Health IT Proves Economic Mettle, Research Says - InformationWeek
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Health IT Proves Economic Mettle, Research Says

Electronic health records and medication and disease management systems offer the most ROI, research review finds.

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Seventy percent of high-quality studies on the economic value of health IT show positive results, according to a new review paper published by the Journal of the American Medical Informatics Association. But the authors caution that the conclusions cannot necessarily be generalized across healthcare organizations.

The 33 studies reviewed looked at several different types of health IT, including primary care electronic health records (7), computerized provider entry systems (6), medication management systems (5), immunization information systems (5), institutional information systems (4), disease management systems (3), clinical documentation systems (2) and one health information exchange network.

In terms of value for money, 23 papers reported positive findings, eight were inconclusive and two were negative. Most of the papers on EHRs, medication management and disease management systems had positive findings, while the CPOE, immunization and documentation studies' findings were mixed.

"As the HIS [health information systems] become more complicated, as in CPOE and clinical documentation and immunization systems where there are multiple objectives, target audiences and performance variations, there may be diminishing returns in having to manage the increased complexities, needed coordination and stakeholder expectations," the study said.

[ Do you have a close eye on your practice's bottom line? See 6 Healthcare Revenue Cycle Management Systems To Watch. ]

Of the CPOE papers, three reported positive economic results, two were inconclusive and one was negative. One paper found that CPOE saved $12,700 per adverse drug event (ADE) prevented, but the effect was dependent on the ADE rate, the physician and system cost, and the system's ability to reduce ADEs. Another study found that after hospitals implemented CPOE, their operating margins declined for two years, especially in rural and critical access hospitals. "They concluded that CPOE cost was likely not financially feasible for small hospitals," the review paper said.

Five of the seven EHR studies showed positive economic results over time periods ranging from six months to eight years. One study found that over a five-year period, an ambulatory care clinic had a net benefit of $86,400 per provider. Another paper showed that, at an average cost saving of about $3 per encounter, an ambulatory surgery clinic saved $184,627 per provider over four years, given an EHR startup cost of $10,329 per provider.

Some of these studies factored in initial losses of provider productivity as part of implementation costs, said Francis Lau, one of the review paper's authors and a professor of health information science at the University of Victoria in Canada, in an interview with InformationWeek Healthcare. "Longitudinal studies demonstrate that even with the initial decrease in productivity, the savings go back up once the system gets stabilized," he said.

The papers on institutional systems showed higher costs related to electronic documentation, but none tried to link those systems to the value of patient safety or quality, Lau said. "The reason for the increase in documentation costs -- which is consistent with other studies -- is that it takes a lot of time to document electronically. The clinical documentation did improve in accuracy and completeness. But that's hard to translate into dollar terms."

Regarding the inconsistent results with regard to electronic medication administration and clinical decision support systems, he said, "if you can demonstrate avoidance of a patient safety event, it's a little easier to show the savings. But it's difficult to show an improvement in quality of care due to a particular information system because there are so many factors that influence care."

Noting that 30% of the papers did not find any economic benefit related to health IT, Lau said that one reason might be because of how the systems were implemented. "There's a gross undertraining in the healthcare informatics field for people who can implement these systems and train clinicians. If you're going to rely on clinicians to learn all the advanced features of these systems, that's not going to happen, because that's not their role. So we have a void, not in the systems, but in the people who are implementing the systems."

Another recent study in Health Affairs supports this thesis, showing that physicians who used EHRs were more likely to improve the quality of care when they received more technical assistance.

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Erik W
Erik W,
User Rank: Apprentice
2/28/2013 | 4:55:00 PM
re: Health IT Proves Economic Mettle, Research Says
I respectfully dissagree with Jay on the use of consultants for HIS system implementations, at least in part.

Having been involved in three major system implementations (Mediserve, Meditech, Cerner) between two hospitals I've found that most CIO's do not properly calculate TCO in terms of both temporary and permanant FTE positions needed for the implementation and maintenance phases, cost in terms of time, productivity adjustments, and data entry ramp downs remaining higher, etc. This miscalculation then inflates the value of a consultant group as those staffing increases are required regardless of either decision.

During two of those implementations, a consultant group was brought in. The one project that saw the consultant group doing the discovery and module level coordination ran into a 65% modification for financials, ultimately deemed too costly and risky, and was abandoned at a 4+ million dollar loss.

Bringing in a consultant group to perform the implementation brings short term gains but long term risks.

A few things come to mind regarding putting the organization at risk with this regard:

1. Increased ramp up time to learn the specifics of the business and organization increasing the overall cost of the engagement.

2. Additonal cost to an already burgeoning IT/Clinical staff required for the new software and loss of ability to duel purpose FTEs.

3. Experience and knowledge walks out the door with the consultant. This is probably, in an anecdotal way, one of the biggest costs in terms of hospital staff understanding the overall flow of the business and process improvement.

4. The push to sell additional services, staffing takeovers, and other costly items that would be a fraction of the cost with the right FTE's.

With regard to FTE's, it's a good idea during the planning stage to begin looking for clinical informatics folks, preferably internally that not only understand the clincial requirements, but have a decent working knowledge of technology without having to be a guru, but more importantly, the organizations culture and staff.

On the other hand, there is value in consultants that have experience with certain venders and can certainly lend some value.

1. Familiarity with vender power brokers. They know who to leverage to get client requests honored or issues addressed.

2. Ability to understand typical hang up points and decision routes specific to the software.

3. Agnostic approach to siloed processes (which can be also avoided with the right IT staff).

In conclusion, what I've seen as the best approach, or at least one that seemed to work well was limited consultant roles and engagement being limited to HIS system liason, adoption and system analysis (ie: Best of breed, Single Vender, Hybrid) for organizational HIS system approach, and limited consulting engagements for additional and/or ancillary systems.
User Rank: Apprentice
2/25/2013 | 8:35:56 PM
re: Health IT Proves Economic Mettle, Research Says
In order to fill the void in the qualifications of the people implementing the EHR systems, I suggest the use of consultant agencies. Most systems provide technical assistance to the purchasers, and provide training of professionals within the organization, but the value consulting agencies provide is ongoing. Many consulting agencies aid not only in the implementation of EHR systems, but also provide ongoing assistance while being up to date with all pertinent information related to the systems. They are dedicated professionals focused on the EHR systems they service, and itGs this focus that heightens their value over, letGs say an in house IT specialist that is focusing on multiple things at once and isnGt as well trained in the system.

Jay Simmons
Information Week Contributor
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