The Fiscal Cliff of Primary Care

Posted on December 20, 2012 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.

The Hello Health blog has a really interesting article up discussing what they called the Primary Care Fiscal Cliff. The thing I like most about the post is the data they provide on what’s happening with primary care doctors. Take for example this list of statistics:

  • Primary care practice income rose just $500 from 2008-2011
  • Operating expenses of a practice continues to rise each year
  • Primary care physicians can spend an average of 13 hours a week of uncompensated care worth over $30,000 in lost revenue a year
  • The cost of a traditional electronic health record can easily exceed $20,000 in the first year with a 5-year projected cost approaching $50,000 per physician

I’m not sure that the US government’s fiscal cliff has much relationship to the primary care doctor fiscal cliff (except for the possible Medicare cuts), but it’s very safe to say that primary care doctors are in a real financial predicament.

In the Hello Health post they suggested from their own research that practice finances and EHR are the two issues keeping primary care physicians up at night. I’m sure these findings won’t be a surprise to any primary care doctors. Plus, it’s worth noting that the finances of a primary care practice are tied to an EHR in many ways.

I have often questioned how much influence the government EHR incentive money has had on getting doctors to adopt EHR. Whenever I do, I usually get a response from a primary care doctor saying that they wouldn’t be implementing an EHR if it weren’t for the EHR incentive money and that they were depending on the EHR incentive money to help cover the new EHR expense.

In my recently started EHR benefit series I’m hoping to expand the thinking when it comes to EHR revenue implications. There are still tens of thousands of primary care doctors that need to implement an EHR or replace their existing EMR. Understanding the financial ties to EHR will help a practice ensure a more successful EHR implementation.

At the core of the question is whether EHR software is a financial benefit or a financial loss. The cop out answer to that question is that it depends on how you implement the EHR and which EHR you implement. I wish someone would take the time to study the top 20 EHR companies and evaluate how practices have done pre-EHR implementation and post EHR implementation. Plus, they’d need to take into account the cost of an EHR. That type of study would produce a lot of interesting EHR data.

My gut feeling having participated in numerous EHR implementations and heard from thousands of other EHR implementations is that the result is usually a wash. In most EHR implementations I don’t think there’s a net financial gain or loss. There are outliers on both sides of that spectrum, but I think for most it has some pros and some cons.

With that said, I think there are long term benefits to a practice that has an EHR. While the immediate financial returns may not come, I think that the EHR in a practice is going to be essential for many of the financial gains a practice wants to achieve in the future. The most obvious example is becoming part of an ACO. Can you really get the financial benefits of being in an ACO without an EHR? I think the answer will likely be no. You need the EHR data to obtain and report on the ACO improvements your practice achieves.