Calculating the Return on Your EHR Investment

In a study published in Health Affairs, researchers looked at the return on investment (ROI) for implementation of an EHR system in smaller medical practices. According to the study, the practices were able to make up for the cost of EHR implementation in 2.5 years. Subsequently, for each full-time employee using the system, the practice received over $20,000 in net revenue per year. The increased revenue was mostly due to improved accuracy in coding and increased provider productivity. Typically, larger medical practices are able to make up for their EHR investment even faster.

When calculating the ROI for EHR purchase and implementation, one of the most important factors to consider are the quantifiable and non-quantifiable benefits that the EHR system will bring to the medical practice.

Quantifiable benefits:

  1. Increased revenue: This is typically due to more accurate medical coding and billing. The more accurate the billing, the more likely the practice will be properly reimbursed for their services.
  2. Increased provider productivity. Because the EHR system allows the clinician to streamline visit notes, physician orders, follow-ups, and billing, the provider is able to be more productive. Most of the encounter notes can be completed during the point of care, which increases productivity and ensures accuracy in documentation.
  3. Improved operational efficiency. EHR systems improve operations of a medical practice. This decreases the need for operational personnel, lowering overhead. Most EHR systems streamline scheduling, billing, and communications, which greatly improves operations.

Recommended reading: use our complete guide to EHR pricing and project costs to help forecast your new EHR system’s ROI.

Non-quantifiable benefits:

  1. Improved job satisfaction for clinicians and staff. Once the staff feel comfortable with the EHR system, their job duties should be more streamlined. There will be less duplication of work and less need for tedious tasks, allowing them to focus on patient care. This will lead to greater job satisfaction, improving retention rate and practice morale.
  2. Improved patient satisfaction. Patients can tell when their medical practice runs professionally and efficiently. Patients will be more satisfied and more likely to remain a patient in the practice.  
  3. Improved patient outcomes. EHR systems provide tools for screenings, medication interactions, best practice treatment plans and means for communication with their providers. These tools lead to improved patient outcomes and better patient care.

These non-quantifiable EHR ROI considerations can be difficult to put into a spreadsheet. However, streamlined working practices can be quantified by analyzing the reduction in personnel and payroll. Increased productivity can be measured by determining the average reimbursement per patient and multiplying by the expected productivity of a clinician. Improved billing and operations can be determined by analyzing what type of codes are being missed and what type of billing errors are occurring.

How much can be made up, on average, when billing is performed correctly? When analyzing other benefits such as satisfaction of patients and staff, think about the cost of losing a patient to another practice, or the cost of hiring and training a new clinician when another one leaves the practice.

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Amy Vant

About the author…

Amy Vant is a doctor of physical therapy and clinical director for an outpatient physical therapy clinic in the United States. She has experience utilizing and implementing many forms of medical documentation through various healthcare practice venues. Amy enjoys writing about healthcare administration strategies, including electronic health record systems.

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Amy Vant