We have all heard that nationwide adoption of Electronic Health Records (EHR / EMR) will save billions of dollars annually. Some estimate the savings at over $100 Billion.

The potential savings is derived from a variety of sources. However, most savings will occur only after the individual Electronic Medical Records (EMRs) in each physician’s office are interconnected / interoperable with the Electronic Medical Records in other physicians offices, hospitals, laboratories, radiology facilities, etc. It is only then that the savings based upon, for instance, ability to more effectively avoid duplication of testing expenses will occur.

Unfortunately, this interconnectivity is one of the most difficult aspects of the electronic highway – if you will. The difficulty lies in two separate areas. First, there are technological hurdles in having systems that have been engineered by different teams at different companies ‘speak’ with one another. This is in large part because of the languages that the different programs speak, as well as because of variations in database structures.

However, equally import is the issue that even if the technologic hurdles could be overcome, there are legitimate business reasons why an EMR/EHR vendor would prefer to keep their database structure proprietary, and thus less able to interface with other companies’ products.

Thus we are left with a rather complicated situation with respect to the interconnectivity between one EHR and another.

This is part of the reason why the somewhat simpler concept of EHR/Laboratory, EHR/Radiology, EHR/Pharmacy and EHR/Hospital interconnectivity remains rather complex

Take for instance some of the nationwide laboratories such as Quest Diagnostics (stock symbol DGX) and LabCorp (Laboratory Corporate of America Holdings or stock symbol LH). In order for them to be interoperable with various EMR/EHR systems, it is required that a separate Interconnect Software Bridge be written. Or, from the other perspective, each of the hundreds of existing EMR products must make a link between their database and the database of Quest Diagnostics and between their database and LabCorp. If there were only 2 laboratories in the country this would be a lot of programming. However, there are hundreds of laboratories, and assuming that any individual mid-sized medical practice may be utilizing the services of multiple laboratories, then the level of complexity expands almost exponentially.

When you expand this concept to pharmacies the same issue is present. For instance, there are Walgreen Co (known as Walgreens – symbol WAG), CVS Caremark Corporation (knows as CVS or CVS/Pharmacy – symbol CVS), Rite Aid Corp (known as Rite Aid – symbol RAD) to name a few of the top pharmacies. Again, each individual EMR/EHR needs to interface with each of these three national companies, as well as the dozens of local pharmacies which may be present in each individual city.

For each of these interfaces there is no competition between the entities attempting the interface, and therefore, theoretically at least, there may be significantly more cooperation. However, as above, once you start asking EMR/EHR companies to interface with each other, not only are the technical hurdles enormous, but the business decisions needed to allow for such interfacing are sometimes at odds with the best interests of the shareholders of those corporations.

It is in part for the above reasons that the issue of interoperability is one of the most complex in this industry. There are a significant number of public initiatives and public/private organizations which exist solely for the purpose of addressing this issue. It is hoped by many that the anticipated tens of billions of federal government dollars that have been promised will be utilized to help solve this issue.

In the meantime, many of the top end EMRs, those with many thousands of physicians currently utilizing their software, already have plug and play interfaces between themselves and the national laboratories, pharmacies, hospital chains, etc. However, if you are planning on having your EMR speak with your local laboratory, local pharmacy, local independent hospital and/or radiology center, you should budget many thousands of dollars for each of those interconnects, assuming that they are relatively simple, straightforward and that there is cooperation on the part of both third parties. In some instances the interconnect charges may be substantially higher, and it is strongly recommended that you clarify all interconnectivity charges for each of the possible third parties with which you may like to communicate, prior to signing any final document with your EMR/EHR vendor.