Faculty Findings

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Why Digital Health Records May Save Lives and Money
By Carol Elliott

In 1999, the Institute of Medicine issued a study titled “To Err is Human: Building a Safer Health System” that reported between 44,000 and 98,000 Americans die each year due to avoidable medical errors. The term “avoidable” meant arising from simple human error: wrong-site surgeries, adverse drug reactions, improper transfusions, mistaken patient identities and a number of other tragic misjudgments or oversights.

The report quickly became the prime topic in public discourse about health care in America. “Typically, the IOM studies are read by only a small group of people,” said Management Professor Corey Angst. “But in this case, you can’t go to a conference without hearing, ‘To Err is Human.’”

The discussion soon turned to the need for electronic health records. In January 2004, Pres. George W. Bush issued a mandate for online medical records to be made available to a majority of Americans by 2014.

A tall order.

Here’s how an electronic health records system would work: Whenever a doctor types notes in your chart, takes a blood pressure reading or prescribes medicine, that information will appear in your electronic chart in real-time. Likewise, test results, X-rays, insurance information, prescriptions—a veritable flotilla of health data that currently resides in a dozen or more health offices—would flow automatically to your digital record so that it can be accessed by computer, cell phone or any device with Internet access.

So, if you broke your leg during a ski trip to Aspen, the ER doctor could check your electronic record online, where he would see your allergy to codeine. And as he entered your X-rays images into your record, your doctor back in Cleveland would be able to view the details of your injury and treatment. You could also manage the medical affairs for your elderly mother, checking appointment times or insurance filings by clicking into her online record.

Angst, who studies health information technology, said initial plans for the electronic system called for a central repository of health records called the Nationwide Health Information Network (NHIN). That concept proved to be cumbersome and in the short term, plans for more localized, Regional Health Information Organizations (RHIO) have become more prevalent. The idea here is that there would be hundreds of RHIOs across the country, which would be groups of organizations that have a business stake in providing efficient health care, such as hospital systems. The RHIOs would then act as building blocks and connect to a national system.

Cutting the error rate is perhaps reason enough to argue in favor of an electronic system. But Angst says that the system will also introduce much-needed cost efficiencies to rein in the health care costs crushing corporate bottom lines.

A case in point is what happened after Hurricane Katrina literally dissolved the health records of a million people. Patients who had been treated at a facility operated by the U.S. Department of Veterans Affairs, however, had access to their full records because they were saved on the VA’s electronic VistA system. The VA began using electronic records in the mid-1990s, a move that the agency credits with keeping operating costs down even while the number of patients treated has increased dramatically.

A report issued in 2005 by nonprofit think-tank RAND Corp. on health information technology (HIT) estimated that a nationwide electronic health records system with a 90 percent adoption rate could save $77 billion in health-care costs per year. The savings would result primarily by improving workflow within the system, cutting out redundancies such as repeated lab work, and other measures to streamline the transactions involved in the process.

But in the long run, these efficiencies may not prove to be the largest benefit to the health-care system.

“There’s another angle to this. Rather than health care, we’re shifting to wellness care,” said Angst. “The idea is that before we have these catastrophic events, which cost everyone a lot of money, let’s try to take care of ourselves before those things happen. I think a system like this can help with that.”

Companies are already hiring third-party vendors who can review employee health data and recommend actions, including dietary changes, exercise and different—and often cheaper—medications.

Obstacles to adopting an electronic records system come readily to mind, starting with the 500-pound gorilla of online technology: privacy. Patients worry their information will be hacked into, or that their employer might view information they would rather keep private. Angst said most of their concerns can be addressed with education about how the system works. “Digitizing scares everybody, but nothing is really changing in terms of information being less secure, less private,” he added, pointing out that paper records are probably more of a security risk than electronic ones.

But there is the issue of control of information—the RHIO model currently doesn’t allow patients to opt out of the system. The information entered by your doctor into your electronic health record automatically feeds into the network.

Another major obstacle to adoption of the system, says Angst, may be resistance from the health-care providers themselves. Physicians would have to invest an estimated $50,000 initially and then another $12,000 to $15,000 per year in maintenance to get their offices operating on electronic records systems.

Progress toward the goal of digitizing the health records into a nationwide system has been slow to date, says Angst. Only about 15 to 20 percent of doctors in private practice keep electronic records, according to the market research group Health Industry Insights. Less than 40 percent of hospitals do.

But given the staggering pressure of climbing health-care costs, and the cost of medical error, Angst said electronic health records are inevitable. Internet giants Microsoft and Google are already on board. Microsoft launched HealthVault in October 2007, which sets up a password-protected file where individuals can monitor their medical data and then forward it to their doctors or other relevant parties. Google announced the formation of the Google Health Advisory Council in June 2007 and has plans to introduce its own version of electronic records at an unnamed future date.

“My dad is a lifelong employee and now a retiree of General Motors,” said Angst. “I hate to see what health care costs are doing to the American corporate world. And from the quality-of-care side, I think it has absolutely been shown that electronic health records can improve the care we deliver to individuals.”

Professor Corey Angst studies the transformational effect of IT, technology usage, and IT value particularly in the healthcare industry. He has published widely and conducted research for multinational corporations such as Pfizer Inc. and Johnson & Johnson, as well as government agencies, including the Department of Health and Human Services and the National Institutes of Health.

—Carol Elliott is the managing editor of Notre Dame Business.