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Unintended Consequences

Saturday September 29th, 2012   •   Posted by Craig Eyermann at 11:34am PDT   •  

Health Care


Do you remember when pushing medical providers to go away from paper-based record keeping in favor of electronic records offered the promise of reducing the cost of health care? Here’s what USA Today reported just over two years ago, on July 14, 2010:

WASHINGTON (AP) — The Obama administration on Tuesday rolled out an ambitious five-year plan for moving doctors and hospitals to computerized medical records, promising greater safety for patients and lower costs.

Starting next year, doctors’ offices and hospitals can get federal money to help defray the costs of the systems, which can run to millions of dollars for hospitals. Providers who don’t comply by 2015 will face cuts in Medicare payments.

Federal incentive payments for doctors and hospitals to buy computerized systems could reach $27 billion over 10 years, and that’s only a fraction of what technology vendors stand to take in. It’s hoped the investment will streamline the delivery of medical care, yielding long-run savings.

The New York Times reports how that’s working out two years later:

When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.

Hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms, according to a New York Times analysis of Medicare data from the American Hospital Directory. Regulators say physicians have changed the way they bill for office visits similarly, increasing their payments by billions of dollars as well.

The most aggressive billing — by just 1,700 of the more than 440,000 doctors in the country — cost Medicare as much as $100 million in 2010 alone, federal regulators said in a recent report, noting that the largest share of those doctors specialized in family practice, internal medicine and emergency care.

So not only are taxpayers doling out money to health care providers so they can computerize their patients’ records, taxpayers are being charged more for the care that’s being recorded because the process of making the conversion is exposing more opportunities for medical professionals to be more fully reimbursed for the care they are providing to patients covered by the government’s health care programs. Care that they were previously providing to patients for free!

Why is it that every politician’s promise to reduce the cost of health care somehow ends up with the taxpayers being stuck with a even higher bill?

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September 2012