Government EMR Incentive / Penalty program.

Two methods of motivation that creates two types of customers.

So we’re nearing the middle of 2010. The ARRA incentive program states that a physician (which includes optometrists!) can begin receiving incentives as early as January 2011! That means there’s quite the urgency in getting a qualified EMR solution, utilizing it for 90 days prior to attestation and meeting those stringent meaningful use criteria. Yup, that’s all you gotta do to get Government $$$. Its so easy. Heck, its cake. But if you ask me, implementing an EMR for the sake of free Gov. dollars is like having kids for the tax write off. Yeah, from that perspective, its just not worth it.

Keeping in mind that there are two sides to this incentive / penalty program… namely, the incentive for early adopters and penalty for later adopters. Clearly, these distinct motivations create two types of clients for EMR vendors. From the EMR vendor perspective, the demographic that are presently interested in EMR (and EMR incentive dollars) are the ones who view the transition and subsequent headache of an EMR implementation as “worth their while.” Who are these people? Well, smaller practices that could significantly benefit from an 18k bonus the first year. For example, a family practice doctor who make 180k a year in qualified Medicare patients could receive 18k (a 10% increase) in revenue for their efforts in the 1st year. Not bad at all! But if you’re a specialist, say, an oncologist, your revenue increase might only be marginal and you might not feel the pressure... not yet.

But you will… by 2015 when the penalties kick in. By then, EMR vendors will experience a wave of the second kind… the late adopters rushing to avoid the penalties. In the second wave, highly specific EMRs will be in demand. These will be the providers who thought that the incentive provided to be the beta testers of new EMR technology wasn’t worth their time… that they can afford to sit by and wait while others scramble. And they are right too. By 2015, a lot of kinks will be worked out of existing systems. Processes, systems, infrastructures and politics would have evolved nearly 5 years. Smaller EMRs will go under, larger ones might just absorb them. Vendors will evolve, their products will become more secure, more efficient. Competition does wonders to reveal who is the fittest.

I’m personally seeing many smaller practices highly interested in transitioning. They are all in a rush. We’ll have to wait and see how things turn out in 2015…