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

Hosted by Robert Michel

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

Hosted by Robert Michel
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University of Michigan Study Predicts that Majority of Physician Practices Will Lose Money on their EHR Systems

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.


Shortage of Newly-Trained Doctors Puts Physician Recruits in the Driver’s Seat

Younger Gen X and Gen Y pathologists have different workplace expectations

Aging Baby Boomers are about to retire and double the nation’s population of senior citizens. Meanwhile, a decline in the pool of practicing physicians-the majority of which are part of the Boomer generation-has put the United States on a collision course for the gravest shortage of physicians in our nation’s history.

For medical laboratories, these demographic trends will change the way labs hire, compensate, and retain pathologists. Cejka Search , a St. Louis firm specializing in physician recruitment, recently issued a report on physician recruitment. Among other things, Cejka Search states that the physician shortage has already created tremendous competition among practices for young doctors. In turn, these young doctors demand more in compensation and perks because they can.


One Barrier to EMR Adoption May be “Close to Retirement” Doctors

As the nation’s healthcare system pursues the goal of a universal electronic medical record (EMR) and a paperless, all-electronic environment, one barrier to adoption may be the large number of physicians nearing retirement. That’s the opinion of a neurosurgeon in his recent testimony before a congressional committee.

Physicians within five years of retirement may not get a return on their investment, Philip Tally, M.D., a neurosurgeon in Bradenton, Florida, told a hearing on “Cost and Confidentiality: The Unforeseen Challenges of Electronic Health Records in Small Specialty Practices,” on July 31 before the House Committee on Small Business.

Just 4% of physicians have an extensive, fully functional EMR and only 13% have a basic system, Tally told the committee, citing an article, “Electronic Health Records in Ambulatory Care-A National Survey of Physicians,” in the July 3, 2008, issue of the New England Journal of Medicine. The committee hearing was on the unforeseen challenges faced by small specialty medical practices when installing an EMR system.

“If you’re not thinking about practicing more than five years, don’t bother because the transition and the cost and the time to make it proficient for you in a small practice is probably not worth it-with one exception and that would only be if you intend to sell your practice someday,” Tally told Modern Healthcare magazine. When selling a practice, the physician who buys the practice is likely to want the EMR, he added.

The American Medical Association’s Physician Characteristics and Distribution in the U.S., 2008 edition, shows how physician demographics are weighted toward approaching retirement. There are 921,900 physicians in this country, of which 343,200 (37.2%) are over age 54. Approximately 166,000 physicians are aged 55 to 64 and 177,200 are aged 65 and older.

Interestingly, Tally was speaking from experience. His three-physician practice of neurosurgeons installed an EMR in 1992, making the group just the fifth in the nation and the first neurosurgery group to do so. At the time, the practice spent $50,000 for the EMR and about $5,000 annually to maintain the system. Tally, who chairs the Florida Medical Association’s IT committee, the congressional hearing that his group spent about 1,000 hours to configure the system after it was installed. His medical office staff found the process challenging, as the staff turnover rate climbed to 30%. Tally did observe that the EMR system, once implemented, significantly increased productivity.

Accurately measuring the return on investment (ROI) that accrues to a physician group from implementing an EMR is complicated by many factors. These include: 1) savings from eliminating the need to maintain and store paper charts; 2) savings in time for physicians to see patients under the new EMR system versus the time it took under the old system; and, 3) savings from electronic data entry of laboratory tests results in the EMR. Perhaps most difficult to measure is physician and patient satisfaction with the new EMR system versus the old.

Tally has an overlooked perspective on why physician age is likely to be an impediment to EMR adoption. He points out that more than one in three physicians in this country are within a decade or less from retirement-and are thus likely to find the transition to an electronic medical records system to be both uneconomical and unwelcome. It may turn out that more financial incentives from federal and state government sources, along with private payer incentives, will be required to encourage smaller physician groups to implement an EMR system. Clinical laboratories will need to take these factors into consideration as they develop effective strategies for supporting to move to a fully-digital patient health record by their office-based physician clients.

Physicians in America (In round numbers)

Younger than age 35     141,500
35 to 44                        213,300
45 to 54                        223,900
55 to 64                        166,000
65 and older                 177,200
Total                             921,900

Source: American Medical Association’s Physician Characteristics and Distribution in the U.S., 2008 edition
Related Information:
Dr. Tally’s prepared remarks for the House Small Business Committee:

Committee Examines Costs and Challenges of Electronic Health Records to Small Medical Practices