EHR and the Real Return on Investment

By: Wildflower International, Ltd.

A basic EHR includes only a patient's medical history, demographics, diagnoses, medications, and allergies, as well as the ability to prescribe and view lab and imaging results electronically. This type of system does not necessarily include functions such as drug interaction warnings and problem lists. Switching to more capable EHR systems (beyond just basic) will not only increase practice competence, but will help practitioners to qualify for government financial incentives, increasing the practical and monetary benefits derived from making the shift to electronic records.¹

A 2009 survey by the Medical Group Management Association (MGMA) reveals that early adopters of EHRs overall practice performance is being positively impacted by EHR implementation. Todd Evenson, assistant director of survey operations, MGMA-ACPE says "The key is that physician practices and health systems are recognizing those Meaningful Use dollars are available to them. Obviously, in an environment constrained by rising costs, they're looking for every opportunity to improve revenue." Implementing a capable EHR system and training staff to use it effectively, is what results in simultaneous capture of Federal incentives and increased revenue thanks to improved service and productivity. ²

Properly implemented EHRs can certainly pay for themselves and more. Proper implementation will necessitate the purchase of software, hardware (or hosting services) and training.  From the survey, MGMA discovered that better-performing practices spent about $30,000 per physician on their EHRs, whereas other practices averaged about $20,000. Successful groups did not purchase more expensive EHRs; they spent more money on training and implementation, which are key to EHR success. The better performers also spent slightly more than other groups did on maintenance of their EHRs--$540 per provider per month vs. $500 per month (maintenance figures include subscriptions to cloud-based EHRs as well as software maintenance fees for purchased systems.) ²

The 2009 MGMA survey determined that the main cost savings experienced by medical groups was in staffing changes, although eventual increase in productivity and efficiency was significant after about a year. On average, IT staffing per full-time-equivalent (FTE) physician increased by 0.13 FTEs, while medical records staffing fell from 0.34 to 0.19 FTEs per physician. This trade-off is just another contribution to increasing the bottom line. ^{2, 3}

On-site IT help will be needed to maintain and support the local servers, hardware and network, but web-based EHRs remove most of this cost burden. Thus the improved efficiency seen with EHR usage is realized more quickly. Medical support staff that previously managed physical records can be re-purposed from paper chart maintenance to electronic chart maintenance in order to avoid job loss. ³

Electronic procedure documentation reduces transcription, paper storage and image printing. Systems which integrate EHR data with billing, e-prescribing, collections, claims, scheduling, messaging, reports, lab results, imaging, referrals and other clinical and practice procedures enhance the patient encounter experience and immediately amplify the profitability realized from transitioning to an electronic records system.

A recent (Jan 12,2012) Electronic Content Management study by Nucleus Research revealed an average return of $6.12 returned for every dollar spent on content management applications (which are similar in mechanism to EHR implementation.) The savings are realized through more streamlined processes, greater productivity, reduced paper use, avoidance of staff costs. ⁴

Bringing this all to a close, the common perspective for EHR creating more ROI for the physician is usually based on the idea that making work more efficient will allow practices to take on more patients and cut labor costs creating higher revenues. However, as portrayed in the article, there is plenty of ROI available to physicians solely from the Meaningful Use incentives and other government benefits with the underlying message being to adopt EHR and adopt early.

1. http://www.cdc.gov/nchs/data/databriefs/db79.htm

2. http://www.informationweek.com/news/healthcare/EMR/232600025

3. http://www.practicefusion.com/ehrbloggers/2012/01/health-it-and-job-creation.html

4.http://nucleusresearch.com/news/press-releases/electronic-content-management-applications-return-6-dot-12-for-every-dollar-invested-nucleus-research-/