Electronic Health Records

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Epic EHR Implementation Costs Brigham and Women’s Hospital

The Boston hospital came up $53 million short of its expectations of a $121 million surplus in fiscal year 2015, a first in more than a decade.

By Kyle Murphy, PhD

Executives at Boston's Brigham and Women's Hospital remain confident that the near-term financial losses stemming in part from an Epic EHR implementation are only temporary, according to a report in Boston Globe Media's national publication STAT.

Melissa Bailey reports the hospital came up $53 million short of its expectations of a $121 million surplus in fiscal year 2015, a first in more than a decade.

Brigham and Women's President, Betsy Nabel, MD, tied the losses to three sources: low patient volume resulting from record snowfall in the winter, employee pension fund expenditures, and costs associated with the EHR implementation as part of the Partners HealthCare move to the Epic platform.

"The Brigham and nearby Dana-Farber Cancer Institute hired 1,500 extra staff to help with the massive Epic go-live in June. The Brigham knew it would cost a lot, and budgeted $47 million for the transition last fiscal year," Bailey reports.

But the EHR replacement ended up costing an additional $27 million as a result of self-imposed reductions in patient volumes in order to avoid medical errors and the improper coding of patient encounters leading to lower reimbursement.

According to the report, Brigham and Women's laid off 20 workers and got rid of 80 vacant positions in response to these financial setbacks. Likewise, the report points to recent Epic EHR implementation at other Massachusetts hospitals — Lahey Health and Southcoast Health — that led both institutions to post losses.

An Epic spokesperson told the publication that up-front investments are generally offset by long-term gains in terms of financial performance and bond ratings.

The implementation of an Epic EHR system can be not only costly but also wrought with technical  challenges depending on the complexity of the health system or hospital undergoing the process.

University of Arizona Health Network spent $115 million on its Epic EHR platform that went live in 2013 and led it to post "unprecedented operating losses," particularly $32 million resulting from delays in getting the system up and running and training and support. The financial struggles ultimately led the organization to be acquired by Banner Health, and the EHR system to be replaced with a Cerner EHR.

More recently, the New York Post found New York City Health and Hospitals Corporation to be embroiled in its financial quagmire during its Epic EHR implementation. The total cost of the project is rumored to range between $764 million and $1.4 billion.

What's more, several high-profile executives have come and gone (some following allegations of wrongdoing) and the project may or may not be in jeopardy of missing its deadlines. One report claims the project to 18 months behind schedule, which HHC denies. Reportedly, a consulting firm bears the responsibility currently for managing the Epic EHR adoption project.

While these two developments could serve as cautionary tales, they stand in stark contrast to the successes enjoyed by various Epic shops across the country that are recognized as leaders in healthcare delivery. Among its clients, Epic is the platform of choice for the likes of Kaiser Permanente, University of Pittsburgh Medical Center, Cleveland Clinic, and Mercy.

In all likelihood, the "losses" at Brigham and Women's are indeed temporary and are part and parcel of making a large-scale change that has proved beneficial some of the most recognizable brands in healthcare.




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