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Physician group warns costs of digital records may threaten solo practices

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While the New Jersey Health Information Technology Extension Center has reached a milestone in getting primary-care physicians to implement electronic health record systems, the head of a physicians group said increasing costs could halt further adoption in the state.

"For solo practitioners like me, the biggest obstacle is the cost and the amount of time you spend in implementing the system. It cost me about $30,000 of my personal earnings to do this, and for other groups it could be substantially larger," said Dr. Salvatore Bernardo Jr., president of the New Jersey Academy of Family Physicians. "I wouldn't have been able to do this without a reimbursement model or backing from my hospital. With the costs and the evolution of medicine for primary care, maybe solo practices may no longer be able to exist."

According to Donald H. Sebastian, chairman of the NJ-HITEC and senior vice president for research and development at the New Jersey Institute of Technology, a $23 million grant awarded to the center from the U.S. Department of Health and Human Services in 2010 has allowed it to assist 5,000 primary-care physicians in adopting digital recordkeeping, and 1,000 of those doctors recently have been recognized as meaningful users eligible to receive federal incentive payments.

"What's significant about our approach, compared to other states' outreach methods, is our message was not about bribing physicians by offering them free hardware, or threatening with future penalties for not implementing the system, or shaming them about still using paper," Sebastian said. "Instead, we created a business model. We said to doctors, 'Let us help you understand why you're losing $100,000 a year in inefficiency from paper transactions.' If they accept our business discussion, then they realize the system pays for itself in less than a year, even without being subsidized."

While Bernardo has received an $18,000 reimbursement from the federal government for achieving the meaningful user designation for his electronic health records system, he said most of his savings have stemmed from improved efficiencies and better tracking of care.

"To a certain extent, there are monetary savings on office supplies with charts and paper and also savings in time with the interoffice messaging system. But what I've really found is that in the past, I was not getting what I was worth out of the care I provided," Bernardo said. "Right now, I use it as a tool to provide and improve care, but as time goes by, the pressure from the Affordable Care Act is the reporting part of it, and I think I'll utilize it for that purpose."

According to Sebastian, one unique aspect of NJ-HITEC is that it has directly involved the private sector by providing consultants for physicians who are implementing the electronic health records system, and Bernardo said wouldn't have been successful without the consultants' help.

"Some states try to provide everything themselves, but with only a $5,000 reimbursement from the government, that just can't happen," Sebastian said. "We've shown we understand how to utilize the private sector to drive down costs and get a more reasonable package of services."

Going forward, Sebastian said it will be a challenge to adapt to ever-changing standards for qualifying as a meaningful user and to get "the other 15,000 primary-care physicians in the state" to implement the system, since funding is limited and training tools are still in the development stage.

"Still, we've gotten 5,000 physicians to sign on in a relatively short order," Sebastian said. "Our objective is to have a provision for physicians who are not part of our cohort to participate in our services, where a small subscription fee replaces federal funding. What we're trying to develop is a system that's independent, with an approach that's scalable to help physicians implement it."

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