Electronic medical record return on investment

Large and small medical practices can see a return on their investment for an EMR system as soon as one to one-and-a-half years—provided they have a successful preparation and selection process and know how they intend to use the EMR, experts say.

“The most significant aspect is preparation and management skills,” says David Kibbe, MD, senior adviser for the American Academy of Family Physicians. “If doctors think it is just about installing software, they are almost bound to fail. But they can get an ROI very quickly if they understand this is a process redesign for their practice.”

Dr. Kibbe, who chairs a technical committee on healthcare informatics, cites an example of a four-doctor practice that spends $32,000 to $48,000 per year on dictation transcription as part of its overhead. By purchasing an EMR that costs between $10,000 and $12,000, the practice can eliminate its transcription costs by inputting data into the system, and it could realize an ROI quickly. But that’s only if all four doctors eliminate dictation. If one or more doctors continue to dictate, Dr. Kibbe says the practice would just be adding costs to its overhead and the EMR would not be an effective financial tool.

A majority of respondents said that hospitals can see an ROI on its EMR systems within six years. Dr. Kibbe says it is more difficult to gauge an ROI in the hospital setting because of the complexity of the work environment. Hospitals can spend as much as $30 million to implement an EMR system.

As for those who responded that an EMR will never pay for itself, Dr. Kibbe says they are resigned to the fact that the technology will never be a money-maker for their practices—even if they purchase a system as a cost of doing business.

“Physicians know how to use EMRs,” he says. “The reason why doctors aren’t buying these systems is because the value proposition just isn’t there yet.”

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