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HITC Cost Budgeting Webinar 4.19.12
The document discusses budgeting for electronic health record (EHR) implementation and ongoing support. It provides information on sources of funds such as government incentives and increased reimbursements. It also discusses uses of funds including direct costs of implementation and indirect costs like staff training. The document emphasizes that accurately accounting for costs and benefits is critical to the budgeting process and long term sustainability of EHR systems. It provides examples of cost-benefit analyses and case studies of organizations that have implemented EHRs.
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HITC Cost Budgeting Webinar 4.19.12
- 1. The Health InformationTechnology Community Electronic Health Record Budgeting Effective and realistic cost plans for today's implementation and tomorrow's support and maintenance ©2012 The HIT Community, LLC. All Rights Reserved. 1
- 2. Michael Levinger •President, CEO and Co-founder of The HIT Community • 30+ years of experience in the successful use of mission-critical software including EHRs and Health Information Technology • On the faculty of Boston University teaching a masters degree course on Electronic Health Records • Serves as the Health IT “Ask the Expert” for Pri-Med • Member of Massachusetts REC workgroup on Health IT Workforce Development ©2012 The HIT Community, LLC. All Rights Reserved. 2
- 3. Welcome! ©2012 The HITCommunity, LLC. All Rights Reserved. 3
- 4. The HIT CommunityServices Create and manage online collaboration solutions Manage public, sponsored nation-wide online communities Consulting services on communications & collaboration strategies and online social communities & media Supported by data analytics ©2012 The HIT Community, LLC. All Rights Reserved. 4
- 5. Agenda • Electronic Health Record Budgeting – Uses of funds – Sources of funds • Critical Success Factors • Questions & Answers ©2012 The HIT Community, LLC. All Rights Reserved. 5
- 6. • Put inpolling question on where attendees are in the EHR deployment process ©2012 The HIT Community, LLC. All Rights Reserved. 6
- 7. EHR Budgeting Sources • Government • Provider Performance • Reimbursement Uses • Direct • Indirect ©2012 The HIT Community, LLC. All Rights Reserved. 7
- 8. Question • How many people have a program budget already? ©2012 The HIT Community, LLC. All Rights Reserved. 8
- 9. EHR Deployment Resources • People • Software • Hardware • Telecommunication • Services ©2012 The HIT Community, LLC. All Rights Reserved. 9
- 10. EHR Deployment Resources • People • Clinical Staff • Software • Administrative Staff • Hardware • Software Expertise • Hardware Expertise • Telecommunication • Project Management • Services ©2012 The HIT Community, LLC. All Rights Reserved. 10
- 11. EHR Deployment Resources • People • Electronic Health Record • Software • HIE • Hardware • Operating Systems • Security • Telecommunication • Virus/Threat • Services • Utilities ©2012 The HIT Community, LLC. All Rights Reserved. 11
- 12. EHR Deployment Resources • People • PC’s • Mobile – Tablets, PDAs, etc. • Software • Servers • Hardware • Telecommunication – • Telecommunication Routers, Modems, etc. • Security • Services • Medical Devices & Connectivity ©2012 The HIT Community, LLC. All Rights Reserved. 12
- 13. EHR Deployment Resources • People • Bandwidth • High-capacity • Software • Backup • Hardware • Voice • Telecommunication • Data • Image • Services ©2012 The HIT Community, LLC. All Rights Reserved. 13
- 14. EHR Deployment Resources • People • Hardware Deployment • Software Implementation • Software • Physical Site Preparation • Hardware • Project Management • Telecommunication • Process Re-design • Training • Services • Support ©2012 The HIT Community, LLC. All Rights Reserved. 14
- 15. Potential hidden costsof EHR • Impact to workflow and patient capacity • Impact to revenues • Hassle factor • Staff impact • Cost/benefit ©2012 The HIT Community, LLC. All Rights Reserved. 15
- 16. ARRA Incentives -Just the tip of the $$ iceberg • Government incentives • More patients per day • Improved practice efficiency • Practice growth • “Pay for performance “ • Better coding performance • Improved contracting ©2012 The HIT Community, LLC. All Rights Reserved. 16
- 17. Question • How many people feel they know the financial benefits of an EHR? ©2012 The HIT Community, LLC. All Rights Reserved. 17
- 18. Government ARRA Incentivesfor EHR implementation As much as $44,000 per provider As much as $63,750 per provider • Must be eligible professionals (NOT • Must be eligible professionals (NOT hospital-based) that are meaningful hospital-based) that are meaningful EHR users EHR users • Must meet certain Medicaid volume • Paid over five years levels • Disincentives if don’t deploy EHR • Payment for up to six years system, payments will be cut • Up to 85% of the costs for certified – 1% in 2015 EHR technology and support services – 2% in 2016 • Some pediatricians can receive up to – 3% in 2017 $42,500 at lower thresholds • Lots of “fine print” • Maximum of $21,250 in the first year, $8,500 in subsequent years, up to a total of $63,750.over total time frame • No payments after 2021 ©2012 The HIT Community, LLC. All Rights Reserved. 18
- 19. More patients/day • Basic truth: the longer it takes to document a visit, the less money you make!! • Example: – Work from 8-5, see 24 patients, Average $70/patient = $1680/day – 3 minutes per patient to document = 72 minutes – 2 minutes per patient= 48 minutes – 1 minute per patient= 24 minutes • If documentation can be reduced from 3 minutes to 1 minute.. – you could see 2 more patients/day – = 10 patients/ week – = $700/week – = ~ $30,000/year BUT – what if documentation time increases? ©2012 The HIT Community, LLC. All Rights Reserved. 19
- 20. Improved Practice Efficiency • Decreased transcription costs • Decreased billing/coding costs • Decreased admin process costs – Managing charts – Filing lab slips, hospital reports etc. – Reduced telephone encounters (more self-serve from patient portal functionality) • Opportunity to decrease 1-2 FTEs…$30,000- $50,000 ©2012 The HIT Community, LLC. All Rights Reserved. 20
- 21. Practice Growth • Driven by consumerism in healthcare – Information transparency – Public perception of technical sophistication – Improved convenience – High tolerance for / desire for self service – Cost consciousness on behalf of the patient => cost transparency Example: 10-15% increase in patient volume can lead to 10’s of thousands of $$ ©2012 The HIT Community, LLC. All Rights Reserved. 21
- 22. Pay for Performance • More accurate data collection • More reliable data retrieval • More efficient alerting and reminders • Private insurance & Medicare/Medicaid • Potential P4P of $15,000-$40,000 per provider per year BUT: Can’t get the incentives if can’t document the performance AND: Capitation/Accountable Care Organizations will have more impact in the future ©2012 The HIT Community, LLC. All Rights Reserved. 22
- 23. Improved coding • Use of EMR system coding prompts • More confident “upcoding” • Less audit concern Potential reward….$50,000-$100,000 ©2012 The HIT Community, LLC. All Rights Reserved. 23
- 24. Improved Contracting • More insurance company leverage • More Insurance company responsiveness • Example … $10-$20 per member per month $20 x 1000 patients x 12 months = $240,000 Done right, you do well – “the new capitation” ©2012 The HIT Community, LLC. All Rights Reserved. 24
- 25. Question • How many people believe EHR deployment will “make” their practice money? ©2012 The HIT Community, LLC. All Rights Reserved. 25
- 26. So…is EHR adoptionworth it? Costs Sources • Upfront investment $40,000-$60,000 one- • Government $44,000-$63,750 one-time time • More patients per day $15,000-$30,000 per year • On-going cost $5,000-$10,000 per year (software, hardware, • Improved practice efficiency $30,000-$50,000 per year support) • Practice growth $10,000-$50,000 per year • Initial lost productivity $50,000-$100,000 one- (converting from paper, time • “Pay for performance “ $15,000-$40,000 per year physician and staff training) • Better coding performance $25,000-$100,000 per year • Improved contracting $50,000-$240,000 per year Total over two years $100,000-$180,000 Total over two years $334,000-$1,000,000+ ©2012 The HIT Community, LLC. All Rights Reserved. 26
- 27. Case Study Michigan State University Sparrow Health System ©2012 The HIT Community, LLC. All Rights Reserved. 27
- 28. MSU Sparrow CaseStudy ©2012 The HIT Community, LLC. All Rights Reserved. 28
- 29. MSU Sparrow CaseStudy ©2012 The HIT Community, LLC. All Rights Reserved. 29
- 30. MSU Sparrow CaseStudy ©2012 The HIT Community, LLC. All Rights Reserved. 30
- 31. MSU Sparrow CaseStudy ©2012 The HIT Community, LLC. All Rights Reserved. 31
- 32. EHR Budgeting –Success Factors • All benefits must have a baseline and well defined measurement approaches. • Expense reductions must result in budget reductions to the appropriate accounts. • Efficiency must show full time equivalent (FTE) reductions or increased chargeable productivity. • Future FTE cost avoidance is only allowed if the position is previously approved in a budget and an account's budget can be reduced accordingly. • Cost avoidance must tie to future expenses that are already contractual bound and budgeted. • A hurdle rate for return on investment (ROI) will be defined and measured. Source: http://www.healthcareitnews.com/blog/building-financial-case-electronic-health-records ©2012 The HIT Community, LLC. All Rights Reserved. 32
- 33. THE HIT COMMUNITY ©2012The HIT Community, LLC. All Rights Reserved. 33
- 34. HITC Communities Standard Community Public HITC •Public & Private Groups Other Services Communities •Content Management Tools •Community Framework • White Papers • Shared Knowledge •Community Site Operations • Webinars used in Multiple Communities •Training Tools to Manage Community • Learning Programs •Integrated with HITC Public Communities • Email Programs • Information to Engage Members Managed Community • Content Marketing •Standard Community Above Programs • Member •Community Access Control • Data Analytics Connections & •Community Activity Reporting • Consulting Engagement •Plus Part-time HITC Community Manager ©2012 The HIT Community, LLC. All Rights Reserved. 34
- 35. The HIT Community • Partners with providers, RECs, QIOs and other organizations • Provides a ready-to-go knowledge and collaboration solution- Tools / Data / Expertise • The expertise to succeed: – Knowledge sharing, collaboration and communication experts - How to create conversation, engage members, and collaborate to achieve results – Expertise in online knowledge, communication and collaboration tools – Quantify results – healthcare performance measures and data analytics Voice of the people - Our mission is to help all healthcare providers through critical healthcare industry inflection points. ©2012 The HIT Community, LLC. All Rights Reserved. 35
- 36. Questions? ©2012 The HITCommunity, LLC. All Rights Reserved. 36
Editor's Notes
- #20 Value to both fee-for-service and productivity-based practices
- #21 Charts – record retrieval, copies, etc.
- #22 Increased public perception…use of IT=good doctor
- #24 If you can optimally code – can 20%Expected margin is 20% improvement in
- #25 In a fee for service world – The AQC is a significant change from traditional fee-for-service contracts. It combines two forms of payment. The first is a global, or fixed, payment per patient adjusted for age, sex, and health status which increases annually in line with inflation. The second payment includes substantial performance incentives tied to the latest nationally accepted measures of quality, effectiveness, and patient experience of care. The contract's global payment covers all services received by a patient including primary, specialty, and hospital care. So, when a doctor spends more time with a patient and helps the patient avoid an unnecessary hospitalization1. the placing of a patient in a hospital for treatment.2. the term of confinement in a hospital. , the patient receives better care, the doctor and hospital have the potential to receive performance incentives, and the overall costs are less. Employers benefit as the new system moderates cost increases through better care. You can read more about the AQC by visiting www.bluecrossma.com/quality. Budgeted breakdown across a range of services and breakdown to a number >> cap available maximum if fee for services, but if shift to aqc – give whole group poss of earning >> closer to premium dollar before carved out – if effective and efficient – sharing savings on the service rendered (cant do it without HIT in place: be proactive not reactive)Level playing field
- #27 Drs. must define realistic goals:based on their needs and anticipated usesbased on the functionality of systems that are in place today (here could mention examples of successes and failures)based on future anticipated needs (what the future might bring in terms of more advanced uses (interoperability, patient portals etc.)realistic examination of value i.e., cost vs. revenue enhancement