The cost of health information technology for the nation's office-based physician practices is rising just as a huge pot of federal funds to offset those costs is running dry.
According to a survey by the Medical Group Management Association, the total health IT cost per full-time physician equivalent has risen 42% to $32,592 since 2009, when the federal electronic health record incentive payment program was created.
The cost of health IT equipment, maintenance and supplies, about 71% of a group's total health IT costs, jumped 40% over the period to $23,187 per FTE physician.
Meanwhile, health IT staffing expenses—about 29% of total IT costs—rose even faster at a 47% clip to $9,405 per FTE.
The health IT data is from physician-owned multi-specialty groups with both primary- and specialty-care physicians. It was excerpted from the annual and broader MGMA Cost and Revenue Report.
“While technology plays a crucial role in helping healthcare organizations evolve to provide higher-quality, value-based care, this transition is becoming increasingly expensive,” said Dr. Halee Fischer-Wright, president and CEO of the MGMA, in a news release.
“We remain concerned that far too much of a practice's IT investment is tied directly to complying with the ever-increasing number of federal requirements, rather than to providing better patient care," Fischer-Wright said. "Unless we see significant changes in the final MIPS/APM rule, practice IT costs will continue to rise without a corresponding improvement in the care delivery process.”
Several early studies, used to support legislation creating a federal program to fund EHR adoption, boasted of multi-billion dollar potential savings generated by these systems.
For example, a 2005 study by the RAND Corp. estimated that the U.S. could save nearly $42 billion a year in healthcare costs if it broadly adopted health IT. The Center for Information Technology Leadership at Partners HealthCare System, Boston, similarly estimated the nation would save $44 billion a year if it invested $14 billion to $30 billion on highly functional IT systems for office-based physicians.
Those estimates have since been roundly criticized, if not totally debunked.
This is the final payment year for late-adopting physicians and other professionals—those who started in 2014—who are eligible for EHR incentive payments under the Medicare portion of the incentive program. Their final payment this year will be $4,000.
The Medicaid program, however, still is taking first-time applications through the end of this year, with payments coming through 2021. About 35% of the nearly 499,600 physicians and other eligible professionals paid thus far have been Medicaid program enrollees.
The CMS estimated 537,600 physicians and other professionals were eligible to participate, so about 93% of those have already been paid. So far, physicians and other eligible professionals have received nearly $14.2 billion out of $34.9 billion in EHR incentive payments. Hospitals received the other $20.7 billion.
According to a separate MGMA poll taken in June, 61.7% of respondents said their groups expected to attest to having met federal meaningful use standards under the EHR incentive payment program. About 10% indicated they planned to file for a hardship exemption, 9% were unsure, 9% responded that the requirements weren't applicable to them, and 9% reported they will not attest.
So, while health IT costs have risen, it's been difficult to measure any offsetting increases in revenue or reductions in other expenses to help pay for health IT systems, said Robert Tennant, the MGMA's health information technology policy director. “We've not really got data on that side, yet,” Tennant said.
Thus far, roughly 93% of the estimated 537,600 physicians and others eligible to receive EHR incentive payments have been paid, a proxy for EHR adoption, according to the CMS data. Love health it or hate it, “the reality in today's physician environment is you have to have it,” Tennant said.
To satisfy patient demands, he said, “you have to offer some of these bells and whistles, like systems to do your scheduling, to pay your bills online, or to see your lab results. If you want to attract a new physician to a practice, do they want to go back to a paper environment? The answer is no. Patients, staff, referral partners, the expectation is that you have to have the technology.”
Health IT is “foundational” to a “better and smarter” health system, according to an HHS statement about the MGMA findings. EHR incentive payments under both the Medicare and Medicaid programs have “more than covered total increased IT costs for physicians on average since 2009,” the statement said. Meanwhile, the systems “have led to a safer, more connected care” nationwide.