Champions of computerized physician order entry have found it to be a particularly tough sell to keepers of the purse strings, but the arguments are there, according to early adopters.
Frank Orth, D.O., reports that a comprehensive electronic medical records system including CPOE has trimmed dictation expenses, formerly about $40,000 a month, by 95% within one year in the emergency department at Mount Carmel St. Ann's Hospital in Westerville, Ohio.
Orth is president of Immediate Health Associates, the private, 18-physician group that staffs the ED. EMR implementation was a joint initiative of the practice and the hospital, which funded it.
"We were able to sell it based on the dictation costs," Orth says.
The CPOE helps with documentation, which has a direct effect on reimbursement rates. Improved documentation has resulted in 11% higher reimbursements since the practice installed the EMR last July, Orth says.
"Our return on investment needs to be separated out from the hospital's," he notes.
The physicians invested time to research systems and train on the one they chose--HealthMatics EMR from A4 Health Systems, Cary, N.C.--to manage the 65,000 patients who visit the emergency room annually. "When I enter information on my handheld (at) bedside, it goes right into the lab," Orth says. "It really takes a large chunk of time out of the ordering process.
"This is a way that we could decrease the number of denials of lab tests (by payers) because we had a proper diagnosis," he says. "Every piece of data that we put in there, we can retrieve and track."
At 898-bed Cedars-Sinai Health System in Los Angeles, the information technology department actually reports to Michael Langberg, M.D., CMO and senior vice president for medical affairs.
"That's unusual among my peers in the administrative structure," Langberg says. "One reason it reports through medical affairs is to assure the organization that we would apply proven technology throughout clinical care."
This structure has helped Cedars-Sinai advance its technological agenda by installing a computing infrastructure with Web-based and remote access, unrelated to its current work in implementing CPOE by October (see page 19).
It also was part and parcel of the strategy for soliciting board approval and funding for Cedars-Sinai's $20 million-plus Patient Care Expert (PCX) information system. PCX incorporates four operations that are the foundation of medical center management: patient accounting, contract management, patient management and CPOE.
"We felt we were at a position technically to look at the next big leap with CPOE, knowing at that time, even a few years ago, what the literature was in terms of patient safety," Langberg says.
"A significant component to our current success around planning is the feeling on the part of the medical staff that this will be important to patient safety."
Langberg continues, "The 'sell' was really driven organizationally by the medical staff. Key leaders have been the chiefs of staff who are committed to projects like this." And, he adds, "We also made a commitment to a financial return on investment."
That ROI was not based on financial savings derived from patient-care quality, but on the patient accounting element of PCX. "We could tell our board (that) on those parameters alone, we could return their investment in just two years," Langberg says.
The chief of staff and medical director of Cedars-Sinai's Enterprise Information System, M. Michael Shabot, M.D., was present at several of the board's finance meetings.
"One part of ROI is the safety return, the other is dollars and cents," Shabot says. "This system has both."
One can talk about patient safety to a point, but there also must be a monetary benefit that hospital boards can see, according to Jay Eisenberg, M.D., a physician sales representative from electronic medical records vendor Cerner Corp. of Kansas City, Mo.
Eisenberg's job at Cerner is to convince hospital executives they can't afford not to automate order entry.
"A lot of the quality cost savings are not quantifiable," Eisenberg says. "There is a pure cost savings at decreasing adverse drug events. Not only is this a big investment, it is a culture change, too."
Charles Koo, CEO and chairman of EMR system vendor iMedica, Mountain View, Calif., says healthcare-business decisionmakers need to see an ROI of three to five times before they will spend money on technology.
"POE doesn't do that," he says.
But a much-publicized 1997 study in the Journal of the American Medical Association suggests each undetected but preventable medication error adds $4,685 to the average inpatient hospital bill. Physician executives are making the case that cost avoidance should count when convincing board members to invest $3 million or more in CPOE.
"It shouldn't be about ROI," says Ahmad Hashem, M.D., global industry manager for healthcare at Microsoft Corp. "It should be seen as a cost of doing business."