Six Health Systems Suffer Financial Losses Following EHR Deployments

I have been blogging for at least seven years about the "numbing costs" of installing a new EHR (see: Who Says a Hospital CIO Can't Get Fired for Picking the Epic EHR?). These costs and sometimes subsequent financial losses are due to the enormous cost of installing such a system, inability to collect on accounts receivable during and even after the transition, and the decreased productivity of physicians and nurses using the new system after system go-live.

There is an inevitable decrease in productivity following the deployment of any new technology because of the unfamiliarity of personal with it. Ideally, this unfamiliarity disappears in short order and productivity rapidly increases if the technology is well designed (see: Lost productivity: the scourge of your EHR cost calculations). A recent article described some current examples of hospitals suffering financial reverses following the deployment of an EHR (see: 6 health systems that blamed Epic, Cerner EHR installs for losing millions). Below is an excerpt from it:

• University of Vermont Health Network said its $151.7 million Epic EHR implementation was partially responsible for its $10 million operating loss in the first quarter of 2020....
• ...[O]fficials at Ector County Health District blamed its Cerner EHR implementation, in part, for financial losses and a bond downgrade....The system's CFO reported that there were issues with its $55 million Cerner implementation that led to challenges with its accounts receivable.
• Centra Health in Lynchburg, Va., posted a loss for the first nine months of 2018, including a $2.7 million operating loss and $18.8 million decrease in net operating income,...[due to] its $65 million Cerner go-live....
• Covenant Health...cited its $83 million Epic EHR implementation for a $60.9 million operating loss in 2018. The hospital reported a 30 percent decrease in productivity after the implementation....
• Vanderbilt University Medical Center reported lower operating income in the first nine months of 2018 after a $214 million EHR roll-out. The year before, the system reported $110 million operating income. It also reported a 9 percent increase in expenses.
• Fairfield Medical Center...reported $22.8 million operating loss for 2018, up from $1.9 million in 2017, and the hospital's CFO...attributed the loss to "the expense of installing and activating a new electronic medical record system"....

A key question in this regard is to what extent physician and nurse productivity bounces back in the months following EHR installation and what is the magnitude of this bounce back. My sense is that health system financial losses and decreased productivity lessens over time but never returns to the pre-EHR installation levels. Then the question arises as to the extent to which other benefits of the EHR deployment such as more effective and efficient billing serve to offset the loss in physician and nurse efficiency. Of interest is that most of these article now and previously about the financial perils of installing an EHR lack any useful comments from the hospital executives themselves. This is not surprising given the negative tone of such articles. I am sure the hospital executives are wary of offending Cerner and Epic leadership with negative comments about their products. However, this does hamper discussion about the root causes of these EHR-associated problems.