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Memorandum to Secretary Shalala, March 8, 1995


As you know, new information and communications technologies will have a pervasive impact on the way we work, learn, live and communicate with each other. The emerging National Information Infrastructure will eventually allow Americans to send and receive voice, video, images, and data with the same ease as we use telephones today.

Although the health sector is highly information-intensive, it has not capitalized on computers and information networks to the same extent as other sectors of the economy. Applications such as automated claims and payment transactions, telemedicine, computer-based patient records, and on-line access to the latest treatment and prevention information will help improve quality, expand access, and contain costs.

To accelerate the progress towards an efficient, useful, and accessible health information system, I would like the Department of Health and Human Services to lead an inter-agency effort to address and resolve the major policy issues discussed below. This effort should include representatives from Commerce, Defense, NASA, Veterans Affairs, and the Office of Management and Budget. It should also coordinate with the Administration's Information Infrastructure Task Force and build on the work of the IITF Privacy and Health Information Applications working groups. Because the private sector will take the lead in deploying, owning, and operating much of our nation's health information system, extensive consultation with the private sector will also be necessary.

Based on the Administration's work to date on health care applications of the NII and the public comments we have received, I believe that progress must be made in the following four areas: health data standards, privacy, health information for consumers, and telemedicine.

Health Data Standards

There is a developing consensus that everyone -- consumers, industry, policy makers -- would be better served by more uniform, shared standards for collection and transmission of health information. HHS has a unique opportunity to help create a national forum for the collaboration of all interested parties, with the long-term goal of increasing the interoperability of diverse health information systems. Such a forum could accelerate the development of a national health information infrastructure that dramatically reduces data collection and paperwork burdens and allows for multiple uses of data, while protecting the privacy of individuals.

The Department, together with a federal advisory Committee on health information systems, should address the following questions:

  • What short-term actions can the federal government take in developing its own health information systems to facilitate the development of uniform data standards that meet the needs of all users?
  • How can computer networks such as the Internet be used to accelerate the adoption of health information standards?
  • How can HHS ensure that the Medicare Transaction System is fully compatible with the multiple health uses of the NII?
  • What are the long-term activities the federal government can undertake to facilitate the evolution of public and private health information systems toward common data standards?
  • How can we promote demonstrations, based on public-private partnerships, that facilitate the development and adoption of standards?

The general steps identified in response to each of these questions should be taken, as appropriate, in the other policy areas as well (for example, identification of short- and long-term federal actions to promote policy goals; use of the Internet to catalogue existing activities; and demonstration projects).


A cornerstone for health applications of the NII must be strong privacy protection. Existing state and federal laws are not equipped to handle privacy and confidentiality in an electronic environment. The privacy policies of institutions that hold health information are of varying efficacy. Privacy policies should have procedural components (for example, determining who requires access for a given purpose) and technological components (for example, audit trails and encryption).

Accordingly, the Department should develop model institutional privacy policies and model state laws for health information. These models should be consistent with the privacy principles developed by the IITF working group and informed by the advisory committee. A starting point for model institutional policies should be the most cost-effective policies in use in the private sector today. The model state laws should be designed to assist state legislatures, which will be struggling with these issues over the next few years.

The Administration should also consider what type of federal framework is needed to support these models. The framework could range from federal legislation to ideas for evaluating the efficacy of the suggested models.

Enhanced Health Information for Consumers

The NII presents nearly unlimited opportunities to make information on health, medical care, and health insurance available to consumers. HHS is already involved in health-related information sharing activities, such as dissemination of AHCPR guidelines and distribution of information about Medicare. The federal government is one of the largest health information disseminators. Like most federal dissemination it tends to be one-way broadcasting of information through more traditional channels of communication -- that is, written or oral. Electronic communications can help us reinvent our existing activities. For example, by using Internet technology such as the World Wide Web, the federal government could help create a "virtual library" on a wide range of health-related topics. Multimedia kiosks may also be an effective means of disseminating consumer health information.

The Department should develop recommendations for federal activities to provide enhanced health information to consumers through the NII. These recommendations should avoid the development of new stand-alone dissemination networks, and should instead build upon existing networked capabilities.


Telemedicine holds remarkable promise for extending the benefits of medical progress to underserved areas, speeding medical intervention in emergencies or on the battlefield, improving medical education, and many other applications. At the same time, there are barriers to numerous applications of telemedicine (such as state credentialing requirements for physicians and reimbursement policies).

The Department should prepare a report on current telemedicine projects, the range of potential telemedicine applications, and public and private actions to promote telemedicine and to remove existing barriers to its use.

I know that good work in all of these areas is already underway at HHS. I would like you to consolidate these efforts into a coherent strategy that is coordinated with other agencies and pays particular attention to an enhanced private-sector and state role.

Given the role that information and communications technologies can play in expanding access, increasing quality, and containing costs, I think it is imperative that the Department commit to making significant progress on these issues in the next year. Please keep me informed of your progress with a six- and twelve-month report and notices of significant achievements as they occur.