HIT POLICY From Realpolitik To Real Solutions Back in the real world, the suggestion that the federal government fix this in actable problem by writing a check for a quarter of a trillion dollars is pure polit ical fantasy. It makes economic and technical sense, and it is not without political precedent; however, no one in today's Washington with the political power to say SO would keep that power after saying so. The very idea of a public works project (at least within our own borders)sounds like an artifact from an era eclipsed by nearly three decades of hostility toward government-based solutions to domestic problems, combined with a seemingly religious belief in marketplace solutions for all of them As this paper makes unambiguously clear, the marketplace will not solve the HIT problem. If so, it would have solved it under the watchful eye of"managed care"or as part of the Y2K conversion or during the most recent Health Insurance Portability and Accountability Act(HIPAA) compliance scramble. There is in deed a collective business case for a national HIT system, but it is one well beyond the reach of the health care marketplace. The federal government may be unable to finance and build that system for political reasons, but it can do far more than try ing to jawbone the private sector into building it on its own If health care's chronic IT failure is steeped in economic reality, then the solu tion should be as well. The obvious entry point is reimbursement. The federal gov ernment, directly or indirectly, purchases half of U.S. health care. 5 Within weeks of the advent of the Medicare drug benefit, that proportion will pass the 50 per cent mark. The government has the ability to catalyze the creation and deploy- ment of an HIT infrastructure by wedding that infrastructure to all of its reim- oursement policies, as follows Mandatory conversion of all government-payer transactions to systems based on new clinical data standards. The federal government should continue to prod the private sector to come up with standards for interoperable clinical data sets;once those standards are set, it should require payers to process all transactions for Medicare, Medicaid, the Department of Defense, and the Federal Employees Health Benefits Program(FEHBP), using an IT system built from those same stan- dards. This will require converting all of today s administrative processes into proc esses driven by standard, interoperable clinical data sets. Everything from benefi- ary look-up, to authorizations for treatment, to claims submitted for payment should be generated from data formats and classification systems consistent with the new standards. Much of the health care informatics industry is built upon the imputation of clinical information from administrative claims data. 36 The proposed idea would simply involve a reverse engineering of the same process. Because this conversion would be required of all government payers, the game theory problem described earlier would go away. The conversion process would be expensive, but that expense would be the same for all payers-all of which could also apply the new systems to their nongovernment business, the way those same payers leverage 1258 September/October 200H I T POLIC Y From Realpolitik To Real Solutions Back in the real world, the suggestion that the federal government fix this in￾tractable problem by writing a check for a quarter of a trillion dollars is pure poht￾ical fantasy. It makes economic and technical sense, and it is not without political precedent; however, no one in today's Washington with the pohtical power to say so would keep that power after saying so. The very idea of a public works project (at least within our own borders) sounds like an artifact from an era eclipsed by nearly three decades of hostility toward government-based solutions to domestic problems, combined with a seemingly rehgious belief in marketplace solutions for all of them. As this paper makes unambiguously clear, the marketplace will not solve the HIT problem. If so, it would have solved it under the watchful eye of "managed care" or as part of the Y2K conversion or during the most recent Health Insurance Portability and Accountability Act (HIPAA) compliance scramble. There is in￾deed a collective business case for a national HIT system, but it is one well beyond the reach of the health care marketplace. The federal government may be unable to finance and build that system for pohtical reasons, but it can do far more than try￾ing to jawbone the private sector into building it on its own. If health care's chronic IT failure is steeped in economic reality, then the solu￾tion should be as well. The obvious entry point is reimbursement. The federal gov￾ernment, directly or indirectly, purchases half of U.S. health care." Within weeks of the advent of the Medicare drug benefit, that proportion will pass the 50 per￾cent mark. The government has the ability to catalyze the creation and deploy￾ment of an HIT infrastructure by wedding that infrastructure to all of its reim￾bursement policies, as follows. • Mandatory conversion of all government-payer transactions to systems based on new clinical data standards. The federal government should continue to prod the private sector to come up with standards for interoperable chnical data sets; once those standards are set, it should require payers to process all transactions for Medicare, Medicaid, the Department of Defense, and the Eederal Employees Health Benefits Program (EEHBP), using an IT system built from those same stan￾dards. This wHl require converting all of today's administrative processes into proc￾esses driven by standard, interoperable clinical data sets. Everything from benefi￾ciary look-up, to authorizations for treatment, to claims submitted for payment should be generated from data formats and classification systems consistent with the new standards. Much of the health care informatics industry is built upon the imputation of clinical information from administrative claims data.^^ The proposed idea would simply involve a reverse engineering of the same process. Because this conversion would be required of all government payers, the game theory problem described earher would go away The conversion process would be expensive, but that expense would be the same for all payers—all of which could also apply the new systems to their nongovernment business, the way those same payers leverage September/October 2005