Return on Investment Does Not Drive EHR Adoption in Hospitals

The adoption of electronic health record systems is not being driven by a return on investment in hospitals and physician practices, Pat Wise, vice president of Healthcare Information Systems at the Healthcare Information Management and Systems Society, said, Healthcare IT News reports.

Wise said that although ROI could be measured as a result of adopting EHRs, many health facilities that do not use EHRs do not seem to recognize their importance.

“There is a real business case to be made for [EHRs], but the word has not gotten out,” Wise said, adding, “More organizations need to know that [EHRs] are a better business practice.”

She cited examples, such as Evanston Northwestern Healthcare in Chicago, which had a $2.5 million increase in revenue because of improved charge capture from its EHR system. In addition, North Fulton Family Medicine in Georgia has saved $775,000 in transcription costs after adopting EHRs in 1998, and it also saves $275,000 annually because of the system.

Wise added that most health facilities have adopted EHRs to improve patient care and workflow management, and surveys indicate that “a large percentage of physician practices that don’t have [EHRs] have no intention of implementing them in the near future,” she said (Pizzi, Healthcare IT News, 6/27).

Article: http://www.ihealthbeat.org

IRS gives physician EMR donations the OK for Non-profits

By Nancy Ferris Published on May 14, 2007 Government Health IT

A long-awaited Internal Revenue Service memo has made it clear that nonprofit hospitals can give e-health records software and support services to their staff doctors without jeopardizing their tax-exempt status.

The May 11 memo was welcomed by health IT advocates, who had expressed concern that uncertainty about how the IRS might rule was inhibiting hospitals from including the doctors’ offices in their medical records networks.

The IRS memo cites Department of Health and Human Services regulations that created exemptions from anti-kickback and physician self-referral laws. Those regulations, which became final in August 2006, were intended to encourage hospitals to share their systems with doctors who practice at the hospitals.

The alignment between the IRS and HHS actions prompted Scott Wallace, president and chief information officer of the National Alliance for Health IT, to call the memo “absolutely as good as anyone could have hoped for.” He predicted it would encourage more doctors to use EHR systems. Once hospitals install such system for their internal operations, “the incremental cost of adding a physician is fairly low,” Wallace said.

“The AHA is pleased that the IRS moved quickly in responding to hospitals’ request for guidance on this important issue,” said Lawrence Hughes, regulatory counsel of the American Hospital Association.

According to the AHA, nearly 3,000 of the nation’s 4,936 community hospitals are nonprofit organizations.

The memo from Lois Lerner, the IRS’ director of exempt organizations, notes that some hospitals believe their medical staff physicians need financial incentives to use EHR software that would exchange information with hospital systems.

Wallace said such arrangements are likely to help especially with small medical practices, which have a much lower rate of EHR usage than larger practices.

Article: http://www.govhealthit.com, also see the HHS EHR Regulation here

To learn more about the ruling:

- read this Health Data Management item
- read the IRS ruling (.pdf)

AHIC reviews, sends back EHR recommendations

By: Joseph Conn / HITS staff writer Modern Healthcare Online

The American Health Information Community on Tuesday sent back for revision a list of recommendations by its work group on electronic health records aimed at boosting EHR adoption, including a controversial incentive proposal that would reward doctors who have EHRs and penalize those who do not.

David Brailer, co-chairman of the AHIC, a public-private policy healthcare information technology policy advisory panel created by HHS Secretary Mike Leavitt in 2005, asked fellow AHIC member and EHR work group co-leader Lillee Smith Gelinas to take the recommendations and tweak their language and have them checked by lawyers.

Finally, Brailer advised Gelinas, vice president of clinical performance at group purchasing organization VHA, that the EHR work group should “have some forum with an open hearing so we can have more debate” on the proposals.

The six proposals were:

• Leverage federal purchasing power by having the government, through its contracts with health plans and other payers, support widespread adoption of IT standards and “foster the use of pay-for-performance programs for physicians that include structural measures to incent the adoption and effective utilization of certified EHRs.”
• The pay-for-performance schemes should use “reliable, standardized and validated tools which are currently available to assess structural measures as defined by the Medicare Payment Advisory Commission, such as the NCQA’s Physician Practice Connections or the CMS’ publicly available Office System Survey.”
• HHS should continue to support the physician IT training programs now under way called Doctor’s Office Quality-Information Technology University, or DOQ-IT U.
• HHS should work with the federally funded Certification Commission for Healthcare Information Technology, which tests and certifies EHR systems, “to obtain medico-legal counsel to assure that its functional criteria include documentation, security and other approaches that will mitigate malpractice risk.”
• “Similarly, HHS should meet with medical malpractice insurers “to encourage premium reductions for those physicians who have adopted certified EHRs.”
• “HHS should develop a schedule for implementing differential reimbursement to Medicare physicians for use or nonuse of EHRs. While we would defer to departmental expertise, we note that this might be achieved by paying full Medicare rates and marketbasket updates (and possibly an EHR premium) to physicians using certified EHRs, while physicians using paper-based records are paid at discounted rates achieved by nonqualification for full marketbasket updates or other measures.”

Full article here: http://www.modernhealthcare.com

House Bill To Help Small Practices Adopt Health IT

April 23, 2007

Reps. Charles Gonzalez (D-Texas) and Phil Gingrey (R-Ga.) on Thursday introduced a bill that would give grants, loans and tax incentives to small physician-practices to help offset the costs of health IT systems, Health IT Strategist reports.

Under the bill, Medicare would provide payment incentives that could be used by physician practices with 10 or fewer full-time employees to purchase health IT infrastructure tools, such as electronic health record systems, evidence-based clinical decision support tools and secure e-mail.

HHS also could include additional incentives for evaluation and care management services, payments for structured e-mail consultations and any other necessary communication methods, Health IT Strategist reports.

The amount of reimbursement would be based on certain factors, including the type and price of equipment and how it will be used, according to the bill. Grants and loans also would be subject to the discretion of the HHS secretary.

The bill also would change the tax code to increase deductions for purchasing qualified health IT tools for physician practices qualifying under the IRS’ broad definition of a small business. Physicians also could use the deduction for equipment that they started using at the beginning of 2007, Health IT Strategist reports (DoBias, Health IT Strategist, 4/20).

Source: http://www.ihealthbeat.org/

Group practice leaders looking to spend: survey

Group practice leaders responding to the 17th annual Modern Healthcare/Modern Physician Survey of Executive Opinions on Key Information Technology Issues are looking to spend more on healthcare IT in the near term than they are currently spending, but how much more is widely variable.

Of the 344 executives who responded to this year’s survey, 96 indicated they were leaders of medical group practices. Their organizations ranged in size from a couple of solo practices to two large medical groups with more than 1,300 physicians. The average practice size was 88 physicians, but the median size was 16. Average revenue was $41.7 million while median revenue was $11.5 million. The survey was open from Oct. 30, 2006, through Jan. 12.

Most executives (81%) deemed their practices to be operating in highly competitive environments, while 19% of respondents indicated their practices were geographically removed from other competitors.

Budgeting for healthcare IT spending varied greatly. More than half of respondents (54%) indicated they currently are allocating just 2.5% or less of total operating expenses for IT, with the mean range of 2.1% to 2.5% also the most often selected (by 16% of respondents).

But one in five respondents selected operating budget ranges of 4.6% or higher.

More than half of the group leaders (55%) in the survey reported they currently are spending 10% or less of their capital budgets on IT, while 50% indicated they would be spending 10% or less over the next three years.

But a large majority of executives (69%) predicted their spending on IT will increase over the same period, compared with 11% who thought their IT operating expenditures would decrease and 19% who reported that it would be unchanged.

Similarly, 61% of respondents estimated their IT capital expenditures will go up over the next three years, while 13% projected capital spending cuts and 24% selected “no change.”

With all the emphasis by the government and business interests on clinical IT systems, they were not the top “hot button” priority this year, according to our readers. Asked to prioritize their IT needs and make their top three choices from a list of 16 alternatives, 41% of respondents picked practice-management solutions, well ahead of ambulatory clinical solutions and clinical communication infrastructure/communication systems that were each chosen by 31% of the survey respondents.

Other oft-selected IT priorities were Web-based technologies to enable patient access to certain data via the Internet at 27%. At 22% were picture-archiving-and-communication and other imaging systems, along with consolidating all IT systems using common applications.

Michael Nissenbaum, president and chief executive officer of iMedica, a Carrollton, Texas-based vendor of an electronic medical-record/practice-management software suite, says there are several compelling reasons practice leaders are looking at their practice-management systems. Before joining iMedica, Nissenbaum spent five years as the president and CEO of Millbrook Corp., a practice-management systems provider that GE Medical Systems Information Technologies moved to acquire in late 2002.

“At Millbrook, we found that most PM systems have a useful life of five to seven years,” Nissenbaum says. “You had degradation of technology. Vendors didn’t supply upgrades on an ongoing basis. Also, this is a data repository and like any repository, data starts getting corrupted.”

A more pressing concern is the upcoming requirement under the Health Insurance Portability and Accountability Act that by May 23 all electronic transactions include a national provider identifier, or NPI.

If an old practice management system can’t accommodate tagging claims with an NPI, “It’s going to kill you,” Nissenbaum says. Additionally, having a common database for office scheduling, billing and EMR systems will allow staff to flag patients in need of other services.

“You set up a health maintenance rule for a patient in the clinical side of the application, whether it’s an Hb1Ac (blood-sugar test) or PSA (prostate-specific antigen) test, and when that patient calls in, regardless of the complaint, if they’re due for their current hemoglobin or their annual PSA, it pops, and it’s attractive for the practice as well. You have an opportunity to enhance services and increase revenues for the practice.”

Physician-Medical informaticist William Bria, agrees.

“That PM would still be king is not surprising,” says Bria, chief medical information officer at Shriners Hospitals for Children, a system based in Tampa, Fla., and chairman of the Association of Medical Directors of Information Systems. “What these folks may be saying is that they’re still focused on the bottom line and either: 1. A new generation of PM products is of interest; 2. Due to changing reimbursement rules and increasing complexity new systems are needed; or 3. New (Web-based) technologies are more attractive for many reasons and are now finally coming available.

“They just could also be purchasing new systems that include more of the clinical components of an ambulatory EMR,” Bria says.

This story initially appeared in this week’s edition of Modern Physician.

Article: www.modernhealthcare.com

Hospitals Giving the Gift of Technology

Relaxed regulations may spark largesse, but when it comes to I.T. donations, nothing is really free. By Beckie Kelly Schuerenberg, Senior Editor Health Data Management 02/01/2007

There’s usually a huge disparity between the use of I.T. in hospitals and physician practices. But the Bush administration is betting that recent revisions to federal law will help change that.Last August, the Department of Health and Human Services published two final rules designed to ease restrictions on hospitals and other entities donating information technology to physicians and group practices.

Hospitals and other organizations have long been loath to make I.T. donations, fearing such activity would violate federal anti-kickback statutes and the Stark Act governing physician referrals. The final rules published in August made specific and conditional exceptions to those laws to permit I.T. donations, while continuing to restrict the referring of patients to facilities in which the referring physician has a financial interest.

HHS issued new exceptions to these laws to allow donations of electronic prescribing and electronic records software to help speed progress toward President Bush’s goal of having substantial adoption of clinical information systems by 2014.

In response, some hospitals are using these exceptions to develop and roll out I.T. donation or data sharing initiatives.

“There are a lot of reasons why hospitals want to work with physicians for I.T. adoption,” says Chantal Worzala, senior associate director for policy at the Chicago-based American Hospital Association. “The biggest one is being able to share information with them. They also feel physicians would be more willing to use technology in the hospital if they are already using it in their offices.”

Health care industry experts and legislators for several years have called for the creation of I.T. donation exceptions. But whether the resulting rules will have a dramatic effect on physician I.T. adoption is uncertain. The new exceptions are somewhat unclear, which has led some hospitals to delay donation plans as they mull over legal advice on what types of technology or related services are allowed.

Additionally, the new exceptions don’t address whether a not-for-profit organization would be at risk of losing its tax-exempt status for donating I.T.-something that would prevent some hospitals from creating such an initiative.

AHA requested the Internal Revenue Service make a ruling on this uncertainty. The association also issued an advisory interpretation of the new rules but is recommending each hospital consult with a lawyer before beginning a donation initiative, Worzala says.

“Having meaningful and very clear changes to the rules will facilitate hospitals’ plans to share I.T. resources with physicians,” she says. “But the way the rules came out, the requirements are sufficiently complex. It’s not the ‘bright line’ guidance we would have liked. It will take time for hospitals to work through what they want to do and what the regulations say.”

Interpreting the laws

The Centers for Medicare and Medicaid Services and the HHS Office of Inspector General each issued separate donation rules because there are two different regulations that govern contributions to physicians.

The Stark Act regulates the financial relationships that a hospital can have with physicians to prevent referrals for Medicare reimbursable services to facilities in which the referring physician has a financial interest. It does so by creating permissible financial relationship “exceptions”, explains Mark Lutes, a partner at Epstein, Becker & Green, a Washington-based law firm. CMS last August issued an exception to the Stark Act that creates an opportunity for a permissible financial relationship for the donation of e-prescribing and electronic records technology.

The anti-kickback statute, a criminal law enforced by the HHS Office of Inspector General, calls for the review of Medicare payments to determine whether a financial relationship exists between a hospital and a referring physician. It also describes a series of “safe harbors” where the intent of such a relationship is lawful. The OIG last August issued a new set of safe harbors that now makes the donation of e-prescribing and electronic records technology a lawful financial relationship, Lutes says.

While there are slight differences in the exceptions and safe harbors created for e-prescribing and electronic records technologies, the final rules are similar on some points. For example, they both require physicians to pay for at least 15% of the I.T., with all physicians paying an equal percentage.

The new rules also require donated e-prescribing and electronic records software to be interoperable as defined by the Certification Commission on Health Care Information Technology. Training, connectivity and maintenance services are permitted in the new exemptions; hardware and staffing are not.

Further, electronic records software donations can include other functionality related to the treatment of a patient, such as scheduling, billing and other clinical support features, Lutes says. It can’t, however, include other office functions, such as payroll or human resources applications.

While the rules might be ambiguous, they are a “facilitating step” toward physician adoption of I.T., Lutes says. But they aren’t enough to turn on the I.T. light for many physicians, he contends.

“This could be an important step for physicians for whom the financial barriers of I.T. were paramount,” he says. “But the adoption of technology is still a matter of physicians being convinced that it’s worth the pain of changing workflow. The psychological barriers surrounding this transition might be stronger than the financial ones for many group practices. And in those instances, the failure to adopt technology is not attributable to a lack of safe harbors or exceptions.”

Ensuring interest

To read the complete article visit: www.healthdatamanagement.com

U.S. bill proposes e-health records incentives

Proposed legislation would give doctors $3 for every patient they move to e-health records in an attempt to push for more widespread adoption

By Grant Gross, IDG News Service March 01, 2007

Doctors would get $3 for every patient signed up to use an electronic health record under terms of a bill introduced Thursday by U.S. Representative Patrick Kennedy, a Rhode Island Democrat.

The Personalized Health Information Act would require that the U.S. secretary of Health and Human Services create a personal health record incentive program to help speed U.S. adoption of e-health records.

E-health records can cut health-care costs by consolidating patient information and eliminating medical errors, such as prescription interactions, proponents say. U.S. President George Bush has called on the U.S. government and private health-care providers to work together to provide e-health records to all residents by 2014.

Using e-health records would allow patients to avoid filling out forms found in nearly every doctor’s office, Kennedy said. The records would allow health-care providers to send messages to patients, such as reminders that a child is due for a vaccine.

Some e-health records allow patients to send e-mail to their doctors, schedule appointments online, or view test results.

But e-health records have been slow to catch on, partly because doctors haven’t embraced them. Kennedy’s bill would give U.S. doctors $3 for each patient converted to an e-health record over three years.

A spokeswoman for Kennedy didn’t immediately have an estimate of how much the program would cost.

E-health records “are a critical piece of the puzzle as we move forward in an effort to improve the quality and cost efficiency of the health-care system in this country,” Kennedy said. The bill would empower patients to be better informed and would also improve communication between them and their health-care providers, he said.

Several companies and organizations, including Microsoft, e-health record vendor Allscripts, and the American Heart Association, endorsed the bill.

Patients’ ability to access personal health records “is a critical starting point to improved health care,” Peter Neupert, Microsoft’s corporate vice president for health strategy, said in a statement.

Read article here:  www.infoworld.com

HIMSS conference opens in New Orleans: See you there.

By Patty Enrado, Contributing Editor Healthcare IT News 02/26/07

NEW ORLEANS – Necessity is the mother of invention, Buddy Hickman, chairman of the board of the Healthcare Information and Management Systems Society, told attendees in his opening remarks Monday morning.

The group’s annual conference and exhibition is under way here in the Big Easy. About 25,000 people are expected to attend the event.

Hickman entreats conference goers to take a good look at New Orleans and the HIMSS07 Exhibition Hall. “The rebuilding of this great city and the progress made by our HIT industry over the past several years are proof positive that innovation happens in response to critical challenges,” he said.

The rebuilding of the city parallels the work of HIMSS – reconstructing essential infrastructure. “As the city rebuilds the underpinnings of lives and livelihoods, HIMSS reinvents the ways healthcare information is gathered, communicated, stored and used,” Hickman said. “Both of our missions are urgent and greatly needed.”

While New Orleans has chosen to rebuild their healthcare records electronically, many hospitals around the country, however, are not even considering adopting electronic health record systems. This mindset flies in the face of a recent study that shows a strong correlation between sophisticated electronic records technology and improved patient outcomes and quality.

Hickman believes the industry should close the debate regarding the value of EHR, appreciating that it is central to care in the future. “Placing the focus on quality, patient safety, and necessary clinical process improvements is consistent with HIMSS’ mission and with the reasons why adoption of healthcare information technology was strongly recommended by the Institute of Medicine’s Crossing the Quality Chasm report in the first place,” he said.

Another strategy Hickman encourages is having a singular voice in the industry for goals, policies and messages. On the federal and state level, that means taking a broader view of health information technology in the context of high-priority healthcare issues. “In this way, HIT becomes part of a necessary solution to critical challenges rather than being viewed as a lesser priority competing for funds that some fiscal policymakers may believe can be better used elsewhere,” he said.

HIMSS’ evolving programs such as its Advocacy Day will help hone its message and build a broader coalition with other HIT advocates. The bottom line, according to Hickman, is to advance the cause of HIT in an inclusive way that benefits all providers and patients.

“Through smart public policy, alliances and the right incentives, we can create the right kind of national health information network – one that contributes to quality, safety and better outcomes for all,” said Hickman. “If we don’t do this now, we only create a greater challenge to fix later. So, let’s get it right the first time.”

Find article here: http://www.healthcareitnews.com

Intel, Motion Computing Unveil Tablet Computer for Medical Records

February 21, 2007

Intel and Motion Computing on Tuesday unveiled a jointly developed tablet computer designed to help health care workers update medical records as they care for patients, Bloomberg/Los Angeles Times reports (Bloomberg/Los Angeles Times, 2/21).

The $2,200 Motion C5 computer is a book-sized device that includes:

• A built-in bar code scanner to track patients and medications;
• A video and still camera for documenting patient problems; and
• Radio frequency identification tracking technology (Keefe, Austin American-Statesman, 2/21).

RFID can be used to identify tablet users and automatically retrieve patients’ medical charts when a nurse arrives at their rooms. In addition, the device is able to record information — such as temperature, blood pressure and other vital signs — directly from a patient’s bedside by using wireless technology like Bluetooth, according to Motion CEO Scott Eckert (Clark, Wall Street Journal, 2/21).

Physicians and nurses can use the device to store, access and update patient records wirelessly from any location within a hospital. The device also is spill-resistant and easy to disinfect.

Executives say the device will help nurses reduce paperwork, which will enable them to spend more time with patients, and is designed to reduce medical errors and improve efficiency in hospitals (Austin American-Statesman, 2/21). It also is a smaller, less cumbersome alternative to the computers on wheels that some hospitals use (Wall Street Journal, 2/21). Allscripts, Cardinal Health and McKesson have been working on the clinical software with Intel and Motion Computing (Poletti, San Jose Mercury News, 2/21).

Louis Burns, vice president of Intel’s digital health group, said that prior to developing the device, the two companies studied nurses’ work habits, consulted with nurses and tested tablets at three hospitals (Wall Street Journal, 2/21). Officials at the University of California-San Francisco Medical Center, which has been testing the device, said the tablet has reduced transcription and medications errors and has improved nurse productivity (Austin American-Statesman, 2/21).

Physicians Tap Technology To Revitalize Family Practices

A small but increasing number of physicians are trying to use technology and curb overhead costs to make family practices more manageable and profitable, the Wall Street Journal reports.

The number of primary care physicians has dropped by half in the past 10 years, according to a series of surveys by the American Academy of Family Physicians. However, the trend of converting to “micropractices” could help counter the decline in primary care medicine, according to the Journal.

For example, Dr. Gordon Moore in early 2001 opened a solo practice and by keeping overhead costs low, he was able to see fewer patients, provide them with better care and still earn a decent income. He previously worked in a large hospital-owned medical practice and grew frustrated by the pressure to see more patients, which he said resulted in errors and prevented him from providing the best care possible.

Moore pays $250 per month for software that combines electronic health records, patient scheduling and electronic billing. Moore also purchased off-the-shelf disease management software, called DocSite, to track patients’ cholesterol, blood pressure and blood sugar levels. In addition, Moore asks his patients once or twice a year to complete an online survey, called “How’s Your Health.” The survey, developed by John Wasson of Dartmouth Medical School, asks patients a series of multiple choice questions about their symptoms, medications and habits. The survey evaluates patients’ answers and provides a one-page snapshot of their health.

Moore estimates that his overhead costs account for 35% of his revenue, while overhead costs for most small primary care group practices make up about 60% of their revenue, according to the Medical Group Management Association. An online survey found that 70% of Moore’s patients received the care they wanted and at the time they wanted it, compared with a national satisfaction rate, based on the same survey, of about 30%.

Some physicians considering a solo practice are concerned about:

• Leaving the financial security of a larger physician organization;
• Setting up the technology and organizing a practice; and
• Difficulty signing up new patients.

Dr. Gary Seto, who three years ago left Kaiser Permanente and started a solo practice in South Pasadena, Calif., said he scaled back his practice to part time after losing money for two years. On his blog, SoloDoc, he wrote, “That’s the tradeoff. But it’s much more enjoyable to me and my patients.” Seto received a two-year, $850,000 grant from the Physicians’ Foundation for Health System Excellence in Boston to promote his practice model (Naik, Wall Street Journal, 2/23).