Guest post by Lea Chatham, Editor-in-Chief, Getting Paid Blog.
Let’s face it, return on investment (ROI) for an electronic health record (EHR) has been has been a rainbow unicorn kitty for practices over the years. Some studies have indicated that many practices don’t see positive returns for years if ever while others show very positive results of increased revenue per full time provider and ROI in as short as two and half years.
Why the big variation? It’s hard to say for sure but some of the factors may be practice size, type of EHR, and looking for the ROI in the right places. According to the Physicians Practice 2014 Technology Survey, sponsored by Kareo, over 40 percent of practices have seen a return on their investment from their EHR.
Some of the places they are seeing financial rewards may be old news but others could be a surprise.
It will come as no great shock that practices that got on board with PQRS and meaningful use at the beginning have reaped some financial benefits. The full incentives for MU early adopters was $44,000, and they avoid any penalties. For the past several years one of the top three reasons physicians cited for changing or adopting and EHR was qualifying for incentives.
The incentives are gone but the penalties are still in play. If you haven’t started yet, you will have reductions in your Medicare payments starting this year, but that doesn’t mean you shouldn’t get on board. If you serve a large portion of Medicare patients it may make sense to attest for MU to avoid further penalties.
The ability to cut costs has always been a bugle call for EHR, and nothing has changed. You can cut costs and streamline with an EHR. The key is to ensure it is implemented correctly with the right workflow, that everyone is onboard and using it the way they are supposed to, and you let go of paper as much as you can.
When you do that, you can save anywhere from $5 to $8 per new paper chart along with ongoing savings on paper, toner, and printer and fax equipment. They are seeing so many benefits from the EHR, they’d never go back now. Eric Pokky, practice manager at Total Healthcare for Women, says about 20 percent of their patients are new and those charts run $5 at their practice. With 15 new patients a week, that is a savings of around $300 a month.
When physicians maximize the EHRs documentation tools, you can also cut transcription significantly or all together. Transcription has been estimated at as much as 11 percent of total collections so that is a substantial savings. For a primary care provider who brings in $300,000 a year, that is a savings of more than $30,000 alone.
One expense that can be reduced might come as a surprise—malpractice insurance. Two different studies have indicated that practices that use an EHR may see lower malpractice insurance. There has also been some anecdotal evidence that providers who use EHRs are less likely to be sued in the first place.
One area where some of the studies differ is in asking about increased revenue. Some focused more on the cost of the EHRs and where they saved money while others also included benefits that resulted in more revenue. These revenue opportunities may be on place where many practices aren’t looking or aren’t tracking improvements.
Over two thirds of physicians do believe that faster more accurate billing results from using an EHR. And, several studies support that belief. An EHR can improve coding and increase charges by as much as 5 percent.
Using an EHR can also enable practices to access dollars that might not otherwise be available for the care they provide. Both the transitional care management (TCM) and chronic care management (CCM) payments from Medicare require some intensive tracking and coordination. Both would be difficult if impossible to do manually. “Even if you could surmount the operational challenges, billing Medicare for the new chronic care management code – 99490 – would not be acceptable on paper,” says practice management and medical billing expert Elizabeth Woodcock. “Medicare requires a certified EHR system to use the code.”
An EHR also makes it much easier to provide revenue generating services like group visits and weight loss programs. And EHR can also help ensure that providers ask the questions that may be required for other incentives. For example, some commercial payers now provide increase reimbursement for asking about smoking or monitoring health indicators like weight and blood pressure.
It is from a combination of the expected savings along with some of the unexpected revenue opportunities that two different surveys have shown a potential to increase overall revenue by as much as $33,000 per full time physician per year when you fully utilize and EHR. If your practice hasn’t been looking at both sides of the picture, now is the time to start.