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EHR Use, High Administrative Burden Driving Healthcare Spending

Senators blame administrative burden associated with EHR use for high healthcare spending.

Senators blame EHR use and high administrative burden for healthcare spending.

Source: Thinkstock

By Kate Monica

- While CMS and other federal entities have made efforts to streamline reporting requirements in recent years, the high administrative burden associated with EHR use and federal regulations continue to add financial strain to healthcare organizations.

At a recent Senate Committee on Health, Education, Labor & Pensions (HELP), committee chairman Lamar Alexander (R-TN) called on the federal government to further reduce administrative burden on providers to cut healthcare costs.

“While many administrative tasks in the health care system come from outside the federal government — such as insurance company or state requirements — the federal government is clearly at fault for some of this burden,” stated Alexander at the committee hearing.

EHR systems allow providers to more easily access patient health records and engage in health data exchange with other providers and care facilities. However, the technology has been a costly investment for both the federal government and hospitals and health systems.

“Since 2011, the federal government has spent $38 billion requiring doctors and hospitals to install electronic health records systems through the Meaningful Use program in Medicare and Medicaid,” noted Alexander.

READ MORE: AMIA Notes Health IT Safety Considerations to FDA in EHR Use

Federal incentive payments have helped to cushion hefty EHR implementation costs, but payment penalties resulting from the failure to fulfill federal reporting requirements have cost health systems and post-acute care providers billions.

“The federal government provided payments to doctors and hospitals to buy those systems, and also created specific requirements for how doctors must use the systems, penalizing doctors who did not comply,” stated Alexander. “Unfortunately, electronic health records systems have ended up being something physicians too often dread, rather than a tool that’s useful.”

Alexander referenced the case of one family physician — Reid Blackwelder, MD — who invested in an EHR implementation to continue delivering care to his Medicare and Medicaid patients. Blackwelder used incentive payments from the federal government to finance his EHR system, but now must pay a monthly fee to keep up with maintenance and periodic updates.

“All of these costs add up to being far more expensive than the paper records he used to keep, or the initial payments the government provided,” Alexander continued.

Persistent problems with health data exchange and interoperability further diminish the value of EHR technology. Health data exchange and interoperability solutions are available to streamline health data exchange and eliminate the need for paper health records, but this additional technology costs money.

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“There is technology that Dr. Blackwelder could buy to make his electronic health record system communicate with the local hospital records systems so he wouldn’t have to have them fax the record to his office,” said Alexander. “However, he would have to pay $300 per month to the electronic health records company for each of the 88 doctors and nurses in his practice.”

All told, the physician practice must spend $26,400 per month to enable health data exchange with nearby hospitals.

“The electronic health records system, which was supposed to make things easier and simpler, has instead made record keeping more expensive,” maintained Alexander.

To help reduce the cost of implementing, maintaining, updating, and optimizing EHR systems, Alexander recommended reducing regulatory requirements on hospitals and health systems.

“The Trump Administration has taken a look at what administrative tasks are required by the federal government and I am glad to see that Seema Verma, administrator of CMS — which oversees Medicare and Medicaid — recently proposed streamlining many of the agency’s burdensome reporting requirements,” said Oliver.

READ MORE: AMA Adopts Policy to Expand EHR Use Training in Med Schools

CMS initiatives including Patients Over Paperwork and Meaningful Measures have been effective in reducing regulatory requirements associated with E/M clinical documentation requirements, as well as trimming the number of quality measures providers are required to report.

Harvard Professor of Applied Economics David Cutler recommended at the hearing that stakeholders advocate to reduce severity adjustments, standardize pre-authorization requirements, and integrate EHR and billing systems to reduce administrative spending.

“Technologically, there is no reason why electronic medical record systems cannot interface with billing systems or automatically submit information for quality assessment,” said Cutler. “However, there are few incentives for existing firms to make this happen. Providers do not wish to give insurers access electronic medical records, because they consider them proprietary.”

“Each individual insurer has little incentive to invest in a system that is more conducive to provider systems, since doing so for a single practice involves large costs and little gain,” Cutler added.

EHR vendors also lack incentive to make their systems integrate with other health IT, which further complicates health data exchange between insurers and providers.

Cutler recommended stakeholders in both the public and private sector take specific action steps to improve health IT interoperability.

“In the public sector, standards regarding health information technology could be modified so that select information flow from electronic medical record systems to billing systems is required,” Cutler suggested.

While the public sector has devoted considerable attention to improving interoperability between clinical health IT systems developed by different vendors, few initiatives focus on improving health data exchange between EHR and billing systems.

“A private sector solution might involve something like the credit card industry, where intermediaries read information from electronic medical records and send the compiled information to insurers in the appropriate format,” recommended Cutler.

“The intermediaries would take a common set of information from providers – the universe of information that is required – and then parcel out the information as required,” he continued.

Overall, Cutler recommended HHS work with healthcare organizations to develop and implement a plan designed to reduce administrative costs in healthcare by 50 percent within 5 years. This plan would include payment simplification, standardized pre-authorization policies, and integrated EHR and billing systems.

“The reality of the situation is this: unless the federal government leads the way, the United States will continue wasting hundreds of billions of dollars annually on unnecessary administrative expenses,” concluded Cutler.

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