Can EMR=ROI? We re Not IT Masters Yet. ROI Starts with Your Current Costs. Objectives. EMR Return On Investment

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1 Objectives Can EMR=ROI? Rosemarie Nelson MGMA Healthcare Consulting Group Syracuse, NY Assess whether an EMR is a costeffective solution for your practice Describe the economic benefits of an EMR 2 We re Not IT Masters Yet EMR Return On Investment Even if they have computers, most physician practices are still miles away from the ultraefficient paperless office. NOT guesstimated income streams from an equipment purchase The medical record is information Information is (infinitely) sharable Most assets lose value when shared (value gets allocated among those sharing) Value of information increases with use Toth CL. Med Econ. April 12, Relationship of Ease of ROI Measurement and Complexity of Environment ROI Starts with Your Current Costs Hard Investments to improve quality (eg, clinical systems) Investments to improve productivity Phone triage including chart retrieval Test result processing including delivery to patient Immunization form completion Prescription re-issue Chart creation Investments with direct cost savings or revenue increases (eg, financial systems) Easy Less More 5 Lang RD. ROI and IT: strategic alignment and selection objectivity. J Healthc Inf Manag. 2003;17(4):

2 Get the Data Time Allocation and Number of Times per Day Where Returns Can Be Seen Patient visits pull and return chart Patient phone calls pull and return chart Rx re-issues and pharmacy calls pull and return chart Physician review of lab/hospital notes pull and return chart Insurance information pull and return chart Referring physician requests pull and return chart; chart copy time; fax/mail time Patient requests chart copy pull and return chart; chart copy time; fax/mail time Average cost of staff (hourly rate plus benefits) 7 Elimination/Reduction in: Time spent looking for lost charts Time spent transporting charts between locations Time spent re-coding tickets Rent paid for storage of active charts Transcription costs incurred Costs incurred documenting HIPAA accesses 8 Other Potential Cost Savings Positive Financial Impact of EMR Charge/fee tickets Education materials Rx pads Storage space (papers, forms, etc.) Improved productivity Improved charge capture Paper cost reduction Transcription Medical record warehousing Decision support Reduced redundancy of diagnostic tests 9 10 To EMR or Not EMR? Response to Inquiry Significant investment risk Savings also significant Cost of pulling paper chart for doctor averages $5-$12 Can improve care, increase productivity Risk of decreasing competitiveness Unprepared for future changes Ability to recruit physicians Record runner : Looks for chart Finds chart Needed info not in chart Looks in to be filed Cannot find Calls source for info Receives fax Responds to inquiry Places info in to be filed File clerk: 1. Retrieves paper from to be filed 2. Finds chart 3. Finds duplicate in chart, paper filed previous day 4. Re-files chart

3 Time/Cost Spent per FTE Physician Admin Costs Per FTE physician Support staff time on phone with pharmacies formulary Support staff time on phone with pharmacies Rx substitutions (generic) Hours/year Cost/FTE $375 $344 Provider administrative cost incurred per lab test = $19.25* Support staff time on phone with pharmacies Rx refills $1,929 Support staff time on phone with pharmacies other issues 26.9 $390 Physician time on phone with pharmacies formulary issues 15.7 $1,570 Physician time on phone with pharmacies Rx substitutions (generic) 14.4 $1.442 Physician time on phone with pharmacies Rx refills Physician time on phone with pharmacies other Support staff time verifying patient coverage/copayment/deductibles Support staff time resubmitting denied claims $8,083 $1,636 $3,876 $925 * Walker J, Pan E, Johnston D, et al. The value of health care information exchange and interoperability. Health Aff (Millwoood) Jan- Jun;Suppl Web Exclusives:W5-10-W5-18. Total cost per year $20, Medical Group Management Association. Analyzing the cost of administrative complexity. September (accessed Oct. 2004) 14 EMR Implementation Success Why Now? Family medicine physician increased revenue (money collected) by $3000/month. Seeing same number of patients Timely visit documentation and automated charge capture Nick Fabrizio, July 2005, QIO presentation quote Online progress notes can save $35/day in staff and physician time Online access to services and tests help control costs and eliminate redundant testing - approx. $65/day Access, access, access can save $330/day looking for charts More savings... Examine Your Hard Dollars Prescription Reissues $20/day in photocopies $70/day in filing and retrieving costs $30/day staff time in processing patient medication refills $850/query on outcomes research to measure effectiveness of treatments $12/day with automatic charge posting $10-$30/day in faxing savings More efficient to find patient s chart electronically Review patient s medication status Document a refill & re-file chart Save 5 minutes? or more? With refills typically requested of a primary care physician each day

4 EMR Prescribing Process Improves ROI Manage reissues during visits Deal with refill requests faster Experience reductions of 12 minutes per refill (from 15 minutes using paper to 3 minutes using e-prescribing)* Fax savings over phone savings Reduce staff use time from 6 minutes per call to less than 1 minute per fax** Another Time-Motion Study Incoming results and correspondence 30% of patients chart pulls are to look up test results *Lang RD. ROI and IT: strategic alignment and selection objectivity. J Healthc Inf Manag. 2003;17(4):2-3. **Miller SR. Scrip for success. Kentucky family practice uses electronic prescriptions to improve efficiency, revenue and customer service. Health Manag Technol. 2003;24(10): (accessed 11/10/1999) 20 The Focus on Transcription Costs Not where the ROI is if you want to maintain productivity! 150 $65 = $9750 One more patient each day: 4 days/week x 46 weeks = 184 visits It s OK to dictate! The financials tell the story. As long as Enter orders and Rx s in the EMR modules Improves tracking (test results) and Rx re-issue process 21 One Case Study: Chart pulls went from 1600 per day to nearly zero in 12 months Shredded 20 tons of paper records 55,000 active charts available online Over 10 million scanned documents Fully converted within 12 months 22 Source: Joel Sauer, The Heart Center Medical Group, in a presentation Oct. 27, 2007, MGMA Annual Conference. Return on Investment What Results Can You Expect? Began conversion in 2003 Costs in 2003 spiked due to increased staffing, etc costs settled back down, but not to preconversion rates 2005 costs dropped below pre-conversion Overall break-even at end of 2006 EMR supports staff handling routine phone requests From 30 minutes for a nurse to process a request for a drug refill to 1 minute Jerry Schlund, Information Systems Director at The Heart Center, Fort Wayne, IN What are you trying to achieve? Source: Joel Sauer, The Heart Center Medical Group, in a presentation Oct. 27, 2007, MGMA Annual Conference

5 EMR Implementation Results Revenue increase averaged 15% FFS collections per visit Automated charge capture Integrated coding compliance features Reduced office supply expense by 50% with elimination of paper chart Reduced labor cost by 10% in first year after implementing More efficient workflow Reduction of filing staff, coding and data entry staff Reduced time to complete clinical tasks Rx refills, referrals, orders j3 *From a 12-provider family practice group Spindel D. EMR vs. DIMS. Yea: full EMR offers enhanced efficiency and workflow. MGMA Connex. 2005;5(2): Pediatric Practice Case Study Charge capture accuracy Filing Turnover and staffing 26 Accurate Charge Capture Reduced Chart Filing j4 Chart audit revealed that 14% of the procedures performed at point of care escaped documentation on the paper superbill. 2% of encounters were never submitted Prior to After 60 After 120 After 180 Type of Visit EMR days days days Patient visits 82,000 82,000 82,000 47,560 Number of phone chart pulls per year (300 per day) 78,000 8,000 7,200 6,000 Medical Records Updates (1359 documents/day) 271, ,340 27,134 13,567 Referrals chart pulls (400/month) 4,800 2,000 1, Total Chart pulls annually 436, , ,334 67,527 FTE Allocation % data entry errors 27 MGMA Health Care Information Technology Forum, Boston, MA. 28 Chart pulls and file related activities estimated at 3-5 minutes per document results in a savings of 7.2 FTEs after 180 days Source: Nancy Babbitt, Roswell Pediatric Center in a presentation June 23, 2006 at MGMA Health Care Information Technology Forum, Boston, MA. Turnover and Staffing Costs Decreased Staffing and Personnel Costs Year 2004 June 2003 Turnover % 16.35% FTE Producers Staff: Producer Ratio YEAR FTE Clinical Staff Support Staff Staff BiWeekly Payroll W/Raise Average Raise % 2002* % 20.72% $ INCREASE 5 % % 21.98% Oct $ DECREASE 5 % *First Full Year On the EMR Savings Annual $160, MGMA Health Care Information Technology Forum, Boston, MA. 30 MGMA Health Care Information Technology Forum, Boston, MA. 5

6 No Excuse to Wait Office Aspect Recent survey demonstrated that total medical revenue after operating cost/fte physician was consistently greater across single specialty and multi-specialty groups using an EMR than for their peers not using an EMR Technology? Or improved operational efficiency? Re-engineering of all processes Re-training to allow staff, nurses to function to their highest level Wireless point-of-care EMR The Patient Encounter EMR with Operational Impact EMR improves data intake 50% faster nurse intake Eliminates collection of redundant info Enhanced documentation with assessment screens Inaccurate coding corrections improved revenue by 3% to 15% Capture patient signatures Sigpad ( 33 MGMA Health Care Information Technology Forum, Boston, MA. 34 Goal of BPR (Business Process Reengineering) Analyzing Processes Create the best overall process to achieve desired results Reduce cycle times (of process) Simply writing down the detailed steps in a process can be effective in convincing people of the need for change

7 Summary Contact Info Warning: It is not about technology; it is about clinical process and process improvement Faced with having to change our views or prove that there is no need to do so, most of us immediately get busy on the proof. John Kenneth Galbraith Rosemarie Nelson Principal Consultant MGMA Healthcare Consulting Group