Computers and Health Care Cost$

Does your doctor use a computer instead of a paper chart?

Chances are that she does. The rate of adoption of electronic medical records (“EMRs”) over the last three years has been very steep.

“How much do we want to stamp out fraud? This much.”

The main driver of this is a government subsidy from a part of the 2009 Stimulus Act (called the HITECH Act) that incentivizes doctors and hospitals to make the conversion to electronic record-keeping.

The push has been on for medical practices to ‘go electronic’ for a long time. It’s about efficiency. Reliability. No more issues with doctors’ handwriting. A better reason: we should be able to share records electronically and analyze them collectively to discern ‘best practices.’

The NY Times ran a nice piece of investigative reporting this week, demonstrating that the transition to electronic record keeping has been anything but ‘cost-effective.’

Computers allow us to set scripts for our visits with you (whether in the hospital, the ER, the OR, or the regular office). Using the scripts, loaded with check boxes, we are able to check off many positives and negatives (e.g. the patient does have fatigue, or the patient does not have headaches, etc.).

Enumerating symptoms and signs in this way allows us to maximize the documentation trail we create. Of course, maximizing the documentation thereby allows us to maximize what we claim on bills of service to insurers like Medicare.

The Times reporters found that over a five year period, claims to Medicare increased by $1 billion. It wasn’t that more service was delivered. When they analyzed individual hospitals, they found huge increases in claims for roughly the same number of visits. As but one outlier example, Baptist Hospital in Nashville saw its ER billings increase eighty-two percent the year after installing an electronic medical record. There are many other examples, suggesting this is no coincidence.

Depending on your viewpoint, one of two phenomena are occurring:

  1. Hospitals and doctors are ‘gaming’ the system to ‘upcode’ every visit to a higher level, resulting in a higher bill OR
  2. Electronica has simply allowed us to more legitimately capture what it is we do and bill accordingly–known as ‘charge capture.’

Of course, the answer is somewhere in the middle–some are no doubt gaming, others likely just doing things better and reaping the rewards. The article noted, however, that the Department of Health and Human Services discovered that a mere 1700 doctors nationwide (out of nearly a half million doctors in practice, or 0.4% of physicians) contributed $100 million of the increased charges. That amounts to sixty thousand dollars per physician in increased year-over-year charges. Do you really think a full time doctor could increase her billing that much for roughly the same amount of work, even allowing for perhaps a small inflation in patient volume or number of office visits?

So, another esoteric post about how and why health care costs so much in the U.S., right? Yada yada yada. Does anyone really care?

Two days after the Times article, HHS Secretary Kathleen Sibelius and U.S. Attorney General Eric Holder co-signed a “strongly worded” letter to hospital associations across the country warning them to steer clear of fraud.

Wait. Does the government want us to implement these computer systems or not? Looks like we’ve hit some unintended consequences of what seemed like a reasonable policy goal.