Health Industry Under Pressure to Computerize

February 19, 2005
Health Industry Under Pressure to Computerize
By STEVE LOHR

DALLAS, Feb. 17 - Dr. David J. Brailer, the federal official who is trying to prod the nation's health care system into the computer age, has delivered a warning to the health care industry: take steps soon to make it happen or the government will probably impose a solution.

Across the ideological spectrum, health care experts and politicians agree that the nation's hodgepodge of paper medical files needs to move into the digital era, so that eventually each person has an electronic health record that can travel across networks and be read by doctors, hospitals, insurers and the patients themselves. Doing so, the thinking goes, would reduce medical errors, improve health care and save money.

Congress has been doing its own prodding on the matter, with another bill introduced this week. Trying to pick up the pace, Dr. Brailer, in meetings with health care and technology executives here at their industry's big annual convention, has told them to come up with a single set of technical standards for electronic health records.

The approach, he said, must include a method to certify that the records can be opened and read by doctors and specialists, as authorized by the patient, even when different clinics and hospitals have different computer systems.

If the industry cannot agree upon such standards by this summer, "then government will probably do what government does best - put out a mandate," Dr. Brailer said in a talk to information technology companies here Wednesday. "Some people think that would be a train wreck, and some people think that would be a great idea."

Dr. Brailer's comments amount to goading with intent. A 45-year-old physician and economist, he explained over a late-night dinner here with a reporter that he regarded his job primarily as taking steps to repair a market failure in health care information technology. He is part policy maker, technologist, cheerleader and arm-twister, traveling much of his first 10 months on the job to meet with doctors, hospital administrators, technology executives and others.

At the Dallas convention, sponsored by the Healthcare Information and Management Systems Society and attended by more than 23,000 people, Dr. Brailer spent a typically adrenalin-charged day and a half. He arrived Tuesday night for a business dinner that ended at 11 p.m. His first appointment the next morning was shortly after 6 a.m., beginning a stream of meetings and talks that ended after 10 p.m., with groups that ranged in size from a few hundred people to a handful.

Thursday morning began with an early meeting, then off to an 8:30 a.m. speech to an audience of more than a thousand in the convention center's main arena. Next came a quick tour of the convention floor, before heading to the airport.

In the smaller gatherings, Dr. Brailer took notes and asked questions as much as he spoke. He is still wrestling with just how large and how direct a role the government should take in trying to accelerate the adoption of computerized health records. But it is clear that a common technical standard for those digital documents is a vital step.

In most markets, technical standards - from uniform railroad track sizes in the 19th century to software protocols for the Web in the 1990's - have enabled the growth of markets and industries that are built on those public standards.

Once a basic standard for electronic health records is in place, Dr. Brailer says, it will be less risky to invest in digital records for doctors or hospitals that may now worry that the software they purchase today, and struggle to learn to use, may become obsolete sometime later. "We've got to take the risk out of purchasing electronic health records," he told the group working on the standard.

The industry is poised for growth, judging from the turnout at the convention. It set an attendance record for the show, and more than 700 exhibitors displayed their wares on the trade floor. The booths were a corporate who's who of household names like I.B.M., Microsoft, Cisco Systems and General Electric, as well as health technology specialists like Cerner, McKesson, Epic and Allscripts.

Dr. Brailer, appointed last year by President Bush as the national health information technology coordinator, said that he would greatly prefer to see an industry consortium agree upon a technical standard, because it might be more flexible and open to future technical improvements than one determined by government edict, however well intentioned.

The industry group that is supposed to develop the electronic health record standard, the Certification Commission for Healthcare Information Technology, was formed last year, with members drawn from large medical centers, technology companies, insurers, physicians, nonprofit groups and consultants.

Speaking to a meeting organized by the commission, Dr. Brailer said their early efforts showed "great promise." Then, he added, "We're banking on this, until it is clear that you can't do it."

In small group meetings, Dr. Brailer urged the technology executives to set aside their narrow corporate interests, giving up some of their proprietary lock on customers, to open up a larger market opportunity for everyone. Each company cannot get all it wants, he said. Yet technical standards groups often bog down amid conflicting interests.

At one point, Dr. Brailer asked a group of technologists what they wanted from government. Wes Rishel, a veteran of health technology standards groups and a member of the certification commission for electronic health records, replied, "We need a tie-breaker - someone who is somewhere between a czar and a diplomat."

By now, the need to computerize a health care system that is choking on paper is beyond dispute. Health experts say that moving to electronic records, which would reduce paper handling and eliminate unnecessary or duplicative tests, could cut 10 percent or more from the nation's $1.7 trillion a year in health care spending. And a digital system should sharply reduce medical errors, which are estimated to be responsible for 45,000 to 98,000 deaths a year - more than breast cancer, AIDS or motor vehicle accidents, according to the Institute of Medicine of the National Academy of Sciences.

The electronic patient records could also open the door to a national health information network in which patient information, stripped of personal identification, could be used for national health research projects, impartial assessments of drugs' effectiveness and other data-mining possibilities.

Health care is already rich in high technology when it comes to diagnosis, surgery and treatment - from advanced body scanners to all manner of medical devices and drugs - in large part because those investments clearly generate revenue. But in information technology, health care lags well behind most other industries. In health care, the average investment in information technology computer hardware, software and services is only about $3,000 annually for each worker, compared with $7,000 a worker on average for private industry and nearly $15,000 a worker in banking.

Falling prices for personal computers and software, and the blossoming of the Internet in recent years, have brought down the cost of adopting electronic health records and made it easier to connect to specialists, hospitals and insurers.

But health care remains a fragmented industry, with much of the care still provided by physicians in small practices. An estimated 60 percent practice in offices with 10 physicians or fewer and 35 percent in offices with three physicians or fewer.

And for these physicians, who essentially are small- business people, information technology still represents a daunting cost: $30,000 a physician to adopt electronic health record technology, according to a recent study, which factored in the cost of hardware, software and time lost in terms of patients not seen while learning the system.

"The elephant in the living room in what we're trying to do is the small physician practices," Dr. Brailer said. "That's the hardest problem, and it will bring this effort to its knees if we fail."

Dr. Brailer is still studying what might be the right mix of incentives to encourage physicians to embrace digital health records. The incentives, he noted, could include federally backed loans, grants and extra reimbursement by Medicare and other insurers for using electronic health records.

Many large hospitals and medical centers already have electronic health records, accounting for most of the 10 to 15 percent of all physicians who have adopted computerized patient records. It will be essential for them, Dr. Brailer said, to make sure they conform to the new open standard, when it is developed by industry or mandated by government, so they can share information with other groups.

Once adoption reaches 45 percent or 50 percent, Dr. Brailer predicted, the benefits from digital records will be so apparent in terms of savings and quality of care that a tipping point will be reached. "That's when the network economics will take over," he said. "It will become a condition of being in business, like e-mail is in most businesses."

Dr. Brailer's challenge is to fashion the right policies to get there. "This is not about technology," he said. "It's really about transforming health care, fixing this market."