Scholarly Study on Cost of EHR

Posted on June 1, 2009 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I decided to dig back in my archive of draft posts to post some items that I should have posted a long time ago (only so many hours in a day). In my list of half started posts, I found this interesting article which claims to talk about one of the first scholarly studies on EHR regulation. I’ve gone through most of the EHR scholarly literature, and I think they’re right. Very little scholarly work has been done on EHR.

I think I’ll leave the discussion of EHR regulation for another post. What I found most interesting about the above article was this section on the costs of EHR software and EHR adoption:

Financial support and incentives are also critical to the success of the transition to EHR systems.

  • It is estimated that the cost of purchasing an EHR system is $33,000 for each physician, with an additional cost of $1,500 per doctor per month for maintenance. This expense has cost challenges for many providers, especially those in small practices. Some estimate that the long-term cost-savings produced by a national health information network could reach $77.8 billion a year from a reduction in medical errors, diagnostic test duplication, and administrative expenses.
  • Currently, however, only 17 percent of physicians in ambulatory care settings use them to any extent, and only 11 percent of hospitals have fully implemented them. The slow pace of EHR system adoption may reflect a misalignment of incentives. While cost savings will be enjoyed primarily by insurers and the government, the expense of purchasing and implementing EHR systems must be absorbed by health care providers.
  • Several Congressional bills, including the Health Information Technology Act of 2007 and the Wired for Health Care Quality Act of 2007, were designed to provide financial incentives such as tax credits and grants, but have not passed due to other health care priorities.
  • Some clinicians may resist computerization for more than just monetary reasons. There is concern that patients may suffer from less face to face time with their physicians if it becomes more time consuming for doctors to input information into a computer than it is to dictate notes. Others believe that EHR systems require time-consuming documentation of irrelevant facts, are difficult to navigate, and do not organize clinical information in a way that enhances the delivery of treatment.

I found it interesting that they estimated the cost of EHR implementation at $33,000 per physician. It’s a really interesting number since the potential ARRA EHR stimulus is over $40,000 per physician. However, what ARRA EHR stimulus doesn’t cover and this article points out is the $1500 per doctor per month of maintenance that’s required by an EHR. I’d never seen a number like this, but the cost of IT maintenance alone starts to add up. I know one local doctor who works with two other doctors and they pay $60,000 a year for IT support. So, the $1500 per month is right in that range.

I think the final point might be the more salient one. I believe that far too many doctors use cost as an easy excuse not to implement an EHR. Instead, the real reason they don’t want to implement is other non-financial reasons.