If the health care industry evolves as some say it will, podiatrist David J. Freedman may one day be regarded as a medical IT pioneer.

Freedman had an electronic records system installed at his Silver Spring practice way back in 1997. Last October, he decided to have a new electronic billing system set up, one that is compatible with the records system.

Freedman, president of the Maryland Board of Podiatric Medical Examiners, said most of his colleagues are still largely shunning such information technology, using paper-based systems and filing cabinets. Only 1.5 percent of hospitals nationwide have fully computerized medical record systems, according to a recent study published in the New England Journal of Medicine.

"The system has not only saved us time and money, but it has improved our efficiency," said Freedman, who presides over Ambulatory Foot & Ankle Center. "For instance, we know right away whether patients are covered" by medical insurance.

But spurred by up to $19 billion promised in federal stimulus funds for health care providers to install electronic medical record systems, more medical offices, hospitals and other providers are switching, or at least expressing interest in technological changes these days. State proposals, including a measure passed by the legislature, are also expected to fuel the changes.

Todd Johnson, president of Salar, a Baltimore company that provides electronic clinical documentation and billing products to hospitals such as Johns Hopkins Hospital and Health System, said he just executed a new deal with another Baltimore-area hospital.

"The funds in the federal stimulus package are really driving this increase in interest," Johnson said.

Other facilities, such as Holy Cross Hospital in Silver Spring, have recently installed new systems to computerize records and physicians' orders.

Salar's products enable hospital physicians to record patient notes and treatment orders electronically on a tablet computer. Doctors needn't type in data; instead they can use voice-recognition handwriting on a tablet keyboard, said Johnson, one of the speakers at a recent health care IT conference organized by the Tech Council of Maryland.

‘Enormous potential'

Besides saving costs and time, the system can improve patient safety and reimbursement rates, Johnson said. "There is enormous potential."

Having comprehensive patient information at physicians' fingertips would mean quicker diagnoses and help providers flag potentially conflicting medications, advocates say. Hospitals could shorten emergency room stays with faster access to information, thus saving money. And patients could more carefully track their care.

Salar, a 20-employee company that began in 1999, recently made a new hire and expects to ramp up in the coming year, Johnson said.

Clinical Trials and Surveys Corp., or C-TASC, a Baltimore company that provides Web-based software to manage clinical data for primarily labs, university research centers and government agencies, has seen substantial growth lately. In the past year, as many companies reduce staff in the recession, C-TASC has seen its work force double and should continue to grow to about 60 by early next year, said president Bruce Thompson. The business plans to move soon to new headquarters in Owings Mills, doubling its office space.

"For many companies in the medical field, it has been going well," said Thompson, also a speaker at the Tech Council conference. "The projects tend to be long-term at five years or more."

Contracts won in the past year include one from the U.S. Food and Drug Administration to develop fresh methods to evaluate new drug applications submitted to that agency, which has a $5.5 million base. Among C-TASC's other clients are the National Institute of Allergy and Infectious Diseases in Bethesda and BL Seamon and Associates in Lanham.

10 percent savings

Freedman's Web-based billing system, called CareTracker and developed by Eden Prairie, Minn., health care information and research company Ingenix, was installed by medical billing company SI Healthcare of Austin, Texas. Ingenix licensed the software to SI, which provides Freedman with the system, training and ongoing support.

CareTracker has been working well, Freedman said, who expects to save about 10 percent annually because he doesn't have to hire an employee in-house to perform billing services.

"It has allowed us to outsource billing, which we used to do with an employee," he said.

Clients such as Freedman save on upfront software costs, with that expense about $1,000 compared with a typical client-server systems startup charge of $15,000, said Michael Hill, an SI vice president. Hiring an employee would cost $50,000 or more annually for salary and benefits, allowing the Silver Spring practice to save about $17,500 annually, Hill said.

Indigo Arc of Rockville, a 10-employee company that targets sleep centers for its electronic records software, has also seen greater interest lately, said Rajiv Dewan, managing partner. Sparking that are President Obama's interest and the financial incentives for physicians to adopt these systems, he said. The more heated competition for funding in the recession is another driver.

"When there is so much competition in business, efficiency counts even more," Dewan said.

The sleep lab segment is growing, providing enough clients in this niche, he said.

"They are becoming more like a business," Dewan said.

Slow to adopt

While only 1.5 percent of hospitals surveyed in the study reported in the New England Journal said they were completely computerized, more than 75 percent said they had adopted electronic laboratory and radiologic reporting systems. A computerized system for medications was reported in 17 percent of hospitals. The study, funded by the U.S. Department of Health and Human Services and the Robert Wood Johnson Foundation, surveyed about 3,000 hospitals nationwide.

"Although levels of adoption of electronic health records were low, many functionalities that underlie electronic records systems have been widely implemented," the study said. "A sizable proportion of hospitals reported that laboratory and radiologic reports, radiologic images, medication lists and some decision-support functions are available in electronic format."

Still, "despite broad consensus on the potential benefits of electronic health records and other forms of health information technology, U.S. health care providers have been slow to adopt them," the study said.

Some surveys have showed concern over privacy and that important medical records and Social Security numbers can be obtained by hackers. Stipulations for hospitals and health care providers to access some of the $19 billion in stimulus funding include the adoption of new privacy and security regulations that introduce "dramatic changes in how organizations manage their privacy practices," said officials with the Chicago trade group American Health Information Management Association.

Dewan pointed out that paper records can be easily compromised and lost, while electronic systems use firewalls and other protective measures. "There are layers of protection built in," he said.

The study in the New England Journal, which included researchers from the Harvard School of Public Health and George Washington University, cited other barriers for hospitals without comprehensive electronic records systems. Those included inadequate capital to purchase systems, concerns over maintenance costs and lack of staff who can operate the systems. Hospitals that had adopted electronic records systems were less likely to cite such concerns as barriers than were hospitals that had not adopted the technology.

The average cost of fully computerizing records is about $20 million for small hospitals and $200 million for large centers, Harvard officials said. In a statement, Ashish Jha, associate professor of health policy and management at the Harvard school and lead author of the study, called the $19 billion in the stimulus bill "really just a down payment for getting us to a healthcare system that is fully electronic and can deliver the kind of care Americans deserve."

Resources

Maryland Health Care Commission, electronic health records, Baltimore, 410-764-3460, http://mhcc.maryland.gov/electronichealth/

electronichealth.html.

American Health Information Management Association, Chicago, 312-233-1100, www.ahima.org.

U.S. Department of Health and Human Services, Office of the National Coordinator for Health Information Technology, Washington, D.C., 202-690-7151, http://healthit.hhs.gov.