Return on Investment Does Not Drive EHR Adoption in Hospitals

The adoption of electronic health record systems is not being driven by a return on investment in hospitals and physician practices, Pat Wise, vice president of Healthcare Information Systems at the Healthcare Information Management and Systems Society, said, Healthcare IT News reports.

Wise said that although ROI could be measured as a result of adopting EHRs, many health facilities that do not use EHRs do not seem to recognize their importance.

“There is a real business case to be made for [EHRs], but the word has not gotten out,” Wise said, adding, “More organizations need to know that [EHRs] are a better business practice.”

She cited examples, such as Evanston Northwestern Healthcare in Chicago, which had a $2.5 million increase in revenue because of improved charge capture from its EHR system. In addition, North Fulton Family Medicine in Georgia has saved $775,000 in transcription costs after adopting EHRs in 1998, and it also saves $275,000 annually because of the system.

Wise added that most health facilities have adopted EHRs to improve patient care and workflow management, and surveys indicate that “a large percentage of physician practices that don’t have [EHRs] have no intention of implementing them in the near future,” she said (Pizzi, Healthcare IT News, 6/27).

Article: http://www.ihealthbeat.org

Not everyone benefits from IRS ruling, analysts say

6/11/07 Richard Pizzi www.healthitnews.com

Not all electronic medical records vendors will benefit equally from the recent Internal Revenue Service ruling allowing not-for-profit hospitals to provide healthcare information technology to physicians, according to a recent report by analysts at Leerink Swann & Company.

George Hill and Bret Jones of Leerink Swann’s Health Care Equity Research team wrote the report for investors in the wake of the May 11 IRS memorandum. They believe that vendors that currently have a high profile position in the national EMR market are best positioned to capitalize on the “potential influx of spending from not-for-profit hospitals,” but that the ruling could actually harm smaller, regional vendors.

The recent IRS ruling was important because it declared that a not-for-profit hospital’s purchase of an EMR system for a physician would not be considered an “impermissible private benefit,” according to the terms of the exemption to the Stark Anti-trust laws provided by CMS, and would not put a hospital’s tax-exempt status at risk.

In their report, Hill and Jones anticipate that the number of hospitals planning to assist physicians with the purchase of an EMR system may be greater than previously thought.

The Leerink Swann analysts contend that some regions, particularly urban areas, could see a “heightening competitive environment” as hospitals offer financial assistance to physicians for EMR purchases in order to attract more referrals for surgeries and other hospital-based procedures.

While hospital spending on EMRs for physicians is likely to increase, Hill and Jones suggest that contract signings with vendors may not spike in the immediate future. Hospital systems are generally conservative, they say, and their longer cycle capital budgeting process probably means that contract awards are several quarters away.

The analysts point out that the relaxation of the Stark Law may have some negative effects on ambulatory EMR vendors. In the near term, physician practices might choose to delay the purchase of EMR systems, “in the hopes that some local hospital will pick up a large portion of the tab for the costs” of a new EMR.

Hill and Jones also claim that competition for the large hospital-physician contracts that the Stark relaxation allows could lead to increased price competition and discounting among EMR vendors. If so, this could result in “lower net pricing and potentially lower levels of profitability for EMR software vendors.”

While the analysts suggest that many companies that offer an ambulatory EMR package will benefit from the IRS ruling, not all vendors will realize financial rewards.

The Leerink Swann report predicts that hospitals may be willing to be interoperable with a few outpatient EMR systems, but by no means all. If this proves to be true, it could act as a barrier to entry for smaller vendors in the ambulatory market.

“A hospital could choose to work with its inpatient vendor, another 3-4 outpatient [EMR] systems vendors, and then all other smaller vendors could essentially be locked out of that regional market as RHIOs are developed,” Hill and Jones warn in the report.

This possibility unnerves many smaller EMR vendors, says Don Schoen, CEO of Des Moines, Iowa-based MediNotes.

“Hospitals need to allow physician practices – particularly smaller practices – to make choices about which product they want to use in the office,” Schoen said. “This ruling can be a good thing, but it’s very dangerous for a hospital to push for only one specific product in every physician office in a community.”

Article: http://www.healthcareitnews.com/

 

Going electronic in six painless steps

Forget the rumours — the switch from paper to computer records doesn’t have to be a nightmare

By Sam Solomon, National Review of Medicine April 30, 2007

“I’d like to…” laments Dr Kalyani Srinivasan, a GP in Fredricton, NB, about the thought of switching from paper records to a computerized system. “But the cost — in time, money and effort — is tremendous and I don’t have any of the above to meet the challenge.”

It’s a familiar refrain. Ask almost any Canadian physician if they’re planning to adopt an electronic medical record (EMR) system and the answer invariably begins, “Sounds great, but….”

In fact, Canadian docs came dead last in EMR use compared to other industrialized nations’ physicians in a survey last year by prestigious US-based healthcare charity the Commonwealth Fund. Just 23% of Canadian primary care physicians have computerized their patient files, in stark contrast to Holland’s sparkling 98% mark. If those were MCAT scores, the Dutch would walk away with all the big grants and the cushy fellowships — and Canada wouldn’t even get into med school. EMR systems have been shown to help reduce adverse events, improve communication between health providers and keep a tighter lid on health record privacy.

Sure, the prospect of going electronic can be intimidating, but it doesn’t have to paralyze you. Follow these six simple steps to guide you through the research and implementation of an EMR software system.

1 LEARN WHAT’S OUT THERE
Research, research, research. And then do some more research. That’s the advice from Dr Alan Brookstone, a Vancouver GP and the creator of Canadian EMR, an industry-funded project designed to help Canadian doctors choose EMR software.

Your most important source should be your fellow physicians, he says. (But don’t forget to make sure they aren’t shareholders or board members of the company they recommend.)

Vendors may offer demonstrations of their products to help you get a better look at them. Or you could go to a nearby clinic to check out their system first-hand.

Don’t rely on the internet too heavily; just sifting through the software company’s website and separating the gibberish from the gems could take longer than it took to earn your MD.

It’s important to include all of your practice’s physicians and staff in the decision process to ensure everyone is on the same page, adds Dr Brookstone.

More research sources will soon be available, including a full version of Dr Brookstone’s Canadian EMR project, which will feature a comparison tool to allow physicians to look at other physicians’ ratings of EMR software based on a number of criteria. (The site, which is not yet fully operational, has a physician-only blog located at emruser.typepad.com.) Canada Health Infoway is also developing a set of standards that it intends to use to certify EMR software.

 

Full article here: http://www.nationalreviewofmedicine.com

 

Health insurer offering free electronic health records to doctors in four states

Aims to reduce duplication, errors and costs while boosting quality of care

Heather Havenstein April 23, 2007 –

Blue Cross and Blue Shield insurance plans in four states are integrating the medical data of more than 11 million people into a single electronic health record (EHR) system in an effort to eliminate unnecessary treatments and to encourage preventive care.

The Health Care Service Corp., which runs Blue Cross and Blue Shield operations in Illinois, New Mexico, Oklahoma and Texas, has been working for two years to merge the plans’ various IT systems that contain data about eligibility, medication, lab visits, hospitalization and physician office visits into a single system. The Chicago-based company plans to provide its patients and doctors with free access to the integrated system.

The move by HCSC is a new twist on a national effort to shepherd the adoption of EHRs, which various government agencies are recommending in hopes of decreasing medical errors and bolstering the quality of patient care by replacing current disjointed paper records with a comprehensive electronic patient record.

To date, the effort has focused primarily on encouraging doctors and hospitals to install EHR technology. Many physicians, however, have balked at undertaking such projects because of their often hefty installation and maintenance costs. Physicians have also complained that even though they’re the ones who pay those expenses, it’s the insurance plans that receive the lion’s share of the financial rewards in the form of lower costs.

As the different insurance plans bring the service online through the rest of this year, HCSC will offer physicians and clients free access to the service, said Joe Taylor, vice president of enterprise business processes. Taylor detailed the effort Monday at the World Health Care Congress in Washington.

The HCSC system uses MeDecision Inc.’s Patient Clinical Summary software, which creates an EHR by gathering patient data from various sources, analyzing the data and applying analytics and rules to identify possible options for treating patients, Taylor said. Doctors can access the data with an Internet connection.

“We’re trying to take this data and empower it with some analytics to provide a more meaningful office visit between the member and their selected physician,” Taylor added. “Think about a health insurance company that is providing information to the physician saying, ‘We want you to do this test.’ There is a chance to do more prevention and more wellness [efforts] and to see a potential treatment opportunity and act on it.”

He noted that the system could use analytics and rules-based software to, for example, remind a patient and physician that an annual mammogram needs to be scheduled or send an alert when different physicians write a patient prescriptions for medications that can’t be used together.

The system will also provide physicians with a list of all tests done on a patient, eliminating the need for duplicate tests, Taylor said.

The system, called Blue Care Connection, went live in New Mexico and Oklahoma last year and in Illinois earlier this year. It will begin operating in Texas this summer, Taylor said.

“All of this hopefully will help to stem the high rate of [cost] increases in health care,” he added.

John Capobianco, president of Wayne, Pa.-based MeDecision, noted that doctors have been reluctant to invest in EHR tools that can cost from $35,000 to $100,000 and ultimately just feed data into a system but provide no information back to the doctor.

“He is not getting a whole lot of value out of all this big expense,” he said. “The economic benefit just isn’t there.”

The health plans, however, have multiple views of a patient’s history based on the different types of claims they pay, he added, and that information can be vital to a doctor. “[The health plans] are a wonderful source of the best set of data that is available today,” Capobianco said. “It is certainly a better record than any one individual would have.”

Article: http://www.computerworld.com/

House Bill To Help Small Practices Adopt Health IT

April 23, 2007

Reps. Charles Gonzalez (D-Texas) and Phil Gingrey (R-Ga.) on Thursday introduced a bill that would give grants, loans and tax incentives to small physician-practices to help offset the costs of health IT systems, Health IT Strategist reports.

Under the bill, Medicare would provide payment incentives that could be used by physician practices with 10 or fewer full-time employees to purchase health IT infrastructure tools, such as electronic health record systems, evidence-based clinical decision support tools and secure e-mail.

HHS also could include additional incentives for evaluation and care management services, payments for structured e-mail consultations and any other necessary communication methods, Health IT Strategist reports.

The amount of reimbursement would be based on certain factors, including the type and price of equipment and how it will be used, according to the bill. Grants and loans also would be subject to the discretion of the HHS secretary.

The bill also would change the tax code to increase deductions for purchasing qualified health IT tools for physician practices qualifying under the IRS’ broad definition of a small business. Physicians also could use the deduction for equipment that they started using at the beginning of 2007, Health IT Strategist reports (DoBias, Health IT Strategist, 4/20).

Source: http://www.ihealthbeat.org/

Case Study: HIMG Regional Medical Center

Huntington, West Virginia

Huntington Internal Medicine Group (HIMG) began as a four physician partnership. Its humble beginnings quite the norm for today’s healthcare world. So imagine the feeling of those original four partners when they awoke one day to a 150,000 square foot medical facility with over 60 partners — grossing an annual revenue of $50 million.

If this seems like a far away, distant dream and not a tale of reality, think again. The HIMG Regional Medical Center, housed in an old Wal-Mart building in Huntington, West Virginia, opened in early 2006.

“We are a medical mall. We’re a hospital without beds,” explains Michael Sundall, chief executive officer of HIMG. “Our whole concept in this medical group is we studied what is going on around the rest of the country. Most healthcare systems are sneezing offices all over; we decided to bring the services to the patient instead of trotting the patient all around.

“We designed this building with the patient in mind. That is why we brought in physical therapy and occupational medicine; we brought in chiropractors, a pharmacy, durable medical equipment, rehab — all into this one building so the patients can have their care in an easy, accessible, lots of parking model.”

The medical mall even has an education center which features continuing education classes and guest speakers from pharmaceutical companies, for example. “That is for our physicians. For our patients, in our community room which is up front, we have a lot of screenings and speakers.

We have everything from ballroom dancing classes to the rotary to the Red Hat Ladies to blood drives, cholesterol screenings, and blood pressure check clinics.” The mall also sports Expresso Mojo, a gourmet coffee shop which also runs the Apple-A-Day Café.

“I can’t believe the people standing in line to get their coffee,” Sundall adds.

This for-profit, West Virginia corporation is 100 percent physician owned. New physicians sign on with a guaranteed base salary plus a bonus opportunity.

Then, depending upon their specialty, in one to two years they become a full partner. “We have no junior/senior type of partnership. Everybody is an equal partner whether you have been here one year or 40 years,” Sundall shares.

He explains that physicians drive their compensation in two ways: 1.) from the professional practice of their specialty; and 2.) they can supplement their income with a variety of ancillary or “designated health services,” as HIMG terms them.

Examples of these “designated health services” include the diagnostic laboratory, full service imaging, noninvasive cardiology, a certified endoscopy surgery center, the chemotherapy center, a hearing center, and the NOWcare center (which mimics an urgent care, but in this model is simply an extended hours doctor’s office).

In addition to these ancillary services (which is owned by the professional corporation), Sundall explains that the doctors also have New Tri- State Ventures, LLC, which is their real estate/ capital equipment entity. New Tri-State Ventures, LLC owns the building, develops the building, and then leases space to HIMG. In addition, the LLC leases space to the other partnered entities housed in the building.

“We’re an adult medical/surgical group. We have tenants — partners — that lease space in the building which compliment our services,” Sundall shares. “For instance, we do not have OB/GYN or pediatrics, but we have practices that lease space from us for OB and peds. A plastic surgeon also leases space from us.” Another facet that makes HIMG Regional Medical Center unique, as well as self-sustained, is its own electronic medical record (EMR) system on which it functions.

The HIMG model is peaking interest around the nation. National players, including Health- South which rents some space for its physical, occupational, and speech therapy, continue to court HIMG for a slice of its futuristic pie. “We’re getting a lot of interest in the concept here and we have had a couple of people check with us to see if it is replicable in their market areas,” Sundall adds.

It’s no surprise that any business person would be intrigued by this model. The numbers alone speak for themselves. Sundall says the group does about 200,000 office visits a year; as well as another 150,000-plus professional procedures, consults, interpretations, etc. “We will do another 400,000 ancillary tests; from labs, noninvasive cardiology testing, X-rays, etc., so in a nutshell, we do about 400,000 professional encounters and 400,000 ancillary. We’ll average probably 16,000 to 17,000 office visits per month in this coming year,” he adds.

But, Sundall warns, it takes some savvy business skills to keep such a giant afloat. “A lot of organizations will say they are cost effective and efficient, etc. We have really had to be. I have been here just seven years, and our malpractice insurance in West Virginia has gone from about $400,000 a year to $1.4 million per year. So we had to really focus on building a system, a structure that is profitable.

“They (HIMG) were a $25 million corporation at the time,” he continues. “These doctors are really good business people. We have been able to maximize our revenue and minimize our overhead. We are now approaching being a $50 million a year company. So, we are hoping through our next phase of growth of becoming a $75 million company.”

This next phase of growth includes adding 18 more physicians between 2007 and 2009 from a vast array of specialties including hematologists, dermatologists, hospitalists, etc. In addition, HIMG is currently in the exploratory stages of forming a partnership with an academic institution.

It is interesting to note that according to the zip code analysis for the HIMG Regional Medical Center, 65 percent of its patients come from outside the city of Huntington — hence the “Regional” reference in the name.

“I wish I would have discovered this medical group 20 years ago,” Sundall adds. “I describe it as the most productive, hardest working, most creative, and most challenging and most fun group of doctors I have ever been associated with. They are a high quality group.”

Read Full article at: www.surgicenteronline.com