Impact of Electronic Health Records on the Financial Performance of Medical Group Practices
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1 David N. Gans, MSHA, FACMPE Vice President Practice Management Resources Medical Group Management Association Impact of Electronic Health Records on the Financial Performance of Medical Group Practices Track 1: EHR Implementation and Adoption September 9, 2008 AHRQ Annual Conference 2008 Bethesda, MD
2 Impact of EHR on Medical Practice One accurate measurement is worth a thousand expert opinions. Rear Admiral Grace Hopper 2
3 Learning Objectives Understand how Electronic Health Records affect the economic performance of medical group practices: in the perception of medical practice administrators who describe how electronic health records impacted their practices by cross sectional comparison of medical groups with and without electronic health records by longitudinal assessment of practices that implemented an electronic health record in the past two years 3
4 Perception of medical practice administrators who describe how electronic health records impacted their practices Name, credentials Organization Date 4
5 MGMA 2007 Electronic Health Record Survey Survey frame of medical practices that responded to a 2005 national information technology survey Voluntary response by medical practice administrators 570 practices responded describing their health record system, including 285 practices that had an electronic health record
6 Summary of Study Findings 1. The study identified 285 practices where EHR implementation is in process or is fully implemented. 2. Respondents described increased operating costs, reduced productivity, and other surprises and challenges during the first 6 to 24 months of the implementation 3. After the first 6 to 24 months, the benefits of EHR adoption exceeded costs and most practices wondered how they ever conducted business without an EHR
7 Types of EHR Other 38.55% What is the name of your current EHR software product? Allscripts Healthmatics 7.27% Allscripts TouchWorks 5.09% eclinicalworks 3.27% EpicCare 3.64% GE Centricity 11.64% Sage Intergy 3.64% Practice Partner 2.55% NextGen 10.18% Greenway 2.91% Misys EMR 11.27%
8 Perceived Impact of EHR on Practice Costs Allowing Six Months after Implementation For Physicians and Staff to Become Familiar with the EHR, What Then Happened to Practice Costs (Overall, Including all Staff Expenses, EHR costs, Transcription Costs, etc.)? Do not know, 17.2% Increased, 12.8% Stayed the same, 29.6% Decreased, 40.4% 8
9 Perceived Impact of EHR on Practice Productivity Allowing Six Months after Implementation For Physicians and Staff to Become Familiar with the EHR, What then Happened to Physician Productivity? Do not know, 16.2% Increased, 28.3% Decreased, 8.5% Stayed the same, 47.0% 9
10 Testimonials on EHR Return on Investment We are definitely receiving a ROI on our EHR but during the first year it cost us much more than it saved us. Physician productivity is actually higher but they used it to get out of the office earlier (quality of life) versus actually seeing more patients. Expensive to start, but ROI should be under three years. It is the only way left to significantly impact practice expenses. A robust EHR, carefully selected and painstakingly implemented can be a huge benefit. It s ROI includes reduction in staff, increased billing, faster A/R, better documentation and patient safety and pay-for-performance initiatives.
11 Cross sectional comparison of medical groups with and without electronic health records Name, credentials Organization Date 11
12 MGMA Cost Survey Report MGMA Cost Survey Report Survey frame of MGMA Medical Practices Conducted annually with similar questionnaire format and definitions since 1979 Voluntary response by medical practice administrators 2008 report based on data submitted by 1695 medical practices, representing the financial performance of 29,215 FTE physicians 2008 report included information from 544 practices with an electronic health record
13 Cross Sectional Analysis Identify medical groups with an EHR and practices with a paper medical record Categorize practices by specialty and ownership Determine the mean for key revenue and expense measures Use the T-test to measure significance
14 Impact of EHR on Multispecialty Groups Hospital and Physician Owned Multispecialty Groups Paper Medical records / charts Mean total medical revenue per FTE physician 675,608 Mean total support staff cost per FTE physician 205,040 Mean information technology equipment cost per FTE physician 9,963 Mean professional liability insurance cost per FTE physician 15,254 Mean total operating cost per FTE physician 430,459 Mean total medical revenue after operating cost per FTE physician 260,153 $ 752,142 $ 228,808 $ 15,024 $ 15,598 $ 469,521 $ 302,465 N = Electronic health record Sig. (2- system tailed) $ 0.03 $ 0.04 $ 0.00 $ 0.79 $ 0.12 $
15 Impact of EHR on Physician-Owned Multispecialty Groups with Primary Care Only Physician Owned, Multispecialty Groups with Primary Care Only Paper Medical records / charts Mean total medical revenue per FTE physician 573,322 Mean total support staff cost per FTE physician 179,810 Mean information technology equipment cost per FTE physician 7,250 Mean professional liability insurance cost per FTE physician 10,649 Mean total operating cost per FTE physician 333,774 Mean total medical revenue after operating cost per FTE physician 239,548 $ 699,969 $ 213,066 $ 14,557 $ 13,007 $ 433,965 $ 282,210 N = Electronic health record Sig. (2- system tailed) $ 0.04 $ 0.16 $ 0.01 $ 0.21 $ 0.02 $
16 Impact of EHR on Family Practice Physician Owned, Family Medicine Single Specialty Groups Paper Medical records / charts Mean total medical revenue per FTE physician 507,136 Mean total support staff cost per FTE physician 175,441 Mean information technology equipment cost per FTE physician 8,264 Mean professional liability insurance cost per FTE physician 11,954 Mean total operating cost per FTE physician 356,958 Mean total medical revenue after operating cost per FTE physician 233,106 $ 677,131 $ 209,127 $ 18,344 $ 14,335 $ 402,997 $ 281,183 N = Electronic health record Sig. (2- system tailed) $ 0.01 $ 0.19 $ 0.00 $ 0.33 $ 0.30 $
17 Impact of EHR on Cardiology Groups Physician Owned, Cardiology Single Specialty Groups Paper Medical records / charts Mean total medical revenue per FTE physician 1,211,963 Mean total support staff cost per FTE physician 302,433 Mean information technology equipment cost per FTE physician 14,423 Mean professional liability insurance cost per FTE physician 19,930 Mean total operating cost per FTE physician 619,528 Mean total medical revenue after operating cost per FTE physician 607,515 $ 1,159,985 $ 308,307 $ 16,974 $ 22,752 $ 577,232 $ 582,752 N = Electronic health record Sig. (2- system tailed) $ 0.60 $ 0.82 $ 0.23 $ 0.32 $ 0.40 $
18 Impact of EHR on Orthopedic Surgery Groups Physician Owned, Orthopedic Surgery Single Specialty Groups Paper Medical records / charts Mean total medical revenue per FTE physician 1,129,408 Mean total support staff cost per FTE physician 245,032 Mean information technology equipment cost per FTE physician 16,652 Mean professional liability insurance cost per FTE physician 37,441 Mean total operating cost per FTE physician 522,072 Mean total medical revenue after operating cost per FTE physician 608,699 $ 1,319,229 $ 337,183 $ 21,951 $ 32,997 $ 634,352 $ 684,877 N = Electronic health record Sig. (2- system tailed) $ 0.02 $ 0.00 $ 0.05 $ 0.31 $ 0.02 $
19 Longitudinal assessment of practices that implemented an electronic health record in the past two years Name, credentials Organization Date 19
20 Longitudinal Analysis Identify family medicine and multispecialty with primary care groups that indicated the practice installed an EHR in 2006 and reported information for the 2007 Cost Survey Identify if practice also participated in the 2005 Cost Survey Determine the change in revenue and expense for each practice To control for environmental change, perform the same calculation for family medicine and multispecialty with primary care groups that indicated the practice had a paper medical record.
21 Mean Two Year Change in Financial Performance for Primary Care Practice Mean Two Year Change in Financial Performance for Primary Care Practices that Installed an EHR in 2006, Compared to Similar Practices with a Paper Medical Record Paper Medical Records/Charts Electronic health record system Total medical revenue per FTE physician $38,852 $ 53,010 Total support staff cost per FTE physician $15,060 $ 6,779 Information technology equipment cost per FTE physician $ (338) $ 1,816 Professional liability insurance cost per FTE physician $ (753) $ (1,523) Total operating cost per FTE physician $ 29,543 $ 34,521 Total medical revenue after operating cost per FTE physician $ 6,603 $18,410 N= 24 9
22 Observations Name, credentials Organization Date 22
23 Observations Allowing for sufficient time for installation and change in processes, practices with an EHR appear to have: Greater revenue Increased expenses More profit Than practices with paper medical record The difference may be significant, but more study is needed.
24 Questions? David N. Gans, MSHA, FACMPE Vice President, Practice Management Resources Medical Group Management Association mgma.com 24
25 About MGMA Our mission To continually improve the performance of medical group practice professionals and the organizations they represent MGMA has 22,000 members Who manage and lead 12,500 organizations With 270,000 physicians
26 Biographical Summary: David Gans David N. Gans, FACMPE Vice President, Practice Management Resources Medical Group Management Association Mr. Gans administers research and development at the Medical Group Management Association (MGMA) and its research affiliate, the MGMA Center for Research. In addition to his management responsibilities, Mr. Gans serves as the association s staff resource on medical group practice management. He is an educational speaker, author of a monthly column in MGMA Connexion, and provides technical assistance to the association s members in all areas of practice management. Mr. Gans received his Bachelor of Arts degree in Government from the University of Notre Dame, a Masters of Science degree in Education from the University of Southern California, and a Master of Science in Health Administration degree from the University of Colorado. Mr. Gans is retired from the United States Army Medical Service Corps in the grade of Colonel, U.S. Army Reserve. He is a Certified Medical Practice Executive and a Fellow in the American College of Medical Practice Executives. Address: Medical Group Management Association, 104 Inverness Terrace East, Englewood, CO Phone: (303) , ext dng@mgma.com 26
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