Determining the Return on Investment of Your EMR Purchase

There is no more popular acronym this year than EMR or electronic medical records. Any practice that plans to be in business for the next five years will have to consider an EMR for their practice. The cost and anxiety associated with the purchase of an EMR can be significant. There are actually hundreds of EMR programs available in the market place. How do you determine which one is right for you? In this article I will discuss the ROI or the return on the investment for purchasing an EMR. After reading this article you will understand both the monetary and non-monetary advantages of purchasing an EMR for your practice. 

There are both financial and non-financial benefits of procuring an EMR. Both are important and both should be part of your decision making process.

Financial opportunities

E&M Coding Support

Most EMR’s will automatically prompt the user with the appropriate level of service allowed based on the documentation entered during the patient encounter. Using the 1997 Coding Guidelines, the EMR will determine whether the visit is coded at a level 1,2,3,4, or 5 by and provide visual queues to remind providers to complete appropriate documentation.

This reduces the regular occurrence of physician down-coding visits for fear of over-coding due to lack of supporting documentation. By coding appropriately the practice will see an increase in revenues and reduced risk of non-compliance. National studies have shown that, on average, physician under-coding results in a 7% to 9% loss of revenue. A conservative estimate of an increase of 3.5% of revenue should be expected after implementing an EMR. One practice found that they increased a least one coding level for every seventh encounter, which resulted in a 4% increase in coding revenue. An example from my practice is shown in Figure 1 where the typical bell-shaped curve of mostly level 3, shifted to the right once an EMR was implemented in my practice.

Recovering Lost Charges

By tracking every visit, every order associated with a charge, most EMR’s will automatically reconcile chargeable orders and ensure they are accounted for during outpatient encounters. Other advantages include:

Your EMR should make charging an automatic triggered event as a result of the documentation and ordering process. An additional step is not required for the providers to select charges from a separate electronic or hand created charge ticket. This ensures that all charges match what has been ordered and nothing “falls through the cracks”. Though many practices feel confident in their handling of charges (in the case of missing charge slips) most practices can anticipate at least a 5% increase in charges due to provider oversight. 

Health Maintenance & Patient Compliance

Most EMR’s offers automated control of health maintenance and recall functions to enable practice wide health monitoring. Automated health control includes automated reports and inclusion of health maintenance data on any EMR template. Having prompts for health maintenance while the patient is on the phone or in the exam room improves patient compliance and associated patient revenue. This not only increases the number of patients seen and procedures performed, but also improves the quality of care that you provide your patients. This can be measured by tracking patients who return to the practice who may otherwise go unnoticed, such as automated reminders to patients to return for their bladder tumor checks or for patients with BPH who are contacted to follow up PSA and DRE exams. 

Patient Encounters

With the EMR in place, physicians can enter patient notes at the point of service, instead of having to dictate notes between patient visits or at the end of the day. This streamlined process has enabled practices to substantially increase the number of patients they see each day, although productivity improvements do not always occur initially with an EMR. A conservative improvement of 2% increase in productivity can be expected.

Medical Records Staffing

An EMR will make the chart immediately accessible to multiple people in multiple locations. This will phase out the need to maintain staff to pull and file charts. Charts will no longer need to “leave” the main office which will eliminate lost or misplaced charts and reduce practice liability risk. Providing 24\7 access to patient charts improves physician productivity, reduces cost, and improves quality care and patient satisfaction. 

Elimination of manual tasks and improvements in productivity have saved practices over 50% on their medical records staff. We have conservatively estimated an expected savings of 35% for this area of the ROI.

Instant Medical History 

Instant Medical History offers a substantial impact on the duration of patient encounters by enabling patients to complete medical histories online and have them flow electronically in a structured data format to the EMR. Based on studies of Online Medical History, it has been proven to save 8 minutes per encounter. For purposes of this analysis we have used a factor of 30% for the percent of encounters reduced through programs like Online Medical History.

Paper and Supplies

EMR will substantially reduce paper and supplies for:

•    Fee Tickets

•    Charts and Chart Labels

•    Prescription pads 

•    Paper Copies 

•    Custom Forms 


• Paper and Supply reduction in annual costs for paper by eliminating charts, forms and prescription pads. The average cost to create a chart is around $5.00 per record:

o    Chart Jacket             $2 to $3 dollars

o    Chart tabs and labels         $1.00

o    Labor cost to assemble     $1.00

o    Labor cost to Handel        $1.00

A physician seeing 30 patients per day can have up to 400 paper chart transactions per day, which would be eliminated with EMR. The following are some examples of this:

➢    30 chart pulls off the shelf

➢    30 charts going back on the shelf

➢    30 chart pulls to file the notes after the exam

➢    30 charts to return after filing dictation 

➢    15 chart pulls for incoming lab results

➢    15 chart returns after the lab is filed 

➢    15 chart pulls for RX request requiring a pull

➢    15 charts to return after the RX request

➢    40 incoming faxes per day requiring a chart pull

➢    40 charts to return after the pull for faxes

➢    60 calls per day requiring a chart pull

➢    60 charts to return after the call

➢    10 with calls after the visit

➢    10 with call to coordinate care

➢    5 will be billing issues requiring a chart pull

➢    5 to return after retrieving for billing

➢    3 medical record requests to transfer their records

➢    3 to return after paying the cost to copy which could have been faxed to the recipient at minimal charge<

416 chart transactions per day @ $.080 cents per transaction = $333.00 per day / $1664.00 per week / $83,200 per year – based on 50 weeks per year assuming a practice closes two weeks per year. 


EMRs have been very successful in eliminating or substantially reducing transcription through templates and pick lists.  

Documents can be customized by provider and document type. Referral letters can be generated automatically and faxed directly to the referring physician before the patient leaves the office. This enhances physician patient relations, minimizes paper, labor and postage costs.

My own experience on reducing transcription costs was nearly $1000\month. If you employ a transcriptionist that is nearly a $30,000 annual savings for each transcriptionist you have on your staff. 

Non-financial metrics

In addition to the financial ROI there are non-financial reasons to invest in an EMR. These also should be considered before investing an EMR.

Improvement in safety and compliance

EMRs are touted to improve patient safety and compliance. An Institute of Medicine report in 1998 pointed out that there were nearly 100,000 deaths each year from adverse drug reactions. These adverse reactions and mortalities may have been prevented if interactions and provide allergy alerts. For example, if a patient takes theophylline and your prescribe a quinolone for a urinary tract infection, the computer should alert you to a drug interaction as the quinolone may elevate the blood levels of theophylline to unsafe or toxic levels. Also, if the patient indicated that they were allergic to a class of medication, and you prescribed a drug that could possibly cause an allergic reaction, the computer should provide you with a message of this situation and offer you the option of selecting another drug. Obviously both of these scenarios might not be picked up if you are using a paper chart which doesn’t have a method of alerting you to these situations or if the patient doesn’t remind you when you prescribe a new drug about their previous medications or allergies. 

Reduction in malpractice premiums 

One of the benefits of an EMR may be realized by converting a non-financial measure to a financial one as a few malpractice insurers are offering a small discount (3-5%) to practices that have implemented an EMR because they anticipate fewer claims if decision-making software were used by the physicians. 

Convert administrative space to clinical space

Another non-financial measure is the reduction in space in the office needed for storing the paper charts. Practices may have racks of charts that occupy several hundred square feet. Once the practice has made the EMR decision and converts from paper to paperless, that space can be used for other clinical revenue-generating purposes.

Access to records 

EMRs also offer the benefit of being available to doctors on a 24\7 basis. I know in the past, one of us (NHB) has made medical decisions on behalf of a patient in the evening or on the weekends and did not take the notes to the office and transcribe them to the patient’s chart. As a result, the chart was not reflecting the care that was provided the patient. With an EMR, you can have access to the chart anywhere you have a computer and access to the Internet. This is another example of a non-financial benefit that improves patient care.

Data mining

With an EMR you have the opportunity to data mine. When you need to locate patients with various diagnoses, using specific medications, or who have had various treatments, you can query the program and with a few clicks can locate all the patients in your practice that meet the criteria you are searching. This means you can locate all the patients using a specific medication when there is a drug recall. You can create a letter notifying the patient of the situation and add this to the record demonstrating that you have made an effort to inform the patient of the problem with the medication. Another example of data mining can be used for clinical research. Recently one of us, NHB, was conducting a study on BPH using phosphodiesterase inhibitors. By entering the inclusion-exclusion criteria we were able to identify potential patients who were contacted to participate in the study.

Bottom Line: The EMR decision is not an easy one for any practice. Perhaps the process can be made easier by looking at the return on the investment. By looking at both financial and non-financial aspects you may find that the decision making is a less daunting experience.