Electronic Medical Record Implementation: Costs and Benefits

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Electronic Medical Record Implementation: Costs and Benefits Sheryl L. Venola

Assignment 3 (24 July 2011)
NURS 517 Intro to Health Care Financing

Saint Xavier University

Professor: Dr. Roger Green, DNP, MSN, BSN

This paper discusses the adoption of an electronic medical record system purchased by Howard Regional Health System in Kokomo, Indiana; the rationale behind its timing and choice in expenditure; the ramifications of not implementing the system (e.g. recent health care legislation requirements); the benefits to the organization as well as to the patients it serves, and a cost effectiveness analysis. Additionally, the American Recovery and Reinvestment Act of 2009 is discussed including compliance mandates that will require eligible providers and health care institutions to meet electronic health technology implementation deadlines or face no compensation for their implementation as well as reductions in Medicare and Medicare reimbursements. Also included are discussions of the “meaningful use” guidelines established by the Centers for Medicare and Medicaid and the differences between electronic medical records and electronic health records. Finally, the advantages and disadvantages of electronic medical records are detailed.

In response to the to changes in the health care delivery system as a result of the Affordable Care Act (ACA) signed into law in March of 2010, Howard Regional Health System (HRHS) has recently purchased the Cerner electronic medical record (EMR) system at a cost of $22,000,000. According to chief executive officer, James Alender, accountable care is the focus of this change in addition to stimulus money for electronic health record (EHR) system implementation, which could offset their initial expenditure by approximately $3,100,000 based on the volume of Medicare business the organization had in 2008 (Munsey, 2011). This monetary investment comes in the wake of health information technology implementation requirements set forth in the American Recovery and Reinvestment Act of 2009 (ARRA). The Recovery Act specifies that eligible providers and hospitals with a fixed Medicare and Medicaid patient populations must adopt EHR systems by 2015 or face reduction in their compensation under these programs (Department of Health & Human Services [DHHS], 2009). Additionally, the act assigned funds to the Centers for Medicare and Medicaid Services (CMS) to assess existing EHR systems and to provide incentives for eligible providers and hospitals in implementing such systems.

With continued funding and legislative measures affecting the organization’s financial future, the adoption of the Cerner system seems to be one of the most important steps in ensuring its financial security in the years to come. If hospital executives and the Board of Trustees were to ignore the requirements set forth in the AARA and ACA legislation, the institution would be in serious jeopardy of losing not only is share of federal funding, but its ability to participate in health care delivery on any level at all. This would signal their demise and would certainly affect the surrounding community as it is one of two hospitals in Kokomo, Indiana, and is the only health care organization of its size in this region of the state.

The patients Howard Regional serves will benefit from electronic recording of their health and medical information in many ways. Alender states that Kokomo’s “snowbirds” should have access to their records so they can be as mobile as they are, suggesting that this will reduce health care costs by reducing duplication of tests, if treatment is obtained away from home. He goes on to assert that digital records will allow more efficient movement of patients through the system allowing seriously ill patients to move more quickly through the emergency department, and other acute care departments...
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