Study tracks EHR effect on Medicaid cost

June 21, 2013 in Medical Technology

Evidence from Massachusetts community providers suggests that EHRs can facilitate increases or decreases in medical costs, and that in Medicaid, the documentation technology may fit best with capitated payments.

Some of the earliest use of ambulatory EHRs by community providers ended up correlating with both higher and lower Medicaid costs, according to a study published in the Medicare and Medicaid Research Review.

In 2004, the year the Office of the National Coordinator for Health IT was created, the Massachusetts eHealth Collaborative launched a pilot program in the Bay State to try to track the effect of EHRs in ambulatory practices, letting researchers follow three of the 30 practices that applied.

Focusing on laboratory and radiology costs as well as general medical costs for Medicaid patients, researchers from the University of Michigan, Partners HealthCare and the Eastern Research Group then followed the three practices and compared them to other providers in Massachusetts that mostly had not adopted EHRs.

“We found evidence that EHRs may impact ambulatory medical costs, driven at least in part by changes in visits, but the direction of the effect was not consistent across communities and the net effect was minimal,” University of Michigan professor Julia Adler-Milstein and the study co-authors wrote. “This suggests that EHRs, in and of themselves, can facilitate either increases or decreases in cost, and this likely depends on how they are used and the context in which they are used.”

Looking at the costs pre- and post-implementation, the researchers found a noticeable difference in costs in two of the three EHR practices — with the effects in opposite directions, and only for general medical costs. Ambulatory medical costs at one EHR practice increased at a rate roughly 2 percent slower at the comparison practices, while medical costs at a second EHR practice increased at a rate of 2.5 percent higher than at the comparison practices. The third EHR practice, meanwhile, showed negligible differences.

The researchers found no significant difference between the EHR providers and the comparison practices in radiology or laboratory costs, the two main factors they were looking for. Instead, they found “more compelling evidence that observed changes in ambulatory costs were driven, at least in part, by changes in visit rates.” For the two EHR practices that did show differences for medical costs, that translated into per member per month savings, for the one, of $41.60, and increased costs, for the other, of $43.34.

As for the larger discussion on the ROI of EHRs, with meaningful use stage 2 starting in 2014, the researchers said their findings “mirror the conflicting evidence about the impact of EHRs on healthcare utilization and associated cost,” although theirs is apparently the first to study EHRs and Medicaid populations.

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