The business case for paperless medicine

Automatic Savings

Deborah Milburn, administrator at Dublin Primary Care, an eight-doctor practice in Colorado Springs, Colo., says it cost her practice about $US12,000 per doctor to install an EHR from Amicore. That included updating hardware and giving doctors tablet PCs to carry around. "Where are these estimates of $US20,000 to $US40,000 per physician coming from?" Milburn wonders.

Dublin Primary Care generates $US5 million or so in revenue a year, exactly the sort of practice that is supposed to be least able to afford to implement electronic health records. Milburn doesn't understand why. The practice decided back in 2002 to install an EHR system as a way to eliminate expenses like transcription costs, while giving more consistent treatment to patients.

Three years after turning it on, the system has done more than break even. Dublin Primary Care spends $US10,000 a month less than it did in 2002, even figuring in $US13,000 a month in IT costs. That's after three years of cost increases, staff raises and the like. Those savings have come from eliminating transcription costs, which were running at more than $US6,000 a month in 2001, plus drops in costs for things like printing. But the biggest savings has come from decreased staff--Dublin has gone from 53 full-time staff to 38, without a drop in patients.

Milburn says that when Vioxx was recalled, she didn't even have to do a search; her vendor (Amicore) sent her software that executed the necessary queries. She also notes that the annual back-to-school headache of pulling immunization records is now relatively painless.

Another doctor who is on his second implementation of an EHR system says that both times it has paid for itself within the first year of use, and he doesn't understand why physicians aren't rushing to implement them. "It's astounding to those of us who've been to the mountaintop and seen the glory of them," says Joel Diamond of Diamond Fera and Associates in Harmerville, Pa.

Diamond says that in his first practice, a seven-doctor group with four locations, it cost $US80,000 to implement an electronic health records system from Misys. But the elimination of transcription costs and 2.5 full-time positions in the first year covered the cost of the system. The practice also got so much better at coding and reimbursements that one of its payers audited it (the practice passed the audit with flying colors).

When Diamond and one of his partners left to form a new practice, they put in an EHR from the get-go. They knew it would work, and they also expect to see pay-for-performance start to make it even more worthwhile to their bottom line. Under the pay-for-performance model, "people will lose money without an electronic medical records system," Diamond says. "There is no way to track your data without one."

Diamond and his partner have also started consulting on these systems, and spend time helping other members of the Pennsylvania Academy of Family Physicians think about them. He says the message is always: You will not lose money, you will save time, and your quality of care will go up exponentially.

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