Financing Questions
What will my initial costs be?
Initial costs vary with the decisions you make. For instance, will you purchase your software or lease it? If you purchase your software, your initial costs will be higher. Set up costs typically include vendor set-up fees; add-ons or customization of the software for your practice; interfaces with other systems in your practice; new PCs for each exam room, physician office and staff stations; hardware for networking of PCs including wireless routers and/or cable installation and file servers (if the vendor is not an ASP provider); new printers; conversion of paper charts to electronic format; and training classes, lost staff productivity, lost physician revenue and potential overtime.
What will my ongoing costs be?
If you make the decision to lease your software, you will have ongoing payments (note that some software vendors require licensing payments per PC). Whether you lease or buy, you will have maintenance fees and continuing technical support (including annual subscriptions) for hardware and software. You will need to pay for a high-speed Internet connection (particularly for ASP arrangements), install security, firewall and virus protections, and establish back-up procedures and additional storage for back-ups. Finally, allow for continued training for new staff or providers.
What may be some unexpected expenditures?
There are always unexpected costs, but the more you account for upfront, the fewer surprises you’ll have later. Consider potential costs like staff overtime, reduced revenue during your initial implementation period and vendor travel costs.
What sort of numbers are we talking about?
Studies suggest that initial costs average $30,000 per physician. After initial costs of purchase and implementation, costs typically stabilize. The median for ongoing costs is around $7,000 per physician per year.
What are the cost savings?
Each electronic health record (EHR) option will also have some positive cost savings and revenue improvement implications. Consider the following:
- Configuring and using your EHR can improve practice efficiencies and help decrease per-provider practice operating costs (personnel, supplies, services).
- Medicare or Medicaid incentive funding is now available to offset the cost of purchasing an EHR. [Link to “Incentives” page here]
- If your practice has a strong relationship with a hospital in your area, they may be offering an EHR product with up to 85 percent of the costs covered by the hospital.
- With the new government initiatives, some states are offering low interest loans. Grants may also be available from local foundations to help local physicians acquire EHRs. Some vendors are also offering low or no cost financing.
- In some states the local regional extension center, or REC, may have negotiated a discounted rate for EHR software and implementation services. Even if you do not plan to participate in the Medicare and Medicaid EHR incentive program, this pricing may be available to you.
Also be sure to conduct a total cost of ownership analysis.
