EHR / EMR ROI

According to a newly released MGMA (Medical Group Management) survey titled -  "Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data," medical groups with EHRs are reporting better financial performance than practices with paper medical records.

In the October 2010 release of the survey from MGMA, medical practices that have implemented an electronic health record (EHR) system are reporting better financial performance than those that have not.  Practices that were not hospital/IDS - owned and that had an EHR reported $49,916 greater total medical revenue after operating cost per full-time-equivalent (FTE) physician (operating margin) than practices with paper medical records. These practices also reported greater expenses ($105,591 per FTE physician) but had $178,907 greater median revenue per FTE physician than practices with paper medical records.

This same pattern can be observed in hospital/IDS-owned practices. Multi-specialty practices that were hospital/IDS-owned and had an EHR reported an operating margin that was $42,042 more than the margin in those with paper medical records.

The adoption of an electronic system can be costly and time consuming, and understanding the impact it will have on the practice is critical, but while the implementation process can be very cumbersome, the data from the survey indicates that there are financial benefits to practices that implement an EHR system.

Additionally, hospital/IDS owned practices with EHRs also report an increase in financial benefits as they gain more experience with their systems. After five years of EHR use, these practices reported an operating margin 10.1 percent greater than practices in their first year of having an EHR.

The survey report reveals that the highest information technology costs occur in the first year after installation in not hospital/IDS owned practices. Medical records and transcription staff costs decrease after this time. Information technology staffing per FTE physician increased slightly after five years (0.13 to 0.15), and FTE medical records staff per physician decreased by 44.12 percent (0.34 to 0.19).

For practices currently on the fence, the potential of improved financial performance should be an encouragement for many organizations to purchase and use an EHR. Physicians adopting these technologies may also earn up to $44,000 in Medicare EHR incentives funded through the HITECH Act. However, while these incentives can defray some of the implementation costs, qualifying for them by demonstrating 'meaningful use' of the EHR is expected to be a challenge for many practices.

Note: MGMA surveys depend on voluntary participation and may not be representative of the industry.