While parts of the private sector have begun to adopt electronic medical record (EMR) software, many physician practices and regional health IT partnerships still are struggling with absorbing the costs of the software.
That was the message from some of the speakers this week at the inaugural National Health IT Day. The event was sponsored by more than 40 public and private-sector organizations to increase awareness of IT’s potential to improve health care and control some its spiraling costs.
Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS) at the U.S. Department of Health and Human Services, said that while most health care executives believe that EMRs can boost the quality of care, many believe that “health IT doesn’t pay off, especially if they operate on thin margins.”
In every other sector of the economy, he said, when IT creates more value, users usually are willing to pay more for it. “In health care … you often get paid less when you provide a higher level of care at a lower cost,” said McClellan.
He said CMS is striving to change that paradigm with several programs, including demonstration projects to pay doctors more when IT leads to better quality of care and initiatives to help physicians get EMRs up and running in their practices.
Finally, he said, CMS will announce changes later this summer to legislation that is designed to prevent hospitals from providing kickbacks to doctors. Those changes to the Stark Legislation will allow hospitals to provide health IT to physicians without running afoul of the law.
It is not only physician practices that are grappling with ways to pay for a move to health IT. Regional Health Information Organizations (RHIO) — now cropping up around the country to begin exchanging health data among local hospitals, physicians and insurers — also are on the hunt for cash
Leisa Jenkins, executive director at CareSpark, an RHIO that encompasses northeastern Tennessee and southwestern Virginia, said the organization has so far received commitments for US$2.5 million of the $4 million it needs for initial capital expenses. The group also will need $1.2 million to cover annual operating costs.
“If we can get over the capital expenditure in Year 1, we can break even in Year 2 and by Year 3 we should be able to show a 3-to-1 RIO,” she said.
As part of the RHIO’s business model, the group aims to show stakeholders what they can expect as far as savings based on their investment, she said.
Glenn Steele, CEO of Geisinger Health System, is no stranger to the sometimes staggering costs associated with moving to an EMR. Geisinger, which operates 40 hospitals, clinics and physician practices in Pennsylvania, has spent $70 million since 1995 to put an EMR into place at its 40 locations, according to Steele. The project began showing a return on investment after about five years. The physician practices that use the software saw a 5 percent to 10 percent reduction in productivity for the first six to eight months but later saw a marked increase in productivity, he added.
Now, Danville, Pa.-based Geisinger aims to use the system over the next five years to provide optimized care for patients with chronic diseases.
The health system was able to get the 650 physicians who work for Geisinger to adopt the software because it was mandatory. For the other practices, Geisinger provided limited connectivity to show them the potential benefits, prompting doctors to ask for access to more data.
“If you really approach doctors with what will help them take care of their patients better and not go out of business … people eventually will say, ‘I need to do this.'”
The health system also tapped several physicians to be advocates for the EMRs among their colleagues. “Without that you are dead,” Steele said.
Jim Morrow, vice president of North Fulton Family Medicine in Atlanta, said his practice began using EMR software in 1998 to eliminate annual transciptions costs of $110,000. Since then, the practice has been able to reduce the number of workers needed to manage patient charts, he said. In addition, the practice can now use the system to ensure that patients are receiving preventative care such as vaccines.
Morrow acknowledged that the costs — as much as $25,000 per physician — can be difficult to absorb. But, he said, doctors should move ahead with automating paper-based records on their own or face the potential of government mandates in the future.
“When the time came to start billing electronically for services, doctors didn’t go into that asking how much money they would make off of it,” he said. “EMRs are the cost of doing business.”
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