The Eight-minute Mystery

Gary Baldwin, Editorial Director
Health Data Management Magazine, June 1, 2009

When Fallon Clinic invested $24 million in ambulatory electronic health records, it figured it would break even on the project at year seven, or 2012, recalls Larry Garber, M.D., medical director for informatics at the 250-physician multi-specialty practice. Within two years, Fallon had every physician in the group using the system, meeting its projections for savings obtained through staff reductions, one of the cornerstones of the group's ROI metrics. Yet, it was falling short on the other big bucket of reduced operating expenses - transcription.

The clinic expected that transcription costs - which ran at least $10,000 annually per physician - could be sliced by 75% once physicians began documenting electronically. Instead, transcription costs only dropped about a third, Garber says. The practice turned to Dragon speech recognition software, from Nuance Communications, Burlington, Mass. The idea, Garber explains, is that physicians could dictate their own notes, edit them and close out the chart promptly, without farming out the tape to an outside service.

Before it took the plunge however, the practice conducted a rigorous pilot, enlisting 10 physicians to determine whether the software could actually save money. It also wanted to analyze the impact on physician workflow. First, a control group completed charts without the speech recognition software. Then a group of physicians, of varying degrees of competence with the EHR, used the speech recognition software for two months. The output of both was studied. "We showed the notes to transcriptionists to look for errors, showed them to coding and billing staff to see what level of service the notes supported, and showed them to other doctors to see how well the note communicated vital information," Garber says. "We also looked at how long it took to complete the note."

Turns out that using the software added an average of eight minutes to the physician's day. "Do you put a cost to that?" asked Garber. He decided the answer was yes, and built the slight loss of productivity into the overall cost-benefit calculus of adopting the technology. To deploy Dragon for three years, Garber concluded, would cost about $29,000 per physician. That included computer upgrades, hand-held microphones and licensing. Yet, the study revealed that by using the technology, physicians provided better documentation that supported a higher level of billing - in addition to shaving transcription expenses to virtually nothing. The combination of increased revenue and decreased transcription - which yielded a net improvement of $21,000 per physician over three years - justified the risk of deploying the technology.

Fallon Clinic is rolling out the Dragon software to an initial group of 100 physicians. "Our trajectory is good and the fact that we're still alive in these difficult economic times means (our technology) may be translating to the bottom line," says Garber. He figures the practice might even come close to its break-even date it calculated at the beginning.

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