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Do EMRs cut liability risk? Insurers want evidence before offering more discounts

A practical look at information technology issues and usage

By — Posted Nov. 30, 2009.

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Many people are banking on electronic medical records to help improve patient safety and quality. But medical liability insurers aren't sure that's happening.

A survey two years ago found that a small percentage of insurers offered a discount to practices that used EMRs. But because adoption has been slow, evidence is scant that EMRs help mitigate liability risk. In fact, there is concern that EMRs, by their very nature, might expose doctors to even more risk.

Jennifer Jones, market manager for Professional Risk Associates, a medical liability insurance agent that co-sponsored the 2007 study along with the now-defunct Medical Records Institute, said the company wanted to present evidence as to why insurance carriers should offer discounts. She felt the survey made the case for discounts, but it produced no action from the six or so carriers PRA represents. None of the agency's carriers offers an EMR discount.

The 2007 survey of 115 practices found that 45% of practices believe EMRs will make them less vulnerable to liability cases. Nearly 20% of respondents said their carriers offered a discount to practices that adopted EMRs.

One-fifth of respondents have had a liability case in which the EMR was used for documentation, and 55% of those said the EMR was helpful.

"We feel there are a lot of benefits [to EMR adoption], but there are many downsides, too," Jones said.

Many carriers still say there aren't enough practices using EMRs to accurately gauge how effective the systems are at mitigating risk, Jones said. Now that the government is pushing more practices toward EMRs, PRA hopes to update the 2007 survey.

CMIC, an insurance carrier that covers physicians in Connecticut and Massachusetts, has offered discounts to Massachusetts practices with EMRs for several years. It started offering similar discounts to practices in Connecticut after the economic stimulus bill was enacted in February.

Susan Sperzel, director of claims operations and loss prevention for CMIC, said the company never conducted a study or analysis on EMRs' impact on liability risk. Nor has it studied how the discounts offered in Massachusetts have affected liability cases there. But it chose to extend the offer to doctors in Connecticut to help increase adoption rates.

Sperzel said the company offers a discount of 5% per physician for practices with at least a year's use of an EMR certified by the Certification Commission for Health Information Technology. While a 5% discount off premiums for a solo practice might not be substantial, 5% per physician in a large group could make a significant dent in premiums and make it easier to afford an EMR, she said.

But David B. Troxel, MD, medical director for The Doctors Company, a national physician-owned liability insurance carrier based in Napa, Calif., said that although there are plenty of benefits to EMR use, it "doesn't seem prudent" to offer discounts to practices who use them.

The real benefit from EMRs will come once there is a robust, interconnected network, Dr. Troxel said. When quality and safety have improved, the number of liability claims will go down. "Every insurance company bases premiums on their loss experience," he said. So fewer cases filed mean lower premiums for doctors.

Several lawyers who say EMRs can help mitigate risks also acknowledge possible downsides.

Bruce Cranner, board member and former chair of the medical malpractice section of DRI, a member organization for defense attorneys, said the default settings of an EMR could present fewer opportunities for physicians to add information to medical records. And those details could be key to a doctor's defense.

Other legal experts say EMRs also could provide too much information. For example, risk could increase if the EMR generates alerts or supplementary information and physicians don't act upon them.

Attorney Jeffrey Kimmel, partner with the New York firm Salenger, Sack, Schwartz & Kimmel, represents plaintiffs in liability cases. He agrees that increasing use of EMRs potentially could mean fewer cases. But the cases that go forward will be stronger because of the EMR, he said. And EMRs could reduce the cost of bringing a case to court.

For starters, he said, EMRs drastically reduce the time it takes to prepare for or conduct a deposition. With paper charts, "a lot of time is spent with the doctor just reading his notes."

Cranner agreed, saying EMRs also help him defend physicians. Because EMRs increase the accuracy of records, orders and evidence of compliance are documented clearly. Many liability cases rise out of the lack of clarity in orders and compliance, he said.

On balance, Cranner said, underwriters who offer discounts have it right. EMRs "significantly increase accuracy and decrease errors. And there's a significant decrease in the risk of medical malpractice cases. But nothing is without problems."

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