Search tips
Search criteria 


Logo of cmajCMAJ Information for AuthorsCMAJ Home Page
CMAJ. 2010 May 18; 182(8): 753–754.
PMCID: PMC2871196

The pocketbook impact of electronic health records: Part 2

Fee-for-service billing is compatible with EHRs: Disagreed

In the opinion of Dr. Karim Keshavjee, a Toronto, Ontario, family physician and associate member of the Centre for Evaluation of Medicines affiliated with McMaster University in Hamilton, Ontario, Canada’s experience with EHRs has largely been a failure.

Part of the problem, Keshavjee says, is that EHRs are incompatible with the dominant model of physician payment in Canada — fee for service. If Canadian patients, physicians and taxpayers are to get the maximum benefit for their ongoing $10-billion investment in an EHR system, “reforms to the payment system are required,” says Keshavjee, who has often advised both governments and primary health care organizations about how to adopt EHRs.

The power of EHRs is best harnessed when physicians use them to reduce patient-related workload, Keshavjee explains. EHRs reduce paper chases, which consume an estimated 30% of time spent with patients. They also enable physicians to delegate work to other caregivers.

But within a fee-for-service system, physicians who delegate patient contact to other caregivers lose income opportunities, Kashavjee says. “If you’ve got highly paid, highly trained people doing low-level work because they can’t delegate, you can’t gain the efficiencies that EHRs inherently present.”

An external file that holds a picture, illustration, etc.
Object name is 1820753f1.jpg

Adoption of electronic health records has been associated with a 25% reduction in patient visits to physicians, as contact is increasingly done by telephone or online, and a 30% increase in patient contact with other care providers at facilities in the United States.

EHRs and fee for service don’t easily mesh, agrees David Ludwick, general manger of the Sherwood Park Primary Care Network in Sherwood Park, Alberta.

Ludwick says his studies indicate that fee-for-service physicians are less likely to use EHRs than salaried physicians (Can Family Physician 2010;56:40–7). “We found that doctors don’t have time, or make time, to select an EHR system. They’re on a treadmill, seeing 40 patients a day,” he explains. “I’m convinced that if you look at an alternate payment plan like capitation or a blended plan you will get a better EHR procurement.”

There is also the question of physician motivation to invest time and money to adopt a system that may reduce their contact with patients, either because adopting EHRs draws physician attention away from patients during an appointment, or because it reduces patient throughput due to the time needed to learn a new system, says Ludwick. “There’s a disconnect” between EHRs and conventional fee-for-service payment structures.

Kevin Leonard, associate professor in the department of health policy, management and evaluation at the University of Toronto in Ontario, agrees that fee for service hobbles EHR uptake. “The physicians have been reluctant to adopt them because they think all it does is waste time and create more work for doctors. That’s the thinking. The funding model goes against it.”

“A fundamental part of adopting EHRs is changing the payment model. In fact, a fundamental change in the payment model has been informally correlated with successful adoption of EHRs,” adds Leonard, citing his studies of EHR usage in 21 medical clinics coordinated by the CMA and funded by Canada Health Infoway (

EHR adoption is associated with a 25% reduction in patient visits to physicians, as contact is increasingly done by telephone or online, and a 30% increase in patient contact with other care providers at facilities operated by the Kaiser Permanente Federation, which provides health care services to 8.7 million Americans, notes Dr. Andrew Wiesenthal, the firm’s associate executive director for clinical information.

Physicians who are paid on the basis of patient visits aren’t likely to want to adopt EHRs, Wiesenthal says. “I think the incentives are aligned against it. As a doctor, you are likely to do the things that you are paid for. The physicians paid fee for service are being asked to pay for [EHRs] at the same time that they would reduce visits.”

The “business case” for EHRs is vastly reduced within the fee-for-service model, says Robert Mechanic, senior fellow and director of the health industry forum at Brandeis University in Waltham, Massachusetts.

“The level of uptake has been very slow,” among fee-for-service physicians in the US, says Mechanic. He argues that fee-for-service reimbursement “penalizes organizations that try to reduce unnecessary services or shift patients into low-cost settings with reduced revenues and profits, creating a sizable barrier to delivery reform.”

Even in a recalibrated fee-for-service system, “providers will still be paid more for doing more rather than for achieving better outcomes,” he adds. “The political challenges of recalibration are also great, as powerful interests will react negatively to potential income reductions.”

David Blumenthal, the US government’s national coordinator for health information technology, says payment reform seems inevitable. “A system that rewards good performance will create a natural market for EHRs. They are virtually unequal in that respect. I do think payment reform will be critical.”

Parts four and five of a series on electronic health records.

Part I: Canada’s electronic health records initiative stalled by federal funding freeze (CMAJ 2010. DOI:10.1503/cmaj.109-3183)

Part II: Ontario’s plan for electronic health records is at risk, official says (CMAJ 2010. DOI:10.1503/cmaj.109-3193)

Part III: Electronic health records a “strong priority” for US government (CMAJ 2010. DOI:10.1503/cmaj.109-3218)


Previously published at

Articles from CMAJ : Canadian Medical Association Journal are provided here courtesy of Canadian Medical Association