EHR: cost or benefit?

Today’s edition of Modern Healthcare’s Health IT Strategist reports: 

Two influential economists yesterday told federal lawmakers that the widespread implementation of e-prescribing tools and electronic health records may only have a marginal effect on savings — and could conversely result in increased costs.

Robert Reischauer, president of the Urban Institute, and Eugene Steuerle, a senior fellow also from the institute, both challenged industry estimates that adoption of health information technology could trim billions of dollars from ever-rocketing healthcare costs.

Reischauer and Steuerle’s views run counter to the widely held belief that adoption of EHRs and other high-tech gear would produce almost immediate savings across hospitals and physician offices alike.

Further detail (including a two-hour streaming video of the hearing for the true insomniacs out there) is available on the Senate Budget Committee’s website. (Navigate to 1/30/07.)

Whether or not you believe that EHR implementation will increase the efficiency and efficacy of care, a well-executed EHR roll-out may now entitle some lucky physicians to a better deal on malpractice insurance.  Exhibit A: Micky Tripathi, at the MA eHealth Collaborative, announced a new insurance plan offering credits to physicians with qualifying deployments of EHR systems.  Check out his post on the subject from earlier this week, excerpted below, at the MAeHC Blog:

Malpractice insurers stand to be among the biggest winners in the move to digital health records. Some of the greatest sources of liability risk for physicians — messy documentation, inconsistent collection of family histories, poor tracking of patients — are addressable by EHRs and HIEs, as long as they’re implemented correctly and properly used.

Of course, there could be some increases in risk as we move to modern electronic systems. Breaches of confidentiality, and increased errors while physicians and medical staff become familiar with the new systems come immediately to mind. However, we can work on reducing these types of risks; for example, the [CT Medical Insurance Co.] program will require that physicians demonstrate long-term commitment to the EHR and to effective risk management. Implementing EHRs and HIEs within a program framework, such as MAeHC’s, dramatically increases the odds of effective implementations and significant net risk reduction. Of course, risk reduction means fewer medical errors, so patients will be the biggest beneficiaries at the end of the day.

Cognitive dissonance?  Not necessarily.  Reischauer and Steurle are looking at the health care system and opining that EHRs will not reduce the amount of money spent within the health care system.  Tripathi is looking at individual physician practice costs and telling us that malpractice insurers have signed on to the notion that EHRs can improve physician performance (from a quality perspective), thus lowering physician’s risk profiles, and thus qualifying for malpractice premium credits.  If Reischauer and Steurle are right, then EHR implementation may just be the latest high-tech boondoggle from a cost perspective: good for patients, good for physicians (if they can recoup some of the cost through premium credits), but adding another layer of cost to an already-burdened system.

— David Harlow