.3 Malignant neoplasm of upper lip, inner aspect

Malignant neoplasm of buccal aspect of upper lip

Malignant neoplasm of frenulum of upper lip

Malignant neoplasm of mucosa of upper lip

Malignant neoplasm of oral aspect of upper lip

C00.4 Malignant neoplasm of lower lip, inner aspect

Malignant neoplasm of buccal aspect of lower lip

Malignant neoplasm of frenulum of lower lip

Malignant neoplasm of mucosa of lower lip

Malignant neoplasm of oral aspect of lower lip

C00.5 Malignant neoplasm of lip, unspecifi ed, inner aspect

Malignant neoplasm of buccal aspect of lip, unspecifi ed

Malignant neoplasm of frenulum of lip, unspecifi ed

Malignant neoplasm of mucosa of lip, unspecifi ed

Malignant neoplasm of oral aspect of lip, unspecifi ed

C00.6 Malignant neoplasm of commissure of lip, unspecifi ed

C00.7 Malignant neoplasm of overlapping sites of lip

C00.8 Malignant neoplasm of lip, unspecifi ed

Source: CMS (2016b).


The American Medical Association (AMA) publishes an updated CPT each year. Unlike ICD-9-CM, CPT is copyrighted, with all rights to publication and distribution held by the AMA. CPT was first developed and published in 1966. The stated purpose for developing CPT was to provide a uniform language for describing medical and surgical services. In 1983, however, the government adopted CPT, in its entirety, as the major component (known as Level 1) of the Healthcare Common Procedure Coding System (HCPCS). Since then CPT has become the standard for physician’s office, outpatient, and ambulatory care coding for reimbursement purposes. Exhibit 2.3 is a simplifi ed example of a patient encounter form with HCPCS/CPT codes.

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Exhibit 2.2 Excerpt from ICD 10 PCS 2017 OCW

Section 0 Medical and Surgical

Body System C Mouth and Throat

Operation W Revision: Correcting, to the extent possible, a portion of a malfunctioning device or the position of a displaced device

Body Part Approach Device Qualifi er

A Salivary Gland 0 Open

3 Percutaneous

X External

0 Drainage Device

C Extraluminal Device

Z No Qualifi er

S Larynx 0 Open

3 Percutaneous

7 Via Natural or Artifi cial Opening

8 Via Natural or Artifi cial Opening Endoscopic

X External

0 Drainage Device

7 Autologous

Z No Qualifi er

Tissue Substitute

D Intraluminal Device

J Synthetic Substitute

K Nonautologous Tissue Substitute

Y Mouth and 0 Open 0 Drainage Device Z No Qualifi er Throat

3 Percutaneous 1 Radioactive

7 Via Natural or Artifi cial Opening 7 Autologous

8 Via Natural or Artifi cial Opening D Intraluminal Endoscopic

X External



Tissue Substitute

J Synthetic Substitute

K Nonautologous Tissue Substitute

Source: CMS (2016c).

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Exhibit 2.3 Patient encounter form coding standards

Pediatric Associates P.A. 123 Children’ s Avenue, Anytown, USA

Offi ce Visits 99211 Estab Pt—minimal Preventive Medicine—New 99212 Estab Pt—focused 99381 Prev Med 0–1 years 99213 Estab Pt—expanded 99382 Prev Med 1–4 years 99214 Estab Pt—detailed 99383 Prev Med 5–11 years 99215 Estab Pt—high complexity 99384 Prev Med 12–17 years

99385 Prev Med 18–39 years 99201 New Pt—problem focused 99202 New Pt—expanded Preventive Medicine—Established 99203 New Pt—detailed 99391 Prev Med 0–1 years 99204 New Pt—moderate complexity 99392 Prev Med 1–4 years

99205 New Pt—high complexity 99393 Prev Med 5–11 years 99394 Prev Med 12–17 years

99050 After Hours 99395 Prev Med 18–39 years 99052 After Hours—after 10 pm 99054 After Hours—Sundays and Holidays 99070 10 Arm Sling

99070 11 Sterile Dressing Outpatient Consult 99070 45 Cervical Cap 99241 99242 99243 99244 99245

Immunizations, Injections, and Office Laboratory Services 90471 Adm of Vaccine 1 81000 Urinalysis w/ micro 90472 Adm of Vaccine > 1 81002 Urinalysis w/o micro 90648 HIB 82270 Hemoccult Stool 90658 Infl uenza 82948 Dextrostix 90669 Prevnar 83655 Lead Level 90701 DTP 84030 PKU 90702 DT 85018 Hemoglobin 90707 MMR 87086 Urine Culture 90713 Polio Injection 87081 Throat Culture 90720 DTP/HIB 87205 Gram Stain 90700 DTaP 87208 Ova Smear (pin worm) 90730 Hepatitis A 87210 Wet Prep 90733 Meningococcal 87880 Rapid Strep 90744 Hepatitis B 0–11 90746 Hepatitis B 18+ years

Diagnosis Patient Name No. Date Time Address DOB Name of Insured ID Insurance Company Return Appointment ___________________________________________________

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As coding has become intimately linked to reimbursement, directly deter­ mining the amount of money a health care organization can receive for a claim from insurers, the government has increased its scrutiny of coding practices. There are official guidelines for accurate coding, and health care facilities that do not adhere to these guidelines are liable to charges of fraud­ ulent coding practices. In addition, the Office of Inspector General of the Department of Health and Human Services (HHS OIG) publishes compliance guidelines to facilitate health care organizations’ adherence to ethical and legal coding practices. The OIG is responsible for (among other duties) investi­ gating fraud involving government health insurance programs. More specifi c information about compliance guidelines can be found on the OIG website ( and will be more thoroughly discussed in Chapter Nine.


The previous sections of this chapter examine how health care data is cap­ tured in patient records and billing claims. Even with this brief overview you can begin to see what a rich source of health care data these records could be. However, before health care data can be used, it must be stored and retrieved. How do we retrieve that data so that the information can be aggregated, manipulated, or analyzed for health care organizations to improve patient care and business operations? How do we combine this patient care data created and stored internally with other pertinent data from external sources?

As we discussed previously in the chapter, data need to be processed to become information. We also noted that data and information may be considered along a continuum, one person’s data may be another person’s information depending on the level of processing required. In this section of the chapter we will focus on the use of data analysis to transform data into information. There is a lot of discussion about the current and future impact of so-called big data on the health care community. We will start the dis­ cussion of data analysis by looking at the basic elements required to perform effective health care data analysis, followed by a comparison of “small” data analysis examples to the emerging big data.

Regardless of the scope of the data or the tools used, health care data analysis requires basic elements. First, there must be a source of data, for example, the EHR, claims data, laboratory data, and so on. Second, these data must be stored in a retrievable manner, for example, in a database or data warehouse. Next, an analytical tool, such as mathematical statistics, probability models, predictive models, and so on, must be applied to the stored data. Finally, to be meaningful, the analyzed data must be reported in a usable manner.
H E A L T H C A R E D A T A U S E S · 43

Databases and Data Warehouses

A database generally refers to any structured, accessible set of data stored elec­ tronically; it can be large or small. The back end of EHR and claims systems are examples of large databases. A data warehouse differs from a database in its structure and function. In health care, data warehouses that are derived from health care information systems may be referred to as clinical data repos­ itories. The data in a data warehouse come from a variety of sources, such as the EHR, claims data, and ancillary health care information systems (lab­ oratory, radiology, etc.). The data from the sources are extracted, “cleaned,” and stored in a structure that enables the data to be accessed along multiple dimensions, such as time (e.g., day, month, year); location; or diagnosis. Data warehouses help organizations transform large quantities of data from sep­ arate transactional files or other applications into a single decision-support database. The important concept to understand is that the database or data warehouse provides organized storage for data so that they can be retrieved and analyzed. Before useful information can be obtained, the data must be analyzed. In the most straightforward uses, the data from the data stores are aggregated and reported using simple reporting or statistical methods.

Small versus Big Data

Data stores and data analytics are not new to health care. However, the scope and speed with which we are now capable of analyzing data and discovering new information has increased tremendously. Big data is not a data store (warehouse or database), nor is it a specific analytical tool, but rather it refers to a combination of the two. Experts describe big data as characterized by three Vs (the fourth V—veracity, or accuracy—is sometimes added). These characteristics are present in big but not small data:

• Very large volume of data

• A variety (e.g., images, text, discrete) of types and sources (EHR, wearable fi tness technology, social media, etc.) of data

• The velocity at which the data is accumulated and processed (Glaser, 2014; Macadamian, n.d.)

Harris and Schneider (2015) describe a useful metaphor for explaining the difference between big data and traditional data storage and analysis systems. They tell us to consider “even enormous databases, such as the Medicare claims database as ‘filing cabinets,’ while big data is more like a ‘conveyor

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belt.’ The filing cabinet no matter how large, is static, while the conveyor belt is constantly moving and presenting new data points and even data sources” (p. 53). They further provide the following examples of questions answered by big versus small data in health care:

o What are the effects of our immunization programs? versus Is my child growing as expected?

o What are some the healthiest regions? versus Is this medication improving my (or my patients’) blood pressure?

Small Data Examples

Disease and Procedure Indexes

Health care management often wants to know summary information about a particular disease or treatment. Examples of questions that might be asked are What is the most common diagnosis among patients treated in the facil­ ity? What percentage of patients with diabetes is African American? What is the most common procedure performed on patients admitted with gastritis (or heart attack or any other diagnosis)? Traditionally, such questions have been answered by looking in disease and procedure indexes. Prior to EHRs and their resulting databases, disease and procedure indexes were large card catalogues or books that kept track of the numbers of diseases treated and procedures occurring in a facility by disease and procedure codes. Now that repositories of health care data are common, the disease and procedure index function is generally handled as a component of the EHR. The retrieval of information related to diseases and procedures is still based on ICD and CPT codes, but the queries are limitless. Users can search the disease and procedure database for general frequency statistics for any number of combi­ nations of data. Figure 2.6 is an example of a screen resulting from a query for a specific patient, Iris Hale, who has been identified as a member of both the Heart Failure and Hypertension registries.

Many other types of aggregate clinical reports are used by health care providers and executives. Ad hoc reporting capability applied to clinical databases gives providers and executives access to any number of summary reports based on the data elements from patient health and claims records.

Health Care Statistics

Utilization and performance statistics are routinely gathered for health care executives. This information is needed for facility and health care provision

H E A L T H C A R E D A T A U S E S · 45

planning and improvement. Statistical reports can provide managers and executives a snapshot of their organization’s performance.

Two categories of statistics directly related to inpatient stays are routinely captured and reported. Many variations of these reports and others that drill down to more granular level of data also exist.

• Census statistics. These data reveal the number of patients present at any one time in a facility. Several commonly computed rates are based on these census data, including the average daily census and bed occupancy rates.

• Discharge statistics. This group of statistics is calculated from data accumulated when patients are discharged. Some commonly computed rates based on discharge statistics are average length of stay, death rates, autopsy rates, infection rates, and consultation rates.

Outpatient facilities and group practices, specialty providers, and so on also routinely collect utilization statistics. Some of the more common statis­ tics are average patient visits per month (or year) and percentage of patients achieving a health status goal, such as immunizations or smoking cessa­ tion. The number of descriptive health care statistics that can be produced is limitless. Health care organizations also track a wide variety of fi nancial

Figure 2.6 Sample heart failure and hypertension query screen

Source: Cerner Corporation (2016). Used with permission.

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performance, patient satisfaction, and employee satisfaction data. Patient and employee data generally come from surveys that are routinely adminis­ tered. The body of data collected and analyzed is driven by the mission of the organization, along with reporting requirements from state, federal, and accrediting organizations.

Health care organizations also look to data to guide improved perfor­ mance and patient satisfaction. Performance data are essential to health care leaders; however, because they are generally managed within a quality or performance improvement department and are not derived from health care data, per se, they will not be discussed in depth in this chapter. A few significant external agencies that report performance data, however, will be discussed in Chapter Nine.

Although each organization will determine which daily, monthly, and yearly statistics they need to track based on their individual service missions, Rachel Fields (2010) in an article published by Becker’s Hospital Review pro­ vides a list of ten common measures identified by a panel of fi ve hospital leaders, as shown in Table 2.1.

Big Data Examples

Health care organizations today contend with data from EHRs, internal databases, data warehouses, as well as the availability of data from the growing volume of other health-related sources, such as diagnostic imaging equipment, aggregated pharmaceutical research, social media, and personal devices such as Fitbits and other wearable technologies. No longer is the data needed to support health care decisions located within the organization or any single data source. As we begin to manage populations and care con­ tinuums we have to bring together data from hospitals, physician practices, long-term care facilities, the patient, and so on. These data needs are bigger than the data needs we had (and still have) when we focused primarily on inpatient care.

Big data is a practice that is applied to a wide range of uses across a wide range of industries and efforts, including health care. There is no single big data product, application, or technology, but big data is broadening the range of data that may be important in caring for patients. For instance, in the case of Alz­ heimer’s and other chronic diseases such as diabetes and cancer, online social sites not only provide a support community for like-minded patients but also contain knowledge that can be mined for public health research, medication use monitoring, and other health-related activities. Moreover, popular social networks can be used to engage the public and monitor public perception and response during flu epidemics and other public health threats (Glaser, 2014).

H E A L T H C A R E D A T A U S E S · 47

Table 2.1 Ten common hospital statistical measures

Daily Monthly Yearly

1. Quality measures, 4. Point-of-service cash such as collections

Infection rates 5. Percentage of charity care

Patient falls 6. Percentage of budget spent

Overall mortality for each department

2. Patient census 7. Door-to-discharge time

statistics 8. Patient satisfaction scores

By physician

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