The electronic health record has been introduced with a view to improve care, reduce costs and improve overall efficiency of healthcare organizations. Companies providing medical record review for attorneys and physicians also welcomed the new system, which could make records review less complicated. However, EHR systems have increased the workload of physicians and have not been successful in reducing the cost of billing.
EHRs Fail to Meet Objectives
The White House released its 2018 economic report on February 21, in which a direct connection was drawn between physicians’ struggles to purchase and operate EHR systems and the increase in consolidation among hospitals. The reduced competition among hospitals may be a major contributing factor for increasing healthcare costs. Many small physicians’ groups and solo providers don’t have the budget to purchase and maintain EHRs and comply with government reporting requirements, according to the White House report. This has led to increase in the number of hospital mergers. Large hospitals are buying up physicians’ practices and outpatient service providers to form large, integrated healthcare networks. It is observed that many parts of the country now have only one or two large hospital systems. Because of this market dominance, costs are often 15% higher than those in markets with 4 or more hospitals. Moreover, Medicare often pays more for identical services provided by a physician affiliated with a hospital than it does for the same service provided by a solo practitioner or member of a small independent practice. The challenge now is to make EHRs provide the expected results and ensure that the federal “Meaningful Use” EHR objective is met efficiently.
Though EHRs were intended to lower administrative costs, they do not do so according to a recent JAMA study. Electronic health records were expected to streamline medical coding and billing, enhance productivity and efficiency, and reduce costs because of reduced paperwork. The JAMA study evaluated an academic healthcare system in North Carolina with 66,000 inpatient stays in 15,000 inpatient beds, more than 2 million outpatient visits, and more than 90,000 emergency department visits in 2016. This healthcare system had adopted a certified EHR system in 2014. The researchers interviewed 27 health system administrators and 34 physicians in 2016 and 2017 and created a process map charting the path of an insurance claim throughout the revenue cycle management process. Billing and insurance-related costs were estimated for 5 types of patient encounters:
- Primary care visits
- Discharged emergency department visits
- General medicine inpatient stays
- Ambulatory surgical procedures
- Inpatient surgical procedures
They found that processing times and total costs for billing and insurance-related activities ranged from 13 minutes and $20 for primary care visits to around 100 minutes and $215 for inpatient surgical procedures. Another important finding was that the billing costs for primary care visits represented about 14.5% of health system revenue whereas billing costs for emergency department visits represented about 25.2%.
Possible Reasons for Failure
According to the researchers, the possible reasons for the failure of EHRs to reduce costs could be:
- HR systems, though able to automatically generate bills for clinical visits, require the time of high-cost physicians to perform coding and documentation activities that are not related to clinical services.
- The billing processes require multiple steps by many staff members, which could lead to increased costs.
- Payment requirements vary across payers and health plans, and this could also contribute to the high cost of billing and insurance-related activities.
Solutions that Could Be Effective
The researchers suggest that improving standardization among payers and health plans could help reduce administrative costs and streamline billing. They feel that the adoption of EHR systems by hospitals seems to have been unable to cope with the complexity of multiple payer contracts or to speed up significant transformation of the administrative business processes in US healthcare. As any experienced medical claims review company would agree, lack of harmonization across the industry is the major reason for increasing costs. For example, a family physician may have a diabetes measure from United, one from Aetna, and one from Medicare and these may have slightly different definition about what diabetes is for that particular measure. This makes it difficult to manage. Most family physicians work with ten or more insurers. Primary care physicians spend around 6 hours daily, interacting with their EHRs during and after clinic hours. They have to deal with rules and norms for each payer and end up spending long hours reviewing documents and checking boxes to meet the mandates of each insurance plan – time they could have spent on patient care.
The following improvements have been recommended that could help lessen the costs.
- Computer decision support tools that can automatically justify a test or drug based on evidence. This could simplify the prior authorization process.
- Automated coding can enhance accuracy and reduce administrative costs further.
- Transactions can be simplified by market consolidation to bring insurers and health including physicians and hospitals under a common umbrella.
- Standardized global payment models are a great way to simplify item-by-item claims and medical bills.
The government, healthcare systems, and physicians all look forward to an efficient EHR system that can meet all the desired objectives. Constructive coordination among vendors and healthcare systems would help to arrive at an efficient model that can streamline all administrative work as well as improve care while also reducing costs.
