EHRs not lowering costs for healthcare organizations
Tuesday, March 20, 2018
Electronic health records were advertised as efficiency machines, capable of reducing paperwork, improving the care efficiency and perhaps even improving outcomes. But, to a large degree, the technology has done no such thing.
Specifically, a recent study published by JAMA shows EHRs do not lower administrative billing costs despite their intent to do so.
Billing and insurance-related costs continue to rise — contributing to rising administrative costs in healthcare — and the EHRs can't keep up. In some cases, the technology is not being used properly to capture the savings needed to make them a cost-reduction center.
Administrative costs, though, contribute to 25 percent to 31 percent of total healthcare expenditures in the United States, largely because of billing and insurance-related activities. Thus, EHRs emerged as a potential solution to easing the billing process.
Supporters of healthcare's shift to EHR usage have suggested that the systems would yield benefits for physicians by streamlining coding and billing, enhancing productivity and efficiency, and reducing costs because of decreased paper work. But they have not lived up to the hype.
The JAMA study assessed an academic healthcare system in North Carolina with 66,000 inpatient stays in 15,000 inpatient beds, more than 90,000 emergency department visits and more than 2 million outpatient visits in 2016. The healthcare system in question adopted a certified EHR system in 2014.
Per the report, interviews were conducted with 27 health system administrators and 34 physicians in 2016 and 2017 to "construct a process map charting the course of an insurance claim through the revenue cycle management process. The data were used to determine the cost for each major billing and insurance-related activity and were combined to estimate the health system's total cost of processing an insurance claim."
The estimated processing time and total costs for billing and insurance-related activities were:
- 13 minutes and $20.49 for a primary care visit
- 32 minutes and $61.54 for a discharged emergency department visit
- 73 minutes and $124.26 for a general inpatient stay
- 75 minutes and $170.40 for an ambulatory surgical procedure
- 100 minutes and $215.10 for an inpatient surgical procedure
Of the totals, the component of billing and insurance-related activities carried out by physicians were estimated:
- 3 minutes, or $6.36, for a primary care visit
- 3 minutes, or $10.97, for an emergency department visit
- 5 minutes, or $13.29, for a general inpatient stay
- 15 minutes, or $51.20, for an ambulatory surgery procedure
- 15 minutes, or $51.20, for an inpatient surgery
"Knowledge of how specific billing activities contribute to administrative costs may help inform policy solutions to reduce these expenses," wrote the authors of the study. "However, most prior studies have analyzed billing costs in aggregate without attributing the costs to specific component activities. Billing activities were associated with these high costs despite efforts to streamline billing operations. Examination of the billing process did not reveal any significantly wasteful or inefficient efforts, such as overt duplication of tasks or the performance of low-skill tasks by high-wage personnel."
According to the report, although EHR systems can automatically generate bills for clinical visits, the systems require the time of high-cost physicians to perform coding and documentation activities unrelated to clinical services, and the billing process still requires multiple steps by many types of personnel.
Seems EHR vendors have either a PR problem or a functionality problem that still needs to be addressed.
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