Subsidy program for EHRs ineffective, draft report argues

The federal subsidy program encouraging hospital adoption of electronic health records has been ineffective, argues a draft paper posted on the National Bureau of Economic Research's website.

Absent subsidy funds, the level of adoption of somewhat advanced EHRs in 2011 would have been matched in 2013, according to the paper distributed by the not-for-profit research organization. And, it elaborates, because the program gave out subsidy payments to early adopters that had already installed EHRs, it meant that $48 million in incentive dollars had to be given out for each new adoption.

The paper looks at the trend line of EHR adoption pre-2008 and extrapolates it to provide a baseline to compare to the eventual adoption with the Health Information Technology for Economic and Clinical Health Act, which created the subsidy program in 2009. It also estimates the level of funds spent per new adoption by estimating the size of each hospital's incentive payment under HITECH.

But the paper does not consider the subsidy payments to nonhospital eligible professionals who had, as of August 2014, received roughly $9.6 billion in incentive payments compared with $15.01 billion to eligible hospitals and critical-access hospitals, according to the latest data from the CMS.

Co-author David Dranove, a professor of health industry management at Northwestern University, concedes he may hear criticism on this point.

But he still wonders whether accelerating adoption was the right thing to do. “We pushed things forward two years, but we don't know how to use” the records, he said. “Why rush? Wouldn't it be better to have a better sense of how to make electronic medical records work?”

In doing their research, Dranove and co-authors consulted with several CIOs at hospitals and heard many accounts about the use and misuse of electronic records. He cited two examples: one, from an ophthalmology group, that found that its old method of the doctors drawing pictures of eyes and putting them into paper records, couldn't work with new electronic records. Eventually, they worked out how to draw the pictures, scan them in and re-program the record to accept such scanned images.

Another instance, he noted, was with a children’s hospital that found its records required doctors to fill in eight pages of data unrelated to pediatric patients. “They just gave up, they didn’t even bother. They needed someone to rewrite the software.”

“(EHRs) are still not ready for prime time,” Dranove said. “We weren’t surprised at the reluctance of hospitals, even with this huge financial incentive, to adopt the technology.”

Follow Darius Tahir on Twitter: @dariustahir