Digital divide: electronic health records are set to change the technology landscape in health care, but is the industry on target to meet a 2014 deadline?

Key Points

* Take-up of electronic health records has been slow, but momentum is beginning to rise.

* Costs to implement the EHR program are daunting but savings would be significant.

* Health plans will play a central part in furthering widespread adoption of EHRs.

Three years into President Bush's 10-year project to urge all doctors to maintain electronic patient records, the newly appointed national coordinator for health information technology believes the industry remains on target.

Dr. Robert Kolodner said much work remains to be done, and health plans will play a vital role. Previously, Kolodner was chief health informatics officer at the U.S. Department of Veterans Affairs.

A Look Back

In 2004, President Bush called for a national electronic health record system by 2014 to replace what he called a "19th-century paperwork system."

So far, less than one-quarter of U.S. physicians have begun the changeover, and only 9% have computer systems with the features health-care authorities recommend, according to the Progressive Policy Institute report, Building a Health Information Network.

Many experts believe electronic health records--which include a patient's health status and information, test results and nonclinical administrative data--are key to reducing medical errors and improving care quality and value.

It's also estimated that using an electronic medical record system in the United States could save nearly $78 billion a year, according to a report in the journal Health Affairs. The U.S. government is even more optimistic, anticipating annual savings of about $140 billion.

Leading the Charge

One of the initial tasks in Bush's executive order was appointing the first head of the Office of the National Coordinator for Health Information Technology. In 2004, Dr. David Brailer. a former senior fellow at the San Francisco-based Health Technology Center, was named to the post, setting the foundation for the creation of a health IT system.

Two years later, Brailer stepped down and Kolodner served as interim coordinator until his official appointment this past April. Kolodner's mission includes coordinating government agencies and private health-care companies in creating a national health IT infrastructure. He's expected to help develop, maintain and direct the implementation of electronic health records that ensure patient safety and proper care while saving money. He's also responsible for addressing interoperability issues.

"We're now laying the foundation for making ongoing progress," Kolodner said. "Three years into that, we've got a lot of momentum, interest and buyin by many parties. But we also have some skepticism because it's going to take more time until we reach the tipping point we're trying to achieve."

Health plan association leaders are confident in Kolodner's ability to lead the way.

"His selection was a brilliant stroke because he has experience that we need now as a nation," said Karen Ignagni, chief executive officer of America's Health Insurance Plans. "That experience is about taking a vision and implementing it."

She said Kolodner already has taken major steps to ensure the federal government's health-records system works with the private sector's. "He's been very open to working with all stakeholders, and work by hospitals, physicians and the American Health Information Community will lead to this interconnected system."

AHIC is a 16-member federal advisory board which advises the U.S. Secretary of Health and Human Services on ways to adopt health information technology.

Kolodner "has great experience and a real understanding about the challenges and what it tares to put a system like this in place and the time needed to accomplish that," said Joel Slackman, managing director of policy for the Blue Cross Blue Shield Association.

Kolodner oversaw the development of the Veterans Health Information Systems and Technology Architecture for the U.S. Department of Veterans Affairs. Used by the Veterans Health Administration, it is one of the largest enterprisewide health information systems of electronic medical records. Its computerized patient records system allows health-care providers to review mad update patients' records at any of the VA's 1,000-plus facilities. The system also can handle orders for medications, special procedures and lab tests.

"Dr. Brailer came from the private sector as an entrepreneur, but Dr. Kolodner has been ha the government for a long time," Slackman said. "Considering the administration's primary strategy for driving health IT is to harness the purchasing power of the government, he comes to the office at a very opportune moment."

The move to electronic health records is positive for health plans, Kolodner said.

"They'll be able to provide higher quality care at lower cost," he said. "Health plans don't have to pay out for the same value. They are major players in helping move this forward because they need to share that savings in some equitable fashion with consumers, employers and physicians."

Plans also will receive more valuable information from the records than just pure claims data, he added.

Justine Handelman, director of federal relations for the Blues Association, said Blues plans are helping providers adopt health IT and improve information at the point of care. Many plans also are offering providers electronic claims-based health records, helping them to put records in place and learn how to use them.

Handelman said plans are also investing in administrative infrastructure. "Health plans are making it increasingly possible for providers to use their claims-based electronic health records in a way that works seamlessly with administrative systems. To increase physician adoption, you have to show how adoption will pay off for them in claims receivables, increased efficiencies mad improved quality," she said.

Technology Insider

A study in the August 2005 issue of Annals of Internal Medicine estimated the nation would have to invest $156 billion over five years to build out a fully functional EHR system. Such a network would cost $48 billion per year to operate, AIM stated, but would yield nearly $80 billion in savings, according to the journal Health Affairs. Other studies say doctors will have to invest more than $30,000 in hardware, software and training in order to meet FMR standards.

"One barrier is that physicians will have to spend money for the systems, and it will lessen income during the initial start-up because it will take time away from patient care," Kolodner said. "[Physicians] need to have a way to cover that and know it's worth it. It's important for plans to get creative on how to provide provider incentives."

Matt Josefowicz, managing director of Celent's global insurance practice, echoed those concerns.

"It's one thing to set up systems in HMOs and big hospital networks where it's all centrally managed," Josefowicz said, "but for small physicians' offices that typically don't have an IT staff or spend much money on office systems, getting them to adopt some kind of standard system is a major organizational challenge."

However, an article by the private nonpartisan foundation Commonwealth Fund titled The Value of Electronic Health Records in Solo or Group Practices said most electronic health record initiation costs are recovered within about three years.

From a technological standpoint, moving into electronic health records involves developing a new product, not retooling an old one, said Ignagni. "When we first began our work, we were building something new. As health plans began to structure their activities, they made provisions for the kinds of messages we're hearing from patients," she said.

"They want control of their information and ability to withhold certain information under certain circumstances. They also want to be able to add information to their personal health records. The system has to be portable, flexible and allow for consumers to have significant amounts of input and control, and we have to meet all HIPAA requirements," she said.

Mounting Concerns

Lack of interoperability--the ability for different IT systems and software applications to communicate, exchange data and use information effectively--remains a challenge.

Handelman said many Blues plans are now promoting interoperability through states' health information exchanges. For instance, Arkansas Blue Cross Blue Shield created a vision for a fully interoperable health system and "spearheaded the Advanced Health Information Network--an online system that gives physicians and hospitals access to administrative and some clinical information which allows them to manage their business functions more effectively," she said. They're also helping small and rural providers test lower-cost wireless electronic health records, she added.

Privacy concerns also abound. According to a Los Angeles Times article, about 150 people, including physicians, nurses and technicians, have access to at least part of a patient's records during a hospitalization, and 600,000 payers, providers and other entities that handle providers' billing data also have some access.

Kolodner's office will soon propose a draft privacy policy partially modeled on those of organizations such as the National Committee on Vital and Health Statistics and Connecting for Health. He said the draft will then move to AHIC for adoption.

"Plans need to work together and with others to determine the minimum set of data they need to make proper adjudication of the reimbursement for payment," Kolodner said. "Not reaching out and asking for additional data for additional purposes musters distrust among consumers and patient populations."

Moving Ahead

Despite these challenges, momentum around electronic health records continues to gather.

At least 60% of more than 200 hospital executives surveyed in the 17th annual Healthcare Information and Management Systems Society Leadership Survey cited electronic health records as their top priority. However, the majority of health-care history--visits, charts, lab results and other records--remains on paper.

"We've already met the challenge of widespread adoption of electronic information more than any other community," Ignagni said. "Now the question is how can we make the advantages of electronic skills, tools and techniques available to patients. Now we must figure out how to marry this capacity with consumer and provider expectations."

Bigger Bytes

Several health plans are making impressive strides on the electronic health record front:

* In 2004, Kaiser Permanente launched its KP HealthConnect system, which provides a real-time digital link between its 8.7 million members' records and their health-care providers. Kaiser Permanente's $4 billion investment is one of the largest civilian deployment of electronic health record tracking in the world.

* Also in 2004, Blue Cross Blue Shield of Massachusetts committed $50 million to the Massachusetts eHealth Collaborative to fund a demonstration electronic health records project, and to wire physicians' offices in several Massachusetts pilot communities, said Justine Handelman, director of federal relations for the Blue Cross Blue Shield Association.

* As of June 2007, Medicare beneficiaries in four major health plans--HIP USA, Humana, Kaiser Permanente and the University of Pittsburgh Medical Center--can access their personal health information about medical conditions, doctor visits and hospitalizations online. The 18-month federal pilot program will help determine the viability of Medicare-wide adoption of electronic health records.

The Personal Touch

Personal health records are one of the building blocks of a larger electronic health information environment, said Justine Handelman, director of federal relations for the Blue Cross Blue Shield Association.

Currently, she said, health plans capture the broadest wealth of information across the spectrum of care in their claims data "until we get to true interoperability and the broader vision of having electronic health records in all doctors' offices and an information highway to exchange information." Many plans are taking the data they have to offer consumers personal health records that can be auto-populated with claims data, such as recent health encounters, diagnoses and medication information, and self-populated by patients and put into a user-friendly format that can help the consumer and their provider make more informed health-care decisions, she added.

Adoption of personal health records--a health record generally initiated and maintained by an individual or nonprofessional caregiver--is slowly gaining momentum. According to the American Health Information Management Association, 42% of U.S. adults surveyed said they keep some form of a personal health record.

There's great potential. "Eventually the records will knit together the entire system and lay the foundation for full interoperability," said Karen Ignagni, chief executive officer of America's Health Insurance Plans.

Recently AHIP and the BluesAssociation partnered to identify core elements and portability standards for personal health records. "Providers and patient groups are asking for predictability about the core elements of data every personal health record should have, how information can be portable if an individual changes plans, and how we ensure what we're doing in our industry will allow us to be interoperable with the rest of the health-care system," said Ignagni.

Portability standards already have been tested, she said. The next step?

"Plans made the commitment to be ready by the end of 2008 to meet the core data elements, and we're working with the industry to make sure that happens," Ignagni said. "Now we're working on a systematic fashion for getting access to lab results and imaging."