Doctors to Lose Money on Electronic Records, Survey Finds

Most doctors who install electronic medical records systems will lose money in the first five years, according to a study that suggests a multibillion-dollar effort to computerize care in the U.S. may not live up to its promise.

A survey of Massachusetts physicians indicated an initial loss of $43,743 on the investment, researchers said today in the journal Health Affairs. Almost two-thirds of the 49 practices using electronic records would lose money even with subsidies included in President Barack Obama’s stimulus package, the researchers said.

The 2009 law set aside $27 billion to help doctors and hospitals go digital, ballooning sales along the way for technology providers including Epic Systems Corp. and Allscripts Healthcare Solutions Inc. The Massachusetts results show companies and politicians may have oversold the potential gains, said Julia Adler-Milstein, the study’s lead author.

“My concern is around the rhetoric and the hype and the assumption that we’ll put these systems in and we see the benefit the next day,” Adler-Milstein, an assistant professor of information and health policy at University of Michigan, said in a telephone interview. “It’s going to be a much longer journey.”

Even the doctors who would have made money dispute the premise pushed by supporters that electronic systems can help reduce U.S. health costs, she said. Practices projected to gain did so mainly because they were able to see more patients or get more claims approved by insurers, the study found.

210,000 Doctors

As of January, more than 210,000 physicians had received payments through the stimulus program, the U.S. Center for Medicare and Medicaid Services said on its website. Closely held Epic, based in Verona, Wisconsin, has been the leading vendor for doctor’s offices, followed by Chicago-based Allscripts, according to a Jan. 8 study by Bloomberg Government.

In the Health Affairs paper, researchers looked at costs and benefits at doctors’ practices in a pilot program to expand the use of electronic records. They projected the results over five years, including the federal stimulus payments that can reach as much as $44,000 per doctor.

The study found only 27 percent of practices would have made money, a figure that rose to 41 percent with the stimulus grants. Smaller offices, those with five doctors or fewer, struggled the most. Along with upfront costs, doctors said they had to work longer hours because of the software. In many cases, physicians failed to take advantage of potential savings, like cutting support workers or eliminating paper records, researchers found.

‘Money Well-Spent’

Computerizing patient records eventually will prove to be “money well-spent” for the nation, Adler-Milstein said. Still, it may take longer to realize the benefits than supporters predicted, and government and companies may need to invest more on training and support for doctors.

“The problem is it’s really hard both to adopt a new technology and to make the changes you need to ultimately come out ahead,” Adler-Milstein said. “There’s getting these systems in place and then there’s getting them to work well.”

The study was funded by the Massachusetts eHealth Collaborative, a group led by state doctors and paid for by Blue Cross Blue Shield of Massachusetts, according to the Health Affairs paper.