February 15, 2023
A Health Affairs study, cited by the largest EHR information resource EHR in Practice, suggests that solo and small practices could recover the average cost of an EHR after 2.5 years. Let’s explore what the average EHR cost depends on. A recent report by Software Path highlights the correspondence between the size of the healthcare practice and the rates it pays for each system user per year. It indicates that EHR adoption may be more cost-effective for larger organizations.
Chart title: Average budget per user (physician) per year for EHR software
Data source: softwarepath.com — What practices look for when selecting EHR (2022 EHR report)
A chart created by the Michigan Center for Effective IT Adoption shows the estimated average upfront cost, the yearly and five-year total cost of ownership (TCO) depending on the EHR’s deployment model: in-office or cloud-based. The ONC claims that overall costs for electronic health records can vary from $15,000 to $70,000, which is quite a broad range. A more exact number depends on the platform type, the healthcare provider’s existing IT resources, additional personnel training, and other factors. For example, if an organization requires a custom-made system, the upfront costs will be higher than for an out-of-the-box solution, yet it may yield higher ROI faster.
Chart title: Average cost of ownership for on-site and SaaS EHR deployment
Data source: healthit.gov — How much going cost me. FAQs
The medical field is so diverse that specific practices require a custom system satisfying their unique needs. General practitioners and hospitals can rely on out-of-the-box solutions, while for pediatricians, surgeons, mental health facilities, hospices, and other organizations with a more narrow focus, a custom EHR could be a better choice.
The average cost of EHR implementation varies depending on the provider. For our clients, it usually lies between $50,000 and $500,000, depending on the number of features and integrations.
There are five factors that any provider takes into consideration while calculating the overall costs of EHR software implementation.
The healthcare organization will benefit from an EHR system only if it functions properly. Thus, having suitable modern hardware and infrastructure is crucial. An EHR vendor can advise the care provider if any changes are required before the implementation, including purchasing new computers/laptops, printers, or other devices, as well as upgrades to the network, OS, or applications.
Each deployment model has its strengths and weaknesses: while cloud-based EHRs are more flexible and scalable with data security and backup options provided by the vendor, on-premise systems are better suited for organizations that have a poor-quality internet connection and don’t rely on third parties for security. The former have smaller upfront costs, while the latter are more expensive from the start, yet cloud-based systems could require higher yearly investment.
Depending on the healthcare organization’s goals and needs, it can resort to low-cost options – ready-to-use solutions that don’t require much implementation assistance – bearing only the software costs. With the help of tech-savvy personnel, a care provider may even opt for open-source EHR software, which tends to be cheap or free. However, many healthcare organizations need help with implementing the EHR system of their choice: it has to be customized for their specifics, integrated with third-party applications, or requires workflow redesign.
Introducing a new system or implementing a major legacy redesign inevitably creates the need to update personnel’s knowledge. Training costs vary depending on the number of new features and altered workflows, the size of the organization, and the complexity of the system.
Evaluating EHR maintenance costs, many healthcare providers prefer having a dedicated support team. Such experts can solve any issues that may come up during the system’s usage, monitor its performance, and suggest cost-effective optimization. They can also carry out additional integrations, supplementary module installations, storage expansions, and other improvements associated with the organization’s growth or technical advancements.
Healthcare providers prefer to know rough estimates for the EHR implementation costs depending on the platform before choosing one or two favorites and starting consultations, quote collecting, and unique price compilations. Aside from the upfront costs and hidden expenses, clients should consider the price for each system upgrade. Katalus’s research shows that Epic charges the most for system upgrades – up to 50% of the initial contract value.
Chart title: Varying EHR upgrade costs (as a % of initial contract value)
Data source: its.uvm.edu — The Total Cost of Ownership of Electronic Health Record Systems
Epic has different pricing plans based on the client company’s size and the number of system users. Unfortunately, this popular EHR provider doesn’t offer a trial version or a straightforward cost breakdown. According to Forbes’ investigation, a price for self-hosted solutions starts from $1,200, while clinics and hospitals might expect to pay $500,000 on average. In addition, the training fees are about $2,000 per organization and other expenses can add from $200 to $35,000 to a monthly bill.
Allscripts doesn’t provide a trial version either and has flexible plans with the license price per provider starting from $150. However, the total cost of ownership of this EHR should include other direct and indirect expenses. As such, customization can cost from $2,500 (for 1-2 integrations) to $25,000 (for more than 5 integrations). If you need to migrate data – expect to pay $2,000 for 1,000 records, $5,000 for 10,000 records, $20,000 for 100,000 records, and $50,000 for more than 1 million records. Training fees vary between $1,000 and $10,000 depending on the number of sessions.
Cerner is the most popular EHR platform provider for individual practitioners, as they offer an annual subscription plan for their basic cloud-based solution for $25 a month. However, they have around 50 speciality-focused products and on-premise systems that are much more expensive.
CareCloud serves mostly ambulatory care providers, with their cheapest cloud-based EHR costing $349. Naturally, each add-on will cost extra, but the price varies depending on the complexity of the integration. CareCloud doesn’t offer a trial version, but its representatives provide a free demo upon request.
Microsoft Cloud for Healthcare is a flexible and secure platform offering care coordination, patient engagement, data management, and analytical capabilities. Our experts utilize a combination of Microsoft products at the core of the MS Cloud to deliver high-performing, reliable, and interoperable EHR solutions. The healthcare framework is free, therefore the cost of such solutions depends on the number and type of Microsoft licenses needed to enable its features.
The EHR cost breakdown can be divided into four categories that should be considered separately for the most realistic budget strategy.
Direct expenses
Hidden costs
Unexpected expenses
Staff-related costs
Despite multiple EHR benefits and evidence that its implementation costs are usually covered within two to three years of usage, healthcare providers keep listing insufficient EHR adoption budgets as one of their biggest digitalization challenges. Here are some tips for reducing EHR implementation costs from our experts.
The open-source system might not have a shiny interface, but it can provide your practice with all of the basic features at a low cost or even for free. In case your organization doesn’t have IT specialists to implement an open-source solution, or you need a few add-ons or integrations, it might be cheaper to hire a developer rather than choose a proprietary EHR.
Perform a deep business and market analysis before shopping for an EHR system to determine the functionality your healthcare organization needs most. If you are on a tight budget, cut all of the “nice-to-have” features and skip any integrations that are not vital for your daily workflows. Consider the difference between EHR and EMR systems and choose the one that most suits your case.
While platforms with annual subscription payments may add up to a higher total cost of ownership, such a model can help if the upfront cost is the problem for your organization. Besides, you can opt-out or change your service plan as you go, which gives your budget more flexibility and room to adapt to unexpected events.
Medical data safety should not be sacrificed to cut the implementation budget. Data breaches in healthcare cost more than in any other industry and happen frequently. Purchasing a cheaper system with weak security might cost you ten times more than a more expensive but reliable solution.
Software companies with various successful EHR implementation cases can help you optimize costs in areas that you haven’t even considered. Additionally, an experienced team will carry out the implementation cycle faster than professionals who are new to the field, reducing the overall project cost and enabling you to start reaping the system’s benefits sooner.
The return on investment for EHRs is tricky to calculate, as it includes both hard ROI (quantifiable metrics like an increase in patient flow) and soft ROI (metrics that are not easily measured, like the enhancement of medical care).
Let’s find out what healthcare companies gain by implementing EHR software, and see how it measures up to what they spend.
While some physicians complain that EHRs lead to burnout, these claims are true for cases when the system is not tuned to the actual needs of a particular organization. On the contrary, a research group from the Medical University of South Carolina found out that providers’ satisfaction rates grow after the implementation of an efficient system.
Scheme title: Positive association between provider efficiency and satisfaction
Data source: ncbi.nlm.nih.gov — Physician Use of Electronic Health Records: Survey Study Assessing Factors Associated With Provider Reported Satisfaction and Perceived Patient Impact
EHRs automate document management, speed up billing and claim management, and contribute to streamlining appointments. This means care providers spend less time on documentation, receive revenue faster, have fewer no-shows, and avoid wasting resources on duplicate tests, which leads to more profitable revenue cycle management.
A study performed by the Israel Center of Medical Simulation showed that using EHR software contributes to making a cost-effective and patient-centric decision in the most prevalent cases. This means, EHRs help healthcare organizations optimize spending on care and increase quality adjusted life years for patients.
Evidence shows that workflows optimized with the help of EHR software help reduce hospitalization time and hospital and ICU readmissions. For example, a nonprofit healthcare facility in St. Augustine, Florida, reduced specific readmissions from 2.9% to 0.4% and saved $1,350 per patient after crafting new data-based care flows.
Patients may not always know if a clinician makes the best decision for their health, but they definitely feel when their physician has more time to dedicate to their care instead of managing documentation. They also appreciate shorter waiting time for an appointment, and a decreased number of tests.
Process optimization enables healthcare providers to handle more appointments without increasing office hours or expanding staff. Meanwhile, enhanced patient satisfaction leads to new clients coming in. Nuance Communications Executive Director and CMIO Bret Shillingstad points out that one to two additional consultations per day can increase procedural revenue by $80,000 per year per physician.
Non-compliance with HIPAA can cost your organization up to $50,000 per violation. A certified EHR will ensure a healthcare organization's adherence to all privacy regulations and help avoid penalties. Compliance with the CMS's EHR incentive program will also ensure reimbursement for Medicare and Medicaid patients.
The time when healthcare practitioners refused EHRs because of their cost has gone. There are plenty of solutions that cover solo physicians’ basic needs at a low cost, while a large hospital can choose highly customized software that costs more but brings special benefits. Though ROI for EHR can be challenging to calculate, it’s possible to create an accurate budget by taking into account your organization’s size and business model.
In addition to the detailed implementation cost breakdown, we will briefly cover other questions care providers might have in this section. For more information, don’t hesitate to contact our team.
Integrating an EHR system with third-party solutions, legacy software, or any customization will significantly increase the implementation cost. Network changes needed for a cloud-based system to run smoothly may also lead to unexpected expenses.
It depends on the EHR provider’s business model. In most cases – no, at least not directly. However, some cloud-based solutions charge patients if they want to manage their personal information in the EHR via the patient portal or app.
Electronic medical records software is less complex than electronic healthcare records, yet it typically costs between $300-$700 per month with annual subscription, while one-time up front costs range between $2,000-$33,000.
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