Literature Review and Environmental Scan: Evaluation of Personal Health Records Pilots for Fee-for-Service Medicare Enrollees. Other Impacts of PHRs


As PHRs are more broadly introduced into the health care system, they may have a significant financial impact. Aside from eVisits, PHRs could serve as a type of intervention that reduces more traditional health care costs through improved chronic disease management, more comprehensive medication management and patient compliance and better informed consumers. These financial impacts will be felt by multiple stakeholders, including providers, payers, patients and employers. However given the relative newness of this technology and limited production instances of PHRs, clear empirical evidence of return on investment and cost savings is scant. There are already efforts underway to identify criteria to measure the impact of a PHR product, but findings have not yet been published.[304] Most of the literature on this subject deals with the areas of provider reimbursement for PHR adoption and employer support for PHRs as a means of lowering health care costs and improving employee health outcomes.

Employer Support for PHR Adoption

A number of major American employers have embraced PHRs and the broader idea of patient access to records and communication channels.[305] Benefits to employers include savings in chronic disease management costs[306] and reduced costs for medications and wellness programs.[307] A 2007 study by Forrester Research noted that large employers are ‘the first out of the gate’ towards PHRs because they have much to gain in terms of lower health care costs and improved productivity from their employees.[308]

A 2007 study by CHCF explored the uptake of PHRs by large national employers.[309] The study found that there are a variety of existing employer-based PHRs, many of which help employees to track and manage their benefits (flexible spending accounts, claims data and payments, and wellness programs). Some of the existing employer-based PHRs enable employees to enter, check, and track health data (e.g., cholesterol, weight, drug information, etc), search for providers, and view their benefits over the internet.[310]

The CHCF study also found that while some employers are launching a PHR on their own, others are forming collaboratives. Wal-Mart, Intel, Pitney-Bowes, Applied Materials and BP America have joined to create Dossia, a patient data system that allows employees to access their electronic medical records.[311], [312] While this approach differs from a PHR, these employers similarly seek to empower employees to take part in their healthcare. This PHR collaborative has added other employer members since its launch, including Cardinal Health and AT&T, and received public support from health care industry and consumer groups such as: the American Association of Family Physicians, American Academy of Pediatrics' Council on Clinical IT; National Association of Manufacturers, the Centers for Disease Control and Prevention, and National Consumers League.[313]

Dell, another large American employer, has implemented PHRs as a part of an effort to reduce health care costs and to empower employees to take a more active role in their health care. Dell began offering PHRs three years ago, along with other health improvement plans and has since reported a 10% decrease in overall health care costs.[314] Dell did not specify how much of the decrease could be attributed to PHR use, instead considering the new technology as a necessary step toward an improved health care system and better informed health care consumers.[315] In this way, Dell and others cast PHR functionality as a part of a broader strategy to maximize the savings and efficiencies offered by health information technology solutions.[316]

Other employers have not embraced personal health records. After being approached to join Wal-Mart, Intel and others, Cisco decided that their employee base would not significantly benefit from access to electronic medical records.[317] In this way, Cisco evaluated the benefits and challenges of personal health records and concluded that the new technology would not reduce health care costs for their relatively young and healthy employee base.[318] The different approach taken by Cisco suggests that the perceived return on investment for PHR-related technologies is lower for specific populations, in this case a relatively young and healthy workforce.

In addition to concerns about return on investment, employers have cited a number of barriers to adopting or expanding PHRs including: costs associated with implementation; policy uncertainties; privacy and security concerns; misperceptions about employer access to employee health information; uncertainties surrounding the HIPAA privacy rule; problems associated with sustainability; lack of research about the benefits of PHRs; and limited consumer demand.[319]

The uncertainty surrounding the HIPAA privacy rule was also highlighted as a major concern among employers in the 2007 CHCF issue brief on PHR adoption by employers. Some employers are not considered HIPAA- covered entities, and thus, the privacy rule does not apply. The study concludes that employers should outline the legal rules that apply to them to ensure transparency, and also develop and post their own corporate privacy policies regarding PHRs, which specifically describe how they handle employees’ personal health information.[320] Furthermore, in the event that employers wish to collaborate on a PHR initiative, it is important for them to create transparent policies and scopes of work that govern their collaboratives.[321]

Provider Reimbursement

Finally, reimbursement for PHR-related work is another a key concern for some physicians. Primary care providers cite a lack of reimbursement for coordinating care as a key barrier to PHR adoption.[322] [323] Reimbursement was also found to be a major concern for providers using web messaging systems with patients.[324] As is often the case with health information technology, payers play an integral role in adoption. Some in the policy realm have argued for changes to reimbursement policies to compensate providers for their time spent working with PHR data and communicating with patients electronically.[325] Recent shifts made by Cigna, Aetna and some Blue Cross Blue Shield affiliates to reimburse for online consultations may signal receptiveness to PHR reimbursement in the payer community.[326] Group Health, another payer, incentivizes providers to use secure messaging; paying them five dollars for every message they send.[327] Finally, others have noted that the Centers for Medicare and Medicaid Services (CMS) could greatly affect the policy discussion regarding PHR reimbursement.[328]

Kaiser Permanente’s PHR implementation did not provide any direct financial compensation to providers in return for their participation in secure messaging with patients. Nonetheless, Kaiser Permanente has had significant success in encouraging providers to use this function. This illustrates that while direct compensation to providers is one possible way of encouraging provider buy-in to PHRs, it is not the only method.[329] [330] [331] In the case of Kaiser Permanente, however, it is important to note that physicians are salaried, and thus, already compensated for communicating with patients in any form (whether it is in-person, online, on the telephone, etc).

Archelle Georgiou, M.D. noted that financial reimbursement is not a relevant factor for salaried physicians. Reimbursement is a significant barrier for providers when time is the only determinant of their income. The impact of reimbursement on PHR adoption will continue to evolve, however. Dr. Georgiou highlighted that the Medical Home model[332] – a model whereby a patient and provider have an ongoing relationship and develop a coordinated approach to the patient’s healthcare – may affect the adoption of provider adoption of PHR. The model includes provider reimbursement for alternative methods of care delivery and care coordination activities such as electronic email and e-visit communication systems, and telemedicine services. Reimbursement for such activities may drive the adoption of PHRs in the future.

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