Readers Respond: The Exorbitant Cost of Meaningful Use
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
- Meaningful Use: Hype and Misinformation Still Abound
- The Meaningful Use Folly
- Here’s Proof: Your Time is Worth More Than You Think
- Meaningful Use Rule: Initial Comments Set the Tone
- The High-Performance Physician
6 Responses to “Readers Respond: The Exorbitant Cost of Meaningful Use”
Lee Schoeffler MD - January 14, 2010
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
Merri Michaels - January 14, 2010
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.
Sandra Brown MD - January 14, 2010
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.
MedInformaticsMD - January 14, 2010
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
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