Electronic Medical Records Take Center Stage

Colin T. Son


May 19, 2009

The Obama administration is so eager to promote electronic medical records (EMRs; or electronic health records [EHRs]) that it has designated $19 billion of stimulus money to create incentives. In fact, the US Government has also unveiled penalties for providers who don't meet specific EMR standards in their clinical practices by 2015, in the form of Medicare reimbursement cuts.

And so the debate over EMRs, which have been around for decades, is now front and center as it never has been before.

That may be some vindication Rich Elmore, president and founder of a health information technology consulting firm, Avance Health. He writes online about "key drivers for healthcare cost containment and improvement to patient care" at Health Technology News.

Many industry observers are skeptical about whether the fruitful implementation of EMRs will be borne out. Some surveys report that less than 20% of all physician offices have EMR systems. But Mr. Elmore remains optimistic. In the following interview, he discusses the future of a "common format" for EMRs, related privacy issues, and what the stimulus money may mean for health technology.

Colin Son: How close are we to the widespread implementation of common-format EMR systems?

Rich Elmore: Now there's the holy grail...

One significant barrier is the structure of physician payments. Our payment systems emphasize treatment over care coordination and engender fragmentation in care delivery. Physicians are universally frustrated by this fragmentation and the implications for coordinating care. This is a barrier to proactive care of the chronically ill, which consumes fully 75% of the $2.5 trillion in US health system expenditures. Achieving semantic interoperability, which is a key enabler to better care coordination and which lies at the heart of your question, will occur much faster if we could better align incentives.

There is also the "chicken and the egg" problem. Until we have implemented the EHR systems broadly along with the standards for communicating clinical information, we won't be able to systematically report on and link payment systems to outcomes and population health.

Although we're still a long way from semantic interoperability on a broad scale, this is attainable. Standards are better developed and there are innovators in the industry that can help propel us towards this.

Health Technology News hosts Grand Rounds
May 19, 2009

Colin Son: What about personal health records (PHRs)? What are the benefits of services like Microsoft's HealthVault or Google Health?

Rich Elmore: Blackford Middleton's Center for Information Technology Leadership has estimated that if we achieved 80% adoption of PHRs in the United States, the benefit would be $21 billion per year. Yet PHR adoption has been challenging. Misaligned incentives are part of the problem. John Moore has done some great research on the challenges of adoption and suggests that a Utility Service Model has the best chance of promoting adoption.

Colin Son: How much impact do you imagine the stimulus money will have?

Rich Elmore: John Glaser has suggested that the industry is at a tipping point, whereby physicians are recognizing the need and opportunity to make these investments.

What impact we make as an industry will be determined in large part by the foundation [US Health and Human Services Secretary] that Kathleen Sebelius sets with the definition of meaningful use. Although some healthcare organizations are thinking strategically, many are trying to "get by"; so this definition sets the baseline for what we'll get from this investment. We can expect over time that the definition will "mature," so physicians will benefit from an early start and a more gradual adoption of needed capabilities.

Colin Son: In your experience, what part do privacy concerns play as an obstacle to the adoption of EHRs? What is the upcoming Red Flags Rule?

Rich Elmore: Privacy concerns will continue to put a damper on PHR adoption. On the other hand, for EHRs, most privacy issues today are matters of policy and operational effectiveness, not technology. John Halamka has argued that today we have the technology and the standards for privacy and security. Congress took a major step on privacy requirements with the American Recovery and Reinvestment Act. Meeting the privacy and security standards is the "price of admission" for the adoption of EHRs.

A new, imminent, and little known proposed regulation concerns the encryption and destruction of protected health information. It's both a Department of Health and Human Services regulation covering protected health information and a Federal Trade Commission regulation covering PHRs. Google and Microsoft can no longer say that the rules don't apply to them. Very shortly, EHRs and PHRs will have to encrypt their data "at rest" and "in motion" to have a safe harbor against pending breach notification provisions required under the American Recovery and Reinvestment Act.

The Red Flags Rule is designed to protect against medical identity theft. Starting August 1, most healthcare organizations will have policies and procedures in place or be subject to enforcement provisions of the rule.

Colin Son: What place does the debate over EHRs have in the larger discussion on healthcare reform in general?

Rich Elmore: We should never skip over an understanding as to why healthcare reform is needed. We all know the statistic about the 47 million uninsured. What is not as well known is that there are now 60 million "medically disenfranchised" who don't have access to primary healthcare. And there are 125 million with chronic disease. The World Bank figures show that the United States spends 16% of its gross domestic product (GDP) on healthcare compared with 11% or less in other developed countries and has worse health statistics in many categories. And were the current trends to continue, according to Peter Orszag, we could be heading for 37% of the GDP.

We spend $1600 more per capita than other OECD [Organisation for Economic Co-operation and Development] countries, with 21% of this excess spending on administration. Access to care for the poor and chronically ill is systemically worse than for other parts of the US population. Our improvements in quality of care are clustered around treatment and critical care -- the most expensive, reactive end of the healthcare spectrum. And to make matters even worse, for each 1% increase in unemployment, another 2.5 million are thrown into the ranks of the uninsured.

The system is clearly in need of reform.

From a health information technology perspective, EHRs and other technologies will be important enablers of improvements in coordination of care, patient self-management of chronic diseases, population health management, prevention initiatives, patient-centered medical home and medical neighborhoods, and other approaches that improve care and take costs out of the healthcare system.

Will the direct benefits of the stimulus through EHRs make a difference? Only somewhat. The Congressional Budget Office has calculated that the acceleration of EHR implementations delivers US Health System net savings of 0.3% between 2011 and 2019, approximately $60 billion in savings. Although this is a good return on the investment, 0.3% won't substantially dampen the trajectory of healthcare spending. Looking more broadly at the overall value of EHRs (not just the accelerator's value) doesn't significantly change the conclusion. EHRs alone cannot stem this gargantuan problem.

It's appropriate that Rich is hosting an edition of Grand Rounds focused on reform of the US healthcare system this week over at Health Technology News. Grand Rounds is a blog carnival that features the best writing from physicians, patients, nurses, pharmacists, students, and others as presented by a different host each week. Go check out Grand Rounds and the discussion of the future of the US healthcare system this week at Health Technology News.


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