Another Study on Electronic Health Records Fails to Show Cost Savings

Like President Obama's search for the precise rhetoric that can finally turn Republican obstructionism into cooperation, as well as Governor Christie's search for the one cure that turns girth into svelteness, electronic health record (EHR) advocates keep looking for that one EHR study that proves that their financial black holes are really sources of profitability.

News reports like this suggest that this just-published Annals paper is that study. Unable to help either President Obama or Governor Christie, the curious DMCB took a look at the EHR manuscript.

Alas, it came away disappointed. EHRs have yet to consistently "save money."

The DMCB explains.

The Massachusetts eHealth Collaborative (MAeHC) has been promoting the community-based installation of EHRs since 2006.  32 Bay State communities applied for their assistance.  Three were selected.  Thanks to MAeHAC, by January 2008, 167 outpatient physician clinics (86% of the total in these communities) were outfitted with one of several commercially available EHRs.

The cost  to MAeHC was a whopping $130,822 per provider.

Realizing a "natural experiment" outcomes study could be fashioned, considerable demographic analytics and statistical effort was used to identify which non-EHR communities most closely resembled the three winners described above. Six communities were selected as comparisons. Two (unnamed) commercial health insurers provided claims data for the patients in the three EHR communities and the six best-matched non-EHR communities.

Keep in mind that the health care system has an ongoing background rate of cost inflation. In this study, the baseline period ran from January 2005 to March 2006 (before the EHRs were installed anywhere), while the EHR-live period ran from January 2008 to June 2009. This allowed the researchers to compare the two community groups' increases in health care claims expenses compared to baseline once the EHR went live.

After looking at more than 4.8 million patient-months worth of data, the researchers found:

Total health care costs increased over baseline by .78% in the EHR communities vs. 1.09% in the non-EHR communties.  This .31% difference was not only small, it failed to achieve statistical significance.

The per member per month (PMPM) costs went from $151 to $173 ($22 increase) in the EHR communities vs. going from $155 to $179 ($24 increase) in the non-EHR communities.  Once again, tests of statistical significant indicated these small shifts could have been the result of randomness. 

When categories of health care utilization were examined, there was no meaningful impact on inpatient or pharmacy utilization.  The two pieces of good news were that a) the trend for ambulatory (or outpatient) favored the EHR communities (.41% baseline to 1.12%) vs. the non-EHR communities (.14% baseline to 1.2%), and b) the trend for radiology studies favored the EHR communities (1.03% baseline to .6%) vs. non-EHR communities (-.25% baseline to .94%).

For the 25% of the study population with one or more chronic conditions, there was no impact on total or ambulatory cost trends.  Radiology, however, showed a statistically significant shift that favored the EHR.

The authors relied on trend calculations to calculate how the PMPMs would have compared in the intervention vs. control communities.  Even though the savings of $5.14 was not statistically significant, the authors projected a 7 year timeline "... to recoup the projected 5 year adoption cost in the (EHR) communities of $130,822 per provider."
 
The DMCB's take

Despite the pro-EHR spin, this Annals article falls far short of being a study that the medical-technological complex can use to justify its existence. The bottom line is that costs did not drop in statistically significant (p less than .05) or financially significant (a seven year return based on a faux $5 PMPM savings) manner.  Let's be honest: there is only one beneficiary of the MAeHC $100K per doc investment, and it's not the patient, the providers, payers or government: it's the vendors that sell these systems to a technology-addled health system with the collusion of too many naïve policymakers.

If ACOs really think their EHR systems are going to be the panacea that helps them tame health care costs, this study tells them that they may be in for a nasty surprise.

The good news here is that this research suggests that the EHR may have had an impact on ambulatory care and radiology claims expense.  The DMCB says "may" because it knows that multiple subgroup comparisons can generate statistically significant findings faster than med-mal plaintiff attorneys around a dollar bill.  Even if the impact is real, the miniscule savings were washed away by the tide of total costs and hardly meet the original vision of President Bush or HITECH.

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