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Counting the costs of EHR implementation -- and minimizing them

The results of a CDW survey of 200 ambulatory care groups are a real-world snapshot of EHR implementation costs, and offer some insights for reducing them.

In the first year of an electronic health record (EHR) implementation, a small group practice can expect to pay about $120,000 per physician, according to a recent survey by IT hardware and software distributor CDW LLC. That total includes productivity losses, staff training, such infrastructure needs as network upgrades, and hardware and software (which itself accounts for 12% of the cost).

Physicians, however, tend to focus on the electronic health records software and hardware costs without even analyzing the rest.

That's the bad news, according to CDW's survey of 200 ambulatory physician groups. The good news is that those costs drop to $30,000 from the second year on. In addition, the return on investment is a 15% boost in annual revenue -- averaging $151,000 per physician -- once users learn and fully incorporate the EHR system into their workflows.

So, it would seem that physicians would jump onto the EHR train to realize those gains sooner than later. After all, each year they maintain paper workflows is a year during which they lose money and postpone the gains in quality of care that EHR systems can bring.

That's hasn't been the case, however, said Jon Karl, CDW health care sales director, in an interview with Part of physicians' reticence is that the federal government just released Stage 1 meaningful use rules, and the next two stages are still under wraps.

"We were pleasantly surprised to see that, if you tackle [implementation] effectively as a physician practice, you can defer and offset costs over time through how you invest and grow into an [EHR] adoption process," Karl said. But that involves investing from the beginning in current and ongoing training for the physician and the rest of the staff, to make sure everyone's up to speed. That ensures that everyone uses the EHR system to its full potential for making workflow more efficient, not just for reaping meaningful use incentives.

The $44,000 physicians can receive from the Medicare EHR Incentive Programs is a "nice return on investment," as Karl put it, in CDW's opinion. But physicians should plan to spend a lot more on their EHR implementation programs. By the third year, he said, practices will be as much as 15% more efficient with an EHR system than with paper-based workflows. "Then the return on investment starts to offset the cost," he added.

Skimping on security an EHR implementation issue

Lax -- or nonexistent -- data security is the norm for many small group practices. It can raise costs in several ways. Hackers can steal data, and the resulting Health Insurance portability and Accountability Act, or HIPAA, violations can be prosecuted. Viruses and other malware can run rampant, affecting uptime. Staffers can accidentally email protected health information to the wrong party.

There's an expense to data loss. Protecting your IT investment will ultimately protect the patient and your practice.

Jon Karl, health care sales director, CDW LLC

Setting up a firewall might be old-hat to IT veterans, but most physicians aren't aware that they need them. That's partly an education issue endemic to small businesses, regardless of whether they're in health care or not, and partly related to the fact that the average person views firewalls as tools that large corporations use to keep bad guys out, not necessarily as tools for preventing inadvertent leaks from within, Karl said.

Investing in a firewall, antivirus software and data encryption can stop malicious and even unintended data breaches. Physicians should discuss security with their IT vendors and ask them to spell out how they will protect their patient data. "There's an expense to data loss," Karl said. "Protecting your IT investment will ultimately protect the patient and your practice."

Tips for minimizing EHR implementation costs

Karl and the CDW survey authors offered four additional tips for keeping electronic health record  implementation costs down:

•  Don't assume servers and infrastructure will have to be ripped and replaced. CDW found the average physician's workstations were less than three years old, with 20% of them having been purchased in the last year. Furthermore, if an office has recently upgraded its infrastructure for a practice management or lab information system, chances are the EHR system will require little if any hardware and software replacement. (Upgrades could be necessary, but that's about it.) Offices should take careful stock of their options, or pay a consultant to evaluate them, to avoid being oversold by an EHR vendor.

•  Train early and often. Some physicians might think they can learn on the job, but it can take as many as 10 hours to train each staffer. Lean on the EHR vendor, especially if training is included with the purchase of an EHR system; and milk those included benefits as much as possible. In addition, 58% of respondents plan to use third-party trainers besides those the vendor has provided.

•  Plan for downtime. Training and file conversion will take time. Twenty-two percent of physician practices will experience more than 10 hours of staff downtime, according to the CDW survey, while 40% will experience at least six hours of downtime. Respondents had an average of 5,470 patient files requiring conversion from paper to digital; 52% indicated they plan to scan files in-house.

•  Consider cloud options. Hosted EHR systems aren't ideal for every physician practice, but "as Software as a Service becomes more viable in the health care space, you're seeing organizations like Cerner [Corp.] move their ambulatory [EHR] into the cloud. … You don't need as much equipment if you move into an [EHR] solution that's hosted," Karl said.

Let us know what you think about the story; email Don Fluckinger, Features Writer.

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