Monday, January 27, 2014

True Costs for Successful EHR Implementation

Published by Pradip Sengupta, CEO of IPS Technology Services 

In order to increase the probability of success for EHR implementation, a physicians practice must take a comprehensive look at all cost components. Understanding true costs of EHR implementation keeps all surprises away and does not create unreal expectations in terms of ROI on EHR and eliminates distractions. Here are the areas that are relevant for EHR implementation that a physicians practice must keep in mind as they are preparing a project budget and calculating ROI for this important investment.

1. Software Costs
  • License Fees – A practice must pay for software licenses. A common mistake made today is try to determine costs on the basis of number of doctors and not consider other users which also needs to be accounted for. A software company typically charges doctors at a higher rate than other users (typically at 50% less)
  • Annual software licensing, upgrades, support – It is recommended to sign up for this arrangement. It is typically 15-20% of the license fee and not 15-20% of the total implementation cost. This gives support and helpdesk access to users which is critical to successful implementation. It also ensures that the practice will get software updates as they are realized. For an immature industry such as Healthcare IT, annual maintenance is highly recommended.
2. Implementation and Startup Costs
  • Hardware – Depending on how the software will be installed e.g., either by using the client server model or ASP, it will have an impact on the implementation costs. For client server, a physician may have to purchase hardware 
  • Software Development and Integration – In order to implement EHR, a number of interfaces may need to be developed including setting up templates, billing arrangement, integrating with other software packages
3. Configuration
  • Workflow – When implementing EHR on of the critical tasks to be done is definition of workflow. This is mandatory so that the software can be configured appropriately to add value to the practice. 
  • Configuration – The software company with the help of the stakeholders needs to sit down to define requirements based on which the software will be set up. 
  • Meaningful Use – If the physician practice is eligible to get incentive dollars steps must be taken by the project team to configure software so that the practice can apply and get the large amount of incentive dollars following the ARRA act. 
  • Reports and other Documents – Time required to define and program all reports and other documents needed to manage the practice.
4. Consulting and Project Management Costs
  • EHR implementation is new to physician’s practice. Compared to the IT needs exists until now, the level of due diligence and risk for this transition is somewhat unprecedented for them. Success for an EHR implementation will be much higher if it is viewed as a project and all the best practices are implemented as much as possible. It is recommended to keep appropriate resources available for this purpose irrespective of whether it is internal or external.
5. Training Costs
  • Training existing users in new technology is fundamentally important for a drastic change like Healthcare reform. It can’t be over emphasized. A physician must take this into consideration and budget for it to address the learning curve issue and get back on track in terms of productivity in the shortest period of time … the organization shouldn’t drag itself with the excuse of not being able to use the new software.
6. Intangible Costs
  • A physician’s practice will experience unproductive time well after EHR implementation is completed. It is natural and happens whenever a new technology or process is implemented for an organization. If possible, some time should be spent to identify what these are and to quantify them in terms of dollars. This will paint the true ROI of EHR implementations.
Given the above critical guidelines for EHR implementation cost, the key thing for a physicians practice is to understand that it must treat EHR implementation as a project and appoint a project manager. A good project manager can ease the pain of change and ensure benefits for an EHR implementation.

To know more about Healthcare IT implementation best practices, feel free to call IPS Technology Services at 248-835-9895 or go to

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