Massachusetts health system lays off 95 due to unanticipated costs of Epic roll out

The high cost of deploying a new electronic health record has forced Massachusetts' based Southcoast Health to lay off 95 employees, according to an article in the Boston Business Journal.

The layoffs, representing 1 percent of the three-hospital system's 7,251-person workforce, stem from training costs associated with the installation of its new $100 million Epic EHR system. According to the article, those costs contributed to a $9.9 million operating loss in the first quarter of 2016, which ended Dec. 31, 2015. It also hit the bottom line in the second quarter, which ended March 31.  

"These financial challenges are attributable to higher-than-budgeted operating expenses, largely a result of our Epic implementation," said Southcoast president and CEO Keith Hovan in a letter to employees, according to the Journal. "During the first two quarters of this fiscal year, revenue has grown positively at a rate of 4 percent--a significant accomplishment, particularly given the lack of a flu season. However, expenses have grown at 6 percent during that time, which is an untenable variance that must be corrected."

Southcoast also said the layoffs were not related to the merger discussions it is having with Rhode Island based Care New England.

Southcoast said when it announced the rollout of the new system Sept. 30 that it was a "state of the art" platform that enables practitioners to work "seamlessly" across all of its sites and that the EHRs had many "behind the scenes" features. The announcement did not note the cost of such a system nor the expense of educating staff on how to use it.

While roll out snafus are not unique to Epic, a number of providers have suffered highly publicized glitches pertaining to the vendor.

Last year Wake Forest Medical Center's bond rating dropped after much larger than expected operating losses due "largely" to the high cost and business disruption it incurred during its EHR roll out. The U.K.'s Care Quality Commission had recommended that the Cambridge University Hospitals NHS Foundation Trust be put on special measures because of problems the Trust had in implementing its new Epic EHR system, which caused, among other things, problems with data collection, inadequate staff training and inaccuracies.

In addition, hospital executives resigned at both Denver Health Medical Center and Elmhurst and Queens Hospitals Centers this year over concerns with the implementation of Epic systems.

To learn more:
- here's the article
- read the press release