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Most physicians will lose money after adopting EHRs, study finds

by Carol Ko, Staff Writer | March 05, 2013
A new study published in Health Affairs shows that most surveyed physicians lost money five years after electronic health record (EHR) adoption.

Using financial data on 49 practices obtained through a large EHR pilot program, the study analyzed the total costs involved in implementing EHR systems including the cost of the system itself, the IT support staff they had to hire and the extra hours doctors spent adjusting to the new system.

The study authors observed that on average, the projected five-year return on investment for physicians was a loss of $43,743.

This figure is strikingly close to the $44,000 Medicare incentive payment for EHR adoption. At first glance, this suggests that the incentive is working the way it's supposed to, recouping physicians' losses. But these figures are deceptive because they only represent averages, according to study co-author Julia Adler-Milstein.

One of the key findings in the study showed that the financial impact of EHR adoption differed dramatically depending on the size of the practice, with smaller practices sustaining far more losses on average than larger practices.

"There were people who were huge winners and people who were huge losers. For many practices, $44,000 was nowhere near enough to get them to break even," Adler-Milstein told DOTmed News.

This finding is particularly significant because smaller practices are widely acknowledged to be behind on EHR adoption due to uncertainties around the return on investment.

If federal incentive dollars fail to cover their losses, it raises larger concerns around effectively motivating smaller practices to adopt EHRs.

Ultimately, the study shows hospitals that did earn a positive return did so by making drastic operational changes in conjunction with EHR adoption. In other words, it's not enough to pay lip service to EHR to get the federal incentive dollars.

"If all you do is adopt new technology, you'll never end up in the black because you won't do anything to benefit from the technology," said Adler-Milstein.

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