What's Plaguing E-health?

That’s why Medicare and a handful of health insurers, such as Blue Cross and Blue Shield of Massachusetts Inc., have begun to sweeten the deal for doctors by offering “pay for performance” incentives that are aimed, in part, at enticing physicians to adopt and use EMR systems to improve their quality of care.

Pain Point

But physician resistance isn’t the whole problem. Cost constraints, the lack of dedicated IT staffers at smaller physician groups and the disruptive impact that EMR installations can have on a health care organization have also limited adoption rates.

Installing a full-blown EMR system at a large hospital can cost up to a few hundred million dollars, says Frisse. That’s a big chunk of change, especially for cash-strapped hospitals. Plus, roughly 3,000 of the nation’s 5,000 hospitals are not-for-profit institutions, notes Eric Brown, an analyst at Forrester Research Inc. in Cambridge, Mass. Unlike for-profit hospitals, those organizations don’t have shareholders “clamoring for profits” through improved technology, says Brown, so there’s less pressure to invest in EMR systems.

EMR investments can be even more daunting for small physician practices of, say, two to six doctors. The average cost per physician for EMR system evaluation, installation and training runs about $40,000, says John Halamka, CIO at Beth Israel Deaconess Medical Center in Boston. He is also chairman of the Healthcare Information Technology Standards Panel, an ANSI-backed initiative that’s aimed at facilitating interoperability among health care applications.

Another problem is that the primary benefits that EMR systems generate — higher-quality care and improved patient outcomes — are skewed toward fattening health insurers’ profits and helping patients, says Halamka.

“The individual who receives the least economic value is the physician,” says J.P. Little, chief operating officer and acting CEO at RxHub LLC, a nationwide information exchange in St. Paul, Minn., that connects physicians, patients, pharmacies and pharmacy benefit managers. That’s where pay-for-performance incentives may tip the scale, Little says. “If a doctor got a bonus of ten or twenty grand to improve quality of care, they’re going to adopt the technology,” he says.

Operating Room

Another barrier to EMR adoption is the disruptive impact that these implementations can have on a health care organization’s short-term operations, especially for smaller entities. It’s a tough sell to persuade physicians to buy EMR systems that can force them to cut back on their patient loads (and revenues) by as much as 25% for up to a month during the implementation transition.