Preserving Physician Income in a Low-Margin Environment: EMR Strategy

A frequent concern I hear in my conversations with physicians is that they are challenged by increasingly harsh economic pressures. Healthcare reform, lower—or at best stagnant—reimbursement rates from government and private payers, and the higher proportion of lower-paying Medicare patients are reducing or capping practice revenue. At the same time, overhead costs are escalating unrelentingly, since employees still expect raises and other operating costs continue to rise. While the common perception is that physicians are not businessmen/women, they are in fact running small businesses; and now, more than ever, they need to focus on ways to maintain business viability in light of lower margins.

Physician Income Calculator

The above graph illustrates the economic challenges. Click on it to enter your own practice data and assumptions concerning anticipated growth or decline in reimbursement and expenses, and observe the effect on physician income—the green line. Given that physicians have no control over reimbursement rates, the only way to positively impact that green line is by effecting fundamental changes to practice operations—and the right EMR is critical to this end.

First, it is imperative to significantly reduce overhead—the orange line. Government programs that may, or may not, deliver short-term financial incentives do not address cost structure. What is needed is an EMR that delivers sustainable and significant reductions in the staff-to-physician ratio and more efficient management of all resources—depressing the orange line. Increasing revenue—the blue line—requires increases in physician productivity and patient volume. The challenge here is to wade through EMR marketing hype to identify the EMR that will actually shift the orange line down and the blue and green lines up.

EMR Purchase: Caveat Emptor

Physicians practice evidence-based medicine. They base clinical decisions on evidence gained from scientific research and experience. As patients, this is the source of our confidence in their diagnoses and treatment plans for us. Unfortunately, an alarming number of physicians do not apply evidence-based decision-making to their EMR purchases. This explains the 50–80% EMR failure rate documented in the Milbank Quarterly and cited by the AMA.

Recently, I’ve spoken with several ophthalmology practices that are struggling under the weight of unsuccessful EMR implementations—many of these situations would have been averted by asking the right people the right questions at the right time—before signing the EMR contract. Let me share a few examples of how aggressive due diligence uncovers important facts:

Buyer BewareAn ophthalmology practice purchased an EMR from [Vendor 1] based on its ad stating that nearly 500 ophthalmology practices use a [Vendor 1] product. Had the physicians asked for the names of 10 ophthalmology practices of their size that use this vendor’s EMR, they would have learned—by the lack of response—that most of the 500 practices use the vendor’s practice-management system, not its EMR. Don’t fall prey to deceptive marketing.

Beware of references with vested interests. For example, a physician would never know that the reference for [Vendor 2] has an ownership interest in the vendor’s company. Not surprisingly, the reference physician described the EMR as “excellent.” It was only a subsequent blog comment from another physician in the practice that revealed that, after 3 years, she still schedules 6 fewer patients each day and has hired a skilled technician to assist her, adding $37,500 per year in costs.

Another practice made a visit to [Vendor 3’s] reference site and learned that the physicians in the practice are, in fact, using the EMR. If they had probed further and asked about staffing, however, they would have learned that instead of 8 scribes, this practice now employs 24 scribes to handle the necessary data entry—two for each ophthalmologist (instead of one before the EMR adoption), and one for each optometrist (when the optometrists had never needed any scribes at all before the EMR).

It’s equally important to randomly select physicians to call. Do not limit your conversations to those physicians hand-picked by the vendor—other physicians in the practice will always take calls from colleagues. Ask each physician how many patients he or she sees each day now as opposed to before EMR implementation. Within the same practice that purchased [Vendor 4’s] EMR, physicians using the EMR successfully are those who see only 25 patients per day, while the ones who see 60 patients daily do not use it because of its effect on their productivity.

If you apply the same due diligence and evidence-based decision-making to your EMR search that you do to treating your patients, you will have the information you need to ensure that the EMR you select will be the right EMR for your practice.

EMR Selection: How to Uncover the Truth

Why are a growing number of practices considering replacing their EMR, or even de-installing it altogether? Most likely because they made their purchase based on a checklist of features and a slick demo, rather than on a careful analysis of actual usability. Physicians who are trading in their EMRs have realized that the features that seemed so attractive at the outset are meaningless when physicians don’t use them.

There are two kinds of features: The first are the glitzy bells and whistles that, while impressive in a sales presentation, are too time-consuming and difficult for physicians to use on a regular basis in the course of seeing patients. Such features are the result of sales-driven—rather than physician-focused—software development efforts. These are the features that one can easily check off in a Request for Proposal (RFP), the limitations of which I discussed in another EMR Straight Talk post. The more important features—those that create usability, e.g., speed, ergonomics, a unified desktop, etc.—are much harder to assess without actually using the EMR in a practice environment. Other than by trial, you can only evaluate usability by speaking with actual users, which makes it absolutely critical to make the best use of EMR references. The following are my top ten suggestions for maximizing the value of client references:

1. Take command of the process yourself—do not let the vendor control which practices you visit and with whom you speak.

2. Ask the vendor for—and insist on—more than just a few references to practices in your specialty, along with a significant sample of practices that are a similar size to yours. (In EMR References: Cast a Wider Net, I suggested asking for fifteen.) Unless your practice is located in a very remote area, you should not have to travel a great distance to find a reference site. Be leery of large, national EMR companies that only offer a limited number of references in relation to the number of clients they claim to have.

3. Identify some references on your own by networking with colleagues in your area, at your hospital(s), through professional organizations, or on listservs. Contact these practices directly. You will enhance your chances of getting balanced information if your sources are not limited to the vendor’s hand-picked, successful clients.

4. Involve both administrators and physicians in the site visits. Physicians must get first-hand feedback from other physicians to determine how—and if—the system could be used effectively in their own practice.

5. Make sure your physicians observe the client’s physicians using the EMR. They should speak with more than one physician at the practice to make certain that all, not just one, of the physicians are successfully using the system. Conversations with randomly selected physicians are most likely to yield reliable feedback.

6. Investigate the impact on physician productivity by asking physicians how many patients they saw per day before implementation, how much they had to cut their schedule back during implementation, and how many patients they see currently.

7. Be concerned if the vendor’s representative insists on being involved in every conversation with the reference. People are hesitant to make negative comments in the presence of the vendor for fear of repercussions.

8. Ask questions such as: “What EMR features did you expect to use that you are not using, and why not?” or “How do you document patient visits?” to elicit valuable information.

9. Ask the practice manager and/or physicians if you can call them again if any other questions come to mind. Get e-mail addresses and follow up as needed.

10. Devote a significant amount of time to the process.

Controlling the reference process will increase your chances of a successful EMR adoption. In the absence of EMR reform protections and specialty-specific vendor satisfaction ratings, it is up to you to protect your interests by conducting thorough due diligence.

Browser-Based vs. Client-Server EMRs: Productivity is King

Last week’s blog evoked some spirited comments, to which I will respond collectively. I encourage you to keep this conversation going by continuing to share your thoughts on this clearly hot topic.

First, let me clarify some terminology, so that we are all on the same page. Some responses to last week’s post confused browser-based applications with hosted ones. Any application can be hosted—the server can reside anywhere. However, software that runs by opening a browser (like Internet Explorer) and going to a website cannot possibly deliver the speed and crispness afforded by software installed on a PC.

There is no question that there are some advantages to browser-based applications, as was pointed out by readers. A few of these are indisputable, while others are debatable, but the overarching issue is the two models’ very different effects on physician productivity. Rather than debate the merits and drawbacks of the various alternatives, I refer anyone interested to “The Evolution of the Productivity-Focused EMR User Interface,” a white paper that explores those issues and suggests ways to overcome the respective drawbacks.

No matter how you balance the arguments in favor of one approach or the other, the fact remains: there is an undeniable difference in impact on physician productivity. This is something EMR vendors do not want to discuss and Wall Streeters do not take into account, but physicians need to consider it carefully. I’ve talked about productivity many times because of its critical importance to high-performance physicians, particularly high-volume specialists. (See the EMR Straight Talk posts on healthcare reform and government incentives.) A 30-second productivity differential per patient visit can allow a 3-physician practice to generate an incremental $700,000 in patient revenue over 5 years. For a 30-physician practice, the incremental difference climbs to $7 million.* This impact dwarfs the IT-related savings delivered by browser-based applications.

* These results use the Productivity Calculator to estimate the value of 30 seconds for each physician, assuming: 125 exams/week; 24 exam-room hours/week; 47 weeks worked/year; and revenues of $1.1 million/year.

Which Is Best: Client-Server EMR or Web-Based EMR?

Three things initially attract people to web-based EMRs over client-server EMRs: they are easier to deploy and upgrade, demand less IT support, and require less hardware. While it is true that web-based deployment and upgrades are easier, client-server technology actually delivers far superior benefits and long-term cost savings on the second two criteria.

For a start, the IT support argument ignores the significant trade-off between physicians’ time and IT staff time. Physician productivity is a crucial part of any practice’s bottom line, which amplifies the limitations imposed by EMRs whose architecture relies on the Internet. Anyone who’s compared the speed and performance of PC-installed Outlook with Outlook’s Web mail accessed through Internet Explorer knows that client-server software affords a richer, crisper user interface that outperforms browser- or web-based software in terms of the number of clicks and the ease of use. Gaining just 30 seconds of productivity per exam with a fast and robust client-server solution can generate an additional $50,000 per year or more for high-volume specialists.

Internet lag/latency can also be very costly, particularly during the “Internet Rush Hour” when millions of teenagers come home from school to play online games, view YouTube videos, and communicate with each other on Facebook. This may result, over the course of a typical patient exam, in repeated several-second delays between the physician’s web-based EMR and the server where the patient’s data exists, increasing the time it takes to pull up patient information, make a prescription, retrieve a document, or display an image. These protracted, productivity-sapping delays can have a significant impact on revenue.

When it comes to hardware, web-based vendors tout their cost savings by claiming that all you need is a computer with an Internet connection to be up and running. This is not quite true—like all client-server offerings, a web-based EMR requires exam-room PCs, tablets, and laptops, as well as computers at the nursing stations, a wireless networking infrastructure, and a Windows server to manage logins and network security. In fact, the only difference in hardware between the two solutions is that the client-server solution needs an in-house, plain-vanilla Microsoft Windows server, which costs just a few hundred dollars per year per physician when amortized over the life of the server. In contrast, practices using web-based EMRs must absorb the frequently exorbitant fees that are built into the subscription model to cover the cost of the web-based company’s sophisticated data center. Over the long term, a client-server offering often costs far less than a web-based subscription offering, and a well-designed client-server EMR always delivers productivity-enhancing benefits that save physicians both time and money—something they sorely need in an era of lower reimbursements and higher patient volumes.

EMR References: Cast a Wider Net

Client references and site visits can be a rich source of valuable information when you’re shopping for an EMR—but only if approached critically and after conducting your own due diligence. The graph below illustrates the limitations of relying on vendor-supplied client references to make an informed EMR purchase decision.

Impact of EMR on Physician Productivity

This graph represents the effect of EMR adoption on physician productivity, given the acknowledged 50–80% failure rate of traditional EMRs—specialists being on the higher end of the range. Immediately upon adoption, physicians experience a significant reduction in the number of patients they can see, and over time, they hope to regain their productivity. Some are able to achieve their pre-EMR levels, and a small number see an increase above that level—the latter are the physicians in the orange-shaded section. These are the physicians whom vendors will identify as references and whose practices will be offered for site visits.

Every vendor will have a few good references and can take potential customers to visit a “show site” client, but this is not necessarily representative of the experience of the majority of users—the experience that you can likely expect.

If this graph instead portrayed the results of a clinical trial for a new drug, would a physician prescribe this medication based on the fact that 100 (of the 1,000) patients in the study showed positive effects? Clearly not!

Ask the vendor for—and insist on—at least 10 to 15 references of practices in your specialty and at least a few that are close in size to yours. If a vendor cannot provide this, there is reason to question whether its EMR is right for your practice. Call a physician of your choosing in the reference practice(s)—selecting at random from the group’s website is most likely to yield an objective evaluation. Don’t be fooled by one reference, one hand-picked physician, or one “show site” visit.

EMR Adoption: Why Are You Still on the Fence?

A growing number of physicians—particularly specialists—are no longer on the fence when it comes to the government’s EHR incentives. As evidenced by a recent spate of articles and blogs—one of the more compelling ones being “Is HITECH Working?: Key Physicians Will Sit on the Sidelines (At Least for Now)”—they realize that the costs outweigh the benefits. Physicians have decided that they:

  • Will not buy the type of EMR that is difficult to use and has not worked for other physicians in their specialty;
  • Will not risk the costs of a failed implementation;
  • Cannot tolerate the decrease in productivity—seeing fewer patients and generating less revenue;
  • Have established as a priority improving the quality of patient care they deliver, rather than collecting and reporting data that the government wants;
  • Cannot afford to take on unnecessary additional administrative burdens in the face of declining reimbursements;
  • Are not worried about potential penalties that will be relatively small, if they are even imposed at all; and
  • Are not interested in the government’s program, the benefits of which accrue primarily to other stakeholders, and not to their practice.
So why are these physicians, who have determined that government incentives are not relevant or achievable, still on the fence about adopting an EMR solution that will deliver measurable benefits? Staying with paper charts is not a good business strategy because there is nothing more inefficient!
  • The costs associated with the excess staff needed to manage these medical records are massive and wasteful—these positions can be eliminated or the employees can be more effectively used in revenue-generating or patient-care roles.
  • Paper charts hinder practice growth because adding physicians requires a proportional increase in support staff—medical records, billing, nurses, and medical assistants—and because physicians can’t see more patients without lengthening their work hours.
  • Slow responsiveness to primary care physicians limits referral volume.
  • Profitability is further affected by billing bottlenecks that delay revenue collection.
  • The chaos associated with trying to manage paper charts has a damaging effect on staff morale and creates rampant frustration among patients, physicians, and staff.
  • Paper charts are a malpractice nightmare—prescriptions are not consistently documented, orders are not easily tracked, and medical decisions are often made without complete clinical information.

You cannot afford to maintain the status quo.

Physicians can transform their practices without the government—there are excellent EMR solutions available, such as the hybrid EMR. It’s time to become digital. It’s time to get off the fence!