Physician Practice EHR Price Tag
With Meaningful Use incentives scheduled to start in 2011, physician practices are actively assessing the costs and benefits associated with implementing an Electronic Health Record (EHR) solution. To aid these analyses, CDW Healthcare surveyed 200 physician group practices not currently using an EHR to establish the current infrastructure, EHR plans and expected impact of adoption.
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CDW Healthcare wanted to provide:
- A baseline understanding of the concerns that physician practices have with specific regard to EHR adoption
- A market-wide understanding of the current Information Technology (IT) infrastructure in place at physician practices
- A complete, up-to-date and comprehensive cost model for implementing an EHR in a physician practice – including recurring and soft costs
- Insight on minimizing adoption costs and maximizing value following adoption
- Although 66% of respondents cite the cost of hardware and software as their primary concern with EHR adoption, these costs comprise just 12% of per physician costs in the first year of EHR implementation
- Just 32% of respondents cite loss of revenue as a primary concern. Yet, all respondents expect to experience a 10% loss of productivity while reworking an average of 44% of their patient encounter workflow
- In the adoption year, physician practices may lose as much as $101,250 in patient revenue because of workflow disruptions. Once fully implemented, however, patient workflow efficiencies could deliver as much as $151,875 in additional annual revenue
Investment, Return and the Speed of Adoption
Based upon the physician practice responses input into the cost model, the total cost of EHR adoption will be more than offset by workflow changes once the system is fully implemented and adopted:
Investment
The total cost – both outlays and lost revenues – will be just shy of $120K per physician in year one, with annual recurring costs of $30K per physician per year.
The total cost – both outlays and lost revenues – will be just shy of $120K per physician in year one, with annual recurring costs of $30K per physician per year.
Return
EHRs could increase the number of patients seen by as much as 15%*, adding $151K per physician in annual revenue once the system is fully implemented and adopted.
EHRs could increase the number of patients seen by as much as 15%*, adding $151K per physician in annual revenue once the system is fully implemented and adopted.
The Impact of Adoption Speed
Improving the pace at which physician practices are able to adapt to new processes and patient workflow by just one month would prevent $8,440 per physician in lost revenue while adding as much as $12,660 per physician in revenue gained through new efficiency – more than four times the cost of hardware and software.
Improving the pace at which physician practices are able to adapt to new processes and patient workflow by just one month would prevent $8,440 per physician in lost revenue while adding as much as $12,660 per physician in revenue gained through new efficiency – more than four times the cost of hardware and software.
*Source: ChannelPro-SMB, January 2010
Physician practices will also need to incorporate time for staff training (training services are often included in EHR packages) and file conversion expenses into their cost estimates. In addition, practices must also budget for annual recurring costs.
Training & File Conversion
- 22% of physician practices will experience more than 10 hours of staff downtime and 40% will experience at least six hours of downtime
- Survey respondents had an average of 5,470 patient files requiring conversion from paper to digital and 52% plan to scan files in-house
Recurring Costs
- 58% of practices will use both internal and third-party services to support their EHR
- Physician practices must budget to regularly replace infrastructure, adding $1,800 per physician per year to costs
- Many EHR packages require monthly subscriptions, adding $750 per physician per year to costs
To get the most value for every dollar spent, consider the following:
- Upgrade vs. Replace: CDW Healthcare's survey found that the average age of physician practice workstations is less than three years, with 20% of workstations less than one year old. As such, practices may achieve better results by upgrading existing workstations with system memory, drive space, backup processes and wireless access points to extend the lifecycle of existing workstation deployments
- Protect yourself: Notably, 30% of respondents did not use antivirus software and 34% did not use network firewalls. To protect IT investments and patient information, physician practices moving to EHRs will need to significantly improve their security and business continuity profiles
- Train and train some more: 22% of survey respondents indicate that they will spend at least 10 hours training staff to use the new EHR system. Because training programs are included in the cost of many EHR software packages, practices should take advantage of every training opportunity as a way of accelerating adoption
CDW Healthcare surveyed 200 physician group practices not currently using an EHR to establish the current infrastructure, EHR plans and expected impact of adoption.
CDW Healthcare developed a cost model based upon a typical medical practice implementation using:
CDW Healthcare developed a cost model based upon a typical medical practice implementation using:
- Components from prescribed solutions on the CommunI.T. Web site and CDW.com
- Medical practice information from the University of Virginia, the Medical Group Practice Association and the American Congress of Healthcare Executives
- Cost benchmarks from CDW Healthcare customer implementations
