EHR incentive funds often reinvested in IT

With no federal rules telling providers how they can spend their meaningful use (MU) incentive checks, practices and hospitals have their options wide open. While many are investing in more technology, that’s only the tip of the proverbial iceberg.

Acacia Internal Medicine Specialists in Phoenix, for example, has used part of its check to invest in a community room to hold wellness classes, and to hire a tai chi teacher. But the prevailing trend is to use the money to fund more IT growth and pay down debt incurred while putting in the software and hardware needed to qualify for MU in the first place.

“Most of our clients are considering the incentive funds paid as an offset for funds they are spending in advance to qualify for meaningful use and to pay for anything additional they will require to meet Stages 2 and 3,” wrote a member of a hospital technology group on LinkedIn in a discussion about how hospitals will use their MU dollars.

“The clear pattern we’re seeing among the hospitals we work with is that they are using their incentive payments to fund current and future IT initiatives,” said Jim Adams, executive director, research and insights at the Advisory Board Company, during a phone interview with Healthcare Finance News (sister publication of PhysBizTech). Most have earmarked the money for EMR enhancement or optimization, said Adams. Some hospitals are also investing in their own health information exchanges, or rolling out an ambulatory EMR for physicians’ offices affiliated with the hospital.

The Advisory Board estimates that to date each Medicare eligible professional received on average of about $17,300, while Medicaid eligible professionals received about $21,600.

Many healthcare organizations are unable -- or unwilling -- to go on record about how they are spending the money. Some providers may be unwilling to disclose this information because they consider it proprietary, but it’s also possible they have miscalculated the anticipated return on investment.

A recent analysis reported in Health Affairs came to the conclusion that EHRs are a money-losing proposition for most physicians. Julia Adler-Milstein, PhD, from the University of Michigan in Ann Arbor, and her associates, surveyed 49 community practices and projected that the average doctor “would lose $43,743 over five years; just 27 percent of practices would have achieved a positive return on investment; and only an additional 14 percent of practices would have come out ahead had they received the $44,000 federal meaningful-use incentive.”