Small hospitals may lose billions by missing EHR deadline

By Dan Cook for benefitspro

A large-scale review of data related to hospital compliance with federal electronic health records mandates reveals that most U.S. hospitals have made substantial progress toward EHR adoption. Nonetheless, because considerable federal dollars are tied to complete adoption, many hospitals — especially small rural ones — could forfeit millions as key deadlines approach.

Already, some hospitals have failed to meet meaningful-use guidelines by the July 1, 2014 deadline.

“For many hospitals, penalties will be assessed in fiscal year 2015 for failing to meet federal meaningful-use criteria,” researchers noted. The stakes of compliance are high, they pointed out. “$30 billion to promote the ‘meaningful use’ of electronic health records through the Medicare and Medicaid EHR Incentive Programs,” plus other indirect payments and support services available to those who meet the guidelines.

Another incentive for hospitals to upgrade EHRs is the Patient Protection and Affordable Care Act, which, the researchers noted, created “delivery system reforms, such as accountable care organizations, [which] are difficult to accomplish without well-functioning EHRs.”

The study was co-authored by eight academicians and health care policymakers, and was released by the University of Michigan. Researchers reviewed data from recent years gathered by the American Hospital Association.

The study posed the following questions:

• What proportion of U.S. general acute care hospitals have at least a basic EHR, and does the rate of adoption vary among different types of hospitals?
• Are hospitals that care for vulnerable populations adopting EHRs at a different rate than other hospitals?
• Which hospitals appear to be making little or no progress toward basic EHR adoption, and are there particular characteristics that distinguish these institutions from others?
• What proportion of hospitals can meet stage 2 meaningful-use criteria, and are there certain criteria that appear to be particularly challenging for hospitals to meet?

From the high level view, the researchers concluded that the outcomes seen so far are somewhat the expected ones: large players are doing fairly well while smaller ones are struggling. Resources have a lot to do with the outcomes.

“In the third year of the Medicare and Medicaid EHR Incentive Programs, we found that EHR adoption among US hospitals continues to rise steeply. Hospitals are clearly responding to market and policy pressures with substantial investments in the time and resources required for EHR adoption. However, there remain important challenges ahead.

“Small and rural hospitals continue to lag behind their better-resourced counterparts, and meeting stage 2 meaningful-use criteria will require specific attention for most hospitals,” the researchers reported.

Another significant trend identified: Serious obstacles continue to block the smooth interoperability of EHR systems, so that the level of information sharing sought by the government is still far from becoming a reality.

But the study also spotted some optimistic events, such as an overall trend toward EHR adoption and federal initiatives created to encourage compliance among specific types of organizations that actually worked quite well.

Key findings featured by the researchers included:

• EHR adoption among US hospitals continues to rise steeply: 59 percent now have at least a basic EHR.
• Small and rural hospitals continue to lag behind their better resourced counterparts; these institutions will likely need customized programs to help them meet standards.
• Most hospitals are able to meet many of the stage 2 meaningful-use criteria, but only 5.8 percent of hospitals are able meet them all.
• Several criteria, including sharing care summaries with other providers and providing patients with online access to their data, need help. Attention from EHR vendors to ensure that the necessary functions are available would be beneficial, as would an additional effort from many hospitals to make certain that these functionalities are used.
• Despite early concerns about a digital divide in services provided between hospitals serving poor patients and the better resourced hospitals, no evidence of such a gap was found. “The lack of a digital divide between safety-net institutions and other hospitals is remarkable, given that safety-net hospitals usually struggle with expensive and complex changes. Policy makers were concerned about this early on and created a separate incentive structure for these institutions.”
• The largest gains are now happening among medium-size hospitals: “those that were not early adopters but that likely have the resources and capabilities to purchase and implement EHRs.”
• The struggle to comply by small rural hospitals has “important implications for the work of Regional Extension Centers — whose primary purpose is to help small institutions, particularly critical-access hospitals, adopt and use EHRs — as well as for other initiatives that target rural providers and care settings.”

“Taken together, these findings represent continuing progress on the part of hospitals in response to the federal incentives. The results also offer clear indicators of where additional efforts are needed,” the researchers said. “These findings may be surprising given the broad reliance on the Internet and information sharing in other sectors of the economy. However, the strict privacy concerns related to health information and the complexity of the data create operational challenges for interoperability. Hospitals have added other challenging features such as physician notes and electronic prescribing. Nonetheless, they appear to be struggling with online access and transmittal of patients’ health information and with sending information to the next provider of care.”

The researchers offered possible ways to address some of the more pressing compliance roadblocks, which included:

• Ensuring that Regional Extension Centers and other federal efforts have the resources to help their targeted institutions select, purchase, implement and successfully use EHRs in ways that earn them incentive payments and enable them to engage in new care delivery and payment models, such as accountable care organizations.
• Creating policies and programs for technical assistance aimed at small hospitals, not only those located in rural regions.
• Determining whether a lack of EHRs specifically designed to meet the operational and budgetary needs of small is the cause of failure to meet deadlines. “Policy makers could devote specific attention to understanding whether these supply-side challenges exist, and whether efforts such as changes in certification or incentive policies might help address them.”
• Careful assessment of “the impact of meaningful use on key performance outcomes going forward, including the potential for unintended consequences that could worsen performance.”

“Policymakers may want to consider new targeted strategies to ensure that all hospitals move toward meaningful use of electronic health records,” said study co-author Julia Adler-Milstein. “We found that rural and small hospitals lag behind, suggesting a need to expand federal efforts to help these institutions select, purchase, implement and successfully use electronic health records in ways that earn them incentive payments and enable them to engage in new care delivery and payment models.”