Insurance Provider Funds Switch to Electronic Health Records

By M.L. Baker  |  Posted 04-05-2005
In a move that drew praise from the nation's health IT czar Monday, Blue Cross Blue Shield of Massachusetts has promised $50 million to implement electronic health records so data can be shared among nursing homes, hospitals and outpatient clinics in three communities in the state.

The pledge is one of the largest investments, if not the single largest, by an insurance company in health information technology. It's also a significant fraction of the $139 million in federal funds earmarked for health IT.

EHRs (electronic health records) are widely believed to improve the quality and cost-effectiveness of health care, but adoption has been slow largely because doctors find them cumbersome to pay for and install.

In addition, EHRs from hospitals, clinical laboratories or outpatient doctors usually cannot be shared electronically among institutions. This means doctors lack important information and may order visits and services that would otherwise be unnecessary.

The Massachusetts project aims to find the best ways for health care providers to shift from paper records to electronic records that can share information across patients and health care sites.

Though funded by BCBSMA (Blue Cross Blue Shield of Massachusetts), the project is managed by a group of 34 health care entities called the Massachusetts E-Health Collaborative, which last week selected three communities out of the 35 that applied to receive the funds. Over the next three years, Greater Brockton, Greater Newburyport and Northern Berkshire will be pilot sites for implementing electronic health records across a community.

In an exclusive interview with Ziff Davis Internet, national health IT coordinator David Brailer—colloquially known as the "health IT czar"—welcomed the move. "The regional initiatives like this are really designed to succeed; it's a peer-driven, culture-changing process," Brailer said. "It's a different animal than just giving a doctor an EHR."

Brailer says it's important to act now to adopt common standards. Click here to read more.

Last year, Wellpoint Inc., a large health benefits company and an independent licensee of the Blue Cross and Blue Shield Association, offered member physicians more than $40 million in free hardware and software. But it found that only about a tenth of doctors would accept an e-prescribing PDA.

John Fallon, chief physician executive at BCBSMA, said funding the project has had unintended positive consequences because so many communities came together to discuss regional health IT. He said in some cases, competing institutions worked together to submit a joint proposal. The number of applicants for funding was nearly four times that expected, he said.

Fallon said BCBSMA put up the funds because it wanted to transform health care and improve quality and safety, but he also cited a need to know how much savings accumulate and who reaps the benefits of more efficient care. "We don't know what the business argument is, because no one has actually done a true business plan for this kind of investment."

Some studies have found that health care payers reap most of the savings benefits from EHRs, while health care providers end up with the bills and hassles required to maintain complicated computer systems.

Adding that other studies have found that savings accrue to the provider, Fallon said carefully tracking expenses in the three communities could help both payers and providers know who receives the financial advantages of electronic health records and therefore who should shoulder the cost.

Brailer said he expects to see more health plans becoming involved in similar regional projects, both as private entities and as collaborative projects. But he added that regional efforts are "still in a state of experimentation" to find the best models, and that the Massachusetts eHealth Collaborative projects will add valuable insight.

"There are very good health services researchers involved in this, so we'll learn a lot from this."