Management Essentials

Beware the Herd Mentality on EHR Timing

By Farrell “Toby” Tyson, MD, FACS

Ophthalmologists bask in the belief that we are masters of all we survey, lions of the savannah. In reality, most are succumbing to herd mentality out of fear — of the future, of being left behind and, most importantly, fear of the government. This is most often seen in the rush to adopt new, unproven technologies, especially electronic health records.

I believe that a good number of practices have decided to adopt EHR now, not in the belief that it will streamline their practices or make them more efficient but because of their fear of government penalties and the lure of incentive payments. In the rush to implement EHR as per mandated timelines, rather than when it makes sense to do so, many practices overlook basic economic fundamentals. The majority of practices are doing it, so it must be wise. Right?

Carrots and Sticks

With a combination of carrots and sticks, we are promised implementation incentives to the tune of approximately $64,000 per provider, which at first sounds great. A three-provider practice would obtain $192,000 once it proves “meaningful use” of EHR. The problem presents itself when you start to factor in just one new cost: the need for one scribe per doctor.

Although every practice should perform a due diligence review of EHR's financial impact, many practitioners (myself included) feel that a scribe is required for data input for every physician, to maintain physician productivity. Assuming $30,000 a year per scribe for the same three-physician practice, that requirement eats up the implementation bonus in 2.1 years and costs the practice $90,000 a year every year after.

And if you fail to earn the incentive payment, no costs are offset and the scribe expense over the next three years is $270,000.

But the illusory carrot is only half the story. Not meeting the “meaningful use” criteria comes with penalties from the government in 2015, beginning at 1% and increasing an additional 1% each year after for non-implementation. This penalty is on your practice's true Medicare dollars — usually around 40% of collections — not on collections from Medicare Advantage or third-party payers. Therefore, for every $1M a practice collects, the 1% penalty would be $4,000. For the 1% penalty to be equivalent to employing three scribes would require $22.5M in collections a year. In year two, the break-even drops to $11.25M in collections and year three $7.5M in collections.

Given such analysis, a practice may be willing to accept the financial penalty in taking time to evaluate the proper course of action.

Also, note that the above projections do not take into account the cost of the software, hardware and IT maintenance. It also assumes no drop in physician productivity. Most practices I have spoken with that have been on EHR for more than five years still rely on some sort of paper charts in addition to their EHR system. The real gremlin in the works is what is necessary to achieve “meaningful use” — the patient portal. On first glance, a patient portal would seem to be an easy and unobtrusive addition to a practice's EHR. But it's more akin to a Trojan Horse. It allows easy and authorized access of your EHR, on a limited scale to patients but on a fairly unlimited basis to governmental compliance agencies.

I think everyone believes that EHR is the future. The questions are which system, when to implement and how to modify your practice for success? There currently are plenty of choices in the EHR arena. Over time, we most likely will see consolidation and/or loss of companies, just as we saw occur in practice management systems. This thinning out of the EHR herd will leave us with fewer but more robust and financially stable choices.

At your practice, implementation may already have occurred or is still on your horizon. Outside forces such as hospital systems or accountable care organizations may force your decisions on which EHRs are acceptable or capable of being integrated into their preferred system. That doesn't mean you are compelled to follow, but do note the disadvantaged position you may be in if you opt to delay implementation.

Above the Herd

Real lions move with the herd, constantly stalking, analyzing and evaluating not only the strengths and weakness of the herd but also the environment and terrain. When the circumstances are right and the probability of success is high, the lions expend their precious energy to go in for the kill. In ophthalmology EHR decision-making, the stakes are high and poor decisions can be costly, but with patience, attention to detail, smart timing and good staff education, we too can rise above the herd and be the apex predator. OM

Farrell C. Tyson, MD, FACS, is a refractive cataract/glaucoma eye surgeon at the Cape Coral Eye Center in Florida. He may be reached at tysonfc@hotmail.com.