According to a recent article by John Lynn, founder of HealthCareScene, “CMS has put out the latest data on meaningful use participation and payments. They broke the Medicare dollars out by meaningful use Stage 1 and Stage 2. Meaningful use Stage 1 cost nearly $20 billion. Meaningful use Stage 2 cost $3.4 billion. The amounts were less for Stage 2, but that’s still a massive drop off (and indicates that many hospitals failed to attain Stage 2).
Less than half of eligible providers participated in Stage 2 that participated in Stage 1 (308k compared to 145k). Participating hospitals dropped from 4600 hospitals to 3096. This illustrates well what we’ve been saying for a while as far as hospitals still largely participating in meaningful use and most doctors choosing not to participate. Also interesting to note is that at its peak, meaningful use was paying about $10 billion per year. In 2015, they spent $2.8 billion.”
What does this all mean? First and foremost, that the gravy train for EMR companies has come to an end. The billions of dollars that tax payers have delivered to Epic, Cerner, Meditech and others will no longer be pouring into their bank accounts. It also means that hospitals will no longer be getting big rewards to cover their costs for bloated IT budgets and will have to find money to cover the high cost of maintaining these systems on their own.
So have taxpayers gotten a good deal for their 34.7 billion or did meaningful use create an inflated market for hospital EMR systems that did not deliver a return on investment? There is a lot of evidence for the latter. Without the 34.7 billion, hospitals would never have paid the inflated prices for software and implementations that EMR companies demanded. Only the feds (and the EMR lobbyists) could come up with a scheme to waste that much money in such a short period of time.
A common joke at the height of the gravy train flow was that you could get a job as an EMR implementer if you could spell EMR. A review of the billings by EMR companies to hospitals bears this out. On top of high-priced consulting fees are airfare, hotels, meals, car rental, and other costs often far in excess of the cost of the software itself. Would hospitals have agreed to this if they had to cough up all the money themselves? Not likely.
And now, many are saddled with cumbersome and expensive systems that are difficult to manage or unreliable. A recent lawsuit by PinnacleHealth, a three-hospital system based in Harrisburg, PA, claimed that Siemens software, (which was purchased by Cerner,) was defective; this was in turn met with a countersuit by Cerner of $20 million for unpaid services from February of 2015 to the present. $20 million for a year and 4 months use of software? As my uncle Charlie would say, ‘You gotta be kidding!’
The hospital EMR market is about to go through a major shakeout as hospital executives are forced to cut costs and find more efficient systems to replace the dinosaurs they inherited from meaningful use. Innovation is sorely needed in the EMR market and disruptive systems that are cloud-based, offer much lower costs, easier implementation and more intuitive interfaces on mobile devices will run away with the market just as they have in other industries.
The show is about to begin…