What do the numbers say about economics and dental EHRs?

Do dental EHRs offer economic benefits? How do you know? A team of researchers looked at this question using a pre/post implementation economic analysis design, along with a probability-based bootstrapping simulation model. In this way, they evaluated the economic effects of EHR implementation at the University of Texas Health Science Center at Houston Dental Branch (UTDB).

In making the case for purchasing the EHR, the Dental College created a list of anticipated benefits, including:

  • more accurate and legible information simultaneously accessible,

  • common integrated application for digital imaging and decision making,

  • improved patient safety,

  • reduced costs and reduced staffing,

  • higher quality (through higher completion of “patient encounter forms”).

During analysis, a few benefits were uncovered that were not previously anticipated, including:

“Improved documentation helped to reduce the “unspecified” procedures by 99 percent, allowing better coding of accurate charges to patients after implementing EPR at the dental school.”     and

“Average monthly expenses for forms, record jackets, file folders, and other supplies used to maintain paper records fell significantly by nearly 66 percent, representing almost $20,000 annually.”

“Incorporating all of these benefits into a deterministic model over a five-year period, with the basic assumptions and distribution parameters from our data collected, the net present value was estimated at $425,191, which indicates fairly significant economic value. In most project evaluations of this size, a five-year NPV of this magnitude would be seen as quite a success. “

This indicates that implementation of an EHR was seen as a major, transformative systems project, and one that not only recouped its financial outlay (within 2.5 years), but which would continue to generate significant increased revenue over the coming years. This indicates that the economic benefits of an EHR far outweigh the short-term potential difficulties. In particular, the ability to accurately and thoroughly document procedures for billing, litigation and other purposes is crucial.

However, the authors make a key caveat. Much of the financial gain from this particular implementation was specific to the nature of the institution: increases in student fees were a major source of income. As a result, dental practices that are not able to glean such income may not see such a dramatic cash change. However, their financial outlay may also be proportionately smaller. As the authors put it:

“There were positive economic outcomes from the electronic patient record, even given a thousand iterative changes in probabilities and other risks, but enhancement of student fees was a key component in positive value outcomes.”

Lessons Learned:

  • Rigorous analysis at a dental college reveals that the EHR produces positive financial outcomes even when many variables are considered in a probabilistic model.
  • Improved documentation and accurate records of procedures are a key component in quality of care, reducing litigation and economic impact.
  • Reductions in paper costs and storage space account for some of the economic gains from EHRs.
  • Dental schools may need to increase student fees to cover short-term financial outlays for electronic records.

Langabeer, James R. II, Walji, Muhammed F., Taylor, David & Valenza, John A. (2008) Economic Outcomes of a Dental Electronic Patient Record. Journal of Dental Education October 1, 72(10): 1189-1200.