October 1, 2007

Incentives or Mandates?
By Selena Chavis
For The Record
Vol.19 No. 20 P. 42

What’s the best approach to encourage physicians to adopt electronic medical records? Will it take a swift kick or subtle persuasion to convince doctors to embrace this technology?

Electronic medical record (EMR) adoption rates—they’re quite the buzz in the healthcare industry. Statistics abound regarding current adoption rates and expectations for what the future holds. Unfortunately, for many professionals tracking the current state of affairs, the picture is anything but promising.

Some recent statistics come from the latest data in the 2005 National Ambulatory Medical Care Survey, which reveals that one quarter of office-based physicians report using fully or partially implemented EMRs. While that represents a 31% increase from the organization’s 2001 survey, it also states that just more than 9% of these physicians actually have a “complete EMR system,” with all four basic functions deemed minimally necessary for a full EMR.

Noting that many areas of the developed world—including most of Europe, Japan, China, Australia, and even Russia—have reached between 50% and 90% adoption rates, Bill Bysinger, cofounder of eMRnet, an EMR services company, suggests that currently, the “best guess on adoption [in the United States] is less than 20%, and that’s really sad.”

Adding that it has been nearly 20 years since EMR systems were first introduced into medical practices, Bysinger says the United States currently has the lowest adoption rate of all developed countries. “We have a major healthcare crisis,” he says.

Force vs. Persuasion
From educational symposiums to government grants and tax incentives, many ideas are currently in the works or on the table to help spur adoption. But so far, it has done little to excite the resistant physician community, says Alice Loveys, MD, a practicing pediatrician and consultant in Rochester, N.Y., and a former Davies Award winner. “Even though it’s nice to think incentives can work, they haven’t been shown to make a dent, especially in small physician offices,” she says, pointing to recent initiatives to provide incentives for e-prescribing that have ultimately resulted in mandates. “I just see history repeating itself.”

Bysinger recalls similar problems getting the healthcare community onboard with HIPAA. “It took 10 years to try and convince people, and then it went to mandates,” he says, adding that EMR adoption faces many of the same issues that HIPAA faced when it became law in 1996. He asserts that the government and healthcare consumers must exhibit serious efforts and focused diligence—in other words, mandates are necessary.

Leigh Burchell, director of the Raleigh, N.C.-based Center for Community Health Leadership, believes incentives could work, but the system is currently too complex. “There is an overwhelming interest in grants. People want to do this—they are just trying to figure out how,” she explains, adding that unless the system becomes more simplified, it’s still going to come down to mandates. “It’s unfortunate. You take a look at HIPAA … the resentment level affects the success of the program, at least initially.”

Healthcare — A Different Culture
EMR implementation is certainly not the first collaborative technology effort ever attempted. In fact, numerous similar undertakings have been successfully implemented in the private sector—even between competing entities.

Recalling similar undertakings in the U.S. automobile industry during his tenure as a consultant to various companies, Bysinger says collaboration was forced when the Japanese started coming in. “[Automobile manufacturers] decided they had to get efficient … they built collaborative networks to make the American automobile industry stronger … and it was successful.” Another example he points to is the national ATM network established by the American banking industry.

Questioning why the same process can’t work effectively in healthcare, Bysinger believes the problem lies in the culture. “It is a challenge in healthcare to get technology moving. EMRs are one of the enablers that can actually provide a return on investment for both practitioners and patients,” he says. In fact, according to Health and Human Services, a national health information network could save $140 billion per year by improving care and reducing costs. In addition, EMRs offer portability—an important component of HIPAA. “The problem we’ve got is that logically, if you present the return on investment, most companies would jump on it. In healthcare, for some reason, if the government doesn’t make you do it, people are reticent to do it,” Bysinger adds.

As a culture, the United States tends to view healthcare as an “art form” rather than a business, making it more difficult to relay the benefits of technology to practitioners, says Bysinger. Pointing to the fact that medical schools spend little time on the business philosophies or the strategic aspects of operating a business, he further explains that the typical medical practice does not make business decisions based on productivity or process improvement, strategic focus that dominates most other industries.

“When I talk to friends of mine who are not in healthcare, they are all shocked that people aren’t using [EMR technology],” he says, adding that practices with less than 10 physicians—the segment that encompasses the majority of the total practice market—are the segment that needs process improvement the most but currently are the slowest to adopt. “I’m not sure that we have a strong enough individual focus that if you don’t do it, you’ll perish.”

Many physicians in small group practices are not sufficiently convinced of the value of EMR systems to make the time and money investment necessary for the transformation to occur, Loveys notes. Larger organizations such as hospitals have more complex processes that can immediately benefit from the availability of electronic records, and they also have the IT infrastructure to support the EMRs.

Burchell notes that even on the hospital level—where EMR adoption is occurring more rapidly—there is still not a move toward full implementation. “Hospitals are on a different level of adoption than physician offices,” she says. “That does not mean they are taking all processes electronic, though.”

Because of this prevailing attitude within the healthcare industry, Bysinger believes that ultimately, the private, profit-motivated sector will lead the charge for transforming healthcare, especially if the move toward EMRs is not mandated. “Take Wal-Mart—I believe, given their technology expertise, they are going to do some things that will dramatically change the way healthcare is delivered,” he suggests.

Can Incentives Work?
It’s not a government-funded grant. Instead, the Center for Community Health Leadership is a private initiative funded through Misys Healthcare Systems.

Burchell notes that “the mandate of the center is to distribute $10 million in software applications to three different communities” to advance electronic health record (EHR) adoption, improving patient care and operational efficiency. “The idea is that we can facilitate and bring that cost obstacle down,” she says.

Via an application process, the center chose its first community—New Haven, Conn.—and is currently reviewing applicants for its next choice. “We received applications from all different sizes of communities. We really got a nice blend,” Burchell recalls. “We want enough size to see the benefits of data sharing on a large scale, but the applicant requirements were not scaled to just sizeable cities like New York.”

Because the organization has 30 years of experience working with the small physician office, the hope is that the collaborative effort will make a difference. It’s a different approach to incentives and whether it will prove successful is still an open question, but many industry professionals are quick to point out that the current structure of incentives and grants on the federal level will not.

“Many grants are too complex for a three-physician practice,” Burchell says. “There should be assistance provided to help with grant writing. There are funds available but not the skills to get to those grants.”

Bysinger concurs, noting that the current incentive system may be good for a community center but not for private practice. “The incentives out there are too hard to get. There needs to be multiple financial incentive programs in place, and they need to be easy to get,” he says. “Everybody gives up. [Practitioners say] ‘I’m going to spend more money trying to get the grant than the grant provides.’”

Funding for the technology is not necessarily what physicians are seeking anyway, Loveys adds. “Numerous programs have been offered where software was made available for free, and it hasn’t taken off,” she says. “Prices have come way down. It’s certainly more affordable, and CCHIT [Certification Commission for Health Information Technology] certification has helped.”

Many industry professionals also believe that the free nature of some initiatives—such as the VistA EHR system and the Santa Barbara regional health information organization—played into their ineffectiveness or demise, notes Burchell. “It requires time and effort. It is so easy to walk away from something you didn’t pay for,” she emphasizes. “It’s easy to run from the pain.”

Medicare offered its VistA EHR software to doctors at no cost. Used by the U.S. Department of Veterans Affairs for a number of years, the software never had the uptake expected from the physician community.

During a presentation offered to a group of physicians, Loveys recalls that attendees were questioned as to whether they wanted help purchasing an EMR. “None raised their hand,” she says, noting that most were more interested in obtaining help with successful implementation. “There’s not enough good IT support on the level of a one- to two-person office.”

A Combined Effort
Loveys believes there is a growing interest in EMR adoption, noting that she is seeing greater physician turnout at seminars devoted to explaining the ins and outs of implementation. Whether it will take hold in a way that hastens the implementation process remains to be seen. “You see a lot of moves for transfers of information electronically. Usually, they are driven by mandates and funding, though,” she says. “Things seem to happen a lot more quickly when financial incentives and de-incentives are on the table.”

Bysinger believes it will take a HIPAA-like mandate for EMRs and personal health records to get physicians on board. “Why not create a mandate for EMRs by 2012?” he questions in a recent blog. “This gives practices five years to comply. Lawmakers could create a disincentive tax for practices that cannot prove they are implementing EMRs by the specified date.” He also suggests that a combination of mandates and incentives could be the most effective answer, offering a number of considerations, including the following:

• the provision of immediate tax incentives that provide a dollar-for-dollar write-off against the cost of EMRs for every practice in the country;

• higher levels of Medicare and Medicaid reimbursement for those practices that can demonstrate the use of EMRs;

• state tax and licensing incentives for physicians that use EMRs;

• mandates adopted by every medical society to promote the use of EMRs and provide cost incentives on membership and services to those physicians that use and promote the technology;

• mandates for health plans to require physicians in their networks to be on EMRs by a specific date; and

• the provision of significant premium discounts by medical liability carriers to physicians who use EMRs, thus increasing patient safety and ensuring better clinical documentation.

“Steps like these—rather than empty rhetoric—will prove to consumers and the industry that lowering healthcare costs and improving quality are among the highest priorities,” Bysinger says. “Compare these actions with the numerous government-sponsored conferences that espouse healthcare change but are void of vision and action to bring about change.”

Bysinger also challenges medical schools to step up and demand that healthcare business and HIT take a prominent position in their curriculums to better prepare the next generation of physicians.

— Selena Chavis is a Florida-based freelance journalist whose writing appears regularly in various trade and consumer publications covering everything from corporate and managerial topics to healthcare and travel.