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The Unfulfilled Promise Of E-Signatures
by Maureen Sirhal
Patients at Boston's Beth Israel Hospitals may not know it, but they could be among a select few in the country who are treated to the latest in healthcare technology thanks to the implementation of a bevy of innovations.
"As I dictate a patient's chart, we transcribe them via voice recognition and ... they are sorted [and] posted on the Web. ... All [lab] orders are done electronically," explained John Halamka, the chief information officer for CareGroup Healthcare System, which manages the hospital.
Digitally processed medical orders and files are far more accurate and therefore reduce medical errors and laborious paperwork, and electronic reminders compel the CareGroup physicians to sign off on patient charts. The failure to sign such charts is one of the most common problems plaguing the medical industry today, Halamka noted.
CareGroup's system is a rare example of how a medical provider has adopted some aspects of a year-old federal law that gave legal weight to e-signatures and contracts. Lawmakers and industry heralded the Electronic Signatures In Global And National Commerce Act (ESIGN) as the most important law for furthering e-commerce growth. But in the roughly 10 months since the law took effect, several industries are stumbling to implement e-signatures in their transactions.
E-Signature Kinks In Financial Services
ESIGN legislation represented a major boost to the financial services sector. Companies like the Baltimore-based eOriginal offer e-signature technology. The company has agreements with companies such as Xerox Federal Credit Union, Flagstar Bank, First Savings Mortgage, Stewart Title and the Attorneys' Title Insurance Fund to provide mortgage financing via the Web.
But Susan Penn, eOriginal's communications director, said much of the last year has been spent educating businessmen and women about e-signatures and what they may mean for the future. All they can do now is wait for Fannie Mae and Freddie Mac, the government-chartered mortgage and insurance underwriters, to craft industry guidelines for using e-signatures.
The guidelines will reach across a broad base of regulatory agencies, from the Securities and Exchange Commission (SEC) to the Health and Human Services Department (HHS). They will determine the intersection between the intentionally vague language of the ESIGN law and industry-specific e-signature solutions -- how to retain records in the mortgage industry or consumer information disclosures under securities transactions, for instance.
"They are establishing the strict guidelines that are taking us through the transactions," Penn said. "Freddie [Mac] published preliminary guidelines two weeks ago, and Fannie Mae is setting up in a month," she noted, but until those guidelines are finalized, all mortgage institutions can do is prepare for the e-signature future.
Even those guidelines that have been drafted have sparked concerns. Recent SEC rules for using e-signatures and documents, for example, have created uncertainty for firms. Scott Kursman said the Securities Industry Association (SIA), of which he is the vice president and associate general counsel, was less than thrilled with the SEC rules on the electronic storage of documents.
The rules, he said, require companies with numerous divisions to keep separate data-storage units for each division. And the SEC's regulations for integrated financial institutions differ from the equivalent guidelines issued by the Federal Reserve Board.
Agency guidelines developed before enactment of the ESIGN law and those in the law, furthermore, may be incompatible. "There are subtle differences ... between what ESIGN has and what the SEC had on the books for five or six years [regarding rules for electronic transactions]," Kursman said. "Firms arguably have extra sets of hoops to go through now, and some ways of doing business are left in doubt as a result."
Here's To Your Online Health
The financial services industry is not the only sector of the economy on technological hold. Already stymied by physicians' slowness in accepting and financing new technology, the promise of e-health has been further hampered by regulatory hurdles and uncertainty in developing and implementing automated health systems that rely on e-signatures.
HHS has been slow to finalize a provision of the 1996 Health Insurance Portability and Accountability Act (HIPAA) stipulating conditions for e-signatures in health records and data. That delay has prevented many groups from moving forward with strategies for using technology in healthcare.
"There has been an expectation that HHS was going to be finalizing that regulation shortly," explained Bruce Fried, chairman of health law practice at Shaw Pittman in Washington. "Folks [in the healthcare industry] have been a bit reluctant to move seriously into moving electronic signatures until the HIPPA standards are final."
Some facilities are trying to overcome the regulatory hurdles. CareGroup's facilities and operations, for example, are fully complaint with federal and state regulations, according to Halamka. The system is serving as a model in five other states that are attempting to streamline communications and administrative tasks. But most medical providers, insurers, and agencies still struggle to utilize the Internet.
An HHS spokesman said the agency has not established a timeline for finalizing the e-signature rules.
Making The Government ESIGN Friendly
Ironically, government agencies themselves have an incentive for promoting e-signatures and the guidelines to implement them. They have until 2003 to comply with the Government Paperwork Reduction Act and other laws that require them to provide online services.
Digital Signature Trust (DST), a security and technology company that supplies resources for electronic transactions, has signed deals with the Social Security Administration, the Environmental Protection Agency and the Veterans Affairs Administration to provide the technology for the public to sign electronic contracts via government Web sites. Still, even the agencies have plenty of work to do.
Keren Cummins, the vice president of federal affairs for DST, noted in a recent interview that the issue of authentication and the lack of interoperability between federal agencies are major barriers to e-government. She said that also is an issue between state agencies and the existing offline systems that still must accept paper transactions.
Most federal agencies that fall under the paperwork-reduction law are conducting pilot programs at some level to comply with the law, Cummins said. But many are still far from meeting the deadline.
Just Give It Time
The news is not all grim on the e-signatures front. Despite the slow agency rulemaking, there is movement in some corners. The Education Department, for example, recently finalized its guidelines for the end-to-end process for granting federal school loans electronically. The FTC also noted in a review of ESIGN last month that not enough time has passed to allow for an effective measurement of the costs of the law and advocated that no changes be made.
And government alone is not to blame. Retails firms expecting to employ e-signatures in business-to-business transactions with suppliers are experiencing a delay because of the lack of agreement with in the industry on technology standards, a source at the National Retail Federation said.
Fear is also a factor. One legal expert said, "Agencies are afraid of ESIGN. They are not sure how to regulate it. If they allow the paper to fall out of their hands, they are afraid it will lead to fraud and abuse."
But despite the regulatory framework and other burdens, several analysts say that everyone simply needs more time to adapt to the e-signature way.
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