Folks, if you’ve worked or presently live in the enterprise software world, you know that proving that you system generates a worthwhile return on investment is tricky.  Sure, vendors sales staffs usually offer some neat calculators that prove you’ll see 1000% return by next Tuesday, but internally, even they admit that making such estimates is more black magic than science.

While some of you may have different experiences, it seems to me that proving that an EMR can generate a return on investment reasonably soon is particularly difficult. Sure, most hospitals and medical practices know their annual revenue run rate, and have a good breakdown of their expenses in hand, but are they set up to detect the effects going electronic can have?

After all, while some enterprise software directly helps companies generate revenue — most obviously, lead-generation monsters like Salesforce.com — others earn their keep but preventing problems from happening or improving quality. And if a provider organization doesn’t know what their mistakes are costing them, and doesn’t pay a direct price when patients fare poorly, how can they pin down how much financial benefit their EMR produces?

Admittedly, as the quality data reporting bandwagon continues to roll faster, everyone from small practices to giant hospital systems are likely to have a better idea of where they’re slipping — they can’t afford not to, as they’re likely to forfeit incentives paid by Medicare or private insurers.  And most cases, it will take an EMR to organize, analyze and report out that data effectively.

Unfortunately, providers can’t expect huge bonuses just for buying an EMR. (OK, let’s be honest and admit that HITECH dollars are nice to have but not enough to make  or break a viable business.) So they’re having to make a leap of faith and invest in a system, sometimes a very expensive one, on the still-unproven assumption that it will offer tangible financial and organizational benefits in the near future. That’s gotta hurt.

Aggressive providers have been taking this risk for years now, and many have been very glad they did.  Not only have there been some nice examples of how hospitals and health systems have benefitted by their EMR investment, I’ve met doctors in small practices who absolutely rave about how productive their shift to EMRs has been. So there’s at least anecdotal evidence to support EMR buy-in.

Still, it sure would be nice if there was a one-size-fits-all ROI we could offer providers, or even a decent series of estimates. Right now, many are just going to have to fly blind.

I turned on the radio on Monday and they were talking about Healthcare again. Universal coverage, the August recess, the “blue dog” democrats.

I keep thinking about how EMRs fit into all of this. Obama thinks that EMRs are going to make care better, more efficient and less costly. I think he is right about the first two (if we install EMRs that are usable and bring value to doctors and patients), but not necessarily about the third. EMRs may not reduce costs!

As Obama takes our economy (and our healthcare system) away from the small business model to the big government/big business model, I wonder how EMRs fit into all this. Investing in an EMR is a big deal for most physicians because we are a small business that provides medical care. Spending hundreds of thousands of dollars on an EMR which may not bring return on investment (ROI) while potentially reducing our productivity is a big risk. At the same time, if reimbursement are reduced or the system becomes Universal, the stakes are higher and the risks are greater.

Everyone (individuals and small business) is struggling with our current economy. Small businesses are at risk (many are closing their doors). Physicians are working hard to pay the bills, make payroll and have a little left over to take home to the family. The EMR issue has to be handled correctly or it could have dramatic effects on our healthcare system. The EMRs have to be effective and efficient. Doctors have to like them and be satisfied with their utility and performance. EMRs have to help us take care of patients more effectively and efficiently. Anything less than this throws more sand into the cogs of the healthcare machinery and amplifies the risks of all the other changes occurring at this time.