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With the income-crushing 21% Medicare rate-cut scheduled for December, 2010, the pressure’s on to make more money and to cut overhead at the same time.
So we asked…How can you accomplish both of these ends without sacrificing time with the family or giving up vacations?
We looked at ways EMRs could help you reach these goals. We did some conservative calculations on potential financial benefits of EMRs based on family practice figures. Here’s what we found…
First: EMR systems free up all medical record space. What that means is maybe an extra 300 or 400 square feet – enough for two more revenue-generating rooms without adding to rent, utilities or moving.
This was a 40% increase in rooms, and enough space for an associate – who could provide more services for more patients!
Second: EMRs eliminate chart budgets including supplies, transcription and staff hours. We found that it cost about $5 to pull, process, and refile every patient chart – every day.
That meant eliminating paper charts would save about $13,680 each year.
Third: We checked on premium discounts some malpractice carriers offer for using electronic records. Savings ranged from 2 to 5 percent. For a family practice, that would be an annual savings around $1,138 each year.
So, looking at just these three benefits of changing to an EMR system, the annual estimated savings and income increase were:
$ 14,818 estimated overhead savings
+ 20,000 estimated net income increase from new associate
Total: $ 34,818 “net revenue boost”
In most areas, $34,818, could easily cover the cost to build-out two family practice rooms, or make a nice downpayment on a vacation home.
We realize that not every practice will benefit in the same ways when moving from paper to electronic files. However, these are three potential ways EMRs can help offset future reimbursement rate-cuts.
Please keep them in mind when doing your EMR research.
To your success,
Nina Bryant
You know, the political pressure we’re feeling today to transition to EMRs (Electronic Medical Records) reminds me of what happened back in the 70s when the government pushed doctors to become “participating providers” and accept Medicare-allowed assignment amounts as payment in full for services.
Back in those days, Medicare actually sent reimbursements directly to early adopters of that system. Which meant those participating physicians, who agreed to settle for lower fees than non-participants, didn’t have to rely on patients forwarding their Medicare reimbursements to them.
Their colleagues, however, who refused to join as “participating providers” had to wait for patients to forward the reimbursement checks they received, plus the remaining non-covered balances. And, that worked fine for them until – patients started pocketing the doctors’ checks during an economic downturn.
Suddenly, those who waited too long to become “participating physicians” were losing 100% of the money they had earned and all of the patients who were going to collection. Early adopters, however, still received checks from Medicare and avoided further dips in their Medicare incomes.
The same thing can be said about the early adopters into the HMO and PPO booms during the 70s and 80s.
Many M.D.s who signed on early as preferred providers for those markets got the lions’ share of the patients employed by local industries. Their businesses were set for years with a fully-insured and stable patient base.
Many well-established MDs who refused to opt-in early to be HMO and PPO providers went through a painfully long and steady loss of patients and income as more patients signed on for those low-cost plans.
Both those scenarios sound very much like today’s Federal Stimulus Program to entice/persuade us to transition our practices – today – to full Electronic Medical Record (EMR) systems.
The government is offering Medicare reimbursement bonuses to early EMR adopters, who qualify, beginning in 2011. While non-adopters will be punished financially with reduced Medicare reimbursements beginning in 2015.
No matter how we feel about the government’s push for EMR transitions – there’s no denying that we’re smack-dab in the beginning stages of a seismic shift that will forever alter the way we do absolutely everything in our businesses.
If history repeats, I believe that many of us are close to the tipping point for taking the next logical step up in medical practice management. Which means exchanging our old paper-based charts for electronic record systems – once it makes good business sense for us to do so.
This transition may be slightly different from past trend changes. Waiting now may be the smart choice. No one knows for sure and only time will tell. (Yes – I used a blatant cliché)
Make sure you keep informed on the latest government mandates, guidelines and requirements for EMRs.
And, be sure to check back often, at this site, to take advantage of the reports, tips and expert interviews that will be available here.
We will bring you information from top professionals in the field and provide the best resources we can get our hands on so that you can make a timely and smart decision when you make your EMR transition.
Please tell us what you think below.
To your success,
Nina Bryant
The EMR Reporter