July 29, 2008

Demonstrating the potential for payer-driven electronic medical record (EMR) solutions, Regence has conducted a one-year pilot project to test the feasibility of connecting an entire medical community with a single, Web-hosted electronic health records system. The initiative demonstrated that a communitywide system could be maintained at a cost of about $3,000 per provider per year, according to the Portland, Ore.-based Blue Cross Blue Shield insurer.

Beginning in January 2006, Regence (approximately $8.3 billion in 2007 gross revenue) funded and led the one-year initiative in the Eastern Oregon city of La Grande, connecting Grande Ronde Hospital, clinical laboratory Interpath, 12 provider practices and local pharmacies. Regence paid providers' subscription fees to ChartConnect (Yakima, Wash.), a Web-based electronic medical records system, and RxHub (St. Paul, Minn.), an e-prescribing service. Regence also funded the infrastructure enabling hospitals and physician offices to exchange records and provided training to staff. Further, the insurer also engaged Portland-based Acumentra Health to evaluate the pilot and provide recommendations for the La Grande and future EMR initiatives.

"There's a lot of discussion in the industry about inefficient medical care and variable quality of care," says Ralph Prows, M.D., Regence's senior medical director. "One reason is that our medical information isn't always where we need it to be. [Electronic] medical records would change that."

By launching the pilot, Regence joined a small number of carriers that have recognized the value of investing in electronic health/medical record initiatives. As Prows suggests, EMRs address not only inefficiencies associated with paper-driven healthcare processes, but also potentially ineffective or dangerous inconsistencies of care and duplication of costly tests. However, the implementation of EMRs requires the cooperation of disparate parties, including providers, patients and payers. Furthermore, there is no customary or legal mandate dictating which party should be responsible for consumers' individual records.

Getting Providers On Board

"Payers don't often take a role in driving electronic health records," comments Christine Chang, a New York-based analyst with Datamonitor. "Payers tend to benefit financially because of less duplication of tests and more effective care. But, typically, providers have to implement the systems themselves." The costs of doing so are often prohibitive, Chang adds.

According to an article in the New England Journal of Medicine, only 4 percent of physicians nationwide reported having a comprehensive electronic records system, and only 13 percent reported even having a more basic system.

"That's a real headache for the insurance companies because they have found from their own studies that physician practices and hospitals using electronic medical records deliver better care and have better outcomes," says John Moore, managing director, Chilmark Research (Boston). Moore argues that using hosted, Web-based systems to support EMR initiatives makes good economic sense. "The ASP [application service provider] or SaaS [Software-as-a-Service] model is a good one for the healthcare industry because so much care does take place at small physician practices," he says.

Regence says that its EMR solution costs of approximately $3,000 per provider annually were dwarfed by the six-figure estimates that providers cited as discouraging their investment in EMRs. The entire project cost less than $100,000, according to Regence spokeswoman Samantha Meese. Provider participants in the initiative reported increased operational efficiency, better medication management, faster access to lab and X-ray reports, and improved physician communication, Regence reports. However, the pilot also found that providers who were unprepared to adopt technology reported mixed results and lower satisfaction.

The greatest challenges associated with the pilot related to providers using the technology and integrating the system into their practices' workflow, according to Meese. "We will use the learning from the La Grande pilot to improve future e-health projects," she says. "We may shift the focus of future efforts to helping providers prepare from a workflow and technology standpoint and provide more up-front training for provider office staff."

ABOUT THE AUTHOR
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek ...