Electronic health record (EHR) systems aren’t just the future of healthcare; they’re practically essential. In 2004, roughly 20 percent of office-based physicians used EHR software. In 2017, that number rose to an impressive 86 percent. Today, nearly every healthcare facility uses an EHR system and those that don’t fall behind the curve with patient care. However many practices will ask the question, how much do EHR systems cost and what is the total cost of ownership?
When you look at the benefits, it’s easy to see why these systems are so popular. They maintain patient privacy, provide more accurate health data, allow quick and easy access for medical providers and patients, and reduce errors. Even better, they usually decrease expenses over the long term.
So, what’s the downside?
Like most technology, EHRs are unfamiliar to providers and staff who have worked with other systems for years. Change can be intimidating, and there are several steps to implementing a new EHR system. Cost is also a factor. Though EHRs may save money down the road, the upfront expense and ongoing maintenance are certainly worth considering.
EHR System Total Cost of Ownership
In this guide, we hope to alleviate some of the concerns around cost. We recognize that implementing EHR software is a significant investment, and most practices want full disclosure before they make this transition. That is why understanding the total cost of ownership (TCO) of an EHR system is critical to your practice before you decide on systems.
When considering the total cost of an EHR system, here’s what you can expect.
SaaS vs. On-Site EHR Systems
Before you analyze numbers, you’ll need to compare EHR systems and the way in which they are deployed. The two primary EHR options are the subscription model versus the on-site model.
While prior software primarily worked on-site, Software as a Service (SaaS) is quickly growing as the more popular option. On-site software requires installation at your office, data center, or with a hosting provider which comes with both pros and cons.
For example, you can better manage patient privacy when you have complete control of your EHR's infrastructure. However, you’re also solely responsible for managing patient privacy when you maintain the servers and other infrastructure equipment required for an EHR. You’ll need to implement the latest security standards or risk compliance issues.
Conversely, when you subscribe to a service, EHRs are accessed via the internet and stored on a remote server or the cloud. These systems usually include privacy measures, though you will still need to work with a third-party vendor to ensure compliance is up to your organization's standards.
There are many advantages and disadvantages to consider when choosing how to license or host, but it’s important to note that the costs can vary considerably between the options. We’ll break down those costs here. All estimates are sourced from HealthIT.gov.
Upfront EHR Costs
First, consider the upfront costs. With on-premise EHR software, the average is $33,000 upfront. Typically this is more because you're purchasing a full license upfront and paying a lower ongoing maintenance cost.
A SaaS EHR averages just $26,000 upfront because it often consists of recurring monthly subscription costs rather than the purchasing of a license.
Please remember that these are averages that may differ depending on the size and location of your practice as well as other factors. They can also vary greatly based upon your vendor selection and special discounting you may negotiate.
Annual EHR Costs
While a SaaS EHR is less costly upfront, the yearly expense is generally higher due to the recurring subscription price. These systems average $8,000 in yearly expenses versus just $4,000 for on-premise installations.
5-Year EHR Cost Estimate
When you compare the total cost over a 5-year time span, there’s a $10,000 difference. On-site EHRs cost an average of $48,000 over the first five years, while SaaS systems average $58,000.
Past this point, it’s more difficult to estimate expenses. While the SaaS option likely won’t increase much in price year-over-year, you’ll likely need to upgrade your on-premise solution at some point if you choose this option. Expenses may vary depending on how quickly your system becomes obsolete and whether (and how much) your vendor charges for upgrades. You also have to include ongoing hardware and software maintenance costs in your on-premise solution.
Primary Components of EHR Systems Implementation
There are several components that make up a successful EHR system implementation where cost can occur. Each of these is included in the combined estimates above, but it’s helpful to see where your expenses lie. Your costs may be higher or lower than average depending on your current infrastructure and other factors.
Hardware Required for EHR Systems
Hardware to include in cost estimates:
- Computers (laptops or desktops for physicians and staff)
- Tablets, smartphones, and other mobile devices
- Scanners (document & business card)
- Electronic signature pads
- Networking equipment
Software Required for EHR Systems
Software to include in cost estimates:
- EHR software application
- Interface software or licensing
- Operating Systems
- Database licensing
- Patient portal
- Third-party software
EHR Support Cost
You will likely need professional assistance when installing your new EHR system, that may include the following:
- EHR consultants
- EHR trainers
- EHR go-live support
- EHR project managers
- Data conversion consultants
- Network administrator
- System administrator
- Database administrator (DBA)
- Medical record abstractors
- Compliance officer
Before you can use your EHR software, you’ll need to provide EHR staff training. This includes:
- Medical assistants
- Managers & administrators
- Front desk
Finally, your EHR system will require regular maintenance. Typical expenses include:
- Hardware and software licenses, maintenance, & upgrades
- Continuing staff training and education
- IT support fees
- Salaries and/or contractor fees for ongoing maintenance and support
The Benefits of EHR Systems
Though the expenses can add up, an EHR system is well worth the investment. These systems provide numerous EHR benefits for physicians, office staff, and other users. Most healthcare facilities enjoy using their new EHR software and find it saves both time and money long-term. There are also performance incentives tied to meaningful EHR usage.
If you are considering an EHR system, schedule a consultation with TempDev for more information. We’re here to answer any questions and ensure the process is beneficial for your practice. We can also help you discover all the hidden costs that may be part of your EHR contract. Contact us here or 888.TEMP.DEV to discuss the next steps.