Inga correctly points out that the problem with the analysis is that the study does not address the potential savings and efficiency gains resulting from implementing and successfully using an EMR, such as reduced transcription, savings on charts and chart handling, lower malpractice and improved patient safety.

In fairness, if we want to take a ‘deep dive’ and look at the ROI that doctors expect from a traditional EMR purchase, one must consider risk. There are three kinds of risk: (i) risk of failure and losing the entire $124,000 EMR investment; (ii) risk that the physician may not comply with the government’s “meaningful use” requirements and therefore not receive any of the stimulus money; (iii) risk of significant losses in productivity, resulting in decreased revenue that dwarfs the $124,000 investment and hoped-for cost savings.

Risk 1 – Failure. The track record of traditional EMRs is well documented, having experienced a 50% failure rate. Would a doctor invest $124,000 in a stock if there was a 50% chance that the price would be $0? Would a doctor purchase a car if there was a 50% chance that when the car is paid for and ready to be driven off the lot, it would not work and he would receive no refund?

Risk 2 – No receipt of stimulus money. The government has issued a conditional IOU, asking for 3 things—ePrescribing, interoperability and quality reporting. There are very few, if any, high volume, productivity-based, private practicing physicians that have accomplished all three. Traditional EMR companies have a long road ahead of them to prove that, on a large, nationwide scale, their products can meet the conditions set by the government and will enable physicians to receive stimulus payments. The physicians who purchase in the foreseeable future will incur a considerable risk of not receiving stimulus incentives.

The experience with PQRI, a much smaller scale government program, is not encouraging. Of the providers who attempted to participate, only half successfully met the requirements and received any money at all. Would a doctor spend $124,000 on a piece of diagnostic equipment that has not been proven to work effectively and consistently?

Risk 3 – Productivity loss. The landmark MGMA government-funded study revealed “a decrease in physician productivity of up to 15% usually lasting a year or more” after implementing an EMR. Just a 5% decrease in productivity for an average high-volume specialist would cost $50,000 per year.

Entering into a “government” EMR venture should be undertaken with a clear understanding of the risks that must be figured into the ROI equation, and with the recognition that these risks fall entirely on the shoulders of the physicians.

There are low risk / high return alternatives available that are worth evaluating, such as the hybrid EMR.

First, you have to assume that the bias of most physicians is against switching to EHRs. That may change as new generations come in, but most doctors in their late 30′s and up are not that eager, particularly when they’re paying for it themselves, and therefore bearing all the risk. The people who wanted to move probably would have already, and there’s probably a small number of people who were interested but couldn’t quite make it financially, and this might get them off the fence. My gut feeling is that it isn’t that many, though. This will probably move the larger physician groups more quickly, but they were already moving.

Second, there are both benefits and costs not accounted for in these analyses. Absent some good, reliable ROI calculators that can show them that they’re guaranteed to get their money back in a certain timeframe, these are still risky business decisions because nobody can actually quantify the amount of risk. These ROI calculations, as we all know, are so dependent on workflow changes and other implementation details, that the only honest advice you can give people is that they may make or lose money, and it depends.

Third, old-school cynicism has kicked in. Many people are expecting that this means the gov’t will be more liberal with Medicare reimbursement cuts because “the HIT money makes up for it”. Given history, this isn’t entirely unreasonable. They’re already afraid of Obama’s “health care cost cuts” (don’t forget, doctors are generally very fiscally conservative), and so see the future looking grim.

Fourth, most people cool off to the idea once they realize that the “$44,000 per provider” isn’t quite as good as it sounds due to how it’s capped. This may be an anomaly at my institution, which is an academic center, and where less than half of the physicians actually make enough money through Medicare to see this maximum amount. Medicaid is even less reliable, so if I was counseling a pediatrician I would tell them to not bother at this point, too many unknowns in the formula.

Lastly, every doctor over the age of 50 is looking at the math and figuring they’ll be close to retirement by the time the penalties kick in (2017), and they’re not that bad anyway, so why worry? This doesn’t change the equation for them. If you put the money you would have spent on an EHR in a CD, you can cover that loss when it comes easily (5% max in 2020).

So, if you’re a physician between the ages of “end of residency” and your late 30′s, who makes enough money to take a $25,000 up-front capital hit plus a drop in productivity, in order to see a portion of that returned over the next 7 years, for unquantifiable and unproven “quality” benefits, then the federal gov’t's got a deal for you! (sorry, had to do it)

At the end of the day, hopefully what the gov’t will conclude is that the current stable of EHR solutions is just too expensive, and they’ll provide a low-cost EHR themselves. There’s at least a provision in the stimulus for this, unfortunately pulling that trigger is a political decision, and we know how that worked out last time around.