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Failed Health Care Reforms Drive Massive Cost Increases

When Obamacare was passed two years ago, one of its least controversial features was continuing support for programs that encourage doctors to use electronic medical records. As supporters saw it, electronic records make it easier for doctors to get reliable information on new patients; improving the quality of service and lowering costs by avoiding unnecessary procedures.

Unfortunately, it doesn’t seem to work that way in practice. Many government incentives for the use of medical records in hospitals were already in place by 2010, and the early reports are not promising. The New York Times reports that between 2006 and 2010 Medicare costs were actually rising as doctors took advantage of electronic medical records to bill for services that often haven’t been performed:

Some experts blame a substantial share of the higher payments on the increasingly widespread use of electronic health record systems. Some of these programs can automatically generate detailed patient histories, or allow doctors to cut and paste the same examination findings for multiple patients — a practice called cloning — with the click of a button or the swipe of a finger on an iPad, making it appear that the physicians conducted more thorough exams than, perhaps, they did.

Critics say the abuses are widespread. “It’s like doping and bicycling,” said Dr. Donald W. Simborg, who was the chairman of federal panels examining the potential for fraud with electronic systems. “Everybody knows it’s going on.”

When Methodist Medical Center of Illinois in Peoria rolled out an electronic records system in 2006, Dr. Alan Gravett, a former emergency room physician, quickly expressed alarm.

He said the new system prompted doctors to click a box that indicated a thorough review of patients’ symptoms had taken place, even though the exams were rarely performed, while another function let doctors pull exam findings “from thin air” and include them in patients’ records.

Over that four-year period, Medicare payments rose an astonishing 47 percent, but only in hospitals that were receiving significant government incentives to move to electronic records. Meanwhile, costs rose more slowly  at hospitals without government incentives.

It’s clear that electronic medical records are a vital component of the health care system of the future, but it’s also clear that government bureaucrats and congressional law-drafters aren’t very good at avoiding unintended consequences. Without some kind of system that gives health care consumers incentives to fight for cost control, efforts by powerful health care interests to game and manipulate government regulations are likely to continue to produce counterproductive results. The Affordable Care Act has increased, not diminished, the nation’s need for comprehensive health care reform.

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