An interesting study on the return on investment from implementing an electronic health record (EHR) appears In the March 2013 issue of Health Affairs. Based on survey data from 49 community practices that participated in the Massachusetts eHealth Collaborative, the authors found that the average physician has lost $43,743 over five years with just 27 percent of practices achieving a positive ROI. Among practices with 1-5 physicians, the average loss was even higher at over $50,000. The findings are based on the purchase of various commercial EHR systems but none were Hello Health.
The results tell a disturbing story when we consider the financial challenges already facing primary care practices.
First, let’s start with the cost picture. The primary cost savings were from lower paper medical record costs, with 55 percent of practices reporting such savings. Forty-five percent reported lower dictation expenses and 27 percent lower billing services expenses. Offsetting cost savings for 22 percent of practices were higher physician costs related to more time spent using the EHR compared to time devoted to a paper-based system.
How about revenue? Primarily revenue gains came from improved efficiencies that resulted in shorter patient visits and higher patient volume. A Faustian trade-off? Eighteen percent of practices reported higher reimbursements because of improved billing and more accurate coding facilitated by an EHR.
Characteristics of positive ROI practices were the ability to reduce outsourced dictation and billing services and support staff by either eliminating positions or reducing hours. The average ROI for practices with a positive ROI was a significant $170,503 over five years.
The report does not spend a lot of time discussing a fundamental driver of all the ROI data – the cost of the EHR in the first place. The average cost for hardware, software and implementation costs was an astounding $130,822 for all practices, and even among the positive ROI practices the cost exceeded $95,000.
Consider the impact of a free EHR. We wipe out the $130,822 average cost that craters the ROI for a practice from the outset.
Now consider the impact of a revenue-generating EHR. Add a new line of revenue opportunity from patient subscriptions. For a practice with 500 subscribing patients, this will generate over $12,000 in recurring revenue each year. Add a new line of revenue for secure online video visits. At a rate of just 2 such visits per week at $60 per visit, a physician can generate a further $6,000. Add a new line of revenue for getting paid for medical record requests through RapidRecords. This can be thousands more in revenue a year. And the daily volume of patients did not increase to achieve this income growth, helping the quality of life for an already overworked physician.
So what does this all mean?
Clearly “mileage will vary” based on a practice’s unique circumstances but the potential for a vastly improved financial outlook is available to practices that adopt a free and a revenue-generating EHR. Among Hello Health customers, the average cost for software is $0, nada, null. Every practice has generated patient subscription revenue. Many have generated incremental revenue from leveraging the platform’s capacity to deliver secure virtual visits at a price they determine and at no additional cost. Many more are leveraging the ability to get paid for more of the work they do every day.
Fiscally speaking taking the “I” out of “ROI” and bringing more to the “R” does more than turn “ROI” on its head. It transforms an electronic health record to an electronic health return for primary care practices.