Why small medical practices lag in EMR adoption

Physicians in those settings are interested in the technology, but many factors conspire to stop them from making a purchase.

By — Posted Nov. 7, 2011

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Although a growing percentage of physician practices are adopting electronic medical records, a large gap persists in adoption rates between the smallest and largest practices.

Small practices are not averse to adopting technology, analysts said. But the cost of systems, confusion about federal incentives for using them and the practice disruption they might cause are holding back their EMR adoption rates.

SK&A, a marketing research firm in Irvine, Calif., released a survey on Oct. 24 that found 40.4% of physician offices used EMRs as of July, up from 38.7% in October 2010. SK&A surveyed 237,862 medical sites.

The larger the practice, the more likely it was to use an EMR. According to SK&A, 75.5% of practices with 26 or more physicians used EMRs. For solo practices, that number was 30.8%. Only 41.6% of practices with two physicians used EMRs, and 51% of those with three to five physicians did.

Jack Schember, spokesman for SK&A, said about 72% of all practices are solo (55%) or two-physician practices (16.6%), which is why the overall EMR adoption was not higher.

He said meaningful use incentives have even solo practices at least considering EMRs. The Health Information Technology for Economic and Clinical Health Act, a provision of the 2009 economic stimulus package, allows practices to earn up to $44,000 per physician over five years from Medicare or nearly $64,000 over six years from Medicaid if they show meaningful use of EMRs. Payments began in 2011. "It's got them thinking," he said. "It's got the wheels turning."

However, "at the same time, those smaller practices are still thinking about when," Schember said. "Those first initial payments are, apparently, not enough to light a fire under them to make an immediate decision." According to SK&A, 72.6% of practices that haven't adopted EMRs don't have a time frame in mind.

Experts said small practices still face much uncertainty about buying EMRs. Depending on the system, the incentive payments being offered under meaningful use might not be enough to cover its cost. (In the SK&A survey, 16.7% of those who didn't buy systems said cost was the major factor.) Schember said physicians also are weighing the impact an implementation can have on a practice. "Is there a payoff in efficiency? Is there a payoff in terms of better patient services? What's the analysis of this cost versus the benefit?" he said.

The purchase price is not the only issue. Many physicians don't know the rules regarding EMRs and payment incentives.

The SK&A survey found that many aren't even aware the meaningful use incentives exist. Of those surveyed, 21% were not familiar with the government incentive program. A division of the Dept. of Health and Human Services said it is trying to reach those practices, particularly through the use of regional extension centers, created in the HITECH Act.

"Reaching small practices with limited resources is difficult, and [the Office of the National Coordinator for Health Information Technology] has recommended that RECs start by focusing on the most at-risk communities," the ONC said in an emailed statement to American Medical News. "According to SK&A data, the RECs have enrolled over 70% of the small-practice providers that are in rural communities."

The ONC, which is a client of SK&A and gets its adoption data directly from the research firm, also said the percentage of practices unaware of the incentive program fell from 24.7% in 2010.

Impact of the RECs

Under the HITECH Act, $677 million was allocated for creating 62 regional extension centers to help spread the word about the incentive program to small practices and help them achieve meaningful use. They had a goal of reaching 100,000 physicians.

Many of the RECs received their funding a few months ago and are just now getting started. During the past two months, Schember said he has seen evidence of the RECs stepping up their marketing.

But even those that had early success with signing up practices for their services say it's too soon to see the benefits, or to see adoption rates rise.

Of the more than 1,100 physicians signed up with his REC, more than 800 had an EMR already, said Randy Bordelon, program manager for Mississippi Regional Extension Center, which serves the state of Mississippi. In the past year and a half, 30 practices affiliated with Mississippi REC have implemented an EMR for the first time. Mississippi REC has had only eight practices attest for meaningful use so far.

He said many practices contracted with Mississippi REC are participating in the Medicaid incentive program. Practices don't have to have their EMR systems implemented to qualify for the first installment of the Medicaid incentive. The Medicaid incentives are being facilitated at the state level, and many states are still launching their programs, which would mean a delay for the practices hoping to qualify for those incentives.

Though the incentive program was meant to stimulate adoption rates, the Centers for Medicare & Medicaid Services did not want to penalize those who were already using the technology. So few people were surprised to see the early recipients of the incentive pay were those who were already using EMRs.

The Center for Public Integrity's online publication iWatch News reported in October that the first batch of payments through the Medicare program totaled $75 million and went to about 320 hospitals and doctors. About half of those who responded to a survey had implemented the technology years before the incentive program was launched.

Brenda Gleason, president and founder of M2 Health Care Consulting, a Washington-based strategic policy and research firm, said it's too early for the incentive plan to have an impact on adoption rates for practices implementing for the first time, especially small practices.

Even those practices that signed up for services offered by the RECs are still struggling with the fact that EMR adoption "wreaks havoc with the practice flow -- there's no question about that. So you have to decide in your own practice when is the best time to do that," Gleason said.

She said many physicians are confused about the Patient Protection and Affordable Care Act and its relationship to the meaningful use incentive program. Many physicians don't know where the money for the incentive program comes from and whether it will be there if health reform is deemed unconstitutional, she said. Various court cases have challenged the legality of the health reform law.

She tells physicians over and over, "They are not related; they are not even part of the same piece of legislation." But, especially in states where there has been a big push-back on the health reform law, "it is affecting some of the meaningful use take-up."

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Technical divide by practice size

In a nationwide survey of practices released Oct. 24, SK&A, a market research firm, found that the electronic medical records gap between large and small practice persists. Overall, 40.4% of physician offices reported using EMRs in July, up from 38.7% in October 2010.

July 2011October 2010
Physicians in practiceYesNoYesNo
26 or more75.5%24.5%72.8%27.2%

Source: "Physician Office Usage of Electronic Health Records Software," SK&A, Irvine, Calif.

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