For the Record

Hawaii's independent physicians get a boost into the electronic age

January, 2007

In 1998, Dan Heslinga trekked into what was then largely uncharted territory for Hawaii physicians. He opened a family medical practice in Kaneohe – without charts. At least not paper charts.

“I was so sold on the notion of electronic medical records,” Heslinga says. “I believed it would not only help me provide better care for my patients, but it would help get my business on its feet quicker, too.”

That conviction was based on his experience working in a traditional group practice. He says, “Charts are always getting lost or misplaced or put in a stack somewhere, and the staff spends half its time just looking for pieces of paper.”

Heslinga invested about $50,000 in General Electric’s Centricity system. He was one of the first independent physicians in Hawaii to enter the electronic age.

Eight years later, the cost has come down, but Heslinga remains in the minority. While many industries were pretty well wired by the turn of the millennium, most doctors’ offices continue to do business the old-fashioned way. Across the country, only about 11 percent of private-practice physicians have converted to computers for clinical work. In Hawaii, industry experts believe the percentage is even lower.

Hospitals in Hawaii and across the country are investing millions in comprehensive computer systems. However, the smaller independent physicians – often the first line of defense against illness – have largely been left behind.

A 2005 national survey by the Medical Group Management Association cites numerous reasons for the slow pace of progress, and concludes that the biggest barrier for private physicians is the price. The survey found the average cost per physician to purchase and implement an Electric Medical Records (EMR) system is over $32,000, plus $1,200 a month to maintain it (See Right).

Now Hawaii’s largest health plan is joining the race to wire our health care community, putting up money to motivate private physicians.

In October, the Hawaii Medical Service Association announced the HMSA Initiative for Innovation and Quality (HI-IQ). HMSA is offering grants of up to $20,000 per doctor to help establish an EMR system. The $20-million program would cover at least 1,000 physicians. The funds come from HMSA reserves, not from patient premiums.

“It’s an investment in the future,” explains HMSA senior vice president Georgiana Fujita. “It’s a tool, so hopefully the tool can be used to leverage the longer- term benefit of improving quality and patient care.”

Prior to announcing the grants, HMSA partnered with local EMR service provider TeamPraxis in a yearlong pilot project to smooth out the stumbling blocks doctors might encounter during their electronic conversion. Five doctors volunteered to be guinea pigs in exchange for the free trial using the TouchWorks system.

“HMSA coming through with the money made the difference for me,” says John Houk, an internist and solo practitioner. “I wouldn’t have done this if I had to come up with that money up front.”

Heslinga has been working to help other doctors get wired. Last year, he received a $900,000 grant from the Hawaii Medical Foundation to help defray the cost of buying computers, software and training.

“The small, private, independent doctors tend to be running on pretty thin margins,” Heslinga says. “Sometimes it’s just them and their wife or aunty running the office and where in the world are they going to come up with even half of $20,000?”


The Hawaii Independent Physicians Association is also offering subsidies to members. HIPA has screened EMR vendors and is working with three that provide local service and support. Executive director Bill Donahue believes that within 10 years – like it or not – every doctor will have electronic records.

“It’s just something that is coming down the pike. I don’t know that there’s any way to resist it,” adds Honolulu dermatologist Carla Nip-Sakamoto, who participated in HMSA’s pilot project.

For each physician, there are pros and cons to ponder. Doctors say the downside is the process of purchasing a system and getting up to speed. Some are also concerned about privacy issues with electronic records. The payoff is acquiring the tools to take better care of their patients.


The prospect of transferring decades’ worth of medical charts into electronic files is daunting for most doctors, not to mention staffers, who often wind up doing much of the scanning and data entry. There are also multiple applications to master, including scheduling, charts, prescriptions, insurance and billing. So the startup phase involves an investment of time as well as money.

Rheumatologist Alan Oki “went live” last July. He says he lightened his patient load the first week, but then returned to a full schedule – with a lighter physical load. “I was dragging 40 pounds of charts between Kuakini and Pali Momi,” Oki explains. “Now I carry a handful of paper and my laptop.”

That’s just one example of the convenience that kicks in once the system is up and running. Doctors in HMSA’s pilot say they now save time with tools such as one-touch prescription refills. And as they purge the paper, they save office space.

There is general agreement that, once the information infrastructure is in place, it will open up countless possibilities for improving care. Doctors blazing the electronic trail are eager to share the myriad examples of how EMRs have transformed the way they practice.

“There are things you can’t imagine doing with paper that you can do with EMRs,” Heslinga says.

In the case of a drug recall, Heslinga only needs 15 minutes to find all his patients taking that drug. “And that includes printing the recall letters to tell them to stop taking the drug.”

Oki says patients are receiving better treatment in the emergency room because he can instantly fax records from his home or office. “That is a huge improvement in communication between the independent physician and the ER.”

Others point out that the legibility of typed records will prevent errors caused by doctors’ notoriously poor handwriting.

Many EMR advocates believe that information technology will ultimately lead to a major transformation in managing health care, shifting the focus toward prevention and away from treatment and hospitalization. For example, if a patient comes in for a sore throat, the computer might remind the doctor they’re due for a mammogram, blood work or other preventive tests.

The economic promise of electronic health records is being promoted from the White House on down. In 2004, President George Bush launched an initiative aimed at shifting all Americans to electronic health records within 10 years in order to improve quality and efficiency, reduce medical errors and control costs. His Executive Order established the Office of the National Coordinator (ONC) for Health Information Technology (HIT). The ONC says that, in the late 1990s, while other industries were spending about $8,000 per worker on information technology, the healthcare industry was spending just $1,000. According to the ONC: “It is estimated that HIT can reduce healthcare costs up to 20 percent per year – by saving time and reducing duplication and waste.”The president of TeamPraxis, Creighton Arita, says it’s often up to the patient to keep track of recommended treatment for chronic conditions. “I get more reminders for my car maintenance than from physicians prompting me that I need to come in for whatever preventive screenings.” He says with the computer keeping track, doctors will be able to manage a patient’s care instead of just responding to symptoms. “If they do these preventive measures early … the cost of health care will fall.”

The long-term goal for electronic medical records is interoperability – the electronic exchange and sharing of information between providers on separate systems. Advocates compare it to the banking industry’s ATM system that allows us to access our personal account from other banks.

One of the first efforts in Hawaii to begin a Health Information Exchange – sharing patient records among healthcare providers – is the Holomua Project. The goal is to improve communication and coordinate care between community health centers and hospitals. The participating clinics are Kalihi-Palama Health Center and Kokua Kalihi Valley Health Center and the hospitals are Hawaii Pacific Health and The Queen’s Medical Center. The three-year project is funded by a $1.5 million grant from the federal Agency for Health Care Research and Quality and administered by the Hawaii Primary Care Association. Participants say Holomua could be the foundation for a Regional Health Information Organization (RHIO.) The federal government would like to connect RHIOs one day into a national health information network.


In 2001, a report by the National Academy of Sciences’ Institute of Medicine recommended “the elimination of most handwritten clinical data by the end of the decade.” Physicians say the potential for electronic medical records to improve quality is clear. There’s less consensus on whether it’s a good investment for a small practice.

Oki is on the optimistic end of the spectrum. He’s a paying TeamPraxis customer and is confident he’ll see a quick return on his investment. Oki says the savings on transcription costs alone will pay for the system. “I come out pretty close to even in the first year,” Oki predicts, “and after that I’m making money on it.”

Other physicians are skeptical. “I think it’ll vastly improve the quality of health care,” says Heslinga. “But I don’t think it’ll save any money.”

“If I can break even and improve the quality of care,” reflects Houk, “then I think this will be a net gain.”

While doctors speak from a small business point of view, HMSA and the business community look at the larger potential for reining in runaway health costs.

HMSA Chief Financial Officer Steve Van Ribbink says it’s hard to quantify, but believes improvements in quality will go hand in hand with savings. “Members will hopefully pay less in better quality outcomes.”

The Hawaii Business Health Council supports HMSA’s initiative and says EMR can be a launching pad to solve problems that lead to poor care and high premiums. HBHC Executive Director Gary Allen says research has shown that up to a third of healthcare costs go to unnecessary services. For example, he says about 10 percent of laboratory tests are duplicates ordered by different doctors. “But if you have an EMR then the system would say to the cardiologist, ‘Oh, we just did that lab work.’”

Whether or not technology promises economic salvation, those who are already headed down the electronic road agree there’s no turning back.

“I can’t imagine that we would ever discard this system and decide to go back to paper,” says Nip-Sakamoto. “It would really be archaic.”

The Big Guys and EMR

Hawaii’s three largest hospitals are all using EPIC software to develop customized computer systems – in varying stages of implementation.

Kaiser Permanente’s HMO model is well suited to an integrated computer system with in- and outpatient treatment under one umbrella, including everything from registration to insurance to labs and pharmacies. Patients have Internet access to records and doctors email. Kaiser Hawaii’s physician leader on the project, Peggy Latare, says their system is about 85 percent deployed and should be complete by the end of 2007. Nationwide, Kaiser is spending close to $3 billion on what Latare calls the largest IT project in the country.

After 18 months of preparation, The Queen’s Medical Center went live in January 2006, consolidating seven separate computer systems into one integrated system overnight. Chief Information Officer Ken Kudla says Queen’s is among the top 5 percent of hospitals in the country in terms of having a comprehensive EMR system, but it will still take another two or three years to complete. Even then, “You’re never really done.” Queen’s has spent about $40 million to date and expects to spend $45 million on the project.

Last September, Kapiolani Medical Center for Women & Children was the last of Hawaii Pacific Health’s four hospitals to join its EPIC system. Straub, Wilcox and Pali Momi went live one at a time during 2004 and 2005, effectively consolidating 32 separate computer systems into one. There are still many features to add, so HPH is only in year three of the seven-year project, which is expected to cost $53 million. Chief Information Officer Steve Robertson says EMR technology is fast “becoming the standard of care and, if you’re not doing this, you will fall behind very quickly.” –CPF

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