MD Anderson Points to Epic EHR Implementation to Explain Drop in Income

The University of Texas MD Anderson Cancer Center in Houston recently reported a $160 million drop over a seven-month period ending March 31, blaming in part, “an increase in expenses combined with a decrease in patient revenues as a result of the implementation of the new Epic electronic health record (EHR) system.”

According to May 11-12 meeting notes from the U. T. System Board of Regents, “Expenses increased  due to the following: salaries and wages  and  payroll  related  costs  increased  due  to  an  increase  in  full-time  employees,  salary  increases  and  increased  premium sharing rates; professional fees and services increased as a result of increased consulting expenses primarily related to  the  Epic EHR    project; and depreciation and amortization increased  as  a  result  of  the completion of several large  projects  such  as  the  Zayed  Building,  which  was  placed  into  service  in  February  2015,  and  the  Epic  EHR  system,  which  was  placed  into  service  in  March  2016,  as  well  as   various  other  facility  management  and  software projects.”

The notes say that MD Anderson did anticipate a material impact to revenues and expenses as a result of the Epic EHR implementation. “The post-implementation strategy will  focus  on clinical  productivity  and  operational efficiencies  to  return  to  normalized  operations  by  year-end,” the notes read.

According to a March 7 report in Houston Business Journal, MD Anderson went live with Epic on March 4. The cancer-center began the process in December 2012, and approved Epic as its vendor in November 2013. While the terms of the contracts weren’t reported, the Houston Business Journal pointed to the Mayo Clinic/Epic EHR deal that would exceed $1 billion over a five-year timeframe.