A recent comprehensive and insightful article in the Harvard Business Review succinctly summarized the essence of the problem facing hospitals and their EHRs in the introduction (see: The IT Transformation Health Care Needs). I copy it below:
A central reason the negatives [of EHRs] seem to outweigh the positives is the way IT systems are being used. To date, the priorities of most health care organizations have been replacing paper records with electronic ones and improving billing to maximize reimbursements. Although revenues have risen as a result, the impact of IT on reducing the costs and improving the quality of clinical care has been modest, limited to facilitating activities such as order entry to help patients get tests and medications quickly and accurately. Relatively few organizations have taken the important next step of analyzing the wealth of data in their IT systems to understand the effectiveness of the care they deliver. Put differently, many health care organizations use IT as a tool to monitor current processes and protocols; what only a small number have done is leverage those same IT systems to see if those processes and protocols can be improved—and if so, to act accordingly. This is a significant reason that productivity growth in health care has been anemic and weaker than that in many other industries.
Also included in the introduction of the article was an example of what one large health system, Intermountain Healthcare, accomplished in reducing costs and improving quality by using its EHR plus another system to analyze the necessary information to initiate changes. Here is the passage from the article:
Quality-improvement teams [from Intermountain Healthcare] focused first on...[newborn delivery and ischemic heart services]. Armed with a sophisticated electronic health record (EHR) system and a separate information technology system that detailed the costs of activities, the teams used evidence-based guidelines and the experience of Intermountain’s physicians to redesign clinical workflows. The top executives, the board of trustees, physicians, and nurses all worked together to support the drive to improve care. Today more than 60 services have been revamped, and Intermountain is recognized as a national leader in quality improvement and cost management. None of it would have been possible without its IT systems.
The authors of this article state that the focus of Intermountain Healthcare on the redesign of clinical workflows to reduce costs and increase quality required two information systems -- the EHR plus "a separate information technology system that detailed the costs of activities." In other words, the health system's EHR was not sufficient to retrieve and analyze the detailed costs of services. In a blog note of February, 2007 (and frequently since then in other notes), I emphasize that our EMRs/EHRs have been designed primarily to generate patent bills (see: Physician Concludes that EMRs Don't Help Patients). Below is a quote from this note:
I think that every physician needs to keep in mind that the primary goal of the paper medical record, and more recently the EMR, is to generate a patient bill that can be defended when challenged by payers. And challenge they will. A new software industry has arisen called "denial management" to support provider payment claims. Most physicians do not view the EMR in this light but they are also not the ones pushing for the deployment of these systems nor are they the ones paying for it. It's the C-level hospital executives.
Let me pose a relatively simple question at this point. Would executives in any industry other than healthcare be willing to spend hundreds of millions of dollars on mission critical information systems that could not provide them with detailed information about the costs of their services to customers? The reason that hospital executives tolerate this gap is that the "retail" prices for hospital services have little relationship to their actual cost, an idea that I raised in a post in December, 2008 (see: Why the Prices Charged by Hospital for Inpatient Care Are Irrelevant).
I am optimistic that increasing numbers of hospitals executives will come to the realization that value-based care will require analysis of clinical workflows similar to those that were launched by Intermountain Healthcare quality teams. This new perspective will require the normalization of the databases of hospital information systems and new types of analytics software. However, I believe that healthcare will ultimately benefit from being managed like other business sectors.