Family physician Mitchell Cohen, who belongs to a three-doctor practice in rural Elma, Wash., would like to acquire an EHR. His group might even qualify for the $64,000 Medicaid subsidy in the stimulus package. But he and his colleagues are now putting up a new office building to accommodate their growing practice. “We just couldn’t swing the extra cost” of investing in an EHR right now, he notes, adding that that might change in another year.
But other physicians are ready to take advantage of the government subsidy now. Internist Jeff Kagan of Newington, Conn., says, “If someone is going to pay for us to get an EHR, we’re certainly going to be much more interested in doing it.”
Kagan and his partner rejected an offer by a local hospital to pay for 65 percent of the cost of EHR software, because the EHR it offered was unsuitable for ambulatory practices. He says the government offer is more appealing, especially since they can choose among certified EHRs.
Some physicians who already have certified EHRs are happy that the government is finally going to reward them. For example, Ed Bujold, an internist in Granite Falls, N.C., figures he’s spent $150,000 on EHR software and computer equipment since 2000. While his EHR has made his practice more efficient and improved his ability to code appropriately, he’s delighted about the government incentive. “This is a novel concept that you might be rewarded for doing the right thing, and that you might get paid more for practicing quality medicine,” he crows.
How Are You Going to Pay for This? With the government promising to provide subsidies for EHR acquisition, but not until 2011, you might consider financing an EHR with a lease or a loan. Then, when the federal money starts flowing, you can pay off the rest of your loan or buy the system at the end of your lease. The tricky part of this, notes MGMA consultant Rosemarie Nelson, is that you can’t be certain that your EHR will qualify for the government funds. The picture should be clarified later this year, when the Department of Health and Human Services is expected to issue regulations to implement the health IT incentives. Nelson, however, urges physicians to acquire EHRs as part of their business plan, not because they might get subsidies later on. If you do decide to go the leasing route, she says, avoid leasing from a vendor. You can usually get a better deal from a bank, and the ability to pay cash upfront can result in getting a bigger discount from the vendor. Despite the recession and the tightness of credit, bankers say they still regard most physicians as creditworthy. Martin Vahsen, national sales manager for professional services within U.S. Bank’s Technology Finance Group, says his company has various units that lend to all types of practices, from sole practitioners to large groups. Whether individual physician guarantees are required depends on the creditworthiness of each practice, Vahsen says. But another banker who prefers to remain anonymous says that personal guarantees are usually required for a loan. He advises doctors not to sign “joint and severable agreements,” which would make each of them liable for the full amount of the loan in case of a default. Leases have several advantages over traditional bank loans, starting with the fact that a practice might have to put up 20 percent of the principal to qualify for a loan. Vahsen also points out that when you take out a loan, you own the system; with a lease, in contrast, you have the option of later buying the EHR, renewing the lease, or turning the system over to the bank. A lease to buy may be structured so that you pay either a predetermined amount or fair market value at the end of the lease. Some banks also have a “step payment” option under which the lease payments start out fairly low and increase later. This could be a good option if you expect federal subsidies, Vahsen points out. From a tax perspective, you may be able to expense the entire lease payment, but you can deduct only the interest payments on the loan if you borrow money to pay for the system. |
Gearing up for the future
Despite everything, many physicians remain skeptical about the value of EHRs and are fearful about what the work flow changes might mean to their practices. Although the regional extension centers are designed to help small practices get over the hump, EHRs represent a formidable technical challenge. And it’s unclear that there are enough qualified technicians available to help physicians implement EHRs and train them and their staffs, notes MGMA consultant Rosemarie Nelson.
Nelson believes that physicians should start shopping for EHRs now. If a product is not yet CCHIT-certified, she recommends getting the vendor to commit to that as a condition of purchase. Anderson says that even if an EHR was certified in the past, the vendor should promise to obtain CCHIT’s 2009 seal of approval. Also, you should make sure the EHR and its associated PM system can be upgraded for compliance to the ICD-10 coding system that must be in place by 2013, he says.
Family physician Steven Waldren, director of the American Academy of Family Physicians’ Health Information Technology Center, notes that physicians who already have a non-certified EHR will be reluctant to switch to another system, especially if they can show the meaningful use that the government demands. But other experts say it’s unlikely that such EHRs will be grandfathered in so that physicians can receive subsidies for them.
Doherty regards the HHS incentive program as “kind of a now-or-never decision for physicians.” If doctors don’t take advantage of it, he points out, they risk not receiving government subsidies and being penalized later on. On the other hand, he says, physicians have found some systems don’t work well, and many don’t offer robust quality improvement features.
At some point, if not enough physicians acquire EHRs, Congress may mandate them as a condition of participation in Medicare and Medicaid, Doherty says. Jim Morrow, a family physician in Alpharetta, Ga. who is an experienced EHR user, believes that that could happen within as little as five years. But he suggests that the government might not require the kind of EHR it’s talking about now.
“It might be a requirement to share data electronically,” he says. “The aim of an EHR is not to create better progress notes, but to be able to access and analyze your patient data. It’s the data that’s important, not the notes.”
Ken Terry is a New Jersey-based freelance writer and the author of the book “Rx for Health Care Reform.” He can be reached at physicianspractice@cmpmedica.com.
This article originally appeared in the July/August 2009 issue of Physicians Practice.
