Electronic health records designed to reduce costs, improve health

Matt Gordon//October 24, 2013//

Electronic health records designed to reduce costs, improve health

Matt Gordon//October 24, 2013//

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Matt GordonIf you have received medical care recently, you may have been notified about your electronic health chart. And if you have not been asked yet, chances are you will soon, because providers in the Treasure Valley and around the country are already using or are in the process of developing electronic health records systems.

The use of EHRs is increasingly common, both at hospitals and in physician’s offices, due in no small part to incentive payments from the federal government through its EHR incentive program. The government pays to promote EHRs because it believes they will help lead to better care with fewer errors at a lower cost, which in turn leads, at least in theory, to lower premiums for businesses and consumers.

The EHR incentive program is not part of the Patient Protection and Affordable Care Act, but integration of health information technology, including meaningful use of EHRs, is key to achieving two principal goals of the ACA – reducing costs while improving health outcomes. Most of the attention paid to health reform recently has focused on the ACA, but while the ACA is the centerpiece of reform, it is not the only law passed by Congress in recent years that seeks to change the delivery of health care in this country.

Before the ACA, there was HITECH, the Health Information Technology for Economic and Clinical Health Act, which was part of the much-maligned stimulus package passed by Congress in 2009.

Among other things, HITECH established the Medicare and Medicaid EHR incentive programs, which pay eligible individual providers and hospitals that demonstrate “meaningful use” of EHR. Providers receive payments for meeting various objectives established by the Center for Medicare and Medicaid Services. The objectives are established in stages to give providers time to get up to speed, and the payments for meeting the objectives are likewise spread out over several years. In general, the idea behind the “meaningful use” objectives is that providers must demonstrate that they are using EHRs in ways that can positively affect the care of their patients, such as e-prescriptions and ensuring patients have access to their digital records.

The payments for meeting the objectives can be significant: individual providers can earn $44,000 or $63,750 over five years for participating in the Medicare or Medicaid incentive program, respectively, and payments to institutions can run into the millions of dollars. That, apparently, is enough to make a difference: By April of this year, more than 85 percent of eligible hospitals and 73 percent of eligible providers were participating in the EHR incentive program.

The EHR incentive programs are part of the movement for increased use of information technology in health care, which got a big push from the landmark 2001 report by the Institute of Medicine, Crossing the Quality Chasm: A New Health System for the 21st Century. Among other conclusions about problems with the late-20th-century health care in America, the institute stated that, “What is perhaps most disturbing is the absence of real progress toward restructuring health care systems to address both quality and cost concerns, or toward applying advances in information technology to improve administrative and clinical processes.”

That report followed the Institute of Medicine’s 1999 report, To Err Is Human: Building a Safer Health System, which received widespread attention for estimating that perhaps as many as 100,000 Americans die every year from preventable medical errors, 7,000 or so from so-called “medication errors,” which include dispensing the wrong drug due to illegible prescriptions.

Not surprisingly, a primary selling point of EHRs has been the reduction of those medication errors, particularly ones resulting from illegible prescriptions. But the goals are loftier than merely serving as an antidote to the age-old problem of sloppy physician handwriting: EHRs are now a centerpiece of efforts to provide integrated care and to track and report outcomes, and the adoption and meaningful use of EHRs are among the pillars on which the ACA rests.

The Medicaid Shared Savings Program is one example of how the ACA relies and builds upon the adoption of EHR. As discussed previously, the ACA encourages the formation of Accountable Care Organizations by allowing ACOs that meet quality and cost targets to share in the savings they create. Because an ACO by definition is an organization with thousands of patients, capturing and reporting the data necessary for demonstrating that the targets have been met would be prohibitive without EHRs. Moreover, the later-stage meaningful use objectives are expected to be aligned with the objectives of the Medicaid Shared Savings Program, creating a synergy between the two.

For these reasons, meaningful use of EHR is a critical piece of both the broader effort to reform health care and the specific goals of the ACA. It is, of course, too early to tell whether the promise of digital records will be realized. But the fact that the incentive payments are flowing – and that most eligible providers and hospitals have already transitioned or are now transitioning to EHR – ensures at least one fundamental change in health care: The era of jokes about doctors’ poor handwriting is coming to a close.

Matt Gordon is an attorney at Hawley Troxell where his practice entails commercial litigation, intellectual property, and health care. He can be reached at [email protected].