EMR Adoption Increases Hospital Costs

A study shows "there are some real negatives that come with the positives" of electronic medical records, according to Michael Furukawa, one of the study's authors.

Furukawa and his Arizona State University colleagues Raghu Santanam and Benjamin Shao analyzed data from more than 300 California hospitals that adopted some form of EMR from 1998 to 2007. Their research, "Electronic Medical Records, Nurse Staffing, and Nurse-Sensitive Patient Outcomes: Evidence from California Hospitals, 1998-2007," was published by the journal Health Services Research.

Contrary to expectations, they found EMR implementation was actually linked to higher hospital costs and in some cases lower quality of care. The study did find that hospitals saw better results from the use of EMRs as their implementation and techniques got more advanced, so cost savings may improve at hospitals over time, the authors stated.

Also, less money was spent specifically on overtime for nurses, presumably because personnel began to enter data into the computers as their shifts progressed instead of waiting until the end of the shift to write everything onto paper charts, the study explained.

It appeared to the researchers that simultaneously reducing costs and improving patient safety through IT was a tough combination. "One possibility is that there is a potential trade off, you either use IT to improve quality or you reduce the cost, but you may not be able to deliver on both fronts," according to Shao. "Also remember the health industry is behind other industries such as financial and manufacturing, so if you look at that and can learn from the lessons of other industries, you'll be better off."

Interestingly, the study found more highly educated nurses were needed to efficiently use the new systems. Added Shao, "So the implication is that when it comes down to staff management, the managers may need to be aware of the different types of impact that can be brought about by the adoption of health IT and be prepared for it."

On the positive side, hospitals experienced lower death rates for certain conditions. EMRs also contributed to fewer medication errors and may have resulted in less ordering of unnecessary, duplicate tests, according to the report.

But will health IT's positive impact on patient safety be negated by the tight implementation timelines called for under the HTIECH Act? Explained Furukawa, "We definitely can't say that rapid implementation is going to lead to disaster, but our knowledge of IT in the healthcare setting would suggest that those organizations without resources, without experience would have much more difficulty than those with experience."

Regarding healthcare's automation relative to other industries, Shao said the sector may just be experiencing growing pains. "So what we are observing right now in this context is not new, and chances are healthcare is following in the footsteps of other industries. I think we are seeing an early transitional period where adopters are going through some pains to realize the benefits that we expect to see," he explained. "Our message is don't lose hope, the chances are that we're in the early stage of adoption and eventually, in the long run, we'll see the benefits."

The new study was partly sponsored by the Center for Health Management Research, a program of the Health Research and Educational Trust.