| Special Features Of An EMR |
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| Implementing an electronic medical record (EMR) is a major initiative that should be undertaken only after a thoughtful analysis of the costs and benefits involved. |
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| ADA for exchanging data processing standards to the dental services of the health care industry... |
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| Barack Obama: In his Plan for a Healthy America, Obama calls for lowering costs through investment in electronic health information technology systems, acknowledging... |
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| RETURN ON INVESTMENT (ROI -EMR SOFTWARE) |
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RERTURN ON INVESTMENT
How quickly can you make back the money you spend on an EMR?
There are several components to calculating the return on investment (ROI) on the software. There is both a revenue side, allowing you to capture charges accurately, code correctly and reducing rejections, as well as the expense side with numerous cost cutting opportunities. In addition to firm numbers there are many intangibles that result in net savings also
Factors that Determine Return on Investment.
Using a single application for your electronic medical record integrated and practice management can generate real cost savings as well as enhanced revenue. The scope of improved efficiency varies with degree of implementation, and includes reduced labor costs, improved cash flow, streamlined clinical and financial management workflow, increased reimbursement, and detailed financial reporting. All these factors can contribute to making a healthcare delivery system of any size more profitable.
What are the real time and money savings? What you read below may seem unbelievable, but the numbers are actually conservative. Do the math for yourself.
1. Spend less time documenting; see more patients without extending your work day
Using EMR to speed history gathering, streamline patient flow and improved documentation accuracy results in real efficiencies. Charting can be done in real-time, at the point of encounter, without a need for longer appointments, or it can be done later at your convenience. Using structured data entry (such as templates), especially with the ability to save personalized versions of these templates in a pre-clicked fashion, results in minimal impact on provider workflow (speed). |
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| Annual Practice Statistics |
| Practice Time Savings with an EMR |
Visits &Time |
Time |
| Average time saved in documenting a visit |
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5 minutes |
| Average physician appointments per day |
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25 |
| Total minutes saved per day |
(25 visits x 5 minutes) |
125 (=2 hours) |
| Total days worked in 12 month period |
(5 days/wk x 48 wks) |
240 |
| Total hours saved per year |
(240 days x 2 hours) |
480 |
| Total Weeks of work saved per year |
(480 hrs / 40hrs / wk) |
12 Weeks |
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| If the 2 hours saved each day using EMR to document visits is converted into more visits, you could see additional 6 to 7 patients per day. Before managed care became so intrusive, you could net approximately $200 per hour for your efforts. Even with managed care, you should be able to average $50 per patient visit. |
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| ROI from Time Savings |
| Additional patient visits per day |
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6.5 |
| Total days worked in 12 month period |
(5 days/wk x 48 wks) |
240 |
| Additional patient visits per year |
(6.5 visits x 240 days) |
1,560 |
| Total ROI for First Year |
(1,560 visits x $50) |
$78,000 |
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Alternatively, you can simply go home earlier every day and spend time with your family.
2. Improve your E&M coding
EMR makes the process of collecting the complete review of systems, past medical history, and family and social history rapid and thorough. Historically, most physicians tend to under code. Use of an EMR allows rapid, extensive documentation of visits, making it possible to properly document your cognitive services in order to justify the correct E&M level. An EMR that helps with E&M coding enables a provider to code correctly, with full supporting documentation. |
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| ROI from E&M Coding |
| Average physician appointments per day |
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25 |
| Total days worked in 12 month period |
(5 days/wk x 48 wks) |
240 |
| Patient visits per year |
(25 visits x 240 days) |
6000 |
| Total ROI per Doctor per Year |
(6,000 visits x $9) |
$54,000 |
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This increases in provider efficiency alone more than pays for the costs of implementing an EMR system. The doctors in this study work 4 days per week and have a relatively comfortable patient volume of average 20 patients per day, so their actual increase in income was approximately $40,000 each.
3. Eliminate paper charts and their associated costs
Enormous economic benefits can be realized by converting a paper-based medical office to a fully integrated, paperless record system. Medical Economics (December 1997) has estimated that the creation, tracking, storage and maintenance of a paper record costs $8 per record per year. Electronic records can be maintained for $1.00 to $2.00 per year. With electronic records, there is also a reduced expense for real estate space that would otherwise be needed for paper records. Combining the tasks of imaging/document management with the reduced work of medical records management (filing, chart pulls, etc.) reduces labor costs by 50 to 100%. |
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| ROI from Electronic Medical Records |
| Estimated maintenance of paper charts |
($8/chart/year) |
$8 |
| Estimated maintenance of an electronic chart |
($1-2/chart/year) |
$2 |
| Annual savings per chart |
($8 - $2) |
$6 |
| Assumed active charts per physician |
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3,000 |
| Total ROI per doctor per year |
(3,000 charts x $6) |
$18,000 |
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4. Eliminate transcriptions costs and reduce or eliminate dictation costs
An average physician spends between $12,000 and $25,000 annually on transcription services. Even if you do not eliminate dictation, but just decrease it by 50%, i.e., you could save $6,000 to $12,500 per year.
Depending on the set-up, the cost of leased hardware and an EMR, plus depreciation, might run to $1,000 per doctor per month. The transcription savings alone pays for the hardware and software! |
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| ROI from Transcription and Dictation |
| Savings on eliminated transcription |
(est. $12,000 to $25,000) |
$12,000 |
| OR Savings on reduced dictation |
(50% x est. $12,000 to $25,000) |
$6,000 |
| Total ROI per doctor per year |
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$6,000 |
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5. Stop chasing paper
When an insurance carrier denies payment for a service, your office staff has to track down the paper chart, find the relevant chart notes, copy them, and then attach the notes and resubmit the claim. With electronic document management, on the other hand, the appropriate record is effortlessly retrieved electronically and instantly resubmitted. The timesavings are enormous. |
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| ROI from Instant Access to Records |
| Time saved handling paper |
(est. 20-30 mins/day) |
20 |
| Additional patient visits per day |
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1 |
| Total days worked in 12 month period |
(5 days/wk x 48 wks) |
240 |
| Additional patient visits per year |
(1 visits x 240 days) |
240 |
| Total ROI per doctor per year |
(240 visits x $50) |
$12,000 |
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Drastically reducing wasted time with denied claims saves hundreds of hours per year for your staff and allows you to capture an additional $12,000 per doctor in timesavings alone. When claims are simply not resubmitted within the 90-day limit specified by most insurance carriers because of the hassle you are missing out on thousands, or even tens of thousands of dollars in billings each year.
6. Automate charge capture
EMR automates accurate charge capture. template based mapping makes it possible to catch all valid charges relevant to a particular ICD-9. Cleaner claims are produced with automatic ICD-9 coding with appropriately linked CPT codes. This process can be defined by a hospital or group administrator to occur automatically as the note is documented. Charge capture efficiency is also improved because commonly overlooked procedure codes and supply codes (HCPCS) are more uniformly charged with charge alerts, which can increase revenue by an additional 15-20%. Physicians have the ability to order 'unapproved' tests, but the tracking is in place to help them recognize when such charges may not be reimbursable. For the small practice, a physician can 'self-audit' their charges and see why insurance companies might be denying their charges. For the large, institutional practice administrator, this allows the organization to identify and capture the enormous number of charges that slip through every day and are never even billed. This is simply not possible with dictation; paper charts or the even most sophisticated billing system.
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| ROI from Charge Capture |
| Total ROI per doctor per year |
(est. $75,000 to $100,000) |
$10,000 |
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We conservatively estimate physician owned clinics lose $10,000 per year by this mechanism. Hospital owned clinics lose about $75,000 per doctor per year. Automated charge capture 'discovers' these lost charges.
So, what are the Final Numbers?
In a best case scenario, assuming you expense all costs up front, the combination of better billing and reduced costs results in an estimated increase in income of $118,000 per physician in the first year. After the first year, the increase in income from pre-EMR deployment can be as high as $158,500 annually. It can be expected that offices, which do not operate at peak efficiency, or avail themselves of all of the EMR timesaving features, should be roughly 50% of these numbers. Finally, in an effort to reveal all of the hidden costs of an EMR purchase and provide an accurate and honest ROI calculation, we include the costs associated with accelerated depreciation and ongoing training for new staff. Together, these costs might be as high as an additional $10,000 per physician, per year. |
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| ROI from Medinformatix Solution |
| ROI from Time Savings |
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$78,000 |
| ROI from E&M Coding |
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$54,000 |
| ROI from Electronic Medical Records |
(After 12-18 months) |
$18,000 |
| ROI from Transcription and Dictation |
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$6,000 |
| ROI from Instant Access to Records |
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$12,000 |
| ROI from Charge Capture |
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$10,000 |
| ROI per Doctor per Year |
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$178,000 |
| Costs |
| First Year "Hard" Costs |
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$30,000 |
| First Year "Soft" Costs |
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$30,000 |
| Annual Network and Software Maintenance |
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$10,000 |
| Annual Training for Updates and New Staff |
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$5,000 |
| Annual Hardware Depreciation |
(Accelerated Over 3 Years) |
$4,500 |
| Final Numbers |
| Best Case ROI per Doctor Year 1 |
$178,000 - $60,000 |
$118,000 |
| Best Case ROI per Doctor Years 2+ |
$178,000 - $19,500 |
$158,500 |
| Typical ROI Expected Years 2+ |
50% of $158,000 |
$79,250 |
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| Hard costs are the cost of software licenses plus computer and networking costs. Soft costs are the hidden costs of decreased physician and staff productivity as the application is first implemented and learned. Invariably, this will impact production for the first six weeks, perhaps by as much as 25%. Network and software maintenance include approximately $2,000 for annual software maintenance, and up to $10,000 for fees associated with maintaining the network (such as virus or Spam ware infestations, security, updates, etc.). Realistically, a practice should also budget $5,000 per year to cover the cost of training new hires and training of new features when updated software versions are released. Even if a physician does not turn timesavings into additional patient visits, he can still expect to net an additional $100,000 due to better coding and reduced overhead alone. How is this possible? Technology can introduce time management and other efficiencies into a medical practice. Not everyone will achieve these numbers. |
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