Track 1: EHR Implementation and Adoption September 9, 2008 AHRQ Annual Conference 2008

1. David N. Gans, MSHA, FACMPE Vice President Practice Management Resources Medical Group Management Association Impact of Electronic Health Records on the Financial Performance of Medical Group Practices Track 1: EHR Implementation and Adoption September 9, 2008 AHRQ Annual Conference 2008 Bethesda, MD

2. Impact of EHR on Medical Practice “One accurate measurement is worth a thousand expert opinions.” Rear Admiral Grace Hopper

3. Learning Objectives Understand how Electronic Health Records affect the economic performance of medical group practices: • in the perception of medical practice administrators who describe how electronic health records impacted their practices • by cross sectional comparison of medical groups with and without electronic health records • by longitudinal assessment of practices that implemented an electronic health record in the past two years 3

4. Perception of medical practice administrators who describe how electronic health records impacted their practices • Name, credentials • Organization • Date 4

5. MGMA 2007 Electronic Health Record Survey • Survey frame of medical practices that responded to a 2005 national information technology survey • Voluntary response by medical practice administrators • 570 practices responded describing their health record system, including 285 practices that had an electronic health record

6. Summary of Study Findings • The study identified 285 practices where EHR implementation is in process or is fully implemented. • Respondents described increased operating costs, reduced productivity, and other surprises and challenges during the first 6 to 24 months of the implementation • After the first 6 to 24 months, the benefits of EHR adoption exceeded costs and most practices wondered how they ever conducted business without an EHR

7. Types of EHR

8. Perceived Impact of EHR on Practice Costs 8

9. Perceived Impact of EHR on Practice Productivity 9

10. Testimonials on EHR Return on Investment • We are definitely receiving a ROI on our EHR but during the first year it cost us much more than it saved us. Physician productivity is actually higher but they used it to get out of the office earlier (quality of life) versus actually seeing more patients. • Expensive to start, but ROI should be under three years. It is the only way left to significantly impact practice expenses. • A robust EHR, carefully selected and painstakingly implemented can be a huge benefit. It’s ROI includes reduction in staff, increased billing, faster A/R, better documentation and patient safety and pay-for-performance initiatives.

11. Cross sectional comparison of medical groups with and without electronic health records • Name, credentials • Organization • Date 11

12. MGMA Cost Survey Report • MGMA Cost Survey Report • Survey frame of MGMA Medical Practices • Conducted annually with similar questionnaire format and definitions since 1979 • Voluntary response by medical practice administrators • 2008 report based on data submitted by 1695 medical practices, representing the financial performance of 29,215 FTE physicians • 2008 report included information from 544 practices with an electronic health record

13. Cross Sectional Analysis • Identify medical groups with an EHR and practices with a paper medical record • Categorize practices by specialty and ownership • Determine the mean for key revenue and expense measures • Use the T-test to measure significance

14. Impact of EHR on Multispecialty Groups 14

15. Impact of EHR on Physician-Owned Multispecialty Groups with Primary Care Only 15

16. Impact of EHR on Family Practice 16

17. Impact of EHR on Cardiology Groups 17

18. Impact of EHR on Orthopedic Surgery Groups 18

19. Longitudinal assessment of practices that implemented an electronic health record in the past two years • Name, credentials • Organization • Date 19

20. Longitudinal Analysis • Identify family medicine and multispecialty with primary care groups that indicated the practice installed an EHR in 2006 and reported information for the 2007 Cost Survey • Identify if practice also participated in the 2005 Cost Survey • Determine the change in revenue and expense for each practice • To control for environmental change, perform the same calculation for family medicine and multispecialty with primary care groups that indicated the practice had a paper medical record.

21. Mean Two Year Change in Financial Performance for Primary Care Practice

22. Observations • Name, credentials • Organization • Date 22

23. Observations Allowing for sufficient time for installation and change in processes, practices with an EHR appear to have: • Greater revenue • Increased expenses • More profit Than practices with paper medical record The difference may be significant, but more study is needed.

24. Questions? David N. Gans, MSHA, FACMPE Vice President, Practice Management Resources Medical Group Management Association dng@mgma.com mgma.com 24