Practice Strategies

Pressure Mounts for the Adoption of Electronic Health Records

Since the Bush administration first launched its campaign to develop and implement a nationwide system for storing patient records in electronic form by 2014, legislators, federal and state regulators, and medical providers have been grappling with the cost, implementation, and privacy issues surrounding health information technology systems.

“By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care,” President Bush said in his 2004 State of the Union Address. Since then, the administration has promoted initiatives intended to harmonize standards for electronic information exchange, establish certification criteria for health information technology investments, develop models for a national online health information system, and establish privacy and security standards.

When electronic health record (EHR) technology is fully implemented, the medical clipboard and the paper file will become obsolete. Instead, all of the patient’s medical history—including chronic conditions, tests, prescriptions, and physicians’ notes—will be stored in databases that can be easily accessed by authorized users. With patients’ complete medical histories at their fingertips, physicians should be able to more quickly and accurately diagnose conditions, recommend treatments, and prescribe drugs.

In addition to helping doctors provide better care to individual patients, the electronic records could be used for research purposes. A nationwide health information network would give researchers access to vast quantities of patient data that could be determined to answer questions about the safety and effectiveness of certain drugs, procedures, and treatments. It could also help providers in determining whether a lower-cost generic drug or less-invasive procedure is as effective as the more expensive alternatives. Advocates predict that the widespread use of EHRs will, over time, lead to greater efficiencies in healthcare delivery and better patient outcomes.

Smaller scale versions of this type of health information network have already been implemented by the Veterans Health Administration, health maintenance organization (HMO) Kaiser Permanente, and other large hospitals and medical providers.

While physicians in smaller practices are generally aware of the potential productivity gains and patient care benefits associated with EHRs, concerns about the high start-up costs of health IT systems remain. Increasingly, however, insurance companies, Medicare, employers, and public funding programs are providing physicians with incentives for implementing systems. In a few areas of the country, community-based health information networks offer smaller practices online access to a central database. Rather than implementing and maintaining their own complex systems, physicians pay modest subscription fees for the use of an off-site system. In addition to operating a centralized database, these networks typically offer technical assistance and training to medical practices using their services.

The House and Senate have passed separate versions of a bill that would promote the use of healthcare IT systems, but the bills had not yet been reconciled at the time Prescriptions went to press. Both bills, which received broad bipartisan support, would implement permanent standards for the design of health IT systems to ensure interoperability. The bills also address issues surrounding the privacy of medical data stored or transferred electronically, calling upon the Department of Health and Human Services (HHS) secretary to recommend a privacy standard that would reconcile current differences in state and federal laws.

“This legislation marries technology and quality to create a seamless, efficient health care system for the 21st century,” said Sen. Hillary Rodham Clinton (D-NY), a sponsor of the Senate bill. “By creating national interoperability standards, we will give health care providers the confidence that an investment in health IT is an investment in the future.”

But the House bill went further than the Senate bill, mandating a sharp increase in the number of insurance billing codes by 2010 and exempting hospitals and health plans that supply small physicians’ practices with healthcare IT hardware and software from anti-kickback laws.

Meanwhile, HHS has been working to establish EHR compatibility standards and to make health IT systems more affordable for smaller practices. In August, HHS Secretary Michael O. Leavitt announced new regulations intended to facilitate the adoption of health IT, including an anti-kickback safe harbor.

“These new regulations will allow certain donations of health information technology that may not have been permitted before,” Leavitt said. “This means that hospitals, health plans, and others will be able to take on an active role in putting electronic health records in the hands of physicians, and it means that physicians who are willing to use these new systems will have a better chance of getting them sooner.”

In addition to the action taken at the federal level, a majority of states have introduced or passed legislation calling for the use of health IT systems, and they are also developing strategies to assist health care providers in adopting EHR systems, according to a recent report by nonprofit group eHealth Initiative.

Janet Marchibroda, the CEO of eHealth Initiative, said, “There is a notable increase in activity at the state level, reflecting a parallel increase in recognition at the federal level of the importance of IT in moving toward a more patient-centered, higher quality healthcare system.”

For more information about our services to the healthcare industry, contact:
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Philip Fox, CPA, Partner - Houston at 713.297.6914.

The articles in this newsletter are general in nature and are not a substitute for accounting, legal, or other professional services. We assume no liability for the reader's reliance on this information. Before implementing any of the ideas contained in this publication, consult a professional advisor to determine whether they apply to your unique circumstances.
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