EHR Implementation Cost Breakdown: A Logistical Breakdown & Implementation

Posted in Healthcare Integration

Remember when you carried a pile of medical history to every hospital visit? Thanks to EHR systems, the paper chaos is over; you can access and share your medical records online, saving time and effort. EHR software has recently become a norm and transformed how healthcare providers conduct patient care. However, many healthcare providers wonder, ‘How much does an EHR system cost?” In a nutshell, the average cost of EHR system is $1,200 per year per user.

As EHR software becomes increasingly essential for modern healthcare practices, understanding the associated costs is crucial for making informed decisions. Implementing the best EHR for solo practices or hospital chains isn’t too complicated. However, cost is often a roadblock. EHR implementation cost breakdown is done in two parts based on the vendor’s needs. Many practitioners believe it is a one-time investment, but the reality states otherwise. Let’s take a look at the detailed EHR implementation cost breakdown.

Executive Summary: EHR Implementation Cost Breakdown

Current Situation

Understanding the actual cost of implementing an Electronic Health Records (EHR) system is crucial since the cost of EHR system varies for healthcare facilities of differing sizes. Large hospitals have hefty amounts available for such projects; on the other hand, smaller practices have budget constraints, making managing such expenses critical.

Actionable Advice

A clear EHR implementation cost breakdown helps the organization stay within budget. This blog highlights insights into how to approach budgeting for your EHR system, from initial setup to ongoing maintenance and potential unexpected costs.

The suggestions covered here help those seeking EHR for solo practices and large hospital networks.

Impact of Software Type on EHR Implementation Cost Breakdown

The software chosen for the Electronic Health Record implementation should improve the practice’s efficiency, patient care, and overall healthcare workflow. By making the right choice in EHR software, practices can achieve their goals of error-free operations and improved patient outcomes.

Multiple EHR solutions, such as Cerner, EPIC, eClinicalWorks, and Allscripts, are available in the market, making it increasingly necessary to align your goals and budget. Whether you are a healthcare specialist, primary care service provider, or an Ambulatory Surgical Center (ASC) owner, choosing the right customization directly impacts your EHR implementation costs.

Licensing Models

There are two different EHR pricing models. The EHR systems for hospitals are chosen on the basis of multiple factors, the most important of which is cost.

EHR Pricing Models: Per-User Fees

Revenue for this model is paid each time an authorized user is registered and consists of either a monthly or a yearly subscription fee.

EHR Pricing Models: Per-Facility Fees

In this case, you pay a fixed amount for the entire structure, no matter the number of people. This could be a cheaper option overall for bigger practices but may not allow much flexibility for smaller ones.

Direct and Indirect Costs 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.

The direct cost of implementing EHR consists of expenses directly associated with obtaining, setting up, and integrating an EHR system into your existing setup. Meanwhile, the indirect costs of EHR systems are expenses that are not included in the original acquisition process.

Let’s take a detailed look at the costs of implementing EHR systems in hospitals.

Direct Costs: Infrastructure and Integration

The direct costs of implementing EHR in hospitals entail more than just purchasing and licensing. Hardware infrastructure, such as servers and network upgrades, is required to complement the EHR systems installed in various departments.

Additionally, integrating the EHR system with the present legacy systems requires IT experts with prowess and knowledge, which increases costs.

Indirect Costs: Training and Operations

The scalability of hospital operations increases the indirect costs of implementing EHR. The sum includes comprehensive training programs that help onboard a large group of workers and the cost of managing downtime during the transition.

Hospitals should know the cost of implementing EHR with the current legacy system, which demands personnel with exhaustive IT understanding. Even trivial inefficiencies within the complex nature of hospital workflows can cause major financial consequences. Hence, such costs should be thoroughly planned upfront.

Choosing one of the top healthcare software companies in the USA can help you take maximum advantage of your investment.

EHR Implementation Cost Breakdown: The Hardware

Your practice must also acquire the computer, server, and networking gadgets needed to access and utilize the EHR software. Your choice determines the security of the server containing sensitive patient data.

Alternatively, you can connect with the EHR provider or a separate hosting provider to store your data if you opt for a cloud-based model. Choosing the cloud will reduce the initial investment in data hardware.

This suggests that off-premises systems require more initial investment in infrastructure due to EHR deployment. Cloud-based or SaaS systems require lower software and hardware infrastructure investments since the data is held at the vendor’s servers and accessed via a web browser.

You should also evaluate your computing and networking adequacy for any EHR system. The major causes of poor performance are slow computers and laptops, poor Internet connections, and network infrastructure issues. Purchase new equipment that is compatible with the new EHR.

EHR Implementation Cost Breakdown: Implementation Support

Several operations rely on support from various professionals to implement an EHR system. These include industry experts like project managers, trainers, analysts, consultants, and programmers. The hospital might need help from an external party like Folio3 Digital Health to assist with all aspects of the project, such as plan development, customization, ergonomic considerations, workflow redesign, training, and customer support.

With expert implementation support, your EHR system can work faster and save you money in the long run. The pricing of implementation support depends on the desired level of assistance. Integration aids in adopting quality practices and ensures successful EHR application.

Implementing EHR comes with its own set of costs, and its support adds to the overall amount. Healthcare organizations may have to spend 15-20% of their EHR implementation budget on support services.

Medical Group Management Association revealed the average per-hour costs for EHR as follows:

• Project management: $50-$100 per hour
• System configuration: $50-$100 per hour
• Data migration: $40-$100 per patient record
• Training: $35-$100 per hour per trainee
• Go-live support: $50-$100 per hour

Cost of Training and Managing Productivity Losses During EHR Implementation

We pondered the training need as the critical factor in EHR implementation for hospitals. This is due to the complex nature of the system and the diverse staff that require proficiency in using it. Therefore, its addition to the EHR implementation cost breakdown is mandatory.

Training Costs: A Large-Scale Investment

Large hospitals, unlike small-scale practices, have specific needs and workflows, requiring coordination of training across multiple care departments. This is why they need detailed and prolonged training, which increases costs significantly.

Appropriate training ensures that every individual has adequate knowledge and skills to utilize the EHR system. Rigorous training reduces the chances of human errors that lead to higher indirect costs.

Productivity Losses: Mitigating the Impact

The scale of operations in hospitals is such that even a minor drought in productivity may cause serious financial implications.

Hospitals should opt for a phase-wise rollout of EHR implementation to subside the losses. This allows different departments to become accustomed to the change while being under the constant supervision of “master users”—highly trained personnel who can provide on-ground assistance when needed.

Implementing such strategies can sustain operational fluency and mitigate the financial consequences due to productivity shortcomings.

Things to Consider in the Ongoing Costs of EHR Implementation Cost Breakdown

Implementing an EHR system entails ongoing costs, including direct costs like setup and maintenance, indirect cost workforce training, and variable resource-related costs, depending on whether your system is cloud-based or on-premise.

Furthermore, you need to keep a margin for unexpected costs. For a more detailed understanding, refer to the guide on EHR implementation cost breakdown in hospitals.

Custom EHR Implementation Cost Breakdown

Every practice has unique needs. For example, a hospital requiring remote patient monitoring, telehealth solutions, or medical billing software will have additional integration costs. On the other hand, practices that want a general EHR without customization can often find suitable off-the-shelf solutions.

Similarly, custom EHR software for mental health is more appropriate because it has unique features that therapists need, like multiple assessments and evaluations.

In the same way, EHR in nursing practice, pediatricians, surgeons, hospices, and other practices with a limited specialty require features that are more relevant to them.

Although a custom EHR may seem expensive initially, it’s a terrific method to avoid spending money over time.

	Upfront Cost	Yearly Cost	5 year TCO
Cloud EHR	$20,000	$8,000	$58,000
On-premise EHR	25,000	6,000	48,000

EHR Implementation Cost Breakdown and Compilation

The cost of EHR system is influenced by factors like the features and functionalities needed, specific components purchased, and the intended duration of use. Let’s get into more details.

1. Medium of Deployment- Cloud or On-Premises

EHR software can be deployed on the cloud or premises. Both mediums have their own unique set of features and advantages. Using a Cloud-based medium for your data allows applications to be hosted in the vendor’s secure cloud environment. This eliminates the need for on-site IT infrastructure and offers greater scalability and accessibility.

On the other hand, hospitals can install and manage EHR software on their servers by utilizing on-premise installation. This gives them more control over their data but requires significant upfront investment in hardware and IT expertise. Cloud-based deployments typically have lower upfront costs but high ongoing subscription fees, while on-premise deployments have higher upfront costs but lower ongoing fees.

2. Cost of High-End EHR

It is difficult to pinpoint the average cost of EHR system because the amount differs based on the specific setting and plan. High-end EHR systems offer advanced features, often tailored to large healthcare organizations with complex needs. These systems typically have a higher price tag due to their comprehensive capabilities and strong infrastructure requirements.

3. Hidden Costs

Implementing EHR in healthcare comes with several hidden costs, which often get overlooked when calculating the cost of implementation of EHR in the hospital. Some of them include:

Implementation Fees

These include installing and configuring your EHR system, where aspects like data migration are involved.

Training Fees

Staff training is an important part of EHR implementation. Training costs vary, but they are often structured as either per-user fees or as part of a comprehensive implementation package.

Customization Costs

Customizing an EHR system increases efficiency but comes at an additional cost.

Integration Fees

Connecting your EHR with other systems, such as labs or billing software, is costly because it requires integration.

Maintenance Fees

EHRs are software; thus, they must be constantly maintained and upgraded, including adding new features and fixing bugs.

Cost-Benefit Analysis of EHR Implementation

Returns on investment are a common part of the EHR implementation cost breakdown and a significant obstacle to EHR implementation and adoption as well. 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 practical healthcare outcomes. EHR cost-benefit analysis can help answer these questions and clear confusion regarding financial decision-making.

This is because EHR cost benefit analysis helps determine the monetary value and benefits of EHR systems. The analysis covers four steps:

• Goal determination
• Estimation of benefits and costs in dollars
• Discounts at an appropriate price
• Decision-making calculations

Key Factors Influencing EHR Implementation Costs

Long-Term Costs of EHR Implementation and Maximizing ROI

The long-term costs for hospitals account for more than just basic maintenance and updates.

Ongoing Investments: Security, Compliance & Updates

Healthcare regulations are strictly followed to maintain patient data security and interoperability standards. Hence, continuous investments are needed to make the EHR system compliant. Additionally, hospitals need to plan for continuous staff training to keep up with system updates and new EHR features.

Maximizing ROI: Beyond the Initial Implementation

Hefty investments and rising costs of implementing EHR systems result in greater ROI by enhancing the following:

• Patient care quality
• Operational excellence
• Revenue cycle management

For instance, the use of EHRs can curtail medical errors, optimize resources, and improve billing accuracy, cumulatively improving financial performance with time. However, such ROI realization requires meticulous planning and commitment to using the EHR system to its full potential.

Segmenting EHR Implementation Cost Breakdown by Facility Type

Implementing an EHR system differs widely in cost based on the type of healthcare facility. The breakdown below highlights potential expenses across different steups:

Small Clinics

EHR cost for small practice is usually lower, but the relative impact on their budget can be high. The costs for implementing EHR in small practices or clinics include licensing fees, minimal hardware upgrades, and essential staff training. Small clinics face challenges in finding affordable and scalable EHR solutions that don’t require costly upgrades as the practice grows.

Multi-Site Hospitals

Large hospital networks with multiple locations typically face significant upfront costs. These include investments in extensive hardware infrastructure, advanced data security measures, and comprehensive staff training programs. While these networks may benefit from economies of scale, reducing per-user costs, they often need detailed customizations to integrate the EHR with existing systems, increasing overall expenses. This factor should be kept in mind while devising an EHR implementation cost breakdown.

Costs of Popular EHRs

EHR software prices vary and implementation involves a range of costs and a common question arises regarding the price of Epic EHR for small practices. Given its popularity, Epic is among many EHR options, including both off-the-shelf and customizable solutions.

The cost of the top 5 EHR systems varies depending on several factors, such as Practice size and specialty. 96% of practices use any type of EHR software, while specialists often require more features and customization, leading to higher costs. Cloud-based solutions are typically less expensive upfront than on-premise systems but may have ongoing subscription fees.

Different vendors have different pricing models and feature sets. However, here’s a general overview of the costs associated with some popular EHRs.

EHR System	Pricing Model	Typical Cost per User/Month as of 2024
Athenahealth	Subscription	$140
Meditech	Perpetual license or subscription	$49
Cerner	Subscription	$25
Epic	Subscription	$200 (for basic functionalities) -$35,000 (for advanced functionalities)
eClinical	Subscription	$449-$599 (for EHR with practice management)

Factors Affecting EHR Costs

Many factors influence EHR costs, but vendor pricing models and ongoing maintenance are the most prominent ones.

Vendor Pricing Models

The cost structures vary from vendor to vendor. Subscription-based models may seem affordable initially, but costs can pile up as time progresses, and the practice expansion requires additional licenses that accumulate more expenses. On the other hand, one-time purchase models often come with high upfront costs but may become cost-effective in the long term.

Long-Term Maintenance Costs

EHR systems demand frequent updates to comply with new industry regulations and maintain data security. These updates increase ongoing costs, which need to be considered in the overall budget. For instance, practices should keep funds for additional IT support or retraining of their staff when such updates are rolled out.

How to Control Costs of EHR?

EHR Development plan for a healthcare organization revolves around cost-benefit analysis and emphasizes on cost control. Although EHR systems offer multiple benefits, evidence has shown that organizations tend to recoup their implementation costs after two to three years.

Industry leaders often highlight budget constraints as a hindering factor in the digitalization of healthcare. Doctors involved with implementation have provided suggestions to help minimize the cost of EHR systems for hospitals and private practices.

1. Installing Open-Source EHR

Utilizing an open-source EHR system might have a user interface that is not perfectly buffed. However, it is capable of delivering essential functionalities at minimal or no cost at all. Sometimes, healthcare organizations lack the IT expertise to implement open-source solutions or require additional features. In such a situation, hiring a developer could be a more economical alternative than selecting a proprietary EHR solution.

2. Select Only The Required Features

Before making the decision, performing a market analysis on how much electronic medical records cost to identify the functions your organization needs to run smoothly is essential. Opting for selected features and integrations is the right approach to avoid unnecessary costs.

3. No Compromise On Security

Patient data is sensitive, and medical care organizations must prioritize its security when evaluating cost-cutting strategies for EHR deployment. In the healthcare industry, data breaches are common and often expensive. Choosing an inexpensive system with inadequate security features can lead to costs significantly greater than those incurred by purchasing a more trustworthy and premium solution.

4. Pick A Subscription-Based Model

Annual subscription payments could be a good solution for healthcare organizations concerned about upfront costs because they offer financial flexibility. Periodic payments are less of a burden, even if it may result in a higher total cost of ownership. Companies can change or modify their service plans as needed, allowing the budget to account for unanticipated expenses and allowing for adjustment.

5. Collaborate With An Experienced Vendor

Experienced software companies like Folio3 Digital Health aim to demonstrate their efficiency in implementing EHR optimally. As a result, they can help healthcare organizations optimize costs by identifying areas that require attention. These companies provide skilled teams that expedite implementation, leading to reduced EHR project costs and prompt utilization of system benefits. This approach is crucial to maximize cost-effectiveness and fully leverage the benefits of the EHR system.

Global Electronic Health Records Market

What Are The EHR Adoption Barriers?

The most significant hurdle is the upfront cost of EHR adoption; however, there are other barriers, such as ongoing costs, maintenance costs, technical support, and technical glitches. Let’s get on to further details.

Cost

Implementing a large-scale technology like an EHR system involves significant upfront costs and ongoing maintenance expenses. Assessing the cost-benefit ratio, keeping in mind about the patient and technological factors, is complex but necessary. Securing funding from authorities for such initiatives can be challenging; however, accurate cost calculations and result projections can effectively persuade authorities to allocate required funds.

Regulations

Excessive regulations and legalities are one of the biggest barriers; however, strict adherence is necessary to ensure the security and privacy of healthcare data transfer. These include state licensing laws, HIPAA compliance services, regulations, abuse, fraud, and intellectual property laws.

Time

It’s another barrier to EHR implementation from the healthcare provider’s point of view. Acquiring, educating, implementing, utilizing, and testing new technology is time-consuming. Healthcare providers hardly have time to allocate for EHR system training, but they need reassurance that the new system won’t increase treatment time or workload but rather streamline processes.

Change Management

Change management disrupts documentation, patient treatment, and workflow. To deal with these risks, the managers should reassure staff that concerns and trust issues can be addressed.

Perception

New technologies like EHR systems are often perceived as complex and hard to learn. To maintain healthcare quality performance, seamless integration in the system with an intuitive, user-friendly interface is a must. It all boils down to demonstrating the ease of use to clear misconceptions.

Power-up EHR Interoperability with Folio3 Digital Health

Whether you are a healthcare professional looking to develop custom healthcare software or a large hospital that wants to streamline operations with EHR/EMR integration, Folio3 Digital Health can help. Our teams of industry-expert designers, developers, and marketers will assist you from ideation to final deployment. Every Folio3 Digital Health product is HIPAA-compliant and uses the latest HL7 and FHIR interoperability standards.

Conclusion and Recommendations

Implementing an EHR system in hospitals is more than just a technical hurdle; it’s a strategic change that boosts the hospital facility’s financial health and improves patient care outcomes. To make an informed decision, conducting a thorough EHR cost comparison is crucial. Consider factors like practice size, specific needs, and long-term goals, and then make an EHR implementation cost breakdown.

Actionable Advice for Hospital Administrators

Hospital administrators must develop a clear understanding and plan to approach EHR implementation for managing costs effectively. The budget must include everything from initial setup to long-term expenses like maintenance, training, and system upgrades. This strategic approach in planning for the EHR implementation cost breakdown in the hospitals ensures their compliance with strict healthcare regulations. It is positioned well within the industry to reap the full benefits of the EHR system.

After grasping the complexity and variability of EHR costs, it’s important to customize your approach based on your healthcare organization’s specific needs regarding implementing EHR. Investing in a scalable, cloud-based EHR system might be the cost-effective choice for solo or small practices. On the other hand, large hospital networks can benefit from a tailored EHR solution that can integrate with existing infrastructure.

Below are some targeted recommendations:

For Small Clinics/Solo Practices

Your focus should be on vendors that offer flexible pricing models and cloud-based EHR solutions, which minimize upfront costs and reduce the need for extensive IT infrastructure.

For Large Hospitals

Seek options to invest in a customizable EHR system that may be expensive in the beginning but will provide long-term benefits through seamless integration and scalability.

Frequently Asked Questions

What is The Cost of Epic EMR For Private Practice?

The prices for a self-hosted Epic EMR system start at $20,000 (suitable for small clinics) and go over $500,000 (for larger hospitals).)

What Type of Costs Are Gradually Lessened Once an EMR/EHR System is in Place?

Once done with EMR/EHR system implementation, several costs are bound to decrease:

Paperwork Costs

The expenses linked to manual paper records, including printing, storage, and administrative handling, are greatly reduced.

Transcription Costs

The need for transcription dwindles as clinicians can easily enter data directly into the EHR system.

Staff Time and Efficiency

Automating regular tasks and streamlining workflows curtails the time spent on administrative duties and lowers labor costs.

Medical Errors and Duplicate Testing

Improved data management and access to patient records reduce errors and the need for duplication of tests.

How Much Does EHR Cost Per Year?

The EHR cost per user starts from $1200 annually, but pricing models vary.

Are There Different Pricing Models for EHR Systems?

Yes, there is a subscription model; other models are per-user and per-feature.

What Are The Components That Contribute To EHR Costs?

Besides the software, training, support, hardware, customization, etc, contribute to the overall cost.

Do EHR Costs Vary Based On The Size Of The Healthcare Facility?

Depending on the size of the facility and features, the cost of EHR software varies from case to case.

What Is The EHR Cost For Small Practices?

Small practices with general features can spend up to $100,000 annually on EHR.

How Much Does It Cost To Implement An EHR System?

EHR implementation services can range from $50,000 for smaller setups to millions for complex hospital systems.

What Is The Cost Of EMR Implementation In A Hospital?

The cost of EHR implementation can go up to Millions for a large hospital (variable based on size and complexity)

How Much Does EHR Maintenance Cost?

Maintenance costs are also significant, estimated at $1200 – $1500 per physician per month.

What Is The Cost Of Electronic Health Records Software Implementation?

Electronic medical records software costs vary based on features, software, and other aspects.

How Long Does It Take To Implement An EHR System?

Implementing EHR involves several factors, like integration with other systems or migration from legacy software, and can take 3-12 months.

How Can We Reduce The Cost Of EHR?

Control EHR costs through negotiation, open-source options, and optimizing usage as needed.

Why Does EHR Cost So Much?

The high price reflects the complex development, security needs, regulations, and ongoing updates required for these crucial systems.

What Is the Average Cost Of EMR System?

The study found an average implementation cost of around $162,000, with an additional $85,500 for maintenance in the first year.

What Type Of Costs Are Gradually Lessened Once A EMR/EHR System Is In Place?

The transition to an EMR/EHR system saves costs by reducing expenses associated with physical space, filing supplies, and long-term storage of paper records.

About the Author