Thoughts on the Cost of EHR Implementation

There are many healthcare-changing initiatives being talked up these days. These include promotion of technology through HITECH and changing the way medical doctors code for problems through ICD-10. In selling these efforts to hospitals and providers, the people responsible will couch their arguments in benefits to the providers and the patients: EHR’s are supposed to make keeping track of patients records more efficient and enhance quality initiatives, e-prescribing is beneficial because it allows for automated interaction checks, ICD-10 allows description of medical conditions and procedures to be more thorough.

In the latest issue of Health Affairs, there is a study from Julia Adler-Milstein, Carol E. Green, and David W. Bates that explores the effect that implementing a new EHR has on profits for medical offices and practices. In “A Survey Analysis Suggests Electronic Health Records Will Yield Revenue Gains For Some Practices And Losses For Many” the authors reveal a mixed result that in theory (and in the title of the article) seems to confirm some of the worst assumptions about EHR use that physicians may hold.

But EHR implementation, despite the way it is presented in Health Affairs, is not meant to increase profits to hospitals and providers. It is primarily about improving quality of care and office efficiency. This is not to imply money plays no role in the process. Healthcare is, after all, a business. But the changes to the system have not been designed with increasing profits as a primary goal.

The amount of money being spent as part of Medicare and Medicaid has skyrocketed as healthcare has gotten better at keeping people alive and treatments have gotten more complicated. All payers, both private and public, are looking for ways to reduce payments, which has providers and hospitals left scrambling for ways to control their own costs. The Centers for Medicare and Medicaid Services (CMS), which oversees the Meaningful Use attestation program, is pushing ICD-10 implementation for various reasons, but admits that the primary goal is enabling it to have greater data on what treatments providers are billing.

We have always been aware of the costs to effectively implement EHR’s. This is why Meaningful Use incentives exist. Essentially, CMS believes that it will do better in the long run if providers keep and use electronic records and is willing to pay providers, after the fact, if they make that change.  The other problematic element within the study is that EHR implementation isn’t just failing to result in a profit, but that in practices with fewer than 6 providers, money loss is occurring. In essence, the cost to implement the new technology is not outstripped by gains in productivity over the long haul.  The study noted possible reasons for this. Almost half of offices were still maintaining paper records. Others will still maintaining and paying for staff to handle tasks that were rendered obsolete by new technologies, including transcriptionists and staff to maintain the aforementioned paper records. On the other hand, some practices increased efficiency and were able to see more patients; others improved billing and had fewer rejected claims. Larger practices (with more than 5 providers) were more likely to recoup costs than smaller ones.

This study was not designed to look at improvements in patient care, but does confirm that some, but not all, practices may benefit financially from the adoption of EHR’s, especially larger practices and those that use the change to improve efficiency in their offices. The final result of the article, despite a misleading title, is to point out a few important things. Practices who commit fully to using an EHR can see more effective billing practices leading to higher coding levels and fewer rejected claims. On the other side, those groups not interested in breaking from the past will end up wasting most of these potential advantages. In our experience, commitment to a successful implementation process should lead practices to not only improve their business model, but do a better job with their original mission: helping their patients.




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