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Epic EHR Replacement Contributed to Financial Trouble at SLU

St. Louis University is making efforts to cut costs following financial problems partly fueled by a 2017 Epic EHR replacement.

An expensive Epic EHR replacement increased financial strain at SLU.

Source: Thinkstock

By Kate Monica

- Missouri-based St. Louis University (SLU) has implemented a hiring freeze across its college and medical practice to overcome financial difficulties spurred partly by a 2017 Epic EHR replacement, according to kbia.

The university has been receiving fewer students and less revenue from its medical practice, which may lead to a projected $30 million deficit by 2023.

St. Louis University President Fred Pestello offered further details about the institution’s financial troubles in an email to faculty and staff. The university also outlined the problem during a November 14 Faculty Senate meeting.

“This is going to be one of the most trying times for the university,” said Faculty Staff President and professor at SLU’s College of Education Doug Rush.

Currently, there are 12,649 students enrolled at SLU — a drop of more than 600 students compared to five years ago.

Incoming freshman have also needed more financial aid than in years previous, SLU officials said. SLU is giving away $50 million more in grants and scholarships than it did five years prior.

According to Pestello, a sudden and significant loss in patient care revenue from SLU’s physician practice — combined with a steep increase in expenses due to the university’s 2017 Epic EHR replacement project — has further augmented the institution’s financial challenges.

“Even more challenging, based on current assumptions, are our financial projections for fiscal years 2020 and beyond, with the possibility of substantial shortfalls,” Pestello wrote in an email to faculty.

Along with cost-cutting measures, the hiring freeze will help to reduce spending while the university finds ways to increase revenue.

“There are going to need to be some hard decisions made for St. Louis University going forward on academic programs,” said Rush.

The university is expecting a budget of around $775 million for the fiscal year starting July 2019 around February.

“Even with these financial challenges, we are a fiscally sound and resource-rich university,” wrote Pestello.

A few years ago, SLU teamed up with SSM Health to create a single, unified Epic EHR system for more connected care across physician practices and facilities.

The university spent two years preparing for the EHR system launch and went live with the single Epic EHR on April 7, 2017.

The Epic system allowed for improved care coordination and integrated referrals between providers at SLU physician practices and SSM Health. The two institutions collaborated closely to complete the project.

“Since the new system has been rolled out, we have also seen great effort, perseverance and team work when it comes to improving this experience for SLUCare patients, faculty and staff,” said SLUCare CEO Robert Heaney, MD, at the time.

SLU warned patients and providers that there may be some disruptions to clinical and business workflows immediately following the system launch.

While the EHR system has contributed to recent financial strain on the university, the system has helped to enhance educational and research opportunities by enabling clinicians and researchers to access a broad database of patient health information.

Vanderbilt University Medical Center (VUMC) also experienced some financial difficulties after implementing its Epic EHR system in 2018.

VUMC spent $214 million on its EHR system and reported lower operating income as a result.

The academic medical center’s operating income for the first nine months of 2018 was $44 million. Comparatively, VUMC’s operating income for the same time last year was about $110 million.

Additionally, VUMC’s expenses in 2018 increased by $257 million — a 9 percent spike compared to the same time last year.

While EHR implementation projects can put strain on a health system’s bottom line early on after go-live, the systems yield long-term benefits for users.

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