Do Electronic Health Records Save Money?

By on December 1, 2012

One of the most important innovations in health care in the past two decades has been the all-electronic health record. Besides dealing with the centuries-old issue of doctors’ bad handwriting, it provides a more comprehensive record of what went on during an encounter, hospitalization or surgical procedure. It allows for much data to be captured, analyzed and researched. Outcomes can be appreciated and successful practices gleaned from electronic records that are centrally archived.

Concerns about privacy surfaced early, but designers of these systems were able to address them to the satisfaction of most observers. Nadya Suleman, the so-called Octomom, mother of eight babies via an implantation later ruled unethical, had her privacy invaded by employees at the hospital where she delivered. Because the facility the organization was able to identify the hackers they terminated these electronic busybodies. This could not have happened so expeditiously in the era of paper records.


Though originally sold as a time-serving measure, this has not proved the case. However most users have expressed a willingness to trade off  greater charting time, for greater reliability and access. The big problem with electronic records however is that they were initially considered a cost-saver as well. Independent studies from Harvard, RAND and the Commonwealth Fund argued that this innovation could cost at least $75 billion to $100 billion over the ten years. The President among others bought into this. To date evidence of savings is still lacking.  Small practices in particular have struggled to make these systems financially viable.

What’s worse several reports this year have documented increased costs to Medicare related to EHS’s. This has appeared in the form of more ‘up-coding’ of acuity by billers, billing for more items identified by the records and the cost of maintenance of systems, training costs, loading in old records and system back-up. Compounding this surprise is that fact that the government has been supporting the installation of these systems with billions of dollars in grants and credits.

It seems unlikely the nation will ever back away from the Electronic Health record for the reasons mentioned first. But if it cannot achieve savings with these systems, then these are just another technologic expense that only adds to the great crisis in runaway cost facing the country. Reformers are running short of magic wands to fix this. The only thing left is the restricted use of new technologies and — rationing, the word never spoke in health policy in this country.

Meanwhile, we will keep watching and hoping, but time is running out.

Tom Godfrey

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