Implementing EHRs in Physician Practices:
Opportunities and Challenges
HealthTechNet Meeting
June 18, 2010
Robert Tennant, MA
Medical Group Management Association
Copyright 2010. Medical Group Management Association. All rights reserved.
1

The Medical Group Management Association mission…
To continually improve the performance of medical group practice professionals and the organizations they represent
MGMA has
• 22,500 members…
• Who manage and lead 13,700 organizations
• With 275,000 physicians
• Providing about 40% of U.S. physician services
Copyright 2010. Medical Group Management Association. All rights reserved.

• Depending on the study, full EHR deployment in the ambulatory space somewhere between 5-15%
• MGMA research suggests the average start-up cost per physician is about
$33k (plus ongoing maintenance costs)
• Industry moving toward standardization of clinical and administrative data standards/reporting/processes
• The push for EHR deployment intersects with:
– Potential decrease in Medicare payments…
– HIPAA 5010 and ICD-10 compliance (costs)…
– Uncertainty in the EHR marketplace (HITECH / Certification)…
– Implementation horror stories…but
– Proven ROI
Copyright 2010. Medical Group Management Association. All rights reserved.

Copyright 2010. Medical Group Management Association. All rights reserved.
4

Financial Impact of EHR on Physician Practices
Allowing sufficient time for installation and change in processes, practices with an EHR have:
• Greater revenue
• Increased expenses
• More profit than practices with paper medical record
Copyright 2010. Medical Group Management Association. All rights reserved.

Financial Impact of EHR on Physician Owned
Single Specialty Groups
Physician Owned, Family Medicine Single Specialty Groups
Mean total medical revenue per FTE physician
Mean total support staff cost per FTE physician
Mean information technology equipment cost per FTE physician
Mean professional liability insurance cost per FTE physician
Mean total operating cost per FTE physician
Mean total medical revenue after operating cost per FTE physician
N =
Physician Owned, Orthopedic Surgery Single Specialty Groups
Paper
Medical records / charts
$ 507,136
$ 175,441
$ 8,264
$ 11,954
$ 356,958
$ 233,106
21
Electronic health record system
$ 677,131
$ 209,127
$ 18,344
$ 14,335
$ 402,997
$ 281,183
20
Sig. (2tailed)
0.01
0.19
0.00
0.33
0.30
0.13
Mean total medical revenue per FTE physician
Mean total support staff cost per FTE physician
Mean information technology equipment cost per FTE physician
Mean professional liability insurance cost per FTE physician
Mean total operating cost per FTE physician
Mean total medical revenue after operating cost per FTE physician
Paper
Medical records / charts
$ 1,129,408
$ 245,032
$ 16,652
$ 37,441
$ 522,072
$ 608,699
40
Electronic health record system
$ 1,319,229
$ 337,183
$ 21,951
$ 32,997
$ 634,352
$ 684,877
22
Sig. (2tailed)
0.02
0.00
0.05
0.31
0.02
0.17
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Financial Impact of EHR on Physician Owned
Multispecialty Groups
Hospital and Physician Owned Multispecialty Groups
Mean total medical revenue per FTE physician
Mean total support staff cost per FTE physician
Mean information technology equipment cost per FTE physician
Mean professional liability insurance cost per FTE physician
Mean total operating cost per FTE physician
Mean total medical revenue after operating cost per FTE physician
N =
Paper
Medical records / charts
$ 675,608
$ 205,040
$ 9,963
$ 15,254
$ 430,459
$ 260,153
118
Electronic health record system
$ 752,142
$ 228,808
$ 15,024
$ 15,598
$ 469,521
$ 302,465
134
Sig. (2tailed)
0.03
0.04
0.00
0.79
0.12
0.01
Physician Owned, Multispecialty Groups with Primary Care Only
Mean total medical revenue per FTE physician
Mean total support staff cost per FTE physician
Mean information technology equipment cost per FTE physician
Mean professional liability insurance cost per FTE physician
Mean total operating cost per FTE physician
Mean total medical revenue after operating cost per FTE physician
Paper
Medical records / charts
$ 573,322
$ 179,810
$ 7,250
$ 10,649
$ 333,774
$ 239,548
13
Electronic health record system
$ 699,969
$ 213,066
$ 14,557
$ 13,007
$ 433,965
$ 282,210
18
Sig. (2tailed)
0.04
0.16
0.01
0.21
0.02
0.21
7


 Medicare funding up to $44,000 per professional (5 yrs)
 Medicaid funding up to $63,750 per professional (6 yrs)
 Other funding for RECs, agencies, research and grants
 Development of NHIN / interoperability
 Important to remember…incentives also apply to qualified professionals and institutions that currently have an EHR
 There is NO UPFRONT MONEY, more of a “rebate”
Copyright 2010. Medical Group Management Association. All rights reserved.

Copyright 2010. Medical Group Management Association. All rights reserved.
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1. Lack of leadership “buy in” – difficult to get sponsorship from senior leaders, find clinician champions.
2. Staff opposition – most practices have staff who are convinced that EHRs will cause financial harm or clinical disruption
3. General computer Illiteracy – many clinicians are not technology literate. Insufficient interest in after hours training sessions.
4. Significant up front and ongoing cost – the stimulus money does not flow until the EHR is purchased and meaningful use is achieved. How will the practice finance the technology and supporting infrastructure?
5. Selection challenges – difficult to select appropriate product for your specialty/workflow needs. Horror stories of failed installations .
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6. Fear of obsolescence – a product that meets the needs of the practice today may not be suitable in the future.
7. Lack of IT infrastructure/reliability – many practices do not have reliable computing and storage support due to high cost.
8. Lack of interoperability – clinical and administrative applications do not seamlessly exchange data for billing, coordination of care, performance reporting, and public health.
9. Fear of lost productivity – concern practice will experience productivity decreases for 3+ months after implementation.
10. Concern regarding poor EHR usability – products can be difficult to use/poorly engineered for optimum clinical workflow.
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• Based on the proposed rule:
– The industry will have a very challenging time meeting the expected program timeline:
• Final rules July 2010
– (Certification rule just cleared OMB, MU rule is not at OMB yet)
• EHR software developed Summer 2010
• EHR certification process defined/implemented Aug 2010
• Certified EHR products for sale Oct 2010
• Certified EHR products fully installed/tested Jan 2011
Copyright 2010. Medical Group Management Association. All rights reserved.

“Meaningful Use” Defined in the NPRM
• EPs
– 25 Objectives and Measures
– 8 Measures require ‘Yes’ or ‘No’ as structured data
– 17 Measures require numerator and denominator
– 100% compliance with 100% of measures
• Reporting Period – 90 days for first year; one year subsequently
• Note: PQRI experience raises issue of three lost years of incentives
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 Challenges with the proposed criteria
(selected):
 ERX (75% permissible prescriptions sent electronically)
 Record and chart changes in vital signs (80% age 2 and up, record BP/BMI, plot growth for children 2-20)
 Check insurance eligibility/submit claims electronically (80%)
 Provide patients with electronic copy of the record (80% within 48 hrs)
 Provide patients timely access to their health information
(10% provided access via PHR/web portal
Copyright 2010. Medical Group Management Association. All rights reserved.

 HITECH contains significant dollars
 Many challenges to meet “meaningful use”
 Final program requirements must be significantly more reasonable, or practices will not be able to participate
 Practices shouldn’t focus only on software that will qualify them for the incentives, but to implement a system that actually improves their clinical and administrative processes
 Vendor contracting critical—consider performance and penalty clauses to ensure the capturing of opportunities (incentives and admin simp)
Copyright 2010. Medical Group Management Association. All rights reserved.

Robert Tennant
Senior Policy Advisor
MGMA Government Affairs rtennant@mgma.com
Copyright 2010. Medical Group Management Association. All rights reserved.