Do electronic medical records lower health costs?

On Monday, the New York Times covered a study that claims electronic medical records may not cut health costs. The paper was written by a collection of doctors and public health experts. Steve Lohr, reporting for the Times:

The study showed, however, that doctors with computerized access to a patient’s previous image results ordered tests on 18 percent of the visits, while those without the tracking technology ordered tests on 12.9 percent of visits. That is a 40 percent higher rate of image testing by doctors using electronic technology instead of paper records.

That’s seemingly bad news for electronic medical records, which have been touted as one way to drive efficiency and cost savings in health care. The New York Times is apparently taking this study quite seriously, going so far as to publish an editorial the day after the article ran.

Still, something about this study didn’t seem right to me, so I asked around. Some professors were willing to give me a bit of background, but not openly, citing research in progress.

First, electronic medical records (EMR) are typically deployed in hospitals and clinic networks that have money to spare. The up-front costs of switching from paper to digital are not insignificant. Second, not all providers have deployed EMR to the same degree. Hospitals and clinics that use EMR can be split into roughly two camps—those still early in the transition and those that have been using EMR for years.

The study covered in the Times did not account for this bifurcation. If it had, it’s most likely that it would have reported a different result. Hospitals and clinics early in their use of EMR have higher costs for the first two years. After that, if the hospital is in a well-networked location with access to talented information technology professionals, costs will likely drop. Many hospitals further along with the transition have seen their costs drop after the initial spike.

Finally, during the time covered by the EMR study, imaging technologies have become more widespread. It’s possible that doctors are ordering more imaging tests because they now have access to more imaging machines, and that this merely coincided with the adoption of EMR.

There’s certain to be more research on this topic, so stay tuned.

Photo by Dave Q.