Will the ARRA money be worth the effort?

According to the just released McKinsey study, the time has come for healthcare providers to set up a lemonade stand. Why? Because their findings indicate that the incentive money available to doctors may only offset about twenty percent of the costs of implementing EHR. You can read their analysis here:

http://www.mckinseyquarterly.com/Health_Care/Strategy_Analysis/Reforming_hospitals_with_IT_investment_2653

I disagree with a few of the comments in the McKinsey paper. First, the paper begins with two comments, neither of which is accurate; “Mandated upgrades to healthcare IT…”, and “New regulations require…” Lest we forget, having an EHR is optional—choosing not to have one is probably not a smart business decision, but the decision is yours, not Washington’s. Meeting Meaningful Use is also optional. Regarding Meaningful Use, I think an argument can be made that providers are better off without it—you can read my reasoning in some of my prior posts.

So, ARRA money will only meet 20% of your EHR costs. This should not be a news flash. In fact, I think that for more than half of the providers, the ARRA money will not even cover the additional costs of meeting Meaningful Use, let alone the costs of implementing the EHR.

So, if you are seeking an ROI over the total cost of the EHR, and not simply an incentive payment to cover the cost of a gross of “EHR—Yes we can” t-shirts, what can you do?

Sometimes the simple answer is the best answer. I think the answer to this question is quite simple, and its simplicity is what makes it achievable. It is not an answer being looked at by many providers. Approach your EHR implementation as though Meaningful Use did not exist.

Too many providers set the goal of their EHR as completing the implementation. “They wanted an EHR and we gave them an EHR.” This passes neither the test of being necessary or sufficient.

What are your business goals for your EHR? I suggest two:

• Be more efficient

• Be more effective

If your EHR can help you do these two things, you will meet the other goals, goals like providing better care, reducing the number of errors, saving time, and eliminating processes that add not value. Therein lays the all too elusive ROI.

There is actually another way to get money for an EHR that functions well. Once the EHR is running, there is a huge volume of digital data throughout the organization that can be aggregated. The Blues (Cross and Shield, not Belushi and Aykroyd) offer money back to healthcare providers who are able to demonstrate that they have saved the Blues money. If providers prescribe generic medications, naturally it costs the Blues less money. The Blues will share their savings with the providers. The way a provider can capture those funds is to have an EHR that is capable of reporting the generic meds it prescribes to the payor.

It is worth a phone call to your EHR vendor to find out if your system can do that. If not, the best fall-back position could be the lemonade stand.

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3 thoughts on “Will the ARRA money be worth the effort?

  1. Pingback: ICMCC News Page » Will the ARRA money be worth the effort?

  2. Pingback: To See EMR Stimulus Money or Not To See EMR Stimulus Money | EMR and HIPAA

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