Proving EMR ROI IS Still Tough, So Buying Takes A Leap Of Faith

Posted on May 29, 2011 I Written By

Katherine Rourke is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

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 — 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.