Kaleida Health’s transition to Epic’s EHR system cost the Buffalo, N.Y.-based health system $170 million and contributed to a $21.1 million operating deficit in the second quarter of 2026, a spokesperson for the organization confirmed to Becker’s.
The Epic platform went live systemwide May 30 and included $24.5 million in one-time operating expenses through June tied to equipment, staff and provider training and a temporary reduction in some outpatient services. The $170 million figure does not include Erie County Medical Center Corp. or UBMD, which are set to go live with Epic later this fall.
Kaleida Health finished 2025 with revenue of $2.7 billion and income from operations of $2 million. The health system budgeted for a positive operating margin in 2026, with revenue projected at $3 billion, and expects the reduction in Epic go-live costs, along with return on the investment and other margin improvement initiatives, to deliver a positive margin by year’s end.
“Using Epic will ultimately cost less than the multiple legacy electronic medical records systems Kaleida Health was using previously,” the spokesperson said, adding that the platform allows the health system to bill and collect payment more efficiently and reduce duplicative testing between previously disconnected entities.
The financial update comes as Kaleida Health executes a $200 million transformation plan launched in 2025 and expands its footprint in Western New York, including an August 2026 move to become the passive parent of Brooks-TLC Hospital System and Bertrand Chaffee Hospital.
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