As many readers are aware, the 2008 HITECH act included a $44,000 incentive for any qualifying physician who implements an approved EHR and puts it to “meaningful use”. The tenets of meaningful use are mostly known* but the final list is not due to be published until this Summer. Our senior editor, Iltifat Hussein is working on more detailed analysis as part of his MPH program but two published analyses shed a little light, or at least numbers, on this question.

What many people, myself included, wondered is where did this $44,000 number come from ? It turns out that it came out of a single published paper which surveyed the implementation costs of an EHR, averaged across fourteen family practice groups [Miller, et al, Health Affairs, 2005] and arrived at an average cost of $44k.

Aside from the marvel of setting far-reaching national legislation on such a small sample size, the next question is what is the financial benefit of implementing an EHR and is there a business argument in favor of it ?

According to Miller et al, the average annual financial benefits were $33k per physician per year. This was split roughly equally between savings in transcription costs and reduced workforce and increases in revenue due to improved charge capture and ability to charge more per episode (“upcoming”), feasible due to improved documentation with EHRs.

Louis McIntyre detailed one orthopedic group’s experience with EHR implementation in 2008. Among the many important findings in this paper was that the costs of implementing an EHR were paid for within 4 years of installation. Following that, there were ongoing yearly savings of $15k per surgeon.

The costs of implementation included both the expenses related to hardware and software as well as training of staff, converting old charts and time spent by physicians adapting their workflow.

McIntyre reported expenses of $44,844/surgeon, rising to $62,733 per surgeon when interest costs for the 5 year amortization were included. Among these expenses were the increased yearly costs of hardware and software which rose from $5k to $12k per surgeon.

Both studies emphasized that savings were only fully realized once physicians adapted their workflow to use of EHR. In particular, this included creating physician-specific templates to document their most frequent encounter types. Although reference templates are provided, Miller et al found doctors worked longer hours for average of 4 months after adoption and practices took, on average, 26 months to fully integrate EMR.

McIntyre reported that the highest workflow efficiencies were obtained by physicians who had highly refined templates that allowed for quick point and click filling of encounter forms. Although developing these templates was very time consuming, in the end his group found that these templates “speed workflow dramatically” and were faster than dictation.

McIntyre also discussed the physical aspects of integration. Their group tried workstations in each examination room as well as mobile tablet computers and settled on workstations located between exam rooms. They found the first two to interfere with patient interaction.

It is interesting that these two papers, analyzing physicians in two very different specialties, arrived at roughly similar numbers and conclusions – that there is a quantifiable financial advantage to adopting an electronic health record. To this, one can also add the potential benefits of an EHR such as simplifying intraoffice communication, on-line ordering of medicines as well the increased probability of surviving a Medicare practice audit.

Despite this, there is a real concern that the rate of adoption of EHRs by physicians (“ambulatory EHR”) will not dramatically rise despite the large incentives offered. This may be due to the uncertain financial climate for physicians as well as uncertainty whether physicians will be able to arrive at “meaningful use” and receive the promised HITECH incentive. We will learn more over the next two to three years how physician practices decide to weigh these factors.

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*Currently, the first 10 (of 25 items) of Stage I of meaningful use will include

  1. Use computerized physician order entry (CPOE)
  2. Implement drug-drug, drug-allergy, drug-formulary checks
  3. Maintain an up-to-date problem list of current and active diagnoses based on ICD-9-CM or SNOMED CT
  4. Maintain active medication list
  5. Maintain active medication allergy list
  6. Record demographics
  7. Record and chart changes in vital signs
  8. Record smoking status for patients 13 years and older
  9. Incorporate clinical lab-test results into EHR as structured data
  10. Generate lists of patients by specific conditions to use for quality improvement, reduction of disparities, and outreach

(from Medical Society of Virginia’s website)