Epic Rollout Contributes To $55M Loss At NC Hospital

It’s no secret that rolling out an Epic EMR is a big-ticket investment. What’s also becoming apparent is that some of the hospitals that take the plunge can’t really afford to pay for what they’ve bought, much less staff and develop an Epic presence.

The latest Epic EMR financial casualty to cross my desk is Wake Forest Baptist Medical Center which, according to the Winston-Salem Journal, saw a $55.1 million operational loss partly due its Epic rollout during fiscal 2012-13.

In a regulatory filing directed to bond investors, Wake Forest Baptist said that the Epic implementation had a substantial negative impact on fiscal 2013 due to both direct implementation costs and associated indirect expenses, according to the Winston-Salem Journal.

While the hospital’s stock investment gains of about $54 million helped offset most of the operational loss, leaving the overall loss at a much smaller $571,000, this fiscal year’s performance is still much worse than the previous year, when Wake Forest had $45.8 million in operational revenue and overall excess revenue of $88.7 million, the newspaper reports.

But the direct expenses and development costs weren’t the real capper, the newspaper said. The biggest Epic-related blow to Wake Forest Baptist came from $53.7 million in indirect impact, including $36.9 million of lost margin due to volume disruptions during the initial go-live and post go-live optimization. On top of that, the hospital reported $16.8 million in other Epic-related implementation expenses.

And that led to a shakeup in the C-suite. Giving the lie to the notion that nobody ever got in trouble for buying Epic, earlier this year, the hospital’s chief information officer of Wake Forest Baptist resigned in the middle of the troubled Epic launch.

In the article, the newspaper reports that Wake Forest Baptist “remains confident in Epic’s long-term benefit to the center”, and that hospital CEO Dr. John McConnell believes that the install “was absolutely necessary for patient safety,” he told the Winston-Salem Journal .

While it may turn out to be true that Wake Forest Baptist will be able to improve patient safety using its Epic EMR, in the mean time it’s having cut back on staff to pay for that gain. According to the newspaper, the center had planned to eliminate at least 950 jobs during the recent fiscal year;  some were not eliminated but may be during this fiscal year.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

2 Comments

  • Huge amounts of money that would have been better spent on patient care, education, research and innovative technology that increases quality while decreasing cost, is instead being dumped into substandard EHRs that decrease productivity while increasing cost without increasing quality. This article is the tip of the iceberg in terms of lost revenue, huge costs, and minimal benefit of the current crop of EHRs forced on us by the government.

    This hospital broke even, how many others will go bankrupt?

  • It’s not a stretch that some hospitals could/will go bankrupt.

    Their starting position was a state of reasonable productivity.

    What followed was a massive outlays of cash for, in many cases, circa-1970 “technology” that almost anyone could predict would cause a sharp decrease in productivity.

    The decrease in productivity can be traced to two (not exhaustive list)factors

    a) reduced patient throughput
    b) staff pushback to being asked to become “data trolls”.

    The usual mantra is “. . . the software needs you to do things this way”.

    Whose “way” exactly is that?

    Certainly not according to “best practices” that individual healthcare service delivery organizations spent year developing a competitive advantage.

    The likely scenario is a need to take on protocols invented by people many of whom have never worked in a hospital/clinic.

    The initial acquisition costs are just the tip of the iceberg.

    It seems many customers of the older “customizable” software systems find themselves on a “slippery slope” of never ending fees/charges, whilst the vendor sits back and enjoys their “cash cow”

    It will get a lot worse before it gets better, in my opinion.

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