As anticipated, the release of the proposed rules on “meaningful use” created quite a lot of conversation in the medical community. Physicians are realizing that the waiting is essentially over, and that the final version of the requirements will not lessen the onerous burden the government is placing on them in exchange for the possibility of a paltry $44,000. And don’t be intimidated by the government’s threats of penalties for not complying with its voluntary program. Not only are the penalties in the legislation quite small relative to the potential risk, but they also would not begin until 2015—if they are imposed at all. According to a recent interview reported in Healthcare IT News, David Brailer, M.D., former “Health IT Czar” and one of Dr. Blumenthal’s predecessors, “doesn’t believe that Congress will follow through with penalties and will either delay or phase them out.“
Last week’s EMR Straight Talk attracted a great deal of attention and elicited a number of interesting comments, some of which I would like to quote and respond to here.
Erin Goshorn, M.D., wrote:
“We have an excellent EMR in our subspeciality ophthalmology and ENT practice, which consists of 50+ providers. I thought that eventually EMR would increase efficiency and the extra time required to input data would go away. However, after 3 years of putting up with the inefficiency in my clinic created by EMR; I finally conceded. I now schedule 6 less patients a day and had to hire an additional skilled technician at 37,500 per year.”
Dr. Goshorn’s experience is typical of what I hear from physicians in a wide range of specialties. Although I don’t know the particulars of her practice’s finances, I did a little digging about the economics of the average ophthalmology practice. A decrease of 6 patients a day could easily represent a loss of $150,000 in annual revenue ($750,000 over 5 years), assuming that she sees approximately 40 patients a day and generates $1 million in revenue—and that’s before she devotes the additional time required to try to meet and report on the 25 meaningful-use measures.
Nick Orlowski pointed out:
“Great post, but you forgot a major additional cost. The costs you quote are accurate if the rollout and purchase work without a hitch. If you implement an EMR product, only to find out that it is the wrong product or doesn’t do what it has promised, you are out at least double your initial purchase cost, probably more!”
This comment alludes to the historically high failure rate of the type of EMR the government is encouraging physicians to adopt. Despite all the evidence—lack of landmark studies showing positive benefits to physicians, negative feedback on the government’s FACA blog, and discouraging comments submitted in the Voice of the Physician Petition, the government expects physicians to take the risk of proceeding down a path that leads—50%-80% of the time, according to the author of a recent landmark study—to a failed adoption attempt.
Another physician—a surgeon—challenged my financial analysis, charging that the meaningful-use requirements really only affect his time in office visits.
Since the bulk of his income comes from surgeries and other procedures, he maintained that I had overstated the impact. Unfortunately, this is a common misunderstanding of the economics of medical practices and ignores the impact of “leverage.” Office visits generate all other revenues—if you reduce the number of these visits by half, then your surgeries or other procedures, diagnostic tests, injections, etc. are also cut in half. Therefore, changes in exam-room productivity—such as the effect of trying to meet each meaningful-use measure—result in large changes in total revenue. Among the most highly leveraged specialists are orthopaedists, for whom every hour in the exam room generates approximately $1,000 in total revenue.
Steven Finch questioned:
“These #’s are terribly inflated and seem pulled out of thin air. I am curious how you attained them or what research you did to find them. I work with physicians who have implemented EMR systems in their practices everyday and they all agreed that not only are your #’s way off, your reporting is irresponsible at best. I would suggest going back to the drawing board and making another attempt.”
Actually, I would argue that if I erred, it was on the low side, since the numbers quoted do not include the cost of lost physician productivity. However, let me address Steven Finch’s allegations. Most of the numbers come from the government’s own published estimates or from industry (MGMA) data. To review, here are the numbers I used in last week’s blog:
| Capital cost to purchase point-and-click EHR: | $54,000 | 1 | |||
|---|---|---|---|---|---|
| Annual maintenance & training ($10,000/year): | $50,000 | 2 | |||
| Cost of reporting for 5 years (9 hrs/year of physician time): | $22,000 | 3 | |||
| Cost of additional staff needed to input required data: | $75,000 | 4 | |||
| Total: | $201,000 | ||||
1 The capital cost is stated in the CMS Proposed Rule on Meaningful Use, in the table on page 361, and includes all the acquisition and implementation costs.
2 $10K/year for annual maintenance comes from the same table, and includes ongoing training and upgrades that will be necessary as vendors change their products to keep up with the increasingly stringent requirements for “meaningful use.”
3 In the same table, the government estimates that it will take physicians 9 hours/year to report and document their “meaningful use” for the government. Using MGMA estimates of average physician revenue, this comes to approximately $500 per exam hour for primary-care physicians, and considerably higher for specialists.
4 The cost of additional staff time is an estimate—I believe a conservative one—based on the anticipated need for one staff member for every three physicians to input the information a physician would typically not input, at a cost of approximately $15K/year/physician. Even if you took this number out of the calculation entirely, the costs far outweigh the potential incentives.
Add in the cost of lost productivity (use Productivity Calculator to estimate), and it is clear that the government’s EHR program is a losing proposition for high-performance physicians.
Related posts:
I have been “paperless” for 6 years. For most of that time when I have complained about the cost and the increased physician time I have been ridiculed even at tha AMA level. The expense is astronomical and there is no way to recoup the cost. I have been in private practice for 35 years and EMR is the biggest mistake of my career. It is somewhat comforting that know others are evolving to my way of thinking on EMR. I feel this is the brainchild of the IT industry with little or no input from those actually using the systems. Thanks
I am wondering where you got your yearly maintenance quote. Our practice pays $6,000.00 per quarter for the EMR maintenance and $4,000 per quarter for the Practice Management software. $40,000.00 per year just for the maintenance. So the government’s $44,000.00 would of course be welcomed but would only pay the maintenance costs of a functionally usable EMR that interfaces with a billing process.
There is another huge “cost”, which is the creation and then electronic perpetuation, ad infinitum, of incorrect medical information. I have yet to find a patient encounter spit out by an EHR in which I could easily understand what was wrong with the patient. The automatically generated reports are often in a new language, “digmedgib”, for digital medical gibberish. I have read reports from “excellent” EHR systems (one of which is utilized by one of your sources quoted above) which contain disastrous errors created by a 0.5 mm slip of the mouse pointer and a click. This is what happens when two opposite diagnoses differ by one consonant and are adjacent in the pull-down list. We are trying to treat the patient but we are really doctoring the EHR.
I question use of the very term “Meaningful Use”:
See:
“Meaningfully Experimental Protocols and Interfaces to Nowhere: Nagging Questions On Healthcare IT Remain”
http://hcrenewal.blogspot.com/2010/01/meaningfully-experimental-protocols-and.html
Actually, I would argue that if I erred, it was on the low side, since the numbers quoted do not include the cost of lost physician productivity. However, let me address Steven Finch’s allegations. Most of the numbers come from the government’s own published estimates or from industry (MGMA) data. To review, here are the numbers I used in last week’s blog:
Capital cost to purchase point-and-click EHR: $54,000 1
Annual maintenance & training ($10,000/year): $50,000 2
Cost of reporting for 5 years (9 hrs/year of physician time): $22,000 3
Cost of additional staff needed to input required data: $75,000 4
Total: $201,000
1 The capital cost is stated in the CMS Proposed Rule on Meaningful Use, in the table on page 361, and includes all the acquisition and implementation costs.
2 $10K/year for annual maintenance comes from the same table, and includes ongoing training and upgrades that will be necessary as vendors change their products to keep up with the increasingly stringent requirements for “meaningful use.”
3 In the same table, the government estimates that it will take physicians 9 hours/year to report and document their “meaningful use” for the government. Using MGMA estimates of average physician revenue, this comes to approximately $500 per exam hour for primary-care physicians, and considerably higher for specialists.
4 The cost of additional staff time is an estimate—I believe a conservative one—based on the anticipated need for one staff member for every three physicians to input the information a physician would typically not input, at a cost of approximately $15K/year/physician. Even if you took this number out of the calculation entirely, the costs far outweigh the potential incentives.
Add in the cost of lost productivity (use Productivity Calculator to estimate), and it is clear that the government’s EHR program is a losing proposition for high-performance physicians.
I am a health care software professional. The numbers quoted above are highly inflated and misleading.
There are lot of small EMR companies who can provide you web based software for $250/month. The annual maintenance is the customer support cost which is not more than $5000/year.Training cost is once when new EMR is installed. Reporting cost is null. These report can be run by any administrative staff and can also be setup for automated running.There is no additional administrative cost for data entry this function has to be done even in a paper setting. In fact you can reduce staff and overheads by proper EMR implementation and usage.
I feel all the above facts are totally incorrect and inflated.There is an initial learning curve where the practice productivity will be reduced but with constant usage the productivity will be improved and practice efficiency enhanced.
To Koshy Thomas—-You did err on thew low side. You will NEVER financially recover from EMR. NEVER. I always thought the reason for technology was to make it work for you, but when you go “paperless” you work for it. LS
There is initial cost for implementing EMR or for that matter any software. There is a learning curve for any software. But if the EMR architecture, design, workflow management is right the ROI will be fully recovered in 5-7 years. In the current physician office setup there are cost and overheads that are not very obvious but there are capital cost to run any practice. Everyone tend to overlook the cost of the number of staff employed to due various mundane things like handling incoming calls to make appointments; inquire about lab results, calling patients to remind them about their appointments, calling labs for getting results and sending across orders, calling in medicine to pharmacy etc. These are few of the things that come to mind. All these functions can be automated and handled by software thereby reducing staff and improving efficiency of the practice functioning.
You can get web based EMR with no upfront cost just a monthly fee with the option of hosting for an additional cost. The annual customer support fees will be around $5000/year.The training cost will be one time cost with documentation for an updated features.Most software also have online help documentation.
Yes you can decide to buy fancy EMR solutions for which you will pay a good packet. At the end of the day you have to decide what is your budget, what are your minimum requirements and what is your wish list of features and then you have to make an educated intelligent decision. But don’t tell me you have to bust the bank to get an EMR solution that is simply not true….!
[From Evan Steele]
Koshy,
The #1 reason why physicians have not and will not adopt EMR systems en masse is because of the lost productivity stemming from the data entry requirements. There is not one landmark study by a venerable institution that concludes that EMR use is beneficial to physicians (note that there are many studies that outline the benefits to other stakeholders): http://srssoft.com/assets/files/DoTraditionalEMRsWork.pdf.
You mention great web-based products that are a fraction of the cost of some of the more expensive, traditional EMR packages. I have yet to see any traction in the marketplace with such solutions – notwithstanding the fact that it is 2010 and we are 15 years into Internet service offerings.
Moreover, studies have documented a 50-80% failure rate of point-and-click systems (most recently, a study reported in the Milbank Quarterly – http://www.milbank.org/quarterly/8704feat.html), and the evidence I’ve seen is that the success rate decreases precipitously below even that level when productivity-based, high-volume, high-revenue practices (e.g., ambulatory specialists) try to implement traditional EMRs. Meaningful use requirements only makes existing, difficult to use EMRs even more complex and onerous for physicians. The potential $44,000 in stimulus incentives over the next 5 years are dwarfed by the loss in productivity of using such systems.
I was asked recently by a friend why the government is so intent on forcing EMR on all physicians. Since EMR systems that currently exist can not communicate among each other typically (such as getting the patients lab and MRI results from whatever institution did the work – ideally even in the absence of the patient knowing where the study was done which is a frequent problem!), then the most important reason for the government to push EMR does not exist with current systems. In other words, improved communication among medical providers should be the real reason to push EMR, but it is not. Therefore, I can only conclude, as have others, that the primary goal of universal EMR systems is to increase and maximize government control over the practice of medicine. Otherwise, the government would accept that doctors actually have the patient’s best interest at heart, and we do what we feel is justified in regards to adopting EMR or not.