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A Brief Guide on EHR Cost Implementation Breakdown for Hospitals

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    Posted in Electronic Health Records

    Last Updated | August 30, 2022

    With advancements in technology, digital information storage methods have become popular, yielding significant benefits for hospitals and other healthcare facilities. Similarly, other healthcare facilities prefer these electronic data storage software to store patient records and relevant information. It ensures systematic and quick data transmission between doctors and healthcare organizations. One of these systems is Electronic Health Records (EHR), and we are sharing everything about it and the associated costs to implement EHR. So, are you ready to check out the cost details?

    Implementation of Electronic Medical Records In Hospitals

    Electronic medical records have revolutionized the way medical records are stored, managed, and accessed. This digital method of record maintenance has improved the healthcare system, allowing doctors to keep information stored in one place. In addition, it allows for easier data accessibility and record sharing between healthcare practitioners. Truth be told, EMR is a new concept, and healthcare organizations are still in the early stage of implementing electronic systems.

    Before we move on to the benefits, let us tell you that choosing the right vendor from the various telemedicine software companies working in the market is essential to yielding favorable outcomes. Coming back to our main point, EHR is another avenue of EMR systems and is defined as the medical records focusing on the patient’s total health, and it goes beyond the traditional data collection method. The medical records saved on these systems streamline the information flow between healthcare organizations without compromising on security. There are additional benefits of using EMR systems in hospitals, such as;

    • Errors Minimization 

    When a patient’s information is handled manually, it often leads to unique terminologies, spelling mistakes, and non-understandable handwriting. However, the implementation of EMR helps avoid these issues and standardizes healthcare information. In addition, it eliminates the chances of inconsistency in data and information.

    •  Higher Cost Efficiency 

    With EMR, the information will be consolidated in one place, so doctors don’t have to hunt down and track the data. Healthcare organizations can share information with other healthcare practitioners, which speeds up patient care and help save money and time for healthcare experts. Subsequently, lowering the overall cost of healthcare services.

    •  Improved Coordination 

    Electronic systems promise effective communication and coordination between healthcare providers and doctors. This seamless data exchange reduces the chances of information misplacement. Even more, the healthcare providers will have access to the patient’s information, such as medical history, previous treatments, and allergies.

    What Is The Cost Of Implementing EHR In Hospitals?

    Whether you want to create a medical app or implement EHR systems in hospitals, the final cost of implementation remains the most pressing concern for all healthcare businesses. That being said, healthcare organizations need to plan and prepare for EHR implementation to avoid any delays in the middle of the implementation. In the section below, we are sharing everything you need to know about the costs of implementing EHR systems in hospitals.

    • Direct Costs 

    EHR implementation costs make around $162,000 for a multi-doctor practice, and $85,000 is only for maintenance costs for the first year. These are average costs and can fluctuate because various factors impact the overall costs. For instance, the costs will depend on deployment methods, such as cloud and on-premise. With on-premise deployment, the EHR solution is implemented on the hospital’s own servers, but you need the perpetual license for this, and it has upfront fees. In addition, these models need back-office technologies, such as servers, data backup, and data storage options.

    On the other hand, cloud-based deployment is another option where the data will be stored on the software vendor’s server and is accessed through the internet. The cloud-based EHR systems use annual and monthly fees. As for the upfront costs, they will be optional as well as subscription-based. The best thing is that there is no need for extra storage, servers, security, and data reserves. However, cloud-based EHR systems have limitations on accessibility (not everyone will be allowed to access the systems). And since it’s a high-cost investment, it’s important to choose from the top healthcare software companies in the USA, so you get the full worth of your investment.

    • Indirect Costs 

    In addition to the implementation and upfront costs, there are various indirect costs associated with EHR systems. For instance, a new system calls for staff training and which can be pretty expensive. In addition, there will be a small duration where healthcare organizations’ productivity will be negatively influenced because they will be adjusting to the new system. That being said, reduced productivity during this time will further increase the cost of implementation.

    • Staffing Costs 

    With the implementation of EHR systems, the IT team needs to be shifted because there might be a need for new IT tools, such as a practice management system, new software, email servers, and more. If the current IT team cannot understand the new system, you will obviously need new staff, and such advanced personnel will cost more, so these staffing costs must be considered while determining the costs of implementing the EHR systems. To gain deeper insights into budget planning, you can check different hospital EHR implementation budget plan examples and have a clearer idea.

    Is EHR Cost-Effective In Hospitals?

    The EHR systems help enhance the management of healthcare and medical practice by enhancing efficiency and improving cost-efficiency. To name a few, EHR can reduce transcription costs, refilling costs, storage costs, and chart pill costs. In addition, it will reduce the chances of medical errors by offering improved access to patients’ records and preventing the chances of mistakes. Even more, it improves the quality of healthcare by managing diseases and educating the patients.

    The EHR systems will automate the clinical orders and documentation because it allows compliance with the regulatory requirements. It will reduce the resources and time for manual entries and automate them, which reduces the lost charges and ensures accurate billing. On top of everything, costs related to insurance denials and lag days will be reduced.

    While we are talking about cost-efficiency, EHR automates the various daily routine processes for hospitals, thus reducing the paperwork. This subsequently enables healthcare organizations to save time on administrative tasks. In addition, it can enhance the efficiency of healthcare standards by streamlining medical tasks, resulting in cost reduction. Not to forget, EHR delivers extra information when needed, and it can be shared on an automated basis (yup, you won’t have to call for information, which reduces communication costs).

    With the implementation of EHR, healthcare organizations have access to the E-prescribing feature, which reduces the chances of errors in medicinal prescriptions. In addition, it eliminates the need for paper to write down prescriptions while streamlining the healthcare information exchange. Lastly, it has every patient’s records, so there are no chances of duplicated tests, resulting in cost-effectiveness (yes, the lab tests cost a leg and arm).

    EHR development

    How Much Is Electronic Health Record Budget Required?

    There can be no precise estimation for the budget for EHR implementation since the final price will fluctuate according to what features you inculcate in the EHR system. On average, the purchase and installation will cost around $15,000 to $70,000, and they will fluctuate whether you choose a web-based system or an on-site system. In addition, cloud-based EHR will have fixed monthly costs (yes, the subscription costs). On the other hand, the on-site EHR system needs continuous management and support.

    However, if you want to calculate the budget for EHR implementation, five primary components will impact the costs, such as;

    • Hardware — the hardware needs to include desktop computers, database servers, tablets, printers, scanners, and laptops
    • Software –the software includes interface modules, EHR apps, and upgrades. The software costs will also depend on the deployment method.
    •  Implementation –the implementation assistance includes the attorney, IT contractors, electricians, chart conversion, installation, redesigning support, and consultation support
    • Training –the EHR implementation asks for training, and that can cost quite a lot. As far as training is concerned, office staff, nurses, surgeons, and all other doctors have to be trained.
    • Ongoing Costs — the ongoing costs include the maintenance costs and network fees, such as communication fees, internet costs, support fees, maintenance costs, and agreement costs

    What Is The Financial Impact Of EHR Implementation?

    The healthcare industry is still lagging when it comes down to the integration of the latest technologies. This is not only affecting the quality of healthcare services for patients but also increases the cost of healthcare services. Integration of EHR systems won’t just help improve the provision and quality of healthcare services but also lowers the cost of services.

    According to research, EHR system utilization has increased to 78% in the case of office-based doctors, while 85% of hospitals are using EHR systems. For the most part, EHR systems can provide better access to patient data, improve data sensitivity, and enhance documentation. As far as financial impact is concerned, EHR can reduce the costs related to storage, retrieval of charts, and transcription, and improve revenue development and billing will be efficient.

    That being said, the implementation of EHR systems will ultimately increase the hospital’s revenues, and there won’t be inconsistencies in productivity. However, this positive financial impact can only be attained when the EHR system is fully implemented, and the staff is trained. On the other hand, there will be ongoing costs related to support and maintenance, but the overall financial benefits will be there.

    Cost-Benefit Analysis of EHR Implementation

    With EHR implementation and adoption, returns on investment are a common obstacle. However, healthcare organizations need to have a clear idea about ROIs to encourage the adoption of the technology. Similarly, they need to ensure the correct integration of the EHR system to ensure the healthcare outcomes are practical and cost-benefit analysis can help answer these questions and helps clear confusion regarding financial decision-making.

    This is because cost-benefit analysis helps determine the monetary value of costs and benefits of EHR systems. The analysis covers four steps: determining the goals, estimating the benefits and costs in dollar amount, and discounts at an appropriate price. The last step is completing the cost-benefit analysis based on decision-making calculations.

    Financial Models for Evaluating Return on Investment of EHR Projects

    For now, there is only one financial model for evaluating the ROI of EHR systems, and it’s designed with the consultation of a finance professional, informatics, economists, policymakers, and researchers belonging to the healthcare industry. The financial model has been designed in collaboration with HFMA. According to this model, the economic assumptions will benefit the attribution costs, such as data infrastructure and EHR systems.

    In addition, it determines the ledger entries related to expenses of EHR implementation and categorizes the EHR benefits, such as organizational savings and reduction in redundant tests. On top of everything, this financial model helps determine the indirect and direct outcomes of EHR implementation. As far as inception is concerned, there is no financial model available for that and generally depends on EHR implementation and vendor.

    If we dig deeper into the details, this financial model means that the financial officers have to create the cost and benefit assumption while the model delivers credibility with board members. Secondly, it can help identify the most efficient approach regarding EHR implementation, according to different experiences. Now that we are clear about the financial model, the quantifiable advantages include higher revenues, improved productivity, and higher operational efficiency.

    How Long Does It Take To Implement An EHR System?

    Implementing the EHR system will take anything between 60 days to 120 days. With the implementation plan, the vendors need to ensure the tasks are completed on time and all the related deadlines are met. In case of updates, the plan should be communicated to every person using the EHR system through the shared system. In addition, the EHR implementation plan needs to have go-live data for covering every aspect of the implementation process.

    As far as the data is concerned, it varies with the system configuration and workflow adaptation, which is why it’s essential to have a target. According to healthcare IT research, the evaluation, development, and planning will need at least one year for EHR to go live. However, the implementation time will be reduced if the current EMR system is modified. Also, keep in mind that a cloud-based EHR system will take a few months.

    When the EHR system is implemented, the workflow operations have to be adjusted and optimized. Even more, the processes and policies need to be updated, and changes have to be made to ensure HIPAA compliance for software development and other regulations. All in all, the correct implementation of an EHR system will enhance revenue and automate various administrative, clinical, and financial tools.

    How Much Server Maintenance And Support Costs For EHR Annually?

    Support and server maintenance costs generally depend on the license and which EHR system you are implementing in hospitals. The prices will depend on which license you opt for, and they include the following;

    Perpetual License — with this license, an upfront fee is paid to own the EHR software and is used for in-house implementation. The one-time license fee costs up to $500,000, while hardware costs depend on the quality. As for the recurring expenses, they include ad hoc maintenance, updates, upgrades, and patches. However, there are hidden costs for integrations and customization

    Subscription License — this license includes a monthly subscription fee and is used for cloud-based EHR systems and can be accessed on devices. The upfront costs include setup and installation, but there are recurring costs, such as premium features and monthly subscription fees. Even more, there are hidden costs, such as integration, customization, and extra storage.

    If you want an exact value, keep in mind that server maintenance and support costs will depend on the EHR system vendor, so it’s best to ask them for an estimate.

    EHR Maintenance Cost and Cost of EHR Training

    Just like there are no actual implementation costs for EHR, similarly, it’s tricky to churn out a definite cost of maintenance for the system. Since the final price will depend on various factors, including the type and make of EHR software, implementation, and deployment method, and vendor. As far as training is concerned, there are multiple factors that impact the training budget, such as;

    • Some EHR vendors offer training packages along with the software and support is provided as well

    • The training costs will be impacted by the travel expenses for trainees as well as trainers

    • The overtime and downtime costs for trainees and trainers should be considered in the budget

    According to research, 73.5 hours of training will cost $3067, 52.5 hours of training will cost $2777, and 23.9 hours of training will cost $1538 for one trainee. If you want a better idea of costs, it’s suggested that you go through different hospital EHR implementation budget plan examples to gain an idea.

    What Are The EHR Adoption Barriers?

    To begin with, the upfront cost of EHR adoption is the most significant barrier, but there are other barriers, such as ongoing costs, maintenance costs, technical support, and technical glitches. In the section below, we are sharing deeper insights into EHR barriers, such as;


    Designing and implementing new technology as big as an EHR system is expensive, and the cost is the biggest barrier. For this new technology, the maintenance and upfront costs are ridiculously high, and it can be challenging to assess the cost-benefit of patients and technology. Even more, getting such capital from the authorities for the EHR system will be challenging. However, calculating the accurate cost to implement EHR will help persuade the authorities to provide funding.


    Yes, excessive regulations and legalities are one of the biggest barriers. Generally, they focus on the security and privacy of healthcare data transfer. In addition, it also includes the state licensing laws, HIPAA compliance services, regulations, abuse, fraud, and intellectual property laws. Multiple rules will have an impact on the adoption of an EHR system and HL7 integration.


    It’s another barrier to EHR implementation when looked at from the healthcare provider’s point of view. The time barriers include acquisition, education, implementation, utilization, and testing of new technology. Similarly, healthcare providers hardly have time to indulge in EHR system training. On top of everything, healthcare providers need to be assured that a new system won’t increase the treatment time or workload and that everything will be streamlined.

    Change Management

    Yes, change management is one of the biggest barriers to EHR implementation because it can negatively impact documentation, patient treatment, and workflow. The technology indeed has the capacity to transform the healthcare system, but it requires overcoming the challenges. For this reason, the risk managers need to tell the staff that concern and trust issues can be overcome. You need to inform the healthcare providers that the EHR system will streamline patient care and healthcare workflow. In addition, keep in mind that UI design in healthcare plays an essential role in adopting a new system, so make it easy!


    New technologies are often rendered complicated and hard to learn, and it’s another barrier that can impact EHR implementation. To ensure it doesn’t affect healthcare quality performance, the system must be integrated with the current workflow, and the interface must be easily accessible and easy to use. All in all, the perception can only be changed by showing that a system is easy to use. Lastly, show them that a new system is designed while complying with regulations of healthcare compliance services, so they are sure about the effectiveness.

    The Bottom Line

    The EHR systems are progressively becoming rampant in healthcare organizations, as they are working in assistance with a healthcare professional to ensure the delivery of high-quality patient care. Even more, it empowers healthcare professionals to deliver top-notch patient experiences during their treatment. So, even with various barriers and a high upfront cost, it’s an investment that’s worth its cost!


    How Much Does Cerner EHR Cost?

    This EHR system starts from $25 on an annual basis, and there is no free version available. In addition, they don’t even offer a free trial.

    Are Electronic Medical Records Worth The Costs Of Implementation?

    Yes, the EMRs are worth the implementation costs because they deliver outstanding results. This is because initial challenges are small while outcomes will be long-term.

    What Are Some Of The Main Categories Of Cost Associated With Purchasing And Implementing An EHR?

    The primary cost categories related to purchasing and implementation of EHR include infrastructure, facilities, personnel, and training.

    What Is EHR Implementation Cost A Logistic Breakdown?

    The logistic breakdown of EHR implements makes around $162,000 for implementation, but maintenance costs range up to $85,000.