Tevi Troy -- Electronic Health Records Won't Save Us

By Tevi Troy
Sunday, April 26, 2009

Are electronic health records the panacea for all our health-care ills? Congress seems to think so: With strong cheerleading from President Obama, it has approved $20 billion for EHRs as part of the stimulus package. Health information technology undeniably holds a lot of promise, but it's still in its infancy. Is it worth a stimulus now? A look at some health IT myths:

1. Electronic health records will cure our health system.

EHRs will potentially provide a lot of benefits, most notably by reducing medical errors -- e.g., doctors prescribing medications to patients with an allergy to them -- that kill as many as 98,000 Americans each year. A much-cited 2005 Rand Corp. study of EHRs found that they could save $77 billion annually and potentially eliminate 200,000 adverse drug reactions. Yet a more recent analysis, by Stephen Parente and Jeffrey McCullough in Health Affairs, found that "the evidence base is not yet sufficient" to show that EHRs would improve outcomes.

Implementing EHRs to improve billing -- which would be the simplest and least creative way to spend Congress's money -- is not enough. EHRs can improve our system and help achieve the assumed cost savings only if they bring about changes in the way we practice medicine. Doctors have extremely limited time with their patients. EHRs would help by giving them access to the patients' documents, including all previous tests and conditions, in advance, and by allowing patients to communicate with physicians via e-mail. With the right kind of EHRs, doctors could obtain real-time guidance on the best care for a specific patient from databases containing all the latest diagnostic and therapeutic guidelines.

But this technology is evolving rapidly, and implementing systems in the right way will require thoughtfulness and creativity. As pediatrician and health IT expert Kenneth Mandl, who co-wrote a skeptical analysis of subsidizing EHRs for the New England Journal of Medicine, told the New York Times, "If the government's money goes to cement the current technology in place, we will have a very hard time innovating in health care reform."

2. Federal carrots and sticks are the only way to get doctors and hospitals to adopt EHRs.

It's true that far too few doctors and hospitals have electronic systems in place. The Congressional Budget Office has estimated that about 12 percent of physicians use them. According to a recent study in the NEJM, only 1.5 percent of U.S. hospitals have a comprehensive electronic records system available in all clinical units, and another 7.6 percent have a basic system available in at least one clinical unit. Seventeen percent of hospitals let doctors prescribe medicines electronically.

The stimulus package established 10-year EHR adoption goals of 70 percent for hospitals and about 90 percent for physicians. But even without the stimulus, the CBO estimates that 45 percent of hospitals and 65 percent of physicians will have EHRs by 2019. In other words, many doctors and hospitals are likely to adopt electronic systems even without the subsidies, which begin in 2011, and the potential penalties for failing to adopt, which are expected to begin in 2016.

3. Cost is the only reason the United States has such low adoption rates.

The initial capital investment in EHRs, estimated at between $15,000 and $50,000 for a practice and $10 million for a midsize hospital, is definitely a deterrent, but there are other reasons for delay. On the economic side, the financial incentives in medicine don't reward doctors for performance, so improving performance with EHRs is not a necessarily a priority. Cultural issues, especially among older doctors, are also a big obstacle. A 2008 study sponsored by the Department of Health and Human Services and the Robert Wood Johnson Foundation found that 29 percent of non-computerized hospitals cited doctor resistance as a major barrier to adopting health IT, and 42 percent claimed it as a minor barrier. David Blumenthal, the Obama administration's recently appointed health IT czar, wrote in the NEJM that beyond cost, the barriers to adoption of EHRs include "the perceived lack of financial return from investing in them, the technical and logistic challenges involved in installing, maintaining, and updating them, and consumers' and physicians' concerns about the privacy and security of electronic health information."

4. Subsidizing EHRs will stimulate the economy or EHR adoption in the short term.

The stimulus package contains bonus payments of $44,000 to $64,000 to physicians who adopt and use EHRs effectively, beginning in 2011 and continuing through 2015, with the largest total spending taking place in 2014. After that point, doctors who do not use EHRs may be penalized. But even if the law called for the money to be spent earlier, the Department of Health and Human Services is not yet close to being ready with the payment rules, certification standards or definitions of key terms such as "meaningful use," which are called for by the end of 2009. Federal encouragement of EHRs could actually serve as an anti-stimulus, because IT companies could be reluctant to develop new products until the government sets the certification standards. Furthermore, doctors and hospitals, seeing the promise of federal dollars 20 months away, will be unlikely to buy new record systems until the government money starts to flow.

5. We know how much we're investing in this effort to promote health IT.

The media typically describes the investment in EHRs as $20 billion. But this doesn't count $12 billion in estimated savings for EHR adoption that may or may not happen, so the real number is closer to $32 billion. And the $32 billion is only an estimate, since the bulk of the stimulus dollars for health IT is in what is known as mandatory spending, meaning that the money is paid out as long as applying doctors and hospitals meet the appropriate requirements. So the actual number could go as high as $50 billion or even higher. This is unsurprising, since Obama called for an investment of $20 to $50 billion in health IT on the campaign trail. So we may not know the actual amount -- but in Washington, it's always a good idea to bet on the higher number.


Tevi Troy, deputy secretary of the Department of Health and Human Services from 2007-2009, is a visiting fellow at the Hudson Institute.

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