'Stunning' CPOE study spurs immediate action in Massachusetts
Hospitals could recoup investments in 26 months, researchers estimate
The implementation of computerized physician order entry (CPOE) by hospitals in Massachusetts could save each facility an estimated $2.7 million a year by reducing error rates, shortening length of hospital stays, and curtailing unnecessary drug tests and laboratory use, according to a study co-sponsored by the Massachusetts Technology Collaborative (MTC) and the New England Healthcare Institute (NEHI). That means, say the authors, that an investment in a CPOE system could be recouped in as little as 26 months.
The findings of the report, which were called "stunning" by MTC's executive director, Mitchell Adams, have spurred major organizations to immediate action. For example, on the day the report was released, Blue Cross and Blue Shield of Massachusetts said it would require all of the state's hospitals to fully install a CPOE system within four years or face the loss of income from an incentive program that promotes high quality of care. In addition, Massachusetts State Senate President Therese Murray (D) has introduced a bill that sets a deadline of 2012 for statewide adoption of CPOE. After this date, the use of CPOE would be required for hospital licensure.
The study, which examined 4,200 medical charts from patients admitted to six Massachusetts community hospitals, was conducted by David Bates, MD, chief of the division of general medicine at Boston's Brigham and Women's Hospital and author of a landmark study on his own facility's experiences with CPOE. Pricewaterhouse Coopers provided the financial analysis.
Here are some of the report's main findings:
- The average baseline rate of preventable adverse drug events in the participating hospitals was 10.4%, meaning one in every 10 patients admitted to these community hospitals suffered a preventable adverse drug event;
- The one-time average total cost of a CPOE system is $2.1 million, with yearly operating costs of $435,000, compared with projected annual savings of $2.7 million;
- The annual savings for the hospitals and payers could be about $170 million, and 55,000 adverse drug events could be prevented every year.
Perceptions changed
The report's findings run counter to some commonly held perceptions about CPOE, asserts Karen Nelson, RN, senior vice president for clinical affairs with the Massachusetts Hospital Association (MHA).
"These findings dispel rumors that it is nearly impossible to have a CPOE system because it is so costly you'll never get your money back," she says. "It put the facts on the table, and ROI [return on investment] is better than we thought; this has created a changed thinking in Massachusetts about the next steps we should take."
Once a hospital knows the ROI is on a shorter time frame and there is a range of examples of implementation and operating costs, it can begin planning and budgeting for such a system, she adds. Nelson also finds it significant that the six hospitals volunteered to participate in the study, "and to tell us what happened," she adds.
Wendy Everett, ScD, president of NEHI, agrees. "There has been a mythology among hospitals that they have to pay for technology, but payers reap all the benefits," she notes. "We were able to demonstrate the payback period for CPOE."
While the co-sponsors understandably hailed the study as "groundbreaking," it clearly had a strong impact on other organizations as well. Everett has her own thoughts on why it had such an impact.
"This kind of study has never been done before, outside a major academic medical center," she says. "Some very few community hospitals have done CPOE, but no one has been able to go in and say how many patients were in the hospital that had suffered from preventable medication errors."
There are three factors behind the strong reaction, she continues. "One, it had a very strong methodology — rigorous, in fact. Dr. David Bates is extremely well regarded — a nationally recognized figure for this area of patient safety. Second, Mitch Adams and I had put together a very significant collaborative across the state; we had involved payers; government and insurance organizations, the MHA, CEOs, and CFOs of some community hospitals, and the business community were involved before we even started the study. So, when people went to make policy decisions as a result, there were absolutely no naysayers. Third, there is not one of those hard issues you can't do something about if you have the data. Doctors in the audience [during the presentation] stood up and said this was the first time they had hard data they could believe in, and now there was no reason not to implement CPOE."
The bottom line, she says, is that "you change policy as the result of good evidence."
A long journey to the evidence
Getting to that evidence was a lengthy process, says Bethany Guilboard, MPQ, MTC's director of health technologies and the report's project manager. "We had partnered with NEHI to look at a series of technologies that would help improve quality of care, save lives, and reduce costs simultaneously," she recalls. "We had published a report called Advanced Technologies, in which we looked at seven different technologies. One area that had significant potential for improvement and savings was inpatient CPOE, and nobody had seemed to take that one on."
They worked with First Consulting Group (now CSC) and came up with a case statement in October 2003 for the implementation of CPOE in all Massachusetts hospitals. "If implemented, we could recognize significant savings," Guilboard notes. "We moved ahead with First Consulting with the endorsement of MHA and other key health care stakeholders."
They issued an on-line survey to all Massachusetts hospitals they believed had not yet implemented CPOE and had a good response rate. "It gave us a fairly strong indication of where hospitals were in moving forward," Guilboard notes. "It looked like 13 or 14 were closer in readiness with implementation and had more planning in place; they looked more ready to launch, so we started talking to them."
In 2006, Bates' study appeared in JAMA, taking a look at Brigham and Women's 10-year experience with its "home-grown" system. "They showed the opportunity for improvement in quality and cost savings, and that was the springboard for our study," Guilboard says. "We considered whether it would it be reasonable to engage Dr. Bates and his team to conduct a similar study in six community hospitals to see if their findings could be extrapolated."
The six hospitals were chosen out of the ones with which the collaborative had been speaking, and were "absolutely promised" anonymity, Guilboard says, noting that some may have been in the midst of CPOE implementation.
"In addition to hiring Dr. Bates, we also hired Pricewaterhouse Coopers, because we did not want this to just be an academic exercise; we wanted to make a business case for financial payback," Guilboard explains. "We asked them to develop a financial model, took clinical findings from Bates' chart reviews, and came up with a calculation to extrapolate what the error rate reduction would be and how much would accrue to hospitals and payers."
Bates' study, adds Everett, indicated that a preventable medication error led to 4.6 additional patient days of hospitalization. "Knowing that and knowing how many errors there were, we could calculate how much money we could save," she explains.
Looking to the future
In addition to promoting universal adoption of CPOE, the report also recommended that payers adopt "robust" incentives to help hospitals achieve the stated goals. "Our intent is to work with payers to create a significant pay-for-performance incentive — in the 7%-10% range," says Everett. "The risk the payers take is that as with any technology, it can be installed and never used to the maximum."
Thus, there will be metrics attached to the awarding of incentives. "So, for example, if you have a pre-implementation error rate of 10%, after implementation you should bring it down to 2%-3%," says Everett. "In other words, it's not good enough to sign a contract and purchase the system; you have to show you are able to reach these milestones."
Nelson, however, adds a note of caution in light of the rapid actions by Murray and Blue Cross Blue Shield. "There is enthusiasm about the initial report, but that should create a pause to consider what it tells us, and what the next step should be," she says. "Hospitals will think about how to make choices, and how to prioritize, while others are telling us quickly what to prioritize. Full agreement is terrific, and CPOE does create a safer environment and save money, too, yet different hospitals are on different timelines with this or any other approach."
All stakeholders have to start thinking together on the right things to do, such as how to revise incentives, says Nelson. "In terms of meeting a deadline, everyone needs to be on the same track," she asserts. "It's not just a financial issue — there are other competing priorities for a particular hospital's community. And in terms of operationalizing, it can be somewhat disruptive, and it takes a huge commitment and a very strong relationship with the medical staff — and requires additional expertise not all hospitals have."
Nelson imagines "there will be a stampede of consultants coming to Massachusetts to help meet these deadlines. All stakeholders need to be aware of those factors to help implement CPOE in a reasonable fashion."
[For more information, contact:
Wendy Everett, ScD, President, New England Healthcare Institute. Phone: (617) 225-0857.
Bethany Guilboard, Director of Health Technologies, Massachusetts Technology Collaborative. Phone: (617) 371-3999 ext. 201.
Karen Nelson, RN, Senior Vice President for Clinical Affairs, Massachusetts Hospital Association. Phone: (781) 272-8000.
For a free copy of the study, "The Imperative for Computerized Physician Order Entry in Massachusetts Hospitals," go to: www.nehi.net.]
The implementation of computerized physician order entry (CPOE) by hospitals in Massachusetts could save each facility an estimated $2.7 million a year by reducing error rates, shortening length of hospital stays, and curtailing unnecessary drug tests and laboratory use, according to a study co-sponsored by the Massachusetts Technology Collaborative (MTC) and the New England Healthcare Institute (NEHI).You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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