Why doctors are reluctant to swallow the IT pill

Electronic record-keeping can dramatically change the work of a physician. With a few taps on a keyboard, a doctor can call up all of the office notes on a patient, as well as reports from specialists, test results, family history, and lists of past treatment and medication. With another keystroke or two, a prescription can be sent to a pharmacy.

But the medical field, despite its dazzling use of technology in so many areas, lags behind other industries in the application of information technology in office settings. Physicians and their staff tote thick manila folders with pages of handwritten notes. Doctors often must query patients at each visit on their medical history because needed information is buried deep inside files. Doctors scribble prescriptions on paper pads.

Researchers at the W. P. Carey School of Business have been exploring the use of information technology by physicians. In a study using data from 2000 and 2001, they found that only about a third of doctors use computers for patient notes, and about 10 percent prescribe electronically. The researchers were trying to uncover the reasons for this reluctance to adopt information technology and how the situation might be changed.

Their conclusion: If you want to understand how likely doctors are to use new office technologies, look first at how they get paid. "I think we can show that there is a link between different kinds of reimbursement and information technology adoption," said Michael Furukawa, assistant professor in the School of Health Management and Policy.

Rewards help

Analyzing extensive data from a nationwide physician survey, Furukawa and colleagues Jonathan D. Ketcham, assistant professor in the School of Health Management and Policy, and Mary E. Rimzsa, medical director of the Center for Health Information and Research at the Ira A. Fulton School of Engineering, found that some practices of insurers appear to encourage doctors to automate their offices.

Physicians with the highest rate of information technology adoption were those paid under a managed care system known as capitation, which allots to physicians a set amount of money for care of each patient. Under this system, physicians have a strong incentive to be more efficient.

"Because physicians are at financial risk, they have a greater incentive to invest in information technology," said Ketcham. An alternative and widely used method of paying doctors — wherein they receive a set fee for the particular service they provide — did not appear to promote use of advanced technology, according to the researchers.

Medicare vs. Medicaid

Another key finding of the study, which was published in the February 2007 issue of the journal Medical Care, is that Medicaid and Medicare appear to influence doctors quite differently. Doctors who get a high proportion of their revenue from Medicaid, a federal-state insurance program for people with low income and resources, were more likely to be high users of advanced clinical information technology.

Doctors who receive much of their revenue from Medicare, the federal health insurance program for the elderly and disabled, were not. The researchers offer a number of explanations for these findings. Physicians treating Medicaid patients are dealing with poorer and often more troubled patients, who may have difficulty answering questions about their health history.

"They have so many stresses in their life, they don't keep track of their health," Rimsza said.

But a physician whose records are computerized has all of that information readily accessible and does not have to rely on recollections of patients. Medicaid is administered by the states, and some states are becoming aggressive about getting doctors to switch to automated systems, Furukawa said. On the other hand, Medicare has not pressured doctors to computerize their records.

Ketcham notes that the Medicare prescription drug benefit program that went into effect in 2006 does not require doctors to file prescriptions electronically. Also, Medicare does not allow physicians to bill for services provided via e-mail, which some private insurers are now doing. "Medicare has really lagged behind the state Medicaid agencies on the issue of clinical information technology," Ketcham said.

Support from the top

Although change appears to be arriving slowly, if at all, in doctors' offices and clinics, support for wider use of information technology has come from the highest levels of government recently. In his 2004 State of the Union address, President George W. Bush listed computerization of medical records as a key piece of his plan to bring down medical costs and improve quality of care.

Later that year, the Bush administration created a medical information technology czar — a national coordinator for health information technology — in the Department of Health and Human Services. The National Conference of State Legislatures also has made adoption of clinical information technology a key policy goal. The efficiency gains from adopting medical information technology can be significant, according to Rimsza, who is a practicing physician in addition to being a researcher.

"There is so much paperwork for physicians, it is a tremendous advantage to minimize the things you have to write down," she said. There also is growing evidence that adopting clinical information technology can reduce errors and improve patient care. "There are medical errors caused by poor handwriting," said Furukawa. "People are getting the wrong drug and the wrong dose."

Who pays? Who benefits?

Other surveys of doctors have found that the reasons for not automating patient records are largely financial, according to the researchers. Buying new hardware and software could cost as much as $20,000 per physician, according to Furukawa, who estimates the cost of training staff and lost revenue during the transition at around $10,000.

While this may not seem like a lot of money in today's medical world, it is money a physician must come up with out-of-pocket. "It is difficult for physicians to recoup the costs of it because reimbursement rates are set by the insurers and thus, unlike other industries, physicians cannot raise their charges to cover these costs," Rimsza said.

Also, doctors surveyed cited uncertainty about whether the new systems will be worth the investment as a reason for not adopting new technologies. "Some people might be a little technology-phobic," Rimsza added. The conclusion that physicians appear to be influenced by the policies of payers should be seen as good news for parties that want to see wider use of clinical information technology, according to the researchers.

Insurers, both public and private, are the leading advocates for greater adoption of medical information technology in the United States. The researchers conclude that the policies of these insurers play a key role in determining whether doctors shift to new technologies.

Insurers who reward physicians for being more efficient are encouraging the spread of information technology, Ketcham said. Doctors are finding that they can manage the care of their patients more efficiently with new information systems, and the savings accrue to the physician.

Conversely, if doctors are inefficient, they take the financial loss. "In health care there has been a fundamental disconnect between who benefits and who pays," said Ketcham. "Financial incentives can promote adoption of new technology."

Bottom Line:

  • Physicians have lagged behind other professions in their office use of advanced information technology. Only about a third of doctors in a survey used computers for patient notes and less than 10 percent filed prescriptions electronically.
  • President George W. Bush declared computerization of medical records a key component of his administration's health care initiative in his 2004 State of the Union Address.
  • Doctors who are most likely to adopt new technologies are those who receive the bulk of their revenue from insurers who offer financial incentives for cost-efficient care.
  • Doctors who receive much of their revenue from Medicaid also tend to be higher users of information technology. Electronic records make it easier for doctors to care for low income patients who may have trouble keeping track of their own health.
  • Doctors who rely on payments from Medicare are not generally higher users of clinical information technology. The federal program does not provide a great deal of incentives for doctors to adopt new systems, researchers believe.



Get the latest from the W. P. Carey School of Business

W. P. Carey News  |  Headlines and deep dives

KnowIT  |  IT news and research


We're committed to your privacy. W. P. Carey uses the information you provide to us only to share our relevant content that you select. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.