Electronic Medical Records: Resistance is Futile

Medical records are the life blood of any life or health underwriter. The collection and review of medical records is the most costly, time consuming, and frustratingly inconsistent necessity of underwriting. As the United States medical system begins making truly meaningful progress away from a paper based system to one based on the electronic storage and dissemination of medical records, the impact on underwriters will be transformational. As those familiar with Star Trek know, when the Borg assimilates another individual entity into their collective they proclaim, “Resistance is futile”!

Introduction

Efforts to move the medical system away from a paper based system to one predominantly operating on an electronic platform have been underway for years. The improvements such a system would have for costs, operations and outcomes are obvious but the transformation by hospitals and physicians has been slow. Over the last two decades, factors such as cost, legacy systems, generational reluctance, worries about technological obsolescence, and fear that systems will be underutilized have all contributed to the glacial pace of adoption. But, in the last 3-5 years the pace has begun to hasten. A number of factors are contribution to the increasing adoption of Electronic Medical Records (EMR) on a national level. The cost of technology has dropped dramatically and the internet has been a big factor as well. The generational divide has shrunk with a greater percentage of medical professionals use technology and the internet on a daily basis. Last but not least, the government has come to realize the benefits of adoption and has been instituting programs and incentives to open up the “mainstreaming” of EMR.

From Bits to Bytes

The logic behind EMR is undeniable. Moving from an analog to a digital world holds a host of benefits for every stakeholder in healthcare. The conversation has been going on since at least the 1960’s, and there are some very interesting (and even humorous) visions for the future in older papers that reminds me of a trip to Disneyland’s “World of Tomorrow” attraction when I was a kid. One of the biggest factors to the delay in making the transition is that until relatively recently the technology has not really been there. Most early attempts at adopting EMR were thwarted by the inability of systems from different vendors to communicate with each other. In an attempt to develop the dominant platform, technological silos were built trapping data within a system and would not allow for “interoperability” or transfer of data across different institutions and systems. Interoperability is a key factor to getting any value from EMR. In fact, the discussion now has moved beyond records and has really shifted to connectivity and communication between various participants in a healthcare value chain..

Another key driver of today’s advances for EMR is the internet. The true utility of the internet only emerged in the last five years. Ten and fifteen years ago the internet was still very much in its infancy. Most companies looked at the internet as a curious novelty where they might put up a website that was little more than an electronic brochure. But, sometime around 1999-2000, IBM coined the phrase “E-Commerce” and a shift in attitudes and utilization began. More marketing than reality at the onset, concepts such as “E-Health”, Tele-Medicine, Smart Cards, and Electronic Medical Records all began to take root. Companies such as Amazon, E-Bay, Apple, Google, YouTube and now the social networking phenomenon driven by Twitter and Facebook proved that the E-Commerce hype of ten years ago was actually quite prescient. Not only could business be conducted using the internet, but the internet had proven itself to be the platform to provide the three key elements that any successful EMR initiative must have: Functionality, Interoperability, and Security.

Meaningful Use

Technological capabilities and capacity have increased, costs have decreased and the internet has created the avenue through which meaningful utilization can occur, yet adoption continues to be the exception and not the rule. In a 2008 New England Journal of Medicine survey of 2,800 physicians only 4% reported having a fully functional EMR platform. What will it take for national adoption of EMR? As is the case with most things that we know are good for us, it will take both the stick and the carrot. In the American Recovery and Reinvestment Act of 2009, President Obama specifically included incentives and possible penalties to move adoption of EMR forward at a much faster pace. Individual physicians are eligible for $64,000 in subsidies and hospitals could receive up to $11 million for implementing an EMR program. Medicare and Medicaid certified providers could also face reimbursement penalties if they do not have a system in place. Specific deadlines are yet to be established, but compliance to receive subsidies or avoid penalties will hinge on systems that would meet the definition of “meaningful use”.

Although the final definition of meaningful use is yet to be agreed upon by the Health IT Standards Committee (a federally mandated body), they have published a quasi-mission statement for the concept: “Better healthcare does not come solely from adoption of technology itself but through the exchange and use of health information to best inform clinical decisions at the point of care.” What is enlightening about this statement is that it emphasizes the use and exchange of data as the key and not the technology itself. It is not the “what” that is important, but rather the “how and why”. This is why functionality, interoperability and security become the three critical elements to a successful EMR platform.

Exchange of data

In recent years Health Information Exchanges (HIE) and Regional Health Information Organizations (RHIO) have been developing around the country to empower secure transfer of medical information between participants across a chain of care. This would include hospitals (and their various departments), physicians and practice groups, specialists, and providers of long term care. It could also include labs, pharmacy, and supplies. HIE’s function day-to-day transferring medical records throughout a connected group of stakeholders. The RHIO is the governing body that sets the standards for the HIE to follow in a given region so that all stakeholders can benefit from participation. Following the mandate set by the Office of the National Coordinator for Health Information Technology to create a National Health Information Network (NIHN); RHIO’s establish the local level of interoperable connectivity that must be in place to create a nation wide network. There are almost 200 RHIO’ around the country at various stages of development and functionality with as many as 57 currently reporting that they are actively exchanging health records across a variety of approved participants.

“In the past, technology was too slow, too expensive, unconnected, and technology was too quickly outdated for any meaningful level of adoption and information exchange to happen”, says Dr. Faiz Fatteh, CEO of Soren Technology, “but now the costs are very low if not non-existent, speed and security of connectivity is finally here, and the emphasis now has moved way beyond simply transferring records from paper to digital files, and it is really now all about sharing data through use of an HIE platform connected via a geographically situated RHIO.”

One stakeholder in the process slow to be involved in the development of the NIHN is the insurance industry. When looking at the various RHIO’s in place around the country, the proverbial elephant in the room is the lack of insurance companies involved. Save for a few exceptions and its own failed attempt at creating a national exchange, the insurance industry has not been as actively involved as it should be. Will that change? It appears that with the efforts towards national healthcare reform being driven by incentives and mandates to finally get a national network in place, the insurance industry will be well served to be getting on board as well.

What’s in it for me?

Financial incentives have been targeted at the providers, but the insurance industry stands to benefit from at least three perspectives:

1) Improved underwriting -- Obviously medical records are the key tool used in underwriting life and health insurance. Easier access to the most up to date and comprehensive records on an applicant can only improve the underwriting process, pricing, and outcomes. Anything that can be done to reduce the time and costs involved in collecting medical records and ensure the records collected are complete, would very much be to the advantage of the insurance company and the applicant.
2) Reduced claims -- Underwriting is always the best defense from unnecessary claims. Better coordination of care and records will provide information to avoid duplicative and unneeded treatments, poor outcomes, missed conditions, and opportunities for fraud.
3) Competitive necessity -- As time progresses there will be more pressure from providers with an EMR capacity to submit claims through them and manage the process on their platform. Insurers not participating will find themselves at a disadvantage in the marketplace.

“As one the largest APS retrieval companies in the United States, we touch thousands of medical records every day”, explained Parameds.com CEO, Eli Rowe, “and we know from experience how difficult the task of obtaining records is. The vast majority of records we collect are sent to us as paper and then need to be sorted and scanned before we can deliver them to our clients. We have looked for a long time at what it will take for payers to be successful participants in the growth of EMR, and our work with life, health, DI and LTC insurers have shown us that payers are well situated to play a lead role.”

Because of the central role that underwriting and claims plays in the world of health care, all carriers are in a position to lead and benefit from the rapid adoption of EMR and growth of a national exchange capability. The benefits to health insurers on the claims side and life insurers on the underwriting side are obvious, but DI and LTC insurers will see great benefits on both of those fronts as well. At the end of the day, it is good public policy and good business to be actively involved and help shape the outcome of what is inevitable.

Conclusion

“Progress has, of course, been made in the development of electronic medical record systems (EMRS). Very little of the data that are routinely generated by computer-such as laboratory test results-are now lost to electronic accessibility, as they typically were twenty years ago, when the typical lab instrument would print its results on paper and discard the electronic version. Nevertheless, much of the information on which clinical care is based continues, in most institutions, not to be captured in electronically usable form. This includes the results of patient and family histories, physical examinations, doctors' and nurses' notes, etc.”

That observation on the state of EMR was not written within the last couple of years, it was written 15 years ago by Peter Szolovits from MIT’s Laboratory for Computer Science. How much progress has been made since 1995 when this was written depends on your point of view. Current studies still show actual adoption and use of an EMR system that would meet the definition of “meaningful use” to be very small (various estimates are 1%-4% of providers). Yet, technology and costs are now conducive to rapid adoption, government incentives are in place, standards and regional networks to foster HIE are emerging across the country, and a majority of consumers support the idea of collecting and exchanging electronic medical records with proper privacy and security measures in place.

Ten and fifteen years ago, it was a matter of if EMR could happen. Now it is just a matter of when. We will see more progress in this direction over the next 2-5 years than we have during the last 30. The insurance industry stands to benefit greatly from what is emerging and it is happening faster than you think. “Prepare to be assimilated--resistance is futile…”