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Value of Electronic Health Records Measured Using Financial and Clinical Outcomes: Quantitative Study.

Shikha Modi^1,2, Sue S Feldman², Eta S Berner²

¹The University of Alabama in Huntsville, Huntsville, AL, United States.

JMIR Medical Informatics

|January 24, 2024

Summary

Electronic health record (EHR) adoption can improve hospital operating margins by reducing readmission rates. This study found that higher EHR adoption is linked to better financial performance, especially when readmission rates are managed effectively.

Keywords:

EHR EHR adoption acceptance admission adoption clinical outcome cost economic electronic health record finance financial financial outcome health outcome health record hospital hospitalization length of stay margin moderation analysis multivariate operating operating margin operation operational profit project management readmission readmission rate total margin value analysis value engineering value management

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Area of Science:

Health Informatics
Healthcare Management
Health Economics

Background:

The Health Information Technology for Economic and Clinical Health Act of 2009 incentivized certified electronic health record (EHR) adoption to improve healthcare.
EHR systems represent a significant investment, necessitating an analysis of their return on investment.
Understanding the financial and clinical impact of EHR adoption is crucial for healthcare organizations.

Purpose of the Study:

To perform a value analysis of EHRs by examining their relationship with financial and clinical outcomes.
To integrate financial and clinical outcomes into a single conceptual model to assess EHR impact.
To investigate how EHR adoption levels influence hospital financial performance and patient care.

Main Methods:

Utilized longitudinal fixed effects modeling with moderation analysis to examine multivariate relationships.
Analyzed 5768 hospital-year observations over 4 years.
Incorporated a 1- or 2-year lag for profit margin ratios to account for delayed financial improvements.

Main Results:

A 1-unit increase in EHR adoption level decreased operating margin by 5.38% for each unit increase in readmission rate.
Hospitals with higher readmission payment adjustment factors experienced lower penalties.
Moderation analysis indicated a significant relationship between EHR adoption and operating margins, moderated by readmission rates.

Conclusions:

EHR adoption is linked to improved operating margins, particularly when readmission rates are reduced.
Hospitals investing in EHRs may achieve reduced readmission rates, leading to increased operating margins.
Findings suggest that enhanced EHR adoption can mitigate financial penalties associated with high readmission rates.