Paying doctors to use digital records — Medicare finally does the right thing

David P. Hamilton — Wed, 31 Oct 2007 21:30:30 +0000

Digital health records would be a great thing for the U.S. healthcare system, should doctors and hospitals ever adopt them widely. (Among other things, they’d likely cut down on medical errors and improve the quality of medical care.) Yet only about 10 percent of smaller physicians’ offices use them, because the upfront costs of implementing an electronic-records system are so daunting — and because the doctors themselves won’t tend to reap benefits from the investment for years, if not longer.

So it’s encouraging to see the federal Medicare program stepping up with a pilot program to offer higher reimbursements to doctors who go paperless in their record-keeping. The program will pay doctors extra when they order prescriptions or submit lab tests online, with the highest payments going to the most aggressive users of the technology.

New digital-record systems can cost $20,000 to $40,000 to implement, but the cost savings of such systems tend to flow to insurers and hospitals, not to physicians themselves. The new Medicare program, which will involve about 1,200 doctors, could boost reimbursements to these doctors by several thousands of dollars a year. Those funds, Medicare insists, will be recouped through improved care and greater prevention of chronic conditions.

Whether or not that’s true — and I suspect such savings will only materialize over the long term — it’s great to see Medicare tacking the financial disincentives associated with electronic-record adoption head-on. Now, if they can just expand this program as quickly as possible — and perhaps offer some standards guidance along the way, to ensure we don’t create an electronic Babel of incompatible systems — then maybe we’ll finally be getting somewhere.

VentureBeat » financial incentives

Paying doctors to use digital records — Medicare finally does the right thing