We are now beginning to consider the question of whether the federal stimulus funds being allocated to hospitals and physician offices in support of the accelerated deployment of information technology will be beneficial. I have always been a strong advocate for the use of healthcare information technology but I want to interject a note of caution here. The deployment of outdated or poorly designed technology in various healthcare settings can also be harmful.
It's also useful to keep in mind the various incentives that are in play when discussing IT deployment in healthcare. In a previous note (see: Why the Prices Charged by Hospital for Inpatient Care Are Irrelevant), I quoted Steve Lipstein, CEO of the BJC HealthCare System in St. Louis who made the following point in a podcast: the entire healthcare reimbursement system is broken and needs reform. One large component of the "brokenness" of our healthcare system is the design of the reimbursement within that system. KevinMD made a similar point in a recent blog post commenting on one potential risk of pouring billions of dollars into the current generation of electronic medical records (see: How the widespread adoption of electronic medical records can raise health care costs). Below is an excerpt from his note:
One of the pillars of health care reform is modernizing our antiquated health records system. That means pouring billions of dollars into the current generation of electronic medical records (EMRs), despite both the flaws, and the myriad of reasons why doctors are so resistant to go digital. In an excellent piece, orthopedic surgeon Scott Haig points to why electronic records are not likely to save money, and worse, can further balloon health spending. The major reason is the physician payment system....Indeed, EMRs make it very easy to "upcode," or easily pick a diagnosis or service level that will pay more money....So, be careful when you hear that digital records can cut costs. With the current generation of systems geared towards gaming the flawed physician payment system, it's unlikely that EMRs will save any money at all.
In an ideal world and in an ideal healthcare system, all of the incentives support the efficient use of resources to deliver top-notch care. In our real world, one of the primary drivers for EMR deployments over the last several decades has been billing optimization, which is to say increasing revenue from payers for services rendered to patients. Algorithms within automated billing systems analyze the billing codes assigned to patients and suggest different ones that are still justifiable but which result in greater reimbursement for the provider. This is called "upcoding" and is the norm for all of the financial modules that are components of EMR systems. Hence the suggestion in the article quoted above that greater adoption of hospital and physician office EMRs can increase the cost of healthcare. In other words, no good deed goes unpunished.