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An EHR is Strategic

May 20, 2008
by E2556BEF60524A5689D02EEBDAEFEDB6
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The primary justification for the enormous cost and risk of EHR implementation is a belief by hospital executives and Board members that they will gain a competitive advantage from its use. Clearly an EHR is differentiated from other IT investments in this regard, as illustrated by the results of a recent HIMSS survey:

"Which technology would most increase a hospital's competitive advantage?"

 - Electronic health records (58%)

 - Clinical documentation (12%)

 - Computerized MD Order Entry (11%)

 - Radiology PACS (8%)

 - Electronic prescribing (7%)

 - Other (5%)

Source: HIMSS survey, October, 2007

A hospital's competitive position in its local market is defined by the following Key Success Factors:

1. Deliver high-quality (safe and effective) care

2. Provide an attractive provider network to meet the needs of patients, payors and employers

3. Provide an attractive care environment for patients

4. Provide an attractive work environment

5. Generate sufficient funds to cover ongoing operations and required capital investments

6. Meet regulatory/legal requirements

Source: Based on HSC Issue Brief No. 97, August, 2005

An EHR can have the greatest potential impact on the first and fifth of these KSFs, as shown in the following summary of published EHR benefit studies.

Greatest Quantitative Evidence of EHR Benefit

 - Reduced ADE incidence

 - Reduced medication error incidence

 - Reduced order turnaround time

 - Increased use of preventive care

 - Reduced redundant testing

 - Reduced drug use and costs

 - Reduced lengths of stay

 - Nursing staff time savings

Some Quantitative Evidence of EHR Benefit

 - HIM workload, staff reductions

 - Pharmacist time savings

 - Decreased cost of paper forms

 - Decreased transcription costs

 - Improved documentation quality

 - Reduced payment denials

 - Improved quality of coding

 - Improved charge capture

Source: Thompson, Classen, and Haug, EMRs in the fourth stage, JHIM, Summer 2007

Clearly the purchase and implementation of an EHR is a strategic issue, given its potential value, its high cost, and the high risk of failure associated with EHR implementations. As such, these decisions and activities demand the direct involvement and participation of the Board of Directors, not to mention senior hospital executives. Mark Hagland makes a more detailed case for Board involvement in IT issues in his April 8 and April 15 blog entries.

Next: The Board's role in EHR benefit realization

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