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The Benefits of Health IT and P4P

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Remarks by Carolyn Clancy, M.D., Director of the Agency for Healthcare Research and Quality (AHRQ)

National Business Coalition on Health, November 6, 2006

I am proud that the National Business Coalition on Health decided to support the city at this time in its history. I am also happy to have the opportunity to see all of the activity that is taking place here.

My primary job this morning is to welcome you to the Coalition's 11th annual conference. But I do want to talk a little bit about health information technology [IT] and value-based care, especially since we're focusing on community collaboration for revitalizing health care. Because I don't think you can have truly value-based health care without health IT.

As Americans, we are very fortunate to have the best trained and finest health care professionals in the world. However, I think all of us know, and frankly, part of the reason you're here today is because we recognize that they don't always have the greatest system for doing the fine work that they do.

The good news is that we're making progress. But I think all of us would agree that the pace is way too slow.

My Agency puts out an annual report on quality care in this country. This year's version will be released very soon. Every year we see modest improvements of about 3 percent. I'll celebrate any momentum forward. At the same time, my statistician tells me it will take us about 20 years to actually close the gap between best possible care and what we routinely receive today. I don't think any of us wants to wait that long.

Accelerating the pace of improvement is a charge that we at the Agency for Healthcare Research and Quality, or AHRQ, take very, very seriously. Our mission is to improve the quality, safety, efficiency, and effectiveness of health care for all Americans. We do this by supporting independent research that is highly informed by the needs of people who are providing care directly, those who are regulating it, those who are paying for it, and policymakers designed to help people at all levels, whether it is Federal, State, or literally on the ground providing care. And it has become clear to us that as the complexity of our system grows, the providers have to leverage health IT to improve patient safety and health outcomes. We know that computers and the Internet have changed the world.

Internet domain company VeriSign says at least 2.25 billion E-mails are sent worldwide every single day. I'm sure some of you feel like you've received a great chunk of those. I certainly do. We've come to trust the technology enough to do banking online, to pay bills online. My personal favorite is shopping online. You don't have to go to the mall anymore unless you want to.

That's the level of trust we want in health IT. Secretary Leavitt often says we actually don't have a real health care system, we have a sector. And we're not going to see the kind of quality care that we want for ourselves and for our families until we have a system.

I'm sure you're going to hear a lot at this conference about the cost of health care. The amount we are currently spending on this "sector" is approaching $2 trillion. This exceeds the gross domestic product of Russia and accounts for about one-sixth of our economy.  There are many projections about how this is expected to double in the next 10 years, and I think we can all agree that this is not sustainable.  Whether it is sustainable or not, I think the worst part of it is we're not buying $2 trillion worth of value.

I believe it was Ben Franklin who said, "God heals and the doctor takes the fee." So, clearly, for some people the issue of value has been around for a long, long time. And today, we have this phenomenal opportunity, through health IT, to make the right thing the easy thing to do.

Those of you who do provide care on some kind of regular basis know that often doing the right thing for patients requires true heroism, and we are relying on health care professionals to work in systems that simply don't work. In order to change this, there has to be a total commitment within the industry. We have to view health IT as absolutely indispensable to getting to where we need to be.  We cannot address the uneven quality of care that we see in this country without it.

I have a couple of questions for you. How many of you have looked online for quality care information for yourself or someone else? Raise your hands. Okay, keep your hands up if it was meaningful. A lot of hands are going down. We're in the very, very early stages of this, but I think we've seen enough to know that it's possible.

In order to keep moving forward, one of the things we need to agree on is what constitutes quality health care. We need one set of rules for the road. We have to design efficient and scalable systems that are able to talk to each other so providers can share information and people can compare costs and quality among the different providers, in order to make informed choices about their care. Right now, this remains a fantasy in many parts of our health care system.

The President's executive order that was issued in August (2006) talks about using approaches that encourage providers to offer high-quality and efficient health care. It says such approaches may include pay for performance models of reimbursement that are consistent with current law.

A few weeks after the President's executive order, Secretary Leavitt issued his vision of building a transparent health care system based on four cornerstones of value-based health care:

  • Quality standards.
  • Interoperability.
  • Price standards.
  • Incentives.

This is all great. However, if you buy an electronic health record now and think that you can hit F7 to upload quality measures, you're likely to be sorely disappointed.

To this end, the American Health Information Community recently created a Quality Work Group, which I am co-chairing with Rick Stevens from Boeing Corporation. Rick and other purchasers who are part of our work group are moving forward and trying very hard to figure out how we can use this technology to automate reporting and—very, very importantly—to give clinicians and health care organizations feedback on how they're doing in something close to real time.

Another challenge with health IT is making the business case. It's one of the first issues that come up. What is the business case for improving quality of care in a system that rewards this kind of effort? And, how do investments in health IT help the business case?

It can be very complicated, but we now have some terrific examples of projects that help to make the business case. Right here in Louisiana, AHRQ is funding several projects that will help determine the effectiveness of health IT in a variety of settings. Just to mention a few, there is the Louisiana Rural Health Information Technology Partnership at Assumption Community Hospital about 75 miles west of here. We are also supporting a service integration project at Franklin Foundation Hospital, further west near Baton Rouge, which gives authorized care providers swift, secure access to important patient information at the point of care, to support chronic disease management and improve patient safety.

If you're interested in the Quality Work Group, our meetings are open to the public, and on the HHS [Department of Health and Human Services] Web site you can find out when they will be. Some of the best contributions by the Quality Work Group have come from the public.

The first sets of measures that we are going to be relying on are going to be from the Hospital Quality Alliance. These are the 21 measures that are now being reported on publicly.

The second set of measures that we are going to be looking at is from the AQA [Ambulatory Care Quality Alliance]. These focus on measuring physician performance. I have to say that, over the past few years we have seen an incredible investment of time and engagement of leadership from physician professional organizations. It's been a very open and transparent process.

When it comes to wiring ambulatory care, there is little or no existing infrastructure, to the point where we're talking about collecting bits of information on pieces of paper in folders. I used to say where I practiced in Washington, DC, that we had a paperless practice, not because it was electronic, but because we actually couldn't find the papers.

Last spring, the AQA started six pilot projects (San Francisco, CA; St. Paul, MN; Indianapolis, IN; Phoenix, AZ; Madison, WI; and Watertown, MA) that are designed to help improve ambulatory care. We expect them to help us figure out how to develop the right infrastructure and collect data on physician performance, and report it in ways that will help doctors improve their care and give consumers meaningful information.

What we have already learned is something the late House Speaker Tip O'Neill said about politics years ago—all politics is local. The same is true for health care. The trust and collaboration and relationships that need to be built are all on the local level, so we are very excited about the AQA projects. In early 2007, you will see information on physician performance being reported publicly.

Health IT is about much more than collecting data. It's about using the data to make better decisions—again, making the right thing the easy thing to do. For example, we recently made available on our Web site the new Electronic Preventive Services Selector, or ePSS. This is for doctors. You can enter a patient's age, gender, and risk factors to see the recommendations in the U.S. Preventive Services Task Force. You can download it to a PDA or computer and it will be updated. You can find the tool at

Expect to see a version for consumers soon—again, making the right thing the easy thing to do.

Since 2004, my Agency has had the opportunity to make investments in health IT at the provider level, trying to understand how to get the most out of our health care system. To date, we have invested $165 million in funding, with a very strong focus on those providers in rural and under-served populations. Very shortly we will announce about $24 million in additional funding to fund studies that assess how we can take advantage of health IT to improve safety and quality in ambulatory care settings, including transitions in care where we far too often drop the ball.

However, the majority of physicians still practice in small office settings. I believe 60 percent of internists practice in groups of less than five. So, it is very important to make sure the technology can be customized for use in all kinds of settings. The smaller providers stand to benefit the most from these advances, but many of them don't have access to the same resources that large hospitals and provider networks have. To help level the playing field a bit, we have dedicated a significant part of our grant and contract program to an online resource center that helps people take advantage of the lessons others are learning as they implement IT systems to improve quality and safety.

All of our grantees tell us that the hardware and software is about one-third of the solution. The rest is what people sometimes call the workflow change or the sociology. This is where we really need to improve, and it is a key priority for the agency.

A few years ago, I had the opportunity—thankfully only briefly—to be a patient in a DC academic medical center (which will remain nameless). As I was being wheeled upstairs to the ER [emergency room], I noticed that they placed the paper orders on me, which is what I used to do when I was a resident. And I said, "I thought you guys had a state-of-the-art health system." And they said, "We do, but it's too slow for the doctors."   So, the doctors write the orders on paper and the nurses transcribe them. Well, that giant noise you just heard is a lot of the value going out of their health IT investment.

Doctors have been hard-wired—it's a core of our medical training—to see patients one at a time, do the very best you can in providing their care, and move on. Health IT is going to give them, and is giving some of them now, the capacity to actually look across the care of populations to help them treat patients.

Doctors who have participated in this kind of activity, and really start to get it, quickly overwhelm their IT folks because they want to do more and more.  But for those yet to make the switch, it's going to be a major cultural change. And, since most doctors have not made the change at this point, we know that we're on the short end of what will be an evolutionary change for the practice of medicine.

We also know that this scenario is not unique to health care. Every single industry that has adopted information technology has had to deal with the same, or very similar, challenges. Fortunately for us, health IT is gaining momentum at a time when people understand the importance and value of putting software developers in the same room with clinicians and people who understand human factors, so we get products that actually work for clinicians in real time, rather than having to teach clinicians to rethink how they do practice.

Of course, one of the key strategies for reaching this stage involves rewarding value creation. Right now our payment system effectively says, if you provide superb health care and go the extra mile, that's great; and if you don't, that's great too. In fact, we may even pay you more if you provide harmful care. Now no one states this explicitly, but that is the net effect of a reimbursement system that doesn't reward value.

We are looking for opportunities to identify ways to work with organizations as they roll out these programs so we can help determine which components of these programs work in which circumstances.

Last week, we released an AHRQ-funded study by researchers at the Harvard School of Public Health and Harvard Medical School which shows that more than half of the Nation's HMOs [health maintenance organizations] use pay-for-performance in their contracts with doctors and hospitals. Studies like this will be extremely helpful as the Government looks to incorporate value-based care into traditional Medicare by 2009.

Another aspect of wiring the health care system that I am most excited about is the opportunity to expand our evidence base. If we lose site of the "E" in e-health that stands for evidence-based medicine, I think we will have lost site of a very important opportunity.

Some of you may know about the concept of registries. These are generally stand-alone data collection efforts. For example, the University of Pittsburgh has one of my favorites, which is a stand-alone registry that tracks people who have lost weight and kept it off. Periodically, you see articles about this program in the New England Journal of Medicine, and sometimes in Consumer Reports.

A new draft Guide to Patient Registries is posted on our Web site for comment. You can find it at I think this guide is going to be very important as we try to develop better strategies for evaluating new treatments, especially treatments that affect very small segments of the population. Some of these will be truly breakthrough in nature, including some that will result from advances in genomics or molecular biology. And your feedback on this guide would be very much appreciated.

It might be today that the penetration of health IT is somewhere in the area of 15 to 20 percent. However, we know that 90 percent of the billing side of health care is electronic. So, we know that we can figure out how to do this on the other side of the business.

It's up to all of us, as individuals, as organizations, as Americans, to work together and share our ideas and enthusiasm, not only for the wiring of American health care, but also to deliver the promise of health information technology for improving the health care quality, safety, efficiency, and effectiveness of health care for all citizens. Everything we do, large or small, will have an impact and bring us closer to the days of interoperable electronic medical records, e-prescriptions, and all of the other benefits and value that health IT has to offer.

The challenges are enormous, but the payoff is huge, and I don't see any option but to work together to complete one of the most ambitious goals of our time: the transformation of the American health care system through health IT.

Current as of November 2006


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