New Marketplace

The Unrealized Potential of EMRs: Why They Fall Short and the Unexpected Source of a Solution

Roundtable · April 24, 2018

Part 1 of a two-part series.

Steven Seltzer Andrew Menard Clayton Christensen Edward Prewitt Electronic Medical Records Roundtable Head Shots

The Participants:

  • Steven Seltzer, MD, Radiology Department Chair Emeritus at Brigham and Women’s Hospital and Distinguished Professor at Harvard Medical School
  • Andrew Menard, JD, Executive Director of Radiology at Brigham and Women’s Hospital
  • Clayton M. Christensen, PhD, Kim B. Clark Professor of Business Administration at Harvard Business School
  • Edward Prewitt, Editorial Director for NEJM Catalyst, moderator


Ed Prewitt:  We’re here to talk about electronic medical records, their unrealized potential, their unexpected cost, and in general, how did the health care delivery systems of this country arrive at the situation, and what can we do about it? What can they do about it to achieve the benefits that were originally sought? We could kick off by talking about the ways in which EMRs have failed to live up to their expectations at this point. Steven?

Five Flaws


Steven Seltzer:  There are probably five things to point to as current weaknesses. One is it’s pretty fair to say that the majority of providers don’t like these systems. They find them cumbersome, inefficient, too many clicks and scrolls, way too much documentation, and I know a previous Catalyst roundtable talked about the contributions of EMR-required use to physician burnout and physician dissatisfaction. I think that point’s pretty well established that the provider community is not satisfied with the tools that it has.

Second is in the economics of it. These systems, particularly if they’re enterprise-wide in a large integrated health care delivery system, are extremely expensive. Hundreds of millions [of dollars] for sure, over a billion in some acquisitions; and it’s been pointed out that the total cost of ownership is way higher than that because you have to take people offline to train them, which is time-consuming. You have to adapt to the diminished productivity that occurs. The total cost of ownership can be staggering and may be unanticipated for some of these systems.

In addition, on the economic side, not a scientific study, but if one follows the blogs about hospital and health system performance, a few months don’t go by until you hear that Health System A had its worst operating margin in the last 10 years, and they blame it on the electronic medical record that was just deployed, and how much is cause and effect we don’t know, but it’s a real phenomenon that health systems take a while to get back in stronger fiscal shape after they deploy these systems. And probably fourth and fifth are the way the systems are designed, and we’ll get into this more. People believe they’re too complex and complicated.

A typical enterprise-wide system today will not only do billing and coding, which some skeptics say that’s really what it’s for, but it covers every kind of care documentation in every setting: outpatient, emergency department, ORs, inpatients. It manages the pharmacy, the radiology department, every clinical specialty department, and many have argued that an operating system, if you will, of that breadth, the complexity can barely excel at any single component, and I think [from] talking with colleagues around the country who practice in medical specialties in particular, they are disappointed that these systems are not more customized to their needs.

And the final thing is that they’re not adaptable. The only changes that can be made are when the provider rolls out a new software version, and then that involves more training and potentially more downtime. It’s very hard to innovate in this environment, which some academic health systems find disappointing because they had done some very creative innovations on their older systems, but can’t on the predominant ones now. The physician dissatisfaction, complexity, and challenges to economic performance — they’re all pretty powerful things.

5 weaknesses of today’s EMRs

  • Provider (user) dissatisfaction with cumbersomeness

  • High total cost of ownership

  • Fiscal hit from adoption

  • Overly complex design

  • Lack of adaptability

Prewitt:  We were talking earlier about an oligopoly essentially, among vendors, and yet there are many vendors out there. If you look at lists of EMR providers, there are the well-known names, but there are 25 less well known. Andrew, you could talk about this oligopoly and how it really works among purchasers.

Origins of Oligopoly


Andrew Menard:  You have the scenario of the HITECH Act — and I can give you the names for these acronyms as well, [it’s all] alphabet soup — but that gave other people’s money, that gave $30 billion ($44,000 per provider) to adopt health systems, to adopt EMRs that had very particular requirements. The functionality was actually [based on] things that came out of regulation, came out of not so much the statute in and of itself, but did come out of the regulations in the White House office for this particular policy.

You quickly had vendors trying to seize the opportunity and to listen to the requirements to say to the customer, the health system, “We’re going to help you comply with an outside requirement. You’re not listening now to your constituents. You’re not listening to the physicians who are so interested in their own practice and actually delivering health care to patients.”

Seltzer:  When the HITECH Act passed, a lot of folks — probably me included — who like electronic health records, said, “Isn’t this great? We’re going to get all the stimulus funds from the government, and this will tremendously accelerate the availability and deployment of electronic health records.” Looking back on it now, some of the unintended consequences were — because that money had to be spent within a finite period of time — the purchasers had money burning a hole in their pocket. It wasn’t possible to say, “Give me my money now and I’ll buy the system 5 years from now when I think it’ll be better.”

Menard:  I wanted to pose some questions to Clay [Christensen]. You see price and sensitivity among the buyers, you see, it seems, a sort of short-term thinking among the vendors, and that should create a vulnerability. Is there a vulnerability there that we’re all going to be switching at some point? Do you think that that’s something that some clever company can attack?

Clayton Christensen:  Yeah, it’s a common problem that you run into in every company. Think about the software world: there were standards if you were a company developing application software from the operating system software, and everybody wanted to have a standard, and finally, little by little, the operating system articulated by Microsoft became the operating system standard. (There’s a UNIX standard that stayed around for a long time, but, ultimately, Microsoft won the game.)

And then when the smartphone emerged from Apple, they wanted to have their own standard, and it almost put Microsoft under water. Because almost always, the standard by which pieces fit together happen in a market, and you have to be in that market in order to get the standard established. We have the iPhone from Apple, and Google has its own standard. Where were the old standards before they were gone? They have to be in the market in order to play in the game.

Menard:  That suggests oligopoly is natural, then, in this type of environment?

Christensen:  It really is.


Up next: Part 2: Interoperability and the Opportunity for Disruption.

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