Business Benefits or Incentive Maximization? Impacts of the Medicare EHR Incentive Program at Acute Care Hospitals

Abstract

This study investigates the influence of the Medicare EHR Incentive Program on EHR adoption at acute care hospitals and the impact of EHR adoption on operational and financial efficiency/effectiveness. It finds that even before joining the incentive program, adopter hospitals had more efficient and effective Medicare operations than those of non-adopters. Adopters were also financially more efficient. After joining the program, adopter hospitals treated significantly more Medicare patients by shortening their stay durations, relative to their own non-Medicare patients and also to patients at non-adopter hospitals, even as their overall capacity utilization remained relatively unchanged. The study concludes that many of these hospitals had implemented EHR even before the initiation of the incentive program. It further infers that they joined this program with opportunistic intentions of tapping into incentive payouts which they maximized by taking on more Medicare patients. These findings give credence to critics of the program who have questioned its utility and alleged that it serves only to reward existing users of EHR technologies.