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New incentive to invest in electronic medical records

U.S. Secretary of Health and Human Services Mike Leavitt was in Mississippi April 3 to promote a new Medicare initiative that would offer incentives to physicians who use electronic health records (EHRs).

Leavitt, joined by Gov. Haley Barbour, pushed electronic records as one step in the process of creating an economic system that could optimize the value and quality of healthcare for Medicare patients.

Currently just a sector, government-subsidized healthcare is a budget-eating albatross with outdated records keeping that does not reward quality and efficiency, Leavitt says.

He wants to create a marketplace for healthcare similar to the one used by manufacturers of goods and services, one that is competitive and whose quality is measured. Leavitt used the airline industry as one whose quality and performance was constantly evaluated by consumers.

“There’s nothing like that in healthcare,” Leavitt said. “We have to change the macroeconomics of this so everybody can participate in the value. We have the sector. Now, we need the system.”

Said Barbour, “This would really help rural areas, with the portability telemedicine provides. Lost medical records, and we’re talking millions of them, was a huge problem after Katrina.”

Leavitt and Barbour want 12 Mississippi communities to participate in the venture. A community can range in size anywhere from one primary care practice to entire regions of the state and all the practices therein, although “that’s probably not practical,” Barbour said. Communities would have to submit proposals; the application deadline is May 13.

“Mississippi is a very good candidate,” Leavitt said. “This is about rallying a community to get this done.”

Physicians who participate would be paid $58,000 the first year. Payments would escalate each subsequent year.

Leavitt and Barbour led a demonstration of the initiative to physicians and hospital administrators and encouraged them to submit proposals.

The plan was greeted with no small amount of skepticism by those who had encountered difficulty receiving government reimbursements for past projects, saying the price tag for creating and maintaining the databases needed to store a large volume of patient records would be high. And would the set reimbursement amounts cover the necessary amount of the costs to hospitals and physicians?

“That’s not clear yet,” said Dr. Richard Ferrans, vice president of medical informatics at Memorial Hospital in Gulfport.

Dr. Bill Peters, medical director of Forrest General Hospital in Hattiesburg, said there is a lot of financial merit to the idea.

“It would reduce the duplication of (medical) tests and other redundancies that drive up the costs of healthcare,” Peters said. But, he added that electronic storage of patient medical records is something he estimated had cost his hospital $20 million over the last decade. And he shared Ferrans’ concern that government reimbursements would not defray enough of the expenses, or cover an overrun.

“Where’s that extra money going to come from?” Peters asked.

Leavitt, before leaving the roundtable, tried to allay some of the financial and security concerns of the proposal, admitting that the program would never get off the ground if proper steps were not taken to protect patients’ privacy. He also admitted that Medicare reimbursements to physicians who do not participate in the EHR plan would not be as much as those who do.

“I just can’t see paying a physician who doesn’t participate as much as someone who does,” the Secretary said.

Dr. Jim McIlwain, president of Information and Quality Healthcare and co-chair of Barbour’s Health Information Technology Task Force, which is handling the application process for physicians jumping on board, said the applicant pool will be filled by the May 13 deadline.

“I can assure you of that,” McIlwain said. “We need to do all we can to get our doctors to adopt this technology.”

Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .

About Clay Chandler

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