Saving the healthcare industry: EMRs are the 'beginning, not the end'

By Chip Means
10:40 AM

Economically healthy industries empower workers to make decisions, compensate based on productivity and use a lot of information technology. The healthcare industry doesn't do any of this – yet.

Stimulus funds for IT could save the day and the economy, according to Harvard economics professor and Obama campaign advisor David Cutler, who spoke at the Tuesday afternoon session of the HIT Symposium at the Massachusetts Institute of Technology in Cambridge.

Every industry except healthcare has figured out how to become more efficient by replacing administrative work with information technology, he said. Nurses spend a third of their time documenting – a procedure Cutler said often involves printing digitized information and re-entering it into another IT system.

With the right IT systems and processes, he said, the business of healthcare could change to focus more on compensation and empowerment, making hospitals and practices more profitable.

Cutler said the promise of electronic medical records lies in three areas that can greatly improve the economic health of a hospital:

  1. Simplified billing – The greatest potential for reducing administrative costs lies in eliminating the process of spending all day talking to insurers and drug companies. Electronic claims and e-prescribing can replace that process, he said.
  2. Decision support – "Meaningful use has almost certainly got to mean decision support in place to avoid mistakes," Cutler said. "Mistakes alone cost us $100 billion a year."
  3. Learning which treatments are effective – IT can provide organizational insight to demonstrate what is and isn't working.

Some physicians fear that if healthcare becomes too automated, the nation will have "cookie-cutter medicine," said Cutler.

"What we know in every industry is that computerization is good for high-skilled people – it frees them up to use their expertise to do what they should be doing." Doctors estimate 40 percent of their time is spent doing needless administrative work, he said. "If I cut your administrative task time in half, I've increased the time you have to see patients by 20 percent."

Simply putting the systems in place isn't enough. "Electronic medical records are the beginning, not the end," said Cutler. "What has to happen is IT has to lead to a change in healthcare as big as it led to in other businesses. If it doesn't, everything we do now will be a big failure."