EHRs a costly choice for CHCs

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Community health centers can gain significant quality benefits from the use of electronic health records, but these benefits do not cover the costs of going paperless, reports a study in the January/February issue of Health Affairs.

Robert H. Miller, PhD., a professor of health economics at the University of California, San Francisco, and UCSF graduate student Chris West conducted retrospective case studies of six CHCs with EHRs in six different states to determine the cost-benefit balance of transitioning from paper to electronic health records.

“The issue of EHRs in community health centers is really a question of short term loss versus long term gain,” said Miller, a scholar at UCSF’s Institute for Health and Aging. “Making the initial financial investment in an EHR is very difficult for CHCs, as is recouping that investment. But the long term benefit comes from improved efficiency.”

CHCs are unique in the ambulatory care field, in that they provide primary medical care for disadvantaged patients – most of whom are uninsured, or underinsured, individuals living below the poverty line. The bulk of CHC revenues come from Medicaid reimbursements and grants.

“Because CHCs are paid differently than most other practices, they really can’t use the EHR as a tool for revenue enhancement,” Miller said. “In the CHC world, it is flat-rate payments from Medicaid, and lump sum payments from the Bureau of Primary Health Care. ”

The six CHCs examined by Miller and West financed their EHRs through a combination of operating funds, federal government grants, and vendor-supplied free software licenses and discounts. The CHCs used a variety of EHR software products, and two of the CHCs were members of application service provider networks.

Miller and West concluded that the revenue enhancement benefits of the EHRs were negligible. All but one CHC incurred ongoing, substantial net financial losses as a result of the EHR investment.

While the financial results of the study are sobering, Miller and West also discovered that the CHCs used their EHRs to make quality improvement (QI) changes that generated sizable QI gains. The CHCs used reminders at the point of care for patients needing services, generated performance reports for clinical and efficiency areas, and used condition-specific templates to document chronic and preventive care visits.

Miller suggested that in some cases the QI gains may justify incurring the short-term financial losses - and therefore justify a CHC's investment in an EHR - but only if the CHC rapidly and extensively used the EHR for QI. He also said that a CHC needs to be creative if it is to make a successful transition to an EHR system.

“The network ASP option is good for CHCs because it allows fixed EHR costs to be spread across a group,” Miller said. “Still, there’s insufficient government support for CHCs that want to implement IT systems. These providers serve the disadvantaged, and I think that’s justification enough for more assistance.”