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Cost Is Biggest Barrier to Electronic Medical Records Implementation, Study Finds

SEPTEMBER 14, 2005 -- The cost of installing and maintaining electronic health records (EHR) systems is the biggest barrier to their adoption by medical group practices, particularly for the smallest physician groups, according to a survey released Wednesday.

Research conducted by the Medical Group Management Association Center for Research and the University of Minnesota School of Public Health found that 14.1 percent of all medical group practices use such a system and 11.5 percent said an EHR was fully implemented for all physicians and at all practice locations.

Researchers also noted that 12.5 percent of medical group practices with five or fewer full-time-equivalent (FTE) physicians have adopted an EHR, a rate that increased with the size of a medical practice. Groups with six to 10 FTE physicians reported a 15.2 percent adoption rate, groups with 11–20 FTE physicians reported an 18.9 percent adoption rate and groups of 20 or more FTE physicians had a 19.5 percent adoption rate.

The study, funded by the federal Agency for Healthcare Research and Quality, found that the average purchase and implementation cost of an EHR was $32,606 per FTE physician and maintenance costs were another $1,500 per physician per month. The average cost for EHR implementation was about 25 percent more than initial vendor estimates, researchers reported.

Lawmakers, health care analysts, and researchers have said that health information technology, or health IT, is the best way to reduce health care costs and improve medical care (see related story this issue). But many physicians have been reluctant to install such systems due to the cost and other concerns, such as liability issues and ensuring patient privacy and safety. Physicians also fear that insurers, rather than doctors, will realize most of the savings from health IT.

Bush administration officials and GOP leaders have said once national standards are in place—a process that's ongoing between the Department of Health and Human Services and the health IT community—costs of EHR systems will decrease as manufacturers compete against one another on price and features.

Such thinking is overly optimistic, said William F. Jessee, president and chief executive officer of the Medical Group Management Association. "Based on this research, [medical] practices won't go out and purchase systems" unless the implementation and operating costs are addressed, he said in an interview.

"It's going to be really, really tough," he said, in part because physicians often have to finance such systems from operating revenues, which already are being reduced by a variety of factors such as higher medical malpractice insurance premiums.

Pending House and Senate measures that promote the adoption of standards to ensure that computer systems function together efficiently would authorize limited grant money to ease the costs of adopting the technology.

Other findings of the research, which are highlighted in the September/October edition of the policy journal Health Affairs, include:

  • While some practices say EHRs have helped improve efficiency, there is widespread dissatisfaction with the systems' design and performance.
  • Less than 65 percent of the 3,300 medical group practices surveyed reported that the EHR provided drug formulary information or clinical guidelines and protocols, while 83.1 percent of respondents said their EHR was integrated with their practice billing system.

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