How to Determine ROI for Health IT Investments

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.

Don’t Just Sit There! Do Something!

Posted by James Kanka on October 6

Every so often researchers find data that enlightens us profoundly and at the same time ruins some of our favorite pleasures. Chinese food, cheeseburgers – maybe we should have known they were not great for our bodies. Now we are learning that we can’t even afford to sit down — at least not for too long. U.S. News recently reported that “mounting evidence suggests that those who spend hours with little movement are at higher risk for developing blood clots, diabetes, cardiovascular disease and a constellation of other maladies fueled by insufficient physical activity.”

And guess who is not exempt from this diagnosis? People who exercise vigorously and regularly.

Really? You could be forgiven for doubting, but the surprising conclusion is that even super fit sitters are at risk from the biochemical effects of being sedentary for continuous periods of time if they routinely sit still for more than an hour, research says.

There is an answer. Get up and move around every hour. US News indicates that a 2015 study in the Clinical Journal of the American Society of Nephrology recommends two minutes of exercise per hour of sitting to reduce the chance of death by one third!

What other good ideas do they have for us?

Count your steps – Try an innovative wearable or even a simple pedometer!
Just move it – Even mild exercise that breaks up sitting spells is a big help.
Ping yourself – A reminder from your watch or smart-phone is a great idea.

Cardiologist Edward J. Teufel, MD has a few other ideas on how to avoid the sitting disease:

“Get up and move at least once an hour, and walk at lunchtime. There are even some companies that are providing employees with ‘walking desks’ which is basically a standing level desk with a treadmill in front of it that allows you to walk while you are working! Another idea is to put a set of pedals under the desk (which are available at medical supply stores, often used for physical therapy) and pedal while sitting. I think it is up to employers as well to make accommodations for their workers to prevent these issues. It will benefit them in the long run to have healthier employees.”

The upshot: Don’t give up on plain old diet and exercise as secrets to a healthy life, experts say; but whatever you do or don’t do for exercise, get up and move around for two minutes every hour. And put simple personal technology to use to keep you on track!

A Plethora of Patients; A Deficit of Doctors

Posted by James Kanka on September 15

The medical world in the United States has a perfect storm approaching – we could have a shortage of 90,000 doctors by 2025 as our population ages and lives longer. With fewer funds, fewer doctors, and more demand for healthcare, technology for running a more efficient practice will become a necessity for every office and hospital.

The crux of this problem is that there are already not enough doctors, and this deficit will only increase if certain issues are not taken care of. There are plenty medical students – a record 49,480 people applied to medical school all over the US in 2014, a number that continues to grow year after year. But, only 20,343 – less than half – were admitted. More people than ever before want to be doctors, and many are going to school and studying to be doctors. So why is this large group not making it all the way to practicing?

Because there is an on-going 17-year cap on residency program funding, there is a limit on the number of newly graduated medical students getting into these programs. In 2014, several hundred medical students did not match to a residency.

To combat this issue, medical schools have started accepting more students, and learning hospitals are willing to expand their programs. But, because there isn’t the federal funding to cover the cost of residency, hospitals cannot expand their programs and these students are not becoming practicing doctors.

Additionally, as many as a third of the nation’s doctors will be hanging up their stethoscope and retiring this decade. Not only will they not be replaced fast enough, they will become part of another piece of this puzzle: the aging Baby Boomer generation.

A major foreseeable challenge over the next few decades is the aging Baby Boomer generation. This generation is much larger than the generations it precedes, meaning less funding from taxes, and fewer doctors to take care of them as their medical needs increase. Also, because medicine has advanced, people are living much longer lives, with more expensive care needed as they age. There is a huge need for doctors to provide healthcare to these patients, a need which will only continue to grow in the coming years.

With healthcare patient demand shooting way up and healthcare provider supply sinking, every person will be affected. Wait times for appointments will become staggering. A study done by Merritt Hawkings, Physician Appointment Wait Times and Medicaid and Medicare Acceptance Rates, shows wait times in Boston average 45.4 days. Boston had the longest average wait time of the 15 cities surveyed and Dallas had the shortest wait time, still 10.2 days. Overall, wait times are down across the country from 2009 but that trend could change soon with the continued shortage of doctors and aging population. Perhaps one of the more shocking stats is “The average appointment wait time to see a family physician ranged from a high of 66 days in Boston to a low of 5 days in Dallas.” Boston has many doctors, but even more demand.

This issue could also cause a larger gap in care provided to the poor, and possibly all the way up through the middle class. Although the Affordable Care Act allowed for many people to get coverage, there is a large group that falls between the cracks of coverage. This group cannot get coverage on their own or through the state. If the current trends continue, this type of problem could grow to where premium care is only for the wealthy.

Technology is needed now more than ever to face these challenges. Doctors’ offices and hospital units will need to become their most efficient to keep up with the growing demand. Schedules need to be optimized – appointment gaps will become much more than frustrating. The inner workings of the medical system will hopefully change in time to ensure the nation continues to provide top of the line healthcare throughout every hospital. Until that happens, to level out supply and demand, we will have to rely heavily on technological advancements.

Tag: healthcare