Disappointed With The ROI From Your EHR Investment? You’re Not Alone

Yet another study has been published showing the disappointing return on investment that hospitals are experiencing with their electronic health record (EHR) implementations. The new study, published in the Journal of the American Medical Association (JAMA), showed that the costs of administering billing and insurance-related functions may actually have increased following EHR roll-outs.

This is a blow to many hospitals that were lead to believe that their EHR implementation would lead to efficiencies and cost-savings on many fronts, including the billing function. However, as this article by Greg Slabodkin at Health Data Management discusses:

“Electronic health records were expected to reduce administrative costs for providers, but a study of a large academic healthcare system with a certified EHR system reveals that the estimated costs of billing and insurance-related activities were substantial and varied depending on the type of clinical encounter.

Researchers from Duke University and Harvard Business School estimated the billing and insurance-related costs for five types of patient encounters—primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, as well as inpatient surgical procedures.

According to the results of their study published February 20 in the Journal of the American Medical Association, the estimated costs of billing and insurance-related activities ranged from about $20 for a primary care visit to approximately $215 for an inpatient surgical procedure—representing 3 percent to 25 percent of professional revenue.

“For primary care visits, this translated to an estimated more than $99,000 of billing and insurance-related expenses annually for each primary care physician working in the system just to get paid,” states a separate editorial accompanying the JAMA study.

Overall, estimated processing time and total costs for billing and insurance-related activities were:

  • 13 minutes and $20.49 for a primary care visit.
  • 32 minutes and $61.54 for a discharged emergency department visit.
  • 73 minutes and $124.26 for a general inpatient stay.
  • 75 minutes and $170.40 for an ambulatory surgical procedure.
  • 100 minutes and $215.10 for an inpatient surgical procedure.

As a result, the JAMA editorial concludes: the study “suggests that, if anything, administrative time needed for billing has increased for physicians and other staff as EHRs have become more widespread.”

“We keep hearing about electronic health records and how they are supposed to improve the efficiency of hospital administration,” says study co-author Barak Richman of the Duke University School of Law and the Duke-Margolis Center for Health Policy. “We found that, as a general percentage of revenue, the amount expended on billing and administrative costs is just as high as it was before EHRs were adopted. Some people thought that EHRs were going to be the solution—and, they’re not.”

Read the entire article here: EHRs fall short in reducing administrative costs

As more evidence comes to light that EHRs are not the cost-savings systems that many hospitals once thought they would be, hospital administrators must find other ways to increase the value of their EHR deployments. EHRs are not going away any time soon due to the wealth of data they create and store, so other avenues should be explored to derive more value from them. One way to do this is to eliminate tasks that can be made redundant by EHRs.  For example, natural language processing tools can help turn transcription data into notes that need to be only verified instead of typed in from scratch.  Additionally, automated data capture systems, such as iRISupply, can provide high quality data by integrating RFID data capture technology directly into your EHR, eliminating the need to have clinicians re-enter supply and implant information into the EHR during hectic procedures.