TEMPE, AZ – A new study by the W. P. Carey School of Business at Arizona State University shows that electronic health records in some cases can impose higher costs to hospitals and lower quality of care.

Researchers on the study, ASU Assistant Professor Michael Furukawa and Associate Professors Raghu Santanam and Benjamin Shao analyzed data from more than 300 California hospitals that adopted some form of electronic medical records over a decade from 1998 to 2007. Their research, recently published by the journal Health Services Research, found that there are some negatives that come along with the positives of electronic health record adoption.

"Everyone has been saying that health IT will save money, but our study and others cast doubt on some of the savings," said Furukawa. "The bottom line is that electronic medical records do appear to help lower mortality rates at hospitals, but they don't necessarily help reduce the number of patient medical complications or reduce costs, especially in the area of nursing."

According to Santanam, there's a disconnect in the policy world that assumes moving to healthcare IT will free up nurses to spend more time with patients. "While some documentation time was reduced, a lot of time at computers may have been added, especially at organizations just learning to implement the new technology in a likely transition period," he said. "Higher levels of nurse staffing were really needed."

The study did find that hospitals saw better results from the use of electronic medical records as their implementation and techniques got more advanced, so cost savings may improve at hospitals over time. Also, less money was spent specifically on overtime for nurses, presumably because personnel began to enter data into the computers as their shifts progressed, instead of waiting until the end of the shift to write everything onto paper charts.

However, patient hospital stays got longer in many cases, possibly because using the computer systems took nurses away from their work caring for patients. Also, more highly educated nurses were required to efficiently use the new systems.

"This could have real implications for the labor market nationwide," said Shao. "Some areas already have registered nurse shortages, and that problem could be exacerbated with the implementation of electronic medical records."

On the positive side, hospitals experienced lower death rates for certain conditions, according to the study. The electronic medical records also contributed to fewer medication errors and may have resulted in less ordering of unnecessary, duplicate tests.

"We're not saying electronic medical records aren't the way to go in the future for the purposes of information-sharing and reducing medical errors," said Furukawa. "However, health practitioners, hospital managers and policymakers should temper their expectations of short-term savings from health IT. This is just a reality check that implementing these systems may be more challenging than expected."

The new study was partly sponsored by the Center for Health Management Research, a program of the Health Research and Educational Trust.