The drive to adopt an EMR software is primarily motivated by the need to enhance operational efficiency and streamline workflows to improve the quality of patient care. These can significantly reduce administrative burdens by allowing healthcare professionals to focus more on patient care and less on paperwork.
However, when selecting new software, healthcare organizations often face the critical issue of the cost of EMR software.
Implementing an EMR system represents a substantial investment in time and financial resources. It is important for decision-makers to evaluate these costs to ensure alignment with budgetary constraints.
We'll break down pricing models, deployment options, training expenses, and ongoing maintenance costs healthcare providers can expect when investing in a top-rated EMR.
Both hospitals and private practices face different challenges in managing patient information and optimizing workflows. EMR software offer a range of benefits to help providers smoothly execute their day-to-day processes, including:
- Increased Efficiency And Productivity: Automate repetitive tasks such as scheduling, prescription management, and charting. This frees up time for physicians and nurses to see more patients and provide higher quality care
- Improved Collaboration And Patient Care: EMRs enable seamless sharing of patient information across different departments and providers. This enables better care coordination, reduces the risk of errors and empowers providers to make more informed treatment decisions
While EMR implementation requires investment, not taking advantage of these systems incurs significant opportunity costs. Practices and hospitals that do not adopt EMRs often experience reduced efficiency, higher operational expenses, and increased risk of errors over time. So, the benefits of EMR systems in optimizing workflows and care far outweigh any upfront expenses or transitional challenges in adopting this important healthcare technology.
There are clear benefits to implementing an EMR, but an approximation on the return on investment can only be determined if we know the cost involved. For the purchase to make sense, the price should not succeed the profits in the long term.
The following chart provides an estimated average upfront cost, yearly cost, and five-year total cost of ownership (TCO) for on-site and SaaS EHR deployment based on the experiences of Regional Extension Centers (RECs).
EMR software pricing and implementation costs can vary depending on several factors. This section will explore some of the key considerations that can impact your EMR budget, including:
- Pricing models
- Training and hardware costs
- Update and customization costs
Pricing Models
Different vendors use different pricing models for their EMR software. It is essential to select an EMR vendor whose pricing model aligns with your practice's financial situation. Here is an overview of what to expect from different vendors.
Subscription Pricing
Most vendors offer a fixed monthly per-provider pricing model, commonly referred to as the "pay-as-you-go" model.
Medical practices typically pay a one-time upfront cost ranging from $1,500 to $5,000 for a small practice, followed by a monthly fee between $200 and $700 per provider. While these vendors do not charge separately for users such as front desk or billing staff, they consider staff members who bill under their NPI as providers, thus liable for the monthly fee.
The cost for part-time providers is usually different and lower than that of full-time providers. In some cases, this pricing model is paired with a "percentage of collection" pricing, which offers a free EMR if the practice uses the company's medical billing services.
Pay Per Visit Based Pricing
This pricing model is relatively less common and is typically offered by small players in the EMR market or by large EMR vendors specifically addressing practices with low patient volumes.
Under this model, practices only pay based on the number of patient encounters or system usage, rather than a fixed monthly cost. The cost per visit can range from approximately $0.50 to $1.50 per visit, covering maintenance, support, and usage expenses.
Training And Hardware Cost
Beyond pricing models, two additional cost factors significantly impact your EMR implementation budget: training and hardware.
Training:
A well-trained staff is important for maximizing the benefits of an EMR system and ensuring its successful adoption within your practice. Training costs can vary depending on several factors:
- Vendor: Different vendors have varying training structures and associated costs
- System Complexity: More complex EMR systems typically require more in-depth training, leading to higher costs
- Training Format: On-site training is often more expensive than online training modules
When allocating funds for training, consider these elements:
- Training Materials: Factor in the cost of manuals, handouts, or any other resources provided during training
- Trainer Fees: If applicable, account for trainer fees if you choose on-site or specialized training
- Staff Time: Dedicate budget for the time staff spends participating in training sessions, potentially impacting productivity
Hardware:
The chosen EMR system might necessitate upgrades to your existing hardware or require purchasing new equipment to ensure optimal performance. Here's how hardware costs can affect your budget:
- Upgrades Or Purchases: Depending on your current infrastructure, you may need to upgrade existing computers or purchase new equipment like tablets for better system compatibility
- Existing Infrastructure: Assess your current hardware capabilities before budgeting. Consider if existing equipment can be repurposed or upgraded to meet the EMR system's requirements
Update And Customization Costs
Successful EMR implementation also involves ongoing expenses to ensure the software remains functional and meets your evolving needs. Here's how updates and customization can impact your budget:
- Updates: EMR vendors regularly release updates to address bugs, incorporate new functionalities, and comply with changing regulations. These updates can be free or require additional fees depending on the vendor and the complexity of the update
- Customization: While most EMR systems offer pre-built functionalities, some practices might require customization to fit their specific workflows or integrate with existing software. Customization can be a significant cost factor, with fees varying based on the complexity and scope of the changes required
Carefully evaluating your needs and negotiating update and customization costs with vendors can help you manage these ongoing expenses effectively.
The cost of implementing an EMR system varies widely, influenced by factors such as the size of the practice, the required features, and the pricing model chosen by the vendor. To provide insight into the costs associated with implementing EMR systems, we will highlight the expenses incurred by different healthcare settings:
Cost Of EMR For Private Practices
For private practices, initial setup costs typically range from $1,500 to $5,000. On an ongoing basis, operational costs for EMR systems are usually based on either a subscription pricing model, which ranges from $200 to $700 per month per provider, or a pay-per-visit pricing model, with costs ranging from $0.50 to $1.50 per visit.
Cost Of EMR For Multi-Physician Practices
A study by Health Affairs sheds light on the costs associated with implementing an EMR system in a typical multi-physician practice. The study found an average implementation cost of around $162,000, with an additional $85,500 for maintenance in the first year. These costs include software licensing, hardware, training, and support.
Cost Of EMR For Large Hospitals
EMR implementation costs can reach significantly higher levels for large healthcare settings. For instance, Becker's Hospital Review reported on several EMR installations in 2023 that reached millions of dollars. These high-cost implementations often involve large hospital systems requiring extensive customization and integration with existing infrastructure.
Ultimately, the average cost of an EMR system varies based on your practice’s size, specific requirements, and the preferred deployment method, which requires careful consideration to understand the total financial commitment.
Type of EMR Deployment
When selecting an EMR system, one important decision is the type of deployment. The deployment type affects cost, maintenance, and security.
The two primary types of EMR deployment are cloud-based and on-premises. Each option has its own set of advantages and challenges, which makes it vital to understand their differences to determine the best fit for your practice’s needs.
On-Premises
This method requires hosting the EMR system on your servers. It requires a perpetual software license, which usually comes with a high upfront fee ranging from $1,200 to $500,000 or more. Additionally, you will need to invest in initial hardware, such as servers, and ongoing premium support, such as expanded telephone support hours.The hidden costs associated with this model can include software customization, integration with existing systems, and additional IT staff for maintenance.
Opting for an on-premises server model means you are responsible for managing the EHR software and related technology. This requires heavy-duty servers, a reliable data backup system, and possibly other technologies to ensure effective operation.
Cloud-Based
This method is generally more cost-effective. It stores your data on the vendor's servers, accessible via the internet, and requires an annual or monthly subscription license. Monthly subscription fees typically range from $200 to $35,000, depending on the size of the healthcare organization and the level of support required.
The initial fee for a cloud-based EHR system is lower compared to an on-premises solution. There are fewer upfront costs, as there is no need to purchase additional servers, data security, storage, or backup systems. However, you will still need to budget for software customization, integration with existing systems, and additional storage for patient data.
A drawback of a cloud-based EHR system is the potential limitation on staff access. For smaller practices, this is usually not an issue, but larger organizations may face increased monthly fees as more users require access to the system.
Cost Of Implementing EMR
Practices, while implementing an EMR system, need to consider multiple financial components to grasp the full scope of the investment. These costs cover initial installation, staff training, ongoing maintenance, and necessary customization. Each factor significantly impacts the overall expense and can vary depending on the practice's size and specific needs.
Installation Cost
Remember, whether you opt for on-premise or cloud-based deployment, you'll still need to invest in your local network hardware. Consider desktop computers, iPads or tablets, printers, scanners, and other devices you might require.
You'll be using the expertise of qualified technicians to install such systems, and this does directly influence the software's cost. On average, you'll spend between $1,000 and $3,000 on installing and configuring software. The financial provision also needs to be made for the required technical support.
Staff Training Cost
Most medical practices can spend at least $20,000 on EMR software staff training costs. Your staff needs to know how the systems work, regardless of whether you're using entirely new software or merely migrating from one system to another.
Sometimes this training is provided by the vendor, or it could be facilitated by in-house staff. It depends on how complex the new system is. Some medical practices try to save on costs by accessing training materials online at no charge via attending webinars or tutorial videos. Training offered by an expert guarantee that their employees understand the new EMR software well enough to use it successfully and has significantly reduced time spent on training, so productivity isn't primarily affected.
Maintenance Cost
In the first year of implementing EHR software, maintenance costs can total at least $85,000. Despite the advanced nature of the technology, malfunctions can occur, and even the best EMR systems require ongoing maintenance and technical support to ensure smooth operation.
In some cases, continuous maintenance and upgrade costs are included in the monthly subscription fee for the EHR software, which provides a more predictable financial commitment.
Customization Cost
This can involve creating patient note templates with customized fields and the capability to report or analyze patient data effectively.
If you opt for a top EMR software system, you can expect to pay additional costs for these customizations. However, choosing a system with a high level of user configuration can help mitigate some of these expenses.
The customization cost is influenced by the selected software features and the number of users. Additionally, whether the software is hosted on-premises or cloud-based also affects the overall costs.
Data Migration Cost
The migration of data from an existing system to a new EMR system can incur additional costs. While some vendors provide basic data migration services at no extra charge, others may require additional payment, especially if the volume and size of the data extractions are substantial.
This process ensures that all historical patient information is accurately transferred and integrated into the new system.
Budgeting For EMR Implementation: A Checklist
Transitioning to an EMR system is a significant undertaking that requires thorough planning and budgeting. A crucial step in this process is understanding the EHR implementation cost breakdown.
Note: This checklist provides a general framework. Specific costs will vary depending on your practice size, chosen EMR system, and vendor terms.
How To Control EMR Implementation Costs?
One of the important aspects during EMR implementation is to control costs for the overall success of shifting to a digital healthcare system. Here are some effective strategies medical practices can consider:
What Is The ROI Of EMR Implementation?
Although implementing an EMR system is a significant investment, the financial and practical benefits often justify the expense for both hospitals and private practices.
Enhanced efficiency, improved service delivery, reduced costs, and increased profits all contribute to a compelling case for EMR implementation. Medical practices of various sizes can find value in EMR systems, not only to comply with regulations but also to leverage the full spectrum of operational benefits.
According to a study by Health Affairs, a typical multi-physician practice spends around $162,000 on EMR implementation. Another study suggests that practices usually recover their initial investment within approximately two and a half years and can then expect an average net benefit of $23,000 per full-time staff member annually.
For hospitals, the ROI is even more substantial due to their larger scale and the greater potential for efficiency improvements. Hospitals can benefit from streamlined workflows, reduced medical errors, and better patient care, which collectively lead to significant financial and operational gains.
However, it is necessary to ensure that the investment aligns with both short-term budgets and long-term financial goals while considering EMR implementation. By carefully planning and evaluating the costs and benefits, medical practices and hospitals can achieve a favorable ROI from their EMR implementations.
The timeline for EMR implementation can vary, generally ranging from one to six months. It is influenced by factors such as system complexity, deployment method (cloud-based vs. on-premises), and the specific needs of healthcare practice.
Initially, the planning and preparation phase, which includes a needs assessment, vendor selection, and project planning, typically takes about three to four weeks. Following this, the system configuration and customization phase can last between one to three months.
Similarly, training and testing usually require an additional one to two months. Comprehensive training sessions are conducted to ensure all users are comfortable with the new system.
Finally, the go-live preparation and execution phase typically takes one to two weeks, during which the system is fully implemented, and immediate support is provided to address any initial issues.
Implementing an electronic medical records system efficiently while minimizing costs involves strategic planning and execution. Here are some best practices you can follow:
| Strategic Planning | Begin with a clear strategy that outlines the goals, scope, and timeline of the EMR implementation. Engage stakeholders from all levels of the organization in the planning process to ensure the system meets clinical and operational needs |
| Vendor Selection | Choose a vendor that offers a flexible and scalable solution at a competitive price. Evaluate their training and support services to ensure they align with your practice’s requirements |
| Identify Hidden Costs | Carefully review vendor contracts to identify any hidden costs of EMR that may arise. Reading the contract thoroughly can help avoid unexpected expenses and ensure you understand all aspects of the pricing and service agreements |
| Customization | Limit customization to essential features that directly contribute to patient care and operational efficiency. Over-customization can lead to increased costs and complexity |
| Phased Implementation | Implement the EMR system in phases rather than all at once to identify and address any issues before a full-scale rollout |
| Staff Training | Invest in comprehensive training programs. Well-trained staff can use the EMR system more effectively, reducing the likelihood of costly errors and the need for additional training later on |
| Data Migration | Approach data migration methodically. Cleanse and archive old data before migration to reduce the volume and complexity of the data being transferred, which can lower costs |
By following these practices, healthcare providers can implement EMR systems that not only enhance patient care but also operate cost-effectively, ensuring a better return on investment.
For any healthcare organization, EMR implementation is a significant investment; however, the costs associated with different EHR systems can vary widely based on multiple factors. Here we will provide an overview of the costs associated with implementing five of the most popular EHR systems:
athenahealth Software
athenahealth offers a cloud-based service, typically charging a monthly fee that’s a percentage of the practice’s monthly collections. Small practices might expect to pay between 3-7% of their collections, while larger practices may negotiate lower rates.
Epic Software
Epic’s systems are often used by large hospitals and health systems due to their extensive features and customization options. The total cost can range from several million dollars for full implementation, including licensing, training, and maintenance.
Cerner EMR
Cerner provides comprehensive solutions for all sizes of practices. For a mid-sized hospital, the cost can range from $5 million to $10 million, including hardware, licensing, and support.
eClinicalWorks EMR
eClinicalWorks offers tiered pricing based on the number of providers, with costs starting at around $500 per month per provider for their cloud-based solution, not including setup and training fees.
AdvancedMD EHR
AdvancedMD operates on a subscription model, with prices starting at approximately $729 per provider per month for their fully integrated EHR and practice management solution.
It’s important to note that these figures are estimates and can vary significantly based on the specific needs and negotiation terms of each healthcare provider. Additional costs for customization, data migration, and ongoing support can also affect the total investment in an EHR system.
