EHR Insider: EHR Sustainability and Long-Term Costs in the COVID Era
By Peyman Zand
For The Record
Vol. 32 No. 6 P. 30
Health care organizations across the country are feeling the financial squeeze from COVID-19. As they reassess and strategize around reboot and recovery, executives are taking a hard look at costs. The long-term cost and sustainability of EHRs are key factors in these recovery decisions, especially as expanded telehealth and other interoperability initiatives become solid components of the new normal.
A survey by the College of Health Information Management Executives (CHIME), collected a month before restrictions were implemented in the United States, showed that 77% of hospital CIOs cited operating cost pressures as the top barrier to making progress with IT initiatives. In the same survey, EHR/EMR optimization ranked as the top 2020 priority, with patient engagement technologies trailing closely behind.
To successfully balance EHR cost pressures with technological advancements, many CIOs turn to purchased services. Data storage, user licenses, software, security, disaster recovery, and networking are noted opportunities for savings. In fact, according to the Healthcare Financial Management Association, reducing purchased services spending offers hospitals the opportunity to save as much as 30% of nonlabor expenses.
Because EHR solutions are such major investments, it is more critical than ever to examine strategies around managing costs and opportunities to support and optimize the system that is the heart of hospital operations. When it comes to long-term EHR cost pressures and sustainability, the following are four areas of focus.
Vendors and Contracts
Analyze current spending and develop a plan, including a series of exercises required to rationalize vendors and contracts.
In the CHIME survey, 61% of CIOs did not receive the value they expected in more than one-half of their projects with managed services providers. This points to projects not aligned properly with organizational strategies, or costs not well understood or managed. In many cases, there have been redundant contracts with vendors for the same functionality. Some of these redundant services were leftover agreements from legacy environments while others were from shadow IT endeavors. There is a tremendous EHR cost savings opportunity in evaluating and consolidating these contracts.
Contractual terms and conditions also may not be favorable to the organization. In these cases, renegotiating may provide additional value.
Finally, zero-based budgeting or ledger-based budgeting for allocating all IT costs to specific departments is recommended. One of the primary reasons why costs increase is lack of transparency on IT costs. These two budgeting methods help users and specific departments understand the true impact upon the bottom line.
Productivity and Utilization Rates for EHR Optimization Projects
For opportunities to control support and project costs, examine the productivity, utilization, and skill sets of the EHR support and development teams.
As hospital systems begin to evaluate essential vs nonessential projects, many have begun to look at their internal EHR staff levels against the new priorities. Departments with highly compensated EHR teams are under deep scrutiny as development projects are placed on the back burner.
“The [COVID-19] crisis is a strong call to action to ensure we control costs by establishing processes, productivity metrics, critical paths, and matching specific skills to specific jobs,” says Justin Diehl, vice president of Epic services for CereCore. “Evaluating team members who may have less experience in telehealth, for example, and assigning them to projects with experienced leads allows us to ensure the highest quality for many organizations while reducing overall spend for everyone.”
Along with the rightsizing of projects has come a rightsizing of the workforce as many experienced EHR analysts are being furloughed or laid off.
“While we’ve been in deep discussions with our clients regarding how we can best support them through the crisis, we’ve heard from many in our Epic community that their roles have been reduced [or] furloughed, or they’ve experienced layoffs,” Diehl says. “Some health systems have traditionally had dozens of Epic consultants supporting internal operations. As health systems move forward and begin to put key projects back into their budgets with limited risk and fairly aggressive timelines, we expect to see a bigger shift toward strategic and cost-effective, project-based consulting services and staff augmentation.”
Key Performance Indicators
It’s recommended that health care organizations revisit service and operating level agreements for EHR support services.
As IT support teams shift to work-from-home models, health care organizations must manage productivity in a remote environment while building agility to be remote-ready as new emergencies and waves of the pandemic arise. This is another area where CIOs may consider purchased services for EHR support. While outsourcing EHR support is commonplace in other industries, 30% of hospital CIOs have never considered this model, according to the CHIME survey.
By outsourcing the EHR support organizations, health systems can reduce costs, improve services by measuring performance through service and operating level agreements, and drive cost reductions through general key performance indicators in the operating environment. In either an outsourced or internal support model, evaluating the service and operating level performances provides essential governance to support costs.
Smart EHR Transformation and Modernization
Examine EHR modernization and transformation projects against the long-term costs to support them. Now is the time to collaborate with departments regarding day-to-day operations of EHR systems. Older EHR systems often require a tremendous amount of hand-holding by the IT organization or clinical informatics personnel to assist the clinicians. Additionally, there are places where clinicians and physicians are not well trained or adapted to the technologies in place.
Interfaces also represent a high-cost issue. Older interfaces may require a lot of human interaction to record information about an episode of care. And in these cases, a replacement, upgrade, or optimization of these systems can alleviate burdensome human interfaces and pay off in the long run.
The following are three other areas to consider when deciding whether to modernize or replace existing technology:
• Examine workflows, mobile devices, and robotic process automation to relieve EHR costs.
• Don’t dismiss options such as cloud hosting and software as a service (SaaS). While a migration or an upgrade to an SaaS model represents some upfront costs, savings come with reduced hours spent on network maintenance, updating servers, hardware replacement, power, cooling, and more.
• Use application management services to keep your EHR updated and patched. This generates savings in maintenance labor and makes it easier to take advantage of new functionality. For example, many EHR vendors quickly released telehealth options in the face of the COVID-19 crisis, but updated systems were needed immediately to take advantage of those options.
With regard to a transition to cloud computing, consider long-term contracts with reputable firms to reduce and eliminate upfront costs. Vendors interested in true partnerships understand the predicament senior executives face when making these decisions and will develop strategies to stratify the costs and risks for moving to the cloud environment.
As the industry moves forward, it must shift from cost adversity to technological advancement. And the only way to do that is with best practices, strong governance, and cost controls.
— Peyman Zand is vice president of advisory services at CereCore.