It’s an encounter that nearly every independent physician has had by now at least once: the sales pitch for a tech solution that will improve the way the practice runs. The promises are big — simplicity, efficiency, “painless” billing, seamless appointment-booking — and as the medical technology industry continues to grow, it seems likely that the capabilities of these products will, too. It’s certainly growing: EvaluateMedTech’s World Preview 2015 forecasts that worldwide sales will reach over $477 billion by 2020.
Another familiar moment for doctors? The sticker shock when glimpsing the price tag on a shiny new EHR, patient portal, or online scheduling tool. For example, HealthIT.gov quotes the cost of purchasing and installing an EHR at as high as $70,000. But by some estimates, implementing an EHR could cost over $163,000 for a single doctor. And that’s before factoring in software licensing, training, and maintenance fees, not to mention unforeseen costs. Patient portals, too, are expensive to initiate, yet can ultimately encourage your patients to be more engaged with their care.
With all this money — and time, for training, onboarding, and testing — the inevitable question arises: Is this new technology I’m about to invest in worth it? Or, to put it another way, how can I determine the return on my investment? Though every software product and service out there is a little different, it is possible to calculate the ROI of your tech investment by considering the following framework.
Identify cost centers the technology is meant to alleviate — and calculate how much those pain points are costing you today.
What functions of your practice are the most time-consuming — and ultimately the costliest? Is it fielding patient phone calls on your scheduling line? Or are bottlenecks in your recordkeeping process disrupting the flow of patient paperwork? If you’re already keenly aware of where operational inefficiencies lie in your practice, then begin to investigate just how much these inefficiencies are costing you on a monthly and yearly basis. Knowing where a new solution is needed and knowing how much a given process is costing you now gives you a measuring stick against which to compare any costs associated with a new technology.
Make a reasonable estimate of what costs will be post-implementation.
Of course, vendors selling you EHR technology and other software will promise the moon, including low costs for getting up and running, then maintaining the system they tout. You’ve heard it before: “cut your collection time in half,” or “reduce average hold times to less than 30 seconds per caller.” Remember, companies want your money and your signature on the dotted line, and if their reps think that quoting phenomenal results will put the pen in your hand, they won’t hesitate to tell you about the absolute best performance scenarios they’ve got. So remember to apply a healthy dose of skepticism to whatever sample numbers you’re being given. That said, those numbers aren’t a bad place to start when you sit down to make your evaluation of how a given piece of software will affect your monthly and yearly costs.
Don’t forget to factor in time.
Many doctors on the other side of a tech adoption process don’t take into account how much time it takes to prepare for, implement, and train staff on its use. During the ramp-up phase, you might be less productive than you were before you added the technology. Additionally, in the case of a new EHR implementation, depending on the size of the practice and technology used for converting existing patient records into digital files, it can take months (and staff overtime or outside help) to successfully scan and properly store every record. And remember — just because your patients’ data is saved in electronic form doesn’t mean that their paper files can be destroyed immediately. Depending on the state and the capability of your EHR to provide full copies of a patient record, you may still be required to retain paper records for up to five years.
Be realistic about the degree to which the technology will be used.
One of the longstanding concerns associated with technology in the healthcare sphere is that patients and providers will shy away from use — for doctors because of fears that it may hinder their efficiency and communication with patients more than it helps, for patients because they don’t see the benefit, and for both because the technology may feel too difficult to learn. Indeed, Deloitte reports that while nine out of 10 doctors say they are interested in mobile health technology, only about 24 percent are actually using such tools. And the majority of Americans say they aren’t yet using a patient portal. So it’s important to be mindful of how quickly adoption will follow implementation.
Despite the cost and effort associated with a successful implementation, health IT tools are undeniably the wave of the future, especially as patients get more plugged in and their expectations begin to change. And there are major payoffs to using tools that work well — 79 percent of providers said that an EHR improved their practice efficiency. It’s critical to use the framework above to guide your decision-making about any new technology to make sure that the product is realistic to your practice and its unique expenses. There are also lots of good ROI templates and forecasting calculators out there these days that can help you navigate. If you’d like to talk more about low-cost ways to improve efficiency and patient satisfaction, we’re here to help, so reach out today.