Upfront Costs Of Going Digital Overwhelm Some Doctors

Dr. Oliver Korshin practices ophthalmology three days a week in the same small office in east Anchorage, Alaska, he's had for three decades. Many of his patients have aged into their Medicare years right along with him.  For his tiny practice, which employs just one part-time nurse, putting all his patients' medical records in an online database just doesn't make sense, Korshin says. It would cost too much to install and maintain — especially considering that he expects to retire in just a few years.

...But starting next year the federal government will penalize Korshin and other doctors for not using electronic health records; Medicare will withhold 1 percent of his payments. What's more, Korshin will lose an additional 1.5 percent for failing to enroll in a federal program that requires doctors to digitally keep track of (and report) quality data about how their patients fare under their care.

And then there's the new coding system, also set to take effect in the the fall of 2015 — an overhaul of the standard method of classifying diseases and conditions. Medicare and other insurers require the proper use of these codes if doctors want to get paid for the treatments and procedures they perform. A cost study sponsored by the American Medical Association earlier this year estimated that depending on "variable factors such as specialty, vendor and software," implementing the new coding system alone could cost a small medical practice between $56,639 and $226,105...