Can Electronic Medical Record Systems Transform Health Care?

Potential Health Benefits, Savings and Costs

Melissa BoufaidaRobert Boyd

Overview• Background• Study Data and Methods• Comparison to Other Industries• Potential Savings• Safety and Health Benefits• Costs of Implementation• Barriers• Conclusion

Background

•Healthcare is the largest, most inefficient information enterprise.

•Consumers lack information to make informed decisions about their healthcare

•Only 15%-20% of U.S. physicians have EHR’s.

•Only 20%-25% of U.S. hospitals have EHR’s.

Study Data and Methods•2003 RAND Health IT project team study:

•Understanding the roles and importance of EMR’s

•Finding government actions that would maximize benefits from

EMR’s

•Estimation of current HIT adoption and related factors

•Data source: HIMSS

•Estimation of potential HIT efficiency savings

•Data source: peer-reviewed literature

•Estimating costs of adoption

•Based on information supplied directly from hospitals and publicly

available databases.

Study Data and Methods•Estimating potential safety benefits

• Hospital data obtained from MEPS, AHA, and HCUP databases.

• Ambulatory data obtained from NAMCS database.

• These databases were used to construct a model to calculate potential

health costs avoided due to increased safety.

•Estimating other potential health benefits

•Included disease prevention and chronic disease management.

Lessons from Other Industries•Retail, telecommunications and security trading

•These industries invested heavily in IT in 1990’s.

•Observed 6-8 % annual productivity growth, of which 25-33% can be attributed to IT

•In Health Care this would translate into savings of $346-$813 billion annually.

Potential Efficiency Savings•At 90% adoption, HIT efficiency savings for both inpatient and outpatient care

would be $77billion per year.

•Savings will be seen when widespread adoption by providers occurs.

•In the long run, savings should accrue to payers

•$23 billion per year to Medicare

•$31 billion per year to private payers.

•Providers have limited incentives.

Potential Safety Benefits•Studies mainly focused on alerts, reminders, and other components of CPOE.

•Reducing adverse drug events in inpatient settings

•Eliminate 200,000 adverse drug events and $1billion.

•Many cases involving senior citizens

•Reducing adverse drug events in ambulatory settings

•Four million preventable outpatient events occur each year.

•Could save $3.5 billion

•Around 37% of savings and error avoidance could come from single provider

practices.

Potential Health Benefits•Using HIT for short-term preventive care.

•Evidence-based recommendations for preventive services.•Reminding providers to offer services.•Reminders to patients.

•Using HIT for near-term chronic disease management•Predictive-modeling algorithms used to identify patients in need of services.•Condition-specific encounter templates in an EMR system.•Registries that allow physicians to compare performance.•Low-cost messaging to remind patients of necessary screens and tests.•Communication between multiple specialists•Remote monitoring systems

Potential Health Benefits•Using HIT for long-term chronic disease prevention and management

•EMR’s could greatly decrease the incidence of chronic conditions and their complications.

•Cardiovascular Diseases•Diabetes•COPD•Cancers associated with smoking

•Combinations of lifestyle changes and medications will reduce the incidence of these conditions.

•Potential of Interventions•Only 50% of patients comply with medical regimens•Only 10% of patients comply with lifestyle recommendations•EMR’s could significantly increase these figures.

•Samuel Want and Collegues Model of estimating cost and ROI •$28 billion per year for 10 years•$ 16 billion a year after 10 years

•Net Savings of $21.6- 77.8 Billion per year

•If 90% of Hospitals adopt EMR it will be $ 98 billion

•If 90% of Physicans adopt EMR it will cost $ 17.2 billion

Cost to Implement EMR systems

•Acquisition and Costs

•Slow and uncertain financial payoffs

•Disruptive effects on practices

•Providers absorb most of costs of EMR, but consumers and

payers are more likely ones to get the benefits

Barriers to Relating Health Benefits and Savings

•Government and Other payers have important Stake in

making the transition from paper records to EMR

•Time to act is now

Conclusion