A Real Case for the Return on Investment of EHR Implementation

If there is one thing that there is no shortage of during the EHR implementation transition, it is cynicism. Much of this negativity is certainly warranted when providers are running into legitimate budgetary and staffing problems, but an even larger portion of the medical community seems to view speaking skeptically as a personal hobby. Perhaps this devout skepticism comes from a fear of change, but even more likely is that they think that the evidence for EHR ROI (return on investment) simply is not there.

Well, we have news for them: EHR ROI is real, and it is not isolated to just a few anomalies. There have been multiple studies confirming that some provider organizations benefited greatly from EHR implementation.

While we must acknowledge the real struggles providers are facing, we must also recognize collectively as a community that negative EHR implementation outcomes are not inevitable. To stir in this dose of much-needed positivity, here are a few examples of providers that genuinely saw EHR ROI within a reasonable time frame:

Reliant Medical Group

Hailing from Worcester, Mass. but with facilities throughout Central Mass., Reliant Medical Group was an early adopter of EHR Software Systems. After shelling out an astounding $24 million in overall costs, the organization says that it is already seeing tangible financial and administrative benefits.

Foremost, the more precise coding and documentation capabilities of EHR are credited with increasing their Medicare Advantage reimbursements by $2 million annually. They also saw a huge surge in their compliance rate for Medicare Advantage patients who had chronic kidney disease diagnoses. Within a three-year period, compliance for these patients increased from 20 percent to a whopping 80 percent.

Additionally, the time and cost of transcribing dictation has fallen significantly for Reliant’s centers — a full 63 percent, to be exact.

Reliant’s Larry Garber even touted that EHRs successfully made good on their promise to reduce medical mistakes. Looking specifically at his radiology departments, there was a consistent problem with the wrong tests being ordered. After customizing a one-click feature that would reveal the specifics of every test ordered, radiologists could vet the pending test requests and confirm or correct them before they were scheduled.

In total, the percentage of radiology tests requiring expensive ordering changes post-scheduling declined from 12 percent to four percent. This reduction saved both patients and providers resources, especially the radiologists who had more time to perform tests that were genuinely needed.

Small Practice EHR Wins

While not every provider has the budget to lay down a cool $24 mil on the table for EHR, many smaller pilot clinics were still able to budget for their EHR implementation properly and see some EHR ROI within a few years.

Here are some five-year case studies courtesy of Providers Edge:

●       OB/GYN of West Michigan saw a 65 percent return on investment after cutting six full-time-equivalent staff positions in transcription and nursing as a result of increased efficiency.

●       Nash OB-GYN Associates, hailing from Rocky Mount, North Carolina, saw a huge 71 percent reduction in both transcription and supplies costs.

●       Lakewood Family Medicine of Holland, Michigan enjoyed a 50 percent EHR ROI, with savings of $100,000 per year on reduced transcription costs alone. Administrator Beth Zandra even fully-endorsed the decision, saying that, “There’s no way my physicians would go back to paper medical records.”

●       One Dr. Jack Dekkinga had an unusually-glowing case for EHR ROI. While his costs for transcriptions and supplies fell just like the other study participants, his receipts also grew by 32 percent coupled with an 18 percent increase in total patient encounters. His small practice was able to achieve an astounding 240 percent ROI, allowing him to pay for the costs of his EHR system in just over five months.

Getting Realistic About EHR ROI

Not every provider organization will see the storybook gains described above, but they will also likely not endure the catastrophic losses bandied about by devout naysayers. The real point is to illustrate that losses are not inevitable.

In fact, one of the most comprehensive studies on the subject of EHR implementation found that small practices would recoup their losses after two and a half years, on average. After that, they could expect incremental gains in the years to come. While this timeline may seem drawn out for some, providers must come to grips that the expectations of EHR implementation are coupled to the promise of better efficiency and better patient care. Tangible, cash results thus may pale in comparison to the revitalized landscape that EHR promises in the long run.

If such idealism is not enough to float your boat, at least take comfort in the fact that significant Medicaid incentives can be had if you implement EHR sometime next year. Between incentive programs like these and the potential gains evangelized by those above, now is the time to create a serious EHR implementation strategy and adjust to what will inevitably color the future of modern medicine.

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