EMR adoption rates up, with small practices left behind

A survey finds the most growth among midsize and hospital-owned practices.

By Pamela Lewis Dolan — Posted Nov. 22, 2010

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The federal stimulus funds aimed at expanding electronic medical record adoption in the U.S. seem to be having the intended effect, as a recent survey found that overall adoption rates rose about three percentage points from January to October.

But the survey found that small, independent practices are the ones most likely to be left behind.

A survey by SK&A, a health care market research firm in Irvine, Calif., found that practices with more physicians, exam rooms and patient volumes have the highest EMR adoption rates. The most growth during the past 10 months has been among practices owned by hospitals and health systems, as well as midsize practices that have six to 10 physicians. Larger independent practices, as well as small practices, also are seeing some movement, but not nearly as much.

"There's absolutely no question" that the 2009 economic stimulus package has had an effect on EMR adoption rates, said David Escalante Jr., vice president of data and information solutions at SK&A. "When you take a fixed number of targets, i.e., the 240,000 plus medical offices in the Unites States, and you take a pile of money and you fix a time frame on it, you're going to get action."

The Health Information Technology for Economic and Clinical Health Act is a provision of the economic stimulus package that created financial incentives for EMR use. Physicians can earn up to $44,000 over five years from Medicare or nearly $64,000 over six years from Medicaid if they show meaningful use of EMRs.

The SK&A report, based on surveys of 180,000 physician practices, found that EMR adoption at hospital-owned medical practices (practices owned by a stand-alone hospital) grew nearly 11 percentage points, from 44.1% to 54.9%. EMR adoption at practices owned by health systems (practices owned by multiple hospitals and/or medical groups under one ownership umbrella) saw an increase of 11 percentage points, from 50.2% to 61.2%, from January to October.

EMR adoption rates by practices affiliated but not owned by a hospital grew from 34.4% to 37.1%, and rates for those affiliated but not owned by a health system went from 34.2% to 36.8%, both showing nearly three percentage point growth.

EMR adoption rates for independent practices, those neither affiliated nor owned by a hospital or health system, rose a little more than two percentage points, from 34.3% to 36.6%, from January to October.

The survey also found that solo practices saw the lowest growth -- half a percentage point, from 28.5% to 29.0%. Midsize practices with six to 10 physicians saw significant growth, with more than a six percentage point increase, from 54.4% to 60.8%. Practices with 26 or more physicians saw a nearly two percentage point increase, from 71.0% to 72.8%.

The most commonly used EMR functions are electronic patient notes (used by 28.4% of all users), electronic labs/x-rays (27.3%) and electronic prescribing (25.9%), the survey said.

Domino effect

The patterns of EMR adoption can be described as a domino effect, partly facilitated by the order in which practices are acquired by hospitals or health systems, Escalante said.

Although the Medical Group Management Assn. has not looked at the number of practices owned versus those that are independent, the number of those reporting hospital ownership in MGMA's annual Physician Compensation and Production Survey had risen to 55% in 2009, up from 50% in 2008.

"If you buy, you are buying the larger practices [first], then the middle tier," Escalante said. "The last ones to go are the small ones."

Once practices are acquired, they are likely to implement the EMR system used by the hospital or health system that purchased them. Many of the larger practices already were acquired or on their way toward EMR adoption when the stimulus package passed. Now hospitals and health systems are setting their sights on midsize practices for possible purchase. Escalante said the last group to be purchased, which also happens to be the largest, will be small practices.

Because small practices are the last to be purchased, they also face challenges that larger practices don't when it comes to technology adoption -- mainly financial challenges. They are likely to be the last domino to fall when it comes to EMR adoption, Escalante said.

Cindy Dunn, senior consultant with MGMA Health Care Consulting Group in Englewood, Colo., said she has not seen patterns in terms of which practices hospitals and health systems are buying first, but she has seen higher adoption rates among larger practices and those owned by hospitals and health systems.

Dunn said larger practices have more money and health IT resources, and that EMR adoption was likely part of their strategy before the stimulus package was adopted.

Hospitals are helping the practices they own because they want to share data with them. "It makes sense," she said.

Also at play is the loosening of the Stark laws, safe harbors and anti-kickback rules that allow hospitals to subsidize up to 85% of the price for physician practices to adopt an EMR. Those exceptions will expire in 2013.

The exceptions, combined with meaningful use incentives that require health information exchange among medical facilities, have made hospitals and health systems more likely to offer the subsidies to their affiliated practices, experts said. Those practices are now more likely to accept the offers.

A July survey by CSC, a Falls Church, Va., consulting firm, found that 54% of hospitals said their first or second health IT priority was helping affiliated physicians achieve meaningful use.

Dunn said most hospitals are going to complete their own implementation before moving to physician practices.

Meanwhile, she said, many unaffiliated small practices are waiting to see what systems others adopt to work out the bugs.

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More ownership, more EMR implementation

View in PDF

Click to see data in PDF.

Practices owned by either a hospital or a health system adopted EMRs at a faster rate than their non-owned counterparts.

Ownership Adoption
as of January
as of October
Hospital owned 44.1% 54.9%
Non-hospital owned 34.4% 37.1%
Health system owned 50.2% 61.2%
Non-health system owned 34.2% 36.8%

Source: "Physician Office Usage of Electronic Healthcare Records Software," SK&A, October

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Growth in the middle

Mid-sized physician practices saw the greatest increase in EMR adoption from January to October. Solo practices saw virtually no movement.

Size of practice Adoption
as of January
as of October
1 physician 28.5% 29.0%
2 physicians 36.8% 40.1%
3 to 5 physicians 42.7% 47.0%
6 to 10 physicians 54.4% 60.8%
11 to 25 physicians 65.2% 69.6%
26 or more 71.0% 72.8%

Source: "Physician Office Usage of Electronic Healthcare Records Software," SK&A, October

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