Tipping point

The nation's health information technology system passed a major milestone last month when the government announced that more than half of all U.S. physicians now use electronic health records.

“We have reached a tipping point,” said HHS Secretary Kathleen Sebelius, adding that adoption of EHRs is “critical to modernizing our healthcare system.” That adoption was accelerated by the massive $22.5 billion government incentive payment program in the 2009 stimulus act.

Experts who've been intimately involved in getting providers to this point say the government effort has set the stage for the next wave of health information technology development, which will build on the widespread diffusion of EHRs. “I believe that getting to this 55% level is truly transformative,” said Dr. Kevin Fickenscher, president of the American Medical Informatics Association, a professional association of healthcare data users and researchers. This pubic investment “is just a down payment.”

On their own, EHRs allow hospitals and physicians to gather healthcare data. “The next true challenge is in how to take the information that exists and do the proper analytics to create, not just informatics, but knowledge,” he said.

Today, moving a medical advance from hypothesis to a commonly used best practice “is a 17-year time gap,” Fickenscher said. “With computerized data analytics, we can narrow that gap significantly.”

Dr. Robert Kolodner agreed. Kolodner spent 28 years at the Veterans Affairs Department and served as the second head of the Office of the National Coordinator for Health Information Technology at HHS. “The next 10 years are really going to be exciting. We're going to discover some patterns of care that we didn't even know existed.”

One of those new care models will be driven by data-empowered people, acting as consumers, using mobile applications and home-based health devices, Kolodner predicted. “The infrastructure is in place for there to be a connection between this personal health space, what I gather on the devices about my weight and my diet, and linking that to data from the healthcare delivery centers … I think the shift is going to be the patient demanding that data be delivered to them for whatever they want to use it for,” he said.

This shift to patient-centeredness “creates the opportunity for a more market-driven healthcare system, and having this a more person-centered, rather than patient-centered healthcare system,” said Kolodner, who is now vice president and chief medical officer at ViTel Net, a McLean, Va., telehealth software and services firm.

The role of government spending in spurring EHR adoption remains controversial. Dr. David Brailer, named by President George W. Bush as the first ONC leader in 2004, said he had “every confidence”—even without federal incentives—that the nation could achieve the goal Bush set then, that every American should have a personal electronic medical record in 10 years.

“It was very, very clear the precursor conditions were ripe for this to do it,” said Brailer, now the CEO of Health Evolution Partners, a San Francisco-based venture capital fund. “I was just, obviously, the gasoline. The tinder was in the room and we were just waiting for the match.”

If the 2014 goal is attained—and it is much nearer, given the halfway mark achievement—a foundation will have been laid for the advancement of patient care through increased electronic communication and data analytics.

According to the CMS, more than 291,000 or 55.3% of the 527,200 physicians and other healthcare professionals eligible to receive federal incentive payments for adopting a certified EHR have been paid. The calculation is based on data from monthly CMS reports through April, just 28 months after payments under the program began.

“There is no going back,” said Dr. David Blumenthal, the third ONC leader and now president of the Commonwealth Fund, a New York-based not-for-profit. “Both of my kids are physicians in training, and I can't imagine them practicing in an office without an electronic record system.”

Dr. Farzad Mostashari, the current ONC chief, said, “A year ago, there were people writing stories about, 'Oh, yeah, the people (receiving incentive payments) are the ones who've already adopted. You aren't doing anything new.' It turns out that wasn't true. We've come past the early majority and now we're moving into the late majority.”

The industry selling EHRs has come a long way since 1979, when Judith Faulkner launched Epic Systems Corp., which today is a leading EHR developer for physicians and hospitals. “We opened with a small bunch of customers, maybe four or five … I never thought, never at all,” that Epic would grow to be as big as it is now, Faulkner said. “I thought we'd have a good niche product.” Epic is the No. 1 provider of complete EHRs used in ambulatory care in the federal incentive payment program, having sold them to nearly 54,500 office-based physicians, according to CMS data.

But some experts are questioning whether there will be a financial return on that investment. A recent study in Health Affairs concluded that only groups of six or more physicians had a modest, $2,205, five-year positive return from their investments in EHRs. Smaller practices actually lost money buying the systems.

The average loss per physician totaled $43,700 over the period, according to the research team led by Julia Adler-Milstein, an assistant professor in the School of Information, with a joint appointment in the Department of Health Management and Policy at the School of Public Health at the University of Michigan.

Even with the maximum $44,000 federal meaningful-use incentive payment, only 41% of practices could achieve a positive return-on-investment for their EHR spending, their study concluded.

Still, many family physicians were early converts to computer technology as an essential tool in creating patient-centered medical homes, said Dr. Jason Mitchell, director of the Center for Health Information Technology, which was launched by the Leawood, Kan.-based American Academy of Family Physicians in 2003. “From a family medicine perspective, we've seen a steady increase in adoptions.”

But for most healthcare providers, the first decade of the 21st century saw EHR adoption advancing at a snail's pace, which many attribute to the lack of federal subsidies. In 2009, the year of the stimulus act, just 6.9% of office-based physicians had adopted a “fully functional” EHR, according to an authoritative survey by National Center for Health Statistics at the Centers for Disease Control and Prevention.

“I knew it was going to take something dramatic to make this work,” said David Roberts, now a San Diego County commissioner, who represented the Chicago-based Healthcare Information and Management Systems Society in Washington as its vice president of government relations when the stimulus act was being drafted. He'd seen earlier health IT bills by Sens. Debbie Stabenow and Olympia Snowe, with $4 billion in proposed health IT funding, and then-Sen. Hillary Clinton, with $655 million, fail.

But once President Barack Obama signed the American Reconstruction and Recovery Act into law Feb. 17, 2009, it created a time-limited entitlement program for EHR incentive payments. Through April, EHR payments have exceeded $14.6 billion, including $5.9 billion to physicians and other eligible professionals.

Beginning in January, the CMS posted four consecutive months of record numbers of initial payments made to physicians and other professionals. During the period, 103,000 EPs were paid, 34,000 in April alone, pushing the nation over the 50% hump.

“The problem of getting physicians to use electronic health records is fundamentally solved,” said Glen Tullman, the former CEO of Allscripts Health Solutions, a leading developer of EHRs for office-based physicians. “You'd be hard pressed to find a hospital or physician” that doesn't own or isn't buying an EHR.

Tullman spent 15 years growing Allscripts from a developer of a hand-held drug reference and e-prescribing tool to the No. 2-ranked producer of “complete” EHRs for physicians in ambulatory care, according to CMS data. He is now a Chicago-based investor in health IT companies. “We've put in place the infrastructure that for the first time will permit us to improve the quality of healthcare services and reduce costs.”

Follow Joseph Conn on Twitter: @MHJConn