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Interim Data Council Report to the Vice President


FROM: Donna E. Shalala
SUBJECT: Memorandum And Status Report To The Vice President

I am pleased to forward to you our first status report on our efforts to promote health care applications of the national information infrastructure (NII).

In your Memorandum of March 8, 1995, you asked us to focus on four areas -- data standards, privacy, enhanced health information for consumers, and telemedicine -- and to report back to you on our progress. As you note in that memorandum, the Department of Health and Human Services (HHS) had work underway in these areas; you asked us to consolidate the ongoing HHS efforts into a coherent strategy coordinated with other agencies, with attention to private sector and state roles in achieving more effective use of the NII for health care applications. I am pleased to report that we have already made significant progress. HHS and interagency efforts have moved beyond planning and into implementation on several projects, and are poised to complete planning and turn to implementation on the remainder.


By virtue of the scope of our programs, the Federal Government is a leader in health information policy and has much to gain from the implementation of electronic information systems. We must take care to exercise this leadership collaboratively, with input from all interested parties and the guidance of our many state and private sector partners.

In some areas, the private sector is calling for direct federal intervention. For example, there is a developing consensus that federal action is required to help move health data users toward more uniform, shared data standards, in the interest of reducing paperwork and administrative burdens. We are uniquely situated to create a forum for collaboration on voluntary evolution toward more shared health data standards, but must be careful to avoid the appearance of imposing a federal mandate dictating such standards. We must also be aware that as this work increases the ease with which health information can be shared, there will be a concomitant increase in the need for uniform national protection for the privacy of health information.

Similarly, as federal agencies and private health plans investigate, fund, or implement telemedicine activities, HHS is increasingly asked to become directly involved. We are working closely with the other departments and our private sector partners to define our appropriate role.

The Federal Government has a duty to make its own information accessible. Accessibility means more than simply putting such information on-line and hoping that consumers will find it.

Accessibility must also include navigation tools and other means to help consumers find the information that meets their needs.

Finally, as you know, we are working on these issues in an uncertain budget climate. Some of these efforts are labor intensive and expensive; our ability to engage fully in the desired activities depends in part on Congressional action. Thus, in some areas, we may not be able to chart a definitive course until we have a clear picture of our available resources.


You will see all these concerns reflected in these reports. Attached are three reports, summarizing HHS and interagency process, progress, and next steps with respect to health data standards, privacy, and telemedicine. The report on Enhanced Health Information for Consumers will follow in roughly one month. In short:

Data Standards:

We are moving simultaneously to implement three efforts to bring greater policy coherence to the health data standards arena. First, we are working to improve inter-departmental coordination in federal data standards activities by consolidating staff efforts (in particular, linking separate Departmental efforts with the Federal Electronic Data Interchange Standards Management Committee), and by providing a vehicle for senior-level coordination and communications. Second, we are using a federal advisory committee, the National Committee on Vital and Health Statistics, to serve as a national forum of expert stakeholders to address data standards and privacy issues, and to explore ways to improve the compatibility of private sector, state, and federal health information systems. Third, the Health Care Financing Administration (HCFA) is in the process of designing the Medicare Transaction System to replace the current information systems which process Medicare payments. The goals of the Medicare Transaction System are to improve control of Medicare program expenditures; to increase standardization; to lower administrative costs; to improve service to beneficiaries and health care providers; and to accommodate managed care arrangements and other alternative payment methods. We will convene focus groups to bring new voices to bear on crucial aspects of the relationship of the Medicare Transaction System to the rapidly evolving health information infrastructure. The report is attached at Tab A.


The inter-Departmental working group on privacy is focussing on privacy issues related to transmission of health information on the NII and other issues related to electronic communications technology and integrated data systems. We are now developing a white paper identifying and analyzing those issues. The work on that paper can inform positions on future legislative and policy proposals.

The group has also begun, pursuant to your memorandum, an effort to compile a best practices guide. Initially, we have requested a comprehensive literature search, which will eventually be published by the National Library of Medicine, for materials identifying current best practices for protecting privacy of individually identifiable health information that is transmitted or is potentially accessible via the Internet/NII. The report is attached at Tab B.


With wide representation from throughout the Executive Branch, the Joint Working Group on Telemedicine is pursuing a range of activities to achieve a greater consensus on the role of the federal government in telemedicine. After meeting with interested parties and reviewing all current major policy studies, the Working Group developed an initial work plan encompassing the following four areas: 1) development of an affordable and accurate inventory of federal and, secondarily, State and private, telemedicine projects; 2) improved coordination of federal telemedicine evaluation efforts; 3) establishment of specific strategies to overcome licensure barriers to telemedicine; 4) clarification of the role of the federal government in establishment and enforcement of safety standards; and 5) promotion of the development of cost effective third party payment policies, including promotion of telemedicine in managed care settings as appropriate. The report is attached at Tab C.

Finally, it is important to note that health information does not exist for its own sake. While improved health use of the NII is an important objective, it is not the final goal in itself. Rather, information exists to serve our fundamental goals: enhancement of our nation's health, improved quality of care, reduced administrative burdens and other unnecessary costs, and empowerment of consumers. In developing information systems policies and activities, it is these goals which must guide our efforts.

TAB A: Status Report: Health Data Standards
TAB B: Status Report: Health Information Privacy
TAB C: Joint Working Group On Telemedicine: Status Report