Adopting electronic health records will cut costs

The good news is that the Congress and the Obama administration have taken significant actions that could help.  In February 2009, Congress included in the American Recovery and Reinvestment Act $36 billion in funding that will provide incentive payments to healthcare providers and organizations to encourage them to adopt health information technology. This technology aims to transform healthcare by improving quality and reducing costs, most significantly through the adoption of electronic health records.

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In late December, the Obama administration issued proposed regulations governing the distribution of this funding. The administration and Congress wisely perceive the tremendous opportunity to transform the health system through widespread adoption of electronic health records, while also recognizing that the adoption of technology by itself is not a silver bullet.

A recent study conducted by Harvard Medical School and published by the American Journal of Medicine stated, “As currently implemented, hospital computing might modestly improve process measures of quality but does not reduce administrative or overall costs.” To address this issue, the government is working to finalize a formal standard of “meaningful use” of electronic health records that will require things like the electronic exchange of data and reporting of clinical quality measures to ensure effective use of technology in healthcare.

But if we are to successfully bend the cost curve on healthcare — and improve our health at the same time — the government needs to focus on two core principles as it finalizes the meaningful-use standard: putting consumers at the center of the solution, and focusing rules about the use of health technology on the outcomes we want to achieve, rather than on the technology itself. How do we do this?

First, it is essential that the definition for “meaningful use” of health information technology includes enabling consumers to have convenient, electronic access to their own medical data. This would guarantee that stimulus dollars are spent on health IT that would engage consumers in managing their own health and their family’s health.  Our current system has been built around providers, insurers, the government and employers — not around consumers. But the majority of health decisions are made at home, and the daily choices individuals make can affect what everyone in the system pays for healthcare. By empowering consumers with the right information, they can make more informed decisions and work with healthcare providers to more effectively manage their health.

Second, the rules around the use of health technology should set objective goals and criteria — focused on better outcomes, chronic care management and hospital effectiveness — without mandating the use of specific technologies or development models. This approach is similar to the government’s involvement in other industries. For example, automobile safety is regulated, but the shape of the car and its features and functions are generally not regulated — which spurs ongoing industry innovation.

The power of technology lies in its potential to transform industries, enabling new ways of working and communicating, new economics and new business models.  As consumers, we’ve experienced how technology impacts nearly every area of our lives — how we manage our finances, travel, communicate, shop and so on — with more self-service, more control, more convenience and ultimately better value for what we spend.

No one said this road would be easy.  We are trying to change a system that is deeply ingrained in our country’s way of life, and it will take all of us — patients, physicians, hospitals, health insurers and technology companies — working together to achieve real reform. The current focus on healthcare gives us an opportunity to do what America does best — innovate to improve productivity and efficiency. As we continue our debate on healthcare reform, we commend the Obama administration for supporting consumer engagement and a focus on health outcomes in the proposed regulation, and we encourage continued commitment to these core principles.

Neupert is the corporate vice president of the Health Solutions Group at Microsoft.  Spector is the vice president of Research and Special Initiatives at Google.


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