Does Meaningful Use Really Reduce Costs?
By Katie Wike, contributing writer
A report in a special edition of the American Journal of Managed Care seeks to answer the question all providers want to know
Providers are finding out the hard way the exact cost of installing and using electronic health records, but the rewards for meeting EHR Incentive Program requirements has served as the proverbial light at the end of the tunnel. In fact, EHR Incentive payments topped $6 billion in 2012.
Despite this, EHR Intelligence notes, “Little information is available that speaks directly to the cost savings made possible by participating in meaningful use beyond the costs incurred by eligible hospitals and professionals in choosing, implementing, and maintaining their EHR systems.”
Now, an American Journal of Managed Care special issue features research that they say shows, “Adopting the five core medication management elements of meaningful use electronic medical records reduces adverse drug events and saves costs.”
The report concludes, “In this study, we developed one of the first quality indicators to track in-hospital ADEs in large administrative data sets. That allowed us to examine the impact of the five meaningful use medication management components across all hospitals in Florida. We found that adopting all five medication management components of Stage 1 meaningful use reduced the rate of ADEs by 61 percent compared with not adopting all five components, and by 10 percent compared with adopting only four components. If all hospitals in Florida adopted all five components, 55,700 ADEs per year would be averted. At $4,790 in hospital cost savings per averted ADE, that would save $267 million per year.”
The authors ask, “Does this cost savings make investing in EMRs worthwhile? In the 2007 AHA IT survey report, the median spending on IT capital per hospital bed was $6,112 per year (2012 dollars). Using the 2007 AHA survey data and following Miller and Tucker’s methods, we found that $380 million is spent on hospital IT capital in Florida annually, given that Florida has 62,100 beds. Thus, adopting IT with the five meaningful use medication management components would recoup 70 percent ($267 million/$380 million) of the IT capital investment due to the averted ADEs. However, the median cost of operating the IT is an additional $13,266 per bed per year. Including both IT capital and IT operating costs, the cost savings from the averted ADEs would recoup 22 percent of all IT costs.”
They found the highest levels of savings occurred in hospitals that met the most meaningful use requirements. “Hospitals with all five medication management functions had 62.8 percent lower odds of a hospital-acquired ADE than hospitals with none of the functions. Hospitals with three to four functions had 53 percent lower odds compared with hospitals with no functions. Hospitals with one to two functions had 58.6 percent lower odds compared with hospitals with no functions.”
EHR Intelligence summarized the results writing, “When viewed on a larger scale, participation in meaningful use can lead to savings. However, the size of these savings is determined by how fully an eligible provider meets the requirements of the EHR Incentive Programs which in turn must be appropriately designed.”
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