EHR transition may be financially risky for hospitals
Adoption of expensive electronic health record systems may hurt a hospital's bottom line, despite promises that the new systems will increase efficiencies and lower costs. Yet another hospital is reporting that the high cost of implementing a new EHR is having a negative effect, with Henry Ford Health System reporting its investment in Epic being a major factor in a 15 percent decrease in net income--from $62.9 million in 2011 to $53.1 million in 2012.
While HFHS still experienced financial growth overall, the $356 million EHR investment--coupled with an increase in uncompensated care--impacted revenue.
Reports from Henry Ford, Wake Forest Baptist Medical Center and others incurring financial hits due to health IT investments raise concerns within the industry about the value and risk of implementing such expensive systems, especially for facilities that already are on shaky financial ground. In a recent blog post, Edmund Billings, chief medical officer for Medsphere Systems, Corp.--which develops OpenVista EHR--called proprietary systems a threat to a hospital or health system's financial viability. He warned that some hospitals will go bankrupt.
"With all the economic uncertainty associated with healthcare at this point in time, it is a truly risky investment to pay multi-millions of dollars for a proprietary health IT system that, let's face it, may take years to generate any concomitant savings, if it ever happens," Billings said.
While Billings clearly has a dog in the hunt, his concern mirror those of a RAND report published in January, in which researchers concluded that health IT is failing to live up to its promise. They also mirror those of a Fitch report published last summer, in which researchers determined that hospital Meaningful Use incentive payments were masking 'anemic' revenue growth.
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