In response to Anne’s post on Senator’s questioning the meaningful use EHR incentive money, Gary Colvin emailed me the following comment:
I would argue for the case where the only reason some providers are in the M.U. game is due to their Hospital subsidies. Instead of paying approx $1,200/ month to lease out their Epic E.M.R., they are enjoying its benefits for under $300 per month. What happens when the subsidy goes away for good? I think you would be hard pressed to see a four doc family practice paying $4,800 / month to enjoy that system — so, when the subsidy goes away (maybe it will be extended to 2016?) it will surely have an impact on who stays in the game.
I did question Gary on his algebra of the cost of Epic per doctor and he said that he got numbers from his hospital which is a public hospital where the pricing has to be transparent. It actually makes me wonder what other EHR pricing data could be uncovered from various publicly available sources. I wonder if data geek Fred Trotter has ever worked on this.
Regardless, I think the EHR subsidies is an important topic. I’ve known many doctors that are afraid of the hospital EHR subsidy because of the lock in it creates with the hospital. However, in many areas the lock in is already there so it doesn’t matter.
I wonder if hospitals are worried what it will mean for them once the EHR subsidies are no longer available.
What happens to those that have taken all the incentive money, and when the incentive is over, they quit servicing Medicare and Medicaid patients?
JennaB,
But Medicare and Medicaid pay so well…oh wait, no they’re one of the lowest payers. I won’t be surprised if what you describe happens. Although, many get paid too much by Medicare and Medicaid to do that.
Great topic, John.
In my experience helping hospitals design subsidy programs, I’ve found that if the subsidy is structured such that the bulk of the investment is upfront, in the form of perpetual software licenses, then the risk to independent practices is lower because if the subsidy goes away, they are only subject to paying software maintenance fees, which are typically lower because the hospital was able to negotiate a better deal than a small practice could.
The ideal scenario is when the hospital has purchased an EHR for their employed ambulatory physicians, and then subsidizes the same product to the community physicians. From a support and negotiation perspective, the small physician practice has the weight of the sponsoring hospital behind them which is vastly more effective than a 2 physician practice trying to escalate a support issue with an EHR vendor.
Jed,
It’s a good comment and that situation is better than many situations where a hospital can offer a subsidy. The concern with the situation you describe though is that the community physicians will play second fiddle to the hospital owned practices. I don’t know many doctors who are ok with playing second fiddle.