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Tuesday
Jun072011

How To Offset the Cost of EHR Implementation

Hospitals are spending millions on electronic health records (EHR) in anticipation of meaningful use requirements that come into force in 2015. Research conducted with C-level executives from 50 hospitals paints a picture of costly EHR implementations that have failed to deliver results. Slightly more than 70% of executives indicated that EHR had not delivered expected benefits.

Electronic health records are viewed fundamentally as a technology initiative; and not the basis for integrating core hospital functions to improve outcomes while reducing operating costs. The emphasis is on implementation not on integration. Reductions in clinical and administrative errors have been relatively minor, as have improvements in patient safety. In our research, only 8% of executives indicated that reductions in clinical errors and improvements in patient safety met expectations. Only 6% reported improvements in patient satisfaction that met expectations.

A different challenge to effective EHR implementation is a hospital culture that is unaccustomed to widely accepted financial measures such as ROI, NPV, or payback. Future compensation models are expected to be driven by value rather than volume. In our research, 24% of executives indicated use of ROI to evaluate their EHR investment, 22% indicated use of payback period, while the remaining 54% didn’t have a metric to evaluate these investments. Sixty percent of executives indicated their EHR implementations were over budget.

Meaningful use must be achieved by optimizing the value of existing EHR platforms not by spending more on technology. Hospital executives must understand the true cost of meeting patient needs and the value created in each patient interaction. A Value Based framework can be used for evaluating all clinical and non-clinical interactions, and then designing and integrating these processes into the usual daily work routine to deliver a flawless customer [patient] experience. A value-based approach drives ROI by optimizing the ratio of output value to input costs. Process integration, enabled by existing EHR platforms, minimizes input cost by (i) eliminating error-prone handoffs, (ii) eliminating duplication of data and of effort, (iii) providing access to real-time actionable information at points of service

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