How To Profit From Technology
How To Profit From Technology
Here are three ways to make IT work for your practice
SCOT MORRIS, O.D., F.A.A.O.
This column will focus on how health information technology yields profits by increasing operational efficiency (reducing cost), increasing patient based revenue, and accessing outside revenue through incentive programs.
There's a cost, but …
First, I'll admit that the technology driven practice does cost money. The average two-doctor paper chart-based practice will spend approximately $60,000 over the next three years to evolve into an electronic health records (EHR) system. That “sticker shock” keeps medical facilities, O.D.s included, from evolving. Yet consider that the average practice spends about $53,000 per provider per year on a paper system. The EHR “sticker” seems a little less shocking. And here's where the investment really pays off:
► Increasing efficiency. Initially, EHR may slow operations as you get used to a new system. However, over the first year, your practice efficiency will improve substantially. Other devices like document management, merchandise ordering portals, inventory management devices, etc., play a crucial role in improving operational efficiency. As your business improves its operational efficiency, you will need less staff and less physical resources (paper and print cartridges especially). For example, a savings of five minutes per patient, by not looking for a paper chart, translates to an hour a day of cost savings in both staff and doctor time. Additionally, each chart in your office costs $3.71 to build, maintain, and search for over a three-year life span. Most practices have $15,000 to $30,000 of poorly accessible information in their file room. Still think paper charts are cheaper?
► Increased patient-based revenues. The increased efficiency of EHR can cut five to seven minutes of time from each exam. That's one hour in a 12-patient day. Go home early, or stay the same amount of time, see two patients and generate an additional $400 to $800 a day. That's another $100,000 a year based on conservative estimates ($400/day x 250 days). Still think you can't afford it?
► Incentives. There are also the various incentives programs such as PQRI, the HITECH incentive money, and e-prescribing incentives. Though PQRI incentives have already begun, the big incentives plan starts in 2010 and 2011. Being an active user of e-prescribing will make you eligible for a bonus of up to 2% of your billed Medicare Fees. (You do not need to participate in PQRI to participate in e-prescribing.) The “EHR” section of the stimulus package, also known as the Health Information Technology for Economic and Clinical Health Act (HITECH), could net your practice as much as $44,000 per provider over the next five years. However, most of this revenue ($27,000) comes within the first two years (2011 and 2012). So the “wait and see'ers” will suffer a significant drop off of revenue.
If you wait
Remember that only about 4% of optometrists are currently using “meaningful EHR's” with integrated e-prescribing. Once it's mandated, those who've waited will compete with the other 96% of O.D.s for limited IT resources.
The financial case to take the plunge and integrate health information technology into your practice is straight forward: It's simply too expensive to continue to do what you have been doing. OM
DR. MORRIS IS THE DIRECTOR OF EYE CONSULTANTS OF COLORADO, LLC, AND MORRIS EDUCATION & CONSULTING ASSOCIATES. E-MAIL HIM AT SMORRIS@EYECONSULTANTSOFCO.COM
Optometric Management, Issue: February 2010