CHICAGO – The relaxation of the Stark Law enables hospitals to bear up to 85 percent of the cost of electronic health record implementation for community physician offices. Despite the generous subsidy, cost is still a barrier for many physicians, according to some experts.

“Cash is king for physicians,” said James Kearns, vice president and CIO of Delnor Hospital in Geneva, Ill.

Community physicians were more concerned about support costs than the one-time implementation costs, he said. Still after several months of the implementation, the common response from physicians was: “I would never want to go through that (implementation) again, but if you try to take it away from me, I’ll kill you.”

Cash was part of a panel called “Real-World CIOs Who Implemented EHR Subsidies Under Stark” at the America’s Health Insurance Plans annual meeting in San Diego last month.

Tom Pacek, vice president of Information Systems and CIO of the South Jersey Healthcare System, agreed that the bottom line is the greatest concern for physicians – even with the full 85 percent subsidy. The problem that Pacek saw in his community was that many practice management vendors were not willing to work with the EHR systems.

“You have to have a total system suite,” he said. “The EHR component is a small piece of it.”
Presenting a clear business case, therefore, was an important part of driving adoption rates for both Delnor Hospital and the South Jersey Healthcare System.

“The subsidy needs to demonstrate economic value for providers,” said Judy Hanover, panelist and research manager for Health Industry Insights.

Hospitals need to create a favorable financial environment by leveraging volume in subsidy programs, negotiating with EMR vendors to control costs, exploring different license options with vendors, offering hosting and software-as-a-service models, minimizing IT infrastructure requirements and providing options such as add-on modules.

Addressing potential end-of-subsidy programs in 2013 is “absolutely critical,” Hanover said. Having a plan in place can help physicians figure their monthly payments and eliminate anxiety about future costs.

Delnor Hospital offers the full 85-percent subsidy. It also took advantage of its information systems capability, secure server environment and existing IS team to minimize cost, said Kearns.

To ensure success of Stark Law relaxation initiatives, hospitals have to identify benefits for both parties, Pacek said.