Electronic Medical Record Remains the Focal Point of Health IT Reform

by Harry Wang | Mar. 27, 2009

Ever since the Obama administration unveiled its healthcare reform initiatives and associated budget plans, electronic medical record has received a substantial amount of attention. This week, a survey result showing that only 9% of the nation’s hospitals have electronic medical records caused quite a stir among pundits, medical professionals and policy makers. Two major sponsors of the study are the federal government and the Robert Wood Johnson Foundation and the survey is based on a sample of nearly 3,000 hospitals. Given the size of the sample and the reputation of the two sponsors, the results can be considered highly creditable.

Interesting enough, the survey results showed that physicians and hospitals well recognize the benefits of a computerized patient record system, so the low adoption rate must reflect hesitations due to other reasons. One obvious one is cost. Initial capital outlay on an electronic medical record system is quite daunting for budget-slim hospitals these days, but ongoing maintenance and support expense is another cost item that is sometimes overlooked. More importantly, the study maybe for the first time showed hospitals and physicians’ concern that many of the benefits of the EMR system may not accrue to the hospital that makes the investment. “If hospitals become more efficient, they could potentially even lose money in terms of lower reimbursement [from] insurance companies. This makes the business case for HIT far more difficult,” the study inferred.

The last point highlights a “chronic” barrier for healthcare reform efforts. Our healthcare system is so complex and intertwined that a costly reform initiative is less likely to succeed if it touches only one interest group at a time. No one party in our healthcare system is willing to shoulder the entire investment if it knows half the benefits will go to other parties on the sideline. EMR is one prime example, so is the home health monitoring technology and wellness initiatives like Medical Home. I have long argued that government should play a more actively role in involving different parties and provide incentives as well as checks and balances to ensure the reform is on the right track all the time. Obama’s EMR incentive program is a first step. But instead of just Medicare giving incentives to hospitals and physicians, why not calling on private insurers to join the initiative? Of course, private insurers don’t have to spend as much as or provide the same form of incentive as the government will. The way they participate can be more creative—for instance, incentives can be tax deductible. My message is that any healthcare reform needs to align well all parties’ gives and takes in order to succeed. EMR adoption is no exception.

By the way, I think fixing our healthcare system is as difficult as fixing our current financial system. Listen to what Treasury Secretary Geithner said earlier this week about his plan—calling on private investors to join hands with the government to buy toxic assets. Is this a model or something that healthcare policy makers should consider?

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