EMRs may increase liability claims in short term
■ A practical look at information technology issues and usage
Medical liability insurers once said electronic medical records would let physicians earn discounts on their premiums, because the potential benefits of the technology included improving patient safety.
But those discounts haven't materialized. The reason, a study says, is that liability insurers are betting that claims will rise during a so-called adjustment period, when practices new to the technology are working out the kinks in their systems.
Conning Research and Consulting published a study looking at medical liability and factors that could influence the industry, including the adoption of electronic medical records. It found that EMRs have the potential to reduce the number of liability claims in the long term.
In the short term, "as systems are tested, errors with coding data input and software-interoperability failures may occur," the study authors wrote. Because patient data will be easier than ever for attorneys to obtain, the study said claims frequency probably will increase, and the costs of claims defense is expected to rise.
These potential pitfalls associated with EMR adoption are a break from many studies that have shown the potential benefits to EMRs -- benefits that, at one time, had some carriers considering offering discounts to physicians who use EMRs.
Professional Risk Associates, a medical liability insurance agent in Midlothian, Va., that represents several carriers, co-sponsored a survey in 2007 that appeared to make the case for insurers to offer discounts to physicians who use EMRs. But Jennifer Jones, marketing manager for the agent, said despite this evidence, none of its carriers decided to offer the discount, choosing instead to wait and see.
Since then, she said, the carriers have backed away from the idea, saying they believe EMR use could increase liability risks because of the adjustment period.
The recent research by Conning, a research firm specializing in the insurance market, found many carriers sharing the skepticism.
Insurance industry analyst Jeffrey Thompson, a vice president with Conning, said physicians and their staffs are more open to errors during the implementation period as they learn the system and adjust to a new way of doing things.
Steep learning curve
Economically challenged medical facilities that are facing a physician shortage and have overworked doctors and nurses -- mostly in underserved, rural areas -- will have an especially tough time, because many lack the information technology talent and the time to get the proper training, Thompson said. Because of this, long-term success with EMR adoption might be regionally based, he added.
David Troxel, MD, medical director for The Doctors Company, a physician-owned liability carrier in Napa, Calif., agrees that EMR use, at least initially, may have unintended consequences that increase the risk of claims.
He wrote an article for the company's publication, The Doctor's Advocate, in 2010 in which he detailed possible risks for physicians. Among them: alert fatigue (ignoring the constant and not necessarily urgent alerts and warnings that a system might give); failure to take action on information that could be dangerous to the patient, such as drug interactions; auto-populated fields generating false information; and cutting and pasting information from one clinical note to another.
However, there is widespread agreement that once the kinks are worked out, EMRs could help reduce the number of liability cases as the risk of harmful errors decreases. They have the potential to help improve clinical decisions as well as physician-to-physician and physician-to-patient communication. Experts also believe EMRs could improve physicians' ability to defend themselves against liability claims, because better documentation of appropriate care will be possible.
Thompson said practices must be open to insurance carriers doing audits that will expose the risks. The audits, he said, would work well for both carriers and physicians. He said carriers eventually might offer discounts to practices that conduct -- and pass -- regular risk audits.
Even if the number of claims increase in the meantime, Thompson doesn't expect that to affect premium rates.
A recent survey of insurers found that most companies are running with a combined ratio (claims versus expense ratios used by insurers to measure profitability) of about 85%, while most other insurance sectors are operating with a combined ratio of more than 100%.