Meeting of the minds on universal EHR adoption

Healthcare Financial Management, Feb, 2006

Government can best facilitate adoption of electronic health records with grant funding, development of national standards, and payment incentives.

These findings are the result of research by HFMA, amplified by two roundtable discussions with senior financial executives that were conducted by HFMA in collaboration with David Brailer, MD, PhD, National Health Information Coordinator for the U.S. Department of Health and Human Services. Brailer has been charged with realizing the Bush administration's plans for fully realized EHRs by 2014.

Fifteen healthcare executives from across the country participated in the roundtable discussions in Arlington, Va. The roundtables were facilitated by HFMA to initiate dialogue between Brailer and providers on the challenges that providers face in acquiring and implementing EHR systems, as well as ways in which government can facilitate the universal adoption of EHRs.

Enhancing quality and controlling costs are widely seen as the two critical needs of the U.S. healthcare system, and EHR systems promise a quantum leap forward in the pursuit of both of these goals. But what are the financial and other barriers to adopting these systems? And how can providers realize the value these systems promise?

"HFMA believes that universal implementation of electronic health records will produce a profound societal return, both in improving the quality of health care in our country and in reducing healthcare costs," said Richard L. Clarke, DHA, FHFMA, president and CEO of HFMA. "HFMA also believes that the true societal benefits of EHRs occur only through universal adoption."

In December 2005, as a result of multiple conversations with Brailer, HFMA conducted quantitative research on these questions and also convened two groups of healthcare financial executives to add depth to the research.

During the roundtable discussions, healthcare finance executives--who represented hospitals that are in various stages of implementing EHR systems--shared with Brailer their thoughts on the value of EHBs, key drivers to EHR implementation, the biggest barriers to adoption, funding sources, and the role of government in facilitating the universal adoption of EHR systems.

"You're exactly the kind of people that I wanted to hear from," Brailer told roundtable participants at the start of discussions, saying that he was "eager to hear and eager to learn."

HFMA research shows that the top barriers to EHR acquisition and implementation are concerns regarding information standards and code sets, funding, physician usage, and interoperability. Sixty-two percent of healthcare finance professionals surveyed by HFMA believe that lack of national, consistent information standards and code sets are a significant barrier.

"What we need more of in this country are standards and approaches that are consistent throughout the industry," said Michael Blaszyk, executive vice president and CFO, Catholic Healthcare West, San Francisco.

Providers also are concerned about achieving consistency in the way EHRs are used throughout their own facilities. "I'm worried about intra operability, just using it within the walls of my own organization," said Phyllis Cowling, president and CEO, United Regional Healthcare System, Wichita, Kan. "In a previous organization that I was associated with, when we rolled out bar coding and medical management systems, we found that the way we did our medication administration was different on the sixth floor than it was on the eighth floor. The policy and procedure was the same, but the actual enactment of that procedure was very different, not only because of the physicians involved, but the nurses involved. And so I think one thing that's going to be critical to the success in rolling out EHRs will be the ability to effect change in our actual operating processes."

Hospitals that indicated a lower level of EHR adoption were more concerned about funding and financial return than hospitals that had achieved a comparatively high level of adoption.

Sixty-four percent of providers that indicated a low level of adoption were concerned about funding, compared to 44 percent of those with a higher level of adoption.

Financial leaders for mid-sized hospitals were most concerned about funding as a barrier to adoption. Seventy percent of hospitals with 100 to 300 beds indicated that they were very concerned about funding for EHR systems, while 54 percent of hospitals with fewer than 100 beds and 49 percent of hospitals with more than 300 beds indicated a high level of concern.

"The problem that we have with funding this type of initiative goes back to the bond issue. If we're going to build a new hospital or do some major renovation, we can wrap a bond around that, and net financing is set aside. In a project like this, where we're getting capital leases or operating leases, that's only as good as the finances are at that particular time when you're ready to go to the next step," said Christopher Ellington, vice president and CFO, Appalachian Regional Healthcare, Lexington, Ky. "Interest rates are rising. So this whole project is only going to get more expensive as we go. And so that's our problem. Without having a lot of available cash flow, we're just trying to make sure we have enough assets set aside to be able to borrow against them to implement this, because there is long-range benefit in all of this. It's just a matter of getting to that point."