Electronic better than paper for bottom line

Medical practices that have implemented an electronic health record system report better financial performance than those that have not, according to the Medical Group Management Association's newly released "Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data." 

The suvey was released Oct. 25 at MGMA's annual meeting in New Orleans.

Practices that were not owned by hospitals or integrated delivery systems 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. Multispecialty 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.

"Adopting an electronic system can be costly and time consuming, and understanding the impact it will have on the practice is critical," said William F. Jessee, president and CEO of MGMA. "While the implementation process can be very cumbersome, these data indicate that there are financial benefits to practices that implement an EHR system."

Practices that are not owned by hospitals or integrated delivery systems 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 non 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).

"The potential of improved financial performance should be an encouragement for many organizations to purchase and use an EHR," Jessee said. "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 challenging for many practices."

MGMA's mission is to continually improve the performance of medical group practice professionals and the organizations they represent. MGMA promotes the group practice model as the optimal framework for healthcare delivery, assisting group practices in providing efficient, safe, patient-focused and affordable care. MGMA is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C.