Healthcare Technology Featured Article

April 24, 2013

Medical Clinics Go Paperless to Save Big Money

If you're the manager of a medical practice, and you're frustrated that the doctors won't give up administrative paperwork, just do what Martin Penninga did in Alberta, Canada.

When some doctors who wanted to start a new clinic hired him as a manager, he made sure to rent a building that was too small to store paper records.

In Penninga's previous clinic, paper records took up nearly one-third of the total building space. Physicians had overhead costs of as much as 40 percent of billing revenue, and he had to employ 1.5 nurses to do administrative work for every single physician.

Many of the physicians in the practice were well along in their careers, and they were reluctant to switch to something as newfangled as electronic medical records (EMR). So Penninga took four doctors from that particular practice, along with two new doctors, and stuck them in a new building with no room for paper.

The new practice, which opened in 2011, saved $6,500 in per-physician annual costs. It also booked $25,000 more in revenue per physician than the old clinic. Overall, annual revenue growth for the clinic was 28.4 percent.

Additionally, the practice doubled the number of physicians on staff and saw 7,000 patients per year compared to just 5,800 at the old clinic.

In the U.S., the Affordable Care Act mandates that all hospitals and medical providers must use EMRs by 2015 or suffer Medicare penalties. However, a recent report from the Healthcare Information and Management Systems Society (HIMSS) showed that two years out, just 1.8 percent of hospitals have completed the EMR transition.

Twenty percent of hospitals are in the final three stages of implementation, and both the American Medical Association and the American Academy of Family Physicians say that doctors need more time to implement their EMR solutions.

However, the lack of interconnectedness is delaying the transition from a fee-per-service healthcare model to an accountable care organization (ACO) model. Fee-per-service allows physicians to charge patients for every service performed, which means that some physicians choose expensive procedures or duplicate them to make more money.

EMRs are the catalyst for changing the way healthcare works. However, it's hard to make changes when doctors refuse to get on board.

Edited by Jamie Epstein
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