Does electronic health record use improve hospital financial performance
This is a review of an article on EHR financial benefits (EMR Benefits: Financial) by Collum et al, Does electronic health record use improve hospital financial performance? Evidence from panel data. 
This article aimed to examine the impact of EHR adoption on hospital financial performance using historical survey data.
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.
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 a comprehensive EHR in all areas within their hospitals, the 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.
The improvements in total margin observed in hospitals with comprehensive EHR adoption were likely due to hospital incentive payments reflecting non-patient revenues and therefore showed up in total margin calculations. More research will be needed to determine financial impact of EHR adoption.
The results found in this article were inconsistent with previous studies which found that EHR adoption was associated with reduced operating costs (e.g. Amarasingham et al., 2009, Chen et al., 2003 ) and patient revenues through improved charge capture (Schmitt et al., 2002). Many factors can attribute to this difference and more studies are needed to investigate the financial impact of EHR adoption. This study was limited to data from Medicare Cost Reports and thus only included information for hospitals that provided care to Medicare beneficiaries. As a result, it may not generalize to other hospitals. Further, the data were from surveys that only captured hospitals that responded to the AHA annual IT supplement survey. This may also limit the generalizability of this study.
This is an insightful study evaluating financial impact of EHR adoption using existing survey data. The authors identified the observed increase in total margin was attributable to incentive payments from government which was quite intriguing. The results would be quite useful to hospital administrators, policy makers and EHR vendors.
- Collum, T. H., Menachemi, N., & Sen, B. (2015). Does electronic health record use improve hospital financial performance? Evidence from panel data. Health care management review.
- Amarasingham, R., Plantinga, L., Diener-West, M., Gaskin, D. J., & Powe, N. R. (2009). Clinical information technologies and inpatient outcomes: a multiple hospital study. Archives of Internal Medicine, 169(2), 108-114.
- Chen, P., Tanasijevic, M. J., Schoenenberger, R. A., Fiskio, J., Kuperman, G. J., & Bates, D. W. (2003). A computer-based intervention for improving the appropriateness of antiepileptic drug level monitoring. American Journal of Clinical Pathology, 119(3), 432-438.
- Schmitt, K. F., & Wofford, D. A. (2002). Financial analysis projects clear returns from electronic medical records. Healthcare financial management: journal of the Healthcare Financial Management Association, 56(1), 52-57.