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Paving the way for electronic medical records. (Health Care Meets E-commerce).


* Electronic Medical Records (EMRs)

* Information Systems (IS)

* Y2K

* Capitation Contracting

* Lack of Standardization

* Obstacles to Deploying New Technology

IN 1996, I WROTE AN article in this journal (1) extolling the virtues of electronic medical records and predicting widespread deployment within a few years. Perhaps the easiest thing to do would be to assume that everyone had forgotten the article, or at least had a fuzzy memory of the details. But the questions raised by the failure of my crystal ball are too intriguing to let them go unanswered. Why have electronic records not become widely deployed? Is this phenomenon indeed a brick wall, or just a speed bump?

Let's peer through the retrospect-o-scope and try to relate events to the current status of electronic medical records.

Y2K took center stage

In 1996, the initials Y2K only had meaning to a few computer geeks. The year 2000 had a romantic image, and seemed very far off. Few people foresaw the scope of the problem and the commitment of resources that would be applied to forestall the widely predicted computer system disasters. Even fewer imagined that almost every other information technology initiative in health care would be delayed or suspended, while the issues of compatibility with four-digit dates would be explored. Addressing Y2K fears became the single greatest obstacle to overcome before considering deployment of new technology.

Finding systems and devices that weren't Y2K compliant and replacing or working around their deficiencies left precious few resources available for other tasks. (2) A shortage of qualified technical personnel and programmers exacerbated the problem. Qualified technical personnel enjoyed rising demand for their services and watched their salaries grow as they jumped from employer to employer. Budgets were stretched to and beyond their breaking points as departments implemented and tested solutions.

The good news is this was a one-time event (until the year 10,000 that is). The bad news is that postponing the implementation of electronic medical records weakened many IS departments and their health systems. As the potential savings from effective use of information have been lost, so have the opportunities to leverage them into further data driven quality improvement and cost savings. While care is not discernibly worse for this lost opportunity, avoidable suffering has not been prevented. Similarly, the chance to conserve precious resources has been lost.

Capitation failed to make inroads

In 1996, capitation as a payment and cost control mechanism seemed to be making steady inroads. There was great pressure on insurance companies to control the costs of medical care. Profit margins were getting squeezed, and the insurers were looking to the providers to share the risks of care and become partners in lowering costs at the same time. Hospitals and practice management companies were buying medical practices at a furious pace, convinced that they had the management skills to provide the framework providers needed to contract directly with the insurers. The prediction was that these contractual arrangements would make information systems, specifically electronic records systems, indispensable.

But capitation has failed to become widely deployed, at least at the provider level. Practice management companies and hospitals that purchased practices are, in many cases, looking to return these practices to their original owners. Only an elite minority of groups has achieved any success with aligning financial and medical care agendas. What went wrong?

Ironically, the lack of reliable information itself has been a huge barrier to entering into capitated contracts with insurers, Organizations that do not have information about the risks of the populations they care for are reluctant to enter into risk sharing contracts. Without those contracts, they are reluctant to commit the resources to install better information systems, creating a vicious cycle.

Lack of reliable Information affects providers as well. Without information systems, clinicians rightfully perceive that shared risk contracts put them in a position of responding only to financial incentives for altering their behavior. Financial pressures alone, without information about the impact on quality of care, create intolerable ethical dilemmas for clinicians. No wonder there has been so little enthusiasm to buy into this model.

For capitation to succeed within an organization, there must be alignment of incentives and mutual trust among the participants. Organizations that have tried to circumvent the process of building trust, consensus, and alignment have had a difficult time. As a substitute for deep structural changes, only large scale crisis is sufficient to get people to quickly reach consensus and develop the sense of urgency needed to succeed with capitation. For better or worse, most communities have avoided a meltdown scenario, and have not yet implemented much capitation.

Finally, the transition to capitation itself is a very difficult process. The behaviors and rewards of the fee-for-service model are very different from those of the capitation model. Attempting to blend these models together within the same organization or group of providers produces confusion and often causes painful dislocations of revenue and personnel. Organizations that lack clarity of vision and deep commitment to change have difficulty weathering the transition. These difficulties are exacerbated in organizations that are not well aligned and do not have mutual trust among all of the parties impacted by the transition.

Capitation has not been able to spur implementation of electronic records in all but a few elite organizations. None of this is meant to imply that better information systems are worthless in other environments. Capitation is simply an environment in which the benefits of electronic medical records are elevated to such great value that implementation is almost a foregone conclusion. In other environments, the value of electronic records is compelling, but sometimes overshadowed by other priorities.

Chicken, please meet egg

Much of the widely discussed return on investment postulated for the deployment of electronic medical records has been predicated on compelling but not rigorously proven contentions. The return on investment calculation is based on a number of hypothetical benefits. These include:

* Reduced need for personnel for filing paper records

* Reduced malpractice costs as an outgrowth of better charting

* Improved resource allocation and efficiency of organizational performance

* Improved cash flow with better visit documentation and coding

* Improved organizational contract negotiation and ongoing contract management

* Reduced waste from unproductive rework

* More appropriate use of clinical pathways and protocols with a built-in quality improvement loop

Conclusive demonstration of all of these potential benefits will remain elusive as long as organizations remain uncommitted to implementation. Resolution of this classic chicken-egg dilemma will require organizations to develop mechanisms to measure these outcomes as well. The organization that has the commitment, vision, and resources to succeed at this will likely dominate in the community it serves.

What good are telephone wires without the poles? The deployment of EMRs has more dependencies than had been anticipated. Electronic records systems have different dependencies, depending upon how many functions they have chosen to integrate into themselves. But just as it makes no sense to try to build a telephone system without having telephone poles and wires in place first, installing an electronic record systems without the needed infrastructure will be unrewarding.

Some of the dependencies are obvious, others subtle and insidious. The obvious include availability of computers, computer networks, and trained personnel to keep them up and running. Less obvious dependencies emerged as attempts were made to deploy electronic records. These include:

* Master patient index systems designed to uniquely identify patients

* Interfaces to existing lab, radiology, practice management, and other information systems that enhance the function and value of EMR software

* Architectural space within existing practices that could accommodate computers in the exam room

When using a telephone, we tend to take the infrastructure for granted. The poles are not the high-tech, glamorous part of the system. Master patient indexes and interfaces are not the sexy part of electronic patient records either. Failure to factor in the dependencies was enough to bring many proposed implementations to a grinding halt.

The devil was going to make me do it

Federal legislation about health care related data exchange, standards for data formats, and data security issues seems to have been in the "pending" stage forever. The Healthcare Portability and Accountability Act of 1996 (HIPAA) is probably going to have most of its operational guidelines in place early this year. Even so, the bill's impact on data related to electronic medical records per se was watered down before it passed. In its early incarnations (prior to passage), it contained mandates for a common lexicon to describe clinical disease and a way to share patient specific data between privileged providers. In its final form, only privacy and electronic signatures remain as issues that directly touch medical records. Indirectly affecting medical records are directives regarding coding and master patient indexes.

Much like the Health Care Financing Administration (HCFA) guidelines for coding, this bill has been delayed in implementation by many factors. Politics, unintended consequences of dealing with complex systems, and lack of agreed upon industry standards are but a few of the causes. In fact, if the health care industry had been able to agree on standards, this bill probably would never have passed. The industry itself asked for the bill as a way of forcing a disciplined approach to resolving incompatible schemes for handling data. Now that the discipline is mandated, there is some movement towards resolution, but the process remains slow and difficult.

Despite the lack of mandates related to clinical data in the HIPAA legislation, many people hope that resolving privacy standards and developing a common scheme for patient identification will hasten the Implementation of electronic medical records. Not until the rules are implemented, however, will the net effect be visible.

What part of choledocholithiasis don't you understand?

The world of paper records is in many ways more forgiving than that of electronic records. Ambiguous or imprecise paper records are a fact of life, tolerated both because they are the norm and because often enough meaning can be gleaned from context to get the job at hand done. But once the jump is made to electronic records, the imprecision of the paper world translates into a glaringly visible and unacceptable compromise.

The potential and promise of electronic records can only be realized if a standard way to describe clinical information can be agreed upon and implemented in practice situations. Although a number of potential candidates exist, none has enough acceptance to be considered even close to a de facto standard. In turn, clients have been reluctant to purchase electronic records while vendors are offering nonstandard solutions.

The failure of HIPAA legislation to mandate a portable data model for an electronic record highlights this issue. The limitations of ICD-9 coding as a descriptor of a patient's clinical status are well known. Common usage and a huge repository of comparative data are major factors keeping ICD-9 codes in use-but they are not the only factors. With paper records, ICD-9 codes serve the function of providing an abstract of the clinical information available regarding an encounter for care. The abstract function allows at least a rudimentary understanding of the nature and complexity of the illness afflicting an individual patient. In turn, this has facilitated some early attempts to benchmark and improve care. More significantly, having some clinical abstract available has allowed insurance plans to limit benefits, control costs, and focus the resource-intensive chart review process on high cost and high volume problems.

With ICD-9 coding in such a central position, any competing scheme hoping to supplant it must accomplish at least some of the following functions:

* Provide a more accurate representation of severity of illness

* Provide a better model of the interactions and dependencies of multiple simultaneous diseases

* Allow for backward compatibility and mapping to ICD-9

* Allow for coding to occur within the current provider workflow of recording their findings while minimizing additional work or rework

* Allow for accurate empiric representation of disease processes that are poorly understood

* Allow for forward compatibility with new understanding of disease processes as they evolve

* Enjoy widespread support as an industry standard

* Allow for description of the disease process to be extended outside scientific boundaries into the cultural world where diseases exert their end effects on people

* Provide a sufficiently rich palette of terminology that providers feel comfortable expressing their findings in that language without resorting to embellishment or addition

* Allow for normalization of information and benchmarks of performance to evolve

* Allow for automated chart reviews that provide understanding of the clinical processes and decisions sufficient to improve clinical care

This is a huge list. Not all of these features and functions need to be accomplished for a new standard to emerge and become embedded within electronic medical records, but many are interdependent. ICD-9 itself is not extendible in these ways. The fact that no usable standard lexicon or coding scheme has yet to be adopted has been an obstacle to the realization of the potential of electronic medical records. That, in turn, would be a compelling push towards widespread implementation of electronic medical records.

New beginnings

Depending upon your hopes and fears regarding electronic medical records. this analysis may trigger different emotions and concerns about the future of medical practice. One thing seems certain. The first organization to successfully realize a significant amount of the potential benefit from electronic medical records will have a huge competitive advantage in its marketplace. Resolving some or all of these issues discussed in this article will hasten the deployment of electronic records. What are the solutions in sight, and how successful will they be? Its time to consult the crystal ball once again.

The only unknown here is if organizations will recognize the need to retain and redeploy their Y2K teams to other tasks and how successful they will be in implementing new systems. Capitation projections are particularly risky. The case for capitation seems to depend in part on provider-sponsored organizations or third party outsource organizations taking on direct contracting responsibilities for physicians. Many futurists are predicting that the time is right for this to occur, (3) but I think it's a close call. There are simply too many variables that remain unaccounted for.

Proof of the return on investment from implementing electronic medical records will be slow in coming. The rate of installation and the need to measure performance over fairly long periods dictates this. The huge potential return and the compelling logic suggesting that there is indeed an opportunity to capture that potential is likely to be all that is needed to carry the day.

Dependencies on other systems and infrastructure are gradually being resolved. HIPAA legislation essentially requires the implementation of master patient indexing systems. Interface engines are becoming ubiquitous in large organizations. New technologies such as distributed component technology, Java, and XML will reduce the need for interfaces. The speed and bandwidth of network technology has been improved, and Internet-enabled systems have improved the connectivity needed to implement electronic records.

Legislative rules will become finalized over the next year, paving the way for electronic records. Once the privacy and data structuring requirements are better understood, many of the theoretical barriers to choosing an electronic record system should disappear.

Emerging standards for coding and describing medical information seem to be approaching a level of maturity that will permit their performance in live clinical situations. The leading candidates may be mapped to each other in ways that make them interoperable before any one standard is adopted--we may have several interchangeable standards that will become a de facto standard, The important outcome is that some standards emerge, and in fact this seems to be happening.

My crystal ball says the future seems bright for electronic medical records. (1)


(1.) Gleiner, J.A. Clinincian Acceptance of Information Technology. The Physf ician Execudve, 22:11, 4-8, 1996.

(2.) Morrissey, J. Y2K: Ready or not.... Modern Healthcare, 29:8, 52-74, 1999.

(3.) Coile. R C. Challenges for Phyiician Executives In the Millennium Marketplace. The Physician Executive, 25:1, 8-13, 1999.


Goldstein, Douglas, Building and Managing Effective Physician Organizations Under Capitation. Gaithersburg, Maryland: Aspen Publications, 1996. The website of the Medical Records Institute. The website of Medical Group Management Association. The website of the American Medical Informatics Association. Intel-sponsored website dedicated to furthering dissemination of information about Internet resources for Health Care. The website of Primetime has reference material about patient-entered data in electronic records.

RELATED ARTICLE: Health Care Information Technology A Primitive Affair

By Michaeil E. Zigelman

Health care, whether practiced at the bedside or managed from the boardroom, is arguably the most information intensive industry on earth. In our clinics, by contrast, information management often consists of an entry level clerk pushing a cart, filled to overflowing with tattered manila folders, waiting for an elevator. This scenario is not atypical of information systems in many health care organizations. Despite millions of dollars invested, Information Technology (IT) in health care remains overall a primitive affair.


In the United States, health care is as much as 40 years behind other industries in utilizing IT. Most health care organizations recognize the need to come into the information age and many are struggling up expensive learning curves as they make that effort. At the same time, disappointment in IT is already evident. Huge financial losses at some of the largest and previously prestigious HMOs are at least par fly attributed to IT failures (Oxford Health Plan is prominently cited as an example of how IT problems got them into so much trouble). There is little solid evidence that documents measurable improvements in clinical practice or productivity attributable to IT. Individual patients and physicians, for the most part, do not yet feel the benefits of user-friendly clinical information systems.

Interestingly, IT in health care may be following a course parallel to that experienced in other industries. Early enthusiasm for IT drove huge expenditures, in many cases followed by disappointing returns, only later entering a phase of sharply improved productivity. Explanations for this pattern often return to a theme replayed again and again in the reengineering literature. Organizations often focus on tools and fail to first examine process. Information Technology is only a tool, and when implemented in the context of current process, may result in more headaches than benefits. When poorly conceived, IT projects may only speed up tasks that need redesign or elimination in the first place.


Organizations that successfully utilize IT to boost quality and increase productivity have adopted a different mindset. New materials and tools weave into new and different structures. They first take one or two giant steps back to develop a larger strategic view. They look at IT as a new tool, and evaluate it in the context of three processes that are fundamental to the practice of health care: (1) transactional competence, (2) communication, and (3) aggregation of information.

Medical care unfolds transaction by transaction. Providers and patients interact with the health care system and each other in a series of discrete events that add up to a total interaction. Physician visits, reception contacts, lab draws, phone calls, bills generated, medications ordered; all are examples of the thousands, if not millions, of transactions happening daily as we care for patients. The diversity and volume of medical transactions on any given day stretches the abilities of organizations to accurately record, much less manage.

1. Transactional competence

Transactional systems are often criticized as being financially-oriented, focusing on recording, coding, and billing for health care events. Shifting transactional systems to a more clinical focus, as envisioned in Electronic Medical Records (EMRs) is often touted as the antidote. EMRS will somehow, perhaps magically, lead to better information coming from our computers. In fact, EMRs are an example of a technology that may do little to alleviate the shortcomings of transactional systems.

In the long run, several key issues will drive the success of transactional systems, whether they are medical records, scheduling packages, claims payment systems, order entry software, or large scale integrated practice management systems. Key issues to consider include whether the system:

* Inputs data from the most accurate source. For example, a pharmacist or home health nurse tending elderly patients may have more accurate knowledge of drug lists than either the patient or the physician.

* Utilizes technology appropriately to maximize both the efficiency and user-friendliness of data input. For example, charge tickets that traverse a long courier trail to a data entry clerk compared to bar-coded direct entry by a physician or nurse.

* Stores data in standardized formats coupled to standardized interfaces to facilitate easy communication of data, integration with larger data sets, and data manipulation capabilities that are decentralized to point of need.

2. Communication

Accurate and timely communication is the most critical factor in health care delivery Achieving it is also one of the most difficult and expensive systemic problems to overcome. Myriad communication links characterize the health care system. Providers communicate with patients and among themselves. Providers interact with labs, medical records, and any number of other ancillary information sources. Most linkages occur through face-to-face contact, via phone, or by paper-based systems. All of them introduce substantial time delays and potential sources for information error.

Going forward, IT systems will be measured against their ability to enhance communication linkages among the stakeholders in the health care system. IT infrastructures must minimize error in transmitting data, while enhancing the speed of communications. Successful IT systems must also be user-friendly for providers and patients. At a minimum, IT communication solutions must substantially outperform phones or hard copy information transfer in terms of convenience and accuracy of data transmission.

3. Data aggregation

Diverse data sources need to be linked in a manner that facilitates integrated reporting across an enterprise. Data aggregation should allow more sophisticated costing and quality measurements. For example, an integrated data set would allow measurement of the total cost of caring for diabetic populations, including physician services, hospitalization, pharmacy, home health, and ancillary services. Without such global costing it is difficult to assess the true impact of specific changes in care, such as shifting to another formulary or instituting disease management programs.

At present, accessing global cost and quality information is a laborious and time intensive process. IT systems should be measured against their ability to facilitate and streamline the aggregation of enterprise-wide data sources. The lexicon of buzzwords in IT today includes "data repositories" and 'data warehouses." In concept, these are large databases fed from the multiple data sources of an organization, linked to reporting engines that allow efficient information extraction. Alternative concepts of data aggregation call for a Web-like solution in which decentralized databases are "browsed" by a user-based search engine. Whichever system is adopted, the imperative of data aggregation remains and must be included as a component of strategic thinking.


The practice of medicine will continue as a series of interrelated transactions involving diverse players, but centered on patients and providers. IT systems will succeed or fail based on their ability to enhance this patient-provider interaction. In addition, medical applications of IT may be on a learning and implementation curve that closely parallels that of other industries. A critical look at outside experience coupled with close attention to processes that are most critical to health care may shortcut our learning curve and save enormous misdirections of money, time, and emotional investment.

Michael D. Zigelman, MD, MS, is Medical Director of Mission Medical Associates of the Central Coast, a California Medical Corporation Tenet HealthSystem, in San Luis Obispo, California. He can be reached by calling 805/546-5614 or via email at



The Healthcare Information and Management Systems Society (HIMSS)

This not-for-pro fit organization is dedicated to promoting a better understanding of health care information and management systems. HIMSS represents approximately 7,500 health care professionals in four professional areas: (1) clinical systems; (2) information systems: (3) management engineering; and (4) telecommunications. HIMSS can be reached by calling 312/664-4467, via fax at 312/664-6143, or via email at

The Informatics Institute

Changing Information technology promises to transform the practice of medicine and the delivery of health care. The informatics Institute (TII) prepares organizations and individuals for these changes through education and TII can be reached by calling 800/844-0922, via fax at 800/240.6379, or via email at


Medical Informatics A:

Fundamentals of Medical Informatics

2-day ACPE course, 12 CME Credits, $675.

Faculty: Marshall Ruffin Jr., MD, MPH, MBA, CPE, FACPE

If your workplace doesn't require a working knowledge of computers, it soon will. The marketplace demands it. In this course, you'll learn how you can use computer technology to help manage patients, Improve decision-making, and sharpen your organization competitive edge.

Medical Informatics B:

Database Management for the Physician Executive

2-day ACPE course, 12 CME Credits, $675.

Faculty: Marshall Ruffin, Jr., MD, MBA, MPH, CPE, FACPE There's a wealth of information about your organization Just waiting to be compiled into a useful format. This course will show how data can be collected into electronic databases and used for clinical decision support, benchmarking practice habits, outcomes management, and day-to-day management decisions.


Being Digital Author:

by Nicholas Negroponte

New York, New York: Vintage Books, 1995, 212/751-2600

This classic book decodes the mysteries surrounding band with, multimedia, virtual reality, and the Internet and suggests what "being digital will mean for our laws, education, politics, and amusements.

CEO'S Guide to Health Care Information Systems

by Joseph M. DeLuca, FACHE, with Rebecca Enmark Cagan

Chicago, Illinois: American Hospital Publishing Inc., 1996, 800/242-2626

Health care information technology, as a critical management tool, is vital to the new delivery environment. This guide offers a non-technical, ready reference to die world of health care information systems.


by Warner V. Slack

San Francisco, California: Jossey-Bass Publishers, 1997, 800/956-7739

Warner Slack makes a compelling case for the vastly expanded use of computers by both clinicians and patients.

Digital Doctors

by Marshall de Graffenried Ruffin, Jr., MD, MPH, MBA, CPE, FACPE

Tampa, Florida: ACPE, 1999, 800/562-8088

One of the leading voices in the medical informatics movement has updated his writings on this increasingly Important subject and added a wealth of new information. His wisdom is collected in a book that defines the history status, and likely future direction of medical informatics.

Medicine and the Information Age

by Jeffrey S. Rose. MD, Tampa Florida: ACPE, 1998, 800/562-8088

The author introduces fundamental concepts of information systems and emphasizes skills, techniques, and abstractions for creating them- and for managing resistance to them. The book is meant to give you a foundation in clinical information systems and to convince you of the critical importance of such systems in health care delivery.

Physician-Computer Connection, A Practical Guide to Physician Involvement in Health Care Information Systems

by William F. Bria II, MD, and Richard L. Rydell,

Chicago, Illinois: American Hospital Publishing Inc., 1996, 800/242-2626

A well-designed patient care information system (PCIS) can help providers and physician realize their shared goal of improving patient out comes through accurate clinical decision while decreasing the cost of care, To support the critical role of physicians in the successful implementation of a PCIS. the authors detail a plan for developing physician task forces and "physician champions."

Technology to Go Beyond your Competition Author:

by Daniel Burrus with Roger Gittines

New York, New York: HarperCollins, 1993

This book looks at how innovations in technology have provided us with a new set of tools to work with that will greatly in crease our productivity and efficiency in all areas. Knowing what these tools are and how to apply them creatively has become a matter of business survival and a key to personal success.

Susan M. Sasenicl

J. Arthur Gleiner, MD, is Vice President for Clinical Affairs at Primetime Software, a company dedicated to enabling patient-entered data to enhance the usability of clinical software and ensure that patients are empowered to participate in the medical records process. He spent 19 years of clinical practice as a primary care internist. He can be reached by calling 802/253-8776 or via email at agleiner@medicalhistory. com.
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Author:Gleiner, J. Arthur
Publication:Physician Executive
Geographic Code:1USA
Date:Jan 1, 2000
Previous Article:The information revolution: opportunities and pitfalls for patients and providers. (Health Care Meets E-Commerce).
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