New systems—especially PACS—can improve the economic efficiency of a practice

Since the first days of residency, orthopaedic surgeons have known and used acronyms such as AVN, OATS, and DJD. But today, new letter groupings are having a profound effect on the way that orthopaedic surgeons practice, as the following questions show:

Is your EMR system CCHIT-certified? Are your PM and EMR systems integrated, and will they work with your office PACS? Can your EMR system provide data that will enable you to receive PQRI incentives from CMS?

Most importantly, how will this alphabet soup of the 21st century of medicine affect your practice workload, efficiency, and income?

Making computers work FOR you
In most practices, the ledger system of billing was retired years ago, replaced by a computerized practice management (PM) system. Electronic claims submission and the ability of billing and collection specialists to apply payments electronically have improved the workflow and, more importantly, the financial stability of orthopaedic practices. Most physicians, however, continue to ask, “How can an electronic medical record (EMR) or picture (radiographs) archiving and communication system (PACS) make me money?” and “Will an EMR system make me more or less efficient?”

“Economic efficiency” is a general term in economics used in the context of how well—or poorly—a system performs with respect to generating the maximum desired output for given inputs with available technology. Efficiency improves if more output is generated without changing inputs—in other words, if the amount of “friction” or “waste” is reduced. When measuring the output of orthopaedic surgeons, one must consider both the number of patients treated and the quality of the work. The main input factors are time, money, and effort.

Learning how to use EMR software does initially require a greater investment of time, but after 6 or 8 weeks, the amount of time to produce an office note generally returns to pre-EMR levels for the same quality of note. With a little additional work, however, the quality of the EMR note and the information it contains can be superior to a dictated note. Usually this additional work can be performed by an office assistant, so the time you have to devote to patient care remains the same—or even increases.

In most cases, the ability to document a higher level of service with EMR software enables orthopaedists to legitimately charge for the higher level of service. Documenting a “consult visit” as opposed to a “new patient office visit” is simple when the ability to fax or e-mail a note to the consulting physician can be made directly from an EMR system with a single mouse click.

The impact on reimbursement
With an integrated, computerized PM system and EMR software, office charges for radiographs, injections, and procedure/visit codes (CPT codes) and the appropriate associated diagnoses codes (ICD-9 codes) can automatically be posted to a patient’s account. This data then can automatically populate an electronic claim form, be reviewed as needed by a billing expert, and sent to an insurance company with little effort. This system improves efficiency and the financial health of the practice by reducing claim denials due to incorrect ICD-9 and CPT codes and typically reduces the number of days the charges are in accounts receivable (AR).

The functionality of EMR products certified by the Certification Commission for Healthcare Information Technology (CCHIT) will meet current standards for a quality EMR system. Additionally, users of CCHIT-certified products may qualify for additional reimbursement from the Centers for Medicare & Medicaid Services (CMS). (For a list of CCHIT-certified EMR programs, visit www.cchit.org) The use of e-prescribing programs (whether integrated into an EMR product or not) is also being rewarded by CMS.

For example, tracking Physician Quality Reporting Initiative (PQRI) quality measures can be easily done by an EMR product with a searchable database.

EMR software and PACS can save a practice money, as well. In a typical practice, for every four physicians, one full-time employee will spend practically the entire work week filing, searching for, and managing patient charts.

X-ray technicians waste similar amounts of time with traditional radiographs—to say nothing of the cost of paper charts with tabs (about $1.50 each), the expense associated with chart storage space (at least 100 square feet per physician), and the cost of X-ray film and film-developing chemicals.

It works in our practice
But does it really add up to more dollars for the doctors? Here are the numbers from my experience at my practice, Sports Medicine and Orthopedic Specialists.

Coding is now supported by documentation. The number of level 4 and level 5 new patient visits that previously did not have necessary documentation to support these codes has dropped. Simply by providing faxed reports to referring physicians, we have been able to replace office visits of lesser codes with level 2 and level 3 consult visits. We also found that we were consistently undercoding on follow-up patients. Using an EMR system has increased our practice revenues from office visits.

Using EMR software has also reduced practice costs by eliminating transcription costs. Our transcription costs used to run $900 per physician per month. With four physicians, that’s $3,600 per month or $43,200 a year that we no longer have to pay.

Now consider the cost of the patient charts and dividers at $1.50 per chart multiplied by 6,500 patients. Finally, we were able to eliminate a planned position for an additional employee to file and pull charts, locate charts at various locations in the office, and hunt for misfiled charts. That saved the practice approximately $25,000 per year in salary and benefits. Conservatively, our use of EMR software has eliminated $78,000 in expenses each year (Table 1).

Our initial investment (when the practice consisted of two physicians) was about $100,000 for a server, five tablet computers, firewalls, wireless transmitters, network installation, and the EMR program and training. When we later added two physicians to the practice, the cost of the required additional software licenses, training, and equipment totaled another $20,000. We now pay about $1,000 per month for maintenance, support, and updates.

Our initial research indicated that the move to EMRs would pay for itself within 30 months. With the growth of our practice, we reached the financial break-even point after only 20 months. And we are continuing to save, since the $1,000 monthly EMR fees are considerably less than the more than $6,000 per month in expenses we would be incurring if we were still using paper charts.

Impact on workflow
Before implementing our well-integrated PM/EMR system, our average invoice spent approximately 30 days in AR. Now, because our system electronically delivers the appropriately matched CPT and ICD-9 codes from the EMR system to the PM system, the time an invoice spends in AR has been cut nearly in half. This significant improvement in cash flow is almost solely due to improvement in workflow, which is easier and less time consuming for the billing department.

Another measure of economic efficiency is generating the maximum desired output. For an orthopaedic surgeon, delivering quality care is a most desired output. EMR technology makes e-prescribing possible, eliminating illegible prescriptions and reducing prescription errors. Medications are easily cross-checked for reported allergies and possible interactions with the patient’s current medications and diagnoses.

The PACS enables easier access to radiographs and allows images to be easily manipulated to provide a better diagnostic-quality radiograph without exposing the patient to multiple studies. Many PACS provide electronic templates for arthroplasties and trauma surgery to better plan for procedures.

You can do it, too
Although many physicians have found EMR implementation a painful or frustrating process, the desired results are eventually achievable with patience and persistence. And implementation of a PACS requires training only in how to view and manipulate images—there is very little workflow disruption. Integrating the PM system with both an EMR system and PACS saves data entry time and enables better coding and time savings for the billing department.

To read accounts of medical practices that have successfully implemented EMR systems into their workflow and find other valuable material on the subject of EMR systems, visit the Healthcare Information Management System Society Web site at www.himss.org and type “EMR” in the search field.

Samuel R. Goldstein, MD, is a member of a small group practice, Sports Medicine and Orthopedic Specialists, PC, practicing in Birmingham, Ala.