UMass Memo­rial posts earn­ings loss due to mas­sive EHR roll­out

Modern Healthcare - - REGIONAL NEWS - —Maria Castel­lucci

De­spite a boost in to­tal rev­enue, UMass Memo­rial Health Care suf­fered op­er­at­ing in­come losses caused by a mas­sive roll­out of a new elec­tronic health record sys­tem.

The im­ple­men­ta­tion of a $700 mil­lion EHR sys­tem contributed to a $31 mil­lion loss in fis­cal 2016. The sys­tem re­ported $40.7 mil­lion in op­er­at­ing in­come this year com­pared with $72.2 mil­lion last year.

UMass Memo­rial’s sys­temwide switch to an Epic Sys­tems Corp. net­work contributed to $26.1 mil­lion in ad­di­tional ex­penses in fis­cal 2016. The roll­out has cost the sys­tem a to­tal of about $64 mil­lion so far, ac­cord­ing to the earn­ings re­port. The roll­out has added $23.3 mil­lion in la­bor ex­penses, $23.9 mil­lion in con­sult­ing fees and $14.2 mil­lion in im­ple­men­ta­tion fees.

The sys­tem ex­pects to spend $700 mil­lion over the next decade to up­grade its EHR sys­tem. The roll­out should be com­plete by fis­cal 2018.

UMass did see pos­i­tive to­tal rev­enue mar­gins. The Worces­ter, Mass.-based sys­tem re­ported a 5.8% in­crease in to­tal rev­enue for its fis­cal year ended Sept. 30. UMass Memo­rial earned $2.37 bil­lion in to­tal rev­enue this year, com­pared with $2.24 bil­lion last year.

Over­all, to­tal ex­penses for UMass Memo­rial for 2016 rose by 6.8% to $2.33 bil­lion com­pared with $2.18 bil­lion last year. The rise was attributed mostly to an in­crease in sup­plies and la­bor costs.

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