Electronic Health Records (EHR) improve financial performance, according to a recent report from the Medical Group Management Association (MGMA). The report, entitled “Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data,” was released on October 25th at MGMA’s annual meeting in New Orleans. The report surveyed both independent and hospital-owned practices.

Independent practices gathered $49,916 more in medical revenue compared to practices with paper records. The increase comes after operating costs per full-time-equivalent (FTE) physician. Practices on EHR did have greater expenses, according to the report, but they did report $178,809 more in median revenue per FTE physician than practices using paper. Hospital-owned practices exhibited a similar trend.

While there are still plenty of skeptics that doubt the benefit of EHR, more and more data seems to come out in favor of adoption. William Jessee, president of MGMA, admits that “adopting an electronic system can be costly and time consuming…” However, he concludes that “…these data indicate that there are financial benefits to practices that implement an EHR system.”

The implementation process itself should not be overlooked. Many analysts point to an initial decline in revenues as practices come online with their systems. This is due to the decreased patient volume during training and implementation. Data from the survey indicates that financial performance does increase after implementation is finished. Specifically, operating margins increase about 10% after five years of using the system.

The highest information technology costs happen in the first year of implementation as the practice acquires hardware and other infrastructure to support the system. Practices should also see a decline in the cost of paper records and transcription after the first year. Many analysts report that the savings from paper records and transcription can usually pay for an EHR system.

The message is clear: EHR adoption does lead to increased revenue and benefit the bottom line in most cases. Many practices today are focused on qualifying for the HITECH stimulus program. The stimulus program certainly can help practice implement EHR and the necessary security measures; however this report clearly shows EHR is a worthwhile investment on its own. Practices should not focus solely on stimulus, but keep in mind the increase in revenue EHRS can provide and make an informed business decision.

Ryan Ricks
Security Officer