The Argument for E-Medicine

Nonetheless, health insurers, hospitals, and state and federal agencies are determined to make that argument succeed, if only because of the potential of EHRs to improve the quality of health care and reduce its costs. A Rand Corp. study published in Health Affairs in the fall of 2005 estimated that the broad use of EHRs would cut $81 billion from operating costs. That same study estimated that if most hospitals used EHRs, it would eliminate 200,000 mistaken drug prescriptions a year, saving $1 billion. Then there are the countless hours that patients and staff spend filling out forms, and then finding them--one study estimates that doctors can't find the records needed for 30 percent to 40 percent of their patient visits.

The effort to accelerate the rate at which the hundreds of thousands of physicians in small practices who don't use electronic health records (roughly 75 percent of them) adopt such systems is proceeding on several fronts. The U.S. government has four major standards efforts under way to provide guidance for electronic data exchange by doctors, hospitals and insurers. Congress is also considering relaxing elements of the Federal Medicare and Medicaid Anti-Kickback laws and the Federal Anti-Referral Law so that hospitals might help doctors in their regions adopt electronic health record systems.

The physicians and IT executives who have taken the lead in implementing EHRs say there is a strong business case for investing in these systems. In interviews with CIO, these early adopters provide a number of valuable tips for how to make the business case to doctors in small and midsize practices and help them over the implementation hump. With national, state and local initiatives starting this year, they say, the momentum for widespread EHR adoption is building.

"It's happening very fast now. The funding to do it isn't there yet, there are cultural barriers, legislative barriers and privacy barriers--but there is now a national effort to overcome all of these barriers," says John Halamka, CIO of the $US1.2 billion CareGroup, a system of hospitals and practitioners that includes Beth Israel Deaconess.

The dynamite needed to break through these barriers, Halamka and others believe, will be pay-for-performance programs, a fundamental shift in the way insurers reward doctors for treating patients. Such programs are designed to reward doctors not only for seeing patients but for how they do on measures such as managing patients with chronic conditions like diabetes, or screening them for preventable problems like colon cancer. The pay-for-performance model would also reward doctors on qualitative measures like patient satisfaction.

Such incentives work best when tracked by electronic health records. Thus, pay-for-performance bonuses give physicians a clear incentive to adopt EHRs. Halamka says the reason he'll have all 3,000 of his group's physicians using electronic health records is because CareGroup's contract with Blue Cross Blue Shield came up for renewal last year, and it now includes a pay-for-performance component. He says that as other insurers' contracts come up for renewal, they'll put in the same incentives.

Pay-for-performance programs will start to counter the impediments that work against doctors investing in electronic health records, predicts Micky Tripathi, president and CEO of the Massachusetts eHealth Collaborative. The Collaborative is using a $US50 million donation from Blue Cross Blue Shield of Massachusetts to link the hospitals and doctors in three Massachusetts communities on electronic health systems. It is the most ambitious pay-for-performance plan currently under way and is being watched closely, in large part because it puts all of the doctors in one area on systems and builds a health information exchange to connect them and the area's hospitals.

Patrick Barbier, a 62-year-old solo family practitioner in Newburyport, Mass., will be one of the very first doctors on the Collaborative system. He applied to be in the pilot because he thinks his patients will benefit from the consistency of care they'll be able to get when he's on vacation or off duty, because their records will be accessible to covering doctors. He also thinks e-prescription and lab systems will reduce his paperwork burden. "That will be a very good thing for me," Barbier says.