Insurers Take Lead in EHR Implementation

When the U.S. Department of Health & Human Services announced its final rules and regulations for meaningful use of electronic health records in July, several health insurers launched programs to encourage EHR adoption among physicians. These programs use financial and other incentives to reward care providers and organizations that embrace federal mandates to modernize America's healthcare system.

"The healthcare industry has realized that it is not possible to manage the demands of delivery with paper and pen," says Dr. Charles Kennedy, VP of health IT for WellPoint (Indianapolis; $65 million in total 2009 revenue). "When you look to the future in terms of genomics and personalized medicine, it will be impossible to manage that without some sort of information system."

Health carriers expect IT improvements on the provider side to lower healthcare costs by reducing care redundancies and readmissions.

"It's less about insurance companies and administrative data, it's about empowering the physician and the patient to take better care of the patient's personal needs," Kennedy adds. "The insurance angle here is healthcare value: quality over cost."

WellPoint is implementing a new financing program that supports health information technology for rural, critical access hospitals. This program, which will start in California and Georgia in 2011, allows qualifying hospitals to borrow short-term funding so they can implement services that satisfy the meaningful use criteria.

"A lot of these hospitals don't have cash like that running around, and many of the hospitals have lab and radiology systems that were never designed to share data in the way we're anticipating," Kennedy explains. "They may have to make investments above and beyond what the feds will cover."

Because these smaller providers aren't able to easily access the capital markets, Kennedy says, WellPoint is stepping in to provide the funding at favorable interest rates. The company will also align its Pay for Performance incentives, which pay out about $250 million annually, with federal programs to spur health IT adoption.

"I hope that you'll see more health plans do this," Kennedy says. "When you align your measures with what the federal government is doing, you allow physicians to take advantage of clarity about what they're accountable for."

Humana (Louisville, Ky.; $31 million in 2009 revenue) is also using a reward mechanism to encourage providers to use EHRs. It will subsidize the implementation of Watertown, Mass.-based Athenahealth's AthenaClinicalsSM electronic health record service for physicians who are part of Humana’s national provider network.

"We were looking for a way, with this great opportunity for physicians around meaningful use, to support that adoption," says Tim O'Rourke, VP of the national network for Humana. "Athena's software, Web-based system, knowledge and services were a really neat fit with what we were trying to do."

The company expects to subsidize the cost for 1,000 physicians at 100 practices. Humana will reward those providers as they meet metrics for improving care and value after implementing Athena.

"We're looking specifically at some of our higher primary care physicians that have a critical mass of Humana Medicare Advantage membership," O'Rourke says. "Instead of just having EHRs, [we're looking at] the data integration between the EHRs and the data we have to improve outcomes and reduce costs."

Kennedy and O'Rourke agree that encouraging provider adoption of health IT including EHRs is going to be a major goal of payers over the next few years.

"It's definitely one of the tools that will help improve efficiency and lower costs for patients," O'Rourke says. "But on the physician side there have been some barriers to adoption."

Kennedy, who sits on the Health Information Technology Policy Committee — a body set up by 2009's American Recovery and Reinvestment Act to advise how some dollars from that stimulus bill should be spent — expects that patience will be the rule as federal money and technological advances roll out over the next few years and insurers look for the most effective ways to support these efforts.

"We're entering into a time of unprecedented innovation opportunities, and the successful health plans are going to figure out how to combine technology with process, product and service innovations to reduce costs and improve quality and satisfaction," he says. "We've gone through a finance strategy. Others are offering EMR products or health exchange products, and I think it's likely to continue over the next five years."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio