Evan Thomas and Dr. Mark Showalter, Economics

Introduction

With issues ranging from controlling insurance availability and coverage to management of healthcare infrastructure and costs, healthcare is an inflationary topic of national debate today. Much of the publicized argument, such as the healthcare reform bill recently passed in Congress, has centered on how to restructure the reimbursement system in order to contain costs. However, within provider organizations the question also focuses on maintaining and improving patient welfare. Many in the healthcare industry believe that technological resources can also help healthcare providers to cut costs by automating complex, repetitive processes while improving quality of care. With this goal in mind, every year hundreds of millions of dollars are spent on Healthcare Information Technology (HIT) solutions in pursuit of better, cheaper patient care. Is it worth the cost?

With the exception of Apkon et. al. in 2005 and a 2010 study by Jha, academic research has not directly examined the effects of HIT resources on patient care. Instead, the related research has asked whether cost increases across the healthcare industry are matched by improvements in patient welfare. Usually, researchers measure the relationship between changes in the money spent by patients and insurance companies on healthcare and any subsequent benefits. For example, in his 1991 “The Healthcare Quadrilemma”, Weisbrod addressed this idea. He identified the ‘crisis’ state of healthcare and insurance in the United States at that time, and proposed that cost increases are permissible so long as patient welfare is increasing roughly in tandem with costs. Although studies such as Weisbrod’s lend important insight to the debate over cost increases in healthcare, they do not help to understand the effectiveness of HIT resources in improving patient care.

Our research sought to examine this question by studying the effects of HIT resource usage on the quality of patient care. By combining proprietary data from an HIT industry research firm with Medicare data from the Centers for Medicare and Medicaid Studies (CMS), we compiled a data set that describes HIT usage and patient welfare metrics at more than 1,600 large US hospitals. We found that—at least in the case of heart attack patients—HIT resource usage is not correlated with improvements in patient welfare. We also found that HIT resource use is correlated with a decrease in Medicare reimbursement levels. In short, providers using HIT resources are not likely to see improvements in the quality of care they deliver; furthermore they can actually expect to receive less per patient on average than those who use standard paperbased record-keeping systems. These two findings help to explain the need for government subsidies, like the American Reinvestment and Recovery Act (ARRA), to incentivize HIT resource adoption among providers.

Methods

As mentioned above, the data set was compiled from several sources. The breadth of the data, as well as the detail of each record, was overwhelming. We were able to compile information on more than 100 different CMS performance measures for more than 2,500 hospitals across several years. This was initially a challenge, as there was just too much information to process. We decided to select key CMS measures for one fatal disease—acute myocardial infarction, or heart attack—and control for hospitals with less than 100 beds in order to homogenize the data in our set. We also attempted to control for unidentified unique characteristics of each hospital by using a technique known as differencing. Then we used statistical modeling to examine the correlation between the effects of HIT resource usage and improvements in patient welfare.

Three aspects of healthcare delivery were examined. Two of them, patient mortality and care procedures, were used as proxies for improvements in patient care. If mortality went down in the presence of HIT resources, or if care procedures increased in frequency, then HIT resources were correlated with improvements in patient welfare. The third aspect of healthcare that we examined was average Medicare reimbursements per patient at a hospital. For this measure, no change or a slight increase in reimbursement amounts would be ideal. This would mean that hospitals could justify further investments in HIT resources because they would be decreasing costs through process improvements without losing revenues—leading to improved profitability.

Findings

We found that HIT usage was not correlated with improvements in patient mortality or care procedures. Most likely, this is due to the substantial amount of training that healthcare professionals undergo in order to participate in their professions—no computer resources can replace that training. This finding implies that improvements in patient care may not be the most effective measurement for the impact of HIT resources in the healthcare delivery strategy.

Another interesting finding came from our examination of the correlation between average Medicare reimbursements and HIT resource usage. We found that there was substantial correlation between the use of HIT resources and average Medicare reimbursements per patient. In fact, as hospitals utilize HIT resources, their average Medicare reimbursements actually decrease. This is excellent for public policymakers, as it gives them an incentive to encourage further adoption of HIT solutions. However, it is a more difficult proposition for hospital decision-makers as it may decrease their future revenues overall. One action that policymakers could take is to provide other financial incentives for new HIT resource investments—as they have with the ARRA.

Personal Outcomes

After completing our research, I presented the findings in the Annual Mentored Learning Conference at BYU. This experience helped me to gain great insight into the value of the research process from start—where a problem or idea is identified—to finish, where the findings are conveyed to clients or to the community. The opportunities I have had in this research project have been instrumental in helping me to determine my career path. Previously, I was unsure which career I wanted to pursue. However, following this research I have been able to contribute to several other research projects at HIT research firm KLAS Enterprises. My experiences observing the problems that healthcare executives face in today’s economy have motivated me to further pursue a career in the business side of healthcare. I hope that I will be able to draw upon the skills this project has helped me develop as I seek to give healthcare providers strategic business leadership based on sound research principles.

References

• Apkon et. al. A Randomized Outpatient Trial of a Decision-Support Information Technology Tool. JAMA. 2005
• Jha AK. Meaningful Use of Electronic Health Records: The Road Ahead. JAMA. 2010;304(15):1709-1710