Despite government subsidies and years to make it work, some hospitals and medical practices are still having trouble getting a good return on investment from electronic health records.
The assumption that EHR would magically increase efficiency and pay for itself is proving to be untrue and now CIOs need to step in to make sure EHR doesn't become an expensive mistake.
In the early days of EHR, a 2010 study by the Medical Group Management Association suggested that healthcare organizations that have implemented electronic health record systems were better off financially than those that had not.
This study, which focused on data collected in 2009 from practices that were not owned by hospitals, reported that facilities that had adopted electronic health records had a higher median operating cost of $105,591 per full-time physician (or equivalent) than organizations that maintained only paper records. However, such organizations also had $178,907 higher revenue per full-time position then organizations that strictly used paper records. Once all of the operating costs were taken out of the equation, these facilities reported an average of $49,916 greater total medical revenue after the electronic health record implementation.
However, a 2013 study suggests that the trend has reversed. This study found that over the course of five years physicians on average lost $43,743 after the electronic health record system implementation. Like the first study, this particular study focused on smaller practices as opposed to hospitals. The study went on to suggest that only 27 percent of the practices surveyed had achieved a positive return on investment. Furthermore, according to the study only another 14 percent of the practices surveyed would have yielded a positive result if they had received the meaningful use incentive from the federal government, which would have resulted in a $44,000 cash infusion.
Of course, this raises the question of why some practices were able to increase revenues after the implementation of electronic health record systems, while most lost money. The difference may boil down to the way in which the electronic health record systems were used. Those practices that were able to increase revenue likely use the electronic health record system as a tool for increasing the number of patients that they are able to treat each day, thereby increasing revenues.
The study suggests that those organizations that were able to increase revenues might also have done so through more accurate billing and coding, which resulted in fewer insurance claims being rejected and fewer billing mistakes.
Given that it can cost well over $100,000 per physician in smaller practices to implement an electronic health record system, and that so many practices are losing money, some physicians have sought more creative ways to recoup some of their investment.
Some practices have begun considering using cloud-based extensions of electronic health records system as a way of interacting with their patients. One organization, Hello Health, offers a subscription-based patient portal that allows patients to perform online scheduling and allows them to access their medical information. In some cases, patients can even interact directly with physicians online.
The Hello Health website advertises the patient portal as a tool for generating new revenue. The site suggests that some practices may see revenue in excess of $35,000 per year by using the service.
Even in larger healthcare facilities where economy of scale can reduce the cost of implementing EHR to more like $20,000 to $30,000, cost controls are still required. Whether you add revenue through seeing more patients or through creative means, it is clear that EHR requires a specific examination of the business plan to make sure it pays off. CIOs who also implement better patient flow and billing practices can more easily justify the cost of EHR regardless of the type of facility. Make sure you do something, however, or you might find a bigger bill than you are ready to pay.