Instant information: health plans are encouraged by the slow, but steady progress in the development of electronic health records.

Imagine everything about your medical history--from the prescriptions you take to the results of your last physical examination--available at the click of a mouse, able to be accessed by health-care providers across the country. Technology advances are making that scenario a real possibility, but is health-care information ready to become paperless?

Many health plans think it is, but they predict widespread adoption of electronic health records and the interoperability to share information among health-care providers across the United States won't occur for at least the next decade. The federal government also is gearing up for that time line. In April 2004, President Bush announced a national goal to encourage wider use of electronic health records to allow physicians, hospitals, pharmacies and insurers to share information. Earlier this year, in a speech concerning the National Institutes of Health's proposed tax credits, the president called for the implementation of a national electronic health records system to help reduce health-care costs and medical errors. "We've got 21st century medical practices, but a 19th century paperwork system," he said.

E-Charts and Charms

Electronic health records--computer-stored collections of patients' health status and health information--have been the Holy Grail since the early 1970s, said Dr. Charles Emery, senior vice president and chief information officer of Horizon Blue Cross Blue Shield of New Jersey. But implementation has progressed slowly. "Only a few leading hospitals have successfully implemented electronic health records, while few physician practices have implemented such a system, driven in part by cost and interoperability, although electronic health records remain a desired application in support of the physician practice," he said. But that's slowly changing. An adoption rate of between 10% and 20%, on average, is anticipated to rise in the next several years.

Many industry experts believe electronic health records are an answer to helping contain rising health-care costs. A report in the journal Health Affairs said that if the United States were to use an electronic medical record system, the nation could save nearly $78 billion a year. The U.S. government is even more optimistic. Efforts currently under way to create a national health information network are anticipated to save about $140 billion a year through improved care and reduced duplication of medical tests.

"The benefits of electronic health records go back to our main corporate strategies of putting members' health first and that the records and decision support will improve quality of care, reduce medical errors, and in terms of affordability, be able to reduce the misuse, overuse and waste in the system," said Dr. Robert Mandel, vice president of eHealth for Blue Cross Blue Shield of Massachusetts. "Savings could then be returned to members through lower premiums and by helping the medical community invest in additional technologies in the future."

Even though health plans don't generally extract data from electronic health records for their own purposes, they also are optimistic about benefits the records will provide, including aiding health maintenance and prevention through disease management and other programs. In addition, e-records and other electronic efforts, such as computerized physician order entry, help improve quality of care by providing timely and appropriate treatment information to healthcare professionals.

It's that improved quality of care that many believe will save lives and dollars. According to the National Academy of Sciences' Institute of Medicine's To Err is Human: Building a Safer Health System, between 44,000 and 98,000 Americans are estimated to die each year from preventable medical errors. In addition, hospitals spend about $30 billion on patients who are admitted due to missing information about their health-care problems and existing treatment, and physicians order more than $8 billion worth of duplicate lab tests, X-rays and prescriptions that could be eliminated through the use of electronic health records, according to "Health Information Networks to Improve Safety and Reduce Costs," an article published by the Democratic Leadership Council, a national network of elected officials and community leaders.

A National Answer

While some organizations are electronically connecting their health-care systems, cost is a big hurdle for many others.

According to a recent Wall Street Journal article, "there is about $125 million in the fiscal 2006 budget for a handful of regional demonstration projects, yet by some estimates it could cost more than $300 billion over a decade to create a national system of electronic health records--about the same amount that studies show is currently wasted on unnecessary or ineffective medical treatments."

Health plans also say that standardization is a major piece missing from achieving interoperability of electronic health records. In order for the electronic records to be portable and to be shared with all health-care constituents, including laboratories, hospitals, pharmacies, radiology departments, physicians and insurers, standards or a common vocabulary must be used to translate and codify patient data, said Dr. Alan Muney, executive vice president and chief medical officer for Oxford Health Plans. "And in order to be truly effective, we need standards among all different software companies." The good news, he said, is that efforts to create standards are now under way nationally.

Dr. David Brailer, who was appointed last year by President Bush as the first National Health Information Technology Coordinator, is leading the charge. One of his main responsibilities is to encourage the private sector to adopt interoperable electronic health records, and a key challenge for the effort is to define the functions of the records.

In addition, the U.S. Departments of Health and Human Services, Defense and Veterans Affairs recently endorsed 20 sets of standards to share information more easily and to serve as a model for the private sector. Also, Health Level 7, which is dedicated to developing an international set of open standards for data format and content, created a functional model and standards for electronic records.

The Right Prescription?

Some health plans are developing local electronic health records programs. Blue Cross Blue Shield of Massachusetts recently pledged $50 million to a statewide collaborative, which will give health-care providers and patients in the state access to patients' records from anywhere in Massachusetts within five years. The pledge will fund pilots in three communities. If enacted, Massachusetts would become the first state with a statewide electronic medical-record system, the Blues plan said. The eHealth electronic health-records pilot program is designed to allow medical professionals to access a patient's medical history, including prior tests and procedures, diagnoses and prescriptions. The result is expected to prevent duplication and reduce errors from misunderstanding handwritten notes or prescriptions, in addition to saving millions of dollars, saving time and creating greater efficiency.

Next month, Blue Cross Blue Shield of Tennessee will unveil its new initiative, "Shared Health," in which it will format data gathered from multiple sources and make it available to providers in an electronic community health record. "It's a similar concept to electronic medical records, but rather than physicians entering all the data and putting it into a record, we will push out to providers information we already have--such as prescriptions, office visits, patient allergies," said Jana Skewes, senior vice president. "While communities are building deep data sources and individual practices are building robust data sources that will probably take the 10 years President Bush laid out to get connected, we believe in Tennessee we can take our data and help jump start that by making fundamental information available to all providers across the state."

Kaiser Permanente recently began implementing a more-than-$3 billion electronic health-record system, "KP HealthConnect," that uses a common technology to help the organization provide real-time medical information to health-care providers. In addition to an electronic health record, the initiative involves a highly sophisticated, nationwide information management and delivery system that covers every element of the health program and the clinical record along with appointments, registration and billing. Full deployment across all of Kaiser Permanente's facilities is scheduled to be completed within the next two to three years. The system will help improve the quality of health care provided across the organization, and by combining its advanced technology with Kaiser Permanente's clinically integrated system, will eliminate the inefficiencies and error-proneness of paper-based systems, said Dr. Andrew Wiesenthal, associate executive director, clinical information.

Health plans will continue to be an integral part of the process. "We worked hard to make sure that there could be sharing of information across providers for purposes of treatment and health-care operations in the Health Insurance Portability and Accountability Act regulations, and so now with that in place in the regulatory realm, we now need to transition into an e-system, and we're there in the insurance industry, but need to work closely with providers to make sure they make the transition as well," said Karen Ignagni, president and chief executive officer of America's Health Insurance Plans.

Forging Ahead

Many health plans believe it will take the next 10 years outlined by President Bush to get an electronic health system fully operational, complete with standards and widespread adoption. "The next three to five years will be a learning curve. What we lack now is experience in knowing exactly how to do this; there will be a lot of trial and error," said Dr. Bruce "Taffel, senior medical director for Blue Cross Blue Shield of Tennessee. "And by five years, we will have separated the weak projects from the strong, and the strong will be the beacon to which other projects will look." He believes systems will begin to be linked together in a meaningful way on a national basis within the next six to 10 years.

"If developing an electronic health record were easy, it would have happened a long time ago," said Dr. Richard Popiel, chief medical officer for Horizon Blue Cross Blue Shield of New Jersey. "Most people understand the potential benefits. No matter where a patient is, health-care professionals providing care can access the information." In any kind of database management, he said, if there's data residing in manageable fields, rules and other analytical applications can be used to find opportunities. "It strengthens your ability to see what's happening with a patient and make recommendations based on technologically empowered clinical rules," Popiel added.

But some things will need to come more quickly. In February, Brailer said the health-care industry must agree to technical standards for electronic health records by this summer or the federal government likely will "put out a mandate." The technical standards, he said during all industry conference, must allow physicians and specialists from different health clinics and hospitals to access patient medical records, regardless of whether different computer systems are used. He also said the biggest challenge remains with small physician practices. In addition, he said he believes incentives, such as grants, federal loans or increased payments from Medicare and private health insurers, would encourage physicians to implement electronic health records. "We are banking on this, until it is clear that you can't do it," said Brailer.

Learn More

Blue Cross and Blue Shield of Florida Inc.

A.M. Best Company # 68174

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Blue Cross and Blue Shield of Massachusetts

A.M. Best Company # 64562

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Blue Cross Blue Shield of Tennessee

A.M. Best Company # 64002

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Horizon Healthcare Services Inc.

A.M. Best Company # 64022

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Kaiser Foundation Health Plan Inc.

A.M. Best Company # 64585

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Oxford Health Insurance Inc.

A.M. Best Company # 60022

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For ratings and other financial strength information about these companies, visit www.ambest.com.

Key Points

* President Bush has proposed an initiative that nearly all Americans have an electronic health record within the next decade.

* While only a small percentage of physician offices have implemented electronic health records, the number is expected to rise in the next several years.

* Electronic health records are believed to help improve quality by reducing medical errors and eliminating duplicate tests and unnecessary hospitalizations, resulting in cost savings.

Maintaining Privacy

Health plans have mixed reactions when it comes to privacy concerns about electronic health records. Some industry experts believe privacy is a "deep concern;" others are less skeptical. All can rest assured, however, that the Health Insurance Portability and Accountability Act plays a major role in maintaining the privacy of the records. HIPAA, which mandates that every medical insurer must have the ability to accept electronically submitted claims, specifies how and with whom certain information may be shared.

"The whole purpose of HIPAA was recognition that this is a new era of electronic information where medical information is now starting to be transmitted electronically and that people have expressed that their personal health information is very important to them, so they want it safeguarded and not misused" said John Washlick, a member of the health-law practice group of Cozen O'Connor.

A concern, however, that could result in potential legal consequences is that individuals aren't specifically protected under HIPAA, said Washlick. "There are sanctions under HIPAA that may be imposed only on 'covered entities.' We as individuals have no private standing under HIPAA."

He said many in the industry anticipate a lucrative plaintiff's bar around electronic health records in the next several years, as many believe HIPAA will be the new minimal standard of care.