Industry leaders are urging the creation of private-public incentives to boost the adoption of electronic medical record systems by physician practices. Their cry comes as several new studies are released today, showing the rate of automation is sluggish, particularly among small practices.

"The needle really hasn't moved very much," said William F. Jessee, president and chief executive officer of the Medical Group Management Association.

"It's a little disappointing in view of the buzz there has been," he said.

Disappointing, but not surprising.

Many barriers to adoption still remain, chief among them is cost, said Jessee. There is also the difficulty physicians face in finding a system that's right for them, the uncertainty of payback, and the disruption to the practice as they convert from paper to digital records. Yet, the rewards to the nation's healthcare system could be tremendous. Widespread adoption and effective use of electronic medical record systems and other information technology could save $162 billion a year, according to a Rand Corp. study released today. The study also found that computerized physician order entry systems could eliminate two million adverse drg events in the ambulatory setting and 200,000 ADEs in hospitals.

Small practices slowest to adopt IT

The MGMA and the Minnesota School of Public Health teamed up on one of several studies on IT adoption published today in the September/October issue of the journal Health Affairs. More than 3,300 medical group practices participated in "Assessing Adoption of Health Information Technology." The study was funded by the Agency for Healthcare Research and Quality.

It shows:

- 14.1 percent of all medical group practices use an EHR

- 11.5 percent have an EHR implemented for all physicians at all locations.

- 12.5 percent of medical group practices with five or fewer full-time equivalent physicians have adopted an EHR.

The adoption rates increase with the size of the practice"

- 15.2 percent for groups of 6-10 full-time physicians

- 18.9 percent for groups of 11-20

- 19.5 percent for groups of 20 or more

"These numbers are completely consistent with other studies and figures I have been using," said Mark Leavitt, MD, chief medical officer for the Healthcare Information and Management Systems Society. "Penetration of EHRs is lowest in the smallest offices with five or fewer doctors. It's what David Brailer (the National Health Information Technology Coordinator) has called ‘the health IT adoption gap.' About half of all physicians practice in that office-size category."

Estimates for implementation vary

While the MGMA/University of Minnesota study pegs the cost of implementing an EHR in a small practice at $37,204 per physician and maintenance costs at about $1,500 per physician per month, a Commonwealth Fund study also published in Health Affairs today estimates the cost at $44,000 per physician to start, with a maintenance cost of $8,400 per physician per year.

The Commonwealth Fund study also found small physician practices on average recoup the cost of investing in electronic health records in 2 1/2 years.

Finding the money to implement the technology in the first place is no easy task for physicians in small practices, said Jessee, and many are still uncertain about return on investment.

"They don't have retained earnings," he said. "It comes out of the physician's income. With the payback uncertain and likely to benefit the health plan rather than the physician, it is understandable physicians might be reluctant to make the investment, he added.

Creativity, incentives needed

"What we are going to need is some creativity," Jesse said. Since payers are the immediate beneficiaries of electronic records perhaps they should help develop a private/public incentive. Perhaps the government could provide tax incentives, revolving loan funds and supplementary payments to physicians who implement technology.

The authors of the studies conducted by the MGMA and the University of Minnesota, the Commonwealth Fund and the Rand Corp. called for similar incentives.

The studies also revealed that physicians remain uncertain about what to buy, worried that a small company that seems stable today might not be here tomorrow. Consolidation of the industry might spur IT adoption, noted Jessee.

"It'll be better for the buyer to choose from a small group of stable companies than from a large group of small firms that may or may not make it," he said.

"One of the major issues is can these technologies do what they say they are going to do," said John E. Kralewski, a professor at the University of Minnesota School of Public Health, a researcher and one of the authors of the study.

Anne-Marie Audet, MD, vice president of quality improvement for the Commonwealth Fund, suggested that physicians need a consumers' guide to EHRs

"Work needs to be done to demonstrate that these systems are effective," Kralewski agreed.

That's exactly what Leavitt is working on as chairman of the Certification Commission for Healthcare Information Technology, an initiative to certify EHR products.

Leavitt said certifying EHR products would accelerate adoption in three ways:

- by reducing the risks for providers preparing to buy EHRs;

- by ensuring that the EHRs will be interoperable; and

- by unlocking incentives for IT adoption that can be offered by healthcare payers and purchasers.