NCPA Gives Shakespearean Response to HHS’ EMR Demo Project

Mike Leavitt, Secretary of the U.S. Department of Health & Human Services (HHS), launched the first-ever, 12-community project to increase the use of electronic medical records (EMRs).  Secretary Leavitt's 5-year project will pay each doctor up to $58,000 per year for electronically monitoring and recording as many as 1,200 practices affecting up to 3.6 million patients. 

Have you ever wondered why physicians are the only significant group of professionals in our society who do not keep their client records on computers? Why is it that doctors don't do what lawyers, accountants, architects and engineers all do?

The answer, according to National Center for Policy Analysis President Dr. John C. Goodman, is: Medicare. Or more precisely, the way Medicare pays doctors-which is also the way Blue Cross and almost all other health insurers pay.

"Doctors use antiquated record keeping because we have an antiquated payment system," said Goodman. "Other professionals use electronic record keeping because they reap benefits from greater efficiencies. In medicine, perversely, the reverse is true.  Doctors who are efficient get less income."

Goodman points to Geisinger Health System in central Pennsylvania as an example of what is wrong with the payment system. Geisinger offers heart patients a warranty on their surgeries; patients and their insurers who choose to participate do not have to pay for readmissions. Whereas most hospitals make money on their mistakes, Geisinger loses money on its mistakes. This creates an incentive to use computer technology to reduce errors but, since Medicare won't pay anything for the warranty, Geisinger and other hospitals have little incentive to boost quality without any financial rewards.

"While we applaud the government effort to promote EMRs," said Goodman, "more progress could be made by changing the way Medicare pays for health care."

"It reminds me of a line from Shakespeare," he said. "'The fault, dear Brutus, lies not in the stars, but in ourselves.'"

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  1. Devon Herrick says:

    If there is one critical improvement that virtually everyone in health care can agree upon it’s the need to increase the use of information technology into our health care system. Liberals and conservatives all seem to agree. In the past year, most of the leading presidential candidates incorporated boosting Health IT spending into their health proposals as a way to improve the nation’s health care system.

    Doctors and hospitals also tend to agree that that patient records should be maintained electronically so multiple providers can access all of patient’s treatment history from different doctors practicing at different locations. Prescriptions ordered electronically are sorted by error-correcting software that identifies potential drug interactions. Electronic record access can minimize redundant medical tests , by providing physicians previous test results ordered by other providers. Many pundits are even calling for incorporating evidence-based medical protocols into electronic medical records, thus prodding physicians into performing best practices in patient care.

    However, health information technology in no silver bullet that will kill the runaway health care spending monster. (As evidence link back to the following blog post IT Bubble Bursts:
    For instance, why would physicians strictly adhere to computerized systems that instruct them to change practice patterns in ways that reduce their income? (e.g. first trying physical therapy for back pain management before ordering a $1,000 MRI)
    What hospital has incentive to install software that identifies redundant lab tests previously ordered by another provider?

    The missing component is competition. Competition for patients’ dollars is the only thing that will induce health care providers to use health IT in ways that both improve quality and reduce cost. Because patients control so few of their own health care dollars, providers do not compete for those dollars on price (or quality, for that matter). Providers would have long ago adopted Health Information Technology in all its forms if they were competing on price and quality.

    To put it in perspective, the Federal Reserve didn’t have to hold hearings, speak at conferences, publish scholarly articles or fund pilot projects to convince banks of the benefits of online banking, ATM machines and credit cards. Competition and customer demand drove those innovations, resulting in a myriad of financial and service benefits for both provider and, ultimately, consumers.