The Economics of Electronic Healthcare Records

Administrative costs form a major portion of the cost structure of any health care provider. In the case of the United States, administrative costs account for more than 20% of the total costs which need to be incurred in order to serve patients. It is for this reason that many healthcare organizations are trying to reduce these tasks by increasing the efficiency of administrative work. One of the ways in which this can be achieved is by the introduction of electronic health records. Americans were amongst the first to make this a standard practice in their healthcare system. Today, more than 76% of all healthcare providers in the United States use EHRs.

In fact, almost all developed countries in the world use EHRs in one form or another. Many experts believe that it may now be time to introduce developing countries to the concept of EHRs. It is true that the costs of employing a human being are extremely low in developing countries. Hence, EHRs may not have that much of an economic impact. However, there are other reasons besides low cost, which make EHR a proposition loaded with value.

In this article, we will have a closer look at what the EHR system is all about. We will also list down some of the advantages that EHRs confer on the medical establishments which use them.

What are Electronic Health Records (EHRs)?

Patients who need medical care often have health records. The traditional way to store this information has been in paper files. These files help physicians understand the past history of the patient, the treatment that has been offered to them and how their body has responded to the treatment. In short, it is a guide to the medical history of a patient. It has a record of the tests conducted, diagnoses made and medications provided.

The problems with a paper-based history are manifold. Firstly, doctors’ handwritings are famously illegible. This makes it difficult for one doctor to understand the instructions written by others. Secondly, paper files cannot be transmitted easily. They take time. Medical records are only required when the situation is urgent and hence a process which takes more time is simply not viable.

EHRs solve all the above-mentioned problems. EHRs are completely legible records which can be accessed by any authorized personnel at the click of a button. These records can be transmitted all over the country and are accessible instantaneously via mobile devices as well. Since each patient has only one record, it becomes a centralized database which multiple medical professionals can maintain instead of each professional maintaining their own record and nobody having the complete picture.

Advantages of Electronic Health Records Based System?

  • The most obvious benefit of having electronic health records based system is the reduced administrative effort and cost. These systems eliminate the need for multiple transcriptions and physical storage. Since all the information related to the patient is stored at a single location, making and processing insurance claims also becomes faster and error free. Electronic health records make it incredibly easy to code medical information and load them on a patient file. In most cases, qualified doctors do not have to be the ones uploading this information on record. Instead, it can simply be done by a scribe who is paid much lower and hence brings a lot of cost efficiency.
  • Electronic records create large volumes of patient data. This enables analysis using big data techniques. Instead of providing reactive healthcare, the system can help predict what problems the patient might face in the future. This increases the overall feeling of well-being in the patient.
  • EHRs also have many other facilities. For instance, since the master data is already fed into the system, the patient does not have to fall out lengthy forms explaining their medical history to every medical practitioner. Also, in many countries, EHRs can also be used to trigger workflows. For instance, if the physician has recommended that the patient get a particular test done after a certain period of time, this health record can trigger an automatic workflow as well.
  • EHRs enables information to reach the right hands in a timely manner. In case of an accident or an emergency, patients are not deprived of adequate medical care since the practitioner did not have access to correct information. Practitioners are able to get access to all the data in a matter of seconds. They can then make the correct data based on information instead of making educated guesses while facing ambiguity.
  • EHRs also make it possible for patients to transition from one healthcare provider to another without loss of information. This is essential in today’s world given the fact that jobs are increasingly mobile and that people have to move cities quite often. In the absence of electronic records, a lot of information would be lost, and the new doctor would have to start from the ground up. The transfer of information is also handy when the patient is being treated by more than one doctor, and information needs to be sent back and forth between those doctors.

The bottom line is that electronic health care records are an excellent way of reducing healthcare costs at any medical establishment. It also drastically improves the quality of treatment for the patients. Hence, this technology must be implemented all throughout the world as soon as possible.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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