E-record conversion costs doctors a bundle

By Nicole Lucht (contact), In Business reporter

Fri, Oct 23, 2009 (3 a.m.)

Staff illustration

Handy CD: A Southwest Medical Associates portable medical record compact disc is nearly as small as a standard business card.

The push for electronic medical records is growing, but the significant investment — as much as $100,000 a doctor — and lack of a standard, could make the choice a harrowing one for doctors in small practices.

Although thousands of doctors are converting their offices to electronic health records, a change the federal government supports with $19 billion in grants, there is a major catch — the government is still working on establishing a standard for e-records.

Doctors who buy a software program could lose hundreds of thousands, if not millions of dollars, if their systems aren’t compatible with the future government standard.

Moreover, software companies are competing in a crowded field because there is a lot of money to be made.

There are about 200 systems on the market — not including the ones created by the “nephews of doctors” — said Wes Rishel, a health care information technology analyst for Gartner, a research and consulting firm.

There is an independent organization that has been certifying e-record programs since 2006, with about 80 already certified, he said.

“It’s still a crowded field,” Rishel said.

He expects the field to eventually narrow to about 10 software providers, who will easily adapt to a set standard. The Recovery Act (the stimulus plan) set aside $19 billion for investment in electronic health records, but with strings: Doctors have deadlines to apply for the money and to implement the system.

Swan Lake Medical Center, a one-doctor pediatric and internal medicine clinic, is finally free from paper health records, said Dr. Victor Bruce, its owner, speaking to doctors at a dinner last month at Cili’s restaurant to discuss e-records.

The conversion has been a work in process, Bruce said.

Before the recent push for medical records, he set up his clinic with technology that he spent thousand of dollars on. But he wasn’t happy with it and ended up dumping it, taking a break from medical record technology.

“It’s like picking a wife,” he said. “You can’t be in a hurry.”

So after divorcing his first software, he’s married to another technology that he says he is happy with, and his staff has converted all the clinic’s paper records to digital.

One note of caution: Bruce said he warns other doctors about the cost of conversion.

Not only is there the initial software fee and startup costs, which Rishel pegged at about $100,000 per physician, but Bruce said medical offices can expect to pay a high price for the system’s maintenance.

That includes the cost of the hardware and software, maintenance and lost productivity because of the learning curve, he said.

There are some other concerns, including the cost of technical support when things go awry and fees to upgrade the software, Bruce said.

“They charge $3,000, and worse (for the upgrade) ... It’s very frustrating,” he said. “Of course they want to charge us $500 an hour for support.”

He noted that not all software programs are compatible and advised doctors to seek a program that works best for their type of practice.

But there are cost savings, too, he said.

Before going electronic, Bruce spent $1,600 every three months on the paper and folders needed for 1,000 medical records, plus $1,000 every month on copier ink.

Faxes sent from hospitals could be 30 pages, now they are sent over the Internet, where they can be filed in e-records.

He sees as many patients as he did two years ago, but his billing clerks are done filing that day’s paperwork to insurance companies by the time the last patient leaves.

“Now I can see a gazillion (patients) in an hour,” Bruce said laughing, “because I’m (that) good.”

The Recovery Act also directed the national coordinator for health information technology office to establish by the end of this year an initial set of standards, implementation specifications and certification criteria, said Seth Pazinski, special assistant to the coordinator.

The administration’s goal is to by 2014 is for all patients to have their treatment history filed in electronic health records, Pazinski said.

In just a couple of years, the technological capability of transferring medical history from one doctor to another could be as simple as loading the data on a thumbdrive for the next doctor to download and view as a document, Rishel said. But the analyst doesn’t envision every bit of information, such as the flu treated two winters ago, to be part of the transferred data. Instead, he imagines the most pertinent information — continuity of care — such as chronic disease, allergies and current prescriptions to be shared with other medical professionals.

By 2015, there’s a good chance doctors could just send that information themselves, he said.

“This is a slow process,” he said. “Health care is a big business, and doctors are particularly sensitive to changing things.”

Doctors who adapted early to electronic records might be faced with spending tens of thousands of dollars or more if the government selects a system incompatible with theirs, said Dr. Steven Evans, chief medical officer and pharmacy director of UnitedHealthcare Nevada.

UnitedHealth is the parent of Sierra Health, the insurance arm of Southwest Medical Associates, a large doctors’ group.

He doesn’t envision a fully integrated system for five to seven years.

“It’s going to be painful,” he said. “If their system isn’t the one (the government) picked, they’re going to be mad.”

But for an electronic record system to be successful the number of software developers needs to be limited, he said.

Evans is confident that Sierra’s system will be among the ones selected by the government because it used a major software company, Allscripts. But, if it’s not, the company would have to spend $5 million to $10 million to make the switch.

Southwest Medical Associates CEO Michael Coleman is also happy with his company’s e-records software supplier.

“Luckily, we picked a vendor that is going to be a player going forward,” he said. “There’s no question that it’s very capital intensive.”

Ten years ago Sierra Health Services, the insurance-providing sister company of Southwest Medical Associates, started prescribing medications electronically.

With a few keyboard punches, the prescription is zipped to a pharmacy for the patient to pick up later.

Evans developed a portable medical record for Sierra Health patients partly as a workaround for systems that don’t talk to each other.

The medical record is loaded on a compact disc roughly the shape and size of a credit card, making it easy to carry in a patient’s wallet. If a person goes to an emergency room, medical workers can put the disc into a computer, allowing them to see the patient’s most important health information, including allergies, medications and chronic illnesses.

The disc leads a nurse or doctor to a secure Web site, where the patient’s up-to-date medical history is stored.

So far, about 17,000 patients have signed up for Southwest Medical’s portable health record.

In Las Vegas, hospitals use three basic systems, Evans said.

In general the systems don’t talk to each other. For Southwest Medical’s doctors to read an outside hospital’s e-record, they have to sign up and be approved for access to that system, Evans said.

“The only way for this to be truly effective is (for the programs) to all work together,” he said. The next step for the company is to have a Web portal available for its patients to e-mail doctors and perhaps have electronic visits, all in an effort to get patients more involved in their care.

Evans said larger groups of doctors will have an easier time setting up e-records. Unfortunately the same can’t be said for small practices, especially those with one or two doctors.

It takes about five to seven years for an e-records system to pay for itself, Evans said.

There is a short-term payoff, however. Patient care is more coordinated and, therefore, quality has improved, he said.

The motive behind the government’s push to move doctors’ offices into the 21st century is the development of a network that would allow for interconnectivity throughout the U.S. health system, said Russell Suzuki, owner of Certified Healthcare Systems, a distributor of Allscripts programs.

He said he expects physicians to have virtually paperless offices by 2014, about the time the stimulus money runs out.

“That would be great if it happens that fast,” he said. “It will be like overnight to a lot of people.”

A key concern is the lack of interoperability among the various software programs out there, he said. “As with any technology, the question is ‘How soon is this going to be obsolete?’ ”

Doctors who invested in inexpensive technologies might find that their software provider won’t be able to upgrade the system because of the high costs involved, Suzuki said. Doctors also need to allow for upgrade costs in their annual budget, he said. Otherwise, they could be locked into an old version that isn’t even supported by the developer anymore.

There has been an economic benefit for Sierra Health, said Coleman, senior vice president of clinical operations at UnitedHealth.

Just 10 percent of small practices have an e-records system, and Rishel doesn’t think that will change anytime soon.

“If 20 percent have a program, I’ll be delighted,” he said.

“From the point of view of the government, if they put up $44,000, they don’t want the doctor to buy (Microsoft) Office and open a spreadsheet,” he said.

The push for e-records is based less on a patient’s ability to seamlessly transfer their medical history, than it is to allow a doctor’s office more accurate record-keeping and help keep apprised of their patients’ health care and treatments.

For instance, if doctors were able to see which of their diabetic patients hadn’t been in for regular checkups and were able to notify them, their care, and health, would probably improve, and overall health care costs would markedly decrease, he said.

“We have to manage health care better,” he said. “You can’t manage what you can’t measure. This is Step 1 of a multistep process.”

Before Sierra implemented e-records, the No. 1 complaint from patients was that their records weren’t at the doctor’s office, causing delays or cancellations, he said.

Dr. Delos “Toby” Cosgrove, Cleveland Clinic’s CEO, said that although electronic health records could improve quality, he’s doesn’t believe the change will be a panacea.

“Whether it will drive down quality, I don’t know,” he said during an editorial board meeting with the Las Vegas Sun, a sister publication of In Business Las Vegas.

“It doesn’t increase efficiency or lower costs.”

Cosgrove, who has conferred with President Barack Obama on health care reform, said the biggest savings realized from e-record conversions are in e-prescriptions because doctors are able to see what medications the patient is currently taking, what her insurance covers, which medicines are most cost-effective, what generics are available. The technology can also help ensure the correct dosage and medicine is given to the patient, he said.

Rishel described the e-record system as “piecemeal.”

Until the medical field settles on a standard that allows doctors, hospitals and insurers to freely send medical information electronically, Rishel said the e-records conversions won’t pack much of a punch.

“Right now, it is virtually impossible ... (for e-records to) have interoperability,” he said.

Nicole Lucht covers health care, workplace, energy and banking issues for In Business Las Vegas and the Las Vegas Sun. She can be reached at 259-8832 or at nicole.lucht@lasvegassun.com.