Are EHR installations derailing hospital finances?

It is an open secret that large EHR installations can cost health systems over $100 million to license and implement. A ticket that large is a material investment for any company on the planet. For a hospital it can be enough to put the bottom line in the red.

 

Cautionary Tales

A recent Forbes article challenged the old maxim that "you can't get fired for buying Epic".

 

Here are some cautionary tales:

 

  • Maine Medical Center of Portland indicated that its operating loss was partly due to its $160 million Epic installation. Around the same time, Barry Blumenfeld, the system's Chief Information Officer, "vacated his post".

 

  • In May, the Winston-Salem Journal reported that Sheila Sanders, the Chief Information Officer of Wake Forest Baptist Medical Center, was stepping down. According to the article, "she is leaving at a time when the center is struggling financially and operationally with implementing the Epic electronic health records system." The health system reported an operational loss of $50 million in its 2013 fiscal year and cited 27 million in lost margin "due to interim volume disruptions during initial go-live and post go-live optimization."

 

  • Cone Health, of Greensboro, NC, also experienced financial challenges during its Epic installation. The Greensboro News & Record reported that Cone planned to eliminate 300 jobs in order to cut $30 million from its annual budget. 

 

ROI, anyone?

This seems like such a basic question that I'm almost reluctant to ask. How can a $100+ million software investment create a positive return for a hospital? Has anyone actually published the math? If so, please let me know. I would be very interested in taking a look at the underlying assumptions. And I promise to share my thoughts via the Axial blog.