Revisiting the EMR Stimulus Math

Sometime in the not-too-distant future, the vast majority of health records will be electronic. I am sold on the benefits of EMR systems and I am a proponent of physician adoption when possible. Even if I weren't, however, I'd recognize that forces are pushing healthcare in that direction and physicians can only lag behind for so long.

So when President Obama signed the economic stimulus bill a couple of weeks ago, I suggested that, with incentives to offset the costs of adoption on the way, it was time for physicians to prepare for the switch.

Not everyone agreed, however. And because I don't work in a practice environment and am not as familiar with some of the operational hassles and implementation obstacles, I want to give the counterpoints plenty of consideration.

As it has always been, the cost of implementation seems to be the hang-up. Reader Michael J. Patti, MD, considers himself a proponent of EMRs, but doesn't see how the incentive plan as it is structured will help physicians in the short-term.

"The economy has tanked, credit is not available ... and the revenue stream in a private practice primary care office has been flat for years. Now one more loan is supposed to be taken out, (if you can get it) on the promise that the check will be in the mail in a few years," he says. "This does not help me buy an EMR now."

An administrator for a cardiology practice in Arizona thinks the nearly $42,000 in incentives in the stimulus package grossly underestimates the true costs of implementation.

"Our cardiology practice of seven doctors and six nurse practitioners just went live on EMR in June 2008," she says. "For a group of our size and specialty with three office locations and four hospitals, thousands of patients and numerous interfaces and additional testing modalities, the cost is well in excess of the $42,000 per provider amount. The scanning of documents alone cost our practice $138,000."

Further complicating the math, James J. Schneider, senior associate dean for Finance & Administration at Marshall University's Joan C. Edwards School of Medicine and executive director of University Physicians & Surgeons, Inc., argues that practices have to consider whether the incentive money is truly a net positive for the practice or just a shifting of funds from other reimbursement areas.

"While the stimulus bill is a powerful financial incentive for those who haven't yet adopted an EHR, investing $30,000 or more per physician in the hope that Medicare's yet to be drafted regulations will present an attainable ROI four or more years down the road is still a pretty 'iffy' proposition," he says. "Plus, there are enough SGR-based physician fee reductions built into Medicare's future projections to more than offset the EHR incentive. With the President and a Democratic Congress battling trillion-dollar-plus deficits as far as the eye can see, physicians likely will not be at the top of anyone's list for future Medicare budget relief."

So what's the final verdict? Is the lingering skepticism justified? Will the stimulus package really accomplish its goals, or are we destined to inch toward EMR adoption for years to come?

Ultimately, the monies' effectiveness depends on yet-to-be-announced details. Patti pointed out that the government still has to outline what qualifies as "meaningful" EMR usage, and as I mentioned in a previous column, the scope of approved systems will greatly determine interoperability and the level of innovation we see from EMR vendors.

Still, many practice leaders believe they cannot afford EMR implementation, even with the stimulus incentives. But for me, the math comes out the same, primarily because of the time line physicians are facing: By 2015, Medicare will start reducing reimbursement rates for providers who are not meaningful EMR users.

Soon, physicians won't be able to afford to not have EHR.