A cost-benefit analysis of electronic medical records in primary care

Abstract

Purpose: Electronic medical record systems improve the quality of patient care and decrease medical errors, but their financial effects have not been as well documented. The purpose of this study was to estimate the net financial benefit or cost of implementing electronic medical record systems in primary care.

Methods: We performed a cost-benefit study to analyze the financial effects of electronic medical record systems in ambulatory primary care settings from the perspective of the health care organization. Data were obtained from studies at our institution and from the published literature. The reference strategy for comparisons was the traditional paper-based medical record. The primary outcome measure was the net financial benefit or cost per primary care physician for a 5-year period.

Results: The estimated net benefit from using an electronic medical record for a 5-year period was $86,400 per provider. Benefits accrue primarily from savings in drug expenditures, improved utilization of radiology tests, better capture of charges, and decreased billing errors. In one-way sensitivity analyses, the model was most sensitive to the proportion of patients whose care was capitated; the net benefit varied from a low of $8400 to a high of $140,100. A five-way sensitivity analysis with the most pessimistic and optimistic assumptions showed results ranging from a $2300 net cost to a $330,900 net benefit.

Conclusion: Implementation of an electronic medical record system in primary care can result in a positive financial return on investment to the health care organization. The magnitude of the return is sensitive to several key factors.