Push for electronic medical records could mean cost savings

Approximately $19 billion designated for health care information technology in the economic stimulus package signed into law by President Obama and the push to establish an electronic medical record for every U.S. citizen by 2014 likely will not directly affect employers and their benefits departments, experts say.

However, employers likely will see indirect, longer-term cost savings as more physicians and health care organizations adopt electronic medical records, thereby improving the quality of care and patient health, said Jaime Ferguson, executive director of health information technology strategy and policy for Kaiser Permanente and a member of the Health IT Standards Committee, which also was established under the American Recovery and Reinvestment Act of 2009.

The IT initiative's effect "is somewhat indirect on employers in the sense it's not necessarily going to make our specific companies' benefits cheaper next year," Mr. Ferguson said. "But to the extent doctors can now access information about patients to help treat them better, everybody wants that."

Rather than developing its own electronic medical record system, the government is certifying existing systems to make sure they meet certain standards and are interoperable, Mr. Ferguson said.

The goal for all health record systems is to "speak the same language" so, regardless of the system doctors and health care organizations use, it can "talk" to a different system and share records.

Only a small percentage of U.S. doctors use electronic medical records, according to a New England Journal of Medicine study last year. It found just 4% of nearly 2,800 physicians surveyed had a fully functional electronic record system. Thirteen percent had only a basic system.

With the stimulus package providing up to $64,000 in incentives for individual physicians and $11 million in incentives for hospitals that adopt electronic records, as well as potential penalties for Medicaid and Medicare providers that do not go paperless, experts say uptake of electronic medical records is expected to increase.

"It's getting to the point in the medical profession where people realize they simply have to have EMRs," said Steve Raetzman, senior consultant with Watson Wyatt Worldwide in Arlington, Va.

Improving care is the major intent in establishing widespread adoption of electronic medical records, Mr. Ferguson said. They do so by capturing patients' medical history, which then can be shared and analyzed by multiple medical professionals to determine the most effective treatments, he said.

The records are composed of data from a patient's health history that providers document and monitor to manage a patient's care. They are the official records detailing a patient's experience and care at a care delivery organization, and include information such as prescriptions and laboratory test results. They differ from a personal health record, which an individual typically initiates and maintains.

In general, experts say, electronic medical records are not intended to interface with claims data collected by insurers and third-party administrators or with health risk assessment data--data that employers may use to analyze their employee populations and address certain health risks. That's why benefits departments might not see immediate results from an initiative to set up such records.

"I don't think it's so much about getting more data in the hands of insurance companies and employers," Mr. Raetzman said. "It's about getting more data in the hands of providers who should be able to use that data to manage patients' care more effectively."

Colin Evans, the Portland, Ore.-based chief executive officer of Dossia, a personal health record platform sponsored by eight large employers including Wal-Mart Stores Inc. and Pitney Bowes Inc., said benefits departments will not be affected by this initiative until the investment in technology translates into lower costs.

"Reimbursement reform needs to happen at the national level; Medicare, Medicaid and the health plans need to decide that they will pay doctors for outcomes and not services. If this happens, there will be incentives for providers and plans to innovate because they can get a financial return from that investment," Mr. Evans said.

Delia Vetter, senior director of benefits and programs for EMC Corp. in Hopkinton, Mass., said while the electronic medical record initiative likely won't affect benefits administration, it is worthy of employers' support because of the long-term cost savings and electronic records' ability to reduce duplicate patient services that increase employers' costs.

"Employers need to support and help to drive adoption and change--whether it's with their workforce or the provider network--because ultimately, they are paying," Ms. Vetter said.

Mr. Raetzman also said better employee health care eventually will translate into savings for employers. Without electronic medical records, significant improvements in the quality and cost of health care are impossible, he said.