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The Economic Effects of EHRs

By April 2, 2013Commentary

Okay, so in health care we are embarked on a variety of journeys to unknown destinations, one of which is the good ship Electronic Health Records.  Tens of billions of tax dollars are being spent to encourage the acquisition and deployment of these systems by providers.  Where are we going to end up–at the port of High Quality/Low Cost or elsewhere, perhaps in the dive waterfront district of some third-world nation.  Research published in Health Affairs looks at the potential impact on the providers themselves.   (HA Article)   The research is based on a survey of 49 community medical practices in Massachusetts.  The authors used the data to ascertain likely five-year returns on EHRs for the practices.  The average physician was estimated to lose about $43,700 over the five years, but much of that loss might be attributed to failure to use the systems to maximize revenue or because the practices continued to maintain at least some paper records.   Only about a fourth of the medical groups would end up with a positive return on investment in the five years and 14% more practices might show a positive return if they received the full federal meaningful use incentive payment.  Primary care practices fared a little better than specialty ones and large practices (more than five doctors) had somewhat better returns than did smaller ones.  Practices which improved revenue did so by seeing more patients as a result of greater efficiency and improving the coding in their billing process, which led to fewer rejected claims and higher reimbursements per claim.  Please note that the last item is a very likely effect of EHRs, which will increase total health care costs unless reimbursements are adjusted, as CMS does now, for the coding behavior changes.  But the general lack of a positive return helps explain why there is so little enthusiasm among physicians for electronic records and why their opinions about them have actually turned more negative recently.

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