How the costs of an EHR install can add up, according to 3 health IT execs

Electronic health records have a multitude of benefits for health systems, such as interoperability, improving physician efficiency and easy access to patients' medical history, but the cost of implementation is just one of the barriers of adoption for healthcare organizations, according to health system CIOs. 

According to a Health Affairs study, for an average five-physician practice, implementation costs an estimated $162,000, with $85,500 in maintenance expenses during the first year. 

But this isn't the only cost driver. 

Susan Snedaker, CIO of Tucson, Ariz.-based El Rio Community Health, attributed the high costs to patient data migration.  

"In some cases, data is both migrated and archived, and these requirements drive costs since many healthcare organizations, particularly IT departments, lack the resources to maintain daily operations, deliver on project requirements, and migrate to a new EHR," said Ms. Snedaker. "In the current environment, that almost always requires the use of outside vendors. While consultants can bring tremendous expertise and value to the migration effort, they also significantly increase cost."

A cost that continues to evolve 

There is more to consider than just an initial and standard implementation fee, and health systems have to account for indirect EHR costs. 

"Organizations may not understand that this is a product that will continue to evolve and the core cost of running the system from technology and application support as well as future enhancements," said Raymond Lowe, senior vice president and CIO of Commerce, Calif.-based AltaMed. 

Health systems must consider training as a part of their EHR implementation budget.

"Any implementation is 15 percent IT and workflow and 85 percent people," said Mr. Lowe.   "People deliver the care and utilize the tools, thus effective change management, continuous support, ongoing training, and optimization activities may or may not have been considered (within the budget). Additionally, we must be mindful of provider burnout and look to balance the right mix of technologies, process change and people adoption."  

The other contributing costs to installing a new EHR system pertain to operational process analysis, breaking down business silos, business process redesign and organizational change impact, along with the training of the staff in the new software, according to Tom Barnett, chief information and digital officer of Memphis, Tenn.-based Baptist Memorial Health Care. 

"Where the added problems can creep in is when organizations allow the allure of customizing features, screens and functionality. That's when costs start rising exponentially not just in the cost of the customizations themselves but the downstream ripple effect of interface changes, report changes, training changes, etc.," Mr. Barnett said. "As for upgrades, depending on the vendor that is used or the magnitude of the upgrade, they can range from very negligible to bordering on small implementations all by themselves."

Is the rate of return worth the cost?

Electronic health records help get entire clinical operations, revenue cycle operations and patients on a single, integrated platform, and health tech leaders say they do see positive rates of returns.  

"Today's EHRs more than pay for themselves and, when implemented properly, can positively exceed their ROI projections," said Mr. Barnett. 

A positive return on investment is not apparent immediately upon implementing an EHR but is something health tech leaders say shows up directly and indirectly over time. 

"If the healthcare organization manages the EHR integration well and tightly manages scope and cost, there can be a significant return on the investment over time. That ROI can show up directly as higher revenues through productivity gains or enhanced revenue capture. It can also show up in less quantifiable ways such as higher provider satisfaction — more time with patients and less documentation time — and more efficient clinical workflows," said Ms.  Snedaker. 

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