1. Return on Investment for Electronic Health Record (EHR) Systems

2. FDRHPO is a not-for-profit agency created in 2007 to strengthen the health care system surrounding Fort Drum, NY. Fort Drum is home to the 10 th Mountain Division, the most deployed division in the US Army during the past 25 years and the only division level fort without an on base hospital. FDRHPO does not provide care, but serves the region by analyzing healthcare needs for both military and civilian population and assisting existing healthcare institutions in meeting those needs. FDRHPO BACKGROUND

3. FDRHPO received a HEAL-10 grant of $6.7 million, with equal matching commitment from area providers for a project budget total of $13.4million. N-CHIP created to provide governance – 5 area hospitals – 94 primary care providers in 23 practices – 3 specialists – Jefferson County Public Health – 4 payers Project Goals – Reduce COPD acuity and cost of effective treatment. – Install certified EHR technology and qualify for Meaningful Use incentive. – Connect to statewide network (SHIN-NY) through HealtheConnections. – Assist providers in achieving PCMH Level II N-CHIP HEAL-10 PROJECT

4. TOPICS FOR TODAY Background of EHR systems in Medical Offices HITECH and other incentives/rate adjustments ERH system costs Financial benefits of EHR systems Return on Investment (ROI) Analysis Hypothetical example

5. The first medical record was developed by Hippocrates in the 5 th century B.C. – A medical record should accurately reflect the course of disease. – A medical record should indicate the probable cause of disease. Fundamentally there was little change for nearly 2,000 years. Physicians manually recorded information which was stored in physical files for later retrieval and reference. The first Electronic Health Records began in the 1960s and were developed and used primarily by large academic medical centers. Adoption has been slow, a study conducted in early 2000s found about 20% of hospitals and only 5% of independent ambulatory offices used EHR systems. With improved technology, lower cost and the HITECH incentive program rapid growth is presently occurring. MEDICAL RECORD HISTORY

6. MGMA 2010 EHR STATUS Source: Electronic Health Records: Status, Needs and Lessons: 2011 Report Based on 2010 Data. Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. 877.ASK.MGMA. www.mgma.com. Copyright 2011.www.mgma.com

7. MGMA 2010 EHR STATUS Source: Electronic Health Records: Status, Needs and Lessons: 2011 Report Based on 2010 Data. Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. 877.ASK.MGMA. www.mgma.com. Copyright 2011.www.mgma.com

8. More accurate charge capture. Reduction in billing errors & disputes. Reduction in chart pulls, maintenance, and storage. Reduction in transcription costs. Increased administrative & clinical staff efficiency. Reduced paper documents, forms, etc.. Drug savings and reduction of adverse drug events. Laboratory and radiology savings. Potential malpractice insurance premium discounts. FINANCIAL BENEFITS OF EHR IMPLEMENTATION

9. 1.Leadership 2.High initial investment 3.Vendor/product selection 4.Fear of lost productivity 5.Lack of IT infrastructure 6.Staff computer literacy/training 7.Interoperability 8.Privacy BARRIERS TO EHR IMPLEMENTATION

10. BARRIERS FROM MGMA STUDY Source: Electronic Health Records: Status, Needs and Lessons: 2011 Report Based on 2010 Data. Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. 877.ASK.MGMA. www.mgma.com. Copyright 2011.www.mgma.com

11. 1.Communication 2.Leadership 3.Education 4.Goal Setting 5.Culture Change 6.Workflow Redesign 7.Training & System Testing 8.Implement with Enthusiasm! 9.Assessment 10.Celebration * http://www.himss.org/content/files/20101007-1-5-doc-implementation-success-factors-FINAL.pdfhttp://www.himss.org/content/files/20101007-1-5-doc-implementation-success-factors-FINAL.pdf SMALL PRACTICE EHR IMPLEMENTATION SUCCESS FACTORS *

12. MGMA SURVEY TRAINING DATA Source: Electronic Health Records: Status, Needs and Lessons: 2011 Report Based on 2010 Data. Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. 877.ASK.MGMA. www.mgma.com. Copyright 2011.www.mgma.com

13. MGMA SURVEY VENDORS ********** * NYeC Preferred EHR Partner Source: Electronic Health Records: Status, Needs and Lessons: 2011 Report Based on 2010 Data. Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. 877.ASK.MGMA. www.mgma.com. Copyright 2011.www.mgma.com

14. Incentive Payments for Medicare EPs First Calendar Year for which an EP receives payment C Y 2011CY 2012CY 2013CY 2014CY 2015 And later CY 2011$18,000 CY 2012$12,000$18,000 CY 2013$ 8,000$12,000$15,000 CY 2014$ 4,000$ 8,000$12,000 CY2015$ 2,000$ 4,000$ 8,000 $0 CY2016$ 2,000$ 4,000 $0 TOTAL$44,000 $39,000$24,000$0 The amount of the payment limit for each year will be increased by 10% for Medicare eligible professionals who predominantly (more than 50%) furnish services in an area that is designated as a HPSA.

15. INCENTIVE PAYMENTS FOR MEDICAID EPS FIRST CALENDAR YEAR FOR WHICH AN EP RECEIVES PAYMENT CY 2011CY 2012CY 2013CY 2014CY 2015CY 2016 CY 2011$21,250 CY 2012$ 8,500@21,250 CY2013$ 8,500 $21,250 CY 2014$ 8,500 $21,250 CY 2015$ 8,500 $21,250 CY 2016$ 8,500 $21,250 CY 2017$ 8,500 CY 2018$ 8,500 CY 2019$ 8,500 CY 2020$ 8,500 CY 2021$ 8,500 TOTAL$63,750

16. OTHER INCENTIVE PROGRAMS ProgramDescription Electronic Prescribing (eRx) Incentive Program 1% of Medicare PFS allowed charges If not participating in the Medicare EHR Program. EPs in the Medicaid EHR Program can participate in the eRx Program. Must use for at least 10 prescriptions prior to June 30, 2011 to avoid 1% downward adjustment in 2012. Medicare Physician Quality Reporting System (PQRS), formerly PQRI 1% of Medicare PFS allowed charges for 2011 & 0.5% for 2012-2014. 1.5% downward adjustment in 2015 for non- reporting, rising to 2.0% in 2016.

17. ItemUnit Cost Network Server $ 2,250 Cable, router, etc. $ 400 Desktop Workstation $ 1,125 Laptop Workstation $ 2,311 Backup Device $ 200 Scanner $ 2,100 Printer $ 250 AVERAGE COSTS ENCOUNTERED IN FDRHPO HEAL-10 PROJECT

18. Return on Investment (ROI) analysis is one of several commonly used approaches for evaluating the financial consequences of business investments, decisions, or actions. ROI analysis compares the magnitude and timing of investment gains directly with the magnitude and timing of investment costs. In its simplest form, ROI is the amount of profit or loss divided by the amount of original investment, generally expressed as a %. ROI = Gain,(Loss)/Investment In the real world however, gains or losses occur at varying rates over time. In order to more accurately analyze this we calculate the Net Present Value (NPV) of the stream of cash flows over a period of time by discounting those flows by a rate commonly called Risk Adjusted Cost of Capital. Thus if the NPV is greater than zero the investment is considered a favorable one. Another common tool is Internal Rate of Return (IRR), which calculates the rate at which the cash flow stream produces a NPV of zero. It is useful when comparing projects competing for limited available investment funds. RETURN ON INVESTMENT (ROI)

19. This workbook is designed to enable a practice owner or manager to analyze the financial impact of utilizing an EHR in their practice so that a better informed decision can be made as to whether or not to make the required investment. By entering current financial and performance information regarding the practice along with system cost information and expected performance data, the model will calculate the present value of the discounted cash flow resulting from the system installation and utilization. Additionally the model enables the user to run different scenarios regarding costs or future performance assumptions so that sensitivity of the impact may be projected, thereby improving the quality of the forecast and aiding in establishing desired performance criteria. RETURN ON INVESTMENT WORKBOOK MODEL TO PROJECT FINANCIAL IMPACT OF ACQUIRING AND USING AN ELECTRONIC HEALTH RECORD (EHR) SYSTEM IN AN AMBULATORY CLINICAL PRACTICE.

28. DocumentLink MGMA EHR Status 2011 Based on 2010 Datahttp://blog.mgma.com/2011-ehr-study NYeC Cost and Benefits of EHR Implementationhttp://www.nyehealth.org/rec/images/files/Fil e_Repository16/qanda/Costs_and_Benefits_of _EHR_Final_121009-7.pdf CDW Healthcare Physician Practice EHR Price Tag http://webobjects.cdw.com/webobjects/medi a/pdf/Newsroom/CDW-Healthcare-Physician- Practice-EHR-Price-Tag.pdf AHRQ – Improved Accuracy of Codinghttp://healthit.ahrq.gov/portal/server.pt/gate way/PTARGS_0_898611_0_0_18/09-0095.pdf NIH EHR overview and historyhttp://www.ncrr.nih.gov/publications/informat ics/ehr.pdf John Halamka, MD, CIO, CareGroup Health System, Harvard Medical School https://www.healthcareitnews.com/blog/blog- top-10-barriers-ehr-implementation HiMSS EHR Implementation Success Factors for Practices with 1-5 Physicians http://www.himss.org/content/files/20101007 -1-5-doc-implementation-success-factors- FINAL.pdf HiMSS EHR Implementation Success Factors for Practices with 6-10 Physicians http://www.himss.org/content/files/20101007 6-6-10-doc-implementation-success-factors- FINAL.pdf SOURCE DOCUMENT LINKS

29. DocumentLink Finding the right EHR vendor for your facility: A buyer's guide http://searchhealthit.techtarget.com/tip/Finding-the-right-EHR- vendor-for-your-facility-A-buyers- guide?asrc=EM_NLN_14090047&track=NL-1628&ad=836872& Will my EHR vendor survive to complete meaningful use Stage 3? http://searchhealthit.techtarget.com/tip/Will-my-EHR-vendor- survive-to-complete-meaningful-use-Stage-3 Key EHR technology features to consider when buying software http://searchhealthit.techtarget.com/tip/Key-EHR-technology- features-to-consider-when-buying-software Web-based EHR may make sense for some providers http://searchhealthit.techtarget.com/tip/Web-based-EHR-may- make-sense-for-some-providers Need advice on buying EHR software? Here's whom to ask http://searchhealthit.techtarget.com/tip/Need-advice-on- buying-EHR-software-Heres-whom-to-ask Keys to a successful EHR implementation: Communication, training, time http://searchhealthit.techtarget.com/tip/Keys-to-a-successful- EHR-implementation-Communication-training-time SOURCE DOCUMENT LINKS

30. CONTACT INFORMATION John Wheeler, HIT Financial Planner Fort Drum regional Health Planning Organization 120 Washington Street, Suite 302 Watertown, NY 13601 Phone: (315) 755-2020, ext. 20 Fax: (315) 755-2022 email: jwheeler@fdrhpo.orgjwheeler@fdrhpo.org