Cross-Industry Approaches to Address Risk and Assurance

Cross-Industry Approaches to Address Risk and Assurance

Lauren FifieldPractice Fusion

June 26, 2013

Does not reflect the work/thoughts of the FDASIA regulations subgroup

TODAY’S AGENDA

• Introduction

• Survey of Approaches

• Discussion Topics


Goals for Today

- Broaden horizons- Learn from other industries, good

and bad- Remove ourselves from health IT

and consider risk of harm and market assurances


Why regulate?Where there are consumers, there is

potential risk of harm and/or a need for

assurances

Risk factors and/or needs for assurances emerge

If a sector fails to address emerging risks and/or the need for assurances, the

government provides those via regulation


What already exists

- Survey of approaches that coexist now with FDA, ONC and FCC regulation

- Looking for areas of redundancy and ambiguity with what we recommend

- Identifying best practices and successful regulatory and non-regulatory tools


Questions to Consider

– What are some trends across different industries’ regulatory landscapes?

– What industries followed a path that could apply to Health IT?

– Which specific regulations could be applicable to regulating Health IT?

– What would be damaging to innovation or ineffective as applied to Health IT?


TODAY’S AGENDA

• Introduction




Government Approaches


Federal Trade Commission

– The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them

– Provides a mechanism for consumers to file complaints

– Enforcement action


Federal Trade Commission

– In healthcare, currently addresses healthy living, treatment and cures, and weight loss & fitness products

– The agency also has oversight over privacy and identity issues to protect consumers


FDA: Cosmetics

Precipitating Factors: – Risk of harm/lack of trust due to poorly

made or misrepresented cosmetics• Tragedies involving unsafe cosmetic products

– In response, FDA passed the Federal Food, Drug and Cosmetic Act in 1938 to mitigate harm and foster trust


FDA: Cosmetics

Federal Food, Drug and Cosmetic Act : – Prohibits marketing of “adulterated” or

“misbranded” cosmetics in interstate commerce– Cosmetic firms must substantiate the safety of

their products and their ingredients before marketing• If do not do this, must have a conspicuous warning

statement saying, “Warning – the safety of the product has not been determined”

– FDA can pursue enforcement action and through the DOJ to remove adulterated or misbranded cosmetics from the market


FDA: CosmeticsSuccesses/Failures of Intervention:– FDA gives the cosmetics industry

responsibility and accountability• Led to some unsafe and wrongly advertised

products on the market

– Virtually all aspects of the cosmetics industry are subject to some form of voluntary Cosmetic, Toiletry and Fragrance Association (CTFA) program Industry• Example: Estee Lauder

– Website features commitment to Product Safety and Testing, and Consumer Awareness

– Company standards that each product has to meetDoes not reflect the work/thoughts of the

FDASIA regulations subgroup

DOT: Pipeline and Hazardous Material Safety Administration (PHMSA)

Precipitating Factors:– Risk of harm in the design, construction,

testing, operation, maintenance and emergency response of pipeline facilities

– Needed assurances that pipelines were being regulated and held up to industry standards to ensure public and environmental safety


PHMSA Responsibilities: • Incident reporting• Data aggregation and analysis• Response to NTSB recommendations• Establish safety goals• R&D sponsorship to increase safety reliability• Transparency




Successes/Failures of Intervention: – Strategy of reporting incidents, analyzing data and

then enforcing safety issues is working– Example: careless digging• Common Ground Alliance

– High investment associated with reporting body (NTSB)


DOT: Performance and Registration Information Systems Management

Precipitating Factors: – Increase of the commercial carrier interstate

population was coupled with an increase in crashes

– Lack of assurances that the motor carriers were maintaining good safety practices


DOT: PRISM

– Process for targeting the highest-risk carriers for compliance reviews and roadside inspections

– Requires motor carriers improve their identified safety deficiencies or face progressively more stringent sanctions up to the ultimate sanction of a Federal Out-of-Service order and concurrent State registration suspensions• Sanctions provide powerful incentives for unsafe

carriers to improve their safety performance – Enforcement:

• Identify carriers operating on the highway while out of service

• Identify high risk carriers to prevent future accidents Does not reflect the work/thoughts of the


DOT: PRISM

Successes/Failures of Intervention:– Evolving, learning process: originated as a pilot

project mandated by Congress, but was so successful that it was expanded nationally• Pilot program demonstrated that State

commercial vehicle registration sanctions are a powerful enforcement tool in Federal and State motor carrier safety efforts

– Demonstrated results: PRISM shows improved safety over time


DOT: Motorcycle Helmet Regulations

Precipitating Factors:– High risk of harm for individuals who were

wearing helmets that were not properly constructed

– The lack of assurances on the quality of helmets led consumers to question if helmets would positively help them in a crash



Regulations:– Helmet must undergo an impact attenuation test– Helmet must meet certain configuration standards– Monitors projections inside and outside the helmet shell– Labeling:

• Permanent and legible• Manufacturer’s name or identification• Precise model• Size• Month and year of manufacturing • DOT symbol • Instructions to the purchaser about the ability to be damaged• Safety information



Success/Failures of Intervention:– Quality products and > trust :• motorcycle Helmets are 37% effective in

preventing motorcycle deaths and 67% effective in preventing brain injuries


ICC: Deregulation of the Trucking Industry

Precipitating Factors: – Motor Carrier Act of 1935 required new truckers to seek a

“certificate of public convenience and necessity” from the ICC• Became extremely hard for truckers to get certificates

– Law required motor carriers to file tariffs with the ICC 30 days before they became effective. • If protested by another carrier, ICC suspended the rates pending an

investigation of their legality



Deregulation:– Competition was reduced and trucking was

inefficient – Began in the 1970s and ended in 1995 with the

abolishment of the ICC– The Surface Transportation Body was created in

1996 within the DOT with jurisdiction over certain surface transportation economic regulatory matters



Successes/Failures of Intervention:– Deregulation dropped rates and improved quality– Has made it easier for nonunion workers to get jobs

in the industry– LTL carriers have not engaged in predatory pricing

since deregulation – Increased number of firms on most routes,

suggesting that deregulation has promoted price competition that is beneficial rather than predatory

– Service to small and remote communities did not suffer

– Promoted efficiency – Beneficial for consumers Does not reflect the work/thoughts of the


Environmental Protection Agency

Precipitating Factors:– Lack of standards in place for safe drinking

water– Individuals needed a way to be assured that

their drinking water was safe – Safe Drinking Water Act in 1974 established

to protect public health by regulating the nation’s public drinking water supply


Environmental Protection Agency

Safe Drinking Water Act: – EPA sets national health-based standards for drinking water to protect

against both naturally occurring and manmade contaminants– Protects drinking water from source to tap – National standards based on sound science to protect against health

risks, considering available technology and costs• Sets enforceable maximum contaminant levels • Ways to treat water to remove contaminants • Requirements for water systems to test for contaminants


Environmental Protection Agency – Standards

• EPA identifies contaminants and runs studies to deduce harm

• EPA determines the level of a contaminant in drinking water below which there is no known or expected risk to health

• EPA specifies a maximum contaminant level – Becomes a standard

– Enforceability • Works to increase water systems understanding and

compliance with standards

– Annual consumer confidence reports on the source and quality of their tap water from water systems

– EPA public, annual summary reports of water system compliance with drinking water safety standardsDoes not reflect the work/thoughts of the


Environmental Protection Agency Success/Failures of Intervention:

– Setting standards– Transparency– Defined Goal (Drinking Water Strategy Goals):

• Address contaminants as groups to be cost-effective• Foster development of new drinking water technologies• Use the authority of multiple statutes to help project drinking water• Partner with states to develop shared access to all public water systems

monitoring data

– Still more contaminants that need to be addressed – Cost of research and analysis– Expertise needed


Department of the Treasury: Dodd-Frank Act

Precipitating Factors: – Financial crisis in the US led to calls for change– No assurances of trust or integrity within the financial sector– Huge risk to individuals and companies after the financial

crisis – Led to the Dodd-Frank Wall Street Reform and Consumer

Protection Act in 2010– Intended to strengthen the economy, stabilize the housing

market, end “too big to fail” and streamline the regulatory process



Dodd-Frank Act:– Advance Warning System: creates a council to identify and

address systematic risks posed by large, complex companies, products and activities before they threaten the stability of the economy

– Transparency & Accountability: eliminates loopholes that allow risky and abusive practices to go unnoted and unregulated

– Protects Investors: provides tough new rules for transparency and accountability for credit rating agencies to protect their investors

– Aggressive enforcement



– Created the Consumer Financial Protection Bureau and the Financial Stability Oversight Council

– Market transparency: requires data collection and publication through clearing houses and swap repositories to improve market transparency and provide regulators important tools for monitoring and responding to risk

– Financial safeguards– Requires companies that sell products like mortgage-backed

securities to retain at least 5% of the credit risk unless the underlying loans meet standards that reduce riskiness


Department of the Treasury: Dodd-Frank ActSuccesses/Failures of Intervention:

– Fear that the Dodd-Frank apparatus will smother financial institutions in red tape that will stifle innovation and ultimately hurt the economy

– Lack of clarity in the bill, which could lead to capricious rulings – Too complex– Extremely costly– Overwhelmed finance and under-addressed the financial crisis – Has led to more information for regulators on America’s derivatives

markets – A new insolvency procedure is in place for firms like AIG, which

lacked an alternative to bankruptcy or bail-out before the crisis


Sarbanes-Oxley Act

Precipitating Factors:– Enacted as a reaction to a number of major corporate

and accounting scandals, ex: Enron – Scandals cost investors billions of dollars and decreased

the nation’s confidence in the nation’s securities markets – Risk of financial harm and lack of assurances of integrity

in the securities market led to the Sarbanes-Oxley Act of 2002


Sarbanes-Oxley ActLegislation:

– Public Accounting Oversight Board– Auditor Independence– Corporate Responsibility– Enhanced Financial Disclosures– Analyst Conflicts of Interest– Studies and Reports– Corporate and Criminal Fraud Accountability– White Collar Crime Penalty Enhancement– Corporate Tax Returns– Corporate Fraud Accountability


Sarbanes-Oxley

Success/Failures of Intervention:– The law was not broad enough – Enhancement of private sector responsibility (internal

controls)• CEOs and CFOs being forced to certify the validity of SEC filings and

the PCACB creation all had positive impacts according to polling

– Without baseline, hard to measure success– Relies now on full regulation rather than self-regulation– Board failures are still common


Private Approaches


HITRUST AlliancePrecipitating Factors:

– Industry need for a common security framework – Born from the idea that information security should be a

core pillar in the adoption of health information systems and exchanges

– Common Security Framework (CSF), a certifiable framework that can be used by any and all organizations that create, access, store or exchange personal health and financial information


HITRUST AllianceOverview:

– HITRUST Academy: offers training courses designed to educate healthcare security professionals about information protection in the healthcare industry and the utilization of HITRUST CSF to manage risk

– HITRUST Cyber Threat Intelligence and Incident Coordination Center: protects the healthcare industry from disruption by cyber attacks through a community defense approach • Early identification, coordinated response and incident

tracking, and enhanced preparedness for healthcare organizations challenged by cyber attacks


HITRUST AllianceCommon Security Framework:– Harmonizes requirements of existing standards and regulations including federal,

third party and government– Provide organizations with the needed structure, detail and clarity relating to

information security tailored to the healthcare industry– CSF Assurance Program: provide assurance to limit the exposure of a breach are

operating effectively • Questionnaire• Report • Cost Effective and Rigorous assurance

– CSF Assessors: organizations that have been approved by HITRUST for performing assessment and services associated with the CSF Assurance Program and the CSF• Need to meet certain criteria


HITRUST AllianceSuccesses/Failures of Intervention:– Harmonization – Standardization – Transparency– Analysis Industry/Data – Ownership – Benefits of CSF Assurance Program:

• Reduced costs and complexity• Managed Risk• Simplified Compliance


The Joint Commission

Precipitating Factors:– Public need for improved healthcare – Led to the founding of the Joint Commission in

1951• Collaborates with stakeholders to improve healthcare by

evaluating health care organizations and inspiring them to excel in providing safe and effective care of the highest quality


The Joint CommissionOverview:– Evaluates and accredits more than 20,000 health care organizations and

programs in the United States– Oldest and largest standards-setting and accrediting body in health care – Gives worthy organizations the Joint Commission’s Gold Seal of Approval

• Must undergo onsight survey, which is data driven, patient centered and focused on evaluating actual care processes

– Standards and Survey Process: assesses level of performance in areas such as patient rights, patient treatment, medication safety and infection control

– Set forth performance expectations and activities that affect the safety and quality of patient care


The Joint Commission– Information and education:

• Launched qualitycheck.org to allow consumers to search for accredited and certified organizations, find organizations by type of service provided within a geographic area, download free hospital performance measure results

– Joint Commission Resources: global knowledge based organization that provides innovative solutions designed to help heath care organizations improve patient safety and quality • Provides services through: education programs, health care consulting and custom

education, online software and publications – Performance measurement and accountability measures for hospitals:

• ORYX Initiative integrates outcomes and other performance measurement data into the accreditation process

• Categorized performance measures into accountability and non-accountability measures


The Joint Commission

Successes/Failures of Intervention:– Common set of measure specifications documentation

• Goal to minimize data collection efforts for common measures and focus efforts on the use of data to improve the health care delivery process

– Conducts Research on health care topics – Sets industry standards – Creates a threshold of quality and patient care


Good Housekeeping Seal of ApprovalPrecipitating Factors:– Need for individuals to understand if products were

healthy and safe • FDA, Consumer Product Safety Commission and

regulatory law did not exist – In 1900, created the Good Housekeeping Research

Institute • Evaluating products• Issuing Consumer Reports


Good Housekeeping Seal of ApprovalGH History:

– In 1902, GH wanted to protect their readers from inaccurate advertising claims and so began evaluating products before allowing them to be advertised

– In 1905, GH introduces a “Roll of Honor for Pure Food Products”, a monthly list of packaged foods inspected and approved for purity and safety

– Lobbied for Congress to pass the Pure Food and Drugs Act in 1906– Set best practices in changing sink heights to have the least pressure on backs– In 1917, shows readers what 100-calorie portions look like– Warns of tobacco use and link to diseases in 1921– Requires documentation of health and safety claims for dietary supplements

before they can advertise in the magazine– In 2000, GH tests bicycle helmets and found that many fail to meet standards. This

led to a large recall by the CPSC– In 2009, released the Green Good Housekeeping Seal

• Meet GH environmental criteria


Good Housekeeping Seal of Approval

Success/Failures of Intervention:– Trust: due to the integrity of the company, consumers view

the seal as a stamp of approval or an indication of a good product

– Accountability: Seal offers a limited warranty in the form of a refund, repair, or replacement if the product carrying the Seal is found to be defective within two years of purchase

– High quality and reliability: Seal is only awarded to products that deliver on their claims, ensuring the integrity of the seal and the product


Florida Oranges Seal of ApprovalPrecipitating Factors:

– After being hit hard by four major freezes within 5 years in the 1980s, Florida Oranges needed a way to maintain their image and quality

– Brazil was having a large impact on orange juice, but their orange juice was not 100% pure• FL Orange producers were worried that this would

hurt the market– In an effort to compete with Brazil and bring back their

image, Florida Oranges created a sticker that says, “100% Pure/Florida’s Seal of Approval


Florida Oranges Seal of ApprovalRequirements for the Seal:

– Believes that the state standards that they established with this seal exceed those of the nation and the world

– The seal is available for firms inside and outside Florida that purchase their products exclusively from a Florida supplier and agree to pack the product to the Florida’s quality standards

– Processors in Florida are inspected continuously by the US Department of Agriculture. Out of state processors must purchase the juice from a Florida producer but do not have to have their plants inspected

– Oranges must reach a specified maturity before they are processed

– The orange juice has to have a certain natural sugar-acid ratio– The seal cannot be used on orange juice with sweetener added

or on blends with other juices – Pulp content cannot be more than 12% by volume– No pulp wash is allowed


Florida Oranges Seal of Approval

Success/Failures of Intervention:– Quality and standards– Confusion: consumers now wonder why

some products do not have the seal– Competitive advantage: revamped

Florida Oranges image


American Podiatric Medical Association

Precipitating Factors:– Noticed a need for consumers to decipher

beneficial footwear from low value footwear

– Seal of Acceptance/Approval Program was created to set standard and ensure quality



Seal of Acceptance: – Evaluates footwear, materials, insoles, hosiery and

equipment

Seal of Approval:– Evaluates the use of therapeutic agents and the adjuncts

Awarding Process:– Companies apply for the seal and must renew it every 3 years– Podiatric Seals Committee scientifically evaluates and

determines whether the product allows normal foot function and promotes quality foot health • Evidence of usefulness and safety must be established either by an

appropriately recognized lab or clinical investigation or by the product’s meeting certain physical standards

• Companies must provide research documentation, information on intended use, patents, composition and evidence of quality control procedures for each productDoes not reflect the work/thoughts of the



Successes/Failures of Intervention:– Awareness and education:

• APMA is able to raise awareness by identifying products of exceptional quality that are manufactured with the consumer’s comfort and safety in mind

• APMA is able to assist the public in making informed decisions about foot health

– Quality: the strict process to obtain seal ensures that only top products are supported by the APMA


TODAY’S AGENDA

• Introduction




Takeaways– Allow the industry to have a chance to self-regulate/mitigate

risk on their own– Industry can set standards that every company will follow if

they want to be competitive in the market – When the industry failed to do so, focused regulation where

industry is failing to address is successful– Reporting and collecting data is critical to understanding the

areas that need regulation• Cannot intelligently regulate until this data is analyzed

– Transparency is an important way to keep industries in line– Regulations that are too big, usually fail


Questions to Consider

– What are some trends across different industries’ regulatory landscapes?

– What industries followed a path that could apply to Health IT?

– Which specific regulations could be applicable to regulating Health IT?

– What would be damaging to innovation or ineffective as applied to Health IT?


Discussion


Cross-Industry Approaches to Address Risk and Assurance

Documents

Transcript of Cross-Industry Approaches to Address Risk and Assurance