Feds Prescribe More Money for E-health Push

New incentives for using EHR systems are on the way. But more may be needed to spur adoption.

The cost of installing and maintaining electronic health rec­ord (EHR) systems in doctors offices has long been described as one of the biggest barriers in the way of President Bushs executive order that most Americans have EHRs by 2014.

Now the federal government hopes to start breaking down that barrier through a demonstration project, under which it will pay higher Medicare reimbursements to up to 1,200 medical practices that deploy EHR systems. The U.S. Department of Health and Human Services announced the plan on Oct. 30, which was billed by HHS Secretary Mike Leavitt as a red-letter day in the push to spur the adoption of e-health technology.

Some doctors and health care IT executives applauded the proposed financial incentives, saying they could ease the cost burden enough to put EHR systems within the reach of small practices. But not everyone was so sure that the plan by itself would lead to widespread adoption of EHRs. Some in the latter group have noted that broader technology hurdles still need to be overcome.

Everyone did agree that the problem the HHS is trying to address is a real one.

Herb Smaltz, CIO. Ohio State University Medical Center

Herb Smaltz, CIO.

Ohio State University

Medical CenterHerb Smaltz, CIO at the Ohio State University Medical Center in Columbus, said that for many small medical practices, the cost of installing EHR systems continues to be prohibitive.

If the incentives achieve a utility function for these physician groups, that will definitely spur adoption [of EHRs], Smaltz said. If insurance companies then follow suit and offer similar rewards and incentives, that should achieve the tipping point for adoption on an almost universal level.

Peter Embi, a physician and director of the University of Cincinnati Center for Health Informatics, said that EHR use can improve the efficiency of medical practices and reduce their costs somewhat over time. But those reductions often arent sufficient to justify the expense and short-term disruptions of implementing an EHR system, Embi added.

The real value in EHRs, when used to their fullest potential, is in improving the quality and safety of patient care, he said. Embi, who practices at a U.S. Department of Veterans Affairs clinic and uses the VAs Computerized Patient Record System, spoke during the HHS announcement about a patient who suffers from severe arthritis, gout and congestive heart failure.

Without the VAs EHR system, the care that the patient receives would be slow and delayed, Embi said. At worst, he might actually be harmed by some conflicting medications.

Improving health care quality can lead to lower costs, according to Embi. But he said that insurers and employers the payors of health care reap most of those cost benefits while leaving hospitals and doctors offices to foot the bill for EHR investments.

Embi is still waiting for the HHS to spell out the details of the financial incentive program before he passes judgment on the plans likely success. For now, though, he said that he sees the announcement as a welcome step toward a resolution of the cost issues.

In the Health Information Management Systems Societys annual survey of health care executives, which was released in April, more than 20% of the 360 respondents listed cost as the biggest barrier to deploying IT systems. That made it the most-cited roadblock, HIMSS said.

Leavitt noted that only 10% of small medical offices and 5% of solo practitioners have installed EHR systems thus far. He said the financial incentives demonstration project is scheduled to last five years and will be overseen by the Baltimore-based Centers for Medicare & Medicaid Services, which are known as the CMS.

The CMS will begin working next spring with as many as 1,200 medical practices that have between three and five physicians. Participating practices will need to put EHR systems in place by the end of the programs second year and have them approved by an HHS-recognized certification body.

Once the technology is installed and certified, the medical practices that sign up will be required to use the systems to automate certain functions that can affect the quality of care, such as clinical documentation and prescription ordering. Leavitt said that during the first year of operation, participants will get straightforward increases in their Medicare reimbursements.

In the second year, additional incentives will be paid to practices that use the EHR software to report on their performance against national quality-of-care standards. Leavitt said further incentives will be added during the third year for practices that improve their care levels as a result of using the technology. Doctors also will be able to get greater reimbursements as they deepen their investments in and use of EHRs, he said.

However, the HHS didnt specify how much it will increase the Medicare reimbursements as part of the demonstration project.

Steven Waldren, director of the American Academy of Family Physicians Center for Health Information Technology in Leawood, Kan., noted that the success of the project will hinge on those details and others such as whether the HHS will give medical practices any money upfront to help offset the cost of acquiring the EHR software.

It will also be important, Waldren said, to monitor whether private insurers increase their payments to physicians who use EHR systems.

At the Oct. 30 announcement, Leavitt acknowledged that the HHS is eager to have insurance companies join in the incentive effort.

Allan Korn, Chief Medial Officer, Blue Cross and Blue Shield

Allan Korn,

Chief Medial Officer,

Blue Cross and Blue ShieldAllan Korn, senior vice president and chief medical officer at the Chicago-based Blue Cross and Blue Shield Association, said that on the whole, his group is interested in taking part. But he added that Blue Cross and Blue Shield plans with more resources for example, those in states such as Florida, New York and New Jersey would be more likely to get involved before their smaller brethren do.

Overall, Korn views the incentive plan as a big step forward for EHRs. To the unknowledgeable, this was a ho-hum announcement, he said. [But] to those of us dealing with this every day, this is a really big deal.

Korn voiced optimism that the announcement by the HHS may help put a chink in the armor of medical practices that have been afraid to adopt EHRs because of the cost of doing so. If we can get over that [fear] and demonstrate meaningfully in enough practices that it was a little pain but it was worth it that is the tipping point we may be at, he said.

Korn pointed to the adoption of automated teller machines by banks as a similar process. Im sure the banks thought buying ATMs was going to cost a mint, he said. Before you knew it, 75% of their tellers went away, and their customers were happier.

Not Enough Money

But Ron Paulus, chief technology and innovation officer at Geisinger Health System in Danville, Pa., said its his understanding that the planned reimbursements would only amount to several thousand dollars annually per practice. That is not enough money, particularly in light of the workflow and lost productivity issues that health care providers must grapple with when implementing EHR systems, he said.

Several thousand [dollars] per practice is not going to compensate for that, Paulus said. Id be surprised if it is enough to really shift the market significantly. Paulus has experience with EHRs: Geisinger, which operates medical facilities in 40 Pennsylvania counties, has been using the technology for more than a decade.

And there are other issues that still need to be addressed before widespread adoption of EHRs is likely.

For example, Smaltz said that while regional health exchanges across the U.S. are working on methods for securely transferring patient data between systems from different vendors, final processes still need to be established. There also isnt a good method for ensuring that information is being taken from the right patient records when data is transmitted from one EHR system to another, he added.

While sophisticated matching algorithms have been proposed as a means of accurately pulling the correct information on a given patient, no matter how good these algorithms are, I dont see them achieving 100% accuracy, Smaltz said. The situation is complicated by the need to deal with patient information spread across multiple locations, multiple local record identifier schemas and over the life of a patient, he cautioned.

Mark Frisse, a biomedical informatics professor at Vanderbilt University in Nashville, said that the government also has to figure out a way to bring pharmacies into the EHR picture.

Frisse noted that one of the rationales behind the financial incentive plan for doctors offices is to boost the quality of patient care. To realize this potential, it will be equally important to connect the small pharmacy, said Frisse, who is leading an ongoing effort in Tennessee to enable health care providers to exchange electronic patient data.

Copyright © 2007 IDG Communications, Inc.

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