Where Federal Subsidies for Electronic Medical Records Went Wrong

Last Updated Aug 26, 2010 7:50 PM EDT

Hospital executives have long suspected they'll never see any money from a federal incentive program designed to encourage the adoption of electronic health records (EHRs). Now, a new report from consulting firm CSC suggests that these CEOs are right. As it turns out, many hospitals -- including those with advanced health IT systems -- don't have a snowball's chance in hell of getting paid to install EHRs.

The CSC researchers looked at the government's requirements for reporting data on hospital quality measures. That's one of several criteria necessary to qualify for the incentives, criteria collectively known as "meaningful use." Transation: The feds only want to pay subsidies to hospitals that can show they're actually benefiting from the installation of EHRs, which in theory makes perfect sense.

Trouble is, the report showed that even if hospitals have information systems that can meet most of the meaningful-use requirements, they'll still only have about a third of the data they'd need to report quality measures electronically. Which means they could be out of luck where the government cheese is concerned.

Jane Metzger, one of the report's coauthors, told me that its findings prove that quality reporting will be a serious obstacle to the majority of hospitals that attain meaningful use in the incentive program's first stage, which covers 2011 and 2012. The requirements are expected to get stiffer from 2013 to 2015.

An earlier PriceWaterHouseCoopers survey of hospital CIOs, conducted shortly before the government's final rules were released in July, showed that eight of 10 executives saw major obstacles to demonstrating meaningful use. Only about half of the CIOs expected that their facilities would be ready to apply for the incentives in 2011. The CIOs cited technical problems like the shortage of trained staff, a potential lack of vendor readiness, and shortfalls in their IT infrastructures.

The CSC report looks at a particular technical issue that some large health systems pointed to back in January: the difficulty of gathering much of the data necessary to collect and report quality information. In 2011, hospitals must attest that their information systems generated this data; in 2012, they must actually send the data online to the Centers for Medicare and Medicaid Services (for Medicare incentives) or the states (for Medicaid incentives).

Most hospitals have patient registration systems and laboratory systems, notes Metzger. If they also have systems for ordering medications and can electronically capture data on allergies, diagnoses, and vital signs, they can meet the bulk of the meaningful use criteria. However, the CSC report says, all of those electronic functions combined can generate only 35 percent of the data required to report quality information on 15 measures specified by the government.

There are three missing links that would have to be put in place to fill in the gaps, according to the report:

  • Physician documentation. Just 12 percent of hospitals have physician notes online in a discrete, coded format (not transcribed dictation). It's usually the last piece of electronic-record systems that hospitals put in place, because physicians are reluctant to document their notes with checkoffs in pull-down boxes, says Metzger.
  • Medication administration. Around 60 percent of hospitals have electronic medication administration (EMAR), which allows nurses to document the name and dosage of each drug they administer to patients and when it was given. But that still leaves a lot of hospitals lacking some of the quality data they'll need for meaningful use.
  • Emergency department EHR. Only 36 percent of hospitals say their emergency departments have no information system. But many of the EHRs used in ERs were originally designed for other uses, so getting quality data out of them could be tricky. Also, 70-80 percent of hospital admissions originate in the emergency department, yet hospital systems are usually not connected to ER systems. That means the hospitals cannot access the ER quality data.
Considering that only a little more than a year remains before hospitals must begin the three-month reporting period for meaningful use in 2011, it seems unlikely that many of them will meet the quality reporting criteria, even if they can satisfy the other requirements. This poses a big dilemma for the administration, which probably won't revise its "final" meaningful use rules again. Too bad its experts didn't drill down into the quality reporting issues much earlier.

Image supplied courtesy of Flickr.
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  • Ken Terry

    Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform.