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.