Sunday, March 19, 2006

Costs a Barrier agains EMRs

If EMRs and RHIOs were going to develop spontaneously we would not be seeing the flurry of activity catalyzed by ONCHIT and state organizations such as CALRHIO.
I am a great supporter of these efforts for it has brought attention to some of the
opinions and conclusions of some well meaning healthcare consultants, government agencies and other third parties to the equation of caring for patients.
Amongst the specialties perhaps Ophthalmology ranks highest secondary to radiology as "technogeeks". Nevertheless in a recent issue of a trade publication dedicated to the annual meeting of cataract and refractive surgeons, there is an interesting and very cogent article by a respect practice management consultant, David N. Gans, MSHA< FACMPE. With his permission I quote several of his poignant caveats.
The link to the entire article can be found at:

Practices without EHR cite cost — an average of almost $33,000 per physician — as the top barrier; whereas practices that have already purchased EHR cite lack of physician support as a major hindrance to implementation.
Aggregating responses from practices that have fully implemented, are implementing, or plan to have EHR shows that EHR could be in use within two years by:
• 79.8% of practices of 21 or more physicians;
• 73.0% of practices of 11 to 20 physicians;
• 62.7% of practices of six to 10 physicians; and
• 52.2% of practices of five or fewer physicians.
The disparity between the EHR haves and have-nots has serious repercussions considering potential federal policies that could link increased levels of Medicare payment to the physician practice’s ability to provide patient-level information that cannot be easily extracted from a paper medical record.

Costs and barriers

The study confirmed that the cost of adopting EHR is not trivial.
The average purchase and installation cost per full-time-equivalent (FTE) physician for an EHR was $32,606, with larger practices spreading the cost of the technology over many doctors and paying less per FTE physician, while smaller practices have a much higher per-doctor installation cost.
Practices with 21 and more FTE physicians reported an average cost of $24,988 per FTE physician, while the smallest practices paid an average of $37,204 per FTE physician. In addition to the implementation costs, monthly maintenance costs averaged $1,177 per FTE physician, with larger practices paying more than smaller medical groups, most likely due to the added complexity of EHR systems designed for multiple locations and clinical modalities.
The study also examined how the vendor’s initial estimate compared to the actual implementation cost. The average cost overrun was 25% more than the initial vendor estimate, with the largest medical groups reporting the highest difference. For medical groups with 21 or more FTE physicians, the average cost overrun was almost 37% more than the initial vender estimate.

At the same time, groups that already have EHR gave their highest score to a completely different type of barrier: “lack of support from practice physicians” — perhaps reflecting that, once the economic justification for an EHR is made, serious operational problems remain.
Responding practices listed other barriers to implementation:
• Concern about physicians’ ability to enter data into the EHR;
• Concern about loss of productivity during transition to EHR and
• inability to easily input historic medical record data into EHR. Each of these barriers needs to be addressed when planning an EHR installation.

President Bush has described the use of EHR and related technologies as a key component in the national health care strategy of lowering costs, improving quality and reducing medical errors. However, given the current state of adoption — and even if all the practices with plans to implement EHR during the next two years do so — at least 40% of medical group practices will still be using paper records at a critical time in the execution of this national strategy.
The economic case for EHR is still being evaluated. Unless the cost barrier to adoption can be breached, it may be impossible to reach the national goal of providing all Americans access to reasonably priced, quality health services.

With funding from the Agency for Healthcare Research and Quality (AHRQ), researchers with the Medical Group Management Association Center for Research (David N. Gans, MSHA, FACMPE, and Terry Hammons, M.D.) and the University of Minnesota Division of Health Services Research and Policy (John Kralewski, Ph.D., and Bryan Dowd, Ph.D.) surveyed a nationally representative sample of medical group practices to assess their current use of information technology.
Findings of the research are also highlighted in the September/October Health Affairs in “Medical Groups’ Adoption of Electronic Health Records and Information Systems,” written by Gans, Hammons, Kralewski and Dowd.


1. Hammons T, Kralewski J, Gans D, Dowd B. The adoption of electronic health records and associated information systems by medical group practices. Final report, AHRQ task order No. 5. 15 July, 2005.
2. Gans D, Kralewski J, Hammons T, Dowd B. Medical groups’ adoption of electronic health records and information systems. Health Aff 2005; 24: 1323-1333.


At 10:09 AM, Anonymous Brannon Lacey said...


First of all, I enjoy your blog very much. Keep up the good work. I have a couple of questions for you regarding this latest post. First, there is obviously a lack of generalized economic knowledge available to really make a strong business case to wary doctors/clinics/hospital for adopting HIT. What role does a RHIO play in catalyzing and facilitating adoption? Additionally, how does the RHIO play a role in promoting structural and ideological change in a region? Or does the RHIO not paly a role in adoption?

Would you mind responding briefly with your thoughts?

Thank you very much,

Brannon Lacey

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