Preventing the Preventable

AHIP Coverage
November 1, 2008

… Health Plans take Notice

In 2003, the Cambridge, Massachusetts-based New England Healthcare Institute (NEHI), in collaboration with the Massachusetts Technology Collaborative (MTC) in Westborough, Massachusetts, published a report on effective technologies that appear to be sorely underused. The report, “Advanced Technologies to Lower Health Care Costs and Improve Quality,” found that computerized physician order entry, or CPOE, showed great promise in eliminating preventable adverse drug events. Subsequently, NEHI and MTC released two reports describing the value position for hospitals and payers in implementing CPOE and identifying barriers to the technology’s adoption.

NEHI and MTC then engaged the services of David Bates, MD, chief of the Division of General Medicine at the Brigham and Women’s Hospital in Boston and a noted expert on patient safety, and PriewaterhouseCoopers to conduct an in-depth analysis of six Massachusetts community hospitals. The study teams reviewed 4,200 charts to determine the baseline level of preventable adverse drug events and the unnecessary use of expensive drug and laboratory tests that could be improved by implementing CPOE. The result, says Nick King, vice president of communications at NEHI, were eye-opening.

One in every 10 patients admitted to the community hospitals suffered a preventable adverse drug event. The study teams found that CPOE with robust clinical decision support could substantially reduce that number. Adding the cost reductions from unnecessary drug and laboratory test use, the annual savings to each hospital could be $2.1 million. The one-time average total cost of a CPOE system is $2.7 million with an annual operating cost of $436,000, leading the teams to conclude that the savings from a CPOE system could provide full payback to the average hospital in about 26 months.

“Why wouldn’t you adopt this technology when you’re going to save any number of lives, any number of hospitalizations, and along the way the hospitals can actually start making money? asks King.

The management team at Blue Cross Blue Shield of Massachusetts wondered the same thing. Shortly after the release of the collaborative report, titled “Saving Lives, Saving Money,” the insurer announced that as part of its ongoing effort to raise the quality of health care in Massachusetts, it would require hospitals to implement and utilize CPOE as part of the criteria for participating in its quality and incentive programs after 2012. In 2007, 64 hospitals earned a total of $104 million through that performance incentive program…

... NEHI plans a follow-up study to assess the real-life and real-time findings, both in terms of reducing medication errors and monetary savings for hospitals implementing CPOE.

Says King, “This is the kind of incentive and policy change that we think will be very beneficial and could be used as a national model for other states to follow.” ...

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