Electronic Health Records Were Supposed to Cut Medical Costs. They Haven’t: Harvard Business School blog

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“Despite the promise that electronic health records would cut billing costs, savings have yet to materialize, according to a major new study by researchers at Harvard Business School and Duke University,” Roberta Holland writes on the Harvard Business School “Working Knowledge” blog. “’The theory was that part of having electronic records was to lower the cost. We didn’t find much evidence for that,’ says coauthor Robert S. Kaplan, senior fellow and Marvin Bower Professor of Leadership Development, Emeritus, at Harvard Business School. The research, conducted at Duke University Medical Center in 2016 and 2017, found that generating a single bill cost anywhere from $20 to $215 depending on the type of visit. That’s despite the fact that Duke has an established electronic health record (EHR) system and an efficient, centralized billing department, Kaplan says. Administrative costs account for at least a quarter of health care spending in the United States. That is twice the administrative overhead found in Canada and is significantly higher than most other high-resource countries. Adoption of certified EHR systems was seen as a potential antidote. By digitizing patient records and adding billing workflows around them, the efficiencies would drive down processing costs, it was theorized. The problem: Automation may help on some record-keeping tasks, but it also imposes its own costs. ‘In fact, more costs were shifted over to doctors in that they had to enter more codes into the so-called automated system,’ Kaplan says. ‘Turns out that that gets them annoyed, and it distracts them from dealing with the patient.’ The study, published in the February 20 issue of the Journal of the American Medical Association, looked at five types of visits: primary care visits, ER visits resulting in a patient discharge, general medicine hospital stays, outpatient surgical procedures, and inpatient surgeries. Findings included: A primary care visit necessitated 13 minutes in billing and insurance-related activities, costing $20. The time and cost ramped up to 100 minutes and $215 for an inpatient surgery. Just the physicians’ portion of the time and cost spent on billing amounted to 3 minutes and about $6 for a primary care visit, up to 15 minutes and $51 for surgery. Physicians, who cost between $3 and $8 per minute, are doing administrative tasks that a scribe costing 50 cents a minute could do better, Kaplan says.” Roberta Holland, Electronic Health Records Were Supposed to Cut Medical Costs. They Haven’t,” Harvard Business School “Working Knowledge” blog.