Sunday, July 18, 2010

Why EHR?

The regulators have completed their work. CMS has defined how you should use technology in your practice or hospital (Meaningful Use) and technical requirements for EHRs have been finalized. CMS and ONC have removed all ambiguity regarding Government financial assistance to those purchasing EHRs, and ONC certified EHRs will start appearing shortly. A national network of federally funded EHR adoption assistance centers for underserved Primary Care docs is slowly beginning to take shape. Everything you need to know to start your “EHR Journey” is in place. The only open questions left, for physicians with inquiring minds, are why should I buy an EHR, and why should I buy it now. Below, we will try to explore the answers provided by Government regulators, payers, patients and even early adopting physicians who completed the EHR journey or are in the last mile of the Meaningful Use race.

The Government

I cannot remember a similar situation in the past, where an entire election and much political capital has been invested in the software buying habits of a particular segment of the economy. Of course, the Federal government has been engaged in oversight and best practice dissemination in multiple cases, such as farming, public roads and education to name a few. However, you don’t see any Federal mandates for all schools, public and private, to adopt software, become paperless and collect and exchange terabytes of data. One could argue that such effort will bring enormous benefits to our, not so great, education system, probably as much if not more than to our health care system. Education, just like health care, suffers from lack of funds, poor quality and extreme disparities. The only difference between the two is the sheer amount of money involved.  This observation leads us to the inescapable conclusion that the national EHR effort is first and foremost about reducing, or containing, health care costs. In these turbulent economic times, the Federal government is betting the farm on the promise that computerizing medicine will put a significant dent in our runaway health care costs. Improving quality and reducing disparities, the other two stated objectives, are window dressing, or “nice to have”. To be fair, this is not a bad gamble. Computer technology has been shown over and over again to be capable of cutting costs in many other sectors, and the identified cost cutting targets in health care (duplication of tests, care coordination, administrative simplification, error reduction and standardization on Evidence Based Medicine) lend themselves very well to technological assistance.

Back to the physician contemplating an EHR purchase, the Government wants you to buy an EHR so you can provide care for your patients at a lower cost. As simple as that. The EHR must reduce your overhead, thus reducing cost per unit of service, and must reduce the direct treatment costs, presumably by helping you identify waste and less costly options for achieving the same results (or close enough). With these goals in mind, and ignoring the moral/philosophical arguments, EHR shopping just became significantly more challenging. To be sure, there are no EHRs on the market today, that can actually deliver on all these goals, but some may be able to provide a good start, and once interoperability is widely established, we should see more meaningful gains in cost containment.

Note: There have been more than a few grumblings out there on how a national network of EHRs is really aimed at obtaining patients and physician data to be eventually used for financially penalizing doctors. While I have no doubt that various quality and performance measures will eventually be used for payment purposes by both private and Government payers, I just don’t see this sinister, and very expensive, government plot to either spy on docs or nationalize health care unfolding in the midst of a recession, and with both the 2010 and 2012 elections very much on the line.

The Patient

Notwithstanding the vocal minority of e-patients and patients turned consumers, the vast majority of folks seeking medical care are interested in quality of care, convenient delivery and easy access. For the uninsured, the increasing numbers of underinsured and those with complex out of pocket arrangements (i.e. almost everybody but the exceedingly wealthy), costs of services are quickly becoming an important factor as well. Interestingly enough, this particular patient interest is very well aligned with the Government objective. The avant-garde of e-patients also wants access to their medical records and ability to participate in their own care. While not widespread just yet, it is conceivable that in the not too far future more patients will come to appreciate the convenience of communicating with health care providers over the Internet.

In a nutshell, your patients want to you to buy that EHR so you can reduce the price of care and save them time (and money) by allowing them to manage their medical care in a manner similar to how they now manage their finances. Your patients are a bit more selective than the Government though, and they are placing a more stringent constraint on maintaining and even improving quality of care while you cut costs and increase convenience. They are also planning on holding you to your sworn promises, and will expect that you protect their privacy while computerizing your records. Of course, the many underserved and really sick people in rural areas and inner cities couldn’t care less about your EHR. They will be grateful to just see a doctor outside the ED.

The “Industry”

Corporations on the periphery of actual care for patients, most notably payers, pharmaceutical and device companies and data mining companies, are really and truly only interested in your data. Private payers are also mildly interested in your ability to lower both your overhead (so they can cut your payments) and the total cost of care (so they can keep a larger percentage of the premiums). However, since the new regulations are forcing payers to spend a minimum percentage of their premiums on patient care, it is arguably better to have more expensive care and larger premiums. So for private payers this will be an intricate dance around the Medical Loss Ratio (MLR). As usual, private payers’ interests do not necessarily align with either patients or the Government. Payers also want you to computerize your records in order to reduce their own administrative costs (and again, keep a larger percentage of the premiums). There is little need to discuss EHR vendors here, since their motives are blatantly obvious and fairly legitimate in a capitalist economy.

All in all, the “Industry” wants you to buy an interoperable EHR, so they can collect, buy, sell and mine the vast array of personal and clinical information residing in your medical records, and worth many billions of dollars.

Note: Recently, the safety of EHRs, particularly hospital EHRs and their CPOE modules, has been the subject of various studies and much heated debate with no conclusive results. The possibility of FDA oversight has been suggested, and hopefully such oversight will be implemented sooner rather than later. However, here we are discussing private practice EHRs which are much simpler and restricted in scope.

The Early Adopters

These are your fellow docs who bought the EHR years ago and managed to make the endeavor successful. Their common denominator is mostly a personal willingness to invest time in molding the EHR to their needs, or the availability of an equally committed practice resource who was willing (or tasked) to do so. It is interesting to note that their EHRs come in a rainbow array of sizes and prices, ranging from $50 per month to tens of thousands of dollars in upfront investments. It’s not really about the product. There are perhaps three dozen credible EHR offerings out there (not the mythological several hundred), and as long as one is motivated and he/she plans early and plans well, there is a very good chance that the purchase of an EHR will add convenience for the physician and staff, quality and accessibility for patients, and if coupled with a decent billing system, even a bit of financial benefit.

Your early adopter colleagues are suggesting that you buy an EHR because theirs was a positive experience and they are now in a comfortable position to deal with the rapidly changing health care landscape. These doctors, unless working for a vendor, have no ulterior motives in their recommendations.

Note: As you are well aware, there are also physicians who failed in their EHR implementations and are bitterly warning against buying EHRs. I would venture to submit that it is not the idea of EHR that failed these folks, but the planning and implementation of it. Theirs is a very important learning experience on how not to buy an EHR and it needs to be listened to carefully.


The Government, the taxpayers (of which you are one) and your patients are all interested in reducing health care costs. At its core, EHR adoption is all about the economy, both on a national level and a household level, and with the approaching wave of value-based health care reorganization, it is on a medical practice level too. Since computer technology has been able to bring about cost reductions in many instances, it is reasonable to assume that it can do the same for health care, particularly once a critical mass of interconnected systems is reached. Your early adopter peers have shown that it is possible to introduce an EHR in one’s practice with some initial effort and inconvenience, but with no dire consequences and in some instances with marginal productivity gains. Since the overwhelming health care expenditures are accrued per “doctor’s orders” during millions of visits every day, and since an EHR need not be detrimental to your financial health, perhaps you should consider lending a hand to help rein in the Nation’s health care costs. Perhaps it is simply the patriotic thing to do.


  1. As was once said, "It's the economy, stupid." Excellent analysis. On the concept of vendor numbers, one blogger I read mused that perhaps we're reading it wrong: perhaps instead of looking at X number of vendors in 1 market, we're really looking at X number of markets for a specific product.

  2. EHR advocates are lucky to be backed up by the government. Since the medical industry are becoming a paperless industry, I've noticed that many medical billing companies are also coming up with new software application like the practice management software which helps the medical practitioners track insurance billing records and other processes.

    Very insightful post. Thanks!