Impact of Electronic Health Records on the Financial Performance of Medical Group Practices—Track 1: EHR Implementation and Adoption

Slide presentation from the AHRQ 2008 conference showcasing Agency research and projects.

Slide Presentation from the AHRQ 2008 Annual Conference

On September 9, 2008, David N. Gans, MSHA, FACMPE, made this presentation at the 2008 Annual Conference. Select to access the PowerPoint® presentation (700 KB; Plugin Software Help).

Slide 1

Impact of Electronic Health Records (EHR) on the Financial Performance of Medical Group Practices—Track 1: EHR Implementation and Adoption

David N. Gans, MSHA, FACMPE
Vice President Practice Management Resources Medical Group Management Association
September 9, 2008
AHRQ Annual Conference 2008
Bethesda, MD

Slide 2

Impact of EHR on Medical Practice

"One accurate measurement is worth a thousand expert opinions."
—Rear Admiral Grace Hopper

Slide 3

Learning Objectives

Understand how Electronic Health Records affect the economic performance of medical group practices:

  • In the perception of medical practice administrators who describe how electronic health records impacted their practices.
  • By cross sectional comparison of medical groups with and without electronic health records.
  • By longitudinal assessment of practices that implemented an electronic health record in the past two years.

Slide 4

Perception of medical practice administrators who describe how electronic health records impacted their practices

Slide 5

Medical Group Management Association (MGMA) 2007 Electronic Health Record Survey

  • Survey frame of medical practices that responded to a 2005 national information technology survey.
  • Voluntary response by medical practice administrators.
  • 570 practices responded describing their health record system, including 285 practices that had an electronic health record.

Slide 6

Summary of Study Findings

  1. The study identified 285 practices where EHR implementation is in process or is fully implemented.
  2. Respondents described increased operating costs, reduced productivity, and other surprises and challenges during the first 6 to 24 months of the implementation.
  3. After the first 6 to 24 months, the benefits of EHR adoption exceeded costs and most practices wondered how they ever conducted business without an EHR.

Slide 7

Types of EHR

The pie chart answers the question, "What is the name of your current EHR software product?"

  • Allscripts Healthmatics: 7.27%
  • Allscripts TouchWorks: 5.09%
  • eClinicalWorks: 3.27%
  • EpicCare: 3.64%
  • GE Centricity: 11.64%
  • Greenway: 2.91%
  • Misys Electronic Medical Record (EMR): 11.27%
  • NextGen: 10.18%
  • Practice Partner: 2.55%
  • Sage Intergy: 3.64%
  • Other: 38.55%

Slide 8

Perceived Impact of EHR on Practice Costs

The pie chart answers the question, "Allowing Six Months after Implementation for Physicians and Staff to Become Familiar with the EHR, What Then Happened to Practice Costs (Overall, Including all Staff Expenses, EHR Costs, Transciption Costs, etc.)?"

  • Increased: 12.8%
  • Stayed the same: 29.6%
  • Decreased: 40.4%
  • Do not know: 17.2%

Slide 9

Perceived Impact of EHR on Practice Productivity

The pie chart answers the question, "Allowing Six Months after Implementation for Physicians and Staff to Become Familiar with the EHR, What Then Happened to Physician Productivity?"

  • Increased: 28.3%
  • Stayed the same: 47.0%
  • Decreased: 8.5%
  • Do not know: 16.2%

Slide 10

Testimonials on EHR Return on Investment

  • We are definitely receiving a return on investment (ROI) on our EHR but during the first year it cost us much more than it saved us. Physician productivity is actually higher but they used it to get out of the office earlier (quality of life) versus actually seeing more patients.
  • Expensive to start, but ROI should be under three years. It is the only way left to significantly impact practice expenses.
  • A robust EHR, carefully selected and painstakingly implemented can be a huge benefit. It's ROI includes reduction in staff, increased billing, faster A/R, better documentation and patient safety and pay-for-performance initiatives.

Slide 11

Cross sectional comparison of medical groups with and without electronic health records

Slide 12

MGMA Cost Survey Report

  • Survey frame of MGMA Medical Practices.
  • Conducted annually with similar questionnaire format and definitions since 1979.
  • Voluntary response by medical practice administrators.
  • 2008 report based on data submitted by 1695 medical practices, representing the financial performance of 29,215 full-time-equivalent (FTE) physicians.
  • 2008 report included information from 544 practices with an electronic health record.

Slide 13

Cross Sectional Analysis

  • Identify medical groups with an EHR and practices with a paper medical record.
  • Categorize practices by specialty and ownership.
  • Determine the mean for key revenue and expense measures.
  • Use the T-test to measure significance.

Slide 14

Impact of EHR on Multispecialty Groups

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record systemSig. (2-tailed)
Mean total medical revenue per FTE physician$675,608$752,1420.03
Mean total support staff cost per FTE physician$205,040$228,8080.04
  Mean information technology equipment cost per FTE physician$9,963$15,0240.00
  Mean professional liability insurance cost per FTE physician$15,254$15,5980.79
Mean total operating cost per FTE physician$430,459$469,5210.12
Mean total medical revenue after operating cost per FTE physician$260,153$302,4650.01
N =118134 

Slide 15

Impact of EHR on Physician-Owned Multispecialty Groups with Primary Care Only

The table presents the costs for "Paper Medical records/charts," "Electronic health record system," and "Sig. (2-tailed)" for "Physician Owned, Multispecialty Groups with Primary Care Only."

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record systemSig. (2-tailed)
Mean total medical revenue per FTE physician$573,322$699,9690.04
Mean total support staff cost per FTE physician$179,810$213,0660.16
  Mean information technology equipment cost per FTE physician$7,250$14,5570.01
  Mean professional liability insurance cost per FTE physician$10,649$13,0070.21
Mean total operating cost per FTE physician$333,774$433,9650.02
Mean total medical revenue after operating cost per FTE physician$239,548$282,2100.21
N =1316 

Slide 16

Impact of EHR on Family Practice

The table presents the costs for "Paper Medical records/charts," "Electronic health record system," and "Sig. (2-tailed)" for "Physician Owned, Family Medicine Single Specialty Groups."

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record systemSig. (2-tailed)
Mean total medical revenue per FTE physician$507,136$677,1310.01
Mean total support staff cost per FTE physician$175,441$209,1270.19
  Mean information technology equipment cost per FTE physician$8,264$18,3440.00
  Mean professional liability insurance cost per FTE physician$11,954$14,3350.33
Mean total operating cost per FTE physician$356,958$402,9970.30
Mean total medical revenue after operating cost per FTE physician$233,106$281,1830.13
N =2120 

Slide 17

Impact of EHR on Cardiology Groups

The table presents the costs for "Paper Medical records/charts," "Electronic health record system," and "Sig. (2-tailed)" for "Physician Owned, Cardiology Single Specialty Groups."

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record systemSig. (2-tailed)
Mean total medical revenue per FTE physician$1,211,963$1,159,9850.60
Mean total support staff cost per FTE physician$302,433$308,3070.82
  Mean information technology equipment cost per FTE physician$14,423$16,9740.23
  Mean professional liability insurance cost per FTE physician$19,930$22,7520.32
Mean total operating cost per FTE physician$619,528$577,2320.40
Mean total medical revenue after operating cost per FTE physician$607,515$582,7520.67
N =2528 

Slide 18

Impact of EHR on Orthopedic Surgery Groups

The table presents the costs for "Paper Medical records/charts," "Electronic health record system," and "Sig. (2-tailed)" for "Physician Owned, Orthopedic Surgery Single Specialty Groups." 

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record systemSig. (2-tailed)
Mean total medical revenue per FTE physician$1,129,408$1,319,2280.02
Mean total support staff cost per FTE physician$245,032$337,1830.00
  Mean information technology equipment cost per FTE physician$16,652$21,9510.05
  Mean professional liability insurance cost per FTE physician$37,441$32,9970.31
Mean total operating cost per FTE physician$522,072$634,3520.02
Mean total medical revenue after operating cost per FTE physician$608,699$684,8770.17
N =4022 

Slide 19

Longitudinal assessment of practices that implemented an electronic health record in the past two years

Slide 20

Longitudinal Analysis

  • Identify family medicine and multispecialty with primary care groups that indicated the practice installed an EHR in 2006 and reported information for the 2007 Cost Survey.
  • Identify if practice also participated in the 2005 Cost Survey.
  • Determine the change in revenue and expense for each practice.
  • To control for environmental change, perform the same calculation for family medicine and multispecialty with primary care groups that indicated the practice had a paper medical record..

Slide 21

Mean Two Year Change in Financial Performance for Primary Care Practice

Mean Measure per FTE PhysicianPaper Medical records/chartsElectronic health record system
Total medical revenue per FTE physician$38,852$ 53,010
Total support staff cost per FTE physician$15,060$ 6,779
  Information technology equipment cost per FTE physician$ (338)$ 1,816
  Professional liability insurance cost per FTE physician$ (753)$ (1,523)
Total operating cost per FTE physician$ 29,543$ 34,521
Total medical revenue after operating cost per FTE physician$ 6,603$18,410
N =24 9

Slide 22

Observations

Slide 23

Observations

Allowing for sufficient time for installation and change in processes, practices with an EHR appear to have:

  • Greater revenue.
  • Increased expenses.
  • More profit.

Than practices with paper medical record.

The difference may be significant, but more study is needed.

Slide 24

Questions?

David N. Gans, MSHA, FACMPE
Vice President, Practice Management Resources
Medical Group Management Association
dng@mgma.com

Slide 25

About MGMA

Our mission...
To continually improve the performance of medical group practice professionals and the organizations they represent.

MGMA has:

  • 22,000 members....
  • Who manage and lead 12,500 organizations.
  • With 270,000 physicians.

Slide 26

Biographical Summary: David Gans

David N. Gans, FACMPE
Vice President, Practice Management Resources
Medical Group Management Association

Mr. Gans administers research and development at the Medical Group Management Association (MGMA) and its research affiliate, the MGMA Center for Research. In addition to his management responsibilities, Mr. Gans serves as the association's staff resource on medical group practice management. He is an educational speaker, author of a monthly column in MGMA Connexion, and provides technical assistance to the association's members in all areas of practice management.

Mr. Gans received his Bachelor of Arts degree in Government from the University of Notre Dame, a Masters of Science degree in Education from the University of Southern California, and a Master of Science in Health Administration degree from the University of Colorado. Mr. Gans is retired from the United States Army Medical Service Corps in the grade of Colonel, U.S. Army Reserve. He is a Certified Medical Practice Executive and a Fellow in the American College of Medical Practice Executives.

Address: Medical Group Management Association, 104 Inverness Terrace East, Englewood, CO 80112
Phone: (303) 799-1111, ext. 1270
E-mail: dng@mgma.com

Current as of February 2009
Internet Citation: Impact of Electronic Health Records on the Financial Performance of Medical Group Practices—Track 1: EHR Implementation and Adoption. February 2009. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/events/conference/2008/Gans.html