EHR’s in small practices

The September/October issue of Health Affairs is devoted to Health IT. One article (The Value of Electronic Health Records in Solo or Small Group Practices) is one of the first to examine EHR’s in small office settings. The top-line conclusions are reasonably bullish: payback comes in 2.5 years and payoffs are substantial after that. But the details are a bit less sanguine:

  • Startup costs average $44,000 per FTE user, with ongoing costs of $8,500 per year per FTE user
  • Practices don’t tend to use their EHRs for quality improvement initiatives. (Only 4 of the 14 practices created lists of patients requiring services, e.g., diabetics overdue for a glycosylated hemoglobin test)
  • More than half of the $33,000 per year financial benefit is from “increased coding levels” (i.e., charging payers more for work that was being done already)
  • Three of the 14 practices profiled had major transition problems, mainly related to connecting their EHR’s and practice management systems. “One had no billing or revenue for three months, another had no revenue for ten months (and nearly went bankrupt). A third had to redo its billing for the first six weeks after implementation and later endured a complete system crash that resulted in total loss of data and several weeks of providing care with no computer access or paper charts”

The authors generated their findings from in-depth looks at 14 practices that were using PMSI’s Practice Partner software or A4. They describe some limitations to their approach that imply that the financial benefits may be overstated: data are self-reported and practices that participated in the study may be more successful than average.

I’d also point out that the initial list of practices was supplied by A4 and PMSI. At a minimum that eliminates any practice that hadn’t fully implemented the software, and I wouldn’t be surprised if the vendors also withheld names of disgruntled customers. The practices that agreed to participate likely did so to demonstrate how impressive their implementations were and also wanted to justify the large expenditures that they’d made.

The authors (Robert H. Miller, Christopher West, Tiffany Martin Brown, Ida Sim, and Chris Ganchoff) are to be commended for making progress in laying out the case for EHR’s for the many smaller practices that are trying to figure out the economics of adoption. It’s also a wakeup call to those who assume that quality improvement initiatives are an automatic byproduct of EHR adoption.

September 19, 2005

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