Physician Income Lowering – EMR as the Solution or Problem

Evan Steele, CEO of SRSsoft has an interesting post called “Preserving Physician Income in a Low-Margin Environment: EMR Strategy up on his blog which does a great job summarizing a physician’s income with a nice graph. In it he shows the 3 main drivers of expenses and income for a doctor: Reimbursement, Overhead and Income. Then, he offers this interesting analysis:

Given that physicians have no control over reimbursement rates, the only way to positively impact that green line is by effecting fundamental changes to practice operations—and the right EMR is critical to this end.

First, it is imperative to significantly reduce overhead—the orange line. Government programs that may, or may not, deliver short-term financial incentives do not address cost structure. What is needed is an EMR that delivers sustainable and significant reductions in the staff-to-physician ratio and more efficient management of all resources—depressing the orange line. Increasing revenue—the blue line—requires increases in physician productivity and patient volume. The challenge here is to wade through EMR marketing hype to identify the EMR that will actually shift the orange line [overhead] down and the blue [reimbursements] and green [income] lines up.

I read today of one physician’s concern over the GOP’s Pledge to America taking away the EHR stimulus money in the HITECH act. Luckily, this physician was wisely counseled that someone buying an EHR solely for the government handout better think twice.

Instead, the analysis above is a much better gauge for measuring an EMR software. Will it increase productivity? Will it increase reimbursement? Will it decrease staff-to-physician ratio? or will it do any of these other EMR benefits?

All of these questions will help you answer the question of whether a certain EMR software will help to improve Physician income or not. For those that think this doesn’t matter, go visit some more docs.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

6 Comments

  • I understand GOP and for that matter both the parties have many knucleheads; but I do hope they are not so knucleheaded that they will walk away from all the $$ invested thus far into REC, Education, HIEs and EHR infrastrcuture just because it was the idea of the opposing party……………. God bless.
    But then again, you never know.

  • Anthony,
    I agree that it would be crazy if the HITECH funding falls prey to the GOP’s efforts to stop healthcare reform. This discussion came up at a conference I went to recently and the consensus seemed to be that although the GOP is likely going after healthcare reform, there seems to be some agreement in Washington that the EMR stimulus is a good idea and shouldn’t be removed. Plus, it’s part of ARRA and not part of the healthcare reform bill. At least that’s my take.

    Like you said though, there are plenty of knuckleheads in Washington, so you never know what might happen.

  • The latest thing I read (last night) is Republican leaders saying they’ll go after any “unspent stimulus legislation” funds should they regain control of Congress, which would include HITECH. While the HITECH piece is a relative spit in the ocean, it could be vulnerable, even if only as “collateral damage.” I don’t totally share Dr. Kibbe’s sanguinity on this. There are certainly tactical “poison pill” ways to defund this or that program short of outright legislative repeal.

  • Of course, one could argue that repeal of the EMR stimulus might be the best thing that could happen to EMR adoption. It would be a relative waste of the money that’s already been spent, but those are called sunk costs. Always multiple ways to look at an issue.

    Although, I’d feeling sorry for those working at a REC if their funding just suddenly slipped away.

  • So far, EMR’s reduce efficiency and patient volume. Therefore they reduce physician reimbursement. (The improved nursing documentation improves charge capture for facilities with some systems.)

  • A good EMR implementation should only reduce efficiency during the training and implemenation period. The purpose of an EMR is not necessarily to improve revenue margins since EMR does not necessarily pertain to billing, which falls under Practice Management. Yes, and EMR costs a significant amount of money for a decent on, however EMR’s are probably not the reason Physician Income is lowering, since not ALL physicians use an EMR. A few thoughts to follow those statements; I would venture to guess the entire cost of ownership of an EMR is much less than the amount a physician pays for Malpractice over 1-2 years. Driving down the cost of Malpractice is probably the simplest solution to keeping their revenues up. Blame James Sokolove and every other Personal Injury attorney out there, not EMR.

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