The editors of the Washington Post note the disappointing results of the move to electronic medical recordkeeping mandated by the PPACA, also known as “ObamaCare”:
It’s easier to identify factors that did not contribute to the downward bending of the cost curve. Health information technology is a case in point. At one time, its cost-cutting promise seemed immense. A 2005 Rand Corp. analysis estimated that the nation could save up to $81 billion a year by digitizing patient records and other data; best of all, it was said, more accurate, accessible information would also help improve patient care. All that stood in the way was the fact that doctors and hospitals had no incentive to invest in equipment that would save other people money. So President Obama’s 2009 economic stimulus bill allotted $27 billion in incentives to health-care providers who adopted electronic health records and showed they’re being used to improve patient care.
But as an article released Monday by Rand researchers argues, the subsequent investment has bought very little in the way of either improved care or lower costs. It’s possible that computerization may actually have increased spending. Between 2006 and 2010, Medicare payment to hospitals receiving federal dollars for electronic records grew faster than payments to hospitals that did not take advantage of the incentives, according to a Sept. 21 New York Times report cited in the new Rand article.
The editorial goes on to consider the problem of “interoperability”, making the cacophony of recordkeeping systems talk with one another. I can think of a half dozen different ways that could have been accommodated. Among them are standards, a centralized database along with an application programming interface for interacting with it in a secure manner, or a full-blown (and mandatory) practice management application provided at no charge. $27 billion is a lot of money.
Anybody who had real life experience might have mentioned to those planning the PPACA something that is very well known: the problem in electronic medical recordkeeping is not capital investment. It’s compliance. Look at it this way. Assume an average wage of $200,000 for a physician, 2,000 billable hours per physician, and five minutes per billable hour spent by the physician in additional recordkeeping to fulfill a system of electronic medical records. That means that $100 per hour would need to be billed just to pay the physician. Using the rule of thumb to relate wage rate to billing rate that means a billing rate of about $300 per hour. Five minutes then costs roughly $25 or $50,000 per year. For a half million physicians that comes to about $25 billion per year. So, we’re going to increase costs by $25 billion to save a maximum of $81 billion. Not a great bet. You might lose money on it and almost certainly will in the short run.
And it’s a bet that isn’t panning out. As I predicted and pretty much anyone reasonably well-informed on the subject might have.
Piece by piece the benefits of the plan are disappearing, like the Cheshire Cat, until nothing is left but the smile.