Austin Holmes

HPM 6058
Dr. Tahara

Silver Lake Memorial Hospital

Overview:
Silver Lake memorial is a 150 bed acute care private for-profit hospital
located in the Los Angeles Area. It offers both inpatient and outpatient
services in all major specialties, and includes an emergency medicine
department. The hospital also has clinics which offer services to the
underserved population of Los Angeles. Recently, the hospital has
experienced declining profits due to reduced medicare and medi-cal
payouts. Silver lake is located in an area that has a large elderly population.
Due to this currently, over 60% of the patients have medicare and of these
40% have combined medicare/medi-cal. Patients with private insurance
comprise approximately 30% and 10% have no insurance.

The issue:
Currently, Silver Lake Memorial utilizes paper charts for its medical records,
and has an understaffed medical records department. This has caused issues
with coordinating care, medical records requests from patients or insurance
companies, and communications between departments. For instance, if lab
tests are ordered, the test is accomplished in a timely fashion, yet the lab
department must request the records of the patient from the medical
records department. Due to the overload, it may take several days for the
lab to get the patients record. Once the lab results are entered into the
patient’s record, the record is then returned to the medical records
department. A CQI task force analyzed the issue and determined that
upgrading to an EMR system would solve many of these issues. The task
force than commissioned a technology committee to study the possible
solutions.

The analysis:
According to a SWOT analysis and CQI methodology (See figure A) (Darr and
Longest, 2008), it was found that an upgrade to an EMR system is warranted.
According to the American Recovery and Reinvestment Act (ARRA) of 2009,
the eventual use of an EMR system will become mandatory for continuing to
receive medicare/medi-cal disbursements. Included in ARRA is funding
available for hospitals who are “meaningful users” of EMR technology
(Latham and Watkins, 2009). At no better time in our history has the move
to electronic medical records technology been indicated. Besides the funding
available, the move to an EMR system would be a wise strategic choice. As
the CQI task force indicated, the area that our organization is most
substandard and could use the most improvement in is the flow of patient
information interdepartmentally. The upgrade would allow our care to be
more coordinated, timely and efficient, and fewer errors, thus leading to
higher patient care and satisfaction. Also, though it takes longer for a
physician to input notes into the EMR, time savings would still be realized in
the system as a whole. These upgrades would lead to better strategic
positioning by giving our organization the image of being the hospital best
able to serve the needs of the population in a superior fashion.
Prospective EMR systems:
Funding for EMR systems is stipulated under section 4102(a)(1) of ARRA
which states that a base amount of $2 million is available to acute care
hospitals that adopt a meaningful EMR system, as determined by the
secretary, which provides for the electronic exchange of information that
improves coordination (Latham and Watkins, 2009). There are three basic
types of EMR systems which qualify under this stipulation (Congdon, 2009):
1. Server based EMR system: This system is the most expensive, both
in terms of set up fees and licensing fees, yet gives the most control
over information and patient charts and maintains the most
confidentiality. It’s also the most reliable, since the whole system is
within the hospital itself. The main EMR system would be located
somewhere in the building and maintained by internal IT members.
This would allow little down time in the event that a server error
occurred. However, the system would require an upgrade of the
existing computer system and the creation of an organization wide
intranet connected specifically to each department. Also, the system
would require frequent updates from the vendor. Cost; $10 million
initial cost, $50,000/year for licensing fees. With four (4) full time IT
techs, $160,000/year (Congdon, 2009).
2. Application Service Provider (ASP) EMR systems: This is the
least expensive system, both in terms of set up fees and licensing
fees, however has the least control over information and patient charts
since the server is controlled at the providers location. Also,
confidentiality issues are a major concern because the charts are
“pulled” via the internet. Also, if the internet goes down, then the
charts are inaccessible, and there is no way to determine how long
before charts are accessible again. Besides the lower cost, IT personal
would not be necessary and department managers could easily be
trained on system maintenance. Cost; $2 million initially, and
approximately $25,000/year (maximum) licensing fees. No IT tech
costs associated (Congdon, 2009).
3. Open source EMR systems: This is an in-between system, where
each department has it’s “own” server (it can be a regular computer
that is just used to store files, and need not be anything fancy), and all
the departments are connected through an intranet system. Again,
this would require an upgrade of the hospitals system to include an
intranet system, though could be made more “loose” than the server
 based EMR system. (Blobel et al., 2009) All that would be necessary is
the running of lines through routers. However, the network would have
to be made secure from outside internet access through firewalls and
data encryption. This system give control to the hospital, however, a
large team of IT personal would be required, since the maintenance of
the servers is beyond the scope of most managers. Though this
system is not as secure as server based, it is much more secure than
ASP systems. Cost: 4 million initially, with approximately $30,000/year
in licensing fees. Associated IT personal costs would be approximately
$200,000/year, with five (5) IT employees (Congdon, 2009):.
In choosing an appropriate EMR system, several factors must be taken into
consideration. Of these, the one we will discuss in more detail, since it is not
obvious, is the financial costs. After financial cost are weighed, the
appropriate decision matrix (See figure B) (Darr and Longest, 2008) criteria
can be applied. Neither the open source, nor the server based system will
have a breakeven point with the ASP system (meaning that the ASP system
will always be cheaper). However, there would a break even point between
the service based system and the open source system. Total per year cost of
the server system is $210,000/year, whereas the open source system would
cost approximately $230,000/year; with the difference being $20,000/year.
The difference in initial start-up costs is $6 million (server minus open). Thus,
it would take 300 years to make up the difference. For all inclusive purposes,
difference in pricing should not be taken into consideration. It is our decision
then, based on the decision criteria that a open source EMR system be
adopted.

By the numbers:
The EMR system would incur a cost of approximately $300,000/year and
after the 10 year depreciation period, an annual cost of approximately
$100,000/year. However, when the system is analyzed in non-tangible ways,
including increased customer care, more efficient systems (allowing more
patients to be seen), and better outcomes make the system worth the
associated costs and provides positioning for a good return on investment.
Looking at it in a different perspective, when medicare/medi-cal turns the
carrot into the stick, the losses from not having a EMR system in place would
be substantial. See financial chart for more detailed breakdown (See figure
C).

Implementation:
In accordance with standard management practice, the implementation of
the EMR system would occur using a CII method (See figure D) within each
department. Each department has its own unique needs and the decision on
how to implement the EMR should be tailored. Also, the implementation of
the system itself will occur in a step-wise manner after each department
comes up with an implementation plan. The stages are as follows:
 Stage 1: Each department would create a proposed implementation
Plan of Action (POA) and submit it to the designated manager.
Stage 2: The coordination manager would then look at the proposed
POA’s and decide in which manner the roll-out will occur.
Stage 3: The intranet structure will be put in place, with both hard-
ware and software requirements. Concurrently, the department
managers will be trained in use of the software.
Stage 4: The managers will then take what they learned, and train
their staff members on use of the EMR and the policies/expectations of
use. Employee commitment to the idea is to be gained through a
discussion of why the EMR is important.
Stage 5: The roll-out. First, the lab will utilize the EMR by placing
results in the system. Physicians will learn to pull the results from the
EMR. Second, the nurses and techs will learn to input basic patient
information into the system. Third, the physicians will learn to input
exam noted into the system. Fourth, and last, a coordination with the
billing department will occur, with all physicians billing through the
EMR (or billing department could take over if physicians have a hard
time with the billing).

Problems and barriers with implementation:

Below are some of the major problems with implementing the system
(Health Care Tracker, 2009).
1. Problems with adding in old charts: This process would be labor
intensive, and would cause the largest grief in the initial
implementation stage. Over-coming this issue smoothly is essential to
the continued success of the EMR. For all return patients, the records
are to be pulled several days in advance, and the most recent chart is
to be placed in the EMR. This will allow the transition to occur smoothly
and in a coordinated and orderly fashion.
2. Long-term preservation of records: What if the company supporting the
EMR system goes out of business? What if the server eventually
crashes. Luckily this is avoided by two reasons; first, in order for an
EMR program to be ARRA certifiable, databases must be compatible
with other ARRA certified programs, thus preventing this problem from
happening. Thus, if the EMR company goes out of business, another
EMR company can be retained the databases easily transferred.
Second, weekly back-ups will be mandatory for each department.
3. Legal/privacy issues: Some patients may be worried about the privacy
of their information when being stored electronically. With the
enhanced security features found in the firewall, as well as encrypted
transmission of information, the likelihood of unauthorized access of
information is so small as not to be considered an issue. Also, ARRA
certified programs and systems are HIPPA compliant.

Conclusion:
With proper planning and implementation, the use of an EMR system could
become reality at Silver Lake memorial. It is essential to our future survival
that we adapt the above plan, and fully commit what resources we can to
make sure the program is a success. The successful implementation of the
EMR system will in the long run enhance the quality of care given to our
patients, allow for a more coordinated approach to treatment, and make the
system more efficient. It makes sense in the context of our mission; to
provide the highest quality of care to the members of our surrounding
community.

Resources:

Blobel, B. Pharow, P. and Stassinopoulos, G. (2003). Model-Based Design and

Implementation of Secure, Interoperable EHR Systems. Pubmed. Retrived
from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1480029/

Congdon, Ken (2009). How much will an EMR system cost you? Journal of
Health Care Technology Online. Retrived from
http://www.healthcaretechnologyonline.com/article.mvc/How-Much-Will-An-
EHR-System-Cost-You-0001?VNETCOOKIE=NO

Darr, Kurt and Longest, Beauford (2008). Managing Health Organizations and
Systems. Baltimore, MD. Health Professions Press.
Health Care Tracker (2009). Barriers to implementing an Electronic Health
Record System. Retrieved from
http://healthcaretracker.wordpress.com/2009/02/04/barriers-to-
implementing-an-electronic-health-record-ehr-system/

Latham and Watkins (2009). The American Recovery and Reinvestment Act
of 2009. A guide for state and local governments. Retrived from
http://www.staterecovery.org/Websites/staterecovery/Images/6%20%20Healt
h%20Care.pdf

Figure A: The CQI model

Figure B: Decision Matrix

Server ASP
Criteria Based system Open source
Initial Cost 1 5 3
Confidentiality 5 1 3
Easy of implentation 3 3 3
Effectivness 5 5 5
Efficency increase 5 5 5
Maintnence cost 1 5 3
Compatibility 5 5 5

Key:
1=Bad
3= Good
5=Best
Figure C: Budget and long term financial plan.

Start up cost 4,000,000

federal aid -2,000,000
Total start-up cost 2,000,000
Depreciation: 10 years
(cost/yr) 200,000

IT tech labor cost 200,000

Licensing fees 30,000
parts/equipment 10,000
Total costs 240,000

Depreciated cost + annual

cost 440,000
minus savings from
time -40,000
minus savings from no
rec. dept. -100,000
Total annual cost of system 300,000

Figure D: CII

CII Methodology
Manager Shares the problem with subordinates as a group (how to implement the EMR),
obtains
their ideas and suggestions, and then makes the decision that may or may not reflect the
subordinates contributions.