The Business Problem

Just getting health care providers to migrate from paper to electronic records systems is a challenge.

"The provider bears the cost, but most of the benefits accrue to other parties," mainly "payers" -- insurance companies -- and patients who reap the benefits of higher-quality care, says John Halamka, CIO at Harvard Medical School and Beth Israel Deaconess Medical Center.

Among the benefits for patients is prevention of adverse reactions to drugs. But while providers recognize the benefits, they aren't rewarded for improved patient care and safety, says John Quinn, chief technology officer at Health Level Seven (HL7), a health data standards development organization.

A recent study on the value of computerized order-entry systems for clinical use found that only 11 per cent of the return on that investment goes to the provider. Most of the rest benefits the payer, says study co-author Blackford Middleton, who is corporate director of clinical informatics research and development, and chairman of the Center for IT Leadership at Partners HealthCare System.

"We're not reimbursed for using better systems to take better care of patients, says Mark Leavitt, chairman of the Certification Commission for Healthcare Information Technology. Ironically, the financial systems are a different matter. "Everyone makes darn sure those work, because if you don't send [insurance reimbursement information] in the right format, you don't get paid," he says.

Historically, the adoption of computers in health care has been driven by the need to bill for services. That hasn't changed, Leavitt says.

The same problem arises with regional health information exchanges, such as the one briefly considered in San Diego. "If I send electronic information to Sharp [Memorial Hospital], I don't really benefit. It costs money to do this, and it doesn't really help our margin," says Lee. "It's good for patients, but it's almost an unfunded mandate."

On the other hand, says Leavitt, "if you're not able to cover the last mile and get that record to the other institution, it won't affect your reimbursement at all."

Shared EHRs can help providers avoid duplicating tests. But providers are compensated for procedures given, not those avoided. "The cost to the payer is diminished, but so is the reimbursement to the radiology department and the radiologist," says HL7 CEO Charles Jaffe.

"The problem we have in this country is a lack of business reasons for integrating," Jaffe explains. "What is the business case for two competing hospitals to share data? None."

On a national level, the inability to exchange health information has public health consequences. About 47 million Americans move every year, but for the vast majority, medical records -- even electronic ones -- don't follow the patients. That can affect continuity of care.