Will Electronic Records Save Money?
Will Electronic Medical Records Implementation Save Me Money?
Under the American Recovery and Reinvestment Act (ARRA) of 2009, over $19 billion is directed as an electronic medical records (EMR) and electronic health records (EHR) stimulus exclusively for EMR/EHR system implementation. Proponents say the investment of the EMR software costs promises long-term savings for the country and there are reports that there are multiple EMR advantages that will help physicians and providers too. However, there is little data on savings for patients.
The administration says one of the EMR advantages is that increased electronic medical records implementation will save the federal government more than $12 billion over the next 10 years while the RAND Corporation, a global policy think tank, estimates savings of about $80 billion a year for the health-care sector when they move towards paperless medical records.
Benefits of Electronic Health Records and Electronic Medical Records Systems
The EHR and EMR advantages, as well as the savings, according to RAND, come from “reducing redundant care, speeding patient treatment, improving safety and keeping patients healthier.”
The difference in these numbers can be attributed in part to different assumptions about the future of the health care industry. A 2008 report by the Congressional Budget Office notes that some optimistic estimates rely on a best-case scenario of potential savings of electronic health records that only apply if other changes are made to the health care system in coordination with electronic medical records implementation.
One of the EMR advantages is the idea that every time a doctor or nurse sees a patient, a whole database of information is instantly available, including allergies, underlying conditions and test results. On a theoretical level this should save patients money by reducing excess treatment. However, there is little data currently available to support that hypothesis.
There are reports that suggest electronic health records software implementation could bring significant cost savings for physicians and providers. A 2003 cost benefit analysis published in the American Journal of Medicine estimated that the net EMR benefits for a 5-year period was $86,400 per provider.
EMR Implementation Can Lower EMR Costs Over Time
Another study in 2003 by the University of California focused on solo and small group physicians. It found that although EMR advantages varied greatly, some of the most successful physicians saw savings of up to $20,000 per year. A decline in staff costs was common.
When considering electronic health records and electronic medical records software implementation, start up EMR software costs cannot be ignored. The University of California study reported initial EMR costs of $15,000 to $50,000 per physician in its focus group. However, government incentives passed in the EMR stimulus bill are targeted to help lower these EMR costs and expenses.