The EMR dialog has finally migrated from the realm of thought leaders, academics, and IT publications into the mainstream, changing the discussion from “if” to “when.” Now, healthcare providers must find a way to fund the implementation of these costly systems.

Unfortunately, although the potential cost savings associated with EMRs are impressive, they are largely realized by payers, not by the party writing the check for the EMR. Worse, of the potential cost savings achievable by the purchaser, typically only a fraction is realized, thanks to the tendency to re-task personnel and overly ambitious savings assumptions.

A large-scale survey by the Medical Group Management Association in 2005 found average direct costs of $37,204 per physician and a maintenance fee of about $1,500 per physician per month for an EMR system. And that does not include indirect costs related to implementation such as the internal human capital required for configuration, training, and rollout, nor the decrease in provider productivity (ranging from 15% to 20% in patient throughput, according to controlled quantitative studies).

The latter is not surprising, given the fact that physicians must move from unstructured notes to the carefully structured vocabulary and elements that power the EMR. Opinions are widely divergent in terms of how quickly this productivity decline can be mitigated.

Finding the “how”
The bottom line for healthcare institutions is that while EMRs are becoming clinically necessary for care quality and patient safety, they are expensive and largely without a compelling ROI case. Therefore, it is important to temper the “when” in the EMR question with a revenue-driven “how.”

The first step can be accomplished before the EMR contract is even signed: revenue cycle optimization. This is the engine that can ultimately provide the means to pay for the EMR, and the good news is that most organizations already have the potential revenue they need—they are just not effectively collecting for the services currently provided.

There are several approaches that result in revenue improvement, including charge master management and electronic charge capture, which is currently gaining substantial traction across institutions due to its rapid ROI.

These compelling returns are based on the fact that organizations using paper-based charge capture are invariably leaving significant revenue on the table. According to industry estimates, upward of $100 billion is lost annually due to missing charges, coding violations, and billing errors. Paper-based systems simply don’t have the controls and reconciliation tools necessary to ensure accurate, prompt, and compliant claim submissions for all services rendered.

The cumbersome processes and data entry associated with a paper-based system adds needless accounts receivable days into the revenue cycle. In addition to capturing previously unrealized revenue, electronic charge capture provides a tremendous reduction in accounts receivable days, improvement in compliance, and lowering of administrative costs through a radically streamlined billing process.

Companies with top-tier charge capture solutions have demonstrated increases in top line revenue of $20,000 to $40,000 per physician/per year on a sustained basis. These highly focused solutions combine mature software including extensive rules-engines covering national and local coverage determinations, correct coding initiative edits, and other common sources of claims rejections.

The best of these solutions offer sophisticated financial workflow tools supported by vendor teams with a deep understanding of the revenue cycle and the workflow changes needed to achieve full adoption from primary care to neurosurgery in both inpatient and outpatient settings.

$7 million annual savings
Consider the experience of University Physician Associates, a large academic multi-specialty group affiliated with the University of Medicine and Dentistry of New Jersey. Its 300-plus physician users are realizing an ongoing increase in collected revenue of nearly $7 million annually, in addition to the $6.7 million one-time revenue from reduction in accounts receivable days during initial deployment. Tremendous gains in billing compliance were also realized.

A number of EMR vendors have tacked on a charge capture module in an attempt to address the ROI issues previously mentioned. Although this approach may evolve into a mature offering, quick entry into the revenue cycle space by throwing a “superbill” on a screen is analogous to scanning all the paper in a medical record and calling it an EMR.

Complexities of the revenue cycle, like those related to EMR software, run deep and are not easily solved with afterthought modules created by companies whose core competencies are in the clinical realm. At best, a second-tier solution is created that still leaves significant money on the table.

Once the revenue cycle is optimized, dealing with the expenses of EMR rollout becomes highly manageable. In fact, for many practices, streamlining the revenue cycle through electronic charge capture can lead to an essentially self-funded EMR pathway. Most importantly, it is accomplished through getting fully paid for services that are being rendered today.

Dr. David Delaney is vice president and chief medical officer of MedAptus, Inc.