Electronic Medical Records And Cost Savings

The New York Times has a story on  an analysis by the RAND Corporation showing limited health care savings from electronic medical records. This has given fuel to some Republicans to attack Obama who (along with Republicans such as Newt Gingrich) pushed heavily for adopting EMR’s. While I have written in the past that I believe the Obama administration has been overly confident about savings from EMR’s, looking at information on the program beyond what is in the New York Times article does show a more favorable picture.

Any study on the savings is premature as we are so early into the transition to EMR’s. The government is providing physicians and hospitals incentive payments for both adopting EMR’s and meeting a list of requirements for their use. Incentive payments have become increasingly common in health care as a partial transition away from pure fee for service payment. I also receive thousands of dollars a year in incentives for providing information to Medicare on the quality of health care provided by my practice, for switching to electronic transmission of prescriptions to pharmacies, and following many policies required of Medical Homes. If the goal is to have physician offices and hospitals change to EMR’s, incentive payments are necessary. The actual cost of switching to an EMR, considering both direct expenses and lost productivity, exceeds the government incentive payments. The incentive payments make doctors more willing to convert by replacing part of the lost income.

The incentive payments are not simple handouts with no strings–a false impression which might be obtained from criticism from a member of the Bush administration:

Dr. David J. Brailer, who was the nation’s first health information czar under President George W. Bush, said he still believed tens of billions of dollars could eventually be squeezed out of the health care system through the use of electronic records. In his view, the “colossal strategic error” that occurred was a result of the Obama administration’s incentive program.

“The vast sum of stimulus money flowing into health information technology created a ‘race to adopt’ mentality — buy the systems today to get government handouts, but figure out how to make them work tomorrow,” Dr. Brailer said.

The incentive program does not allow doctors to take the handout and then figure out the computer system afterwards. In order to receive the incentive payments, doctors and hospitals must meet a number of requirements with the actual use of the system. These requirements are called Meaningful Use.

In order to receive the maximum possible incentive payments over a five year period, doctors had to show Meaningful Use beginning in either 2011 or 2012. Only three months are required the first year, with twelve months of Meaningful Use required in subsequent years. This means that doctors could have started using a computer system in October 2012 and still qualify for the maximum incentive payment. Most likely many doctors did not begin using their computer systems until this time, or shortly before. (My system went live in September to give an extra month in case of any problems).

With many system not being in place until a few months ago, the RAND study was premature in coming to any conclusions.

Complicating this even further, the current requirements under Meaningful Use Stage I do not require that all functions of an EMR be in use–a necessary break to make implementation realistic. The Stage 2 Meaningful Use requirements which will be required as of October 2014 are far stricter. Presumably the requirements for far greater use of electronic medical records will also provide increased potential for savings. Actually in some ways the requirements are too strict, and hopefully will be revised. The Stage 2 Meaningful Use requirements include requirements which are to some degree out of the control of the physician. For example, there is a requirement to have an electronic portal which will allow patients to view their medical records on line, but this includes a requirement that five percent of patients actually view their records. It hardly seems fair to penalize a physician if less than five percent of patients decide to view their medical records on line as long as they are available, which could be a problem for practices with older and less affluent populations. There are also requirements to provide a patient summary after office calls, and after receiving this summary patients might have less interest in using the patient portal.

The plan established by the Obama administration was not devised to see major cost savings by this date, considering how recently many physicians have begun using EMR’s and as the Stage 2 requirements don’t take effect until 2014. The program, by providing payments to offset the costs of implementing EMR’s, has been effective in getting a large percentage of physician offices and hospitals to adopt such systems in a few years, providing the potential for savings in the future.

In retrospect, there is one thing which might have been done better to provide savings earlier in the use of EMR’s. At this time there are difficulties in communicating between different systems. I still receive paper copies of laboratory results and they must be manually typed or scanned into the EMR if they are to be included in the electronic record. I will have to pay more to add a laboratory interface, provided that the outside laboratories I send work to are willing to work with my system.  It might have been wiser to set up better systems for communication between different physician EMR’s, hospital system, public health facilities, and laboratories so that this would be easily available as soon as an EMR is used, as opposed to being a more difficult function which we have to pay to set up afterwards.

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