Good EHRs and Proper Billing Management Can Reduce Administrative Costs and in the Long Run Reduce Patient Costs

by | Published on Dec 3, 2013 | Medical Billing

Good EHRs and Proper Billing Management Can Reduce Administrative Costs and in the Long Run Reduce Patient Costs
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Previous studies regarding electronic health records had created a lot of confusion regarding the possibility of cost reduction through Electronic Health Record (EHR) implementation. The main concern highlighted in those studies was that the EHR system would make it easy for doctors to order additional tests which will increase the spending eventually. However, a new study led by Julia Adler-Milstein, University of Michigan in Ann Arbor reveals that electronic health records can bring about some reduction in spending per patient at a doctors’ office. According to the researchers, doctors’ offices that started using EHRs can expect to spend around $5 less for providing healthcare services to each patient per month, compared to those offices that continued to rely on paper records.

It is estimated that the U.S government is ready to spend around $30 billion for encouraging doctors and other healthcare providers in the country to use computerized medical records. The research found that extensive use of EHRs will result in less expensive and appropriate care, fewer medical errors, and better efficiency.

The data on around 48,000 patients with EHRs (from three communities in Massachusetts) and 131,000 patients with paper records (from six other communities) between January 2005 and January 2009 were used for the research. Even though there was no change in the total cost of medical care, a small difference did emerge in the case of ambulatory care delivered at doctors’ offices. In the beginning, the average cost estimated for a patient’s ambulatory care per month was around $121.93. At the end of the study, the cost increased to $140.46 and $135.77 for offices that use paper records and EHRs respectively.

According to the researchers, the cost savings obviously came from reduced amount of money spent on radiology and lab tests. The expenses related to implementing EHRs, which would be paid by doctors’ offices are not factored in the cost savings. EHRs themselves may not help save money. It is required to devise a strategy that includes both EHR and healthcare delivery methods for actual cost savings.

If doctors’ offices implement servers and other facilities for maintaining electronic health records in-house, their costs will add up. The better option is to outsource the billing and health record maintenance. A professional medical billing company can launch EHRs on behalf of doctors’ offices, monitor all healthcare delivery methods and manage the billing properly. In this way, the company can take up the entire responsibility of billing staffs and reduce the administrative costs in physicians’ offices. This will eventually reduce the amount spent for patients each month.


Rajeev Rajagopal

Rajeev Rajagopal, the President of OSI, has a wealth of experience as a healthcare business consultant in the United States. He has a keen understanding of current medical billing and coding standards.

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