While estimates vary, the U.S. Department of Health and Human Services (HHS) puts the conversion from ICD-9 to ICD-10 at a price tag of $1.64 billion, including $357 million for staff training, $572 million for losses in productivity and $713 for system changes.
These costs are offset by $87.7 million in annual savings, HHS says — with a cumulative benefit of about $3.95 billion by 2023. But costs won't break even until 2018.
Health care organizations will feel the pinch and will need to look for new ways to counteract the shortfall.
Further, poor implementation of ICD-10 has the potential to diminish financial performance well beyond the dollar value of any federal funds received for EHR implementation.
"Instead of taking a system-wide view, they've delegated the transition to their information technology departments. That's a big mistake."
– Eric Schenk, Ernst & Young
"We've found that many health care executives do not understand ICD-10's financial implications like the relationship to Medical Loss Ratio reporting," notes EY's Eric Schenk. "Instead of taking a system-wide view, they've delegated the transition to their information technology departments. That's a big mistake. ICD-10 is more than a compliance effort — it's a strategic imperative; it can be transformative; it requires executive sponsorship and a place at the top of the business agenda."
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