Published 9/1/2007
J. Michael Maxwell, MD

Paperless office: A must, a maybe, or a mistake?

In Poor Richard’s Almanac, Ben Franklin stated the paradox that best describes the current state of information technology in medicine: “A penny saved is a penny earned.”

Although information technology may, in the long run, save thousands of dollars for a medical practice, this leap of faith does not easily and immediately exceed the technology’s acquisition costs. Information technology is a major expense, and any physician who runs an office knows that every penny of expense equals one less penny of income. The question is, therefore, does the promise of information technology really bring value to a medical practice?

In his book Business @ the Speed of Thought, Bill Gates laid out the business case for information technology. Gates explained its benefits and provided insight into the successful operations of an organized business. This glimpse into Microsoft’s inner workings underscores the competitive advantages of leveraging information technology.

Is it worth it?
To determine if such technology will bring the same value to your medical practice, the cost of acquisition vs. “value added” must first be examined.

An inefficiently run office will not operate more effectively by going “electronic” unless current systems are examined and process improvements are implemented. A practice that wants to move to a paperless environment must evaluate processes and streamline them in order to achieve successful cost reductions.

With efficient office systems in place, information technology can, indeed, add value to your office staff’s work product. For example, chart management costs can be reduced through lower costs for chart creation and storage, as well as the need for fewer chart pulls.

The cost of pulling a chart in a physician’s office is about $5, according to a study by Partners HealthCare Systems. Creating a new patient chart runs about $3; the average annual cost for storing charts is $1.75 per square foot. Faxes are $0.05 a page, medical history sheets cost $0.15 each, and postage is now $0.41 per letter. Replacing a lost or misplaced chart is an even more significant expense, averaging $8 a chart. In addition, these tasks typically require the services of two full-time employees.

Other expenses include processing new prescriptions, estimated at $3.50 per prescription. A study in the Journal of Healthcare Information Management showed that an electronic prescription system can reduce staff time spent on a prescription refill from 15 minutes to 3 minutes. At seven refills per day, that’s a savings of 84 minutes a day.

Once you recognize these costs, it’s easy to see the potential savings that a paperless environment can provide in terms of staff time, utilization of office space, and reduction of supplies.

Physician time = money
The major obstacle that must be understood and overcome is whether the paperless environment will add value to the physician work product. For example, the average cost of medical transcription is $1,000 per month per physician. Eliminating the need for transcription services by using voice recognition software can result in an immediate cost savings.

The real analysis of electronic medical record (EMR) technology begins at this point. Can EMR really deliver voice recognition that will eliminate transcription? And if so, remember that for physicians, time equals money. Any system that increases the time a physician must take to document a medical encounter takes away from the time available to examine, prescribe, perform surgery, or treat patients. Therefore, the technology must be carefully analyzed to determine whether it will require more of the physician’s time. If so, the EMR technology may completely cancel cost savings in staff productivity.

Following are just a few of the questions you need to answer when evaluating an EMR product:

  • Will the technology deliver a benefit or time savings to the physician—not simply to the staff and the front office process?
  • Almost everyone is aware that voice recognition software exists, but is its accuracy adequate for daily use?
  • Does the technology require the doctor to change his or her paradigm of documentation, or can processes be easily transferred from paper to the screen?
  • Is programming knowledge required to run the system, or will the physician have to learn new software language?
  • Can a product be found with familiar tools, such as a full-functioning word processor or database format, that will be easy and versatile to use in any paradigm of practice?

For more detail, please refer to the Academy’s 16-page EMR Primer for Orthopaedic Surgeons, which can be downloaded for free from the online Practice Management Center at www.aaos.org/pracman (password protected). Select “Private Practice Operations” on the left-hand navigation bar, then click “Information and Resources” to find the primer.

“A penny spent is a penny saved?”
Without question, a paperless environment offers potential benefits to medical office staff and the physician. The real question is which of the available products on the market will deliver those benefits—both to the provider and the medical staff. If the EMR actually delivers on this promise, then a “penny spent will be a penny saved.

J. Michael Maxwell, MD, is a member of the AAOS Practice Management Committee. He can be contacted at jmmaxwell@tc3net.com.