Hurricane Katrina’s Destruction Underscores Need for Electronic Health Records

By Kelly M. Pyrek

The aftermath of Hurricane Katrina, which struck the Gulf region in late August, underscores the need for a greater, speedier adoption of and conversion to electronic health records (EHRs). In early September, federal public health officials were working to access a database of prescription drug records to assist evacuees in reassembling their personal healthcare histories. In Katrina’s wake are left potentially hundreds of thousands of destroyed medical records, a situation which could complicate healthcare delivery in the future. With EHRs, invaluable treatment histories are computerized, backed up, and stored safely, and are accessible in the midst of a natural disaster or other emergency. Clinicians in the Gulf region have reported that patients have been walking into clinics and hospitals seeking treatment, and can only remember that they take “some kind of pill.”

One success story was the New Orleans Veterans Administration (VA) Medical Center; even though the facility flooded, EHRs for 50,000 patients of that hospital and local veterans’ outpatient clinics survived. According to the Associated Press, three days after Katrina struck the Gulf Coast, Charlie Gephart, a VA computer specialist carrying back-up tapes of the entirety of the records, was airlifted from New Orleans. By the following evening, the EHRs had been re-entered into computers in Houston. The AP quoted Gephart, records chief for the South-Central VA Healthcare Network, as saying, “Every single thing on that computer was saved.” Gephart even reported that his office posted to a secure Web site patient prescriptions and other data tracked at a separate location.

Experts warn, however, that simply having medical records stored on a computer is an inadequate solution; healthcare facilities should back up its records to another computer server and ensure that these tape back-ups are stored at another secure location for retrieval in event of an emergency. While a number of healthcare organizations have established EHR systems, most providers continue to write orders for services and maintain patient records on paper. Most also practice without computer-aided decision supports, such as prompts to check a diabetic patient’s blood glucose or alerts that indicate drug interactions.

The Institute of Medicine (IOM) has long supported the increased use of information technology in healthcare delivery to improve the quality and safety of care. In 1991, the IOM declared computer-based patient records an essential technology for the delivery of safe and effective healthcare in the United States, and reinforced this idea in its report, “Crossing the Quality Chasm,” a decade later. In a 2002 report, the IOM urged the federal government to support demonstration projects focused on accelerating the adoption of information technology in healthcare settings.

Last July, the Department of Health and Human Services (HHS) unveiled a 10-year plan to create a new national health information infrastructure, including an EHR for every American and a new network to link health records nationwide. HHS Secretary Tommy Thompson stated that “electronic health information will provide a quantum leap in patient power, doctor power, and effective healthcare.” He estimated that adoption of EHR systems nationally could save 10 percent of the nation’s current annual $1.7 trillion healthcare bill, and also said that EHRs would improve privacy, better protect medical records, and decrease medical errors while reducing administrative costs. Patients would own and control access to their own medical records, he added.

The use of EHRs could cut costs from the healthcare system by providing physicians with access to information about any patient electronically, thus helping to eliminate duplicate tests and treatments when a patient visits an out-of-town physician and improving the quality of care. However, generating those cost savings could come with a hefty price tag. The U.S. government has budgeted $50 million this year and $100 million next year for healthcare IT, meaning the costs associated with the new systems could be pushed out to doctors and hospitals, with the financial benefits flowing to health insurance companies.

Healthcare providers will likely absorb the brunt of the costs, so many in the industry believe HHS needs to provide incentives to encourage clinicians to embrace EHRs.

In its “Framework for Strategic Action” plan for healthcare information technology, HHS recognized that it needs to provide such incentives. The plan said that the Centers for Medicare and Medicaid Services (CMS) is considering authorizing extra payments to physicians who use EHRs. CMS will also evaluate pay-for-performance EHR demonstration programs to boost adoption and will develop an Internet portal for Medicare beneficiaries to access personal medical information. HHS will also consider regional grants and lowcost loans to stimulate EHR use.

The HHS plan also calls for development of standards-based and certified EHR systems and networks. Three industry groups representing a wide range of providers, payers, and vendors have established a collaborative initiative to certify EHRs: the American Health Information Management Association, the Healthcare Information and Management Systems Society, and the National Alliance for Health Information Technology.

The healthcare system could save more than $81 billion annually and improve the quality of care if it were to broadly adopt computerized medical records, according to a RAND Corporation study that is the most detailed analysis ever conducted of the potential benefits of electronic medical records.

“Our findings strongly suggest that it is time for the government and others who pay for healthcare to aggressively promote health information technology,” says Richard Hillestad, a RAND senior management scientist who led the two-year study that was reported in the journal Health Affairs in September.

Researchers from RAND Health suggest federal officials accelerate efforts to set universal standards for health information technology, an important step that would foster wider adoption. The study also recommends that the federal government consider financial incentives, including increasing Medicare payments to providers who use approved electronic records systems and providing grants to institutions that embrace the technology.

The study found that electronic medical records systems could save money by reducing redundant care, speeding patient treatment, improving safety and keeping patients healthier.

A soon-to-be released RAND study prepared for the federal Agency for Healthcare Research and Quality concludes that there is not yet enough published evidence to reach conclusions about the relative costs and benefits of healthcare information technology. Given this shortage of published research, Hillestad and his colleagues undertook their project to help fill the knowledge gap by using computer simulation models to estimate possible savings and health benefits of the systems under a range of effectiveness values and assumptions about the level of adoption and use of electronic medical records.

Hillestad estimates that if 90 percent of doctors and hospitals successfully adopt health information technology and use it effectively, resulting efficiencies would save $77 billion annually. The biggest savings would come through shorter hospital stays prompted by better-coordinated care; less nursing time spent on administrative tasks; better use of medications in hospitals; and better utilization of drugs, labs and radiology services in outpatient settings.

Researchers also estimate that an additional $4 billion would be saved each year because of improved safety, primarily by reducing prescription errors as computerized systems warn doctors and pharmacists of potential mistakes.

The RAND researchers say their findings also suggest that the savings from health information technology could be much higher if the medical sector is able to achieve efficiency gains similar to those experienced by other industries that have embraced technology. If efficiency in the nation’s healthcare system increased by an additional 1.5 percent per year — what economists generally agree was the impact of information technology on the wholesale and retail industry — savings could be as high as $346 billion annually, the study says.

“A national system of electronic medical record keeping could take a significant bite out of healthcare costs,” Hillestad says. “These systems are expensive, but it doesn’t take long before the benefits surpass the costs. People may choose to take the savings, or savings may be used to provide insurance to the uninsured. Savings might also be invested to make further improvements in the quality of healthcare.”

The study says it would cost U.S. hospitals about $98 billion and physicians about $17 billion to install the electronic medical records systems — an average of $7.7 billion per year over a 15-year adoption period. However, it says replacing paper records with electronic tools eventually could generate much more in savings.

Advocates say health information technology may help curb America’s $1.7 trillion annual healthcare bill and aid efforts to boost quality, but relatively little research has been conducted up to now to demonstrate the value of health information technology or to estimate its potential value.

Despite the promise of savings, hospitals and doctors are uncertain that their initial investment in health information technology would pay dividends, so America’s medical system has been slow to embrace the technology. Only about 20 to 25 percent of hospitals and 15 to 20 percent of physician offices have adopted such systems and those systems are generally limited in their ability to share information with other providers, according to RAND researchers.

“A major obstacle to investment in health information technology is that those who pay for it don’t necessarily experience the savings,” Hillestad says. “We need to find ways to reward health providers who invest in measures that will boost efficiency and promote quality.”

RAND studied the impact of adopting electronic records systems that would include both patient medical records and additional supporting tools to help health professionals and patients. These additional tools would provide: prescribing support that checks patient allergies and drug interactions; decision support suggesting the best evidence-based practice for given conditions; and patient reminders about needed screening or other preventative measures. “It’s going to take 10 to 15 years to achieve wide adoption of electronic medical information, even if all the ongoing efforts are successful,” Hillestad adds.

RAND researchers examined the potential benefits of health information technology by visiting hospitals and physician practices that have embraced the technology, reviewing past studies and interviewing experts in the field. In addition, the team analyzed the costs and benefits of information technology in other industries, paying special attention to the factors that enabled such technology to succeed. The full benefit of healthcare information technology will not be realized unless hospitals and health providers use the technology innovatively to improve quality and cut costs, the study says. Computerized systems could help doctors identify patients at risk of becoming sicker and suggest preventive treatment. Patients could use remote monitors to transmit their vital information from home to medical providers, allowing a quick response to potential problems.

In addition, health information technology could help improve short-term medical care by reminding doctors to provide services during routine visits, such as flu shots, and encouraging patients to schedule visits for services such as cancer screenings. These interventions have relatively low costs, but have the potential of trimming the nation's medical costs by another $81 billion annually by reducing the need for costly hospital-based care when patients become sicker, according to the study.

A separate RAND study published in the same edition of Health Affairs suggests that federal officials should consider additional incentives to help spur the adoption of advanced electronic drug prescribing systems. Legislation that will create the first-ever prescription drug benefit for Medicare recipients in 2006 includes measures encouraging adoption of electronic prescribing technology. However, many electronic prescription systems being adopted fall short of the full potential of the technology, warns study lead author Dr. Douglas S. Bell, a RAND senior natural scientist and assistant professor of medicine at UCLA's David Geffen School of Medicine.

Federal officials should consider additional incentives that would encourage medical providers to adopt more advanced drug prescription systems, according to Bell and co-author Maria F. Friedman, a senior advisor at the Centers for Medicare and Medicaid Services. These advanced systems are essential to achieving the full potential of electronic medical records described by Hillestad and his co-authors.

In the week following relief efforts in the Gulf region, the Medical Group Management Association (MGMA)'s Center for Research and the University of Minnesota School of Public Health released a report describing the current state of adoption of EHRs by U.S. medical group practices (MGPs). More than 3,300 MGPs participated in the "Assessing Adoption of Health Information Technology" project, which was funded by the federal Agency for Healthcare Research and Quality (AHRQ). The study reports current rates of EHR adoption, which EHR features are more frequently used, barriers to adopting an EHR, and how users rated the benefits of having adopted an EHR system.

The research shows that just 14.1 percent of all MGPs use EHRs, and just 11.5 percent indicated that an EHR system was fully implemented for all physicians and at all practice locations. More significantly, the research shows that only 12.5 percent of MGPs with five or fewer full-time-equivalent physicians (FTE) have adopted an EHR system. The adoption rate increased with the size of practice; groups with six to 10 FTE physicians reported a 15.2 percent adoption rate, groups with 11-20 FTE physicians reported an 18.9 percent adoption rate, and groups of 20 or more FTE physicians had a 19.5 percent adoption rate.

Other data reveal that 12.7 percent of groups were in the process of implementing an EHR system; 14.2 percent said implementation is planned in the next year; and 19.8 percent said implementation was planned in 13 to 24 months. The remaining 41.8 percent have no immediate plans for EHR adoption. Among those with no immediate plans for implementation, the difference between large and small groups is striking -- 47.8 percent of practices with five or fewer FTE physicians compared with only 20.7 percent of practices with 21 or more physicians.

Smaller groups face more challenges in adopting these technologies and progress more slowly than their larger counterparts, said Terry Hammons, MD, senior vice president, research and information, MGMA Center for Research, and co-author of the study. For widespread adoption of EHRs to be successful, more work needs to be done, and small- to medium-size medical group practices will need more help than they are getting now.

The report provides insight into which EHR capabilities are actually used, as not every EHR system has all functions and not every medical group fully uses the capabilities of its EHR system. More than 97 percent of the respondents with an EHR system reported that their system had functions for patient medications, prescriptions, patient demographic and visit/encounter notes. Less than 65 percent reported the EHR provided drug formulary information or clinical guidelines and protocols. Equally important was that only 83.1 percent of respondents said their EHR was integrated with their practice billing system. System integration is a highly important function of the EHR system. Integration with the practice billing system facilitates cost savings by eliminating the manual entry of billing information, improving charge capture and improving documentation in the medical record of billed services.

Despite state and federal efforts to encourage adoption of these technologies, group practices cited lack of capital resources to invest in EHR as the top barrier to adoption. Also, University of Minnesota researchers noted, an important barrier to adoption is that practices are not convinced EHRs will improve their performance. The return on investment in terms of cost and quality are not yet evident, the researchers add.

The research indicates that the average purchase and implementation cost of an EHR was $32,606 per FTE physician. Maintenance costs were an additional $1,500 per physician per month. Not surprising was the finding that smaller practices had the highest per-physician implementation cost at $37,204. The study also found that the average cost for EHR implementation was about 25 percent more than initial vendor estimates.

The Medical Records Institute's report, "Survey of Electronic Health Record Trends and Usage for 2005," showed that of 280 respondents, consisting of IT managers and professionals, physicians, and nurses, 48.6 percent worked in the ambulatory care arena. According to the respondents, the top reasons for the implementation of an EHR system were: the need to improve clinical processes or workflow efficiency; the need to improve quality of care; the need to share patient record information among healthcare practitioners and professionals; the need to reduce medical errors (improve patient safety); the need to provide access to patient records at remote locations; the need to improve clinical documentation to support appropriate billing service levels; the need to improve clinical data capture; the requirement to contain or reduce healthcare delivery costs; the need to establish a more efficient and effective information infrastructure as a competitive advantage; and the need to meet the requirements of legal, regulatory, or accreditation standards. According to respondents working in an ambulatory healthcare facility, 44.6 percent said their EHR system is integrated with practice management applications, while 34.7 percent said it interfaces with a separate practice management system. For more information about this survey, go to: http://www.medrecinst.com/files/ehrsurvey05.pdf

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines