Taking a cue from its largest local competitor, UnitedHealthcare of New England is launching a financial-incentive program to encourage local primary care doctors to set up and use electronic medical record systems, starting next year.

Doctors who sign up will get a check upfront to help them cover the cost of EMRs, and annual payments after that if they meet benchmarks to be set as the program evolves, said Stephen J. Farrell, president and CEO of United, in an interview.

“There’s a lot of focus in this community to get physicians up to speed with electronic medical records,” Farrell said, and EMRs are associated with “a great deal of health care quality improvement,” so United felt this was “an appropriate place” to put its money.

“We’re going to be rolling it out in the first quarter, and we’re pretty excited about it,” he said.

EMRs allow doctors to track their patients’ medical history, lab test and imaging results, annual check-ups and sick visits just as they do on paper, but they can be much more efficient and provide search and analytical tools, guidelines for optimal care of, say, diabetics, alerts to help avoid adverse drug reactions, and often anywhere/anytime access through the Web.

Nationally, policymakers and many health care experts have been pushing doctors to adopt EMR systems as a way to improve quality and reduce costs. Locally, the Rhode Island Quality Institute, a collaboration between providers, insurers, government, business and academia, has made EMR adoption and the next level – data sharing – a top priority.

Two physician-led initiatives have made a big impact: An offshoot of the Rhode Island Primary Care Physicians Corp., which represents small practices, has put the home-grown EpiChart in more than 100 doctors’ offices, and the nonprofit EHR Rhode Island has brought in eClinicalWorks, from Massachusetts.

United itself has a hand in the EMR market through Providence-based LighthouseMD, which was acquired a year ago by UnitedHealth Group member Ingenix. The firm’s practice management software, CareTracker, used by about 800 local doctors, has an optional integrated EMR.

But logistical challenges and high costs – in the thousands and tens of thousands of dollars – have kept EMRs from gaining widespread acceptance. To help, and because most of the savings produced by EMRs go to the payers, insurers have been urged to pitch in.

Blue Cross & Blue Shield of Rhode Island President and CEO James E. Purcell has been happy to oblige. The insurer has included EMR incentives in its contracts with two large physician group practices; in its Quality Counts program, which includes 80 doctors; and in a multi-year plan to increase primary care doctors’ pay.

Quality Counts pays monthly stipends that help offset the EMRs’ cost, but it also sets three-year targets for how doctors are to use them to improve care by, for example, tracking diabetics’ blood tests. Doctors who meet the targets can earn bonuses of up to $12,000, said Dr. Gus Manocchia, chief medical officer for Blue Cross.

The primary care pay-increase plan, which applies to about 1,100 doctors, provided an extra 5-percent, across-the-board fee increase for doctors, effective last July 1, who used qualified EMR systems, with more to come in phases through April 2010.

Like the Quality Counts program, however, the pay raises come with standards, not just for the EMRs – they have to include tools to improve care, and eventually they’ll also be required to be CCHIT-certified – but for how they’re used, with expectations rising over time. Doctors have to do at least 30 percent of eligible prescriptions online, for example, Manocchia said, and they have to document visits electronically, in real time, for at least 60 percent of patients.

“If we’re going to be paying for these systems, we don’t want them to just sit there gathering dust,” Manocchia said. “Our intent is to have them used for the betterment of the health of the citizens of Rhode Island.”

That is also United’s goal, Farrell said, but its program is going to be more lenient at first. Targeted only to small to mid-size practices and to community health centers, the incentives will be available not only to doctors already using EMRs, but to those who want to implement them.

In the first year, there won’t be minimum standards for the EMRs themselves or for how they’re used, Farrell said, though over time, that will change. The idea is to help the practices that face the biggest obstacles to make the leap, he said.

Asked how much United would give each doctor, Farrell said the dollar amount “is still being finalized,” but it will be “in the thousands,” but also proportional to United’s market share, which is about one-third of Blue Cross’. To qualify, doctors will have to fill out a survey to document their EMR use.

Told about United’s plan, Manocchia said it’s a good thing, because “Blue Cross can’t do this alone.” Newell Warde, executive director of the Rhode Island Medical Society, also welcomed the news.

Warde noted that along with their many benefits, EMRs come with huge costs, not only in terms of hardware and software, but also lost productivity while a medical practice adjusts, and to some extent, in the long run as well.

“It is only right that health insurers participate financially in supporting and easing the transition, because they are major beneficiaries of the kinds of efficiencies that EMRs can bring,” Warde said. •