Government should let healthcare IT evolve, not dictate its use

We have all wondered why vaccination and prescription records can’t be readily available. Most medical information is still stored on paper — in filing cabinets at various medical offices and in boxes and folders in patients’ homes. 

Implemented correctly, electronic health records (EHRs) that collect, store and transmit our medical records would lead to widespread reductions in hospital readmissions, medication errors and test duplications.

{mosads}These hoped-for benefits contributed to the passage of the Health Information Technology for Economic and Clinical Health Act in 2009. This law authorized subsidies to hospitals and professionals to adopt and meaningfully use certified EHR technology.

Unfortunately, subsidies have so far failed miserably to improve patient-doctor relationships. The subsidy program was created partially as a Keynesian stimulus program in 2009 as a panicked response to a failing economy.

Political expediency did not allow for a rigorous plan to redesign an industry that accounts for 18 percent of GDP. Rather, a half-baked plan emerged with a pledge that all medical records would be computerized within five years — 2015. Failure was destined from the beginning. 

The case for subsidies was entirely speculative, easily explained by the fact that only 11 percent of office-based physicians used basic EHR systems in 2006. Studies were necessarily theoretical because EHR usage was rare. Even today, most studies are not randomized, controlled trials — the gold standard for research — and evidence that EHRs hold down healthcare costs or improve patient care is, at best, modest.

Promised benefits may eventually emerge, but designing government programs on the basis of hunches means $35 billion in subsidies to over 478,000 healthcare providers represent government waste. 

Government has also failed to promote interoperable networks — the fancy term for when networks share information with one another. The prime source for this government failure is that subsidies were simply conditioned on recipients showing they had the ability to share data.

Actual data sharing with others was not a requirement and remains infrequent because EHR vendors have incentives to discourage data sharing between their systems and those of other vendors.

A huge mistake happened late last year when a rule was finalized giving the Office of the National Coordinator for Health IT more oversight over certifying electronic health records. Mandating deadlines for evolving technology locks-in today’s immature systems that quickly become tomorrow’s outdated systems.

Government has no special power to predict the advance of information technology and should not base decisions on hunches and political expediency. 

The best that government can do may be to establish a standard, similar to our convention of driving cars on the right side of the road or our system of weights and measures. A standard simply could be mandating which data must be collected, with the added requirement that all data files must be available for sharing with all health providers at low or zero cost.

Of course, the government could err by asking for too much data, or by not requiring the right data. But setting standards on data collection with interoperability mandates makes sense, provided that the timeline allows the best system to emerge from the market. 

A farsighted government allows technology to emerge rather than dictate an evolving technology that promises to improve our healthcare system. Markets then have a fighting chance at innovating EHR systems that improve public health and lower healthcare costs.

Michael L. Marlow is professor of economics at Cal Poly, San Luis Obispo and author of, “Should Government Subsidize Electronic Health Records?,” a Mercatus Working Paper for the Mercatus Center at George Mason University.

The views expressed by contributors are their own and not the views of The Hill.