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Electronic Medicine Could Save Money; But Doctors and Hospitals Would Get Fewer of the Profits, Study Cautions

Posted on: Sunday, 18 September 2005, 18:00 CDT

WASHINGTON -- Electronic medical records could improve patient care and possibly save billions of dollars, yet many doctors aren't investing in the technology because they may not reap the savings -- insurers and the government will, researchers report.

It's one of several pitfalls blamed for slowing adoption of computerized medicine in a collection of provocative, sometimes conflicting studies published Wednesday in the journal Health Affairs.

No more than a quarter of U.S. hospitals and 20 percent of physician offices have adopted electronic medical records, the RAND Corp. found. Usually, they're hospital- or doctor-specific, not easily transferred and read by other health care providers.

The ultimate goal of electronic medical records is a nationwide network, allowing quick access to, say, the medical history of a patient lying unconscious in an emergency room far from home. Other benefits could include paperless prescriptions to cut drug errors and software linking patient records to care guidelines and automatic checkup reminders.

RAND researchers set up a statistical model to predict the possible savings from such health care improvements and from improved business efficiency, such as eliminating redundant care and shortening hospital stays, if 90 percent of hospitals and doctors ultimately adopted such a network.

A conservative estimate came to $81 billion a year, $77 billion from improved efficiency and $4 billion from reduced medication errors and side effects, RAND lead researcher Richard Hillestad said.

Assume that patients and doctors actually follow checkup reminders and other software-spurred advice -- an unknown, Hillestad acknowledged -- and his model predicts savings could double.

Replacing paper records with such a connected electronic network would take about 15 years and cost hospitals about $98 billion and physicians about $17 billion, Hillestad estimated.

"The potential savings would not be realized immediately," and doctors and hospitals making the investments would get fewer of the profits, the study cautioned.

Instead, Medicare would receive about $23 billion of the potential savings each year, and private insurers about $31 billion a year, he concluded, saying those predictions justify more government funding of computerized medicine.

But another study from the University of California, San Francisco, found the technology not as expensive. Among 14 single or small-group physician practices, the average spent about $44,000 per full-time provider to establish an electronic medical records system and about $8,500 a year to maintain it, money recouped in business savings within 2 1/2 years.

Those were averages; some practices didn't recoup the investments for years. And the quality of the computerized systems varied, as two reported severe billing problems -- one nearly went bankrupt -- at least partly due to the system they adopted, the study found.

Most of the hoped-for improvements from electronic medical records are still hypothetical, cautioned Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School.

RAND's models in particular are based on "a disturbing array of unproven assumptions, wishful thinking," they wrote in a review of the research.

Moreover, nobody yet knows what computer features doctors should buy. A third study published Wednesday, from Boston's Brigham and Women's Hospital, said that in addition to record storage, systems should include electronic viewing of test results, paperless prescriptions, electronic claims submissions and secure patient e- mail.

But such systems will be useless unless the records can be shared between doctors and hospitals.

Source: Columbian

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