MGMA report: EHRs boost practices' financial performance

Medical practices that have implemented an electronic health record (EHR) system report better financial performance than those that have not, according to the Medical Group Management Association's (MGMA's) newly released Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data.

Practices that were not owned by a hospital or integrated delivery system (IDS) and that had an EHR reported $49,916 greater total medical revenue after operating cost per full-time-equivalent (FTE) physician than practices with paper medical records. These practices also reported greater expenses ($105,591 per FTE physician) but had $178,907 greater median revenue per FTE physician than practices with paper medical records.

This same pattern was observed in hospital/IDS-owned practices. Multispecialty practices that were hospital-/IDS-owned and had an EHR reported an operating margin that was $42,042 more than the margin in those with paper medical records.

"Adopting an electronic system can be costly and time-consuming, and understanding the impact it will have on the practice is critical," says William F. Jessee, MD, FACMPE, president and chief executive officer of MGMA. "While the implementation process can be very cumbersome, these data indicate that there are financial benefits to practices that implement an EHR system."

Nonhospital-/IDS-owned practices with EHRs also reported an increase in financial benefits as they gain more experience with their systems. After 5 years of EHR use, these practices reported an operating margin 10.1% greater than practices in their first year of having an EHR.

The survey report found that the highest information technology (IT) costs occur in the first year after installation in nonhospital-/IDS-owned practices. Medical records and transcription staff costs decreased after this time. IT staffing per FTE physician increased slightly after 5 years (0.13 to 0.15), and FTE medical records staff per physician decreased by 44.12% (0.34 to 0.19).

"The potential of improved financial performance should be an encouragement for many organizations to purchase and use an EHR. Physicians adopting these technologies may also earn up to $44,000 in Medicare EHR incentives funded through the Health Information Technology for Economic and Clinical Health Act," Jessee says. "However, while these incentives can defray some of the implementation costs, qualifying for them by demonstrating 'meaningful use' of the EHR is expected to be challenging for many practices."