Standard EMR ROI Thrown Out The Window

Posted on July 27, 2009 I Written By

John Lynn is the Founder of the 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 and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

One of the things that has bothered me most about the $36.3 billion which is estimated to be spent by the government in EMR stimulus money is the affect it’s had on the decision to implement an EMR. The doctors looking at the stimulus money remind of of Scrooge McDuck from my favorite cartoon ever Ducktales. Yes, Scrooge was the one who had so much money he’d go and swim in it. That part of the story is fictional. The part of Scrooge that’s not fictional is the trance that he’d go into when there was the possibility of more MONEY!! That same look seems to have come over far too many people looking at selecting an electronic medical record.

Certainly there are exceptions, but with the announcement of ARRA’s EHR stimulus money it seems like all of the previous benefits of an EMR have been thrown out the window. All people care to think about is “How do I get that EMR stimulus MONEY from the government?” I think this is a huge mistake and will most certainly lead to major problems in the future.

I’ll continue to argue inform people that an EMR should be implemented on its own merits and not with the hopes of a government windfall of cash.

Let’s step back a second and look at a study done in 2003 about the ROI of an EMR system. Here’s a summary of their findings:

The estimated net benefit from using an electronic medical record for a 5-year period was $86,400 per provider. Benefits accrue primarily from savings in drug expenditures, improved utilization of radiology tests, better capture of charges, and decreased billing errors. In one-way sensitivity analyses, the model was most sensitive to the proportion of patients whose care was capitated; the net benefit varied from a low of $8400 to a high of $140,100. A five-way sensitivity analysis with the most pessimistic and optimistic assumptions showed results ranging from a $2300 net cost to a $330,900 net benefit.

Certainly we could discuss the details of this study, but I think the important point is that there’s an argument that can be made for implementing an EMR that doesn’t include EMR stimulus money. We can’t let the EMR stimulus money put us in a trance where we make stupid decisions. If we do, there will be a huge price to pay years later.