HSR: Expected cost savings generated from EMRs could be a sham

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Advanced EMR applications may increase hospital costs and nurse staffing levels, as well as increase complications and decrease mortality for some conditions, according to a study published online recently in Health Services Research.

Michael F. Furukawa, PhD, assistant professor at the School of Health Management and Policy, W.P. Carey School of Business at Arizona State University in Tempe, and colleagues sought to estimate the effects of EMR implementation on medical-surgical acute unit costs, length of stay, nurse staffing levels, nursing skill mix, nurse cost per hour and nurse-sensitive patient outcomes.

The researchers conducted a longitudinal analysis of an unbalanced panel of 326 short-term, general acute care hospitals in California, comprised of 2,828 hospital-year observations using data on EMR implementation from the 1998-2007 HIMSS Analytics databases.

For data on on costs, nurse staffing, discharges and patient days by hospital unit, the researchers collected information from annual financial disclosure reports of the California Office of Statewide Health Planning and Development from 1998-2007.

Information on patient risk factors, diagnosis codes and in-hospital mortality was gathered from the public version of the 1998-2007 Office of Statewide Health Planning and Development patient discharge databases.

EMR implementation was associated with 6 to 10 percent higher cost per discharge in medical-surgical acute units, according to the article. Specifically, EMR stage 2 and EMR stage 3 implementations were associated with 5.9 to 10.3 percent higher cost per discharge, due to both higher cost per patient day and higher length of stay, according to the findings.

EMR stage 3 increased costs per patient day by 5 to 9.6 percent and increased length of stay by 3.7 to 4.4. percent. EMR stage 1 was associated with a 2.1 percent higher length of stay in year one of implementation, stated the authors.

EMR stage 2 implementation increased registered nurse hours per patient day by 15 to 26 percent and reduced licensed vocational nurse cost per hour by 2 to 4 percent, according to the article. However, EMR stage 3 implementation was associated with 3 to 4 percent lower rates of in-hospital mortality for conditions, the researchers added.

The effects varied by EMR stage and by year of implementation, but “in general, more advanced EMRs had the largest effects on costs, staffing and patient outcomes,” stated Furukawa and colleagues.

“Our findings provide empirical evidence on the impact of EMRs in community hospitals. The results imply that EMRs may increase the demand for skilled nurses, which could have implications for nurse labor markets,” concluded the authors. “Contrary to expectation, we found little support for the proposition that EMRs generate significant cost savings to hospitals through reductions in length of stay and the demand for nurses.”

The article was titled "EMRs, Nurse Staffing and Nurse-Sensitive Patient Outcomes: Evidence from California Hospitals, 1998-2007." Health Services Research is published by Wiley-Blackwell of Hoboken, N.J.