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.
The following exemplifies
ways an EMR will give you a return on
your investment.
1. Increase number of patients seen per
provider by reducing time spent on chart
documentation.
2. Reduce time spent by nurses and clerical
staff on patient intake information
3. EMR
charting features automatically generate
and transmit charges to billing applications
via interfaces.
4. Eliminate lost and under-coded charges
with code assistance.
5. EMR Prescription writing notifies physician
if requested medication is included on
the approved formulary for each patient’s
insurance.
6. Reduce pharmacy call-backs by electronically
sending prescriptions.
7. Malpractice insurance carriers frequently
offer discounts to organizations using
an EMR system.
8. As the number of paper charts are reduced,
costs associated with external storage
space are reduced.
9. Reduce supply costs for paper charts
per chart, per physician.
10. The EMR documentation templates significantly
reduce or eliminates transcription.
11. The labor costs related to the medical
records department for requests of chart
pulls are reduced.
12. Use of the EMR automates the process
of generating and receiving referrals.
13. Real-time clinical alerts ensure that
treatment for like conditions follow cost-
and clinically effective regiments.
14. Avoid duplicating tests / procedures
by using EMR’s automated order communications
and lists of prior tests for each patient.
15. Eliminate costs associated with inpatient
adverse drug-to-drug and drug-to-allergy
events.
Increases Profitability
with Rapid ROI
The
key to medical office profitability is
increasing the efficiency of current operational
workflow without compromising quality
of care. Medinformatix
improves profitability by decreasing medical
record documentation time, justifying
higher coding levels, prompting for complete
charge capture, eliminating medical transcription
expenses, reducing paper costs, and decreasing
malpractice exposure. The efficiencies
generated by these paperless processes
routinely result in two hours saved each
day in visit and record documentation
time, higher reimbursement for cognitive
medical services and decreased expenses
with revenue increases of over $100,000
per doctor per year.
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 Medinformatix 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).
Annual
Practice Statistics
| Practice
Time Savings with an EMR |
|
|
| Average time
saved in documenting a visit |
|
5 minutes |
| Average physician
appointments per day |
|
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 |
If
the 2 hours saved each day using Medinformatix
to document visits is converted into more
visits, you could see an 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.
| ROI from
Time Savings |
|
|
| Additional
patient visits per day |
|
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 |
Alternatively,
you can simply go home earlier every day
and spend time with your family.
2. Improve your E&M coding
Medinformatix 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 undercode, whether
due to fear of an audit or to lack of
time to sufficiently document the care
given. A "level 2 E&M" visit is based
more on deficiencies in documentation
than on the merits of the visit. 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. Medical
Economics magazine has estimated a $40,000
to $50,000 annual loss to physicians who
routinely down-coded one E&M level. An
EMR that helps with E&M coding enables
a provider to code correctly, with full
supporting documentation.
| ROI from
E&M Coding |
|
|
| Average physician appointments
per day
| |
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 |
This increase 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 approximately
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 paper records
cost $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%. Medinformatix with
its capability of providing a paperless
medical office, offers dramatic workflow
efficiency and cost savings.
| 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 |
|
3,000 |
| Total
ROI per doctor per year |
(3,000 charts
x $6) |
$18,000 |
Of
course, in the first year of conversion,
dual medical records will probably be
maintained, so this savings will not be
recognized for the first 12 to 18 months.
4. Eliminate transcription
costs and reduce or eliminate dictation
costs
The 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%,
you could save $6,000 to $12,500 per year.
Depending on your set-up, the cost of
leased hardware and an EMR, plus depreciation,
might run you $1,000 per doctor per month.
The transcription savings alone pays for
the hardware and software!
| 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 |
|
$6,000 |
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 time savings
are enormous.
| ROI from
Instant Access to Records |
|
|
| Time saved
handling paper |
(est 20-30
mins/day) |
20 |
| Additional
patient visits per day |
|
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 |
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 time savings alone. When claims are
simply not resubmitted within the 90-day
limit specified by most insurance carriers
because of the hassle (which happens more
than you might think), you are missing
out on thousands, or even tens of thousands
of dollars in billings each year. Even
better, an EMR using tools such as ICD-to-CPT
links and CCI (Correct Coding Initiative)
detection ensures submittal of "clean
claims" the first time, dramatically reducing
the number of rejected claims!
6. Automate charge capture
Medinformatix automates accurate charge
capture. Our 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. Medinformatix does far more
than electronic documentation. It stops
the hemorrhage by identifying these charges
during documentation, at the point of
patient care. This is simply not possible
with dictation, paper charts or the even
most sophisticated billing system.
| ROI from
Charge Capture |
|
|
|
| |
|
| Total ROI per doctor
per year |
(est $75,000
to $100,000) |
$10,000 |
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.
Other ways to save. .
.
Ancillary benefits include lower malpractice
risk and protection from embezzlement.
Medinformatix practice management system
has fraud and abuse prevention measures
in compliance with HIPAA built in to help
ensure collection of all copays and other
monies owed to you. Considering as many
as 50% of practices have some degree of
pilfering, this can prevent thousands
of dollars in lost funds and costly legal
fees. Efficiencies can also be gained
through optimizing the use of non-physician
providers, such as physician assistants.
Since a structured, template based EMR
can be used to deliver customizable protocol-driven
care, non-physician providers can deliver
healthcare with high adherence to quality
standards set by organization or by individual
provider.
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 time-saving 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.
| ROI from
Medinformatix Solution |
|
|
| ROI from Time
Savings |
|
$78,000 |
| ROI from E&M
Coding |
|
$54,000 |
| ROI from Electronic
Medical Records |
(after 12-18
months) |
$18,000 |
| ROI from Transcription
and Dictation |
|
$6,000 |
| ROI from Instant
Access to Records |
|
$12,000 |
| ROI from Charge
Capture |
|
$10,000 |
| ROI per Doctor per
Year |
|
$178,000 |
| Costs |
|
|
| First Year
"Hard" Costs |
|
$30,000 |
| First Year
"Soft" Costs |
|
$30,000 |
| Annual Network
and Software Maintenance |
|
$10,000 |
| Annual Training
for Updates and New Staff |
|
$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 |
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 spamware 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 time
savings 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. If you do not become a power
user, availing yourself of all of the
time saving features and charge capture
tools included in Medinformatix, you can
expect to enjoy a more modest increase
in net income. At a minimum, physicians
should reasonably be expected to achieve
half these results. That is an additional
$84,000 take-home income per year! The
cost of delay is significant. Every month
that you procrastinate implementing electronic
medical records costs you between $7,500
to $15,000 per physician in unrecognized
income. Physicians that expend the effort
to become power users, by emphasizing
training and implementation, will see
their incomes increase proportionately
to their effort.
