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An EMR's ROI

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After weathering initial resistance, a San Antonio physician practice finds financial returns in electronic records.

Many of the 15 physicians at Urology San Antonio had a lot of questions when the partners decided to implement an electronic medical record. Chief among them: What's in it for us?

Determining reliable return on investment results for an EMR at smaller physician practices is exceptionally difficult. Clayton Hudnall, MD, a vice president and partner with the practice, says Urology San Antonio had been using a pseudo-electronic filing system in which physicians dictated notes that would be transcribed and put in this system. "But we still had a heck of a time finding the notes, so we needed something different." Perhaps more important, the practice was spending $20,000 a month on transcription and "had very little to show for it," he says.

The partners decided to take the plunge. But first, Hudnall—who was in charge of the project's implementation and troubleshooting—had to take on resistance from physicians who were concerned that all the work they once delegated to dictation and transcription was going to become their responsibility, taking time away from patients and revenue-generating opportunities.

On that count, they were right, as Urology San Antonio transitioned to McKesson's Practice Partner system. "We held a vote in our group and everyone was 100% behind it, and we have held that stick over their heads numerous times," he says. "You voted for it, so you will do it." Still, he says, "it turned our world upside down for three to six months."

Through a rigorous financial analysis, the partners had determined that by committing to using templates and avoiding transcription, the practice would break even over a three-year period and accrue efficiency savings after that period. But they didn't count on the fact that under the previous regime, physicians were "defensively coding," meaning they were undercoding procedures for fear of an audit that would show documentation was lacking.

"That was costing us a lot of money," says Hudnall. "But through improved and higher coding, backed up by adequate documentation, we found a pot of gold. We paid for the system in about nine months."

Through improved coding and elimination of transcription, employees, and paper, the system added about $500,000 a year to the practice's bottom line, he says.

Besides the possible financial benefits, Hudnall sees EMR adoption as a must because of payers' various carrots and sticks that all but require an EMR to achieve—for example, e-prescribing.

He advises other practices of Urology San Antonio's size to look at their current expense patterns to determine whether the switch will work for them financially. "What are they spending to buy store and move charts? What about the associated personnel involved with the transcription expense? If you went all the way to the wall with an EMR and eliminate those things, how do the numbers work?" Hudnall says. "If they apply themselves totally, it will become a revenue center rather than a cost center. It was far beyond anything we would have guessed at the outset."

—Philip Betbeze

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