Dave Close

EHR Benefits: A Macro and a Micro View

The New York Times ran a short piece by Steve Lohr yesterday that highlighted a new study led by two doctors from Massachusetts General Hospital.

The study compared 3,000 hospitals at various stages of implementing and using electronic health records (EHRs). For those who see EHRs as a panacea for the healthcare system, the initial findings are disappointing. To quote from Lohr’s story: “In the heart failure category, for example, the hospitals with advanced electronic records met best-practice standards 87.8 percent of the time; those with basic computer records, 86.7 percent; and those without, 85.9 percent. The differences in other categories were similarly slender.

“Reducing the length of hospital stays, according to many experts, should be a big money-saving payoff from electronic health records — as better care aided by technology translates into less time spent in hospitals. For hospitals with full-featured digital records, the average length of stay was 5.5 days; for those with basic computer records, 5.7 days; and those without, 5.7 days. The differences, Dr. Jha said, were ‘really, really marginal.’”

So, at least by these two measures the return on the use of EHRs so far is pretty meager. But, as the study authors point out, the evidence for gains from EHRs so far has come from an “elite” group of high-performing providers that have spent years adapting to the technology. No surprise, with just 20 percent of U.S. physicians now using computerized health records (and less than 5 percent in very small practice groups) there’s a long way to go to meet the federal EHR usage goals, despite the financial incentives in the HITECH portion of the 2009 ARRA stimulus package.

That’s a macro view. But if you take a micro view, there are some stunning successes in the use of EHRs to improve physicians’ practice operations and patient care. Twice this year I’ve had the pleasure of seeing a presentation by Dr. Jim Morrow, formerly of the North Fulton Family Medicine Center. Dr. Morrow presented at HIMSS 2009 in Chicago, and a few weeks ago he presented at the HIMSS and Massachusetts Health Data Consortium Healthmart 09 conference in Worcester. Massachusetts. Morrow is a compelling presenter and he tells a detailed story about his small medical practice group implementing and using EHR technology, going back almost 10 years. Here are his slides.

To summarize some of the ROI from his four-physician practice:

Transcription costs dropped from $110,000/year to zero
Chart handling dropped from $30,000/year to zero
Chart searches dropped from $16,000/year to zero
Dictation dropped from $32,000/year to zero
Reduced cost per patient visit from $112 to $79
Full time employees per provider dropped from 4.7 to 2.8

Morrow estimates that EHR technology saved the practice 11,440 billable staff hours per year, which could go into serving more patients. His presentation has some compelling images of unreadable handwritten prescriptions next to clear, legible e-prescriptions – a key part of reducing medical errors.

Now, none of this is new. EHR vendors, HHS officials, Dr. David Blumenthal and many others have been pushing for widespread EHR adoption for years. And it’s not that surprising that a study would find that so far the measureable benefits are not compelling across the entire U.S. hospital system. But EHRs will help transform healthcare and it’s only a matter of time.

This study is like taking a snapshot of internet-enabled e-commerce in 1996. What looked like hype back then is now a critical underpinning of our economy. Many people have invoked the so-called Metcalfe’s Law (ie.: the value of the network is proportional to the square of the number of users) first postulated about communications networks, as something that will come into play as EHR usage reaches critical mass. Let’s hope that’s the case, and the findings of this new Mass General study are simply a realistic progress check.

Tags: healthcare+pr EHR EMR physician+practice HITECH hospitals health+data

Posted by Dave Close on November 17, 2009 at 11:54 AM
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Billions in Stimulus Funding for Healthcare IT - What To Do?

Part of the larger, $787 billion stimulus package signed by President Obama in mid-February is $19.2 billion under a bill called the HITECH, or Health Information Technology for Economic and Clinical Health Act. Hey, no one said these things would have simple names.

That $19.2 billion directs most of the funding - $17.2 billion of it - to pay for the widespread adoption and "meaningful use" of "certified" interoperable electronic health record (EHR) technology. The other $2 billion covers a wide range of healthcare information technology projects including health records, health information exchange, computerized physician order entry, clinical decision support systems and electronic prescribing. Recently we ran a webinar about the HITECH funding - slides and an audio are available below.

The EHR funding will be administered through CMS - Medicare and Medicaid - in the form of reimbursements available to physicians and hospitals, and spread over several years. The $2 billion is allocated by the Office of the National Coordinator for Health IT to be headed by Dr. David Blumenthal, appointed to the job on March 20, 2009. A couple questions come to mind:

How do you get healthcare stimulus money? As of this week the details of the process are still being developed by several federal agencies.

So what does this mean for healthcare IT companies and how can companies get stimulus funding?

First, the stimulus funding is intended to boost rapid technology adoption in the hopes of controlling healthcare costs, making healthcare more efficient and perhaps creating jobs. Despite the fact that there are more than 200 companies offering some form of EHR technology to physicians and hospitals, adoption is still too slow - by some estimates, well below 15% market penetration with perhaps a third of those using the systems effectively. An even worse EHR market assessment was published on March 26, 2009, which said that just 1.5% of non-Federal hospitals in the U.S. are using a comprehensive EHR system. Yikes!

(An interesting recent development is the start of a backlash, often from doctors, against the orthodoxy that widespread use of HCIT technology is an unquestioned good. The latest is this opinion piece from Time, this week. Among other intriguing points, it argues that EMRs could increase healthcare costs and push providers to input inaccurate information. I’ll write more about this later.)

Second, the stimulus funding is intended to foster better integration among the various proprietary HCIT technologies, which have been notoriously complex and difficult to integrate.

Third, the EHR funding encourages adoption through a payment schedule that can subsidize the costs of purchase and implementation, but it also includes a penalty. In 2014 physicians will see reduced Medicare and Medicaid reimbursements if they have not implemented EHR technologies and are not using them effectively.

The details of accessing the ARRA and HITECH funds are not yet fully developed, but the race is on for companies to tap into these funds. Whatever the details turn out to be, HCIT companies with a strong public image and strong brand awareness will be best positioned to take advantage of this rare opportunity in which the government is essentially funding their customers to buy their products. That means HCIT companies with strong government relations, strong brands and a strong public presence must maintain and extend it. HCIT companies without those advantages had better build them, and fast.

Several of us from our Healthcare IT Practice will be at HIMSS next week. We’ll be in booth # 3145, so please stop by and let’s talk about this.