Electronic Medical Records Use May Rise

The Associated Press
Sunday, November 19, 2006; 5:35 PM

KANSAS CITY, Mo. -- Health care advocates have long encouraged physicians to switch to computerized medical records, saying they could improve patient care and increase efficiency. Doctors, however, have been more concerned about the high price tag _ often more than $20,000 per physician for software, hardware and Internet connections _ as well as having to maintain a computer network. Surveys estimate less than 20 percent of doctors have fully automated their offices.

"They're saying, 'I'm shelling out the money and everybody else is getting the benefits,'" said Tom Leary, director of federal affairs for industry group Healthcare Information and Management Systems Society.

But federal officials last month paved the way for hospitals to come to the rescue, allowing them to donate medical record systems to physician practices to blunt some of the financial bite.

In addition, those inside the industry recently agreed on technology standards that allow software from different companies to share data, taking some of the fear out of the purchasing decision.

Those moves are apparently loosening purse strings as medical software makers say they've seen a surge in new interest and new customers and predict this may be the spark they needed to pull the $1.5 billion electronic health records industry into the medical mainstream.

"It's been a month since the (new regulations) were announced and the increase in engagement has been immediate," said Sunny Sanyal, group president for clinical solutions at San Francisco-based McKesson Provider Technologies, which serves about a third of the nation's hospitals. "Physicians weren't ready to provide a big investment. The fact a hospital can now provide it for them completely changes the picture."

Added Rick Heise, an executive with Kansas City, Mo.-based software provider Cerner Corp., "It's created a huge amount of excitement so there's an opportunity for a lot of money to go around."

Electronic medical records have slowly gained acceptance in the health care industry, especially after President Bush in 2004 said he wanted all Americans to have an electronic patient record by 2014. Proponents, who envision a nationwide online database of medical information, say the records can speed up medical decisions, avoid errors and save lives.

Such information would be protected by federal privacy laws covering medical records, and supporters say secure networks would move information between health care providers bound by those laws.

Annual sales of records software are expected to more than triple to $4.9 billion by 2010, said Jewson Enterprises, an Austin, Texas-based research firm.

But while hospitals, with their deeper pockets, have steadily evolved to electronic medical records (EMRs), doctors' groups, constrained by declining Medicaid payments and a smaller pool of capital, have proven slower to adapt.

Hospitals weren't allowed to help, blocked by federal laws preventing physicians from referring Medicare patients to businesses in which they have a financial relationship or accepting compensation from a health care provider that could be viewed as an incentive to refer patients.

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