MGMA survey: Medical groups with EHRs report better financial performance than practices with paper medical records

New Orleans, La. Oct. 25 2010— Medical practices that have implemented an electronic health record (EHR) system report better financial performance than those that have not, according to the Medical Group Management Association’s (MGMA's) newly released Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data. Practices that were not hospital/IDS- owned and that had an EHR reported $49,916 greater total medical revenue after operating cost per full-time-equivalent (FTE) physician (operating margin) than practices with paper medical records. These practices also reported greater expenses ($105,591 per FTE physician) but had $178,907 greater median revenue per FTE physician than practices with paper medical records.

This same pattern can be observed in hospital/IDS-owned practices. Multispecialty practices that were hospital-/IDS-owned and had an EHR reported an operating margin that was $42,042 more than the margin in those with paper medical records.

"Adopting an electronic system can be costly and time consuming, and understanding the impact it will have on the practice is critical," said William F. Jessee, MD, FACMPE, president and CEO of MGMA. "While the implementation process can be very cumbersome, these data indicate that there are financial benefits to practices that implement an EHR system."

Not hospital/IDS owned practices with EHRs also report an increase in financial benefits as they gain more experience with their systems. After five years of EHR use, these practices reported an operating margin 10.1 percent greater than practices in their first year of having an EHR.

The survey report reveals that the highest information technology costs occur in the first year after installation in not hospital/IDS owned practices. Medical records and transcription staff costs decrease after this time. Information technology staffing per FTE physician increased slightly after five years (0.13 to 0.15), and FTE medical records staff per physician decreased by 44.12 percent (0.34 to 0.19).

"The potential of improved financial performance should be an encouragement for many organizations to purchase and use an EHR. Physicians adopting these technologies may also earn up to $44,000 in Medicare EHR incentives funded through the HITECH Act. However, while these incentives can defray some of the implementation costs, qualifying for them by demonstrating 'meaningful use' of the EHR is expected to be challenging for many practices," Jessee said.

Note: MGMA surveys depend on voluntary participation and may not be representative of the industry. Readers are urged to review the entire survey report when making conclusions regarding trends or other observations. Editorial copies of the report are available to members of the media who qualify. Please contact media relations representatives Liz Boten at lboten@mgma.com to request an editorial copy. Click here to purchase a copy of the report.

About MGMA

MGMA is the premier membership association for professional administrators and leaders of medical group practices. Since 1926, MGMA has delivered networking, professional education and resources, and political advocacy for medical practice management. Today, MGMA's 21,500 members lead 13,700 organizations nationwide in which some 275,000 physicians provide more than 40 percent of the healthcare services delivered in the United States.

MGMA's mission is to continually improve the performance of medical group practice professionals and the organizations they represent. MGMA promotes the group practice model as the optimal framework for healthcare delivery, assisting group practices in providing efficient, safe, patient-focused and affordable care. MGMA is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C.

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