The Right System for the Right Price: To Avoid EHR Sticker Shock, You Have to See the Big Picture

By Robert Rowley, MD
Published: Monday, Dec 29, 2008
The decision to move from a paper-based oncology practice to one based on an EHR system can be onerous and intimidating, in part because there are literally hundreds of vendors with products on the market, each with different cost structures, feature sets, and ability to connect and share data with other systems. When you also consider the inevitable post-implementation disruption to workflow and volume, and concomitant dip in revenue, the slow rate of EHR adoption in this country makes sense. However, new systems and technologies on the horizon may enable practices to cut through all the clutter and make the transition to a paperless environment much cheaper and smoother.

Numerous studies indicate that EHR system cost remains the biggest barrier to adoption. Because the purchase and implementation of an EHR system represents such a significant expenditure, you want to make sure that your practice derives similarly significant value from it. When deciding which EHR system to purchase for your practice, it is important that you consider not just the sticker price of the software itself, but the true cost of the product, which includes the hardware requirements for the system, ongoing IT support, training, and a host of other factors that add to the cost of creating an e-office.


Deciding upon what kind of software system (hosted versus in-house) you want to implement can be perhaps the most significant determinant of the overall cost. Some of the hundreds of EHR systems have limited functionality— chart creation only, for example. Others are so feature-filled that they overwhelm the user and get in their own way, slowing the physician down rather than helping speed the process along. To help buyers sort through all this, over the past few years, the CCHIT (Certification Commission for Healthcare Information Technology) has developed an exhaustive set of standard functionality, security, and interoperability criteria and certified several dozen systems.

A practice in a particular specialty may want a specific EHR that is tailor-made for that specialty. In oncology, for example, there are several unique workflows that oncologists undertake that might best be addressed by an oncology-specific EHR, rather than by adapting a general-purpose system.

Traditionally, EHR systems have been developed as client-server enterprise software, meaning that you purchase the software from the vendor, install it on your own machines, and upgrade it as new versions are released. With this approach, there is an up-front cost (typically in the $8,000-$16,000 per-physician range for a CCHIT-certified system), and an ongoing update/service cost in the 18%-of-original- cost-per-year range.

Some systems are hosted (meaning you don’t have to install them on your own servers) and are priced as a “lease”—several hundred dollars per physician per month, possibly with an initial set-up fee. These software-as-a-service (SaaS) systems are emerging as a more favored approach for several reasons, including lower up-front software costs, minimal local hardware needs, and more potential for clinical data sharing between subscribing physicians.


If you decide to implement a traditional enterprise system, then you will also need to consider what kind of hardware is required to run your EHR. You will need a server and a local area network (LAN). You will need data backup (onsite and offsite) for your locally hosted data. Depending on the way the software is written, you might not be able to access your system from outside your LAN, which means you will need to enable special security portals (virtual private network, or VPN, connections) in order to access your EHR from outside your office, which adds an additional element of cost.

If you have decided on a SaaS-based system, your hardware needs are much reduced. All you will need is a collection of Internet-connected computers in your office. Performance, of course, will be a function of your Internet connection speed; however, broadband connectivity is pretty much ubiquitous these days. Nevertheless, broadband Internet connectivity is a cost element that must be factored into the overall IT budget.

Implementing a full-fledged LAN with data backups, ongoing security patches, and upgrades is something most medical offices do not have the skill set to carry out. Large group practices or staff-model or hospital-supported systems might be able to hire an IT professional; smaller practices must generally hire outside IT vendors to act as consultants. In either case, one must rely on IT vendors/professionals for network support, as well as vendors for EHR software support. These may or may not be the same vendors.


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