Cover Oregon Debacle Calls into Question the Cost of Big Data

The author contends that the failure to implement Cover Oregon could have a much more far reaching impact with the owners of big data and proprietary systems having the upper hand.

The public execution of Cover Oregon wasn’t a dignified death. Last Week Tonight with John Oliver debuted this past Sunday. With “bleepless swearing,” the former “British news correspondent” for The Daily Show” lambasted Indian elections… and Cover Oregon.

“Oregon spent a quarter of a billion dollars on its website designed to sign people up in one setting—did that for exactly nobody! And they’re now handing the keys to healthcare.gov. That has got to be a bitter pill to swallow for the people of Oregon—or it would be if they could get the pill (but they can’t) because their shitty website is broken!” Oliver then parodied the “Long Live Oregonians” ad campaign, which already had its plug pulled last December.

The Cover Oregon debacle deserves thoughtful analysis beyond criticisms of the waste, fraud and abuse it generated (rather than mitigate). Toward Cover Oregon’s end-of-life, we learned the digital platform, intended to weave together Oregon’s safety net services, was too complicated to construct.

Gleaning emails, the Oregonian chronicles the political carnage.  As late as mid-October, Oregon’s technology workers and their Oracle counterparts discussed rescuing healthcare.gov with their technology. (DSM 5 diagnostic code 297.1: delusional disorder, grandiose type)

Oregonians, the financial losers, can’t form a posse to wrangle the millions of lost dollars. But we can figuratively hang the financial winner in this fiasco. Oracle founder and CEO Larry Ellison is America’s top-paid executive. He collected $78.4 million in 2013 alone—more than double what his 2nd place rival earns.

Pause and think about that.

Ellison’s income depends on big data. Big data miners and servers depend on the complexity of their work to derive value that we cannot question. Yet, the “seductive power of data,” as this Oregon Business article points out, has unintended consequences in health systems. Their list does not include costs.

Portland is an Epic town when it comes to electronic health records (EHR). Kaiser Permanente, OHSU, Providence, Legacy, the Portland Clinic and the Oregon Community Health Information Network. Founded in 1979, Epic is a privately owned EHR software company that surely owes its market dominance to Kaiser. Kaiser Permanente Northwest first implemented early versions of EpicCare in the mid-1990’s, while Oakland-based Kaiser Health Plan jointly invested in Clinical Information System (CIS) with International Business Machines (IBM).

By 2003 Kaiser concluded the EpicCare system had matured beyond CIS and was better able to meet the health plan’s needs. All Kaiser Permanente regions halted implementation of CIS and began planning for implementing EpicCare. The process was messy to say the least. In November 2006, an employee accused Kaiser Permanente of recklessly spending “over $1.5 billion in waste every year, primarily on HealthConnect, but also on other inefficient and ineffective information technology projects."

Phillip Fasano, Chief Information Officer of Kaiser Permanente admits former CEO George Halvorson wrote $400 million off when Kaiser scrapped CIS. Last year, he says the organization spent ~$4 billion to build the infrastructure for its 8.6 million members (about $444 per member). He believes the government’s $11 billion estimate for "meaningful use of technology" is "a nice down payment,” suggesting it will cost “tens of billions of dollars “ to implement.

For many Portland hospitals and clinics, Epic is the second (and sometimes third) contract with an EHR vendor. These unknown costs are passed on to the consumer. Yet this Epic near-monopoly doesn’t facilitate communication between the hospitals and clinics in the metro.

Dr. Aaron Cohen, an associate professor who directs commercial partnerships and collaboration for OHSU’s Informatics Discovery Lab, said this about their relationship with Epic: “Right now this isn’t really a financial exchange.” But Medicare and Medicaid EHR Incentive Programsdo provide financial incentives for the “meaningful use” of certified EHR technology.

Certainly, no hospital or clinic would argue with Epic’s “meaningful use” of EHR: “Be more profitable - with permanent improvements to physician productivity and a central source for enterprise intelligence.”

Written into the Affordable Care Act (ACA), meaningful use is implemented in stages.  

Stage 1: Data capture

Stage 2: Exchange of information and patient engagement

Stage 3: Focused on outcomes, clinical decision support, patient self-management and access to all relevant data.

“Meaningful use” is a blank check for technology. This arises through a recalibration of the “medical loss ratio” (MLR).  The MLR was previously calculated as the portion of premium income that insurers pay out in the form of health care claims. Claims simply divided by premiums.

Now, costs of quality improvement activities are also included in the numerator. Quality improvement activities are “measurable improvements in patient outcomes or patient safety, prevent hospital readmissions, promote wellness, or enhance health information technology in a way that improves quality, transparency, or outcomes.”

Insurance companies that cover individuals and small businesses must spend at least 80% of their premium income on health care claims and quality improvement with no more than 20% of the premium dollars going toward administration, marketing, and profits. For large group plans, the MLR threshold is 85%.

What happens if “enhanced” information technology boosts the MLR while consumer costs rise and outcomes decline? Is it possible that technology budgets will eventually outspend the services we collectively desire?

In February, the American Medical Association delivered a letter to former U.S. Department of Health and Human Services Secretary Kathleen Sebelius asking for delay and flexibility in the meaningful use program. They cited a recent collaborative study between their organization and the RAND Corporation that found that “many physicians are dissatisfied with their EHR systems and feel the technology interferes with the quality of face-to-face time spent with patients.” AMA President Dr. Ardis Dee Hoven expressed alarm that “the meaningful use program continues to move full steam ahead without regard to the challenges faced by physicians, hospitals and vendors during the past few years."

Owners of big data and proprietary software have the upper hand.  In his book To Save Everything, Click Here, author Evgeny Morozov cautions us to be wary of large-scale and sophisticated interventions in politics, culture, and everyday life through “smart” technologies and big data. He coins this “technological solutionism." We should ask whether EMR implementation “spurred by… the prospect of cost and outcomes accountability” is just a prophecy from Larry Ellison and other oracles who benefit from data inequality.

Cover Oregon is much more than a costly misadventure. It's virtual remains are scattered with other dead canaries in the healthcare data mine.  Universal, affordable and quality health care will never be achievable if we don’t critically question the cost of big data in health care.

Dr. Kris Alman can be reached at [email protected].

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