Electronic records turn out to potentially add costs rather than reduce them

posted at 1:21 pm on January 11, 2013 by Ed Morrissey

Remember how the White House and Democrats promised that ObamaCare would “bend the cost curve downward”?  One key initiative involved spending billions to convert medical records into digital form, which supposedly would reduce costs by as much as $81 billion a year. Instead, the same group that insisted that would happen now says it might make costs rise — in part by allowing providers to bill patients and insurers more:

The report predicted that widespread use of electronic records could save the United States health care system at least $81 billion a year, a figure RAND now says was overstated. The study was widely praised within the technology industry and helped persuade Congress and the Obama administration to authorize billions of dollars in federal stimulus money in 2009 to help hospitals and doctors pay for the installation of electronic records systems.

“RAND got a lot of attention and a lot of buzz with the original analysis,” said Dr. Kellermann, who was not involved in the 2005 study. “The industry quickly embraced it.”

But evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services. …

Officials at RAND said their new analysis did not try to put a dollar figure on how much electronic record-keeping had helped or hurt efforts to reduce costs. But the firm’s acknowledgment that its earlier analysis was overly optimistic adds to a chorus of concern about the cost of the new systems and the haste with which they have been adopted.

Legislate in haste, repent at leisure.  How exactly did this influential report come to be?  Three guesses:

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.

In fact, the CBO “harshly criticized” the analysis at the time, the New York Times notes far into the article.  RAND’s new analysis gets its funding from disinterested sources, and is being conducted in part because RAND’s board wanted to revisit the industry-funded results from 2005.

It’s a little late for that now. Congress has passed billions of dollars in subsidies to this supposed cost-saver, without ever asking the pertinent question: if electronic records save so much money, why didn’t providers adopt it on their own?  Why didn’t insurers insist on it? Those stakeholders have the most immediate incentive to save costs.  There may be other benefits to having electronic records, but clearly cost savings isn’t among them, and the lack of a rush to adopt the practice should have been the first big clue to Congress that ObamaCare wasn’t going to deliver what Barack Obama promised.

Now that the money has been allocated, of course, we get the full Emily Litella.  Too bad there wasn’t as much scrutiny on these promises from the media — and where and how they originated — at the time.


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Good Lt on January 11, 2013 at 1:23 PM

Well I’m shocked…NOT. Wait until we see what EMRs do for medical confidentiality and eventually treatment and insurance costs. Ain’t seen nothing yet!

indypat on January 11, 2013 at 1:29 PM

Also, good luck getting a doctor to look at and engage you when they are sitting there reading and typing on a computer during your entire visit.

besser tot als rot on January 11, 2013 at 1:29 PM

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices.

Yeah, and studies showing cost effectiveness of green energy are paid for by windmill makers.

I see a pattern, here.

DaveDief on January 11, 2013 at 1:31 PM

As all things in Obamacare … it’s not about care nor cutting costs … it’s all about power and control. The electronic records on all patients is to get them into the system so the healthcare panel can easily decide who is allowed to have medical treatment and who only qualifies for colored pills. Although, now Bloomberg wants the power to decide how many colored pills.

Hobbes on January 11, 2013 at 1:32 PM

Yeah, and studies showing cost effectiveness of green energy are paid for by windmill makers.

I see a pattern, here.

DaveDief

*But you see, Capitalism and the ‘free market’ has failed us!!!eleventy!!!&*(&&

The GOP and the Right in general lost the battle when they didn’t fight this idea that we have a free market. We’ve had a mixed economy for decades.

chimney sweep on January 11, 2013 at 1:38 PM

Also, good luck getting a doctor to look at and engage you when they are sitting there reading and typing on a computer during your entire visit.

besser tot als rot on January 11, 2013 at 1:29 PM

Exactly. And, how about the fact that some doctors need to gain or refresh typing skills! I wonder how many typos they make and who is going to proofread and correct them? The time they could spend reviewing patients health problems are now being spent taking typing classes. And, how about the surgeons who now have carpal tunnel syndrome from all the typing they need to do. What surgeries might be botched because the doctor no longer has his skilled touch? Ah, the world of unforeseen consequences.

Hobbes on January 11, 2013 at 1:40 PM

Electronic records also prevent you from getting a true second opinion. The subsequent doctor will simply look at what the last doctor did or recommended and be influenced by that, possibly even subconsciously, instead of looking clinically at the patient.

HopeHeFails on January 11, 2013 at 1:42 PM

Yeah, this one’s not hard to follow. It gave the Obama administration the chance to appear tech-savvy and futuristic, and the chance to spend more on stimulus while appearing very concerned about people’s healthcare prior to pushing Obamacare. Plus, of course, it gave them the chance to funnel millions towards well-connected and friendly corporations that of course funnel millions towards their re-election campaigns.

Whether it actually worked as advertised is not really the important consideration here.

One thing about Washington has never changed throughout Republican and Democratic administrations: Corruption is always bipartisan. As long as both sides get their money, they can come to agreement.

tom on January 11, 2013 at 1:42 PM

I work for a company that sells the technology needed for these records. Lottts of compliance stuff from the federal government. Will definitely not save money for the “health care industry”, but hey, it’s putting $$ in my pocket :)

Timin203 on January 11, 2013 at 1:43 PM

As I said above, my partner and I will retire before shelling out the over 20 thousand dollars to replace our computers with new computers. Imagine running a business and being offered a product for 5 thousand and hearing “oh you’re a doctor office? We meant 25 thousand.” And then the cretins “warn” about what’s “going to be required by the government, you know…”

BS.

Marcus on January 11, 2013 at 1:43 PM

Unlike paper records electronic ones need extensive training on the software package to use… for doctors and staff. Plus all the electronics. Plus the O&M of the stuff which has to be shouldered by someone… probably those getting the equipment… which means the doctors.

All of this overhead cost, the cost of intermediaries, the cost of ‘required’ parts of plans that then do not apply to large segments of the population, the cost of adding more people to the overburdened system, and on and on and on…

Now what happens when the system needs an upgrade? Yup, sooner or later new hardware, new software and new training will have to be performed. All to make things ‘more efficient’.

Filing paper is easy to train for, you only need to train for it ONCE and it is faster to scribble a note than it is to hunt’n'peck on a keyboard or tap with a stylus. Good luck on handwriting software for doctors! You think you have interpretation problems NOW? Just imagine the fun a spellchecker will have with an overworked doctor and staff!

It isn’t about efficiency, but the power to force people to do things the way the government says YOU MUST DO THEM.

Things are far more efficient without subsidies, without ‘helping’ people find ‘affordable care’, and by letting the system alone without price supports or added government controls. Yeah, I would bet that independent labs paid for by users to test drugs to stringent standards of underwriters is better than the FDA… since underwriters have skin in the game and will set extremely stringent standards before they let something go out the door with their seal of approval. Want a better medical system? The entire system, soup to nuts, that is? Get government out of it and force the entire system to undergo the true liability of care and to let doctors, companies and patients find the best way to pay for things without the damn ‘help’. Once the overhead cost for insurers, government regulations and the rest goes away, the time that will be freed up will be huge and that time is money… money now wasted to meet the rigmarole of all this junk… productive time that could be spent doing other things like actually finding out about patients and not treating them as numbers.

ajacksonian on January 11, 2013 at 1:46 PM

The electronic records on all patients is to get them into the system so the healthcare panel can easily decide who is allowed to have medical treatment and who only qualifies for colored pills. Although, now Bloomberg wants the power to decide how many colored pills.

Hobbes on January 11, 2013 at 1:32 PM

No, it’s to allow the government easier access to your personal information. They have the ability to come up with a fairly complete profile based on your online behavior (since they have all of your emails and texts etc etc), but medical records will be very insightful. People admit all kinds of things to doctors they otherwise wouldn’t. Oh, and anyone remember laughing at the fact that doctors will now ask if you have a gun in your house during your yearly “free” checkup?

Better then registration!

Timin203 on January 11, 2013 at 1:46 PM

As I said above, my partner and I will retire before shelling out the over 20 thousand dollars to replace our computers with new computers. Imagine running a business and being offered a product for 5 thousand and hearing “oh you’re a doctor office? We meant 25 thousand.” And then the cretins “warn” about what’s “going to be required by the government, you know…”

BS.

Marcus on January 11, 2013 at 1:43 PM

Whoa, whoa whoa… I AM one of those cretin sales people making a killing off o’care. Careful :-D.

Timin203 on January 11, 2013 at 1:48 PM

Dear liberals-

Would you like your “I told you so” one at a time or all at once?

Chuck Schick on January 11, 2013 at 1:48 PM

This is a No SH*# Sherlock!
As a family doc in a small practice, electronic medical records are a financial black hole. Electronic records ate our retirement plan. Computers don’t last forever. Neither do servers and they are not cheap. The software in 2006, for 2 physicians cost around $70,000. Throw in required updates and ongoing support – it never ends.
But it does help achieve one of Obama’s goals – driving docs out of small private practices. There is no doubt that Obamacare hopes to drive us all to be employees instead of employers. The cost of Electronic Med records makes that day approach ever faster.

humdinger on January 11, 2013 at 1:48 PM

But you’ve missed the point, Mr. Morrisey.

Judith Falkner, Obama supporter extraordinaire, owner of EPIC, the medical records software provider, is making billions.

M240H on January 11, 2013 at 1:50 PM

The “Legislate in haste, repent at leisure” meme is ALL WRONG.

The tech industry is a major source of donations and a PR behemoth. They get the pork they want and pass the costs on to the rest of us. That is how the system works and has always worked (e.g., Erie Canal). It’s called “coalition building.” The AMA played the same game on behalf of the docs.

Bonus: in addition to complete internet records for everyone (compliments of the post 9-11 power grab), the government will now have complete medical records for everyone. So there’s “something for everyone”! Cheers.

kunegetikos on January 11, 2013 at 1:50 PM

/

… missed that sarc tag

M240H on January 11, 2013 at 1:51 PM

P.S. The Americans are convinced that they are “green” exactly when they run computers and phones and pads, etc., burning coal and gas 24/7 and go through batteries like popcorn versus renewable paper. That is how prone they are to believe whatever they “want” or, rather, what a psychological power the tech industry is. Obamacare is an annuity for the industry.

kunegetikos on January 11, 2013 at 1:59 PM

Oh, and anyone remember laughing at the fact that doctors will now ask if you have a gun in your house during your yearly “free” checkup?

Better then registration!

Timin203 on January 11, 2013 at 1:46 PM

If you are a male the proper answer to that is:

chemman on January 11, 2013 at 2:02 PM

The cost savings may well be overstated, but it still seems essential to have electronic medical records. Medical professionals should be able to quickly sort, search, and view data on patients’ diagnoses, treatments, and prescriptions, and I don’t see how you do that with paper-based systems.

bobs1196 on January 11, 2013 at 2:02 PM

If you want to “bend the cost curve,” double the number of medical schools. Not hard to understand. Not to say, politically possible.

kunegetikos on January 11, 2013 at 2:03 PM

That fact that electronic records cost more has been known since shortly after the computer became popular.

Ken James on January 11, 2013 at 2:07 PM

Hey, it may be more expensive, but at least it’ll be easier to violate everyone’s confidentiality en masse now.

forest on January 11, 2013 at 2:08 PM

The cost savings may well be overstated, but it still seems essential to have electronic medical records. Medical professionals should be able to quickly sort, search, and view data on patients’ diagnoses, treatments, and prescriptions, and I don’t see how you do that with paper-based systems.

bobs1196 on January 11, 2013 at 2:02 PM

Sure, and if your primary care doc wants to go electronic, fine. But to mandate it is absurd and, frankly, I feel much more comfortable will my file in paper form in a locked filing cabinet in my doctors office then swirling around on “cloud” servers that anyone (including government) has access to.

And I’m excited for when an ER nurse gets a new boyfriend, pulls his medical file from his doctor, and finds out he was treated for gonorrhea before they met.

But yeah, no one cares about privacy anymore, I know I’m just being old fashioned.

Timin203 on January 11, 2013 at 2:10 PM

And I’m excited for when an ER nurse gets a new boyfriend, pulls his medical file from his doctor, and finds out he was treated for gonorrhea before they met.

But yeah, no one cares about privacy anymore, I know I’m just being old fashioned.

Of course they care about patient privacy. Just look at this story:

[Henderson] had been filming from about 30 feet away, he said. Henderson said deputies gave him no warning before Muellner took his camera.

The deputy wrote on the citation, “While handling a medical/check the welfare (call), (Henderson) was filming it. Data privacy HIPAA violation. Refused to identify self. Had to stop dealing with sit(uation) to deal w/Henderson.”

Socratease on January 11, 2013 at 2:16 PM

ROFL….. Just like how seat belts was going to reduce our insurance costs. It didn’t happen and more of our freedoms are gone. when will people understand what is going on. Those that want to control you and lord over you will always tell you its in your best interest to turn over your freedom, your privacy, your money to them. Its only the fools that takes that bargin.

electronic medical records gives the government all your information at the drop of a hat. Now watch how the fully function Obamacare deathstar uses that electronic records over the coming decades to decide via death panels who lives and who dies. Freaking idiots.

Hey lets turn over our income information to the government they would never use class warfare with that information…..ROfl.

Hey let’s give up our guns. the government will protect us. ROFL.

unseen on January 11, 2013 at 2:17 PM

Recently, my wife had to be treated for an unknown severe pain. I actually appreciated the fact that she went to the ER, got prescriptions electronically sent to the pharmacy in another town that were ready when we picked them up, and then the specialist had all the records the next day. Maybe I am being naive, but I actually saw a benefit from this. I know my insurance is paying for it, and yes my costs will go up. But for a little convenience for a service I pay for, I like it. In her case, the specialist was able to quickly see her real problem, fix her medicine, and now she is fine. It saved us money in wrong prescriptions, and saved her pain from wrong diagnosis.
While that is a glowing anecdotal review of electronics records, I am STILL opposed to having the government mandate a system like that, even though we benefited directly. And I am opposed because I know our government will find a way to ruin a system that has potential to really help patients.

balishak on January 11, 2013 at 2:17 PM

My family practitioner still happily charges $30 for sending any documents to another doctor, casually shrugging off charge limit set by federal HIPAA. So much for “electronic transfer”, a.k.a. email.

Archivarix on January 11, 2013 at 2:20 PM

If anything Obama has brought more economic freedom.
 
lester on January 10, 2013 at 4:49 PM

rogerb on January 11, 2013 at 2:20 PM

Seems to me that health care is like cell phone plans. Some people want unlimited data, some people want friends and family, and some people want to stick a calling card or a few quarters into a phone in case of an emergency. Markets choose what they need, and suppliers organize themselves to provide it, resulting in a low-cost system with lots of services and technology that is continually advancing.

Once the federal government got into health care, first by making health insurance (but not doctor bills) tax-free and then by adding regulation on top of regulation, culminating in the one-size-fits-all Obamacare, everything went to hell. Prices went up, service went down, innovation stalled, and everybody looses except the politicians and the lawyers (but I repeat myself). They’ve pretty much done the same thing with education and everything else they’ve “helped”.

Socratease on January 11, 2013 at 2:23 PM

An electronic medical record system really does make health care more efficient. What is happening is that this increased efficiency is NOT used to lower the cost of healthcare. It is used to offset the increasing costs of government compliance and mandates.

Resolute on January 11, 2013 at 2:23 PM

BTW, lester, credit where it’s due, and you nailed this one:
 

have actually added to costs by making it easier to bill more for some services. …

 
Completely in the wrong way, but “making it easier to bill more” is, technically, making that greedy corporation more free.
 
Who would’ve thought you were on their side?
 
(Nicely done, btw.)

rogerb on January 11, 2013 at 2:27 PM

Actually – there are ample examples of how this can save – starting with stoppping poor drug interactions and duplicate testing.

Now – if providers can find ways to add services more easily – perhaps that should make you receonsider the villian in all of this – besides the govt of course – who is driving costs – your local hospital. Expensive medicine is good medicine for them.

Zomcon JEM on January 11, 2013 at 2:40 PM

a woman not far from here built a $1.2 billion business around the idea…her business “compound” sounds like the ultimate dream of the far left (and she pours a ton of $$$ into far left organizations).

I’m sure all that is merely coincidence and she is the only one that has profited from it. To take gov’t $$$ and then spin it around to give it back to where it came from would reek of RICO.

teejk on January 11, 2013 at 3:00 PM

forest on January 11, 2013 at 2:08 PM

Wait for it….the first invasion of privacy scandal will take place within two years.

There were never private detectives in DC or NY who could get your armed services records, social security digests even tax returns in some cases.

I just had women in my life swear they used such sources.

Liars.

IlikedAUH2O on January 11, 2013 at 3:00 PM

Let’s see….decisions made by the people who didn’t get the best grades in school and the best grades on standardized testing and get into medical school about how to run healthcare. Yeah, that’s the ticket. Geniuses, I tell ya. Noone could have predicted this outcome./double sarc/

txmomof6 on January 11, 2013 at 3:18 PM

RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.

COINCIDENCE! Yeah, that’s it, COINCIDENCE!

GarandFan on January 11, 2013 at 3:24 PM

If they have not hurt you, yet, they will.

Schadenfreude on January 11, 2013 at 3:32 PM

So is it “potentially,” or did they add costs?

Dante on January 11, 2013 at 3:39 PM

Also, good luck getting a doctor to look at and engage you when they are sitting there reading and typing on a computer during your entire visit.

Kaiser went to all electronic records several years ago, and I’ve never had this be a problem–and I see a lot of doctors. It’s great to have everything in one place so any given doc can see what all the others are up to, what procedures/meds I’ve been doing, my PET/MRI/ultrasound/CT scans, labs, patient instructions, etc., all in one place that can be shared with me as well. I like it.

With that said, I surely don’t want the federal government to have any access to my records at all, for all the obvious reasons.

Bob's Kid on January 11, 2013 at 3:59 PM

Also, good luck getting a doctor to look at and engage you when they are sitting there reading and typing on a computer during your entire visit.

besser tot als rot on January 11, 2013 at 1:29 PM

Exactly what I was going to say.

My doctor, who was old school and just retired, used to always look straight at me holding his file. Then, when government mandated electronic records.. he was always looking away from me at the screen. Sometimes with his back to me. He said he hated it. I think that, and ObamaCare, was why he just retired.

JellyToast on January 11, 2013 at 4:02 PM

My doctor, who was old school and just retired, used to always look straight at me holding his file. Then, when government mandated electronic records.. he was always looking away from me at the screen. Sometimes with his back to me. He said he hated it. I think that, and ObamaCare, was why he just retired.

JellyToast on January 11, 2013 at 4:02 PM

The next visit to my family internal dr., he said because of obamacare he was quitting the practice to go clean teeth as a dental hygienist in his brother’s dental office.

He was furious.

tom daschle concerned on January 11, 2013 at 4:41 PM

So is it “potentially,” or did they add costs?

Dante on January 11, 2013 at 3:39 PM

Sweet comeback, dude.

Chuck Schick on January 11, 2013 at 6:16 PM

Re: doctors retiring/leaving their practices.

It’s not a bug, it’s a feature.

I think that having doctors leaving the medical field is part of the long-term goals of Obama. Remember when he said in a speech to some AFL-CIO affiliate that he was a believer in single-payer healthcare but that it would take a while.

I believe that the end-game is to have all the physicians be federal employees, with education paid by the government similar to physicians in the military, and then to apply affirmative action to who is admitted to med school.

But hey that’s just me.

Angineer on January 11, 2013 at 6:24 PM

It’s not a bug, it’s a feature.

I think that having doctors leaving the medical field is part of the long-term goals of Obama.

More control over physicians is the #1 goal. Driving out independent thinkers is icing on the cake.

RightKlik on January 11, 2013 at 9:36 PM

I’m what used to be called a medical transcriptionist but is now called a medical language specialist. We type up doctors’ notes from their dictated voice recordings. Most doctor’s practices have computerized systems these days, where they can pull up patient’s records and view on-screen, with faxes or printed and mailed copies that can be sent to other professionals who need to know. There is no bachelors degree or other required, although you can test and become certified and some companies will pay an MT more for that. But its not something that anyone can just jump into. Extensive knowledge of grammar, anatomy and physiology, medications and dosages, medical terminology, diseases, surgeries and treatments are all necessary skills, along with fast typing.

Many many times I have had to change incorrect medication names and doses (just recently someone there was a big law suit, in Alabama I think, where triple dose of meds killed a woman), names of surgical treatments and even body parts (left instead of right, for example). The doctors have to do their notes quickly and they do make errors. Often. The MT is responsible for catching and flagging those errors.

Sure, EMR is a bit faster than transcription but I feel there’s a great risk for critical errors that will not be caught. I’ve been to the doctor, where most of their attention was on the computer, and not on me. Didn’t like it.

I really think the choice should be up to the doctors. But I guess that won’t make it easy for obamacare.

Before I get off my soapbox, you all should be aware that a lot of MT companies are sending voice recognition patient files over to India because its much cheaper. MTs in the US are bound by HIPAA laws (confidentiality being of utmost concern). I don’t think HIPAA laws can be enforced in India. This shyte needs to be stopped. Its taking jobs away from US workers. Because of competition with foreign workers, I’ve had to take a 30% pay cut. I’m now making just a few bucks more than minimum wage, when I used to make over $25/hour. Sucks to be me. Over and out.

fullogas on January 12, 2013 at 1:24 AM

An electronic medical record system really does make health care more efficient. What is happening is that this increased efficiency is NOT used to lower the cost of healthcare. It is used to offset the increasing costs of government compliance and mandates.

Resolute on January 11, 2013 at 2:23 PM

The entire industry was heading to electronic medical records, so I wouldn’t blame that entirely on the Obama administration. Of course, pushing it in the stimulus package with a raft of federal mandates, standards, and deadlines to achieve an as-yet undefined “meaningful use” standard — the definition wasn’t settled until maybe a year ago — pretty much guaranteed that the EMR systems would be rushed and expensive, and that efficiency costs would be spent on the ever-expanding federal mandates.

So an EMR can be a very good thing. But probably not the way the government mandated them.

There Goes The Neighborhood on January 12, 2013 at 2:08 AM

Okay, so I’m a doctor and with the ObamaCare mandate (and the lure of a 1 year subsidy to do it) we went ahead with an EMR system in August, and it’s now fully implemented. Of course it raises costs. Ordinarily my notes can’t possibly contain as much information as would be needed to qualify for a higher level of reimbursement. It would take to long to dictate that much. But with the EMR, qualifying for the next level of billing code is relatively easy.

But you have to understand the government mindset here. The real goal wasn’t to save money, or to prevent providers from billing the higher codes. The real reason is to make it easier for the government to audit each and every record, to crawl into the details of lives and collect data, and to claw back money from physicians who (they say) are collecting more than they should. Waste, Fraud and Abuse, y’all.

By the way, the amount of actual fraud and abuse in medicine is 2 orders of magnitude less than what the President and his minions at HHS claim.

giacomo on January 12, 2013 at 1:54 PM

By the way, I don’t bring a computer into the room with me. There it’s just me and the patient. I work at a “workstation” away from the exam rooms. And I still dictate my note and a transcriptionist enters it into the EMR. Works better than full EMR, with fewer clicks and fewer potential computer errors undiscovered.

giacomo on January 12, 2013 at 1:59 PM