The Fiscal Cliff of Primary Care

The Hello Health blog has a really interesting article up discussing what they called the Primary Care Fiscal Cliff. The thing I like most about the post is the data they provide on what’s happening with primary care doctors. Take for example this list of statistics:

  • Primary care practice income rose just $500 from 2008-2011
  • Operating expenses of a practice continues to rise each year
  • Primary care physicians can spend an average of 13 hours a week of uncompensated care worth over $30,000 in lost revenue a year
  • The cost of a traditional electronic health record can easily exceed $20,000 in the first year with a 5-year projected cost approaching $50,000 per physician

I’m not sure that the US government’s fiscal cliff has much relationship to the primary care doctor fiscal cliff (except for the possible Medicare cuts), but it’s very safe to say that primary care doctors are in a real financial predicament.

In the Hello Health post they suggested from their own research that practice finances and EHR are the two issues keeping primary care physicians up at night. I’m sure these findings won’t be a surprise to any primary care doctors. Plus, it’s worth noting that the finances of a primary care practice are tied to an EHR in many ways.

I have often questioned how much influence the government EHR incentive money has had on getting doctors to adopt EHR. Whenever I do, I usually get a response from a primary care doctor saying that they wouldn’t be implementing an EHR if it weren’t for the EHR incentive money and that they were depending on the EHR incentive money to help cover the new EHR expense.

In my recently started EHR benefit series I’m hoping to expand the thinking when it comes to EHR revenue implications. There are still tens of thousands of primary care doctors that need to implement an EHR or replace their existing EMR. Understanding the financial ties to EHR will help a practice ensure a more successful EHR implementation.

At the core of the question is whether EHR software is a financial benefit or a financial loss. The cop out answer to that question is that it depends on how you implement the EHR and which EHR you implement. I wish someone would take the time to study the top 20 EHR companies and evaluate how practices have done pre-EHR implementation and post EHR implementation. Plus, they’d need to take into account the cost of an EHR. That type of study would produce a lot of interesting EHR data.

My gut feeling having participated in numerous EHR implementations and heard from thousands of other EHR implementations is that the result is usually a wash. In most EHR implementations I don’t think there’s a net financial gain or loss. There are outliers on both sides of that spectrum, but I think for most it has some pros and some cons.

With that said, I think there are long term benefits to a practice that has an EHR. While the immediate financial returns may not come, I think that the EHR in a practice is going to be essential for many of the financial gains a practice wants to achieve in the future. The most obvious example is becoming part of an ACO. Can you really get the financial benefits of being in an ACO without an EHR? I think the answer will likely be no. You need the EHR data to obtain and report on the ACO improvements your practice achieves.

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.

2 Comments

  • Docs who went to an EHR pre-incentive are a small group. There is no doubt the incentive/threat of reduced reimbursements is a major reason docs are going to EHRs.

    You have to be careful to be specific when you talk about EHR & financial benefit.

    IF the practice was not on a PM
    AND the new EHR has PM as part of its functionality
    THEN measuring financial benefit is rather easy

    IF the practice has been on a PM (as most are)
    THEN showing a financial benefit is rather challenging as an EHR does not increase the efficiency of most practices…in fact they tend to hurt productivity.

    I, too, think being on an EHR is the right thing for a practice, but we all know, doing the right thing doesn’t always happen.

  • I think too many practices have purchased EHR without addressing in parallel the business/operational and clinical workflow changes impacted by the shift to digital records. Having practice operations and technology walk hand-in-hand can have a very positive impact on financial performance – everything from efficiency of clinical staff to speed to full utilization of the chosen system.

    This lack of business focus has, I think, left practices to rely too heavily on the chosen EHR system to support them on areas outside their core competency. Too think a software development organization measured on deployments is going to have strong skill sets and focus on non-deployment tasks like clinical workflow management and Meaningful Use consulting is unrealistic.

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