Does electronic health record use improve hospital financial performance

This is a review of an article by Collum et al, Does electronic health record use improve hospital financial performance? Evidence from panel data.

Purpose

This article aimed to examine the impact of EHR adoption on hospital financial performance using historical survey data.

Methods

Three sources of survey data were used to construct a longitudinal panel including: (1) the 2007-2010 American Hospital Association (AHA) Annual Survey, (2) the 2007-2010 AHA Annual Survey Information Technology Supplement, and (3) the 2007-2011 Medicare Cost Reports from Centers for Medicare and Medicaid Services. A multivariate regression model was used to assess the relationship between EHR adoption and hospital financial performance metrics including total margin, operating margin and return on assets.

Results

A change in the level of EHR adoption was not statistically associated with operating margin or return on assets. However, for hospitals that moved from no EHR to comprehensive EHR in all areas with in their hospitals, total margin was significantly improved after 2 years. Nevertheless, hospitals that increased the level of EHR adoption without achieving hospital-wide comprehensive adoption did not experience changes in any of the financial performance metrics.

Practice Implications

The improvements in total margin observed in hospitals with comprehensive EHR adoption were likely due to hospital incentive payments reflecting nonpatient revenues and therefore showed up in total margin calculations. More research will be needed to determine financial impact of EHR adoption.