Cost/Benefit and ROI aspects of Health Information Technology (HIT)

Whether or not EHR and other HIT systems benefits exceed costs is a question being discussed in many quarters today. A 2006 report { click here } based on research conducted by the Southern California Evidence-based Practice Center provides what I consider a good framework for a priori and a posteriori examination of the cost/benefit and ROI aspects of this question.

Despite the heterogeneity in the analytic methods used, all cost-benefit analyses predicted substantial savings from EHR (and health care information exchange and interoperability) implementation: The quantifiable benefits are projected to outweigh the investment costs. However, the predicted time needed to break even varied from three to as many as 13 years.

Many of the studies concerned HIT systems developed and evaluated by academic and institutional leaders in HIT.

• Regenstrief Institute in Indianapolis, IN
• Partners/Brigham and Women’s Hospital in Boston, MA
• Intermountain Health in Salt Lake City, UT
• Kaiser Permanente health care system
• Vanderbilt University in Nashville, TN
• U.S. Department of Veterans Affairs (VA) health care

As asserted above, you need to ask when a particular system will reach the break even point. You also need to examine any potential for a mismatch between who pays for and who accrues cost savings from HIT use. Private organizations deciding whether to invest in HIT must weigh the costs and benefits of doing so. Although the primary goal of nonprofit healthcare organizations may be to provide high-quality care, these organizations still need to watch the bottom line to survive, which includes understanding the costs of measures designed to improve quality. Such private return-on-investment (ROI) calculations can provide results that are quite different from those of societal cost-benefit analysis, which are often reported in clinical journals. For example, one study showed that a hospital that installed a computerized reminder system to alert providers when patients were not up-to-date on their immunizations increased pneumococcal vaccine orders by 8 percent. Another study showed that, among the elderly, each $12 vaccination averts $20.27 in hospital costs and increases life expectancy an average of 1.2 days. From society’s point of view, the reminder system saves money and improves health, so it is a win-win program. However, from a financial perspective, the hospital has spent money on a system that had no effect on the costs or revenues of current stays because the pneumococcal vaccine is not delivered in the hospital. To benefit from this intervention, the hospital must make a reputation for higher quality and convert it into profits. This is one example of the potential for a mismatch between who pays for and who accrues cost savings from HIT use. A more extreme example would be a hospital’s implementation of a HIT intervention that averts future hospitalization. In this case, HIT implementation both costs the hospital money and decreases hospital revenues, even if the HIT implementation has a net cost-savings from a societal (or Medicare) perspective.

For more, click here, here and here.

Epocrates Mobile Electronic Health Record

Health care delivery is now moving away from a specific location and into a virtual care space, where patient medical records and real-time clinical data will reside.

There has also been a revolution in access to clinical reference material, and physicians and other care providers are moving core scientific knowledge from books to apps. Today’s doctors are no longer what they can memorize.

Throughout this blog, I've been discussing many of the components of Electronic Health Record (EHR) systems that will likely be used in the larger systems installed throughout entire hospitals and regions. However, 50 percent of physicians in the US work in small or solo practices.

The Epocrates EHR is specifically targeting the solo practitioner and the small physician groups, which have different needs from the larger enterprise care facilities that so many EHR providers are pursuing. To that end, Epocrates says that it has "teamed up with a very well known” but still undisclosed practice manager partner, whose software will be integrated into the Epocrates EHR for calendaring, scheduling, appointments, billing and more.

The as-yet-not-released Epocrates EHR app will include the company's drug and safety content and will, they say, meet “meaningful use” and HIPAA compliance requirements.

There are offerings from other vendors such as Microsoft and Symantec too, but I've decided to look at Epocrates Mobile EHR because Epocrates was the first company to introduce a medical app for the iPhone. Furthermore, as seen in the image below, their app is now available for many of the popular hand-held smart devices.











Their fully functioning mobile EHR app will work both when connected and disconnected. It’s not enough to just have a mobile EHR, of course, and it is also a fully featured, web-enabled desktop application, too.

The mobile and desktop versions may have the same functionalities, but the different form factors will likely lead to certain applications being favored on each.

There is a functional parity between their mobile and web interface. The information will be delivered differently and the iPhone version will be used for some use cases more often than the desktop version and vice versa. These two platforms are complementary, so Epocrates is not necessarily "leading" with mobile.

Unlike some mobile “portals” to EHR systems, Epocrates offering is a native app with patient data stored in it.

One differentiator between the Epocrates mobile EHR app and some others is that theirs will be a native app and it will store patient data on the device. Users will interact with the EHR differently from a mobile device vs. a desktop client. The iPhone interface is not ideal for text entry, so they are looking for other ways to get information into the device. The iPhone interface will be used more for things like dictation, while the desktop interface won’t be used for that as much. From a task perspective, though, they are not looking to hobble the handheld interface in any way.

Click here to see new apps from Epocrates

Click here to see the Dragon speech-to-text application on a hand-held device

Epocrates is launching an EHR offering now because of the increase in EHR adoption because of the ARRA deadlines for stimulus fund incentives payments. These external deadlines are encouraging physicians to adopt EHR, making it an ideal time to enter the market.

There are also drivers from the technology perspective as well. It’s a good time to enter the market with a mobile EHR because more clinics have a high penetration of smartphone users. Also, 3G wireless networks now have higher bandwidth – enough to support these kinds of applications. Physicians rarely take note of [mobile] Internet connectivity issues anymore. Note: I've also talked a little about the less-ubiquitous 4G (WiMax) networks in earlier posts.

Epocrates plans to integrate the features of the iPhone, such as the camera, as well as dictation directly into the app, an interesting feature especially in light of the recent announcement by Nuance that they will be shipping a medical transcription application for the iPhone.

Epocrates will also utilize the iPhone’s Push Notification Service to alert doctors of important or timely information (and hopefully not overuse it). Given Epocrates’ depth of knowledge of pharmaceutical formularies, e-prescribing will be built in.

Although the mobile application will synchronize with the web application, it will continue working even when there is no internet connection. Data will be stored on the handheld device in a secure, encrypted manner and synchronize when a connection is available, a real issue for hospitals where there are many “dead” zones. And, there will be condition-based templates for easy entry of clinical information.

There will also be integration with a revenue-cycle platform so physicians can charge and submit codes, through a partnership with a “known” company. Epocrates anticipates they will achieve Certification Commission for Health Information Technology (CCHIT) certification by the time of release. The EHR will be delivered as a software-as-a-service (SAAS) model, meaning the physician will effectively lease, not purchase it.

This could be an attractive low-cost product for solo or small group physicians who do not have complex office staff EHR integration needs. In particular, for the physician who already uses their smart phone for many work activities, the potentially painless transition to using it as the primary interface into their office EHR may be very appealing.

Stay tuned.

Click here to see Epocrates executives at HIMSS 2010

Click here to see Andy Wiesenethal, Kaiser Permanente at HIMSS 2010

As an aside, I'd like to note that when Epocrates Online can be accessed with a browser on which Google's (or other) translation app has been installed, as shown in the image below.