Back to EMR basics

by Ben Lapscher

Electronic Medical Records (EMR) were created with two basic goals: 1) To improve profits through automating patient information handling 2) To minimize mistakes and reduce physicians and patients risk. This has allowed physicians to improve workflows and processes and ultimately provide better patient care.

These used to be the main drivers for EMR adoption since its inception in the early 60's through the mid 2000's. Though still a significant investment, EMR systems provide tangible benefits that broadly justify the money and time required to fully implement them. A well executed EMR application can save thousands of dollars in transcription and storage costs and increase the billing through a more accurate coding.

Despite the value provided by EMR systems, adoption among private practices still remains low, estimated to be close to 17% by the end of 2008. The main reason is the upfront costs required for acquisition and implementation of EMR technology. Lab and hospitals donations have helped lower the burden, financing up to 85% of the software and services costs.

In early 2009 the government approved the Health Information Technology ACT (HITECH) which provides incentives for EMR adoption up to $44,000 per physician. If you consider an upfront EMR investment close to $20,000, physicians not only can pay their investment back, but they will actually profit from these incentives. This does not take into account the inherent value from EMR adoption.

Despite these attractive economic incentives, adoption is not moving at a faster pace. Logic suggests, physicians should be lined up to implement their EMR's, as Cash For Clunkers incentive is doing for the auto industry.

One explanation is that despite the attractive return on investment, physicians are still concerned about the initial operational disruption that EMR implementations cause. Some may be still be concerned of changing the way they have been functioning for many years. The third explanation lies, in my opinion, in the incentive themselves. In some cases, instead of accelerating adoption it may slow it, causing an opposite effect than the originally planned.

In the case of donations, some practices may delay their decision waiting for a best offer from the participating donors. Law allows donating up to 85% of software and services, however not all donors offer this percentage. This creates some sort of bidding process in which the winner usually is the highest bidder, delaying the implementation. In the case of HITECH, the incentive may be causing unexpected delays due to unclear regulations like the definition of "meaningful use" required to qualify for the incentives. In other cases, some practices may be skeptical of the viability of the program, or are expecting changes in the regulations that will yield an even greater reward.

As a result many practices have adopted a "Wait and See" position disabling the quick EMR adoption effect the incentives were designed for. The pursue of the "best deal or conditions" is delaying capturing the benefits of automation. In a sense, it could be compared to the individual that is waiting to buy a computer at the lowest price. Since the price keeps decreasing every month, he keeps handwriting and mailing letters instead of enjoying the advantages of email.

All these elements have created a distraction that tends to minimize the intrinsic benefits that an EMR brings to medical practices. So how should practices deal with this dilemma?

In my opinion, physicians should go back to the basics of EMR. An EMR application provides enough value by itself to justify the prompt adoption. Any incentive that comes on top of it will be welcome, but should not delay the automation process. We estimate that every month a five physician practice delays its decision, leaves close to $25,000 on the table in potential costs savings and increased revenue. Sometimes good is better than perfect, especially when physicians can provide better care to their patients and improve profits for their practices.

On the other hand, when the late majority of practices decide to automate, there will be a backload of implementations and the good EMR companies won't be able to satisfy the demand explosion. Your practice could end up having to wait a longer period and even miss some of the incentives deadlines or install a poor solution.

In summary, EMR provides sufficient value by itself, waiting too long could be a very risky strategy for your practice.