ROI

ROI

Six Ways to Return On Investment

Using an electronic medical record integrated with a robust practice management application can generate real cost savings as well as enhanced revenue.

The scope of improved efficiency varies with degree of implementation, and includes reduced labor costs, improved cash flow, streamlined clinical and financial management workflow, increased reimbursement, and detailed financial reporting. All these factors can contribute to making a healthcare delivery system of any size more profitable.

What are the real time and money savings?

What you read below may seem unbelievable, but the numbers are actually conservative. Do the math for yourself.

1. Spend less time documenting; see more patients without extending your work day

Using e-MDs Chart and our patent pending FastForm to speed history gathering, real timesavings can be achieved. Streamlining patient flow and improving documentation accuracy may realize real efficiencies. The average time saved in documenting a patient visit with Chart is 5 minutes. New innovations including 'Short-cuts' and FastForm make this possible. Charting can be done in real-time, at the point of encounter, without a need for longer appointments.

Using structured data entry (such as templates), especially with the ability to save personalized versions of these templates in a pre-clicked fashion, results in minimal impact on provider workflow (speed). The majority of patient visits are for a group of diagnoses with similar patient presentations, exams, and treatment plans, facilitating the use of pre-prepared information.

 

Annual Practice Statistics
Average time saved in documenting a visit    5 minutes
Average physician appointments per day    25
Total minutes saved per day (25 visits x 5 minutes) 125
(2 hours)
Total days worked in 12 month period (5 days/wk x 48 wks) 240
Total hours saved per year (240 days x 2 hours) 480
Total weeks of work saved per year (480 hrs / 40 hrs/wk) 12 weeks

If the 2 hours saved each day using Chart to document visits is converted into more visits, you could see an additional 6 to 7 patients per day. Before managed care became so intrusive, you could net approximately $200 per hour for your efforts. Even with managed care, you should be able to average $50 per patient visit.

 

ROI from Time Savings
Additional patient visits per day    6.5
Total days worked in 12 month period (5 days/wk x 48 wks) 240
Additional patient visits per year (6.5 visits x 240 days) 1,560
Total ROI per doctor per year (1,560 visits x $50) $78,000

Alternatively, you can simply go home earlier every day and spend time with your family.

2. Improve your E&M coding

e-MDs provides extensive documentation 'short-cuts' to speed the process of data collection. Collecting the complete review of systems, past medical history, and family and social history is rapid and thorough. Historically, most physicians tend to undercode, whether due to fear of an audit or to lack of time to sufficiently document the care given. A "level 2 E&M" visit is based more on deficiencies in documentation than on the merits of the visit. Use of an EMR allows rapid, extensive documentation of visits, making it possible to properly document your cognitive services in order to justify the correct E&M level.

Medical Economics magazine has estimated a $40,000 to $50,000 annual loss to physicians who routinely down-coded one E&M level. An EMR that helps with E&M coding enables a provider to code correctly, with full supporting documentation. As an example, Northwest Diagnostic Clinic, the medical practice located in the same facility as e-MDs, completed a reimbursement study following the second quarter of 2000.

Actual E&M coding distribution with corresponding reimbursement was compared to the E&M distribution report for Blue Shield of Texas and projected reimbursement. The distribution of E&M codes by users of e-MDs Chart was shifted toward higher-level codes. They also realized increased reimbursement approaching 20% when compared with the expected reimbursement if the clinic followed the standard E&M code distribution. Northwest Diagnostic was able to increase average reimbursement by $9.01 per visit due to the increased documentation efficiency afforded by our EMR. In addition, accurate evaluation and management service (E&M) coding reduces staff time needed for claims correction and post-processing.

 

ROI from E&M Coding
Average physician appointments per day    25
Total days worked in 12 month period (5 days/wk x 48 wks) 240
Patient visits per year (25 visits x 240 days) 6,000
Total ROI per doctor per year (6,000 visits x $9) $54,000

This increase in provider efficiency alone more than pays for the costs of implementing an EMR system. The doctors in this study work 4 days per week and have a relatively comfortable patient volume of approximately 20 patients per day, so their actual increase in income was approximately $40,000 each. See the article "Are You Leaving Money on the Table?" published in Health Management Technology (March 2001) for more in-depth information.

3. Eliminate paper charts and their associated costs

Enormous economic benefits can be realized by converting a paper-based medical office to a fully integrated, paperless record system. Medical Economics (December 1997) has estimated that the creation, tracking, storage and maintenance of paper records cost $8 per record per year. Electronic records can be maintained for $1.00 to $2.00 per year.

With electronic records, there is also a reduced expense for real estate space that would otherwise be needed for paper records. Combining the tasks of imaging/document management with the reduced work of medical records management (filing, chart pulls, etc. ) reduces labor costs by 50 to 100%.

e-MDs Solution Series, with its capability of providing a paperless medical office, offers dramatic workflow efficiency and cost savings. Northwest Diagnostic eliminated paper charts by scanning all of their old records with our electronic document management product, e-MDs DocMan. They utilize one full time equivalent (FTE) staff member to maintain in excess of 12,000 digital patient records. Over 7,500 of these patient records contain 46,000 scanned documents that would otherwise be filed in paper charts.

 

ROI from Electronic Medical Records
Estimated maintenance of paper charts ($8/chart/year) $8
Estimated maintenance of an electronic chart ($1-2/chart/year) $2
Annual savings per chart ($8 - $2) $6
Assumed active charts per physician    3,000
Total ROI per doctor per year (3,000 charts x $6) $18,000

Of course, in the first year of conversion, dual medical records will probably be maintained, so this savings will not be recognized for the first 12 to 18 months.

4. Eliminate transcription costs and reduce or eliminate dictation costs

The average physician spends between $12,000 and $25,000 annually on transcription services. Even if you do not eliminate dictation, but just decrease it by 50%, you could save $6,000 to $12,500 per year. Depending on your set-up, the cost of leased hardware and an EMR, plus depreciation, might run you $1,000 per doctor per month. The transcription savings alone pays for the hardware and software!

 

ROI from Transcription and Dictation
Savings on eliminated transcription (est $12,000 to $25,000) $12,000
OR Savings on reduced dictation (50% x est $12,000 to $25,000) $6,000
Total ROI per doctor per year    $6,000

At the Northwest Diagnostic Clinic site, this represents a minimum annual savings of $50,000 for the 5 FTE (full time equivalent) providers.

5. Stop chasing paper

When an insurance carrier denies payment for a service, your office staff has to track down the paper chart, find the relevant chart notes, copy them, and then attach the notes and resubmit the claim. With electronic document management, on the other hand, the appropriate record is effortlessly retrieved electronically and instantly resubmitted. The timesavings are enormous.

 

ROI from Instant Access to Records
Time saved handling paper (est 20-30 mins/day) 20
Additional patient visits per day    1
Total days worked in 12 month period (5 days/wk x 48 wks) 240
Additional patient visits per year (1 visits x 240 days) 240
Total ROI per doctor per year (240 visits x $50) $12,000

Drastically reducing wasted time with denied claims saves hundreds of hours per year for your staff and allows you to capture an additional $12,000 per doctor in timesavings alone. When claims are simply not resubmitted within the 90-day limit specified by most insurance carriers because of the hassle (which happens more than you might think), you are missing out on thousands, or even tens of thousands of dollars in billings each year. Even better, an EMR using tools such as ICD-to-CPT links and CCI (Correct Coding Initiative) detection ensures submittal of "clean claims" the first time, dramatically reducing the number of rejected claims!

6. Automate charge capture

e-MDs Chart can automate accurate charge capture. Our proprietary template 'extended attributes' make it possible to catch all valid charges relevant to a particular ICD-9. Cleaner claims are produced with automatic ICD-9 coding with appropriately linked CPT® codes.

This process can be defined by a hospital or group administrator to occur automatically as the note is documented. Charge capture efficiency is also improved because commonly overlooked procedure codes and supply codes (HCPCS) are more uniformly charged with charge alerts, which can increase revenue by an additional 15-20%.

Physicians have the ability to order 'unapproved' tests, but the tracking is in place to help them recognize when such charges may not be reimbursable. For the small practice, a physician can 'self-audit' their charges and see why insurance companies might be denying their charges. For the large, institutional practice administrator, this allows the organization to identify and capture the enormous number of charges that slip through every day and are never even billed.

A hospital consulting group, Bryn Technologies audits hospital owned medical practices and has identified that the average "well managed" primary care practice loses over $250,000 in non-billed services per year. This averages between $75,000 to $100,000 in missed charges per doctor per year! e-MDs Chart does far more than electronic documentation. It stops the hemorrhage by identifying these charges during documentation, at the point of patient care. This is simply not possible with dictation, paper charts or the even most sophisticated billing system.

 

ROI from Charge Capture
Total ROI per doctor per year (est $75,000 to $100,000) $10,000


We conservatively estimate physician owned clinics lose $10,000 per year by this mechanism. Hospital owned clinics lose about $75,000 per doctor per year. Automated charge capture 'discovers' these lost charges.

Other ways to save. . .

Ancillary benefits include lower malpractice risk and protection from embezzlement. e-MDs Bill practice management system has fraud and abuse prevention measures in compliance with HIPAA and a patent pending embezzlement safeguard built in to help ensure collection of all copays and other monies owed to you. Considering as many as 50% of practices have some degree of pilfering, this can prevent thousands of dollars in lost funds and costly legal fees.

Efficiencies can also be gained through optimizing the use of non-physician providers, such as physician assistants. Since a structured, template based EMR can be used to deliver customizable protocol-driven care, non-physician providers can deliver healthcare with high adherence to quality standards set by organization or by individual provider.

The integration of electronic, multi-station scheduling with the clinical information system can eliminate duplication of data entry, and help maximize efficiency. A full-featured scheduler, such as e-MDs Schedule, provides combined internal workflow efficiencies with state of the art features, such as modified wave scheduling. This allows optimal use of staff and resources, increasing profitability. Many commercially available electronic billing software applications handle invoicing and claims management, but these functions are not sufficient to provide maximum workflow efficiency and productivity. e-MDs Bill combines powerful billing and claims management features with robust reporting capabilities. In this way, revenues are maximized while providing an efficient means of tracking productivity and performance.

So, What are the Final Numbers?

In a best case scenario, assuming you expense all costs up front, the combination of better billing and reduced costs results in an estimated increase in income of $118,000 per physician in the first year. After the first year, the increase in income from pre-EMR deployment can be as high as $158,500 annually. It can be expected that offices which do not operate at peak efficiency, or avail themselves of all of the EMR time-saving features, should be roughly 50% of these numbers. Finally, in an effort to reveal all of the hidden costs of an EMR purchase and provide an accurate and honest ROI calculation, we include the costs associated with accelerated depreciation and ongoing training for new staff. Together, these costs might be as high as an additional $10,000 per physician, per year.

 

ROI from e-MDs Solution Series
ROI from Time Savings    $78,000
ROI from E&M Coding    $54,000
ROI from Electronic Medical Records (after 12-18 months) $18,000
ROI from Transcription and Dictation    $6,000
ROI from Instant Access to Records    $12,000
ROI from Charge Capture    $10,000
ROI per Doctor per Year    $178,000
 
Costs
First Year "Hard" Costs    -$30,000
First Year "Soft" Costs    -$30,000
Annual Network and Software Maintenance    -$10,000
Annual Training for New Updates and New Staff    -$5,000
Annual Hardware Depreciation
(Accelerated Over 3 Years)
   -$4,500
 
Final Numbers
Best Case ROI per Doctor Year 1 $178,000 - $60,000 $118,000
Best Case ROI per Doctor Years 2+ $178,000 - $19,500 $158,500
Typical ROI Expected Years 2+ 50% of $158,000 $79,250

Hard costs are the cost of software licenses plus computer and networking costs. Soft costs are the hidden costs of decreased physician and staff productivity as the application is first implemented and learned. Invariably, this will impact production for the first six weeks, perhaps by as much as 25%. Network and software maintenance include approximately $2,000 for annual software maintenance, and up to $10,000 for fees associated with maintaining the network (such as virus or spamware infestations, security, updates, etc. ). Realistically, a practice should also budget $5,000 per year to cover the cost of training new hires and training of new features when updated software versions are released.

Even if a physician does not turn time savings into additional patient visits, he can still expect to net an additional $100,000 due to better coding and reduced overhead alone.

How is this possible?

Technology can introduce time management and other efficiencies into a medical practice. Not everyone will achieve these numbers. If you do not become a power user, availing yourself of all of the time saving features and charge capture tools included in e-MDs Chart, you can expect to enjoy a more modest increase in net income. At a minimum, physicians should reasonably be expected to achieve half these results. That is an additional $84,000 take-home income per year!

The cost of delay is significant.

Every month that you procrastinate implementing electronic medical records costs you between $7,500 to $15,000 per physician in unrecognized income. Physicians that expend the effort to become power users, by emphasizing training and implementation, will see their incomes increase proportionately to their effort.