Take A Hard Look At EHR Costs, Benefits

Most healthcare organizations don't measure the overall success of their electronic health record (EHR) systems, according to a survey of 300 healthcare executives by Beacon Partners, a Boston-based healthcare management consulting firm.

Forty-one percent of the respondents said their organization has performance measures related directly to return on investment (POI) or goal achievement for their EHRs. Nearly the same percentage (38%) of respondents said that data analysis was most often leveraged for initiatives related to quality management and/or utilization management in their organizations.

But only 36% of respondents were satisfied with their organization's efforts to measure the value of their clinical IT systems.

Nearly 80% of the respondents said their organizations collected feedback from physicians and nurses to measure user satisfaction. The data is most often used for system enhancements and improvements (60%) and for determining training and/or support needs (55%).

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Reflecting the chaotic way in which EHRs are often introduced, the survey found that performance measures are determined during the planning stages of EHR implementation less than half of the time. Performance measures were added after EHR implementation in at least one patient care area 32% of the time.

Just over half of responding executives said they wished that performance measures had been developed and implemented earlier in the process. The report's authors commented, "Often, the limited resources and hurried deadlines associated with EMR implementation preclude a thoughtful, strategic analysis of expected value for the substantial sums invested in clinical IT."

While the survey did not indicate how much the respondents had spent on clinical IT systems, on average, the amount must have been fairly high, judging by how far their organizations had gotten in installing EHR components. Using the seven-point HIMSS Analytics scale, the study showed that 76% of the responding organizations were at stage 3 or higher in EHR deployment.

An Accenture report last year estimated that hospitals experience an 80% increase in their IT budgets as a result of EHR implementation. Moreover, the expenses continue to be higher than they were before the EHRs were introduced, due to the cost of maintaining these complex systems.

The Beacon Partners report concluded that despite the great expense of implementing clinical IT systems, healthcare organizations "are often slow to establish strategic performance measures to determine the value obtained from investments in IT."

Alan Cudney, executive consultant at Beacon Partners, told InformationWeek Healthcare that it's extremely important to measure the ROI on investments in clinical IT systems. "It's just like any other major investment of a capital or an operating nature for a healthcare organization."

The difficulty in measuring ROI in an EHR, he said, is that it goes beyond pure financial considerations. "Hospitals typically measure ROI from a business perspective," he pointed out. "But many benefits of clinical applications fall into the realm of quality and safety that doesn't easily translate into dollars and cents."

To really understand this complex equation, he said, healthcare executives need to develop a "balanced scorecard" that provides a holistic view of where an EHR fits into an organization's strategic goals. That includes the incentives being provided to adopt the EHR, the potential penalties down the road and the organization's preparations for value-based reimbursement.

The performance evaluation should also encompass "the opportunity costs of what they're giving up by these huge expenditures," Cudney pointed out. For example, investing in an EHR might mean that the organization can't hire more nurses or purchase more equipment such as a mobile CT scanner, he said.

Cudney admitted that all of these factors make it difficult to pin down the ROI of a clinical IT system. "But we maintain that the costs are so huge of implementing EHRs and what that does to the bottom line for maintaining those systems, that you need to have a better pulse on the value that those costs are bringing strategically to the organization."