February 13, 2013

Electronic Medical Records – Still Waiting for the Big Returns

By Gordon Schnell

The Obama administration is spending billions of dollars to push hospitals and doctors to go digital with their medical and billing records.  It is supposed to revolutionize the industry, improving efficiency and patient safety and drastically reducing the cost of healthcare in this country.  Unfortunately, the move to electronic health records (EHRs) has fallen far short of these hoped-for returns.  In fact, according to several recent reports, it is actually contributing to higher healthcare spending.  That is because the sizeable government subsidies intended to encourage this electronic transformation are not being met with any reliable move towards improved patient care.  Even worse, many healthcare providers are exploiting the innovations in record-keeping to more easily bill Medicare and private insurers for medical services not actually provided.

The most recent report on the subject was issued by the Office of the Inspector General of the Health and Human Services Department (HHS).  It studied the results of the government’s EHR incentive program which thus far has paid out roughly $4 billion to thousands of doctors and hospitals, with several billion dollars more to come.  To be eligible for these payments  — which can be tens of thousands of dollars per doctor and several million per hospital — the healthcare provider must not only adopt an electronic record system.  It must also satisfy certain “meaningful use” requirements to ensure that the new system will lead to concrete advancements in patient care.  According to the HHS study, that is where the EHR program has suffered a critical lapse.  It is doling out heaps of money without any real safeguards to ensure the government and public at large are getting what they are paying for.

What appears to be an even bigger problem with the EHR program is that some healthcare providers are adopting the technology only to extract payments they do not deserve.  That is what the New York Times seemed to draw from an analysis it conducted of Medicare data from the American Hospital Directory.  The Times found that hospitals receiving EHR incentives had disproportionately large increases in Medicare collections over the past several years compared to those that did not receive these incentives.  The paper concluded from this and other findings from its study that “the move to electronic health records may be contributing to billions of dollars in higher costs . . . by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.”

The Times is not alone in this assessment.  The Center for Public Integrity reached the same conclusion in its own analysis of the subject.  It found that questionable hospital billing practices have increased Medicare charges by billions of dollars over the past few years and that this trend “appears to be getting worse amid lax government oversight and the proliferation of electronic medical records systems.”  The RAND Corporation likewise just came out with a report revisiting as grossly overstated its early predictions of huge cost savings from EHR systems.  Ironically, it was RAND’s original study in 2005 that largely contributed to the government’s digital push in the first place.  RAND has now done an about-face, recognizing that healthcare costs are continuing to skyrocket and that the move to EHRs may be part of the problem.

Despite this growing chorus of concern, there appears to be little disagreement that electronic records can lead to huge advances in patient care and treatment.  Think about the benefits of broad access with the flick of a key stroke among multiple care providers to patient medical histories, diagnoses and treatments.  If fully adopted and interoperable, EHRs really could change healthcare as we know it — reducing duplicative tests, minimizing the risk of medical errors, and greatly speeding up the path to the best diagnosis and treatment plan.  They also can be a huge contributor to medical research by, as the New York Times recently reported, making “every patient a participant in a vast, ongoing clinical trial, pinpointing treatments and side effects that would be hard to discern from anecdotal case reports or expensive clinical trials.”  All of these advances are there for the taking.  The government and medical community just need to get their acts together in adopting and administering this 21st Century approach to managing our medical records.

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