Stimulus dollars aimed at improving medical record systems spur questions on health care industry needs

March 3, 2009 – As President Barack Obama signed the stimulus bill into law last month, some health care experts worried that the plan’s multi-billion dollar investment in health care information technology upgrades may fall short of reviving the failing health system.

The bill designates as much as $19 billion to widespread implementation of interoperable electronic health records, which provide portable patient medical records that can be transferred between different doctors treating the same patient.

Electronic health records could largely reduce the cost and improve the quality of health care for patients and providers alike.

Hospitals using paper health records waste thousands of dollars each year repeating unnecessary medical tests, misdiagnosing diseases and prescribing the wrong medication for patients whose records are incomplete, which drives up the price of health care for everyone, said Jane Horowitz, chief operating officer of the National Alliance for Health Information Technology, a health care research center in Chicago.

But Horowitz is skeptical about the $19 billion price tag and the effectiveness of a plan that may focus too heavily on only one piece of a bigger health care puzzle.

“It’s hard to say how far the money will go – whether it’s too much or not enough,” said Horowitz. “We have to be cautious. We don’t want to just throw money into the system to be misspent.”

Most U.S. hospitals have taken some measures to computerize since 2004, when President George Bush called for complete health modernization by 2014, but many have been stalled by insufficient funds or inadequate access to basic communications services, such as high-speed Internet, said Horowitz.

“Quite frankly, adoption rates are not really where they need to be,” she said.

About a third of U.S. hospitals still rely on a paper filing system to manage everything from patient medical histories to payment documentation, while only 11 percent – the majority of which were large, urban, teaching hospitals – reported having fully implemented technological upgrades, according to a 2007 study by the American Hospital Association.

Peter Waegemann, chief executive officer of the Medical Records Institute, a health information technology consulting firm in Boston, said interoperable electronic health records are an important investment, but that spending the $19 billion on the them alone may produce smaller returns than expected.

The biggest returns, he said, would come from investing in inexpensive communications upgrades, massive public health outreach and, above-all, industry-wide restructuring.

“Providers, doctors and hospitals are trying whatever ways there are to make people spend money,” said Waegemann. “What we really need is a complete structural change of health care in America.”

The Health Information Technology Standards Panel, which aggregates health technology best practices and provides implementation guidelines to the U.S. Department of Health and Human Services, agrees that there is a need for extensive communication upgrades and will likely recommend that the federal government invest the stimulus money in patient monitoring and secure online messaging, said Liz Austin, spokeswoman for the panel.

Representative from the Department of Health and Human Services did not return calls for comment.

Health care providers say they are happy with the government’s effort to upgrade health information technology, and that the investment is likely to save the health care industry billions of dollars in the long run.

“We strongly believe that now is the time to wire the health care system,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a health care trade association. “It will improve efficiency, reduce errors and lower costs for consumers.”

According to a 2008 report from the group, widespread adoption of health information technology could produce an annual savings of $37 billion by 2015.

Horowitz said she’s hopeful the government’s investment will go a long way toward strengthening U.S. health care system and ensuring that patients are receiving more comprehensive and consistent care, but worries that the government’s efforts may prove more difficult than expected.

“I think the basis of [the bill] is pretty good,” she said, “But there’s not a lot in there for implementation. I think implementing this bill will be a challenge.”