BBI Contributing Writer
SAN FRANCISCO When physicians and other medical personnel began arriving here in early October for the Medical Group Management Association's (Englewood, Colorado) annual conference, it seemed fitting they be greeted by striking hotel workers at many downtown hotels. The hotel workers were striking and spending much of their time outside their employers' establishments banging on pots and pans because, among other things, those employers were asking workers to pay a more substantial amount of their health insurance benefits. Undoubtedly, hotels were asking for this concession because the costs of employee health plans have been spiraling upward, essentially out of control. Ironically, at the same time healthcare executives from around the U.S. were flying into town to attend the MGMA conference and discuss, among other things, the rising, out-of-control costs of healthcare.
MGMA considers itself the "nation's principal voice for medical group practices." It has 19,000 members that manage and lead more than 11,500 organizations in which more than 237,000 physicians practice. It states that its core purpose is to improve the effectiveness of medical group practices and the knowledge and skills of the individuals who manage and lead them. Accordingly, much focus at its annual meeting was placed on healthcare IT to help manage costs, which had electronic health record (EHR) and computerized practice management (CPM) vendors salivating.
The bottom line is this: U.S. healthcare expenditures are estimated to be roughly $1.7 trillion in 2004, or 15% of the gross domestic product. Double-digit healthcare insurance premium increases (up 11% in 2003) have become a way of life, and prescription expenses were projected to increase 12% from 2003 to 2004. The U.S. leads the world in technological break-throughs and sophistication, yet 45 million Americans do not have any health insurance, and others find coverage being dropped or cut back as their employers try to control rising costs. Because the U.S. health system is incredibly complex, Americans spend more resources than any country and system in the world, yet lag far behind other countries in some results. Thus healthcare has become a hot political issue.
A well-known and much-quoted study by the Institute of Medicine (Washington) reported that 98,000 deaths occur each year from medical errors. More Americans will die in the next 2-1/2 years from medical errors than during the entire Civil War. Put another way, it is the equivalent of 33 Sept. 11th attacks annually. Although the public is not well-informed about the magnitude of the problem, this information is beginning to filter through to Capitol Hill. Dr. David Brailer, the first National Health Information Technology Coordinator, is moving quickly. He is to follow up on President George Bush's executive order of April 2004 calling for widespread deployment of health information technology within 10 years. "Unless interoperability is achieved, physicians will still defer IT investments, potential clinical and economic benefits won't be realized, and we will not move closer to badly needed healthcare reform in the U.S.," commented Brailer.
In a Washington Post op-ed article, Sens. Hilary Clinton (D-New York) and Bill Frist (R-Tennessee) wrote: "Recently, the Department of Health and Human Services [HHS] announced a 10-year plan to build a new health information infrastructure. And while there is no consensus yet on all the changes needed, we both agree that in a new system, innovations stimulated by information technology will improve care, lower costs, improve quality and empower consumers."
Because of limited connectivity, too many duplicate efforts result between providers and payers. Many providers also duplicate their own efforts, and as a result physicians appear inept, the consumer's time is wasted and health plans pay for needless tests more than once. Ultimately it is employers and consumers who end up paying at the end of the day in the form of higher insurance premiums.
A recent study completed by MGMA's Group Practice Research Network (GPRN) indicates that substantial amounts of office staff and physician time are devoured each year by administrative tasks that are redundant and wasteful, adding no inherent value to either the practice or its patients. In fact, the research found some $24,759 worth of waste per year, per physician. With more than 500,000 practicing doctors, the total dollar waste is staggering. Much of that waste is spent by support staff haggling with pharmacies over prescription refills, substitutions, formularies, etc. Another chunk of it is spent verifying patient coverage, copayments and deductibles for thousands of varying health plans. Remember that the study focused just on wasted time in the doctor's office alone, which does not even include needless labs, tests, lawsuits, etc. that could be avoided.
William Jessee, MD, president and CEO of MGMA, said, "While we were certain that the waste generated by administrative complexity was extensive, we are dismayed at the figures reported in this research." He added, "We urge all the stakeholders in our system patients, payers, employers and providers to face the real cost of this wasteful system and work toward redirecting wasted resources into activities that expand access and improve care for our nation's citizens."
Numerous reasons behind lack of adoption
Workflow adjustments introduced by computerized systems not only will help combat rising costs, but also make healthcare much safer for individuals. With widespread implementation of the EHR, many lives could be saved through routine drug interaction and dosing checks. Many of these systems also have alerts and reminders built in that can aid doctors in clinical decision-making. So why have these systems not been universally adopted? The reasons are many.
Technology will have to be embraced by doctors. Doctors have to "buy into" the system, even if it is begrudgingly, for the betterment of their patients. A 2004 Medical Strategic Planning (Lincroft, New Jersey) survey revealed that "doctor and staff resistance" was the second-highest factor for not implementing a system, right behind "ability to cost-justify" a system. Many doctors are used to being the captain of the ship and are leery of trusting machines over their own instincts. They perceive EHR systems as a necessary evil. However, until someone proves it is necessary, they will view it as just plain evil. The exception to the rule is the younger doctor fresh out of medical school who has grown up in an era where computers play a valuable role in everyday life. Many of these doctors have used EHR systems regularly at the universities they attended and are shocked when they hit the real world. All the computer training in the world cannot prepare them for what they face: an endless supply of paperwork.
Inexpensive and secure computer hardware and technology was previously unavailable. Over the past few years, we have made amazing technological advances, with less technological limits than there once were. Consider that only a decade ago, the original Pentium processors at 66MHz were considered fast in comparison to the 386 and 486 processors they replaced. Not only have computers become much faster, they are now smaller, more lightweight, carry a larger data load and have increased battery life. The most important change over the past few years is that in this disposable society, computers, components and periphery devices have come way down in price. This is good news for system vendors, as they now have the flexibility to build more intricate and graphically based systems that previously would not have run well.
Who is going to pay for it? Even with the cost of hardware at bargain prices, the cost of installing a system across an entire office remains formidable. The Medical Strategic Planning survey mentioned above showed that cost justification is a major reason doctors have not adopted systems. Many physicians have become convinced that EHR systems capable of electronically linking and corresponding with payers and pharmacies mostly benefit . . . payers and pharmacies. Until doctors feel there is a standardized process with guidelines and protocol set, they will not dip their foot in the pool in large numbers. The fear is that jumping in too early means financial disaster, and doctors are well aware of some of the implementation horror stories passed along by colleagues. So far, the government has put only $139 million on the table for healthcare IT, leaving physicians to foot the majority of the bill for an EHR system. They feel that although it will make life easier for others, it will initially make life harder for them. The compelling risk/reward exchange is not quite there yet.
How about the support staff? When you ask market visionaries how practices are going to handle the additional IT overhead that installing a system will bring, you almost universally get the same answer. "When a doctor installs an EHR system, the IT costs associated with that system will be offset by the ability to reduce office support staff." What is left out is that initially doctors will need more support staff. They will end up having to replace unskilled staff with skilled staff. Doctors also can face the exodus of key office personnel who decide they have no interest in using computers on a daily basis. Offices will need help installing and maintaining their EHR system, computer hardware, and, in some cases, an onsite server. Whether in-house or on contract, good IT resources are expensive and not readily available or easily accessible around the country. Another challenge is moving a practice's current paper records into the EHR system. Physicians often use outside contractors to do that as well. Down the road, yes, doctors can reduce support staff costs; however, the initial hurdle may be financially challenging for most practices. Aware of this barrier to purchase, larger vendors are charging on a per-doctor, per-month basis. Like financing a new car, they are helping physicians spread the cost over a 48-month to 60-month period through financing these systems.
Do physicians really need these systems from a cost standpoint? The simple answer is yes. The average doctor wastes $24,759 on unneeded office work. This does not include staff reduction in hours that has been shown by many practices to occur after the system is running smoothly. MGMA's most recent Cost Survey Report indicates that as overall costs continue to rise, especially in primary care, practices are trying to cut back in key operating areas such as support and ancillary staff. Noteworthy are increases in medical liability premiums. Multispecialty groups reported a 22.73% increase in professional liability costs. Keep in mind that MGMA data are national aggregates and do not reflect the greater increases that have been experienced in many individual states where increases can be much greater if there are no tort limitations. According to the same survey, full-time employee support staff positions decreased in 2003. It also found that management fees paid to management services organizations went up $9,000 per FTE physician in 2003. This suggests that practices are outsourcing some functions as they cut staffing levels.
In spite of these measures, multi-specialty groups reported a 3.18% increase in operating cost per FTE physician in 2003, coupled with only a 2.96% increase in total medical revenue, continuing a trend of operating costs outpacing revenue growth. Medicare has proposed a 1.5% increase in average Medicare physician reimbursement for the 2005 Physician Fee Schedule, which although not great, is a relief from the projected 3.7% cut for 2005 initially announced by the Centers for Medicare & Medicaid Services (CMS; Baltimore). However, with doctor costs increasing more than 4.5% yearly, this is hardly adequate relief.
"The future looks bleak for primary care medical group practices, as well as for several specialties most affected by liability premium hikes and decreasing margins," says Jessee. "This economic trajectory is unsustainable and steps must be taken to help these practices meet the burden of these continually increasing costs."
Is the EHR market finally stable? Absolutely not! While many vendors are reporting accelerated growth for 2004, physicians see too many risks associated with adopting EHR systems. What if the implementation is a disaster, the system never fully installed and productive? The economical impact to single-physician offices and small group practices could be devastating. As with other industries on the uptake, there undoubtedly will be mass consolidation between the hundreds of vendors currently marketing their products. If the company from which doctors purchase their system is absorbed into another company, or even worse, fails and goes out of business, then what? What is a practice's recourse? As companies begin to merge, true market leaders will become apparent. Vendor stability or close to it, combined with new national standards and revamped systems, should begin to calm already frayed nerves. This is depressing product sales of some smaller EHR vendors.
Public outcry! Currently, the general public is in the dark as to why healthcare costs are rising. Many may not even be aware of the rise if their employer pays the entire cost. This makes the public vulnerable to political, press and other manipulations. Unless people have had to chase down their own medical bills or have been hospitalized, they are unaware of how convoluted the system has become. If the public was aware of how many needless deaths occur each year, it might demand improvements, especially if it happens to them or to their loved ones. Until the public understands that computers are there to assist their doctors and not replace them, significant public outcry will never materialize.
Our government . . . to the rescue? A government-run, single-payer system most likely would hold little appeal for payers or providers, although it would certainly appeal to the 45 million Americans currently without healthcare insurance. A single system would slow the adoption of new technologies, devices and systems. Many in Washington agree that a single-payer system is not the answer but want the government to take on some role. The government may be instrumental/influential in devising a national "standard" for EHR systems, a protocol list of what functionality every system should support regardless of vendor. That way, if a vendor does fail, it would be easier for doctors to move freely from one vendor to another without a large amount of conversion expenses. A real contribution would be a tax credit or other incentive plan for helping doctors over that initial hump of IT investment. The government has been bailing airlines out to the tune of billions of dollars for years. How far will the $139 million allocated by HHS go? The re-election of President Bush should provide some level of stability in proceeding with a goals-oriented solution to the growing crisis, which should be good news for many EHR vendors. Even without a public outcry, the issues of lost lives and wasted medical dollars are too important to remain invisible.
Product improvements on display
There are many improvements being made in healthcare IT that were being shown at the MGMA conference. WebMD Practice Services (Tampa, Florida), which had previously purchased Medical Manager's (Elmwood Park, New Jersey) practice management business, launched its new EHR product, Intergy, with the tag line "Works. Thinks. Moves. The way you do." This may be good news for former Medical Manager customers still upset over the dissolution of the Medical Manager dealer network when WebMD purchased the company. WebMD Practice Services President and Chief Operating Officer Tom Stampiglia was quoted in the product launch press release as saying: "We've listened to the feedback from our physician customers, and have designed Intergy EHR so it fits the way a physician works, thinks and moves to deliver patient care." Although just released as of the time of the MGMA meeting, Intergy may become a popular choice for those physicians who are already using the Medical Manager practice management system, and those physicians who are looking to a newer, web-based solution.
Cerner (Kansas City, Missouri) also was at the show. This is noteworthy in and of itself as Cerner has always been a major force in the hospital information system market, but not at the group practice level. It was touting the "community care model" where doctors within specific geographical areas can benefit from being integrated in one common system. Cerner has a case study completed where Community Memorial Hospital (Winona, Minnesota) is connected with doctor offices, clinics and long-term care facilities in the surrounding area. Already established in inpatient care, look for Cerner to make the leap to the physician's office even as it continues to push its systems out to the point of care in the hospital market.
GBA Health Network Systems (Warwick, Rhode Island) has developed what it believes to be the next generation in practice management. Although in business for 20 years, the company has launched a new product, MEDfx, which it claims to be the only completely standards-based solution that is hardware-neutral and fully written in Java. Most new-generation systems currently rely upon Microsoft as their platform, but GBA has created a product that is truly hardware platform-independent.
Bond Technologies (Tampa, Florida) was showing its Clinician EHR product. Built on the Microsoft .NET framework, it allows all configurations to be completed at the server allowing for centralized deployment and maintenance. Bond Technologies is one of the first to integrate proximity badges into the EHR system, providing greater security at the desktop. If you do not have a badge, you cannot get in.
Mountain Medical Technologies (Incline Village, Nevada) was showcasing its Cyramed EHR System. The product was formerly known as XocDoc. What makes this product interesting, besides the Laurel and Hardy impersonators the company brought to the MGMA exhibit floor, is its low-risk approach. The system has a low monthly subscription rate that includes all software maintenance, support and upgrades. There is no penalty for canceling at any time if the physician is not happy with the product. As with any other system, costly hardware still has to be purchased. However, this product as it currently exists represents a low-pressure, low-cost solution for getting in the electronic game.
AcerMed (Irvine, California) reported that it has completed a bi-directional integration between its EMR product and JulySoft's (Tucson, Arizona) LabRetriever, allowing physicians and their patients to securely access lab test results 24 hours a day.
Allscripts Healthcare Solutions (Libertyville, Illinois), one of the larger record vendors at MGMA, announced the launch of TouchWorks Version 10. The latest version addresses physician workflow needs, a hot-button topic of late. One of its users, Chris Madden of Affinity Medical Group (Tifton, Georgia), said, "The new features . . . make it easier to access the patient data I need. With enhanced workflow capabilities, I can document patient care faster and more completely than before."
Companion Technologies (Columbia, South Carolina) reported a contract with Georgia Healthcare Systems (GHS) to implement its Companion EMR electronic medical records software at 14 health centers statewide. GHS is an organization of federally qualified health centers with 78 sites. It provides healthcare to the medically underserved population and documented nearly 560,000 patient visits in 2002.
Hardware for EHR systems is becoming a fast-growing market. Many large computer manufacturers are finding they have to design different hardware configurations specifically for the physicians' office sector. Small vendors are recognizing that they can carve out a niche in the medical field. One platform type that has emerged is the tablet PC. Motion Computing (Austin, Texas), a leader in mobile computing for the healthcare vertical market, was showing its new third-generation M1400 Tablet PC, the latest enhancement to which is the new Bluetooth-Enabled Wireless Keyboard. There was also a new second version of Motion Medical Pak. The Motion Medical Pak is a suite of "gold standard" applications that run on the tablet and is designed to increase healthcare productivity.
Automated appointment schedulers were shown to help support staffs that spend much of their time confirming appointments, rescheduling, etc. AppointmentCall by US Netcom (Joplin, Missouri) is an automated patient notification system. Using phone numbers and e-mail addresses from a practice's own database, messages can be sent to confirm appointments, remind of overdue invoices and more. In addition to reducing the use of office staff to make such calls, "no shows" can be drastically reduced with aggressive reminder campaigns.
TeleVox Software (Mobile, Alabama) takes the same concept as AppointmentCall one step further. Although it is more expensive than AppointmentCall, the TeleVox LabCalls system also gives patients secure access to lab results 24/7 through the phone or Internet connections. TeleVox is integrated with healthcare IT products from many larger companies such as Misys (Raleigh, North Carolina), VitalWorks (Ridgefield, Connecticut), NextGen (Horsham, Pennsylvania) and others.
Appointment reminder systems also reduce or eliminate the need for postcard reminders, which can become very expensive, especially for larger practices. The tradeoff, of course, is that not all patients are ecstatic about automated messages. However, most practices that have used it rate patient satisfaction with the systems at 90% or higher.
SanDisk (Sunnyvale, California), promoting its media for the personal health record (PHR), is a market leader in USB flash drives. Connect SanDisk's device to your computer's USB port and transfer information simply from your computer to its portable device with storage capacity from 128 MB to 1.0 GB. If and when the PHR ever takes root, these devices could become the mode of transportation of individualized health information. Any hospital, clinic or physician's office with a modern computer would instantly be able to access in a split second critical health information on an individual such as drug interactions, previous medical history and a list of any vitamins or supplements the individual is taking. Patients in turn would be able to carry their medical records with them in case of emergency.
Another hot topic at MGMA was E-prescribing. Many in the industry feel it is the first baby step towards doctors becoming more receptive of a full-scale EHR system. RXHub (St. Paul, Minnesota) delivers on the promise of electronic prescribing with a nationwide information exchange connecting physicians, patients, pharmacies and pharmacy benefit managers/payers for the conveyance of critical information at every point of care. RxHub says it is building the electronic framework that will enable standardized communication throughout the prescription writing and delivery process. The company says its goal is "to improve the process by establishing a single standardized channel of communication that will connect all parties in the delivery chain physicians, pharmacies, technology providers, PBMs and benefit plans."
Although there is a lot of progress still to be made as the healthcare industry moves toward adopting electronic health records, there is the hope that the positive changes this transformation will help reduce healthcare insurance premiums, save lives, and at some point silence the beating pots and pans at downtown San Francisco hotels. The only question is when exactly that will occur.