EHRs: Where do payers fit in?

February 17, 2006

A growing number of plans and employers are offering doctors discounts, subsidies, and bonuses, but don't expect a free EHR.

Like many small primary care practices, the six-physician Braddock Medical Group in Cumberland, MD, recognized the importance of adopting an electronic health record (EHR), but balked at the price: around $200,000. Yet now, an EHR is being installed in the practice. As a result of financial help Braddock Medical received from one of its payers, the up-front cost to the group is only $60,000 to $70,000.

That drop in cost is thanks to an offer from CareFirst BlueCross BlueShield, which is participating in an employer-led pay-for-performance (P4P) program called Bridges to Excellence. By acquiring the EHR and meeting certain criteria for IT applications, patient education, and care management, Braddock became eligible for a CareFirst grant of $100,000 that it applied to the cost of its information system.

This pilot program exemplifies a nascent trend: health plans and employers helping physicians acquire health information technology. It's most common for insurers to subsidize e-prescribing programs as a way to promote generic drug prescribing and adherence to formularies. But a small number of insurers-usually market-dominant Blues plans-and big companies are experimenting with discounts, subsidies, and grants to help doctors buy EHRs as a crucial tool in advancing their agenda of quality and efficiency improvement.

Subsidies, not giveaways are the rule

While some payers are picking up the full tab for e-prescribing or even for a full EHR for a limited number of physicians on a pilot basis, once a program is offered to many in-network doctors, a health plan typically covers only part of the cost.

"It's important to assess the readiness to change by asking physicians to make a contribution," says pediatric cardiologist Donald R. Fischer, chief medical officer of Pittsburgh-based Highmark Blue Cross Blue Shield, the dominant insurer in western Pennsylvania. "Free isn't good enough. It doesn't assure that a program will be used."

Highmark's health IT subsidy program grew out of its P4P program, which awards points for use of an EHR at the point of care. "It's definitely enough dollars to have gotten doctors' attention," Fischer says.

Specifically, last November, Highmark contributed $26.5 million to The Pittsburgh Foundation to help subsidize physician purchases of health IT. The foundation will award 4,000 to 6,000 grants to local physicians to adopt e-prescribing, whether or not they're in Highmark's network. "There are probably 15,000 local physicians, but not everyone is ready to make the leap," Fischer says.