June 2 , 2008

Improving Healthcare IT
By Jim Knaub
Radiology Today
Vol. 9 No. 11 P. 6

What are your plans for upgrading the IT infrastructure of your facility, and how have 2007 Deficit Reduction Act (DRA) imaging reimbursement cuts affected those plans?
According to Medical Group Management Association President and CEO William F. Jessee, MD, FACMPE, about one half of you (53%) are reducing your IT investment as a direct result of DRA reductions. Jessee spoke during a session on healthcare policy in Las Vegas last month at the 2008 Radiology Summit sponsored by the Radiology Business Management Association (RBMA).

“Every time there is a ratcheting down on the price side, the volume goes up,” Jessee told attendees.

Providers’ classic response to reimbursement cuts—increasing volume—is a solution that will only exacerbate the problem. The tremendous growth in imaging volume (and corresponding cost) prompted the federal government to enact imaging reimbursement cuts in the first place.

The irony is that reducing reimbursement to radiologists, hospitals, and imaging centers to save Medicare money is delaying the infrastructure tool that most agree has the greatest chance to reduce the spiraling growth of healthcare costs: IT. In an earlier address at RBMA’s Radiology Summit, former Sen David Durenberger, JD, noted that 30% of healthcare costs are administrative. Many experts believe computerization can bring significant cost savings to healthcare, though Jessee noted it’s not as simple as some people believe.

“I’ve heard people say, ‘If everyone had an electronic health record [EHR], everything will be solved,’” Jessee told the RBMA audience. He also noted that people who know better have said EHR is a “one-time” investment.

Misunderstandings and oversimplifications aside, people who do have some understanding of IT believe in its ability to cut cost and improve care and service. IT in healthcare means many different things across medicine. In radiology, it manifests as PACS and RIS implementation and practice management software (plus clinical modalities). In the broader healthcare arena, IT manifests as electronic medical records (EMRs), electronic prescribing, and the ability to exchange clinical information, including DICOM images.

While the Bush administration rightly pushed the goal of nationwide EMRs by 2014, what form that may take remains unclear. Most facilities are still far from implementing any kind of integrated medical record/information system within their walls, let alone real interoperability with other medical facilities.

On July 1, the 10.1% cut delayed from January 1 is scheduled to take effect. Presumably, what Jessee said about medical practices putting off IT investment because of reimbursement cuts won’t be helped by further cuts.

If the government believes improved IT in medicine can reduce costs because of a swifter exchange of better information, it should develop standards that these EMRs and other information systems should use. Then it should find an appropriate incentive to reward facilities that implement them. Granted, federal regulation regularly visits the land of unintended consequences, but reimbursement cuts that put off what most everyone in the field agrees can be a real healthcare cost saver—as well as one with fewer losers than other healthcare cost savers—do little to chip away at the growing healthcare cost problem. Real solutions require real investment in achieving them.

— Jim Knaub is editor of Radiology Today.