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Health Care: Electronic Health Records (EHR) Fail to Reduce Administrative Costs

By Dick Weisinger

Healthcare providers were requried to adopt electronic health records (EHR) by January 1, 2014 in order to continue to qualify for Medicaid and Medicare reimbursement. EHRs were promoted as a way to improve quality and minimize risk and fraud, but primarily they were promoted to reduce costs.

An initial study by researchers at Duke University and Harvard Business School shows that, at least so far, EHRs have not been able to achieve their goal of reducing costs.  In fact, billing costs using EHRs have actually increased.

Barak Richman, law professor at Duke University, said that “we keep hearing about electronic health records and how they are supposed to improve the efficiency of hospital administration. We found that, as a general percentage of revenue, the amount expended on billing and administrative costs is just as high as it was before EHRs were adopted. Some people thought that EHRs were going to be the solution—and, they’re not.”

And when the actual start-up costs of software, hardware and system implementation are bundled and amortized into the costs, the report found that actual EHR costs increased by another 44 to 68 percent.  Richman said that when the initial financial investment is included in the results that EHR implementation turns out to be a “questionable endeavor.”

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