No Rx for ROI

It should be easy. Electronic health records (EHR), if widely used in the U.S., could save more than $200 billion a year (see story). The total cost of rolling them out is estimated at $100 billion. They would pay for themselves in six months. Now that's ROI.

So why have 65% of hospitals and 95% of doctors still not jumped on the EHR bandwagon? What's holding up EHR?

Sure, there are unresolved security and privacy issues. And competing standards for health record formats. And probably a healthy dose of technophobia on the part of some doctors and hospitals. That would explain it -- right?

Maybe. On the other hand, maybe that great return on investment isn't so great for the people making the investment.

Here, look: How do you measure ROI? Usually it's the sum of increased revenue, lower costs and reduced risk.

Now suppose you're a doctor or hospital that's not part of a managed care plan. Where's your ROI from EHR?

Will it increase your revenue? Nope. Remember, EHR helps to cut costly duplication of services: tests, treatments, prescriptions, office visits. Those are all the things that doctors and hospitals charge for. For every blood draw or nitroglycerine patch or specialist exam that isn't requested, somebody's revenue actually goes down.

Will EHR cut costs? Maybe a little, in processes like record keeping. Sure, the insurance and managed care companies will save a bundle from all those avoided procedures that they don't have to pay for, and all the fraudulent claims that EHR will help to catch. But doctors and hospitals? Not so much.

Will EHR reduce your risk? Yes -- and no. Certainly, having a patient's complete records easily available means a doctor can make better decisions more quickly. That reduces the risk of a serious mistake -- and maybe a malpractice suit.

On the other hand, lack of information isn't the only reason why doctors order a new set of tests or make their own measurements. Sometimes the information they've received just looks wrong. And going with that wrong-looking data is very risky.

Another risk is the temptation to use EHR to automate medical processes based on "best practices" -- a favorite pitch of EHR boosters. But as IT people, we know this: Automation is really good for routine processes.

It's not nearly so good at exception handling. And the practice of medicine is heavy on exceptions -- especially in difficult, high-stakes cases.

And if things go horribly wrong, it's the doctor and hospital that will get sued. That makes replacing a doctor's medical judgment with hard-coded automation a very risky proposition.

So let's recap: The doctors and hospitals that will shoulder the expense, effort and pain of EHR will lose revenue, cut few costs and probably face increased risk.

No wonder EHR's ROI doesn't sound so great to most of them.

Does that mean they'll never accept EHR? Of course not. Risks and costs can be reduced, especially if EHR systems are focused on tools that doctors can control to be more efficient -- instead of on automation to control doctors.

EHR truly does hold the promise of improving patient care and helping to control soaring medical costs. It really could save insurers and patients hundreds of billions of dollars every year.

But right now, the people being asked to make the investment aren't likely to get much of the return. For them, EHR doesn't make business sense.

And until it does, don't expect this to be easy at all.

Frank Hayes is Computerworld's senior news columnist. Contact him at

This version of this column originally appeared in Computerworld's print edition.

Got something to add? Let us know in the article comments.


Copyright © 2009 IDG Communications, Inc.

Bing’s AI chatbot came to work for me. I had to fire it.
Shop Tech Products at Amazon