STIMULUS PLAN

As your hospital prepares for the ARRA stimulus incentive and EHR implementation, it is critical to include the hard-dollar financial benefits associated with EHR applications. Avoiding Medicare penalties and evaluating the total cost of ownership are essential factors in understanding the overall financial impact to your hospital and to help drive a favorable financial return.

Consider all these factors as you make your EHR implementation decision:

• EHR Financial Benefits
• One-Time ARRA Stimulus Incentive Payment
• Ongoing Medicare Penalty for Failing to Utilize an EHR
• EHR Total Investment Costs

INCLUDING EHR FINANCIAL BENEFITS IS THE KEY
TO A FULLY INFORMED EHR IMPLEMENTATION DECISION.

This graph shows, by hospital annual net revenue, a 10-year total cash flow projection of an EHR implementation. It illustrates the positive ROI to your hospital when including EHR financial benefits. By not including these EHR benefits, there is a potential negative effect. As you evaluate the Total EHR Financial Impact, consider the EHR financial benefits. They will help drive a favorable financial return for your hospital.

EHR Financial Benefits
When evaluating an EHR to meet ARRA stimulus incentives “meaningful use” criteria, many hospitals fail to consider the hard-dollar financial benefits associated with an EHR implementation. These applications can help generate revenue, reduce operating expenses and improve staff productivity. Unlike the one-time ARRA stimulus incentives, EHR-driven financial benefits continue as long as the EHR is utilized.

The following graph identifies a range of the Total EHR Financial Benefits your hospital could realize over a 10-year time period, based on hospital annual net revenue.

ARRA Stimulus Incentive
When a hospital implements an EHR and demonstrates “meaningful use,” it becomes eligible to receive stimulus funding. The incentive opportunity is based on total discharges, Medicare/Medicaid case mix and charity care rate.

This graph shows a typical hospital’s Total Medicare Incentive Potential, based on hospital annual net revenue, with a $2 million base payment and additional incentive based on discharge volumes and case mix.

Medicare Penalty for non-Adoption of a Certified EHR
Beginning in 2015, hospitals failing to show “meaningful use” will receive no incentive payments. Instead, these hospitals will face penalties in the form of a reduction in their annual Medicare market basket adjustment.

This graph, based on hospital annual net revenue, shows the Increased Revenue hospitals may realize by avoiding costly Medicare penalties. This additional revenue would begin to be recognized in 2016, after your hospital confirms meaningful use of a certified EHR.

EHR Total Investment Costs
It is vital to evaluate and fully understand the total cost of ownership (TCO) for any EHR investment and ensure that the EHR vendor can support your implementation timelines to meet “meaningful use” guidelines.

The following graph, based on hospital annual net revenue, shows an example EHR Investment with the total cost of ownership represented over a 10-year time period.

By including the EHR financial benefits and determining the ARRA incentive potential as well as the total cost of ownership to your hospital, you can gain a true understanding of the total financial impact of your EHR implementation.

The clock is ticking, but it’s not too late!
The FiscalHealth Group can show you the “hard-dollar” financial benefits and provide the information you need to make a financially informed, confident EHR decision for your organization.