How do I budget for my EHR implementation project?

 When an organization is in the initial planning and budgeting phase of their EHR project, one of the most common questions to come up with is how much should I budget for this project?

Several sources researched had varying numbers for the cost per provider. The cost for implementation, range from $25,000 to $60,000 with a mean of $42,500. Maintenance costs range from $5,000 to $18,000 per provider per year. The details from several sources are listed below:

Harvard – “Based on the informatics literature, the initial implementation cost of an EHR for private practices averages between $40,000-$60,000 per provider and the cost of maintenance averages $5,000-10,000 per provider per year.” – “The research indicates that the average purchase and implementation cost of an EHR was $32,606 per FTE physician. Maintenance costs were an additional $1,500 per physician per month. Not surprising was the finding that smaller practices had the highest per-physician implementation cost at $37,204. The study also found that the average cost for EHR implementation was about 25 percent more than initial vendor estimates.”

Perot Systems – “For physician groups, the CBO reported that total implementation costs for office-based EHRs ranged from $25,000 to $45,000 per physician, with annual operating, licensing, and maintenance costs ranging between $3,000 and $9,000 per physician”

EMR and HIPAA – “It is estimated that the cost of purchasing an EHR system is $33,000 for each physician, with an additional cost of $1,500 per doctor per month for maintenance. This expense has cost challenges for many providers, especially those in small practices. Some estimate that the long-term cost-savings produced by a national health information network could reach $77.8 billion a year from a reduction in medical errors, diagnostic test duplication, and administrative expenses.”

Since the federal incentive payments are being offered, the next question is whether or not those funds will cover the cost of implementing an EHR will be covered.

Avalere Health – “These new incentives are intended to motivate doctors to adopt EHRs, yet for many physicians, the level of the incentive may not reflect current financial realities,” said Jon Glaudemans, a senior vice president at Avalere Health.  “Given this gap, EHR adoption will still require a significant investment by small physician practices.  In today’s economic climate, many physicians will struggle with this calculus.”

MGMA – “…physician-owned practices with paper medical records generally spend $20,000 per full-time equivalent (FTE) physician on IT (chiefly for hte billing system) and have less profit (medican total medical revenue after operating cost per FTE physician) compared with groups with EHRs that spend more than $20,000 per FTE physician on IT have a substantially greater profit than those that spend $20,000 or less on IT.”   Gans, MSH, FACMPE, D. N. (2010, July). Investing in Technology: How Information technology expenditures affect the bottom line. MGMA Connexion,  19-20. Jerri Cowper

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