Paul Roemer, a frequent and knowledgeable participant in the ongoing meaningful use debate, posed an interesting question on Twitter the other day. He tweeted, “If the cost of Meaningful Use is greater than the incentive check, at what point should you consider not meeting Meaningful Use?”
The answer to his question is that if successfully meeting and reporting on all the onerous meaningful use measures adds as little as 6 seconds to each patient exam for a high-volume specialist, compliance will eat up the entire $44,000 incentive over the course of 5 years. The productivity calculator below illustrates the mathematics for a typical (by MGMA data) orthopaedic surgeon.
(To calculate the breakeven for your own practice, you can input your personal volume and revenue information into the productivity calculator and see the value of your time in the office.)
This confirms what has become prevalent thinking—that many specialists will not participate in the government’s EHR program—and was discussed in a recent post by Vince Kuraitis, J.D. and David Kibbe, M.D.: “Is HITECH Working? Where’s Plan B? Congress and ONC need to address major flaws in HITECH.” They recognize that specialists, who are the physicians with typically higher incomes, “likely won’t be bothered with HITECH incentives, period.” Since the passage of the legislation, it has been clear to me that it was not designed with specialists in mind, and I have written about this subject in past blog posts—most recently in “Specialists: Square Pegs in the Government’s Round EHR Holes?”
While it is abundantly clear that a potential $44,000 is not worth the time it will take high-volume physicians to demonstrate meaningful use, physicians should not use the potential government money alone as the reason to consider the selection and implementation of an EMR. Physicians should adopt EMR technology because it will enhance their practice, and they should purchase the particular EMR that best meets their practice needs for efficiency, productivity, and enhanced patient care—without regard for the government incentives.
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I believe that if you were going to accurately look at the fiscal impact to a physician it would make sense to add the impact of reduced Medicare reimbursements to the formula. That is a very real cost of not demonstrating meaningful use of an EMR in the physician’s practice. The reduction increases annually as you fail to comply with the law.
It would also be prudent to add the potential bonus of being classified as an underserved market and receiving a 25% bonus, or $55,000 instead of the proposed standard amount of $44,000. Using your example above the physician would come out ahead. The bigger picture is that the complete fiscal impact of the decision to migrate to an EMR system must thoroughly explored.
[Evan Steele says]
Yes, it is important to look at the penalties starting in 2015. Note, however, that for the average physician, the penalties (if they are not delayed or eliminated) average less than the annual incentives so the analysis above still applies.
Nicely done. One of my hospital clients had already implemented EHR and CPOE–spent significant money. We looked at what additional cost it would take for them to meet MU. It was several million more than they would receive and it would use up most of their IT resources for 3 years, and still they would have no guarantee that they would pass the MU audit. On top of all that, they (and everyone else) will give away their business strategy and run their firm the way DC wants them to run it. What’s not to like?
Once again, that simplistic chart on projected revenue assumes that each of these 6 second blocks of time are additive when trying to project cost/benefits. It does not work that way in vivo.
Also, not to nitpick but I would disagree that nearly $1000/hr in exam charges is a reasonable estimate of E&M coding reimbursement. A new patient medicare visit is $60-80 for level 2 or 3 visits while established patients are $35-60. Many clinic patients in a surgery practice will also be within their global period and be non revenue producers as well. Based on your presumed clinic throughput and visit lenghts, it would be impossible to bill higher levels of service accurately or ethically. With all that in hand and assuming a mix of new/establish/postop patients your having to see nearly 20 patients an hour to come up to your $1000. That is not a credible figure no matter how productive you are and it will also lead to more lower level E&M codes being applied.
[Evan Steele says]
You maintain that I have overstated the revenue generated per exam room hour. 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 surgeries and 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 physicians are specialists, for whom every hour in the exam room generates approximately $1,000 in total revenue.
Glad I am not a prinary care doctor if a patient on Medicare, new to the practice, can walk in and have 65 years of medical history reviewed, receive an examination, treatment and plan and only require a Level 2 visit.
None the less I suspect that is why my FP cousin dropped off EVERY insurance 15 months ago.
Thanks for an instructive dialog (=thinking together) on an important topic. These conversations suggest the range and complexity of decisions that will be made by Providers with respect to MU. More critically, those decisions will require alignment (in a Provider organization and often in an extended enterprise)in order to achieve successful implementation.
Many other industries have experienced – fundamental transitions in process and economics, supported by information technology. Healthcare can benefit from adapting and applying some of those lessons in change leadership, decision-making and alignment.
Illustrating the implications of decisions visually, quantitatively and interactively – part of what can be called ValueDialog – can play an important role in understanding, making thoughtful choices and implementing effectively.
After further consideration I think we must consider the very real possibility that there is no ROI for Meaningful Use. The standards for Meaningful Use are arbitrary. There was no mandate in the development of those standards to create standards which when met would yield an ROI. Even had there been, the ROI would naturally differ by provider, both in terms of whether the ROI was positive and its numerical value. Hence, any positive ROI may be more out of chance, and from having fitted the data to the desired ROI rather than measuring the ROI against its true impact.
I am curious as to how does one factor in the benefits of an implementing an EMR. As an example, less errors and less time spent searching for history must surely result in some benefits?
As I understand, aren’t there potential medicare cuts involved? That has to be factored into the equation as well.
[Evan Steele says]
Yes, there are potential Medicare adjustments in the future. It is important to note that they are not scheduled to begin until 2015, they are a relatively small percentage of Medicare reimbursements, and there some industry thought leaders (David Brailer, M.D. and David Kibbe, M.D.) who believe that the penalties will be either phased out or eliminated when the time comes. Also, the meaningful use requirements become more stringent and onerous between now and when the penalties are set to begin, which will make the cost of the extra data entry far greater than the penalties.