The Failure of Healthcare IT

You can track a package down to the hour online. You can order a pizza online. You probably manage your finances online as well. You can even pay your taxes online! Why can’t you do almost anything with regard to your healthcare online? Why has the IT revolution failed so miserably in the health care industry?

A 2008 nationwide survey found that only 4% of physicians used a fully functional electronic medical records system (EMR). Health care information is certainly complex, but not any more so than information in many other industries. Integrating medical systems and ensuring seamless transfer of patients’ medical information would yield huge benefits, including fewer medical errors, few repeated tests, and less time spent filling forms. The security of modern IT systems has been tested by hackers again and again, but if it’s safe enough for trillions of dollars of financial transactions, it’s safe enough for medical records as well. So why haven’t EMR and health care IT progressed further?

IT Advance Who Benefits? Who Pays?
Electronic Medical Records Patients Doctors and Hospitals pay for installation, and could lose some revenue due to loss of additional tests, checkups, etc
Medical Record Portability Patients Doctors pay to upgrade systems, could lose revenue as above
Billing System Integration Doctors and Insurers Doctors and Insurers
Online Appointment Scheduling, Email Patients Doctors pay for website and systems, lose time spent on email if not reimbursed

Looking at the table above, it becomes obvious why America’s health care system practically guarantees IT will fail! In almost every case, information technology will cost health care providers money, while primarily benefiting patients (and perhaps payers). Why would any sane business invest in an IT system that has low or negative ROI? If health care were a truly free market, then in some areas IT might flourish, as patients demand conveniences like online appointments and control of their medical records. If US health care were dominated by a single payer, that system would enforce health care IT compliance and integration. But the bizarre no-man’s land of American health care reimbursement makes it difficult to advance IT beyond billing integration between providers and payers.

Can this situation be improved? The Obama administration has decided to get involved by offering carrots initially, followed by sticks later. Time will tell if this approach is sufficient to bring health care into the 21st century.

8 thoughts on “The Failure of Healthcare IT

  1. It’s a really very useful and also very informative blog for me. Thanks a lot for sharing the blog and also the useful information’s. Appreciate this article to help us read between the lines to get to the truth.

  2. I would be interested in others perspective on where and how health IT will result in significant cost savings to the system. For example, the public has been told over and over that health IT will eliminate a duplicate testing and save a great deal of money. The question is how much money? 1 billion, 20 billion, etc? and finally is there really any evidence for these figures. The reason I throw this out, is that I’ve been providing care primarily to the elderly and more so to those with complex and multiple problems. For example elderly diabetics who have widespread plaquing in their arteries, many of whom have had bypasses/stents, strokes, advanced kidney disease, and significant nerve damage to their lower legs and feet, etc. These patients may also be seeing specific subspecialists such as cardiologists, nephrologists, neurologists, intermittently or regularly. The overwhelming percentage of duplication I’ve seen following these patients for years is laboratory testing, followed distantly by duplication of basic bone X-Rays.
    CT scans/MRI scans/colonoscopies etc won’t be duplicated unless there is documented problem with original. The physician who orders the testing is responbile for balancing the risks of a procedure with the benefit. If the same test has recently been done and results can be obtained within a time frame that won’t subject the patient to risk related to delayed diagnosis or
    treatment, there would no benefit gained from repeating the test, and therefore you would not be meeting your duty to the patient if you subjected them to another test. Further, virtually any expensive test has to be approved by private or group health plans. Medicare of course, has no pre-approval, but as a physician, I am subject to Medicare’s fraud and abuse guidelines… there are potential criminal penalties. I’m not saying there aren’t unscrupulous physicians, but even those that aren’t guided by their duty to the patients, are generally constrained by factors such as those mentioned. If the dollar amounts are that substantial, why hasn’t Medicare
    been willing to shoulder the expense of a pre approval for tests that cost more than say $200. As long winded as this has become, I’ll wait and see if there is any interest in pursuit, before posing questions/observations as to other ways health IT might or might not save money.

    1. Richard, let me refer to the link in my original post on this:

      Exhibit 2, on page 6 of the pdf, lists the potential savings according to the authors of the study (RAND Corporation).

      “Exhibit 2 shows the most important sources of the savings we estimated: The largest come from reducing hospital lengths-of-stay, nurses’ administrative time, drug usage in hospitals, and drug and radiology usage in the outpatient setting.” – from the RAND study

      A number of doctors that I know have also echoed the sentiment that they do have labs/tests redone simply because that’s easier than getting hold of tests done elsewhere/previously.

      But insofar as hard savings estimates go, the RAND study above seems to make a good case. Most interestingly, they compare IT productivity gains measured in other industries, and then look at what could happen if that were to occur in health care. They calculate up to $374 Billion in savings as of 2005 – that number would have grown with health care inflation to almost $500B by now.

  3. This is a great topic. I am have been a software developer and IT manager for the last 10 years in the manufacturing, retail, and insurance of health care.

    The above table makes one assumption not founded on reality. Patients absorb most of these costs. For instance, at the a set of clinics in MN, continuing patients or their insurance companies absorbed the costs for medical record transfer, up to $90/patient not doctors. Often there are administrative fees made by the IT departments or outsourced companies to cover the costs or moving to an electronic world tagged onto the bill and paid by patients (insurance), not doctors.

    Dental, vision, MRI have been successfully capitalized — true transparent prices (unlike the rest of medicine) and have been willing to front the costs for the long term payoff. But the rest of the system . . . and I totally agree with the statement about reimbursement being a no-man’s land … sees upgrading to systems as unfair, too costly, etc. I wonder how they felt about placing the first yellow page ads.

    Point: conversion to an electronic system is non-trivial. It’s not cheap, and it will not pay off in the short term. But the costs are getting cheaper, and methods to do it are getting better.

  4. Although the crawl-before-walk approach is not one generally favored by
    politicians, there are three relatively “simple” functions a health IT system
    that would realize 98% of the clinical value (as opposed to reimbursement
    monitorring). First, work out electronic prescribing. Once you have all the
    interface and security problems resolved, then have all laboratory results
    fed to the same database. Finally add X-Ray and procedure reports.
    These all can be placed into standard formats.

    If I’m seeing a new patient and I have access to these I truly have 98% of what I need that can’t be supplied from speaking with the patient.

    If the government did invest in and maintain this type of database, it could also provide access to both patients and physicians. Perhaps I’m underestimating the cost of this type of system, but it would seem likely to
    be a fraction of what they are proposing to spend.

  5. Richard, thanks for your comment. I agree – part of the reason that IT hasn’t been more successful in health care is the lack of standards and integration. The HL7 standard is a failure in the sense that so few EMR providers implement it properly or fully in their systems, and they generally don’t provide interfaces to communicate with outside systems.

    I like your point on having a familiar user interface or format so that electronic records can be easily reused by other physicians. This is a point that I haven’t heard often, but you’re right – it’s not enough for records to contain the right information, or even consistent information. Records have to be displayed in a standardized way so that physicians can learn it once and then benefit thereafter, and not spend time sifting through endless pages.

    These requirements make it even more likely that the government will have to mandate a standard. It’s ok if the standard isn’t the best – in this case sharing the information is more important than having the best system. It’s kind of like the Microsoft Windows/Office monopoly – not the best software, but the benefits of info sharing and reusable human capital are huge.

  6. As a practicing primary care physician for the past 27 years, I have a decent perspective on what computerization has to offer patients and the medical profession. Let’s say you are a patient with only one disorder like diabetes, and you’ve been very conscientious about have lab work drawn etc for the past ten years. Then let’s say you’re doctor had an electronic medical record in place during that time and you even had you’re own records on a CD with viewer. It would take HOURS to sort through. So how much per hour is that physician’s time worth? Let’s say we pay that physician who has overhead costs of $125-$150 (which is not excessive) $250 per hour in line with a cheap lawyer. So can we afford $500 dollars to review a very basic medical record anytime a new physician is involved. Hardly. The problem with exisitng Health IT, is that the records being generated attempt to show every single bit of information gathered, or effort expended, to justify insurer review on payment issues. One emergency room in this area generates around a 25 page record for an emergency room visit. I’m sure the insurers and governement love it, but its a major ordeal to even figure out what happened. Unless health IT evovles to a common platform, so that when a doctor is looking at records, they are familiar with the layout and storage system, and until it offers event summaries, lab result trending etc. it is a burden rather than a blessing. It’s not that this couldn’t be done… its just that it hasn’t been, and its a bit like the tower of Babel. A hundred or more proprietary systems that take a very long time to learn, and then have no ability to to be read (without expensive conversion) by other systems. Does this sound like a good investement?

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