Medical Records, next tech goldmine

According to a recent CNNMoney.com article, the next technical goldmine is medical records.

There are an estimated 300 to 400 companies in the United States peddling electronic medical records (EMR) systems to the nation's hospitals, medical clinics and solo practitioners. While some, such as GE Healthcare and NextGen Healthcare Information Systems, are part of corporate behemoths, the vast majority are small, privately held firms like eClinicalWorks.

While large firms such as Allscripts-Misys Healthcare Solutions Inc. and NextGen Healthcare remain huge presences, industry observers say that the electronic medical records field is as open to smaller challengers as it has ever been.

One big factor working in the small companies' favor: The majority of doctors' offices that have yet to adopt electronic records are small businesses themselves. While more than half of medical practices employing 50 or more doctors are using EMR systems, less than 10% of practices made up of three physicians or fewer can say the same, according to a study published in the New England Journal of Medicine in 2008.

To read the full article, click here.

Parks Associates predicts expanded adoption for Personal Health Records due to $19 billion government incentive

The U.S. government’s recent EMR (electronic medical records) incentive will trickle down to benefit personal health record (PHR) providers over the next few years, raising awareness among consumers and pushing total number of PHR users over 100 million by 2014, according to Electronic Health Records: Information Center of Connected Care.

This new industry report from international research firm Parks Associates notes that the $19 billion financial incentive from the U.S. federal government designed to promote EMR adoption includes a “meaningful use” requirement. PHR, though not fully spelled out, is implied in one of the requirements.

Parks Associates defines PHRs as software and applications designed to enable consumers to access and store personal health and wellness information for self-care or for sharing with doctors or designated recipients.

Electronic Health Records: Information Center of Connected Care analyzes adoption of EMR and PHR among providers and consumers and offers insights on usage models, government incentives, pilot programs, and technology trends.

Electronic Medical Record Remains the Focal Point of Health IT Reform

Ever since the Obama administration unveiled its healthcare reform initiatives and associated budget plans, electronic medical record has received a substantial amount of attention. This week, a survey result showing that only 9% of the nation’s hospitals have electronic medical records caused quite a stir among pundits, medical professionals and policy makers. Two major sponsors of the study are the federal government and the Robert Wood Johnson Foundation and the survey is based on a sample of nearly 3,000 hospitals. Given the size of the sample and the reputation of the two sponsors, the results can be considered highly creditable.

Interesting enough, the survey results showed that physicians and hospitals well recognize the benefits of a computerized patient record system, so the low adoption rate must reflect hesitations due to other reasons. One obvious one is cost. Initial capital outlay on an electronic medical record system is quite daunting for budget-slim hospitals these days, but ongoing maintenance and support expense is another cost item that is sometimes overlooked. More importantly, the study maybe for the first time showed hospitals and physicians’ concern that many of the benefits of the EMR system may not accrue to the hospital that makes the investment. “If hospitals become more efficient, they could potentially even lose money in terms of lower reimbursement [from] insurance companies. This makes the business case for HIT far more difficult,” the study inferred.

The last point highlights a “chronic” barrier for healthcare reform efforts. Our healthcare system is so complex and intertwined that a costly reform initiative is less likely to succeed if it touches only one interest group at a time. No one party in our healthcare system is willing to shoulder the entire investment if it knows half the benefits will go to other parties on the sideline. EMR is one prime example, so is the home health monitoring technology and wellness initiatives like Medical Home. I have long argued that government should play a more actively role in involving different parties and provide incentives as well as checks and balances to ensure the reform is on the right track all the time. Obama’s EMR incentive program is a first step. But instead of just Medicare giving incentives to hospitals and physicians, why not calling on private insurers to join the initiative? Of course, private insurers don’t have to spend as much as or provide the same form of incentive as the government will. The way they participate can be more creative—for instance, incentives can be tax deductible. My message is that any healthcare reform needs to align well all parties’ gives and takes in order to succeed. EMR adoption is no exception.

By the way, I think fixing our healthcare system is as difficult as fixing our current financial system. Listen to what Treasury Secretary Geithner said earlier this week about his plan—calling on private investors to join hands with the government to buy toxic assets. Is this a model or something that healthcare policy makers should consider?

Obama’s Commitment to Electronic Medical Records (EMR) is Ambitious

Last week, President-elect Barack Obama openly pledged to computerize the nation’s medical records in five years. The promise is ambitious, as I remembered talks about computerized medical records dated as far back as in 1999. Will Obama accomplish this goal?

The first barrier is himself and his administration. I am impressed with his resolve and courage to take on this issue in his first year. But the reality is that the economic recovery is the national priority and if he has too broad an agenda in the first year, he might lose the focus and underachieve on the main goal. This could negatively impact his support from the grassroots up to the Congress, making his future tasks difficult to accomplish. Will this consequence shake his confidence and commitment levels? It remains to be seen.

The second challenge is clearly on the financial side. EMR is not simply a database but the brain of a modernized healthcare system. It reminds me of the SAP-type of ERP systems adopted by America’s largest multinational corporations (try asking any ERP adopters of their experience and see what they say privately). Since its functions touch every aspect of a healthcare system, it does not come cheap given the fact that it will be implemented at the national level. Industry pundits estimate that the cost of computerizing medical record systems can be anywhere between $70 billion to $100 billion. Will federal government have that amount of money in the first place given all the budget deficits and a traumatized economy? Even if it does, how to ensure that this money will be appropriated correctly and not siphoned off for other purposes? We all know that government accountability standard is quite weak. Even with the appointment of the Chief Performance Officer in the Obama administration, many doubt the effectiveness of such a position. Finally, the actual cost can be much higher, which can be caused by the third barrier—implementation.

The healthcare industry is considered one of the most challenging environments for healthcare IT implementation. Not only is it big, but it is complex and extremely fragmented. The first ten years of Internet did not help much, only exacerbating the situation by adding non-standard based, proprietary IT systems on top of the legacy ones that the healthcare facilities inherited from the 70’s and 80’s. The most daunting task is to make each system talk to one another in the same language. Using a more official term, it is called interoperability or more accurately, the lack of it. Do not underestimate the challenge here. The Bush administration created the Office of the National Coordinator of Health Information Technology in his first term (May 2004). After five years, the interoperability standards are still in debate and only a few are adopted in a piecemeal fashion.

I cited these barriers in a bid to lower people’s rosy expectation on Obama’s plan. We need to have a sober recognition of the challenges and advise the incoming administration of the lessons we learned over the last eight years. The five-year plan is good for rallying the industry, but when it comes to the time to roll up your sleeves, a more pragmatic approach should be adopted. President Obama: I would like to see your implementation timetable and approach first before I can agree with your ambition.