IT in Healthcare – Electronic Medical Records (EMR) and Beyond

By: Gavin P. Smith, on behalf of teammates Christy Kollmar, Stephen Land, Fernando Tarafa and Mei-Shu Chang

HIT/EMR – Background

As trends and technology continually evolve, the healthcare industry must also evolve in its methods of creating, storing and sharing information.   The current healthcare system is stuck in an outdated, tedious realm of information sharing.    Fear of new technology, lack of standardization, insufficient incentives, uncertain legalities and questionable cost drivers hinder progress.  Regardless, a standardized HIT system is an inevitable necessity 1) to advance health care quality, 2) to better assist patients with acute and chronic conditions, 3) to diminish disparities in treatment, and 4) to reduce medical errors.   (HIT in the United States: The Information Base for Progress, 1:2)  The problem has gained attention at the highest levels of government, resulting in increased funding for IT development in the recent American Recovery and Reinvestment Act.  The Act “includes more than $20 billion to aid in the development of a robust IT infrastructure for healthcare and to assist providers and other entities in adopting and using health IT.” (National Health IT Week, Press Release, 2009)  Why such intense focus?  A recent RAND study determined that “properly implemented and widely adopted, Health Information Technology (HIT) would save money and significantly improve healthcare quality.” (“Health Information Technology: Can HIT Lower Costs and Improve Quality?” 1)

Key Findings

  • Productivity and cost drivers remain major concerns.
  • The healthcare sector is not fully saturated with IT capabilities, limiting full deployment of a standardized system.
  • Interconnectivity and technological factors hamper deployment.
  • Financial incentives and systems to reward universal adoption are necessary.
  • Uniform technology and training across the market is the optimal goal.
  • Regulatory standardization of policies, procedures and certifications mitigates risk.
  • Cloud computing represents a long-term, viable option once standardization is achieved.

Recommendations for Management

The U.S healthcare system lacks centralized organization.  Size of a practice also plays a part in the current market.  Larger practices are more likely to adopt an HIT system both out of necessity and due to their enhanced financial position.  Larger networks are also in a better position to pay for and integrate HIT than smaller independent or rural hospitals, pharmacies and physicians.  (HITUS, 5:46)  The overall holy grail of the healthcare industry is to create a standardized software solution that communicates with all varieties of currently deployed IT systems within all points of the healthcare triangle (see Exhibit 3).  With nine major software players already in the market, and entrepreneurial efforts on the rise, the space is becoming very crowded.  It should only be entered if the monetary and technological will is there.


Productivity and Cost

Transition to new HIT methods would cause a disruption in the industry.  Providers will need extra, specialized staff to move information from paper to digital, or re-purpose current staff members to the task.   In addition, “HIT dissemination has not occurred rapidly, due in part to the high costs of electronic health record (EHR) systems for providers of care—including the upfront capital investment, ongoing maintenance and short-term productivity loss.” (HITUS, 1) Finally, there exists a fundamental “disconnect between who pays for HIT and who profits from HIT. Patients benefit from better health and payers benefit from lower costs; however, providers pay in both higher costs to implement HIT and lower revenues after implementation.” (HIT: Can HIT Lower Costs and Improve Quality?, 3)

Current Market Conditions

A uniform dispersal of HIT is sporadic at best within the overall healthcare community.  “Relatively few providers have access to HIT. Only about 20 to 25 percent of hospitals and 15 to 20 percent of physicians’ offices have a HIT system.” (HIT: Can HIT Lower Costs and Improve Quality?, 3) This makes it even more difficult to determine who needs what and where, not to mention how to interconnect with what is already in place.

Those that have EHR systems arguably provide better quality to patients through better accuracy of records.  But the opposite is also feared to be true.  “EHR adoption, if uneven, may further exacerbate existing health disparities” (HITUS, 4:29)  The lack of uniformity in the current market could pose problems for patients with low income or socio-economic status.  These might reside in areas with less affluent facilities capable of purchasing and integrating EHR and other forms of HIT.  As a result, quality of care suffers in these areas, creating a disparity in care between different population groups.  (HITUS, 4:29)

Technology & Connectivity

In the current market environment, “connectivity—the ability to share information from system to system—is poor. HIT implementation is growing, but there is little sharing of health information between existing systems.” (HIT: Can HIT Lower Costs and Improve Quality?, 3)  Concerns include the exchange of: 1) information between hospitals and admitting physicians, 2) information among hospitals with a community, 3) information between physicians and community physician groups, 4) information between patients and hospitals, 5) information between patients and physician offices beyond lab results, emails and appointments, 6) information between health plans and patients and 7) information between or among hospitals, physicians, pharmacies, nursing homes and home health care providers. (HITUS, 2:16)

Realistically, most providers do not have the systems or technologies available to coordinate patient care, share information, monitor prevention efforts and measure and improve performance. (HIT: Can HIT Lower Costs and Improve Quality?, 1)  Reasons vary but include concern over the constant evolution of technology.  Many lack guidance to know where to enter the technology cycle, what systems to select, what level and source of training is needed and how much shelf life exists before their initial investment becomes outdated.

Financial Incentives and Assistance

Despite the fact that estimates place annual savings from efficiency of HIT to be $77 billion or more, the cost of implementation remains a major barrier.   According to studies, “the largest savings come from reduced hospital stays (a result of increased safety and better scheduling and coordination), reduced nurses’ administrative time, and more efficient drug utilization. (HIT: Can HIT Lower Costs and Improve Quality?, 1)   With this obvious savings within reach, barriers remain because “economic incentives in the health care industry generally do not reward good performance, reducing the motivation of self-interested health care actors to acquire HIT and compete more effectively.” (HITUS, 5:43)  In addition, most providers are uncertain about return on investment.  Changing payment policies to reward good health care performance “creates a non-specific incentive for providers to improve their quality and reduce costs of care.” (HITUS, 5:48)  Other solutions include reimbursing providers that use HIT in clinical care and providing grants or low-interest loans to those who acquire HIT systems.

Uniform Technology and Training

Paradoxically, improvements and evolution of technology causes frustration within the healthcare industry. Provider “concerns about ease of use and obsolescence were second only to financial barriers as a primary reason for not adopting this new technology.” (HITUS, 5:46)  They fear pouring money into a constant and never ending cycle of technology upgrade and replacement.  There are no standards to dictate the style of investment (rent, lease, purchase, etc.).   Finally, there are simply not enough skilled and trained people in HIT, a situation also indicative of the overall lack of skilled and trained workers that plagues the overall industry.

Uniform Government Policies and Certifications

Centralized training programs, government subsidies for purchases, certification standards for HIT training are all ways that the government can intervene.  For example, “forcing providers to be more transparent about their performance, through public reporting of efficiency and quality data, may stimulate doctors and hospitals to join larger groups and integrate into systems.” (HITUS, 5:49)  New government policies will also reduce the phobia of legal problems that come with HIT adoption.  “The use of certain technologies is associated with an actual or perceived increase in legal burdens.” (HITUS, 5:49)  Many are concerned about accreditation issues, privacy of information, liability and legal issues.

Cloud Computing

Cloud computing could greatly enhance the ease of deployment of HIT throughout current infrastructure.  According to the National Institute of Standards and Technology, cloud computing is “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”  In layman’s terms, cloud computing takes major functions away from individual computers, eliminates most hardware and makes a majority of functions internet-based.  Cloud computing provides a centralized platform for software and file storage, removing the maintenance hassles required of individuals, and expands portability.  (Mell, Grance – The NIST Definition for Cloud Computing)  Lower overall IT costs would result.


Hesitance to embrace technological change, absence of a standardized HIT software system and lack of overall regulatory will is holding back a standardized HIT reality.  Fears, financials and phobias must be met by standardization, subsidies and sustainability. The combination of cloud computing, standardized software platforms and assurance of robust security will deliver a plausible solution for transition to full HIT within the healthcare industry.  Access and portability provided by these innovations will result in increased productivity, better accuracy and higher quality of healthcare.


Exhibit 1 – Key terms defined:

HIT – Health Information Technology – A system that incorporates both computer hardware and software that deals with the storage, retrieval, sharing, and use of health care information, data, and knowledge for communication and decision-making.

EMR – Electronic Medical Record – A collection of patient and healthcare information generated and maintained in accordance with legal policies, made by the patient, the insurer or the provider.  Such records will include all knowledge of the acts, events, opinions or diagnoses relating to the patient.  It must meet all statutory, regulatory, and professional requirements for both clinical & business purposes.

EMR System – Record system framework that integrates data from multiple sources, captures data at the point of care, and supports caregiver decision making. The information may be from any variety of sources and in any format, including, but not limited to print medium, audio/visual recording, and/or electronic display.

Exhibit 2

According to a RAND study, “around 200,000 adverse drug events could be eliminated each year, at an annual savings of $1 billion.”

Source: RAND – Health Information Technology: Can HIT Lower Costs and Improve Quality?

Exhibit 3

The Healthcare Triangle:


Exhibit 4

Information Sharing – Physician Environment:



Exhibit 5

Top Healthcare Software Competitors:








Quadra Med




Top Overall Software Competitors:


SunGard Data Systems



Computer Associates




BMC Software





Top Healthcare Hardware Competitors:












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