Brigham reports $53M shortfall after Epic transition

Boston-based Brigham and Women's Hospital has reported its first budget shortfall in more than 15 years, according to STAT.

The hospital came $53 million short of its budget in the fiscal year that ended Sept. 30, owing in part to unexpected costs associated with its EHR transition in June, according to hospital spokeswoman Erin McDonough. 

The EHR transition — part of a broader Epic implementation across 10 Boston-based Partners HealthCare hospitals — cost Brigham $27 million more than its $47 million cost estimation.

The hospital had planned for a $122 million surplus in the most recent fiscal year, which was to be reinvested into capital projects. Financial problems prompted the hospital to lay off 20 workers and eliminate 80 vacant job positions earlier this year, according to Ms. McDonough.

Improperly coded patient visits resulted in lower reimbursements from insurance companies, estimated at $13.5 million of the $27 million excess costs. The other half came from reduced patient volume this past summer in an attempt to avoid miscoding.

Brigham and Women's Hospital President Betsy Nabel, MD, said the Epic-related losses and coding problems are expected to be temporary, according to STAT.

Epic spokeswoman Erika Koch told STAT that while there are initial financial investments in launching the company's software, "what we typically see when a health system transitions to Epic is permanent, long-term improvement in financial health and increased bond ratings."

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