September 30, 2005
Hope Is Not a Strategy
Not only good admonition, but also the title of a book on complex selling by Rick Page (Nautilus Press, 2002).
But in this case I am referring to adoption of Electronic Health Records (EHR). In the Sept/Oct, 2005 issue of Health Affairs one can find a mind numbing compendium of mostly opinion about the value or not of EHR and whether or not government should ram it down out collective throats, ready or not. Does EHR add any value?
The lead article is a report of a study from the consultants at RAND Health. Entitled "Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, and Costs," it reports an extensive study done by the group to try to answer these questions.
It was an ambitious study to say the least. And appears rigorous. But like most consultants’ work it depends upon assumptions that may fairly be vigorously challenged as irrelevant.
The most disappointing conclusion after all that work was that the annual savings from EHR adoption was projected to be a paltry $81 billion. This is out of current expenditures of $1.7 trillion per year. That works out to be less than 5%. And it is mostly dependent upon extrapolating possibly irrelevant experience from other industrial adoption of automation techniques.
So, the hope that EHR will result in massive efficiencies in healthcare doesn’t look too likely. And really, this makes pretty good sense. Although the impact of the better file cabinet is tidy, it doesn’t really address most of the inefficiencies in the system.
As has been pointed out before, there is almost no investment in healthcare in research and development in process improvement and innovation at the point of care service delivery in healthcare. Nor is there much examination of our cultural predilection to maximum utility and treatment at the margins of benefit. Nor is their much attention to patient satisficing. So, if one has an inefficient system, and then one automates the inefficient system, one now has an automated inefficient system.
One of the accompanying perspectives titled "Hope and Hype: Predicting the Impact of Electronic Medical Records" by David Himmelstein and Steffie Woolhandler pretty much sums up why the studies' conclusions are more hope and hype than reality.
At least a significant part of their point has to do with the low adoption rate of EHR by hospitals and physicians. The study found that 15-20% of US physicians’ offices and 20-25% of hospitals have adopted EHR systems.
A recent study published by the Medical Group Management Association (MGMA) found a slightly lower adoption rate. Though larger medical groups (>15 FTE physicians) had adoption rates around 14%, the adoption rate for all practices was 11.5%.
Why don’t physicians embrace the Electronic Health Record? Although people seem to obsess about the answer to this question, it is really quite simple. Physicians derive no benefit from using an electronic record. There is no value to them.
Physicians behave like most small business owners. Physicians generate income from piece work (Sorry, this sounds a bit crass but in economic terms it is accurate). Physicians who are experienced know about how many pieces of compensate-able work they can do per day. Anything that disrupts this work flow or causes increased aggravation or increased time, will be highly resisted.
This can be expressed in the mathematical formula:
di/dt/H
Where i=income, t=time, H=hassle
This not different from any value proposition in business where the relationship between revenue and costs is constantly assessed. In this instance, however, income is a derivative since it is a time dependent function.
EHR up to now has been a largely institutional phenomenon with the costs and the attendant benefits deriving to the institutions. There has been no incentive to create benefit for the physician practitioner much less the patient.
Long experience shows that it is expensive to implement EHR in medical practices. Recent figures (also in Health Affairs) suggest that it costs around $44,000 per physician user and the return on investment, again made with challengeable assumptions, is 2.5 years. That’s significant.
Also, there is a learning curve. My personal experience in going from paper to 100% electronic was an initial halving of productivity (i.e., doubling of time) but an improvement in productivity from baseline after 90 days. And that’s if everything works. Imagine if the billing system doesn’t work. Again, this is significant.
Physicians generally gain productivity from retrieval functions. The items are always available. There is less time spent searching for things. They give up productivity on data entry. So, physician order entry and entering notes cause resistance due to loss in productivity.
In the Health Affairs compendium there are a number of articles trying to figure out how the government by fiat, financial incentives and direct payments could make EHR happen. This is rather like having difficulty lifting a heavy object and then suggesting a solution that adds weight to the object.
If and when the EHR adds value, it will be adopted. Not before.
