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EMRs Slow Rise In Outpatient Medical Costs

Posted on July 24, 2013 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

EMR use can slow the rise in outpatient medical costs by about 3 percent, according to a new study done by the University of Michigan.

The study examined more than four years of healthcare cost data in nine communities, including doctor’s visit fees and services typically ordered in labs, pharmacy and radiology.

The cost data, which encompassed 179,000  patients, was drawn from the years 2005 to 2009.    Researchers studied three Massachusetts communities that adopted an EMR during this period and six other communities to serve as a control group.

All of the communities, including the three communities that adopted EMRs  — Brockton, Newburyport and North Adams — were participating in the Massachusetts eHealth Collaborative pilot which funded entire cities’ worth of doctors’ offices. The eHealth Collaborative pilot was testing the premise that converting entire communities to EMRs generates the best results.

After analyzing 4.8 million data points, breaking costs down by hospital care and outpatient care, the researchers concluded that the communities which had an EMR in place saved $5.14 per patient per month on outpatient services.

Most of the savings came from radiology. Research leader Julia Adler-Milstein speculates that the presence of EMRs may have led to the ordering of fewer imaging studies because doctors had prior images and full medical histories available to them in the EMR.

Researchers found no reductions in total cost or in hospital costs, a result Adler-Milstein attributes to the fact that community doctors, not hospitals, were taking part in the pilot study.

All told, this is interesting but perhaps not a huge deal. While a 3 percent savings is all well and good, I’d rather see results along the lines of what Canadians have seen. (A recent Pricewaterhouse Coopers study found that EMRs have saved the Canadian health system $1.3 billion since 2006.)

That being said, you can’t fix what you don’t understand. Let’s hope more serious academic attention is given to the problem of how and when EMRs can begin to bend the cost curve in a favorable direction.

The Shift from Expensive Technology to Cost Saving Technology

Posted on June 6, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Someone recently pointed out to me the irony of healthcare’s history investing in technology. Plus, they pointed out an interesting shift in healthcare IT investment that I think’s worth pointing out and discussing further.

If you look at many of the healthcare technology investments of the past they often were in very expensive equipment. Think about the huge robots or other medical devices with enormous price tags. These machines were often miracle workers in what they could accomplish, but in order to have that miracle it usually came with a really hefty price. I’m not sure all the rationale for buying these huge expensive machines, but they would make these purchases over and over. This type of spending led healthcare technology investment to spend huge amounts of money trying to create the next technology that would get hospitals to spend large amounts of money on a huge device.

The unfortunate thing for healthcare was that while this new technology could improve the quality of care provided it cam at an enormous cost. I know that I and many others mostly throw cost out the window when we’re talking about our health. We want the best treatment possible no matter the price.

The interesting thing is that a new breed of healthcare IT investment is happening. There’s a shift to investing in software and devices that instead of increasing the cost of healthcare strive to actually lower the costs of healthcare. While certainly many would argue on whether EHR software lowers the costs of healthcare, that’s the intent. I think that long term we’ll see the cost savings of EHR software and the software that gets built on the backs of EHR software will lower costs.

I’m sure there are a lot more examples that illustrate both sides of this. Plus, there are likely some exceptions to the above analysis as well. Although, I do think this is a trend that’s important and will serve healthcare very well.