Conversion to Electronic Health Records: A Huge Pot of Gold for ECM Vendors, Practitioners and Consultants?

The carrot. What would you think if I told you that, starting in 2011, the federal government is going to provide some $17 billion in financial incentives to assist doctors and hospitals in converting to electronic healthcare records (EHRs), and that, further, providers cannot be denied funding if they meet the criteria spelled out in the enabling legislation? You’d probably think it sounded too good to be true, like some of those late-night television ads for questionable programs and products that say “and you cannot be denied coverage!”

But in this case it is true. “Starting in 2011, physicians can receive extra Medicare payments for the ‘meaningful use’ of a ‘certified’ EHR [system] that can exchange data with other parts of the healthcare system,” says David Blumenthal, M.D., M.P.P., writing in The New England Journal of Medicine. A similar set of incentives will also be offered for Medicaid payments.

All good, right? Well yes, but you’ve got to get moving quickly. Doctors who can demonstrate “meaningful use” by 2011 are eligible for up to $44,000 over 5 years, while waiting until 2013 would limit the maximum bonus to of $27,000 over 3 years, he notes. Physicians will clearly need this money to move forward, since experts estimate the cost of “purchasing, installing, and implementing” EHRs in a medical practice at roughly $40,000.¹

Up to $18,000 will be available to physicians who convert in 2011 or 2012; $15,000 for physicians who adopt in 2013; and a slightly lower amount for those who wait until 2014. Incentives will then be gradually reduced and completely phased out entirely in 2016, adds Blumenthal.

Funding for both Medicare and Medicaid providers
The largess is provided by the Obama administration’s American Recovery and Reinvestment Act, passed in February 2009, a part of which is the “Health Information Technology for Economic and Clinical Health Act” (HITECH). Incentive payments for both Medicare and Medicaid providers “have been established as entitlement funds – if one meets the criteria, one will receive the payments,” writes healthcare ECM consultant Deborah Kohn in the Sep/Oct issue of Infonomics magazine. ²

Physicians, however, will have to choose either Medicare or Medicaid incentive payments, but not both. A huge stumbling block, however, is that the provision is highly complex, while much of the federal bureaucracy needed to handle the program is not yet in place, and indeed, much is still in flux and could be changed in coming legislation as Congress, the administration, and regulatory agencies wrestle with details and changing priorities.

Still, broad federal support moving forward is thought likely. HITECH represents “a shared conviction among the fledgling Obama administration, the Congress, and many healthcare experts that electronic information systems are essential to improving the health and healthcare of Americans,” says Blumenthal. And America has a long way to go to get there.

“Few U.S. doctors or hospitals—perhaps 17 percent and 10 percent, respectively—have even basic EHRs,” Blumenthal estimates, “and there are significant barriers to their adoption and use: their substantial cost, the perceived lack of financial return from investing in them, the technical and logistic challenges involved in installing, maintaining, and updating them, and consumers' and physicians' concerns about the privacy and security of electronic health information.”

In sum, he states, “[HITECH] addresses these obstacles head on, but huge challenges await efforts to implement the law and fulfill President Barack Obama's promise that every American will have the benefit of an EHR by 2014.”

A growing need for EHRs amid growing glut of paper
So, there’s money available, but clearly, as is often stated on Facebook pages about romantic relationships, “It’s complicated”. But does this very complication spell opportunity for the Enterprise Content Management (ECM) community? Recent AIIM research also indicates a crying need for EHRs, with the volume of paper records growing for 60 percent of the healthcare industry, with 29 percent of respondents indicating that they are growing rapidly. Further, 49 percent of the industry also “manually file newly received items as paper.” Clearly, the healthcare industry has a long way to go when it comes to EHRs. ³

But let’s take a “before” and “after” look at a large healthcare practice that recently took the plunge. The Huntington Internal Medical Group (HIMG) in Huntington, West Va., is a major regional medical provider with more than 60 licensed internists specializing in disciplines ranging from cardiology to endocrinology, gastroenterology, oncology, and pulmonary diseases. ⁴

Until recently, HIMG was like most doctors’ offices—reliant on myriad paper documents to conduct business with patients, other physicians, administrators, insurance companies, governments, and other entities. By going paperless with scanners in both back-office and front-office operations, however, the practice reduced document management staff from 17 full-time employees to four; eliminated four storage rooms, and several thousand square feet of offsite storage space for a combined annual savings of approximately $500,000 per year. 

Clearly, there are great benefits to be attained from conversion to EHRs; and if Uncle Sam is doling out $17 billion to help you get there, why not take advantage of it if you can? This is a good argument when selling EHRs solutions.

The knowledge gap
Give this a shot: the next time you see your doctor, ask them if they know about the $17 billion coming available in HITECH – or even whether they’ve heard about the legislation. Based upon this author’s experience with his own personal physicians in the Washington, D.C. area—a region more tuned-in politically than much of the rest of the nation, many are hazy, at best, on the details. This should come as no surprise, since the practice of medicine today is more complex than ever before, leaving few physicians with the time or bandwidth to wrestle with this incredibly complex beast.

Physicians also, based upon this author’s experience, are in general fearful and even resentful at what they perceive to be costly mandates shoved down their throats. As my internist, one of three physicians in a busy practice recently told me, “it’s going to cost us $40,000 to convert to electronic records, and after we’ve spent all that money, how do we know that the government will not later force us to spend more money to convert to yet another system, as technology improves and new standards emerge?”

It’s a good question. But, given the intevitability of conversion to EHRs, and the fact that Uncle Sam has set aside this pot of gold, it behooves anyone practicing ECM who wants a piece of the action in this huge potential market to bone up on the facts as well as the technology, and make it easy for physicians to comprehend. Marketing will be critical. If you can deliver the information in understandable terms—as well as the technical solution—you will stand to gain new customers and create a new area of speciality – an ECM market that is guaranteed to grow by leaps and bounds in the coming years and decades.

Penalties for non-conversion
The stick. The devil is in the details, as they say, and if one hasn’t already seen enough devils above, the following is another–for physicians–but a further selling point for ECM professionals: HITECH will also penalize providers who do not climb aboard the EHR bandwagon. “Physicians who are not using EHRs meaningfully by 2015 will lose 1 percent of their Medicare fees, then 2 percent in 2016, and 3 percent in 2017,” states Blumenthal. Hospitals, too, will face penalties if they do not meet certain provisions by 2015.

Want to get started in the HITECH market?
In closing, let me say that matters are even more complex than characterized above; this article merely touches the surface. Members of the ECM community who are interested in pursuing this market, however, will find a growing wealth of resources and information available from AIIM.

The author’s advice? A good starting point is to consume the articles footnoted below, and be sure to visit AIIM’s Healthcare Information Management microsite at www.aiim.org/healthcare on a regular basis. Next, you’ll want to visit AIIM’s training pages at www.aiim.org/training, for more information on the association’s industry-certified Electronic Records Management courses and other certificate programs.

Benjamin L. Herring , editor-in-chief, Infonomics magazine. 

Footnotes
1. “Stimulating the Adoption of Health Information Technology,” by David Blumenthal, M.D., M.P.P., The New England Journal of Medicine, Vol. 360: 1477-1479, April 9, 2009, No. 15. (Find online at www.nejm.com ). Dr. Blumenthal is director of the Institute for Health Policy, Massachusetts General Hospital-Partners Healthcare System and Harvard Medical School. He has been named National Coordinator for Health Information Technology.

2. “Impact on the Enterprise Content Management Industry: The 2009 ARRA and HITECH Acts: How the American Recovery and Reinvestment Act of 2009 (ARRA) and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) are going to Rock your World!” By Deborah Kohn, MPH, RHIA,CPHIMS,FACHE, FHIMSS, Infonomics magazine, September/October 2009 (www.infonomicsmag.com ). Kohn is Principal, Dak Systems Consulting, a national healthcare information technology advisory consultancy. Reach Deborah at 650.345.9900 or dkohn@daksystcons.com.

3. See the AIIM “Industry Watch” market intelligence report, “Electronic Records Management – still Playing Catch-up with Paper?” By Doug Miles.

4. See the Nov/Dec 2009 issue of Infonomics magazine, “Conversion to Electronic Health Records at a Large Medical Practice,” by John Harney, at www.infonomicsmag.com. Harney (johnharney2@netzero.com) is president of ASP Watch, a consultancy for application service providers and software-as-a-service vendors.