News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Research study shows opportunity for clinical laboratories to help client physicians get more value from their electronic health record systems

For the majority of physicians in the United States, implementation of an electronic health record (EHRs) system in their practice may turn out to be a money-losing proposition. That is one prediction made by researchers at the University of Michigan (UM), based on a study they conducted.

Among other things, these findings indicate that progressive clinical laboratories and pathology groups have the opportunity to leverage the interface between their laboratory information system (LIS) and the client physician’s EHR to deliver added value. That’s because pathologists, Ph.D.s, and laboratory scientists know many ways that physicians can improve how they order medical laboratory tests and act upon the results of those tests.

In the study, the UM researchers concluded that the average physician practice will lose nearly $44,000 over five years due to failure to leverage the benefits of its electronic health record (EHR) systems in ways that increase revenue and create efficiencies. “The vast majority of practices lost money because they failed to make operational changes, such as ditching paper medical records after adoption,” wrote lead researcher Julia Adler-Milstein, Ph.D., Assistant Professor in the School of Public Health at the University of Michigan.


Pictured is Julia Adler-Milstein, Ph.D., Assistant Professor in the School of Public Health at the University of Michigan Ann Arbor. She served as lead researcher in a study that looked at whether electronic health record systems will benefit the bottom line of physician practices. (Photo copyright University of Michigan School of Public Health

Why Some Physicians Achieve Positive ROI and Others Don’t

Even when adding in the federal meaningful-use incentives, the majority of doctors would have lost money, noted an article  published in MedPage Today.

“The largest difference between practices with a positive return on investment and those with a negative return was the extent to which they used their EHRs to increase revenue, primarily by seeing more patients per day or by improved billing that resulted in fewer rejected claims and more accurate coding,” noted Adler-Milstein. “Almost half of the practices did not realize savings in paper medical records because they continued to keep records on paper.”

An analysis of the study data indicated that physician practices realizing a positive return on investment (ROI) increased revenue by more than $114,000 over the five-year period. However, just 27% of physician practices are expected to leverage the EHR to achieve this level of revenue growth.

Only 14% of Physicians Will Get an ROI after $44K Fed Incentive

Just 14% of physician groups will come out ahead financially after receiving the $44,000 federal meaningful-use incentive, according to the researchers. They noted that primary care practices fared better than specialists. Applying the federal EHR incentive, more than half of primary-care practices would achieve positive ROI, compared to only one-third of specialists.

The Study’s Design Looked at a Projected Five-Year ROI

To project five-year ROI, the researchers collected data from 49 community practices that adopted EHRs through the Massachusetts eHealth Collaborative , a pilot EHR project with 80 physician practice members in three communities. This pilot EHR is being sponsored by the Massachusetts Medical Society and American College of Physicians and is funded in part by $50 million from Blue Cross Blue Shield of Massachusetts.

The study was published online in the journal Health Affairs on March 25, 2013. It looked at practices’ financial cost/benefit data. This data included factors such as total revenue, total operating costs, and total labor costs during the pre- and post-adoption of the EHR, noted MedPage Today.

The researchers also requested cost information about practice areas impacted by EHRs, including paper medical records, dictation costs, and the costs of billing services.

They used this information to calculate how EHRs impacted the medical practices’ bottom lines. “Our aim was to decrease potential over attribution that could result from asking practices to focus exclusively on EHR adoption,” wrote the researchers. They admitted that it was difficult to attribute certain savings, such as significant increases in revenue, to adoption of an EHR.

Other Study Findings About Physician Adoption of EHRs

The study also found that:

• 38% of practices with six or more physicians achieved a positive ROI, compared with 26% of practices with one or two physicians.

• 55% of practices reported a reduction in the cost of paper medical records after EHR adoption.

• 22% of practices reported the most common ongoing cost was additional hours of practice time.

• 10% of practices noted improved efficiency, allowing them to see more patients each day.

• 18% increased revenue through improved billing.

• Practices with a practice management system in place to help with billing functions. before EHR adoption benefited less on average.|

EHR Success Depends on the Practice Setting and How Physicians Use It

It is generally accepted that EHRs can improve patient care, while increasing physician revenue with improved billing and efficiency gains, noted MedPage Today. However, doctors complain that EHRs are cumbersome and require more time to document patient visits.

“We conclude that current meaningful-use incentives alone may not ensure that most practices, particularly smaller ones, achieve a positive return on investment from EHR adoption,” wrote the researchers. They suggested that policies that provide additional support—such as expanding the regional extension center program—could help ensure practices make the changes needed to realize a positive ROI from EHRs.

“Whether the meaningful-use incentive is sufficient to ensure that practices at least break even probably depends on both the practice setting and the decisions made by practices to organize and deliver care differently after EHR adoption,” the researchers added. “Understanding how to help all practices benefit from adoption is crucial to the success of HITECH and represents an important area for future research.”

Why Pathologists and Medical Labs Should Care About This Issue

It is generally accepted that EHRs have the capacity to improve patient care and physicians’ bottom lines. The fact that only a handful of physicians are using EHRs in ways that increase ROI may come as no surprise to pathologists and medical laboratories.

Along with the researchers at the University of Michigan, other experts have questioned EHRs promise to deliver greater financial rewards. (See Dark Daily “Healthcare Observers Disagree on Cost-effectiveness of Electronic Health Record Systems”.)

However, this new peer-reviewed study should be of particular interest to pathologists and medical laboratories. That’s because clinical labs have invested substantial amounts of money in developing interfaces between their LISs and the laboratory information systems and EMRs for office-based physicians.

—By Patricia Kirk

Related Information:

If Practices Don’t Change, EHRs Lose Money

A Survey Analysis Suggests That Electronci Health Records Will Yield Revenue Gains for Some Practices and Losses for Many.

Healthcare Observers Disagree on Cost-effectiveness of Electronic Health Record Systems

Health Insurers Spending Big Dollars to Be Players in ‘Big Data’; Trend has Implications for Clinical Pathology Laboratories