Medical profession can learn how to share from credit bureaus

By CRAIG RICHARDSON

The White House on Dec. 9 announced plans to spend $88 million in unused stimulus funds to pay “health communities” to adopt electronic medical records (EMRs), foreshadowing a likely confrontation between those with sincere privacy concerns and those who believe the change is medically necessary.

A nationwide EMR system would give health-care providers instant access to patients’ medical records, enabling them to view and share information needed for diagnostic or treatment purposes. The system also would provide research labs with a treasure trove of new medical information, make it easier for patients to monitor their own care, and help hospitals and other providers streamline administrative and management practices. EMRs would save our country $77 billion a year in health-care costs, such as fewer radiology tests and shorter patient hospital stays, the experts estimate.

Profit motives

There’s a problem, though. One person’s savings is another person’s loss of income. With fewer tests and procedures, hospitals and doctors stand to lose revenue as a result of implementing EMRs. Insurance companies will lap up the savings instead. That’s one reason most doctors and hospitals continue to use paper files, which are not accessible to other health care providers.

And let’s not overlook the cost: EMR software can cost from $30,000 to $100,000, more than most small medical practices can afford. Privacy is another concern. A paper file seems safer than all that information flying around the Internet.

Our retail industry once faced strikingly similar problems. During the 1800s, small shopkeepers maintained individual customer histories and provided customers with short-term credit. Like doctors today, they hoarded information, since there was no incentive to share their customers’ creditworthiness with other stores. As a result, little lending occurred without a more complete credit history.

In the 1880s credit bureaus arrived, and helped overcome this logjam. These new institutions offered to handle the stores’ unwanted task of managing customer payment histories. Businesses and lenders would receive a customer’s complete credit history if, in exchange, they added their own information about that customer to the database. The benefits of sharing information soon exceeded the benefits of hoarding it. And credit quickly expanded.

Loan parallel

Today, three large credit bureaus — Experian, Equifax, and Transunion — handle billions of transactions monthly and instantaneously issue credit histories to lenders. While a loan might have taken several weeks to process with paper files, a customer’s credit history today is available electronically within seconds. Loans are often approved seconds later.

Health Information Bureaus (HIBs) could assume a similar role in managing patient medical histories. Doctors and hospitals would agree to file information electronically in exchange for complete and instantaneous access to their patients’ medical histories, creating an incentive to share information.

Ideally, patients would own the intellectual property rights to their medical histories, established by government regulation. Individuals could choose (or not) to license their records to the bureaus.

The HIBs, which would have vast and rich databases, could sell the data anonymously to academic researchers and corporations. Patients who license the use of their data would be entitled to a part of the revenues, as well as the health-care providers who paid for the EMR software.

Even with the inevitable recording errors that would surface, an electronic medical records system would allow far fewer mistakes than the rudimentary file system we have now. A radiologist in St. Louis could examine the same X-ray as a pulmonary cardiologist in Las Vegas and discuss treatment options over the phone. Doctors and patients automatically could be reminded about prescriptions and appointments.

Credit bureaus cost no tax dollars to create and led to the expansion of the retail sector and to great innovations in the delivery of credit. A parallel innovation in the health care market could over time lower costs and improve care, without undermining privacy or adding billions to the national debt.

X Craig Richardson is visiting research fellow at the American Institute for Economic Research, Great Barrington, Mass. Distributed by McClatchy-Tribune Information Services.