Examining legal, financial, and technical matters surrounding electronic health records.

Paper-based medical records have been in existence for decades, and their gradual replacement by computer-based records has been slowly under way for more than 20 years in the United States. Computerized information systems have not achieved the same degree of penetration in health care as that seen in other sectors such as finance, transport, and the manufacturing and retail industries.

Over the past decade, electronic health records (EHRs) have captured the attention of practitioners, payors, and policy makers for several reasons. EHRs are a part of the larger patient safety debate and are seen by some as a key component of any patient safety solution. EHRs are responsive to efforts by providers in search of new efficiencies in their operations. Many believe that EHRs are essential to better clinical integration and health information sharing.

On January 20, 2004, President George W. Bush first publicly threw his support behind EHRs. Since then, a host of Washington-based policy groups and health information organizations have been working to make widespread, interoperable EHRs a reality through regional record exchange organizations.

EHRs have the potential to advance health care quality by helping patients with acute and chronic conditions receive recommended care, diminishing disparities in treatment and reducing medical errors. Nevertheless, EHR dissemination has not occurred rapidly, due in part to the high costs of EHR systems for providers of care and the legal concerns associated with EHRs.


It is clear that the electronic format is becoming the emergent new standard for medical records. The electronic medical record is a powerful new tool for improving the quality of patient care and for enhancing office efficiency. There are a number of clinical and administrative benefits of electronic medical records that will benefit both hospital and physician practice.

First, EHRs will replace paper-based medical records, which can be incomplete, fragmented (different parts in different locations), hard to read, and sometimes hard to find. The EHR will provide a single, shareable, up-to-date, accurate, and rapidly retrievable source of information, potentially available anywhere at any time. Additionally, the EHR requires less space and administrative resources than a paper record.

Other benefits of EHRs involve improving clinical efficiency, patient care, and service, as well as reducing some costs, enhancing revenues, and boosting administrative efficiency.


An electronic medical record includes a number of features that allow the clinical side of the practice to operate more efficiently. Some clinical benefits of EHR systems include the following:

  • Improves documentation quality (legible, organized, complete);
  • Facilitates better patient communication;
  • Provides built-in protocols and reminders (including health maintenance);
  • Improves medication management; and
  • Enhances the efficiency of signing of charts.


The productivity and efficiency gains of an EHR translate into lowering the hard-dollar cost of running a practice. The following are examples of potential cost benefits that may be experienced through the use of EHRs:

  • Reduces transcription costs;
  • Lowers labor costs;
  • Reduces internal/external copying expenses;
  • Lowers malpractice insurance costs; and
  • Reduces pharmacy costs.


In addition to potential cost savings, an EHR can positively impact the top line of a practice in a number of ways, including:

  • Improves the completeness of documentation;
  • Improves coding accuracy;
  • Increases the number of services offered; and
  • Boosts the number of visits per day.


Finally, successful EHR sites are typically more efficient than traditional offices. As a result, the number of full-time employees required to support physicians is lower than at paper-based offices. This improvement can be attributed to the following:

  • Reduces chart pulls and less filing;
  • Allows universal access to the chart (by more than one person at a time);
  • Eliminates time spent searching for lost charts;
  • Reduces phone tag with patients;
  • Improves internal office communication;
  • Reduces callbacks from pharmacies; and
  • Improves compliance with chart requests and chart audits.


Despite the many potential benefits of implementing EHRs, widespread implementation of EHRs has been hampered by many perceived barriers. These barriers include technical matters such as uncertain quality, functionality, ease of use, and possible lack of integration with other applications.

Additionally, financial issues often arise and are particularly applicable to nonpublicly funded health service systems. These systems lack the financial capacity to handle the initial costs for hardware and software as well as the finances to fund maintenance, upgrades, and potential replacement of the EHR system.

Furthermore, health entities that desire to make the switch to an EHR system may have resource issues related to training and retraining employees and staff. Also, some health systems face potential incompatibility among different information systems. Often, EHR formatting related to user interface, system architecture, and functionality varies significantly between suppliers’ products. Health entities often face difficult and complex information technology system issues when switching from paper medical records to an EHR system.

Finally, of major concern are legal and ethical issues related to the security of patient privacy and confidentiality. As is often the case with cutting-edge technology, the law tends to lag far behind technological advancements. To those who have endeavored to implement EHRs that can be shared with other clinically integrated practitioners, it will come as no surprise to learn that many legal barriers to sharing EHRs must be addressed. Ethical, legal, and technical issues linked to accuracy, security, confidentiality, and access rights are set to increase as national EHR systems come online.

The health care system operates within a complex legal environment whose standards and requirements can both speed and impede health information technology adoption. Mandates imposed through regulations, accreditation standards, or as the result of judicial liability rulings linked to the failure to incorporate new technologies into practice can push the health care industry to adopt new treatment modalities and patient safety techniques.

However, until health care leaders recognize that the legal benefits of EHR adoption outweigh the risks, the industry’s response may remain slow—even in the face of legal incentives that aim to spur adoption. The numerous legal issues that arise in the context of health information technology, such as EHR, fall into two main categories:


Health care providers may be concerned that decisions related to EHR adoption may violate certain legal standards. For example, a hospital’s decision to provide staff physicians with the systems necessary to prescribe electronically, in order to maintain and improve patients’ quality of care, may expose both the institution and its physicians to potential liability under federal and state fraud laws.

To diminish these concerns, the Centers for Medicare and Medicaid Services and the United States Department of Health and Human Services Office of the Inspector General in 2005 issued regulations establishing legal “exceptions” and “safe harbors” for market conduct related to the use of financial incentives to spur adoption of e-prescribing and EHR technology. Determining the extent of the protections afforded under these exceptions and safe harbors, once interpreted and applied by the medical community and legal counsel, may influence EHR adoption rates.


The use of certain technologies is associated with an actual or perceived increase in legal burdens. For example, a health professional or organization may be unwilling to adopt EHR systems in the belief that issues associated with compliance stemming from laws such as HIPAA would add to the burden and cost of practice.


Read more about EHR issues on the Centers for Medicare and Medicaid Services Web site.


Nonelectronic personal health information is protected by extensive federal, state, and common law concepts of privacy and confidentiality; indeed, the legal duty to protect the confidentiality of patient medical records is a basic aspect of health care providers’ legal obligations toward their patients. Yet because of the attention given to electronic records, many health professionals may mistakenly believe that they are insulated from possible legal ramifications by remaining a “paper” practice.


These barriers, which are impeding widespread adoption of EHRs, must be weighed against the benefits of the EHR. The benefits clearly outweigh many of the drawbacks and will help ensure the highest quality of patient care. Although there are some legal concerns, the government is working to ensure that all EHR technology is secure and private. Within the next several years, new advances are bound to occur that will make EHRs readily accessible to all health care providers, and the law will continually develop and adjust to ensure that all confidentiality and privacy issues are well-protected.

Cherilyn G. Murer, JD, CRA, is CEO and founder of the Murer Group, a legal-based health care management consulting firm in Joliet, Ill, specializing in strategic analysis and business development. Murer may be reached at (815) 727-3355 or through her Web site at www.murer.com.