Utilize your EHR system to boost practice revenue
Value-based incentives can help practices offset EHR costs and derive a return on investment
It’s difficult for small practices to get a return on investment (ROI) from their electronic health record (EHR) systems, even if they receive government Meaningful Use payments, health information technology consultants say. Still, it’s possible for practices to achieve ROI if they participate in alternative delivery models that help them garner value-based reimbursement.
The two traditional sources of ROI are increased efficiency and higher charges, based on better documentation. Using an EHR to increase efficiency requires major changes in office processes, and the government has recently increased its scrutiny of certain documentation techniques that help practices justify higher charges.
As a result, says Michelle Holmes, a principal with ECG Management Consultants in Seattle, Washington, not many small practices can achieve ROI on their EHRs in a fee-for-service world.
“The big Meaningful Use incentive dollars were in the early years,” she notes. “So at this point, the practices’ spend is greater than what they take in, unless they’re doing something in addition to the EHR implementation.”
Nevertheless, Holmes and other experts say, it’s possible for practices to achieve ROI if they participate in alternative delivery models that help them garner value-based reimbursement. These include accountable care organizations (ACOs) that participate in shared savings programs; Patient-centered Medical Homes, which many insurers incentivize; and pay-for-performance programs that pay quality bonuses.
All of these models, to varying extents, require the use of EHRs. Therefore, Holmes notes, not having an EHR represents an
“opportunity cost” that can be quantified and weighed against the cost of installing a system.
Most practices are still not receiving much, if any, income from value-based reimbursement. But ACOs and medical homes are increasing, and some physicians are beginning to see the possibility of achieving ROI.
Nephrology group counts on ACO
Simon Prince, MD, is part of a seven-doctor nephrology practice in Manhasset, New York. The physicians have attested to Meaningful Use for two consecutive years, but those payments covered only 20% to 25% of what they invested in their EHR, Prince says.
While the EHR has made the practice more efficient in some ways, in other ways it has decreased efficiency and productivity, he says. For example, documentation of patient encounters takes him longer than it used to. On the other hand, improved documentation has led to fairer reimbursement, in his view.
With these and other factors included in the analysis, he says, the ROI on his EHR “is around a wash,” at best. But the group’s participation in an independent practice association that has turned into an ACO could change the picture in the long run, he says.