For decades, policymakers have been trying to get hospitals to give up paper-based medical records and transition to electronic medical records (EMR).

The underlying assumption is that EMRs should reduce errors and make it easier to coordinate treatment, ultimately improving patient care. But despite the obvious advantages, progress has been slow and painful.

Why so hard? One reason is that the health care system is complex, and, inevitably, so are EMR systems. EMR involves different modules used by personnel with different functions (e.g., nurses, physicians, pharmacists, etc.). As a result, each group of users need a different interface and require different training. These systems are at the same time interdependent, not unlike the hospital itself, and their full value can’t be achieved until they are adopted by the entire hospital. Two recent papers by researchers at The Ohio State University’s Fisher College of Business also suggest a second source of friction: federal regulations. Government legislation intended to drive EMR adoption and better patient experience may instead be slowing down the transition to digital recordkeeping.

The researchers found that many hospitals are caught in a vise, squeezed between the HITECH Act of 2010 and the Value Based Purchasing regulation adopted in 2013. The HITECH law mandates hospitals to adopt and use EMRs over the next few years, irrespective of whether they are large or small, teaching or non-teaching. All hospitals are required to make a real transition to EMR or risk losing 1 percent of their Medicare reimbursements this year and up to 5 percent annually beginning in 2017.

At the same time, the Value Based Purchasing rule began penalizing if they didn’t demonstrate some improvement in their patient experience, as defined by the patient’s perception of physician and nurse communication. This penalty withheld up to 1.5 percent of their Medicare reimbursements beginning in Fiscal Year 2015 and up to 2 percent in 2017.

But as software developers often say, “You can have it cheap, fast, or good. Pick any two.” The research suggests that hospitals pressured to speed up their EMR adoption processes and improve their service at the same time are likely to be squeezed in ways that will make it harder for them to do either. This may be particularly true for smaller hospitals with fewer IT resources, because the conversion raises their operational costs and focuses caregivers on issues other than customer satisfaction.

In their first study, on EMR adoption’s impact on the patient experience and operational cost, Associate Professor Aravind Chandrasekaran and PhD candidate Luv Sharma reviewed data on the adoption of EMRs in 895 hospitals over six years (2007-2012). They also collected insights from administrators and users at a major teaching hospital that was going through an EMR implementation. For a second study, Sharma, Chandrasekaran and Boyer looked at the adoption of health information technologies at 3600+ hospitals over seven years (2006-2012).

The findings of the two studies suggest that at many hospitals, less pressure to implement EMRs rapidly would actually yield more progress. The researchers found that hospital IT managers would be better off tackling implementation projects at the departmental level first, gaining basic skills and knowledge before taking on larger hospital wide technology. This is especially true for small institution with limited IT resources.

Approaching the task piece by piece instead of attempting a full-court press might slow the transition to EMR but it would also reduce the risk of compromising customer service. A slower, sequential adoption gives users more time to learn the new systems, gives technical staff more time to help them adapt to the transition, and gives the hospital an opportunity to learn from its experiences.

The results also suggest that IT should take special care to make sure nurses are comfortable with the new system, as nurses’ communication with patients during care delivery declines by 2.5 percent as adoption speed increases compared to 1.2 percent for doctors’ communication during care delivery.

EMR is a necessary step forward for health care. Between opportunities for operational efficiency and medical research, electronic records offer some important advantages. Unfortunately, though, policymakers have encouraged a dysfunctional pattern of behavior by passing legislations that actually makes it more difficult to deliver better care. The sooner hospital executives and policymakers understand the tradeoff between patient experience and adoption, the better. Given this situation, policymakers should consider a two-track system with longer timelines for smaller institutions to ensure that the effort to improve care and reduce cost doesn’t have the opposite effect.

Aravind Chandrasekaran is an associate professor in the Department of Management Sciences. He specializes in innovation, learning, and knowledge-creation issues, and his work spans high-tech, research and development, manufacturing, and health care delivery. His articles have appeared in a variety of journals, including Management Science, the Journal of Operations Management, Journal of Surgical Research and the Harvard Business Review.

Luv Sharma is an assistant professor at the University of South Carolina. His articles have appeared in the Journal of Operations Management.

1 “The Electronic Medical Record Adoption Process: Impact on Patient Experience and Cost,” Luv Sharma, Aravind Chandrasekaran, currently under a second-round review at a major academic journal, April 2016.
2 “The Impact of Health Information Technology Bundles on Hospital Performance: An Econometric Study,” Luv Sharma, Aravind Chandrasekaran, Kenneth K. Boyer, and Christopher M. McDermott, Journal of Operations Management 41 (2016) pp. 25-41.

Aravind Chandrasekaran Fisher Distinguished Professor of Operations, Associate Dean for Graduate Programs and Executive Education
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