Minhang District Health Bureau

1
Minhang District Health Bureau
Shanghai, China
February 9, 2012

• Evolution of Global HIT
• Where Does China Stand on the Global HIT
  Continuum?

2
Presentation Agenda

• Page
• About the Dorenfest Group 3
• The Evolution of Global HIT 11
• Evolution of RHNs in Other Countries 20
• Current Status and Future Direction of HIT in
  China 27
• Evolution and Current Status of RHNs in China 40
• Where Does China Stand on the Global HIT
  Continuum? 47

3
About the Dorenfest Group

• 40 years experience in HIT
• Offer healthcare improvement services through a
  variety of businesses.
• Software
• Hospital Operations Improvement
• Consultation with Technology and Software Vendors
  In Health
• Information Business
• Focus on improving patient care and operational
  efficiency through better change management
• Work process improvement
• Management systems improvement
• Improvement in services for patients
• Improvement in quality of patient care

4
Some Dorenfest Hospital Projects
5
Some Dorenfest Healthcare Supplier Projects
6
Dorenfests Investigation of China Healthcare in
2005-2006

1. Visited 17 cities in China
2. Met 100s of healthcare industry leaders in China
3. Visited over 100 hospitals to review hospital
   operations and define opportunities for
   improvement
4. Met provincial and city health bureau leaders in
   cities visited
5. Met with many companies selling products and
   services to the healthcare industry in China
6. Evaluated a group of hospital ownership and
   management opportunities and assessed viability
   of the Dorenfest model hospital in China
7. Developed a strategy for bringing Dorenfest skill
   and experience to China

7
Dorenfest Vision of a Model Hospital

• Provides improved quality of care to its patients
• Operates at a highly efficient level through
  effective use of systems and better work
  processes
• Offers its services to patients at an affordable
  cost
• Creates a highly satisfied patient population
  with the patients observing a noticeable
  improvement in the services and treatments
  provided by the hospital
• Utilizes appropriate digital technology to create
  a state of the art digital hospital

8
China Healthcare Leaders Want to Leapfrog the
World in IT Use

• Chinese hospitals and health bureaus are
  carefully considering how to be more successful
  in taking next steps forward in IT use
• There is a recognition that for China to
  accomplish its objectives in HIT requires the
  following
• Learning quickly from the global experience
• Overcoming resistance to change
• Knowing how to manage change
• Doing more of what the rest of the world did
  right and less of what they did wrong to avoid
  mistakes other countries have made and China is
  still making
• Developing more expertise in these areas of need
  quickly

8
9
The Dorenfest Group Is Bringing Needed New
Skills to China

• 1. Hospital Operations Improvement, Work Process
  Improvement, and Change Management
• 2. IT Program Improvement, Problem-solving,
  Strategy, and Planning
• 3. New Approaches to Buying IT Systems in a
  Stronger Partnership with Users
• 4. New Ways to implement IT Systems

10
Examples of Dorenfest Projects in China

• Some health bureau clients for RHN and digital
  hospital planning
• Shenzhen
• Chongqing
• Some hospital clients
• Peking University Third Hospital
• Shanghai Changning Maternity Infant Health
  Institute
• Rizhao City Peoples Hospital
• Foshan City First Peoples Hospital
• Help clients from other locations bring their
  skills to Mainland China
• Hong Kong Hospital Authority
• Microsoft
• Philips

10
11
Minhang District Health Bureau

• The Evolution of Global HIT

12
Opportunities to Improve the Healthcare Delivery
Process Have Been Pursued for Many Years

• Great redundancy of information
• High error potential
• Lack of timeliness
• High cost
• Organization complexity

13
The U.S. Hospitals Have Sought an EMR/EHR Since
the 1960s through Four Generations of IT Systems

• Finance Systems (1960s and 1970s)
• Limited Clinical Systems (1970s and 1980s)
• More Advanced Clinical Systems (Late 1980s and
  1990s)
• Electronic Health Records (2000s)

14
But Poorly Implemented Change Layered Redundant
Work on Top of Original Inefficiency
Growth in Redundancy
4x
New Thrusts of the 2000s
3x
NOW
1990's Systems and Surrounding Integration
2x
Legacy I.T. Systems
Before IT1x
Manual
Total Hospital Work Process
15
At the Beginning

• 1. Large vision
• 2. Hardware technology limited and expensive
• Large computers
• Inefficient software development methodologies
• 3. Self development was the only software
  approach and remained the preferred approach for
  a period of time
• 4. Packaged software emerged first as a
  customizable starter set and later became
  products requiring less customization from user
  to user
• 5. As time passed, packaged software products
  became preferred
• Less expensive
• Faster to implement
• But many problems in implementation

16
The Late 1970s and 1980s

• 1. Several generations of technology, software
  vendors, software approaches, and products came
  and went
• 2. Software buying and implementation methods
  improved
• Users and management became more involved
• Functional requirements to define needs and
  compare vendors became more complete and useful
• User site visits, user customer references, and
  user discussions with counterparts at other
  hospitals became part of an improved buying
  approach
• 3. Integration became a large problem as the
  number of software vendors used by a hospital
  increased
• Started out all manual with duplicate entry into
  multiple systems
• Moved to hard coding of interfaces between
  systems
• Caused a focus on the development of standards
  for software products of different vendors to
  communicate with each other

17
The 1990s and 2000s

• 1. Management of the buying and implementation of
  IT software continued to improve
• 2. A new generation of software systems emerged,
  with better features and functions built on
  superior technological platforms
• 3. Integration problems kept growing, causing the
  movement from hard coded interfaces to standards
  such as HL7, and interface engines which
  facilitated the transfer of data in a more
  efficient way between software systems
• 4. Clinical data repositories, data analytics
  tools, and clinical decision support systems
  emerged
• 5. The pressure for physicians to enter orders
  through CPOE grew in the late 1990s and early
  2000s.
• 6. In the 2000s, the long sought after vision of
  an EHR began to emerge in inpatient and
  ambulatory settings. The U.S. 2009 healthcare
  stimulus will further expand EHR use

18
HIT Evolution in the Rest of the World

• Canada started in the late 1970s
• Europe and Australia began in the early 1980s
• Asia began in the 1990s
• Canada, France, Germany, England, and Australia
  all started later than the U.S., Invested less,
  and have made more progress
• Hong Kong started even later, invested less, and
  now is the state of the art in HIT use in the
  world
• China HIT is now at an earlier stage of
  development. China has the goals and desire to
  leapfrog the rest of the world in HIT use in
  the next few years

19
Successful Later Adopters Learned from the
Experience of Earlier Adopters to Make Progress
Faster

• By playing close attention to what worked and did
  not work in earlier adopter countries, later
  adopters were able to avoid many of the
  difficulties experienced by earlier adopters and
  accomplish better results
• China is now at a key point with more rapid
  progress in IT use being a key factor to support
  the successful implementation of healthcare
  reform in China

20
Minhang District Health Bureau

• Evolution of RHNs in Other Countries

21
RHNs Were First Introduced As CHINs in the U.S.
in the Early 1990s
22
Summary of Evolution of RHNs in the U.S.

• Community Health Information Networks (CHINs)
  began in 1990 as the first generation of RHNs in
  the U.S.
• Formed with a broad vision of sharing information
  among health organizations within a city or state
  
• Unclear objectives
• Lack of value to potential participants
• Much money invested by many CHIN projects
• Integrated delivery ownership models emerged in
  1993 as the hospital answer to the Clinton
  healthcare reform proposal
• By the middle 1990s, integrated delivery systems
  emerged in every city in the U.S., and the CHIN
  concept disappeared by 1996

23
The Vision of Integrated Delivery System
Ownership Models
24
RHIOs Emerge in the Decade of the 2000s

• RHIOs were the second generation of RHNs in the
  U.S.
• Many different organizations promoted them in the
  early 2000s
• By 2004, national policy emerged through the
  Office of the National Coordinator for Health
  Information Technology (ONCHIT)
• In the ensuing several years between 2004 and
  now, almost 100 officially designated RHIOS
  emerged
• Heavy investment in these RHIOs with most funds
  used in their start-up
• Many were unable to find a sustainable operating
  model and approached financial collapse
• Some long term successes emerged to share limited
  data

25
HIEs Emerge as A New Name for RHIOs with
Objectives to Fit US Healthcare Reform

• Similar goals to CHINs and RHIOs
• The new model is built into the Meaningful Use
  standards in EHRs in the US and gains more
  stakeholders support
• But still difficult to develop a financially
  self-sustaining business model

26
Executing Broad Visions Needs Detailed Plans

• Broad visions needs detailed plans
• Oversimplified implementation approaches create
  flawed and limited success
• Lack of stakeholder commitment created failed
  programs
• Heavy investment in poorly conceived ideas wasted
  money
• Success accomplished through limited, well
  thought through first steps and strong
  stakeholder participation and support

27
Minhang District Health Bureau

• Current Status and Future Direction of HIT in
  China

28
The Development of HIT in China

1. Chinese hospitals began to computerize in the
   early 1990s
2. The initial focus of computer efforts was on
   financial systems
3. In the early 2000s, Chinese hospitals began to
   implement IT for clinical systems
4. Many software solutions are now available, with
   well over 1000 smaller software companies now
   operating in the HIT market in China
5. Between 2005 and 2010, China hospital spending on
   IT grew from 5 billion RMB in 2005 to 16 billion
   RMB in 2010, and we estimate it has risen to 21.5
   billion RMB in 2011
6. This rapid growth in spending will continue at an
   even more rapid pace over the next several years

28
29
Factors Contributing to Future Spending Growth
in China HIT

• China hospital work processes were redundant,
  expensive, and error-prone, which led to the
  initiation and development of HIT in China
• In 2003, the ministry of health (MOH) issued
  guidelines for health IT development which called
  for all cities in China to implement RHN and
  digital hospital programs by 2010
• Gave momentum to hospitals to purchase clinical
  systems
• Very little progress towards stated goals during
  the policy period
• The healthcare policies of China were pronounced
  a failure by the NDRC in 2005. Much publicity
  about this appeared in the Chinese press. The
  Chinese government promised to reform this failed
  policy
• It took four years for healthcare reform to be
  passed in 2009. The reason for this is that many
  government ministries had some relationship to
  the new reform programs, and these ministries did
  not agree on what the reform should look like.
  Finally, in 2009, a program was passed. It
  involved a healthcare stimulus spending program
  to support the reform in the order of magnitude
  approaching 1 trillion RMB (published as 125
  billion USD in U.S. press)

30
Factors Contributing to Future Spending Growth
in China HIT (Continued)

• Improved use of IT is one of eight pillars of the
  new China healthcare reform plan, giving a new
  momentum to HIT in China healthcare. Focuses
  include
• Improved hospital IT systems
• Electronic health records (EMR and EHR)
• Data sharing through RHNs and integration with
  community clinics
• IT systems to support expanded health insurance
• Healthcare reform fueled a number of central
  government programs as well as increased spending
  by district, city, and provincial health bureaus
  and hospitals on various aspects of the reform
  program
• A vision for HIT was summarized in the 12th
  5-year plan for HIT, referred to as the 3521
  Project. This vision provides a framework for
  RHN efforts in China from 2011 to 2015. The
  vision is very high-level and complicated, so
  most of the local government implementation
  programs define first and second steps in their
  own way.
• The vision document components may be summarized
  as follows
• 3 levels of health information platform nation,
  province and region (city or county)
• 5 groups of applications public health,
  healthcare service, health insurance, drug
  administration, general management
• 2 basic databases resident electronic health
  record and electronic medical record
• 1 dedicated health infrastructure network
• 2 sets of systems data standards system and
  network security system

31
Factors Contributing to Future Spending Growth
in China HIT (Continued)

1. Execution of this vision is in the very early
   stages and has many aspects to be thought through
   in order to become a reality. Much of the
   spending going on right now is to implement first
   steps in the execution of this vision and is
   fueling the HIT market in China to grow much more
   rapidly over the next few years
2. The Minhang District RHN is one of the best RHN
   accomplishments in China, and the district should
   be proud of its efforts. The Minhang District
   conceived a vision, which it began implementing
   in about 2006 and is now a showplace that
   represents one of the big steps forward in the
   country in implementation of the 3521 vision
   framework
3. Chinese hospital leaders want to take a big leap
   forward in improving work processes and in
   digitizing Chinese hospitals
4. While money has always been a problem in Chinese
   hospitals, today there is much more money
   available from many sources, and it is now being
   spent more freely

32
HIT Is One of Eight Pillars of China Healthcare
Reform
33
12th 5-Year Plan HIT 3521 Framework and
Development Architecture
34
What Are the Key Factors Impeding Success in
Chinese Hospital IT Use?

• 1. Chinese hospitals have not invested a lot of
  resources in IT systems and infrastructure to get
  to the present level of accomplishment
• 2. Because of weak change management, the
  implementation of new IT systems in China has
  often added work instead of reducing work, and
  has created unnecessarily redundant work
  processes and unhappy users
• 3. The poor results in HIT in China have been
  caused primarily by the way Chinese hospitals buy
  and implement software products
• 4. The inexperience in the buying of HIT software
  products in China has followed a similar path to
  other countries around the world in their early
  stages of evolution. Most countries have learned
  from bad experience in their early investments a
  better way to make HIT buying decisions
• 5. Fueled by healthcare reform, substantial
  investment in new IT systems will be made by
  Chinese hospitals. But the reasons for the poor
  results accomplished from past investments in HIT
  are not well understood by Chinese hospitals and
  are not being corrected fast enough

35
What Are the Key Factors Impeding Success in
Chinese Hospital IT Use? (Continued)

• 6. The current state of the art in HIT software
  products, hardware platforms, and integration
  tools to facilitate the accomplishment of Chinas
  HIT goals is in need of improvement
• 7. More importantly, the implementation and
  change management skill required to take this big
  leap forward in IT use in China is not yet
  available at the level required for China to
  accomplish its goals
• 8. Many times, hospital leadership, not knowing
  what it does not know, is continuing to use poor
  buying and implementation approaches, because
  they do not know better ways are possible, and
  there is still strong momentum to continue with
  these poor approaches

36
The Current Computing Environment in a Typical
Large Complex Chinese Hospital Today
Sample Current Systems (High Level View)
Office Automation Systems
Core Vendor (Vendor 1)
Major Financial Systems
Major Ancillary Systems
Major Clinic
R.I.S./PACS (Vendor 4)
Financial (Vendor 2)
Performance Assessment System (Vendor 13)
Order Management
Inpatient ADT and Billing
Policy Exchange Platform (Vendor 13)
Inpatient Physician Workstation
L.I.S. (Vendor 3)
MD Workstation (Vendor 2)
Outpatient and ER Registration
Webport System (Vendor 13)
Outpatient Physician Workstation
Blood Bank (Vendor 3)
Pharmacy (Vendor 2)
Outpatient Pricing and Charging
Major Admin Systems
Hospital Website (Vendor 13)
Inpatient Pharmacy
Bar Code (Vendor 3)
L.I.S. (Vendor 3)
Material Supply
Medical Ins (Vendor 9)
Outpatient Pharmacy
OR/Anesthesia (Vendor 5)
Smart Card
Medical Ins (Vendor 10)
Lab Price System
Ultrasound (Vendor 6)
Patient Consultation Survey
Medical Records (Vendor 11)
Inpatient Insurance Interface
Stomatology (Vendor 7)
RF Card Producing Sub-System
Human Resources (Vendor 12)
Instrument and Equipment Management
Many Other Niche and Specialty Systems
Inpatient EMR (Vendor 8)
Note Chart taken from a couple of real hospital
situations with each vendor or product family
shown in a different color
37
The Competitive Environment

• 1. There are over 1,000 small software vendors
  active in China HIT
• 2. The market segments with the most vendors are
  HIS, PACS, RIS, LIS, and EMR
• 3. All HIT vendors in the market started in a
  city and most are still operating in that city or
  a small region around the city. Many of these
  smaller local vendors have a dominant market
  share in the area they service. Some HIT vendors
  are becoming more national in scope
• 4. Many vendors in the hospital computer systems
  market offer heavily customized solutions rather
  than products. These heavily customizable
  solutions create greater dependency on the
  software vendor and are more difficult/expensive
  to keep current when vendors release new software
  updates periodically
• 5. Chinese hospital leaders would like to see a
  new generation of HIT software developed for the
  country to assist in helping them accomplish
  their leapfrog objectives

38
Major Areas of Future Product Development and
Opportunity in the China HIT Market

• 1. Application software will become more
  productized with greater tools to support the
  growing use of IT in hospitals
• 2. New application software to serve the not yet
  automated areas of clinical work processes are
  emerging very quickly
• 3. Integration tools to facilitate the
  development of an improved IT environment will
  emerge
• 4. Data analytics products and support tools to
  facilitate better data analysis, reporting, and
  decision making will emerge as Chinese Hospital
  Managers grow in sophistication
• 5. Service and implementation tools will improve
• General contracting for entire efforts with some
  company software and some partner software
• Planning and implementation services to support
  making better buying decisions and creating more
  successful implementation of software
• Other problem-solving services

39
Today Chinese Hospital HIT Investment Is Spent
Differently Than the Rest of the World
SOURCE CCW Research
40
Minhang District Health Bureau

• Evolution and Current Status of RHNs in China

41
Evolution of RHNs in China

• 1. The Ministry of Health (MOH) guidelines for
  Health IT Development called for regional health
  networks and digital hospitals to be implemented
  throughout China between 2003 and 2010
• 2. This provided much momentum for RHNs a few
  years ago as many health bureaus undertook
  regional health network and digital hospital
  investment
• 3. In the last few years data sharing has begun
  to emerge in China as some RHNs share limited
  data such as test/diagnostic results and some
  patient information
• 4. Healthcare reform calls for a more aggressive
  pursuit of EHR and RHN development, and has
  provided substantial additional funding in a
  variety of ways, so it is expected that
  substantial additional progress will be made in
  the next few years
• 5. Much more activity and funding in many cities
  and provinces with even U.S. funding for one or
  two major planning projects, including the
  Sichuan Provincial Health Bureau EHR and Regional
  Health Network Project

42
Overview of the RHN Market in China

• We have been surprised by the amount of RHN
  buying going on today. Our review of RHN bidding
  data in the first 7 months of 2011 found 63
  health bureau acquisitions to support RHN
  activities. These acquisitions were at the
  district, city, and provincial health bureau
  levels as follows
• 2. The RHN programs can be invested in a variety
  of different models, but the purchasing activity
  falls into three categories

43
Overview of the RHN Market in China (Continued)

• The first category of purchasing is around a
  model where the health bureau encourages the
  hospitals it owns to buy EMR systems that meet
  certain guidelines or funds the acquisition of
  such EMR systems for its poorer hospitals. In
  addition it funds the acquisition of HIS and EHR
  systems for outpatient visits to its community
  clinics. It then plans to put the data from the
  EHR systems in community clinics and EMR systems
  in hospitals into a central database for data
  analysis at the health bureau level. While many
  health bureaus are pursuing this model, there is
  little awareness of what to do with the data it
  will accumulate in the central database.
  Questions such as the following have not been
  answered
• How is the EHR and EMR data linked?
• What happens to the data that is now in the
  patients outpatient manual record and is not yet
  automated (usually covers all hospital outpatient
  activity)?
• How will the data that will be available in the
  central databases be analyzed?
• In spite of these unanswered questions, there is
  much funding of programs following the model
  described above

44
Overview of the RHN Market in China (Continued)

• A second category of spending in the RHN area is
  for the community clinic model without the
  hospital EMR component.
• The third category of buying to support RHNs are
  to develop the RHN platform to handle data from
  various sources and construct some public health
  applications for the health bureau. In this
  model, a big investment is being made in hardware
  with little clarity about the applications that
  will run on the platform
• There are still many health bureaus in China that
  have not taken a first step in spending to build
  their RHNs. They are now in the planning process
• 7. Minhang District is an early adopter of RHN in
  China. In Minhang a patient can visit any of the
  clinics, and the data for prior visits at any of
  the clinics is available in a central database.
  Its now in an early stage to have hospital EMR
  data to shared in the central database.

45
Overview of the RHN Market in China (Continued)

• 8. Health bureau buying of software applications
  has increased from a relatively small percentage
  of total China HIT software buying five years ago
  to 2.8 billion RMB in 2010 and 5.3 billion RMB in
  2011
• 9. In the bidding data, there were 42 vendors
  that won bids that did not appear in the hospital
  bidding that we examined, and 17 vendors that won
  bids that were also winning bids in the hospital
  bidding
• 10. These 59 winning vendors had a total of 69
  wins. 7 vendors have more than one win
• 11. The MOH 12th 5-year plan HIT development
  framework, referred to as the 3521 Project,
  provides guidelines for RHN development covering
  what should be bought and how the RHNs should be
  architected. While health bureaus are trying to
  comply with these guidelines, the complexity of
  the guidelines makes it difficult to comply. For
  example with the EHR, health bureaus are defining
  it in different ways, and often these definitions
  do not meet the intention of the MOH guidelines

46
Overview of the RHN Market in China (Continued)

• 12. Given this scenario, it is difficult to
  evaluate what will emerge in successful RHNs. If
  the RHNs move in the right way to answer the
  questions that are unanswered right now, then the
  RHN market in China will grow substantially
• 13. If the questions remain unanswered, and if
  the MOH vision is not attainable by the RHN
  investment over the next couple of years, then
  some rethinking will take place
• 14. At this stage it looks like the health bureau
  RHN investment will grow substantially over the
  next five years and represents a great market to
  be in front of so that the vision of MOH can be
  fueled and accomplished by the products of one of
  the successful companies that emerges from this
  setting
• 15. Many companies are benefitting from RHN
  development. Many others will benefit in the
  future

47
Minhang District Health Bureau

• Where Does China Stand on the Global HIT
  Continuum?

48
Broad Comparison of U.S. and China HIT Situations

• .

Key Element U.S. China Per Capita Healthcare
Spending 7,500 100 Employees per bed 6 1 to
2 HIT Spending Very high Very low Number of
Software Vendors in a Hospital 80 20 Integration
Status Okay Very bad Size of IT Staff Very
Big Small Dependence on Software
Vendors Medium Very High Implementation
Approaches Fair Bad Historic Data Available in
Any Form Lots Very Limited Historic Data
Available in Accessible Automated
Form Considerable Very limited Clinician Use of
Data Growing Limited to none
49
Creating More Success in the Current China
Healthcare Environment

• 1. There is much momentum for change
• 2. The rapid change being fueled by healthcare
  reform activities requires stronger IT systems to
  support it. More money will be spent, and better
  results are required
• 3. By recognizing what the rest of the world
  learned from their successes and failures, and
  doing more of what the rest of the world did
  right and less of what the rest of the world did
  wrong, China will be able to make faster and
  better progress in the future

50

• THANK YOU.
• FOR MORE INFORMATION CONTACT
• SHELDON I. DORENFEST
• THE DORENFEST CHINA HEALTHCARE GROUP
• SUITE 908, NO. 998 RENMIN ROAD, SHANGHAI
• PHONE [phone]
• WEB SITE ADDRESS www.dorenfest.com
• E-MAIL ADDRESS info_at_dorenfest.com
• SHELDONS E-MAIL ADDRESS sheldon_at_dorenfest.com