Electronic Health Record (EHR) systems have revolutionized how healthcare organizations handle patient data. But, despite the many benefits, EHRs come with a price tag. EHR implementation costs include both direct and indirect expenses. This article will look at implementation budgets and the total cost of ownership for EHR software.
EHR Implementation Cost Breakdown
As with any technology implementation, there are costs, and EHRs are no exception. EHR implementation cost breakdown varies significantly based on the vendor, clinic size, and how well the clinic adjusts during implementation. In the following sections, you can learn what to expect when budgeting for EHR expenses.
Direct EHR Costs
Initial setup and EHR deployment can include software and hardware, data migration, training, and customization. These average costs can range anywhere from $15,000 to $70,000, depending on your chosen vendor and the software customization your clinic needs. The following are direct EHR costs to consider.
1. Software and hardware costs – Healthcare organizations may select a cloud-based or a server-based system depending on their requirements. Cloud-based EHRs have a subscription-based model, where costs are distributed over the number of users, whereas server-based EHRs require a one-time payment with additional maintenance and support overheads. Additional hardware such as desktops, laptops, servers, and other peripherals such as barcode scanners, tablets, and printers can add to the overall costs.
2. Data migration costs – Moving from a paper-based system to an EHR is more time-consuming and costly than migrating from a legacy system. The costs can vary based on the organization’s size, the volume of data to be migrated, and the resources required for the transfer.
3. Training and support costs – Training costs depend on the type of system deployed, the number of staff to be trained, the duration of training, and go-
4. Interface costs – Healthcare organizations requiring integration with third-party applications such as revenue cycle management, clinical decision support, and e-prescribing may incur additional interface costs.
5. Legal costs – Organizations may require the services of legal and compliance experts to ensure regulatory compliance and review and revise their policies and procedures to align them with EHR implementation.
Indirect EHR Costs and Hidden Expenses
Hidden costs and indirect expenses are the costs you might not see upfront, but they add up. Consider the following indirect costs of EHR implementation – and potential solutions – when planning your budget.
1. Office staff training – Training staff, especially those who are not tech-savvy, can take time and money. Additionally, staff training should be updated periodically to ensure they use the latest version of the EHR and its fullest capabilities. Training must be factored into the overall EHR implementation budget. Consider the following:
- Will the practice need training support from the vendor or an outside consulting firm?
- Who will be selected as super users?
- Will training materials need to be developed to accommodate the clinic’s workflows?
Remember, most EHR vendor training sessions are not customized to the practice’s workflows. That is why many organizations choose to bring in EHR consultants when it comes to additional training and implementation.
2. Downtime and unforeseen costs – Organizations may experience unexpected downtime and struggle to access patient information during implementation. It is important to consider the cost of contingency planning in the budgeting and implementation processes to mitigate downtime.
3. Staff time – Your staff must dedicate time to the implementation process, which could directly affect patient care. Proper delegation will help minimize workflow disruptions and maintain optimal patient safety levels throughout the transition.
4. Data migration – When switching to an EHR system, a data migration often occurs. Data migrations are typically necessary, but do not always go to plan. It is essential to have a dedicated staff member(s) who will oversee and assist with the migration. The vendor will supply representatives from their side, but those folks sometimes do not understand the data and where it should be migrated to within the record.
5. Customization – Medical organizations will want to customize their EHRs to suit their specialty, workflows, and revenue goals.
Ongoing EHR Operational and Maintenance Costs
Like any digital system, EHR requires ongoing maintenance, internet technology (IT) support, and upgrades to remain up-to-date and secure. Maintenance and operational costs include data backup, recovery, software updates, and cloud service fees. These costs vary based on the practice’s needs and the level of customization and redesign support needed. Keep in mind that the operational cost is usually much lower than the initial implementation.
Tips for Financing and Budgeting for EHR Costs
When budgeting for EHR costs, you must consider upfront and ongoing expenses. Initial setup and deployment can be expensive, but the goal is that overall operational costs will go down if the EHR is set up to work with you and not against you. Keep in mind the following when creating your budget.
1. Federal and state incentives – Incentive programs such as the Medicare and Medicaid EHR Incentive Programs provide financial rewards for eligible providers to adopt and demonstrate meaningful use of certified EHR technology. The incentives can offset some or all of the costs of EHR implementation.
2. Explore financing options – Some organizations may be eligible for vendor financing, leasing, or loans from financial institutions. Medical practices can evaluate the various options available and choose one that works best with their budget, financial resources, and expected long-term costs.
3. Create a realistic budget – Medical practices should consider all costs associated with EHR implementation and develop a feasible budget considering their cash flow and revenue streams.
4. Prioritize key features – Medical practices should identify the most essential EHR system functions. Conducting this assessment, also known as a gap analysis, will help prioritize key features and reduce unnecessary costs.
5. Negotiate with vendors – Requesting proposals from different vendors and comparing the offers can help medical practices choose the vendor that offers the best value for the money. Stakeholders can also negotiate prices and terms with vendors to gain cost savings.
Summary: Understanding EHR Costs
Understanding the cost of EHR implementation will help you budget your upfront and operational expenses more effectively and make informed decisions about the best options for your practice. Consider all the costs surrounding your EHR to get a clear picture of the direct and indirect costs.
The cost of implementing EHRs can vary based on various factors, such as the clinic size and customization needs. However, the benefits of EHR far outweigh the costs. Improved patient care, greater operational efficiency, and reduced paperwork are just a few of the many benefits EHR brings to the table.
Make the Most of Your EHR Investment with Expert Guidance from Medical Advantage
Our consultants support thousands of healthcare professionals with everything from EHR implementation and integration to system selection and system optimization. Contact us to learn how we can help your organization get the most from your EHR investment.