EMRs cost too much? This group says No Way!

Computerizing records allowed this group to boost productivity, avoid new hires, and increase collections.

By Ken Terry
Senior Editor

Electronic medical records systems might improve clinical documentation and the ability to access patient data, but they just cost too much. That's what many physicians think, but Primary Care Medical Center, a seven-doctor practice in Murray, KY, is proving that going paperless can improve care and office finances. By using the clinical work flow features of an EMR, coupled with a new practice management system, the group has increased its efficiency, reduced its staff, and boosted collections.

The physicians—three FPs, two internists, a pediatrician, and an internist/pediatrician—believe they'll recoup their $600,000-plus investment in the EMR and billing systems within two years.

Their EMR, called PenChart, incorporates a scheduling system, an internal e-mail system, electronic charge capture, digital dictation, and a prescription writer. These features have allowed the Murray practice to eliminate not only paper charts, but also most paper-based forms of internal communication. And interfacing charge capture with the billing function of the group's Millbrook practice management system has removed the need for manual charge entry.

Of course, none of this would make the physicians happy if documenting visits on the EMR was more time-consuming than writing notes. After a year and a half of experience with PenChart, the doctors concede that it does take a little more time, but they say the documentation is more complete. "The EMR speeds up the process of writing a reasonably good note," says internist Hollis J. Clark.

Pediatrician Joyce F. Hughes agrees that she might spend a bit longer on documentation than she used to. But by increasing the efficiency with which patients are funneled through the office, freeing up nurses' time for helping doctors, and making it easier to handle patient callbacks, the system helps her leave the office most days at 5 or 6 pm, rather than a couple of hours later.

If you'd like to automate your office as the Murray group has done, bear a couple of things in mind. First, a solo or small practice might not be able to afford all the hardware and software needed. But the company that owns PenChart—a joint venture of Pfizer, Microsoft, and IBM called Amicore—plans to offer the EMR as an application service provider. (Right now, it's being sold on a monthly subscription basis.) That means the company would supply the EMR over the Internet or a secure private line, decreasing your equipment and software costs. Other EMR software vendors have taken the ASP route, and some have integrated workflow features like scheduling into their EMRs.

You should also realize that, for this approach to office automation to work, you and your staff have to be prepared to work differently (see "EMRs boost efficiency, too"). This is true not only for PenChart, but for most EMRs. When combined with scanners, for instance, EMRs can eliminate the need to maintain paper charts—but only if you let staff members access them. With all this in mind, here's why that primary care group in rural Kentucky bought an EMR and how they implemented it.

Why the doctors needed an EMR

For FP Robert C. Hughes, who'd been practicing in Murray for 16 years, the biggest problems in the growing clinic were lack of space to store more paper charts and the difficulty of tracking patients' multiple medications. The group had also decided to open a satellite office, and Hughes wanted to make sure that clinical records were accessible at both locations.

After Pfizer Health Solutions demonstrated PenChart for the group, Hughes and Clark visited a multispecialty practice near Boston that was using the EMR. The doctors also sent office manager Sarah Lovett, insurance coordinator Julie Stone, and Clark's nurse, Janet Schecter, to Massachusetts to see PenChart in action. "That was the wisest thing we ever did," says Hughes. "Because they came back from Boston and were enthusiastic about it."

The physicians had some familiarity with computers, although not all had used a Palm or other handheld device. Clark was apprehensive about the EMR slowing him down, but his concern lessened after visiting the Boston group.

Clark and his colleagues were swayed by Hughes' arguments about the need to free up more space in the clinic, the cost of duplicating support staff in a satellite office, ongoing problems with lost charges, and the potential of an EMR to improve clinical documentation. The decision to go forward was unanimous, and the doctors agreed to devote up to 4 percent of collections to paying for the system.

The group is buying the PenChart license over four years, rather than paying a set amount each year as long as they use the system. (Neither the practice nor Pfizer would reveal the price.) Other costs include a three-year payout of $30,000 for the Millbrook practice management software; fees for leasing servers, routers, and other equipment; $2,700 each for 21 Fujitsu pen tablets (small wireless computers with pressure-sensitive screens); $1,000 each for several new PCs; $9,000 for the wireless network; $7,500 each for the interfaces with the group's billing system and lab; and $24,000 for training.

In total, the new information technology is costing the practice about $1,300 per provider per month. With seven doctors, two physician assistants, and one nurse practitioner in the group, that adds up to $624,000 over four years. After that, maintenance, updates, and replacement equipment will cost approximately $700 per provider per month.

These costs, which cover both the EMR and the new practice management system, should not be taken as typical. There are many different kinds of EMRs, ranging from simple note-taking programs with problem lists and med lists to applications like PenChart that allow extensive customization and interface with billing systems. Some EMR vendors sell their product licenses, while others charge a subscription fee. So when you shop around, compare products that are roughly similar.

Implementation of the EMR went smoothly

Two weeks before "going live" with the EMR in October 2000, the Murray practice's 45-member staff attended four-hour training sessions in small groups. Such minimal instruction, of course, wasn't sufficient to get the physicians up to speed on the EMR or get them used to taking notes on a pen tablet. So the practice phased in the new system, first requiring the doctors to use it on new patients, then on a percentage of established patients. Starting on Jan. 1, 2001—about two months after their training—the doctors took all notes electronically.

Pediatrician Joyce Hughes says she wasn't fazed. "Once we got going, we found out you learn best by doing it," she says. "You commit it to memory and your speed picks up."

Bob Hughes, her husband, agrees. "There's a learning curve," he says. "The first month is frustrating, but after three months you're starting to feel real good about it."

What about the staff? Nurse Janet Schecter recalls that her colleagues helped each other learn the new system. This was especially important because not all of the nurses were computer literate. "I thought they might have a problem, but after I told them, 'Here's how it works; we'll never have to pull or hunt another chart again,' they were all for it."

One of the biggest fears had been that something would go wrong with the system and a mass of patient records or bills would be lost. But the combined EMR and practice management system has proven reliable. Lovett attributes that, at least in part, to excellent technical support from a local computer service firm. She also notes that everything in the system is backed up daily on a redundant server and on a 70-gigabyte tape drive (small enough to put in a purse or briefcase) that key employees take turns bringing home with them each night.

All clinicians can access the EMR on pen tablets

All the doctors and nurses—as well as the group's two physician assistants and one nurse practitioner—have wireless Fujitsu pen tablets that they carry from room to room. The computer tablets have easy-to-read, full-color screens measuring 5 inches by 6 inches and fit into plug-in chargers at the nurses' station when they're not in use in the exam rooms. Users can attach a keyboard and type in notes while the tablet is in the charger stand if they prefer that to dictating.

The physicians typically enter their notes by checking off boxes on pressure-sensitive screens with their stylus "pens." Clark figures he dictates short passages for only about six of the 30 visits he has each day. Since there's so little dictation, a transcriptionist can handle all 10 providers' daily notes in about two hours.

The doctors aren't saving much on transcription, since most of them used to take notes by hand, but the EMR has helped them save in other ways: When two nurses left recently, they weren't replaced, and the remaining staffers easily took up the slack. In fact, with the office running more smoothly, overtime pay is down.

When the practice opened a satellite office and installed a newly recruited internist/pediatrician, the group hired only an office manager and a nurse to support him; without the EMR and a T-1 line allowing the doctor to send his charges into the central billing system, two more billing clerks would have been required. If the satellite attracts enough business, the group could put another doctor in there and increase the support staff by only one nurse.

Now that its 35,000 paper charts are in storage, the group has space for expansion at the main clinic, too. If the paper system were still in place, explains Bob Hughes, the group would have had to find larger quarters.

In fact, Hughes and his colleagues had already purchased a 22,500-square-foot building, which would have cost $2.5 million to renovate if they'd decided to move into it. Now, they're selling the building.

On the collection side, more accurate charges, cleaner claims, and a more efficient billing system have improved the group's cash flow and reduced the amount of labor required to stay on top of claims. According to insurance coordinator Julie Stone, only 20 percent of accounts receivable is more than 60 days old; a year ago, half of A/R was older than 60 days. More than 90 percent of claims are being paid, and the practice is no longer writing off debts more than a year old, because they don't exist.

Office visits, after increasing between 10 and 20 percent annually for several years, declined slightly last year because of the economic downturn. Nevertheless, the physicians increased their billings in 2001 by 4 percent and their gross income by 3.4 percent without raising fees. In the fourth quarter, charges jumped 10.3 percent and collections almost 15 percent. "The numbers show we're capturing more of our charges and collecting more of our money," explains office manager Sarah Lovett.

The group took a big financial risk when it decided to purchase the EMR. Was it worth it? Bob Hughes has no regrets. Doctors, staffers, and patients are happier, he notes, and the practice is on track to recoup its investment.

He recalls something a medical school professor once told him: "If you're not a good businessman, you won't be a good doctor. If you don't run your business well, you won't be able to buy the best equipment or hire the best staff. And if you're running on too thin of a margin, you can't be compassionate to your patients."

From where Hughes stands, using technology to make his practice more efficient is good business and good medicine.

Ken Terry. EMRs cost too much? This group says No Way!. Medical Economics 2002;7:34.