Return of the Guru

Slow Progress on Electronic Medical Records Spells Higher Health Insurance Premiums

Ara Trembly
Insurance Experts' Forum, December 2, 2010

When it comes to health insurance for all who need it, many solutions are proffered, but few make any sense; witness the recent federal health care legislation that was rammed through despite opposition from 75% of the electorate, according to polls. 

There is no question that while optimum health care should be the goal, money is the true bottom line driving force in most proposed changes.  Yet a study released earlier this year by the Harvard School of Public Health (HSPH) illustrates that while money, and by extension, lives can be saved in our health care systems, we don’t seem willing to do what is necessary to make that happen. 

The study points out that transforming the U.S. health care system from paper-based to electronic-based may improve health care quality and reduce costs; unfortunately, the study also notes, that goal is far off.  “Adoption of basic or comprehensive electronic health records (EHR) by U.S. hospitals increased modestly from 8.7% in 2008 to 11.9% in 2009, but only 2% of hospitals met the federal ‘meaningful use’ standard needed to qualify for government financial incentives,” said HSPH.

According to the study’s lead author, Ashish Jha, associate professor of Health Policy and Management, “Paper-based medical records lead to hundreds of thousands of errors each year in American hospitals and probably contribute to the deaths of tens of thousands of Americans. This is not acceptable. There is overwhelming evidence that EHRs can help, yet the expense and the disruption that implementing these systems can cause has forced many hospitals to move slowly.” 

The resultant effect of this problem on health insurance rates is negative to say the least.  If it costs more to process medical records, someone will have to pay those costs.  If there are more medical errors, insurers (either on the health or life side) will likely end up paying out more claims on extended hospital stays, more treatments and/or death benefits.  It should be no surprise that health insurance premiums will rise in such an environment, yet, as the study points out, this doesn’t have to be. 

Why has progress been so slow?  The obvious reason is the current economic environment.  Then we have to consider the additional financial stresses placed on hospitals and other health care providers by the new legislation.  Where are these providers supposed to get the money to make the necessary upgrades that will then save money (and health and lives)? 

“The problem is that the bonuses that hospitals get for meeting meaningful use are front-loaded, meaning hospitals have to implement and use EHRs by 2012 in order to get the bulk of the incentives,” Jha says. “This is an aggressive timeline, and many hospitals may not make it. If they miss out, it may be years before many of these hospitals will be able to afford to purchase and install their own EHR systems.” 

I do have a suggestion here.  The federal government has been quick to bail out corporations and banks that have failed due to their own poor business decisions.  The current administration in particular has been all-too-ready to throw money at those problems—especially since it is the taxpayers’ money, and not their own.  But if we’re going to throw money at something, why not make our target something that will pay back a huge dividend for all of us?  Yes, I’m talking about the upgrading of medical health systems. 

Maybe some will say it is more important to save General Motors than it is to save lives lost to medical errors that arise from faulty records.  I cannot count myself among them.  As usual, however, those in political office seem to have their priorities backwards.  One can only hope that coming elections will purge those who don’t get it. 

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