Epic EMR Costs Drag Down Finances At Brigham and Women’s

Posted on January 4, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

It’s worth noting from the outset that many healthcare organizations have had it worse. Epic installs have blown health system budgets sky high, sapped their profitability and undermined their credit ratings. So upon hearing the following you may not be tempted to play a sad song on the world’s smallest violin.

Still, it’s worth noting that in part due to the costs of its Epic implementation, the venerable Brigham and Women’s Hospital will fall $53 million short of its expected $121 million surplus for fiscal 2015. According to news reports, this is the first time Brigham and Women’s has missed such a target in more than 10 years.

The hospital’s president, Betsy Nabel, MD, noted that the Brigham and Women’s install is part of a massive $1.2 billion Epic implementation cutting across the 10 hospitals of the Partners HealthCare system. The broader Partners implementation is proving to be a budget-buster as well. Three years ago, Partners went into the effort with a comparatively scant $600 million budget.

Brigham and Women’s — along with nearby Dana-Farber Cancer Institute — hired 1,500 extra staff members to help with the Epic go-live, which took place in June of this year. The Brigham had budgeted $47 million during the previous year to pay for the transition costs.

But the transition cost $27 million more than expected. For one thing, once they began using the EMR, Brigham and Women’s staff apparently undercoded a bunch of visits, lowering patient care revenues.  The hospital also gave up some revenue voluntarily, by cutting back on patient volume during the first months post-go-live to ease the transition.

The rest of the shortfall came from lost patient volume in February due to heavy snowfall, as well as paying more than it had expected into its employee pension fund.

A few words of commentary seem called-for here.

* It’s not clear to me why the staffers made so many coding mistakes going out the door with the new install. I’ve written about perhaps a dozen Epic installs in depth, and have studied many more, and a rash of post-implementation coding mistakes doesn’t seem to be common. Am I missing something, or were the staffers undertrained?

* News reports suggest that nearly $14 million of the unexpected costs came from the planned reductions in patient care volume. It seems to me that if Brigham and Women’s execs planned for that shortfall, they’d know how much it was going to be. Why all of the surprise already?

By the way, the shortfall apparently kicked up so much dust that Dame Judy personally flew out to Boston to meet with the hospital leadership to head off PR trouble offer guidance.

Following the meeting, hospital president Dr. Betsy Nabel told a town hall-style gathering that all is well — that the coding problems will pass and revenue levels reestablish themselves. And after all, she noted, the Epic install is already working well enough that there’s been no increase in medical errors at the hospital.

Well, that’s a start at least. Keeping medical errors from getting worse is certainly a good thing. But for its sake, let’s hope the Brigham expects more than that from Epic!