ELECTRONIC MEDICAL RECORDS IN DOLLARS AND CENTS June 1, 2010
Posted by jaxncmd in EMR in the Financial Office.Tags: cost, electronic medical record, electronic medical records, EMR
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As this title suggests, the topic of this post is going to be my actual costs for electronic medical records over the years. I have purchased two EMR systems in the last ten years and have been using my current system for six years. I am going to avoid naming the particular systems in order to keep this as a general discussion.
As I indicated in my previous post, when you are talking about the cost of electronic medical records systems, you need to be prepared for some “sticker shock” as these are big ticket items. These systems are typically software purchases, although some companies will bundle it with the hardware purchase, and many of these companies will have other more specific hardware that needs to be purchased through them as it cannot simply be bought at the local Best Buy store. When you purchase an EMR system, however, the main purchase is actually the software itself, and then typically yearly purchases of provider licenses and technical support.
To move on to my personal experiences, I will now reveal just how much I have spent (wasted!) on electronic medical records over the years.
I purchased the first EMR system a little over ten years ago and it was a software package alone. The system represented an electronic version of the typical paper medical record, and included drop-down menus for the HPI and stored menus for things such as physical exam and treatment plans. It did not have a scanning option and did not interface with the billing software.
I researched this company and its system before I purchased, and it seemed to be positively reviewed with a good reputation. The system cost me almost $19,000 that was financed as a four-year lease. I used this system for about 2 1/2 years before I finally scrapped it because of repeated software difficulties, lack of more significant customization, and poor technical support.
This system was a purely software package and did not include any hardware. Fortunately, the system was able to be run on a desktop computer and did not require the purchase of a server. That being said, you have to remember that this was ten years ago, so the desktop computer that met the system requirements for the software cost me an additional $3000. Therefore, my total cost for this system was about $22,000!
Like most physicians, I work hard and make a decent living, but I certainly did not have $22,000 to waste, and definitely could have found a better use for this money. This experience was certainly very costly and made me much more cautious when I decided to even consider purchasing a second EMR system.
Given the issues that I had with this first EMR system, I was not necessarily surprised to find that the company filed for bankruptcy a year and a half after I ditched using the system and went out of business. This point regarding the fate of that EMR company leads me to a great concern that I currently have regarding the over 300+ EMR software vendors out there today, and it is a significant topic that I will eventually address in a later post.
As I already indicated, despite that $22,000 screw-up, I still believed in electronic medical records and eventually purchased a second EMR system, which I have currently been using for about six years. I have been pleased with this system and overall have been satisfied with the company’s support. This EMR is a client-server system and I purchased it as primarily a software package. I then went out and purchased my own server and desktop/laptop computers, although there was some additional hardware that needed to be purchased through the company.
The cost of this second EMR system that was directly purchased from the company totaled over $40,000, and this was able to be financed through a lease. When I started with this second EMR system six years ago, the cost for the server and desktop/laptop computers was about $17,000. The initial capital cost for this second EMR system, therefore, was approximately $57,000. Since the system has been in place, the yearly license and maintenance support is about $4000, although certain technical support situations may incur additional charges.
As indicated in my previous post, the federal government is actually estimating the initial capital costs for installation of electronic health record systems as part of the HITECH program at $54,000 per provider. Based on my own personal experience with this second EMR purchase, I feel that this estimate is reasonable; although my purchase was six years ago and I have not priced any new systems recently. From my discussion with other physicians who have purchased EMR systems more recently, however, I feel that my costs are typical. Some of them have actually indicated that my costs are a little lower than what they have experienced.
I would also add a bit of a disclaimer regarding my ongoing yearly costs for the current EMR system. The $4000 license and support fee is for the EMR company to support their software product, and this does not include local IT support. Fortunately, I enjoy computers and technology, and I have been able to provide the local IT support myself. My colleagues, however, indicate that they have additionally spent several thousands of dollars a year for local IT support, beyond the licensing and EMR software support costs.
As I indicated toward the beginning of this post, electronic medical records are a big-ticket item and represent a major financial investment for a small medical practice. I hope that by revealing the actual “real-life” dollar amounts my electronic medical records purchases have cost me over the years, this will be helpful to my fellow providers as they shop around for their own EMR systems. Electronic medical records cost “major dollars”, not just for the initial purchase, but in the ongoing cost for yearly support, for potentially as long as the practice is in business. I hope that by providing my financial figures that my fellow providers will be able to shop wisely, spend their money prudently, and avoid a “lemon” like my $22,000 mistake.
Now that I have put the price tag for electronic medical records on the table, given how much this is going to cost, there is one question that a lot of providers who currently do not have an EMR system are asking: “why do I need to buy one?” I will answer this question with my next post.
THE COST OF ELECTRONIC MEDICAL RECORDS: SHOW ME THE MONEY! May 28, 2010
Posted by jaxncmd in EMR "Hot Topics", EMR in the Financial Office.Tags: EHR, electronic health records, electronic medical record, electronic medical records, EMR, incentives, medical practice, physician
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I hope that the title of this post got your attention, but I didn’t just use it because it’s catchy. I used this title because the current environment in which electronic medical records systems is being promoted makes it sound like the “money tree” is in full bloom.
If you look at the websites for the EMR vendors, you will almost universally find references to the government financial incentives right on the home page, typically in bold print. The marketing for EMRs also includes things like 0% financing and “there’s never been a better time to buy”. Dr. Blumenthal, the National Coordinator for Health IT, even recently blogged that one of the reasons that physicians should adopt electronic health records is because “the federal government is making a once in a lifetime, never to be repeated, offer”.
With all of these claims out there, it feels like you’d almost have to be an idiot not to buy an EMR system at the current time. Unfortunately, all of these claims make it feel more like a late-night television infomercial for a brand-new system for selling real estate than the significant investment in a piece of equipment for your medical practice.
I do not mean to be too sarcastic, as I recognize that there is a lot of money out there to promote the adaptation of electronic medical records/electronic health records for medicine. This project was part of the 2009 American Recovery and Reinvestment Act, also known as “the stimulus package”. As such, there is over $19 billion that has been earmarked for this project. With this kind of funds available, there are definitely going to be people who will make a significant amount of money, including very healthy profits, by participating in this program.
The next statements that I am going to make are now directed at the medical providers, and in particular physicians in small practices, regarding what you are going to get from this program. If you can accept what I am going to say, then I feel that you will be able to move forward with electronic medical records freed from some of the angst and frustrations that you may otherwise experience.
I have significant EMR experience as a physician in a small practice and therefore can only definitely comment on my opinion related to this practice situation, although my review of the overall information makes me feel that it is probably applicable to even larger practices.
As far as the current financial programs that are being promoted for the adaptation of electronic medical records, the primary thing that physicians and providers are going to get out of this program is that: “we are going to get screwed!” I apologize for the language, and you can insert a less offensive term in that sentence, but I feel that this word and phrase summarizes some of the visceral feelings that you may experience from a financial standpoint as you move forward with electronic medical records.
Medical providers are not going to make a profit by purchasing an electronic health record system. The EMR vendors, the IT support, the REC centers, and all of the other support companies are going to make a large amount of money by participating in the EHR initiative. Unfortunately, in many ways, the medical providers are the “mark” in this situation, as we are the ones forking over the money to pay for EMRs, with only a hope of getting some financial assistance afterward. To support my statement, I only have to refer to the Federal Government itself to provide documented evidence.
The discussion of the Electronic Health Record Initiative Program is presented in the Federal Register in January 2010. As part of this presentation, there is a discussion regarding the cost burden that providers will encounter as part of their participation in this program. The government’s general estimate is $54,000 in capital costs for installation, and then an additional $10,000 for annual maintenance and training costs. This brings the grand total cost per medical provider for the adaptation of EHR over a five-year period to $104,000! Now the incentive money available to participating medical providers from the government is a maximum of $44,000 from Medicare or $63,750 from Medicaid, with these funds expensed over a five-year period with progressively decreasing amounts each year. In addition, these funds are maximum amounts if you participate from the very beginning of the program, with an already established EMR system, and it still depends on whether you are able to meet all of the documentation requirements to qualify for the incentive payments.
When you review the above figures, you do not need to be a math genius to figure out that medical providers are not going to make a profit from this program. Based on the government’s own estimates, it will easily cost you anywhere from $40,000 to $60,000 to start from scratch and move to full adaptation of an electric health records system. I guess your best hope would be to break even, if that is somehow possible, as this may at least make the process more palatable. And again, your practice will need to pay out this money first to buy the EHR system before you can ever hope to regain any of the financial incentive money.
I did not mean to make this post depressing or to induce anger from medical providers regarding the situation with the EHR initiative. I just feel that physicians and medical providers need to know exactly what they are getting involved with when they purchase an electronic medical record system. I feel that they should be told the amounts of the actual money that they are going to have to pay to buy an EMR, but this information does not appear to be something that is being readily presented or discussed as part of the HITECH program. It seems as if the marketing of the EHR initiative is trying to hypnotize and distract providers with the dollar amounts of the stimulus incentives, so that hopefully the providers will not realize how much the program has actually cost them.
As I said earlier, if medical providers can accept the fact that the move to electronic medical records is going to cost a lot of money, and that they are not going to make any money/profit on the deal, then hopefully they won’t be as angry or frustrated with their financial situation as they move forward.
While part of today’s post was based on the cost estimates provided by the federal government regarding electronic medical record systems, I plan to discuss my personal experience with EMR from a dollars and cents standpoint in my next post.
BUYING AN EMR – WHAT HARDWARE ARE YOU GOING TO NEED? May 20, 2010
Posted by jaxncmd in EMR in the Physician's Office.Tags: electronic medical record, electronic medical records, EMR
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This topic may sound kind of “dry”, and is rather straightforward to answer, but it still requires significant forethought before you make your purchases. Depending on the electronic medical record system that you decide to go forward with, some of the decisions regarding what hardware you need to purchase will be made for you. In addition, the current extent/level of technology that you already have in your office will also impact the amount and type of new hardware that you may require.
The first major determinant regarding the amount of hardware that you will need for your practice depends on the type of electronic medical record system that you purchase. There are two different types of EMR systems: client-server solutions and application service provider (ASP) solutions, which is the Internet-based solution.
If you choose a client-server solution then you will obviously need to have a data server in your office on which to store the EMR application and data. While servers are a lot less expensive than they were ten, or even five, years ago, they are still significantly more expensive than desktop or laptop computers. In addition, with the server solution, you will obviously need technological expertise to manage and maintain the server.
The benefit of the ASP solution is that your data is maintained on the server at your EMR provider’s site, so you do not need to purchase a server or deal with the IT expertise that’s needed to maintain the server. The ASP solution, therefore, dramatically decreases your up-front hardware cost.
Beyond this first consideration, you will obviously need computers in your office to access the EMR software, no matter which of the above solutions you choose. You will most probably need at least one desktop computer, and/or laptop computers, tablet computers, or PDAs. You will also need an internal network that can either be wired or wireless, in addition to Internet access through a modem.
Part of this consideration also depends on the extent of technology that you already have in place in your office. If your office already has a wired network in place, then it may make more sense to use a fixed desktop computer in the exam room rather than a portable tablet or laptop computer. If you have a wireless network already, or if wiring the office is not possible, then portable laptop and tablet computers with a wireless network are the better option. If the location of your office, however, has significant interference for wireless communication, then the wired network may be your only option. Obviously, you will need to purchase routers, modems, and network hubs based on the option that you choose. As I initially stated, these decisions are more specific to your individual practice office, but these issues should be considered before you commit to purchasing any specific hardware.
Finally, there are additional hardware purchases that will be required to obtain based on the electronic medical records system that you choose and options that the vendor offers. These options include things such as optical scanners, electronic signature pads, digital scanners, and faxing solutions.
Hopefully, this shopping list of products will be helpful as you prepare from a hardware standpoint to implement your electronic medical record system.
Now that you know what you need to purchase, and what you are getting for your purchase, it’s now time to start considering how much all of this stuff is going to cost.
BUYING AN EMR – WHAT ARE YOU GETTING FOR YOUR MONEY? May 18, 2010
Posted by jaxncmd in EMR in the Physician's Office.Tags: electronic medical record, electronic medical records, EMR
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I know this may sound like a very simple question, but with all of the emphasis on physicians moving to electronic medical records, this very straightforward question is actually more complicated than it sounds.
A basic definition for electronic medical records is that it is a computerized system that replaces the traditional paper medical chart. In the traditional paper medical chart, physicians would store all of the patient’s medical information, including notes regarding the patient’s office visits, results of lab tests and x-rays, copies of surgical notes and hospital admissions, information or copies of prescriptions given to the patient, patient demographic information, along with billing and payment information. If the electronic medical record were simply a replacement of the traditional paper medical chart, then physicians should be able to implement electronic medical records by simply using a word processor program and a scanner.
Unfortunately, the definition of electronic medical record systems as this process moves forward is much more than a simple reproduction or replacement of the traditional paper chart. In fact, as the government moves forward with its incentives to encourage adaptation of electronic medical records, the requirements for what the electronic medical record system must be able to do continue to expand and this takes electronic medical records well beyond the traditional medical chart. These requirements include things such as e-prescribing, the capability to generate reports regarding your patients and their conditions, checking insurance eligibility, sharing information with other providers, in addition to many other capabilities. The question of “what are you getting when you purchase an EMR”, therefore, becomes even more important.
Typically, when you purchase an electronic medical record system, you are purchasing a software program that can perform the above tasks. Depending on the vendor, these programs may require an in-house server to run the software or they may be Internet-based. Obviously, the software will require hardware/computers on which it can run. Some of the vendors only sell the software, while others will package it with the hardware. Depending on the system you choose, this obviously can produce significant differences in the initial overall cost.
Another issue when determining what you are buying when you set out to purchase an electronic medical record system depends on the current status of your practice, in particular, whether you have an existing electronic practice management system in place. Several of the requirements for the government incentives that I listed above are actually more consistent with a practice management system than an electronic medical record system. It is therefore very important to also have an electronic practice management system in place in order to satisfy the requirements and receive the incentives (although the exact requirements have still not been fully defined by CMS!).
If you already have a practice management system, then you need to be sure that your current system and your future electronic medical record system are able to fully and seamlessly share patient data. If you do not have an electronic practice management system in place, then you will need to purchase one, which will also further add to your overall costs.
Regarding the interaction between your electronic medical record system and your practice management system, this is a very important issue that I would strongly suggest that you have fully addressed before committing to either an EMR, PMS, or both. If you are going with the same company for both of these systems, then there should be no problem with the exchange of data between both programs. If you have a different vendor for each system, then I offer a massive word of caution.
It is very important that your electronic medical record system and practice management system are able to seamlessly communicate data between each other. This will allow you to complete the record for the patient’s visit in the electronic medical record system and then have the data, including the CPT and ICD codes, immediately loaded into your practice management system for billing. While most of the vendors will act like this linkage between the systems is not a big issue and can easily be performed; trust me, from personal experience, this is not always the case. If the linkage is not able to be set up, then you will have to manually enter the CPT and ICD codes that were generated in the EMR into the practice management software so that the billing can be performed. This obviously creates a massive waste of time and money through purely redundant work that should have been able to be completed with a simple click of the mouse, if the systems were linked.
As I said, I unfortunately experienced this problem in the past. I had been using practice management software for several years before I decided to obtain a new electronic medical records system. I was assured that this linkage could be easily performed when I purchased the EMR system and was told how much easier and more efficient this would make my practice billing. The EMR company and practice management software company communicated with each other beforehand, and there was no anticipated issue with the software linkage. Unfortunately, after I committed to and purchased the EMR system, when it came time to link the two systems together, the practice management software company would not provide the EMR company with the proprietary information to link the two programs. I was therefore not able to link these programs and it cost me significant money in “wasted” staff time as they had to reenter the charge information into the practice management software for billing. Several years later, I eventually purchased new practice management software from the same company that does my EMR system. I am not exaggerating when I say that this one problem cost me significant money, and wasted staff time, as I had to pay someone to manually enter the CPT and ICD codes for a process that now takes a microsecond with the click of a mouse.
As a side note to my above experience, the “old” practice management software company that I had been using had “surprisingly” come out with their own electronic medical record system shortly after the time that I had purchased my EMR system. I suspect that their reluctance to work with my EMR company may have been an attempt to try to encourage me to go with their “new” EMR system.
I hope that this post will at least start you thinking about what exactly you are purchasing (and need to purchase) when you start looking at electronic medical records. I know that everyone seems to make it sound so easy to “just start using electronic medical records”. It seems as if all you have to do is “go out and buy one” and then you are done. It is obviously a complicated prospect and, particularly for a solo or small practice, it can be a very daunting task. I hope that my information is useful and helps you along this path. Next time, I will discuss some of the hardware considerations that can be involved with an EMR system.
EMR IN THE FINANCIAL OFFICE May 13, 2010
Posted by jaxncmd in EMR in the Financial Office.Tags: electronic medical record, electronic medical records, EMR, medical practice, physician
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Most of the discussion regarding electronic medical records is primarily concerned with the impact that these systems can have on the clinical practice of medicine. It seems as if any discussion regarding the financial impact of electronic medical records more recently is primarily focused on the incentives that the government is offering to encourage physicians to adopt EMR systems. While the financial incentives are certainly an important consideration, there are several other financial issues associated with the move to electronic medical records, and these issues can have both a positive and negative impact on the medical practice.
Several of the financial factors are rather straightforward, while some of the other effects may be less obvious. I will briefly review these issues in today’s post and then explore each individual factor over the coming days.
The first financial factor to be considered when discussing electronic medical records seems rather straightforward but may not be as clear-cut as it sounds. This first factor that you need to consider is very simple – what exactly am I buying/what will I get with an electronic medical records system. When you look at the advertisements and websites from the electronic medical record vendors, you will discover that there are numerous products available. Terms such as electronic medical records, practice management systems, electronic health records, and practice software solutions are frequently used in a manner that makes them seem interchangeable, but each term can refer to different products with dramatically different costs.
The next financial factor is exactly as stated – the cost of the electronic medical records system. Unfortunately, even this factor does not lend itself to a clear-cut answer. There is the obvious “sticker price” of an electronic medical records system, which can vary greatly depending on the size of the practice, number of providers in the practice, whether you are purchasing software, hardware, etc. These are the costs associated with the initial installation of the electronic medical record system. There are many other costs, however, that are frequently not quoted, not mentioned, or completely overlooked. These include the additional costs directly related to the EMR for things such as maintenance, licensing, support, and indirect costs such as conversion costs, expenses related to training, etc.
Another financial factor is related to the intrinsic impact that an electronic medical record system can have on the billing for services in the medical practice. There are different ways that an EMR system can both positively and negatively impact how and what a provider charges for a patient encounter or service.
The final financial factor is regarding the financial incentives that the government is offering, from both the federal and state levels, to encourage physicians to adopt electronic medical records. These incentives, while at face value may seem like a fantastic “carrot” to encourage adaptation of electronic medical records, are actually more complex than they seem. In addition, the actual guidelines and rules to qualify for these incentives are still a work in progress, so while the carrot is out there, it is still not clear how long the stick will be.
Each of these factors can have a significant price associated with them and this can cost a practice anywhere from a few thousand dollars to hundreds of thousands of dollars. As physicians, we are used to being providers, but when it comes to electronic medical records, we are now consumers. I plan to discuss each of these topics to create a more complete invoice regarding the full costs of electronic medical records to the medical practice. My hope is that I can help you to become an informed consumer in dealing with electronic medical records. By making you aware of the financial impact that each of these issues can cause for your practice, you will hopefully be better prepared to deal with them and will save yourself significant time, effort, frustration, and money.
