The federal government is set to roll out a massive incentive program aimed at making electronic record-keeping the standard in health care. But Connecticut doctors lag behind when it comes to making changes that experts say could save time and money, reduce medical errors and duplicate tests, and improve patient care.

Among state doctors, 25.8 percent used electronic medical records, and less than a quarter prescribed drugs electronically, according to a 2008 survey by the Connecticut State Medical Society. In a national survey conducted the same year by the National Center for Health Statistics, 41.5 percent of doctors reported using electronic medical records in their office-based practices.

Connecticut hospitals fared better. According to a recent study, less than 12 percent of U.S. hospitals used either basic or comprehensive electronic health record systems to track patients in 2009. In Connecticut, 7 of the 28 hospitals that responded to the survey reported using basic or comprehensive systems.

“It is an absolutely essential ingredient to making the health care system work better,” said Dr. Ashish Jha, an associate professor of public health at Harvard and an author of the hospital study.

Proponents of electronic medical records say the potential benefits are immense. Prescriptions transmitted electronically don’t carry the risk of a pharmacist misreading a doctor’s handwriting, and some electronic records systems can check for possible negative drug interactions with other medications a patient takes.

Even more significantly, Jha said, electronic records that multiple health care providers can access could help avoid duplicated tests that commonly occur when patients receive care at two or more places that don’t share records. Avoiding extra tests would save time, money, and, in the case of some tests, unnecessary exposure to radiation.

A 2005 study estimated that using electronic record systems that could share information between providers could save nearly $80 billion a year. Jha predicted the figure would now be closer to $100 billion.

“We are at such an abysmal level,” he said of health providers’ current use of EMRs.

Many health care providers in Connecticut embrace the concept behind electronic medical records. But they say there are significant barriers to getting to the sort of system the federal government will begin pushing next year through cash incentives – and, later, through penalties for providers who haven’t made the shift.

Matthew C. Katz, executive vice president of the Connecticut State Medical Society, said cost and caution are major barriers. An EMR system can cost between $5,000 and $25,000 per doctor and require long periods of staff training, he said, a hardship for the state’s many small medical practices.

Stories abound of doctors who bought systems from companies that later went out of business, or sytems that don’t meet the new federal standards.

“Many physicians are sitting back and saying, ‘I’m going to wait 6 months or a year for the dust to settle before I buy one because I don’t want to get burned,’” Katz said.

Among doctors, the use of technology varied by specialty and by size of practice, according to the medical society’s 2008 survey. Fifteen percent of solo practitioners reported using electronic medical records, compared with 44 percent of physicians in large groups. And in Connecticut, unlike many other states, the majority of doctors work in groups with four doctors or fewer.

Connecticut also has an older medical workforce than most states, with the majority of doctors over 50.

“Many of them are close to retirement and they’re thinking, ‘well, I’m going to retire in 5 years, do I really want to spend $50,000 in my practice when margins are already thin?’” Katz said.

Other doctors are waiting for costs to go down or to see how much their colleagues get paid by the federal government for using the systems.

“I think there’s still a fair amount of skepticism on the part of physicians about whether or not it’s going to happen, number one, and then also trying to justify an investment,” said Douglas S. Arnold, executive director of Medical Professional Services, an independent physician association that includes more than 400 Connecticut doctors.

Arnold noted that Medicare rates are set to drop substantially at the end of the year, leaving many doctors skeptical that incentive money attached to Medicare will be worthwhile.

Commercial insurers are starting to offer incentives for providers using electronic systems, which Arnold said could be a key step toward getting more doctors on board.

“When the public and private payers all start saying ‘we’re going to provide incentives for the adoption of health information technology,’ I think that’s going to be a pretty substantial tipping point,” he said.

Eager to usher in changes, Congress included in the 2009 stimulus bill $27 billion in payments over 10 years, starting in 2011, to Medicare and Medicaid providers who adopt EMRs.

But to be eligible for the money, providers have to meet certain federal criteria, known as “meaningful use.” One requirement is being able to share information with other providers’ systems electronically – a key element that many electronic systems lack.

Come 2015, the federal government will impose penalties, in the form of reduced reimbursements, if providers do not meet key yardsticks, which will evolve with time.

Connecticut hospitals are at varying stages in implementing health information technology systems, said John Brady, chief financial officer and vice president of business development at the Connecticut Hospital Association. But hospitals don’t see meeting the federal requirements as a matter of choice.

“The financial incentives and then penalties laid out in the rule make it so that it’s clear that hospitals need to do this,” he said.

Some hospitals in Connecticut will be ready to capture federal money as soon as it is released. Others will need more time, but most will be able to achieve meaningful use within the timeframe the federal government established, he said.

Achieving meaningful use will require changes in how hospitals operate, not just adding technology. One requirement, for example, calls for entering a certain percentage of patient orders electronically.

“There’s an IT project aspect to all of this, and to date, most of the work has been in IT,” Brady said. “However, there are significant operational issues and impacts to the utilization of the information technology that will prove to be just as time-consuming, if not more so, than the actual getting the systems upgraded and up and running.”

Jha said a lag is understandable. For one thing, because the U.S. system works on a “fee-for-service” basis, hospitals get reimbursed for performing tests and procedures, even if a patient has recently had those tests done somewhere else. The fact that another round of tests does not bring any new benefit to the patient doesn’t matter.

“The hospital doesn’t see it as a revenue loss,” Jha said. An expensive new IT system, though, is seen as a major revenue loss, with both an initial outlay to buy the system and the disruption required to put it in and training staff already working in “a very busy and very high-risk environment,” he said.

For doctors, putting money into technology programs can seem like spending money on changes that will primarily help insurance companies, Arnold said, since insurers stand to gain from efficiencies.

“There are a lot of structural issues in the whole health care milieu that are arguing against massive adoption of health care information technology,” he said.

Ultimately, Katz believes there will be a time when all doctors will be using electronic systems – if not electronic medical records, then disease registries and systems that help them track aspects of patient care.

“I don’t think that time is tomorrow,” he said. “I don’t think that time is in two years. I think that you will see within three to five years the vast majority of practices having health information technology.”

Installing new software alone will not transform the health care system, Jha said. Instead, along with the electronic systems must come fundamental changes that move health care from a fee-for-service system to one that rewards outcomes, treating patients in a more holistic fashion, something electronic records enable.

“Right now, doctors get paid to do more, not necessarily to do better,” he said.  But, he said, “If all of a sudden you were required to take care of the whole patient and all of his or her health care needs, doing that in a paper-based world is very difficult because you just won’t have the information you need.”