HSAs Will Catalyze Adoption of EHRs

Jim Klein is the director of healthcare technology for InterSystems Corp., Cambridge, Mass. InterSystems develops and markets the CACHÉ post-relational database and the Ensemble universal integration platform. Contact him at jim.klein@intersystems.com.

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs and improve care.”

At the president’s urging, the nation has pinned its hopes on information technology to address the rising cost, inconsistent quality and poor safety record of the U.S. healthcare system. In response, the healthcare IT industry has embraced Dr. David Brailer’s presidential mantle, dynamic personal leadership and his “Framework for Strategic Action” document as the basis for fulfilling these hopes.

There is plenty to like about Brailer’s framework. It emphasizes getting electronic health record (EHR) systems into the hands of physicians in their offices, while astutely acknowledging that the movement of an individual physician or small group practice to an EHR system involves not only a major financial risk, but also extensive changes to office workflow, and frequently an initial decrease in individual physician productivity. Under the current, convoluted structure of healthcare financing, the benefits of electronic ambulatory medical records systems accrue first to the payers, but it is the providers who must purchase, install, support and use these systems. Clearly, physician adoption is a major challenge.

Support for HSAs
In as serendipitous a development as anyone has a right to expect, the federal government, by instituting the health savings account (HSA), has given the healthcare industry the catalyst it needs to accelerate the adoption of EHRs by individual physicians and small practices. An HSA is a tax-advantaged healthcare expense account, created by the Medicare Modernization Act of 2003. If an employee is enrolled in a qualifying high-deductible or catastrophic-coverage health insurance plan, he may set aside tax-free funds by payroll deduction into an HSA, up to the limit of the deductible. The employer can match a percentage of the employee’s contribution. Funds may be withdrawn without penalty to pay medical expenses, including medical expenses not covered by the plan. Funds held in an HSA may earn investment income, and funds not spent in the plan year roll over to the next year and may accumulate indefinitely to the benefit of the employee.

If consumers and beleaguered employers embrace HSAs as rapidly and pervasively as we expect, adjustments to Brailer’s framework will be possible, which will increase the likelihood of its success and reduce its cost.

It is time we seriously considered putting electronic health records directly in the hands of the consumer.

The lack of IT adoption is not the heart of the problem, but rather an “in your face” symptom of the economically distorted relationships that characterize the U.S. healthcare system. No less an authority than Nobel prize-winning economist Milton Friedman characterizes the fundamental problem in the U.S. healthcare system as the disconnection between the consumers of healthcare services and the third parties (mainly the government and employers) who pay for the services consumed. Unlike all the other economic decisions consumers must make concerning housing, automobiles and vacations, most consumers of medical services do not need to make tough, money-versus-value decisions.

The institution of the HSA represents the first significant movement away from a centrally planned healthcare economy since the creation of Medicare. HSAs offer the hope of reintroducing consumer-driven, free market principles to U.S. healthcare. There can be little doubt that U.S. employers will race to embrace HSAs to relieve the burden of explosive growth in healthcare insurance premiums over the last five years. The rapid growth in HSAs over the next five years will create a population of 20 million households, which, with the exception of hospitalizations, will be accustomed to paying their own money for healthcare services.

Connective Infrastructure
The Brailer framework is right on target with its emphasis on the importance of interconnecting physicians, because the problem of who pays for healthcare information technology and who benefits from it is exacerbated when the ability to exchange electronic personal health information (ePHI) among physicians, patients, retail pharmacies and commercial labs is lacking, as it is today. Physicians need the ability to conduct business electronically and exchange ePHI with colleagues in referral relationships and with labs and pharmacies as a seamless part of using an EHR, if the productivity of their small business is to be improved.

Consumers will flock to the convenience such connectivity provides. Those who embrace consumer-directed health plans and HSAs will have a powerful financial incentive to use healthcare services conservatively. Also, they will reward physician practices which provide the higher quality care and convenient customer service that is made possible only by an ambulatory EHR electronically connected to other doctors, retail pharmacies, commercial laboratories, local hospitals and the patient’s home computer via the Internet.

This suggests that the federal government should minimize subsidies and complex pay-for-performance schemes with their requisite bureaucracies and concentrate on simulating the electronic connectivity that makes EHRs both attractive to consumers and operationally efficient for physician practices—and trust to the rebirth of free market pressure from consumers to drive adoption of EHRs.

In fact, there are several federal initiatives that are laying the foundation for this connective infrastructure, including the brilliantly simple National Electronic Disease Surveillance System. The “Connecting for Health” and “Café Rx” consortiums have the right idea, as do vendors Kryptiq, SureScripts and RxHub. By no means is this list complete.

One final suggestion: Consumers are only passive participants in the Brailer framework’s recommended regional approach to EHRs. Let us not forget that no one has more to gain than the consumer from a simple, summary view of his or her medical history. Now consider that almost 60 percent of American households already have access to the Internet, growing to 73 percent by 2006, according to Forrester. More than half of current connections are broadband.

It is time we seriously considered putting EHRs directly in the hands of the consumer. HL7’s Clinical Document Architecture (CDA) and Internet e-mail provide the mechanisms to do just that. HL7 CDA-compliant prescriptions, lab results and care summaries (additionally compliant with ASTM’s Continuity of Care Record), would provide 80 percent of the value of a regional EHR, without the privacy issues, or the cost of a physical or virtual repository—and these XML-based standard documents would follow the consumer by definition.