Modernizing Electronic Health Records Key to Unlocking Industry Efficiencies

Posted August 27, 2009 at 12:59pm

Health care is indisputably one of the most data-intensive industries in the U.S., yet modern dissemination and control of patient data consistently lags behind other industries such as banking, airlines, insurance and retail.[IMGCAP(1)]The Health Information Technology for Economic and Clinical Health Act within the American Recovery and Reinvestment Act of 2009 attempts to rectify this, providing some $36 billion to promote the use of interoperable, certified health information technologies. The announcement last week by Vice President Joseph Biden and Health and Human Services Secretary Kathleen Sebelius announced that $1.2 billion in ARRA funding via two grant programs is an additional step in this direction. Historically, savings estimates from these moves have been the subject of wild speculation. Iron Mountain Inc., which provides information protection and storage services to one-third of the U.S. market (more than 2,000 hospitals in 43 states), takes a different view: Cost efficiencies do exist — yielding perhaps $60 billion in savings over the next decade — but only if Washington mandates a national standard for the treatment and custody of patient records. Unlocking these savings relies heavily on a key requirement: the need to develop a strategic transition plan. Such a plan will dictate the duration that a health care provider will be required to maintain a patient’s physical paper and film records. A tremendous amount of the current cost of maintaining patient records come from the labor involved and the rents paid to manage giant file centers — in some cases stretching for acres — on each patient who is treated, regardless of whether an electronic patient record system is in place or not. In anticipation of the widespread use of electronic health records, Iron Mountain has spent the past 10 years developing a transition strategy that will facilitate the implementation of an EHR. The transition models we have built are not proprietary. Together with the implementation of a national retention policy, the transition plans described here will reduce health care operating cost by up to $60 billion over 10 years.We base these savings on experience and, more importantly, on the actual savings we have created for many of the largest health systems and university hospitals in the United States.The Problem in a NutshellToday, the nearly 6,000 hospitals in the U.S. spend more than $10 billion annually to store and manage 500 million patient records and the billions of financial, claims, business and film records associated with patient care. Iron Mountain, a global leader in information management services, performs much of this work, for some of the industry’s biggest players, including HCA, Tenet, Johns Hopkins, Memorial Hermann, Ascension Health, Exempla Healthcare, Intermountain Healthcare and Centura Health. Its $60 billion savings estimate is based on the real-world savings Iron Mountain has created for many of its largest clients.While most pundits and lawmakers see technology as the solution, Iron Mountain believes that’s only part of the answer. Though much of the possible savings will be realized by implementing best practices, we see an easy way to trim costs in this area by about $1 billion a year by sweeping away the overlapping, contradictory and Byzantine state rules that dictate the length of time that patient records must be maintained. A reasonable federal standard for maintaining patient records should be made part of any health reform effort.Currently, state laws dictate how long a patient’s paper records need to be maintained, and these laws differ widely between jurisdictions. In Florida, for example, health care providers are required to maintain records for seven years — and it’s no coincidence that medical costs there are below the national average. On the other hand, Massachusetts rules require health care professionals to maintain patient records for 25 years — and again, it’s no coincidence that health care costs there are consistently above the national average.From an analytical stance based on market share, a more “national— approach to record retention can dramatically impact savings associated with the transition to an EHR. Establishing a 10-year national retention policy will immediately reduce the 500 million hard copy records by 35 percent and will shorten the cost to transition from the paper- and film-based record to only 10 years. Simply adopting a 10-year national retention policy will reduce storage and transition costs up to $11 billion over a 10-year period. As Congress and the White House seek ways to revamp the nation’s health care system, modernizing the electronic health record is essential to unlocking efficiencies in the industry and driving down the cost of medical care. The government will need to devise an intelligent plan to spend this money. If that happens, the estimated net cost of this program to the federal government, once health care cost savings are factored in, is estimated to be approximately $19 billion. Ed Santangelo is the senior vice president of health care at Iron Mountain Inc.