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.
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.
