Wednesday, September 15, 2010

Do EMRs increase clinic or hospital profits?

What is the most common question asked by Doctors and Hospital Administrators when they meet me? Safe to say it is quote unquote: How does implementing an EMR solution increase my clinic/hospital profit?

Now first let’s go into the economics of the whole thing.

Profit = Revenue – Cost

So to increase profit an EMR needs to either increase revenue or decrease cost, and also factor in its own development, implementation and training costs.
So let us look at revenue first:
A good EMR system can drive revenue up in following ways:

1. Cause: Better customer service
SMS alerts, Quick Generation of reports, No confusion in terms of appointments, neat printed prescriptions, Doctors more attuned to patients with their complete history available, Emailing of reports
Effect: Patients keep coming back to you due to their pleasant experience, they develop a fan following and also recommend relatives and friends thereby driving up revenue.

2. Cause: Better Management of Time
Quicker access to Patient History, More Accurate Appointment schedules, Quicker Generation of Reports, Easy one Click Generation of Management Reports and Statistics
Effect: Man Hours saved by Doctors, Nurses and Attendants can be effectively used to see more patients’ thereby increasing revenue.

3. Cause: Minimizing Errors
Accurate prescriptions, Better Access to History, Improved note taking, Auditing of stored information
Effect: Less time spent on un-doing errors, less chances of revenue loss and time wastage on medico legal cases.

4. Cause: Portability and Access
Online Appointments, Online availability of EMR, Online Access to reports by Doctors, SMS and Email Communications
Effect: Access over the Internet to Patients and Doctors increases work time, provides more avenues for patients to interact with the hospital or clinic thereby potentially increasing revenues. E.g. Charging Patients to access their records online, or Doctors giving reports in quicker due to online access.

5. Cause: Offering More Services
Online EMR, Patient History Printouts, Fast Insurance Clearances, Multiple Doctor Schedules
Effect: New Services offered can be charged increasing the revenue streams

6. Cause: Better Decisions
Unpaid Bills Reports, Daily Registers, Medical and Administration Statistics
Effect: Where is your largest revenue coming from, which service, what kind of patients, which days, answers to all these questions which are now at your fingertips lets you plan better to increase and maximize revenues?

Increasing revenue is just one end of the bargain. The other is saving costs! How?

1. Decrease Staff Size: A good EMR system lets you maximize your efficiency especially on the administrative end. This lets you streamline your staff activities and in some cases even reduce staff.

2. Generating Important Reports: Report on Unpaid bills let you call the requisite clients to follow up and recover the money, a time consuming affair on paper. Or important statistics on schedules lets you find the bottle necks in Doctor Timings and improve the scheduling, decreasing losses to the setup.

3. Save Paper: Less work is done on Paper leading to long term benefits and gains.

4. Save Space: Less paper means less storage space required. Use the clinic and hospitals to provide new services or better service.

5. Manage it all: A good EMR allows you to manage your practice as well, integrating basic accounts and inventory to prevent losses, theft and effective reminders when stocks or balances run low.

Now for the down side, what costs are attached to the EMR?

a. Development: For a customized solution or a product you will spend on developing vis-à-vis buying a ready product, this is the direct sunk cost.

b. Hardware: Choosing a good EMR can greatly reduce this cost, but this too is a sunk cost.

c. Training: Time and effort required in training the staff and migrating to the new system takes time and since time is equal to money there is a cost attached to this.

d. Upgrade and AMC: Support costs are also involved with any software, so is upgrading it to newer versions. But this is vital to pay, because in the long run, PC problems do crop up and its best to be protected.

In the long run however, the ROI on a good EMR system can be tremendous.

Our product case studies for our Clinic Management Software Clinkare showed that a doctor using all the features of Clinkare in a multi-user setup can save upto Rs 15000 per month directly and in man-hour estimates.

But nothing will increase your Profit as much as using all the features of an EMR in a proper manner and fully utilizing its potential. The real value comes when you are ready to work with the EMR and not against it, when you can understand where all it can help you, increased profit is then certain.


  1. Then again this is the real thing. The Electronic medical records are usually part of a health information system that allows storage, retrieval and manipulation of records. That is why EMR is so much of big help for health organization. With regards to profit, then it is true also that you should know what is on this EMR.

  2. Great post! According to research, The right electronic medical records software system can save a physician practice time and money, while also improving patient outcomes.EMR will also protect us if we use the system well and are meticulous about our usage. The EMR record can document that patients were notified of test results and were given instructions on when to follow up with us. Anyway, thanks for the post. I enjoyed reading it.

    electronic medical records

  3. All wonderful claims. How many EMR users have actually decreased their staffs due to the use of EMR. I believe this is a false hope and claim. Does EMR save time? Sometimes, but across the board, no. The input of 'meaningless repetitive data, and time lost with input offsets this gain and ROI. This sounds like consultant hype. Beware !

  4. Hi Health train... we believe that EMR will save time in small doses which overall make for a more efficient process. People who persevere get the maximum benefit, in over 100 implementations in India we have done the 30-40 who have taken the EMR way seriously not only save time but actually have improved accuracy... Again its how much you are willing to wait apart from just having a good system

  5. Full disclosure: I am an EMR provider. Older EMRs that have since become "the big guys", and likely the new "stimulus chasers" often do present the drawbacks that Health Train mentioned. Just today I had a new client, previously experienced with a "big" tell me that none of the other EMRs Tabs in the record communicated, thus requiring her to enter "meaningless repetitive data" as HTE mentioned. It slowed everything down and required "many additional hours" per week just to manage. Good systems are better integrated, and info entered in one area auto-populates everywhere else. I can speak with first hand knowledge of clients who now have more physicians and less support staff (were previously in the red and now in the black) due to our EMR. We have studies to prove it. ROI and profit is possible but usually only when the EMR company invests more in their system than they do in marketing it.

  6. As much as three quarters of hospital staff are usually burdened with some sort of billing-related work in a traditional billing system. Opting for electronic medical billing solutions (ones that come with free EMR plans) that fit easily into the healthcare business' workflow are key to freeing up staff resources.
    Physician Billing Services
    Medical Billing Services