Electronic Health Records: Is Corporate Profitability Key to Innovation?

June 6, 2019
Despite roadblocks, there are ways in which innovation can take place in the electronic health record field

Innovation in the electronic health record (EHR) segment has been long overdue. The primary cause of the lack of innovation is the issue with data interoperability between various platforms. Different hospitals across the nation have different platforms to collect patient healthcare records. These platforms are not compatible with each other. Several standards or specifications such as HL7 and FHIR 4 are another reason for the complexity of data exchange.

The issue with interoperability is further manifested at the consumer end. EHR consumers may be long-term care (LTC) facilities or certain end-user apps such as those provided by Apple or Google. The end consumers may be on a standard that is not compatible with the source standard.

For the purposes of this article, adult daycare, nursing home, rehabilitation centers, mental institutions, hospice care, and a skilled nursing facility are considered as LTC facilities. LTC facilities usually work with an EHR vendor to maintain their patient health records.

In the end, everyone suffers because of issues related to data interoperability. Corporations such as hospitals and LTC facilities suffer because several costs that could be reduced with a seamlessly connected EHR system cannot be reduced. Patients suffer because of increased costs and a delay in receiving quality care.

Impact on Patient Care

Today, a patient discharged from a hospital to an LTC facility carries his or her medical records in the form of physical paper. At the LTC facility, a nurse reviews the discharge papers and orders the patient’s medication. After the doctor’s approval, the medication is procured. The time lapse in this entire process may cause the patient to miss a dose or two, impacting patient care.

Impact on Cost

If the medication is not available on-site, the LTC facility will incur costs associated with expensive delivery methods to procure the medication on time. Medication procurement occurs at the last minute when nurses do not have the time to evaluate an alternative medication or to evaluate a generic to a brand name drug.

How to Spark Innovation?

There are two ways in which innovation can take place in the EHR field. The first is through regulatory interference, when the government passes regulations to decrease interoperability issues. This is very time-consuming. The second is through corporate involvement. If corporations see a profitable market in streamlining the flow of health information, then corporations might fund projects to seize that opportunity and make a profit.

The corporate approach looks more feasible at this stage. With the increase in life expectancy and with baby boomers approaching old age, LTC facilities are set to grow at a tremendous pace.

LTC pharmacies are entities that serve LTC facilities with a supply of medication. LTC pharmacies are an example of corporations that benefit from the innovations in EHR data exchange model.

How is the EHR Data Exchange Model Profitable?

In the EHR data exchange model, patient data (Continuity of Care Document, or CCD) flow from the hospitals to the LTC pharmacy. CCDs are processed at the LTC pharmacy and then electronically transferred over to LTC facilities. Profitability originates from strategic, cost savings, and advertisement perspectives.

Strategically, the EHR data interoperability model, where patients’ data efficiently flow from a hospital to LTC pharmacies and to LTC facilities, provides a tremendous strategic expansion opportunity for LTC pharmacies.

·        Once the model is prototyped to be successful, other LTC facilities will want to be a part of the network. Thus, LTC pharmacies have a chance to expand into facilities where they do not currently serve.

·         With this innovative product, LTC pharmacies’ sales and account management team would have an upper hand while negotiating new contracts or contract renewals.

From a cost savings perspective, LTC pharmacies can reduce costs with a smart medication dispensing system. Once an LTC pharmacy receives the patient’s data, and before it transmits the data to LTC facilities, the LTC pharmacies can add logic into its software to include “value added information” that will help nurses and doctors to make data-driven decisions at the LTC facility.

·         A patient’s CCD, which is the electronic version of a patient’s discharge instruction file, lists the medications to be administered. If a prescribed medication is unavailable at an LTC pharmacy serving a facility, the software can recommend an alternative medication. The National Institute of Health offers an application programming interface (API) to identify alternative medications. Thus, expensive delivery costs to procure medications at the last minute can be reduced.

·         Brand name drugs can be substituted with generics, resulting in cost savings for both the pharmacy and the patient.

·         Logic can be built into the software to identify any possible drug interactions. Any concern can be flagged to the nurses and doctors.

·         A number of LTC pharmacies have medication cabinets in the LTC facility. These cabinets are usually spread out into several floors. Because pharmacies usually have the cabinet inventory up-to-date, the software can identify whether the medication is available and the exact cabinet with its location where the medication or its alternative is located. With this information, nurses will not waste time trying to search for the medication in various cabinets on different floors. Satisfied nurses will drive product adoption.

·         Medical errors arising due to negligence can be reduced. Moreover, with patients’ data easily accessible, providers are less likely to order lab tests that were previously conducted, thus reducing costs.

Advertisement: A happy customer (patient) will recommend the LTC facility to others. This first-hand word-of-mouth advertisement presents an amazing growth opportunity for both the LTC facility and the LTC pharmacy.


·         The primary challenge will be the adoption of the product at LTC facilities. The initial version of the product will not be 100 percent consistent. Product adoption may suffer if nurses do not have confidence in the new system.

·         The adequacy of the IT infrastructure at LTC facilities is another dependency. LTC facilities and their EHR software vendors must work together to provide reliable support.

·         Hospitals move very slowly. Any request from nurses that involves making changes at the hospital’s end will need time to implement.

·         Cultural shift: At the hospitals, nurses entering any comments about the medication or allergy must enter them in the comments or observations column. Although this is the expected norm, hospital nurses usually enter their comments and observations in any adjacent column. However, comments need to be entered in the correct column for the software to effectively parse and display the information.

·         Logistics: The HIPPA, PHI, and PII laws prevent a patient’s health information from unauthorized access. Therefore, any fax coming to the LTC facility containing a patient’s health information should be easily accessible to the nurses involved. The fax machines should not be far away or in a different floor; else, accessing the fax will become a hassle, and this will affect product adoption.

The Future

In the future, more innovation should be expected. The government understands the need to have an interoperable platform. There will be regulations streamlining the data exchange, but this will take time.

Hospitals have an intangible incentive to work with LTC pharmacies, because if the patient receives good care, the chances of the patient being re-admitted reduce significantly. The Center of Medicare and Medicaid Services uses excess re-admission ratios to measure a hospital’s performance and to penalize hospitals for excess re-admissions under the 21st Century Cures Act.

There are growing expectations from patients that their data should be safely and easily accessible. Technology has made data easily available. Therefore, shouldn’t data also be available and accessible for the healthcare system?

Regulations and corporate profitability will bring innovation to the EHR system. Subsequently, the expectations and demands to urgently resolve interoperability issues will be high.

In conclusion, corporate profitability is key to the innovation of the healthcare sector. The EHR segment is no exception. Owing to regulations surrounding HIPPA and PHI data, patients’ medical information is very tightly controlled within an entity. An entity may be a hospital or an LTC pharmacy or LTC facility. Any data transferred to external entities go through a stringent legal review. When there is so much at stake, a sizable corporate profit is the only route toward encouraging innovation.

Aloke Sinha works in the project management office at CVS Health

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