A Tutorial about the Costs, Barriers and Benefits of Electronic Health
Records Systems
By
Alex Daubert
Alexander Formoso
April 23, 2008
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We, the undersigned, give permission for posting our work to the web. We have
removed all personal identifiers from this manuscript, except our names. We give
permission for others to create a derivative work from this manuscript, as long as we
remain an author of the derivative work and as long as the order of authorship reflects
each author’s relative contribution. In case of conflict, the course instructor makes the
final choice of the order of authorship.
Executive Summary
This paper examines the barriers, costs and benefits faced when implementing a system
of electronic records in a health care organization.
Cost is a major factor that weighs on
anyone looking to implement such a system. Initial costs are high, and maintenance and
repair fees can be expensive. The barriers faced when implementing a system of
electronic records in a health care setting include uncertainty about the levels of return,
technical issues, and a lack of interoperability between different organizations. Some of
the major benefits include reducing medical errors, improving physician productivity,
reducing costs, fostering interoperability between departments and improving the overall
quality of care provided to patients via greater integration of care. The paper will then
offer a case study of an electronic health records system—the Central Utah MultiSpecialty Clinic (CUMC) TouchWorks Electronic Medical Record—to provide an
example of a real electronic health record that was implemented.
Introduction
In this modern era of constantly emerging technology, health information technology has
begun to transform the face of the health care system in the United States. Electronic
records systems have surfaced as a major form of health IT. These systems have become
an important topic of discussion on the healthcare horizon because George W. Bush’s
administration has set out a goal for American hospitals to implement EHRs by 2014.
From the outset, we would like to discuss the difference that exists between the
terms “electronic health record” and “electronic medical record.” According to The
Alliance for Health Reform Toolkit, an EMR is the digital version of a patient’s medical
record, whereas an EHR is a subset of a patient’s EMR and is owned by the patient. We
have found in much of the literature that the terms EHR and EMR are used
interchangeably by the authors of these papers, with little regard to the distinction
between them. Ultimately, however, these two terms are so closely related that the
distinction does not significantly change the rationale behind the arguments for the costs
and benefits of implementing an “electronic records system.” Therefore, for the purposes
here, we will be emphasizing the costs and benefits of implementing an electronic records
system. Throughout the text, there will be references to both EHRs and EMRs because
different sources used varying terminology in their respective journal articles. However,
any instance in which the authors mention this technology outside of the context of
another source, the reference will be to electronic records systems. This paper will aim to
outline the most prominent costs, barriers and benefits of implementing a system of
electronic records in the health care industry.
Costs
As with most major investments, the first major consideration when deciding whether to
implement an electronic records system. These are indeed significant, and this could
prove a major deterrent to facilities and providers interested in purchasing such a system.
For example, when implementing an EMR, there exist two major costs: system costs and
induced costs (Wang, et al. 2003).
Basic Costs of Implementing an Electronic
Medical Record System
System Costs
Base
Range
Case
Software (annual
$1,600
$800-3200
license)
Implementation
$3,400
-
System Costs
The first costs encountered are the
initial costs of software. Furthermore,
since these systems rely heavily on
Support and
Maintenance
Hardware
$1,500
$750-3000
technology, there will be significant
$6,600
$3300-9900
costs incurred when purchasing the
Induced Costs
Temp. Productivity $11,200
Loss
hardware necessary to house these
$5500-16,500
Source: Wang, et al. (2003). “A Cost-Benefit Analysis
of Electronic Medical Records in Primary Care.”
American Journal of Medicine, 114: 397-403.
programs. Additionally, ongoing
maintenance and support are costs the
system owner must pay to keep the system updated and running properly (Wang, et al.
2003).
Induced Costs
Induced costs involve the costs incurred during the transition from a paper system to an
electronic system (Wang, et al. 2003). The first major cost of implementation is related
to the entry of data in the system. This requires a significant amount of labor, which is
quite expensive. Facilities must also face the costs of hiring and training personnel to run
the system. Many of these necessary tasks result in a temporary productivity loss, as
resources must be concentrated on learning about and adapting to the new system, rather
than on performing normal tasks (AHRQ 2006).
This image is an example of what an Electronic Health Record might look like. This
particular view is from the Veteran’s Affairs VistA system.
http://www1.va.gov/imaging/page.cfm?pg=3
Barriers
As mentioned, a primary barrier to the implementation of electronic record systems are
high initial costs (see Table below for list of perceived barriers). For instance, the
upfront costs of EMR systems in ambulatory care are about $16,000-$36,000 per
physician (Anderson 2007). Furthermore, physicians are left with uncertainty in regards
to the amount of money they will receive for implementing such electronic record
systems. Such precariousness is another major barrier in the adoption EHR systems. If
physicians were properly reimbursed for using EHR systems and received reduced risk
for investing in them, the adoption of such electronic record systems would likely
increase (Thakkar & Davis 2006).
1
Top 10 Barriers, according to a survey of
providers
Software cost
2
Hardware cost
3
Participation from physicians
4
6
Interoperability among different electronic
systems and the true EHR system
Inability to find the software that meets the
requirements of the true EHR system
Organizational culture
7
Participation from nursing staff
8
Standards
9
Return on Investment (ROI)
10
Personnel costs
5
Source: Thakkar and Davis. (2006). “Risks, Barriers, and
Benefits of EHR Systems: A Comparative Study Based on Size
of Hospital.” Perspectives in Health Information Management,
3:5.
According to Thakkar and Davis, the adoption of the electronic records system
brings about various technical issues. Different software will be used to retain all the
health records. This may pose problems of interoperability between the various hospitals
and physician clinics that have adopted electric health record systems. Moreover,
interoperability raises concerns to patients about privacy. Patients will look to see that
their health records are kept confidential and will have a perception of data insecurity.
Due to the implementation of this new form of data collection, there may be a lack of
well-trained clinician informatics that can fully undergo all of its operations. Several
more barriers are discussed at length in the following paragraphs.
Information Entry and Retrieval Errors
Some literature cites two major problems related to information errors which may be
encountered when using a Patient Care Information System (PCIS): “(1) PCISs that have
human-computer interfaces that are not suitable for this highly interruptive use context,
and (2) PCISs that cause cognitive overload by overemphasizing structured and complete
information entry and retrieval” (Ash, Berg and Coiera 2004). In more easily understood
terms, this first point is arguing many of the interfaces currently available seem to have
been constructed for a single user who concentrates only on computer screens and
entering information. However, this is not the case with physicians, who spend much of
their time with patients. Therefore, when they return to their computers to enter specific
information about a patient on an interface which is not compatible with their style, they
are left prone to entry error because many of the buttons are quite close to each other.
Upon retrieval, the physician may end up ordering a wrong procedure, treatment or
medication. This is referred to as a “juxtaposition error” (Ash, Berg and Coiera 2004).
The second problem, in layman’s terms, is that many of the electronic records
systems are not properly suited to the entry needs of physicians. For example, some
systems provide information blanks that are unnecessary in certain circumstances, but
that the physician feels obligated to fill out. Also, when the information is broken down
into sections, some physicians report that they begin to lose the ability to grasp it as an
overview, which somewhat negates the purpose (Ash, Berg and Coiera 2004).
Emotional Stresses
Some sources posit that a switch from paper-based to computer-based processes can
trigger negative emotional responses. These negative responses “can affect one’s ability
to carry out complex physical and cognitive tasks” (Campbell et al. 2006). This source
was dealing specifically with the implementation of computerized physician order entry
(CPOE) systems. While CPOE systems differ from electron records systems, they are
still an information technology solution to a formerly paper-based task, so the responses
are likely very similar. The risk of inhibiting a physician’s ability to carry out physical
and cognitive tasks due to emotional stresses is certainly a barrier that organizations face
when seeking to implement an electronic records system.
Unexpected Changes in Power Structure
Campbell and colleagues (2003) also cite another issue with CPOE systems that is
applicable to electronic records systems. According to their research, they found that
with CPOE systems, doctors begin to resent entering information in a computer because
they view it at a clerical task. The same problem could arise with an electronic records
system. While the entry of information is not much different than the paper-based
method with which most doctors feel comfortable, if the physicians begin to feel they are
above entering data into a computer. Though this is likely more an issue of structural and
institutional ideologies rather than a practical issue with the information technology, it is
still a factor which presents a barrier for any health care organization’s attempt to
implement an electronic records system.
Benefits
There are several clear benefits to implementing an electronic records system in a health
care facility or physician practice. Different sources cite different benefits as the greatest
gain from the implementation of such a system. Some of the most popular factors given
include reducing medical errors, increasing physician productivity, reducing costs,
fostering interoperability between departments within a facility, and improving quality of
care (the table below shows the top ten perceived benefits, according to a survey of
practitioners). In the following paragraphs, we will explore some of these major topics.
Top 10 Benefits, according to a survey of
providers
1
Interoperability with other departments
within a facility
2
Quality of care
Reducing Medical Errors
3
Clinical workflow
often-cited reasons for implementing
4
Medical staff’s work efficiency and time
management
Patient safety
an electronic records system is the
Interoperability outside the facility, but
still within the healthcare system
Patient privacy and confidentiality
significantly reduce the number of
hospitals (Anderson 2007). Under
9
Business practices (strategic and
operations)
Patient-doctor relationship
10
Cost of care
human error is decreased
5
6
7
8
Source: Thakkar and Davis. (2006). “Risks,
Barriers, and Benefits of EHR Systems: A
Comparative Study Based on Size of Hospital.”
Perspectives in Health Information Management,
3:5.
Among the most prominent and
argument that such a system could
medical errors experienced in U.S.
electronic systems, the margin for
tremendously. This could help to
prevent potentially fatal mistakes
such as prescription errors, operating on the wrong limb, or ordering an unnecessary
procedure.
Increasing Physician Productivity
According to Anderson (2007), physician productivity can be increased through the
implementation of an electronic medical record. When physicians are spending less time
searching for paper patient records and dissecting their handwriting, they will be able to
operate more efficiently throughout their day. This could lead to more productive
interactions with patients and help physicians to do their jobs better.
Cost Savings
Some sources estimate that the net cumulative savings from the adoption of EMR
systems in United States hospitals during the next fifteen years could be as much as $371
billion and the net cumulative savings from the adoption of EMR systems within
physician practices could reach $142 billion dollars (Anderson 2007). It should be noted,
however, that evidence shows that most of these savings do not result from reduced paper
and printing costs, an argument often heard by proponents of EHRs. Instead, these
savings result from a combination of factors such as reducing the time spent on filing
information, and the time spent pulling files. For example, some experts estimate that the
total cost of pulling a paper file amounts to $5 per file (Wang, et al. 2003). In time, these
costs amount to significant savings for any organization.
In addition to these payer-independent benefits, which all organizations can see
regardless of their reimbursement method, other means of saving costs can be seen
specifically in either capitated or fee-for-service reimbursement systems. Under a
capitated reimbursement system, benefits “accrue to the practice and HCO from averted
costs as a result of decreased utilization” (Wang, et al 2003). For example, alternatives to
expensive medicines can be offered and the use of laboratory and radiology tests can be
minimized. Under a fee-for-service system, the benefits result from increased revenue
and reduced losses, because billing errors are reduced and the capture of previously
performed but undocumented in-office procedures can be improved (Wang, et al. 2003).
Saved office space
Another benefit, which is somewhat related to the previous point about cost savings, is
that the amount of required office space will be reduced, so the organization either will
need to pay for less office space, or will find themselves with extra office space and
therefore more room to expand patient services (Barlow, Johnson & Steck 2003). This
extra space results from the decrease in physical space required to store paper patient
records. Because all charts are maintained electronically on a database, the time and
money required to create a new chart is eliminated.
Interoperability between Departments
Electronic records systems also benefit the facility in which they are implemented by
increasing interoperability between departments. This is particularly applicable to
hospitals and other large facilities (Thakkar & Davis 2006). In a large facility, an
electronic records system can store patient records in a centralized database in order to
help to minimize the possibility of miscommunication between departments, in the event
that a patient requires services from multiple, varying specialties.
Integration of Care
Ultimately, the greatest goal of any health care facility is to provide the highest quality of
care possible to its patients. This is yet another benefit of electronic records systems
(Thakker & Davis 2006). As seen in the examples above, EMRs and EHRs have many
implications for the quality of care provided to patients. Medical errors can be reduced,
physicians can spend more time with patients, and obtaining services in multiple
departments will be easier.
Perhaps the greatest way in which electronic health records can improve care is
through better integration of care. For example, in the case of doctors whose patients
require blood pressure medicine, 10-15 different types of medication exist (Alemi 2008).
When used in conjunction with a computerized physician order entry (CPOE) system, an
electronic record system and a simple algorithm can help the physician determine which
one of these medicines is best suited for the patient, based on other factors specific to the
patient (Alemi 2008). This means that the physician will be able to tailor the medicine on
the first prescription, instead of forcing the physician to make an educated guess about
the best choice. Ultimately, electronic records systems have the potential to improve the
overall comprehensiveness and efficiency of an organization, and this translates to better
quality of care for patients. While there are certainly significant monetary costs and the
financial savings of implementation are not always guaranteed, electronic records
systems still bring significant benefits to both patients and physicians, and therefore
should be considered essential to the future of the American health care system.
Case Study
The implementation of an EHR system does not bring along with it a guarantee
that cost savings will occur. In fact, sometimes organizations will be faced with
increased expenditures after the implementation of an EHR system. Still, even with this
possible financial loss, these organizations can yield many of the benefits mentioned
above. However, in certain circumstances, organizations like the Central Utah Multi-
Specialty Clinic have actually been able to attain many benefits revolving around costs,
in addition to the other aforementioned benefits.
In the state of Utah, the CUMC is known to be the largest multi-specialty group,
managing over 59 physicians in nine different locations (Barlow 2003). Over the past
two years, the CUMC has grown significantly, more than doubling in the number of
physician specialists they have on staff. Their organization’s strategic plan predicts this
continuance of growth in the future. The increases of growth, amongst the various sites
of the organization, as well as its multi-specialty focus, all contribute to the challenges
and difficulties that arise in the management of their patient’s clinical records (Barlow
2003).
In an attempt to eliminate these challenges, the CUMC implemented the
TouchWorks electronic medical record system, developed by Allscripts Healthcare
Freed up
storage space
Increased
Accessibility
Increase in
company
growth
Multispecialty
focus
Various
locations
TouchWorks
electronic
medical system
Reduction of
transcription expenses
Elimination of costs
for creating charts
Cuts in staffing
requirements
Overall increase
in revenue
Solutions of Chicago, IL (Barlow 2003). Since this system has been put into effect, the
clinic’s management of patient records has improved considerably. The physicians have
been able to access their patient’s clinical information from any of the nine clinics,
several hospitals, or even their homes (Barlow 2003). Aside from an increase of
accessibility, the CUMC has witnessed a reduction in transcription expenses, eliminated
costs for creating charts for new patients. Moreover, they cut their staffing requirements
needed for the maintenance, pulling and filing of patient charts as well as freed up storage
space from where the files used to be kept. The organization has even increased their
revenues because of the improvement of E/M coding (Barlow 2003).
This is an example of a health care organization whose goals for its EHR
implementation were successfully met. In addition to from meeting these goals, CUMC
was also able to achieve financial gains.
Conclusions
The purpose of this tutorial was to outline the major costs, barriers and benefits faced by
any health care organization seeking to implement an electronic records system for its
patients. While there are certainly both strong arguments weighing against such a
system, the benefits to the patient, physician and society as a whole make electronic
records systems a worthwhile investment. As the country progresses toward President
Bush’s 2014 goal of nationwide EHR implementation, Americans will find themselves a
large step closer to a better health care system.
Glossary Terms
**In an effort to accurately maintain the meaning of the definition, all of the following
definitions have been taken verbatim from the Alliance for Health Reform Reporter’s
Toolkit on Health Information Technology**
Electronic Health Record (EHR): “In health informatics, an electronic health record
refers to the subset of a patient's electronic medical record (EMR) that is integrated into a
larger information network and owned by the patient. In common usage, EHRs and
EMRs are used interchangeably to refer to a patient's medical record in digital format.”
Electronic Medical Record (EMR): “An electronic medical record refers to a patient's
legal medical record, stored in digital format. It serves as a repository for clinical data
and may have additional capacities such as computerized physician order entry (CPOE)
and clinical decision support.”
Computerized Physician Order Entry (CPOE): “A computerized system that allows a
physician's orders for services such as medications, laboratory tests and other tests to be
entered electronically instead of being recorded on order sheets or prescription pads.”
Health Information Technology (HIT): “Information processing using both computer
hardware and software for the entry, storage, retrieval, sharing, and use of health care
information.”
Interoperability: “The ability of different information technology systems and software
applications to communicate, to exchange data accurately, effectively, and consistently,
and to use the information that has been exchanged.”
Works Cited
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Implementing an EMR in an Outpatient Clinical Setting [Electronic Version].
AHRQ Publication. April; No. 06-E006
Alemi, F. (2008). “Benefits of Information Technology.” Lecture given in HESY-210-01
at Georgetown University.
Alliance for Health Reform. Reporter’s Toolkit: Health Information Technology.
<http://www.allhealth.org/publications/health_information_technology/health_inf
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