Growth and Opportunity: The Healthcare Sector, Examined

HealthLeaders Media Staff , December 13, 2010
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As the healthcare industry prepares for the new year that will, no doubt, include a measure of uncertainty about reform and its implications, there are positive indications regarding wages, jobs, and technology. Our HealthLeaders Media online news team regularly covers matters of economic significance to the industry, including these pieces from Jeff Elliott and John Commins. To see the original reports, visit, and click on the e-Newsletters link.

MGMA: Practice revenue increases with EHRs

Medical practices that have avoided implementing an electronic health record system because of the costs may not have such a strong argument, according to a study published by the Medical Group Management Association. Data collected from both independent and hospital-/IDS-owned practices indicates that practices that have implemented an EHR system produced better financial results.
Multispecialty and single-specialty practices—including primary care, nonsurgical, and surgical specialties—with an EHR had almost $50,000 more in operating margin (total medical revenue per full-time-equivalent physician) than practices that still use paper medical records.

And while overall expenses rose among EHR-enabled practices (approximately $106,000 per FTE physician), median revenue per FTE physician was also greater, at $179,000 for the year. “The potential of improved financial performance should be an encouragement for many organizations to purchase and use an EHR,” said William Jessee, MD, president and CEO of MGMA in a statement.

The results, detailed in the report Electronic Health Records Impacts on Revenue, Costs, and Staffing: 2010 Report Based on 2009 Data, also point out that multispecialty hospital-/IDS-owned practices with an EHR, while not quite achieving the results of their unaffiliated counterparts, also realize better operating margins than those without, at just over $42,000 in 2009.

The report indicated that while an EHR system’s expense was quite high during the first year, other operating expenses tended to decline. In fact, nonhospital-/IDS-owned practices realized 10% greater operating margin in their fifth year with an EHR than the first.

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