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Is HHS Going Private?

July 1, 2007
by Kathryn Foxhall
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Three firms are tasked with devising competing business plans for taking AHIC private.

Health and Human Services (HHS) Secretary Michael Leavitt has always meant for the government's two-year old advisory body on HIT to move to the private sector as a national standard-setting organization. Now he is having that body, the American Health Information Community (AHIC), decide what a spin-off will look like. The decision could influence HIT coordination for years.

Michael Leavitt

Three private firms (Alchemy, Avalere Health and Booz Allen Hamilton) have written competing business plans for AHIC's long-term survival. A draft prototype will be developed by July 2 and be available for public comment for three weeks after that. AHIC is to make final recommendations to Leavitt on Sept. 18 and the transition is to begin early next year.

To date, AHIC's history has been short and eventful. Three years ago, President Bush directed that the government undertake a major HIT push, including creation of a sub-cabinet position for a national HIT coordinator. Two years ago, HHS initiated AHIC, an advisory body, to mold and speed that agenda. It was stocked with high-profile stakeholders. The current 18 members include the Blue Cross Blue Shield CEO, a Wal-Mart vice chairman, and the Intel Corporation chairman.

Leavitt also added weight to the group by personally attending and chairing at least part of many AHIC meetings, which occur about eight times a year. He stresses regularly that HIT standards must be seen moving quickly on an established path before he leaves office at this administration's end, in January 2009, or they may bog down in the transition to a new administration.

And indeed, some historic milestones have been met, through the Office of the National Coordinator for HIT (ONCHIT) and with some key directions from AHIC. For example, national certification has begun for electronic health records and a national "harmonization" process is selecting standards for communication.

But at a recent AHIC meeting, Leavitt said he wanted the well-recognized body to continue this consensus work in the private sector. According to Leavitt, it's not best for government to arbitrarily set standards, nor is it wise to wait for the market to choose in a "last vendor standing" process.

AHIC member Charles Kahn III, Federation of American Hospitals president, called the spin-off a great idea, but expressed concern about how funding—or lack thereof—would affect it.

Estimating the organization will need $30 to $50 million for operations, even before demonstrations and other activities, conflict of interest concerns could arise, Kahn says. "Broad-based financing of some type, whatever it is, is really fundamental here, to make this work," he says. He warned about the "frustrating," model of the National Quality Forum. Although it is effective and careful in its endorsements of healthcare standards and has a dues base, he says, it receives most of its funding to "consider endorsements of measures from those who want to get their measures endorsed."

Leavitt commented that, "One of the most important aspects will be assuring that government purchasing power is committed to the outcome of AHIC," bringing to mind mammoth operations such as Medicare and the Department of Defense. He said that the executive order that created AHIC requires government agencies to adhere to it and that drives a lot of the change.

On the other hand, another AHIC member, Lillee Gelinas, R.N., M.S.N., vice president of Clinical Performance at Irving, Texas-based VHA Inc., indicated that HIT is one of the foremost bipartisan issues in Washington and asked why AHIC should not be kept as it is, under government: "I just want to put that ugly elephant on the table."

Kathryn Foxhall is a contributing writer based in Hyattsville, Md.