Poster Design & Printing by Genigraphics® - 800.790.4001

Electronic Medical Record Implementation:Electronic Medical Record Implementation:Money Maker or Bust?Money Maker or Bust?

Kimberly Chen and Robert R. Reza IIThe University of Texas at Austin Health Information Technology Summer Certificate Program

INTRODUCTION DISCUSSION

RESULTS

REFERENCES

ABSTRACT

The United States has the world’s most inefficient healthcare system, spending about 1.7 trillion dollars per year2. Electronic health record (EHR) systems show potential with the ability to provide major health care savings, reduce medical errors, and improve health of the population2. EHR implementation can cost $10,850-$38,600 per physician with additional maintenance being about 20% of the start up cost3. Moreover, additional tests requested by the EHR system nationally could cost $3-$12 billion annually3. However, there are potential saving of $76 billion annually (at 90% adoption)2. Based on our research, we believe that EHR implementation was more of an expense than a benefit in the short term with potential for benefits in the long run. The benefits, however would accrue to the payers and consumers and not the providers. We propose that in order to drive adoption, the model for reimbursement should be switched to a fee-for-performance. This would allow for benefits to accrue more to the physicians.

Costs•$10,850-$38,600 per physician: including software, productivity loss, etc. (see figure 1)•Ongoing maintenance and upgrades: about 20% of initial startup cost3

•Additional cost of $3 -$12 billion due to more screenings by alerts and reminders produced from EHRs3

•Higher quality visits could lead to healthier population, hurting ROI due to fee-for-service model of reimbursement•Hard to compare EHR systems, possible expense of consulting continuously needed

Benefits•Average monthly revenue increased by 20% due to better billing practices•Savings of more than $76 billion per year including inpatient and outpatient care at 90% adoption (see figure 2)•Reducing adverse drug events could save 1 billion per year with CPOE7

•Better quality of patient care could lead to savings (1000-2000 per event avoidance)2

•Implementation of a full EHRs have potential of net savings of $86,400 per provider over a 5 year period2

•Opportunity to see and manage more patients.•Electronic messaging could serve as cheaper means of communication   

Background •The U.S. has the world’s most inefficient healthcare system, spending about $1.7 trillion annually2

•Medical records stored on paper are unable to measure quality and generate timely reports•Health information technology (HIT) shows potential to improve access, quality, and cost of patient care.•Electronic health record (EHR) systems display potential for major savings•Cost is primary barrier for EHR implementation•U.S. Federal Government has provided financial incentives, for providers that demonstrate all the criteria of meaningful use•Incentives not enough to inspire adoption

Purpose1.To identify whether EHR implementation will end up costing financially more than it benefits2.To identify the recipients of any costs or savings

1. Lorenzi N. M., Kouroubali A., Detmer D.E. and Bloomrosen M. (2009). How to successfully select and implement electronic health records (EHR) in small ambulatory practice settings. BMC Medical Informatics and Decision Making 9:15.

2. Hillestad R., Bigelow J., Bower A. Giorosi F., Meili R., Scoville R. and Taylor R.(2005) Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, and Costs. Health Affairs 24(5). 1103-1118.

3. Moore P. , “ Tech Survey: Navigating the Tech Maze” Physicians Practice 2008, http://www.physicianspractice.com/index/fuseaction/articles.details/articleID/1214/page/4.htm (Accessed 7/19/2010)

4. Clancy C.M., (2006) Getting to 'Smart' Health Care. Health Affairs. 25 w589-w592

5. Wang S.J. et al. (2003). A Cost-Benefit Analysis of Electronic Medical Records in Primary Care. Am J Med. 114 397-403

6. Goldzwelg, C.L. et al. (2009). Cost and Benefits of Health Information Technology: New Trends From The Literature. Health Affairs 28, no. 2: w282-w29

7. Subramanian, S. (2007). CPOE with CDS in Long-Term Care Facilities: Costs and Benefits to Stakeholders. J Am Geriatr Soc 55:1451–1457.

CONTACT INFORMATION

Kimberly Chen Email: Kimberly10587@aol.comPhone : (512) 468-6736

Robert R. Reza IIEmail: r.reza131@gmail.comPhone : (512) 767-8640

Fig. 1: Costs of an EHR system implementation per provider, by category. *information courtesy of reference5

Figure 1: Cost of EHR system (per Provider)

Figure 2: EHR Potential Efficiency Savings (In the U.S.)

  Lower bound Upper bound Software (annual license) $800 $3,200 Implementation $500 $6,000 Support and Maintenance $750 $3,000 Hardware (3 computers plus network) $3,300 $9,900 Temporary productivity loss $5,500 $16,500 Total $10,850 $38,600

Annual savings ($ billion)Mean Yearly

Savings ($ billion)Cumulative savings

by year 15 ($ billion) Year 5 Year 10 Year 15Outpatient          

Transcription 0.9 13.4 0.4 1.2 1.7 Chart pulls 0.8 11.9 0.4 1.1 1.5 Lab tests 1.1 15.9 0.5 1.5 2 Drug Usage 6.2 92.3 3 8.6 11 Radiology 1.7 25.6 0.8 2.4 3.3 Total 10.7 159.1 5.1 14.8 19.5

Inpatient           Nursing time 7.1 106.4 3.4 10 13.7 Lab test 1.6 23.4 0.8 2.2 2.6 Drug usage 2 29.3 1 2.8 3.5 Length of stay 19.3 289.6 10.1 27.6 34.7 Medical records 1.3 19.9 0.7 1.9 2.4 Total 31.3 468.6 16 44.5 56.9

  TOTAL SAVINGS 42 627.7 21.1 59.3 76.4

Fig. 2: Potential efficiency saving from implementing an EHR by category and includes inpatient and outpatient savings. Note: numbers are based on a 90% adoption rate for year 15 from initial adoption.

*information courtesy of reference2

Figure 3: U.S. National Healthcare Spending Projection

1400

1900

2400

2900

3400

3900

4400

2002 2004 2006 2008 2010 2012 2014 2016

Year

An

nu

al

Healt

h S

pen

din

g (

bil

lio

ns o

f d

oll

ars

)

Fig. 3: National healthcare spending projection. Black, blue, and red curves represent our current spending, 1.5% savings, and 4% savings spending projection, respectively. *information courtesy of reference5

Legend

Black-Current path

Blue- 1.5% savings

Red-4% savings

CONCLUSIONS

• Short term: high cost and none to low ROI for providers at best

• Long term: marginal ROI for providers that yield benefits that outweigh initial costs

• Benefits: mainly accrue to payers and consumers, not providers

• Fee-for-service model limits benefits for providers

• Switching to fee-for-performance could improve monetary benefits for providers

• Must integrate EHR into provider’s workflows to incur benefits

• EHR improves efficiency, workflows, and quality of care to patients

  

 

To acquire a higher adoption rate, a fee-for-performance model is needed because it would yield a higher ROI for providers. In switching to this model, cost, quality, and access will be enhanced for the consumer. Overall, electronic health record system implementation will result in short term cost but long term benefits that mainly are seen to the payers and consumers, not the providers.

Acknowledgements: Dr. Rick Nauert, Dr. Kimberly Smith, Dr. Diane Kneeland, and Dr. Leanne Field