Financial analysis projects clear returns from Electronic Medical Records: Demonstrating the economic benefits of an electronic medical record is possible with the input of staff who can identify the technology's benefits - Statistical Data Included

Healthcare Financial Management, Jan, 2002 by Karl F. Schmitt, David A. Wofford

Involving the managers whose departments were directly affected gave considerable credibility to the analysis.

Before any team can identify the benefits of an EMR, it first needs to understand the EMR's capabilities. Therefore, any organization attempting to analyze the benefits of EMR technology should educate team members at the outset about the technology through product demonstrations, site visits, and other presentations.

Keep the analysis objective and close to home. Healthcare organizations that conduct this type of analysis often are tempted to focus on savings from things such as less expensive but equally effective clinical protocols, or enhancing clinical outcomes to reduce future costs dramatically. In fact, many academic studies attempt to quantify these benefits and generally show tremendous potential for saving money. However, most organizations cannot easily produce the detailed information regarding patient mix, clinical costs, and other factors needed to replicate such an analysis. Therefore, the analysis will gravitate naturally toward those areas for which data are already available, such as the ones described in this article.

The numbers do not tell the whole story. The healthcare organization described in this article represents an ideal environment for demonstrating an EMR's economic value because the organization encompasses both inpatient and outpatient services and employs a single group of physicians to provide patient care. In outpatient-only settings, such as a medical group, the smaller size of the organization and the reduced scope of the EMR benefits may make the economic advantages of an EMR less obvious. The same also may apply to an inpatient-only environment, which often will have the additional challenge of persuading a disparate collection of nonemployed physicians to use the system.

Organizations that provide care only to inpatients or outpatients therefore will need to pay closer attention to benefits that would have a financial impact but that may not be readily quantified. These benefits would be in addition to those described earlier and may tip the balance in favor of an EMR. Examples include:

* Elimination of wasted effort that may not translate into staffing reductions but ultimately should increase productivity and quality;

* Decreased risk of malpractice lawsuits or compliance violations;

* Enhanced management reporting and feedback to physicians;

* Improved negotiating position with insurers through better HEDIS scores by better management of patient populations through such services as breast cancer screening and childhood immunization; and

* A more in-depth understanding of the organization's existing lines of business, which will help it to recognize and respond to new opportunities.

Finally the EMR provides many purely qualitative benefits that should not be overlooked, such as:

* Reduced errors and better clinical decisions resulting from having information available to the physician when and where it is needed;