The Ultimate Guide to EHR Costs and How to Set Your Budget

Discussing the cost of implementing EHR is impossible without considering the numerous benefits associated with it, which make up for the initial expenses.

For example, clinical research suggests that EHRs may boost communication among clinicians. One study found that the proportion of clinicians who agreed that communication improved rose from 72% to 93% over 12 months after implementation. Another study reported that 80% of physicians view EHRs as a positive force in disease management.

Despite these advantages, certain regions and countries, such as Ethiopia, report a readiness to implement EHR at just 52.8%. This is a result of both apprehension about the cost of implementing EHR in hospital environments and a lack of technical know-how. Today’s guide aims to remedy that, showing ways to limit expenses and simplify integration for medical purposes.

EHR, or Electronic Health Records, contain all relevant patient information in a digital format. An EHR system is the software that allows doctors to store, manage, and secure those records.

When talking about the cost of EHR, we typically mean the price of building this software or purchasing a license, as well as ongoing maintenance costs. Plus, depending on your infrastructure, it might need to include hardware updates and integration expenses. Moving data from a legacy system to a whole new software can boost the EHR implementation cost.

Before we proceed, let’s list the standard expense categories associated with EHR. This includes:

System Selection and Licensing

The first choice you make also influences the final cost of EHR systems for hospitals.

Ready-Made EHR Solutions

You can opt for a “mass-market” system that has baseline features and requires paying a subscription fee every month. This lowers the cost of initial adoption but ends up costing extra after some years of use. It also lacks the flexibility of custom software, offering generalized functionality.

Custom EHR Solutions

Building your own system requires a sizable upfront investment but comes with the benefit of choosing precisely how it will work, what the tech stack will be, and how it will grow over the years. As a result, you have a system with some longevity that doesn’t require extra payments and may help you get an edge over the competition.

Hardware Requirements

Some hospitals run legacy systems that won’t support newer EHR software, requiring investments in hardware. Others may be easy to integrate with, but could benefit from having dedicated devices.

Workstations and Tablets

Having these in sufficient numbers can increase the cost of implementing EHR, as you want every department to have access to the system, with the relevant devices reserved for that purpose. As a result, you may be looking at buying dozens of new pieces of hardware.

Servers and Networking Equipment

Supporting an intricate EHR system that connects hospitals and departments will likely require more hardware than you have now. The exception to this would be institutions that already have major networks in place and can have the two systems share the hardware.

Integration and Data Migration Costs

Connecting your existing software and databases to the new EHR system and transferring all the data to it securely and in an error-proof way is a time-consuming process. It also requires quite a bit of technical resources and knowledge, increasing the cost of EHR systems.

Training and Support Expenses

You will also have to spare a portion of your budget to onboard the staff, as the lack of standardized solutions and support programs is one of the main challenges here. Plus, if you’re going to use an off-the-shelf solution, you will be spending a bit on support queries to get proper help.

Ongoing Maintenance and Upgrades

Once your system is in place, there is one last point to add to the total cost of EHR, as the software will inevitably require updates to incorporate new technology and additional features. Meanwhile, the hardware it runs on will require maintenance, which further raises expenses.

Your cost of Electronic Health Records systems will always be affected by a certain range of changing factors, which can be used to your advantage when necessary.

Size and Complexity of Your Organization

The bigger your company, the more data and points of entry you will be working with, and the more resilient the software has to be. As a result, the average cost of EHR implementation goes up as the business size grows.

Customization Requirements

Adjusting the standard EHR system structure to tailor it to your business will come with extra expenses too, as each new feature or compatibility tweak comes with its own price tag. So if your core priority is keeping the cost of EHR implementation low, consider going with a simple system.

Regulatory Compliance and Industry Standards

Medical software has strict regulatory rules to follow, such as SaMD laws, HIPAA, and ISO 13485. As a result, custom systems require some spending to ensure they’re fully legally compliant, avoiding any trouble in the future.

Third-Party Integrations and Partnerships

Another crucial factor in the EHR implementation cost breakdown is the inclusion of third-party software and databases, which are a must in the medical field. You will need to work with other organizations to get patients’ medical data. Partnering with them is both an extra cost and a potential way to split the expenses or recoup them with paid partnerships.

Implementation Timeline and Resource Allocation

If you have a tight timeframe to develop and integrate the EHR system, you will need to stretch the budget to accommodate the overtime work your team will do. Conversely, giving the developers a bit more time might mean you’re able to keep the EHR implementation cost lower.

“How much does an EHR system cost upfront?” and “What is its overall cost?” will have two different answers because you need to account for any maintenance expenses that the software incurs. These include:

Regular System Maintenance

Ensuring data integrity, keeping API interactions working smoothly, and generally taking care of your system’s stability are all essential aspects of maintenance. They factor directly into the EHR implementation cost breakdown and should be in your budget.

Updates and Software Patches

Any software eventually becomes outdated if it doesn’t get new features and support for newer technologies. Create a roadmap for your EHR system updates and use it to assess the budget needed for them as well as their potential contents.

User Support and Helpdesk Costs

EHR systems are rather complex, and getting consultations that help users acclimate to these new tools is yet another line on the expenses sheet. When using a licensed product, you might have the cost of basic support baked into the subscription fee, but this isn’t always the case.

We’ve talked at length about the cost of implementing EHR, so let’s shift gears and focus on reasons why that cost is absolutely worth it.

Improved Operational Efficiency

Research proves that medical organization efficiency is influenced not just by staff numbers but also by the application of useful systems, such as EHR. These allow doctors to spend less time on admin work, providing faster care to patients.

Enhanced Patient Safety and Care Coordination

Speed isn’t the only thing that EHR improves, as it helps doctors collaborate and stay fully informed on a patient’s needs, preventing cases of adverse reactions to drugs. Having comprehensive data on patients' medical history is a core boon of EHR systems.

Better Regulatory Compliance and Risk Management

Compliance is part of the cost of EHR, but it’s also one of its benefits, as it helps ensure your data storage and management are all in line with legal regulations. This helps mitigate the typical risks in the healthcare field and avoid malpractice cases.

Financial Benefits and ROI from EHR Systems

Data shows that using EHR systems can help generate as much as $10,000 to $20,000 per bed annually for hospitals. This does require a conscious effort from the organization to utilize EHR data and optimize its workflow. But this kind of return is more than worth it.

Here are some useful tips on keeping your budget in check by approaching EHR systems with care.

Choosing Between Cloud-Based vs On-Premise Solutions

Most organizations won’t readily have enough server hardware to support a sprawling EHR system. Therefore, the typical pick, and one that keeps the EHR implementation cost moderate, is to go with a cloud provider. Plus, they come with plentiful resources and easy infrastructure management, two major pluses.

Factoring in Hidden Costs of EHR Implementation

Remember that unforeseen expenses should be baked into your budget, leaving some room for maneuvering. This can include updating your legacy systems to be compatible with this new software, upgrading hardware, or simply working on data transfers.

Understanding the Pricing of Popular EHR Systems

If you decide against developing your own custom EHR system, the two typical price models you can expect are:

• Subscription-based;
• Upfront license purchase.

The former is a simple monthly or yearly payment, but tends to add up over the years, making it a steep long-term option. Meanwhile, an upfront license can be pricey and require annual maintenance payments, but it will likely add up to lower expenses in the long run.

Picking between ready-made and custom can be tough, considering the multitude of factors, so here’s a primer on their qualities.

Ready-Made EHR Solutions

Off-the-shelf software typically has the same drawbacks regardless of category. It lacks flexibility, it locks you into working with a specific vendor, and forces you to trust a third party with data security.

Advantages and Costs

When it comes to the EHR implementation cost breakdown, licensed EHR systems do have the advantage of having the cost distributed over an extended period instead of a lump sum. They’re also designed to be as compatible as possible, making adoption easier.

Best for Small to Medium-Sized Practices

What could be both a plus and a minus for ready-made EHR software is that it’s typically designed for simplistic use in standardized conditions. Therefore, it’s suited mostly for smaller businesses, where innovative or complex workflows aren’t common.

Custom EHR Solutions

Requiring a solid investment of both resources and money, custom solutions may not be an option for those on a budget. They do, however, offer the ability to update them as you see fit, use your preferred tech stack, and tightly control data processing.

Tailored Solutions for Larger Organizations

Crucially, you can tweak custom EHR systems almost endlessly to fit the business that pays for them. This includes unique features, tailored integration with proprietary infrastructure, and enhanced security features.

Cost Implications and Long-Term Benefits

With these, the cost of EHR implementation is steep right away, but very transparent and easy to control. You’ll be able to limit the system’s development based on your budget availability and generate some solid ROI by applying a tailored solution that enhances your services.

Now that we’ve looked at all the details of EHR implementation cost, let’s try to calculate what the final expenses will look like.

Direct vs Indirect Costs

Things like licensing fees or development budgets are pretty obvious direct expenses, but they’re not the whole cost of installing an EHR system. You’ll also need to account for support payments, long-term maintenance, purchasing necessary hardware, etc.

Workforce Costs and Resources Needed

Another major chunk of the cost of EHR implementation is what you’ll spend on the development or maintenance teams. This also combines with the expenses for hardware and storage options, which usually can be curbed by going with cloud hosting, a cheaper approach.

Evaluating the Return on Investment (ROI)

It’s important to understand that you’re not sinking money into nothing, as EHR systems will recoup your investment by optimizing your operations and increasing the quality of services. To calculate what EHR has done for you, gather extensive analytical data and compare the before and after.

Implementing an all-new EHR system doesn’t always go as planned, so let’s finish by discussing the potential roadblocks that you should avoid.

Managing EHR Costs Efficiently

You don’t want to let the EHR implementation cost get out of hand, which can happen with poorly managed development or overly ambitious projects. Draw up a plan and stick to it, fitting the work to your capabilities.

Navigating Regulatory Compliance Requirements

While qualified development teams will typically know how to keep your app compliant with relevant legislation, they might have blind spots for specific regions and features. Therefore, it’s best to recruit a legal consultant if you can fit that into your budget. This will ensure your product is fully in line with regulations.

Overcoming Technological Barriers and Resistance to Change

Data suggests that staff hesitation is one of the barriers to adopting EHR systems, as some professionals might be more accustomed to older tech or unwilling to change from traditional methods. This can be solved by offering training and onboarding lectures to show the advantages of EHR.

Training and Skill Development Challenges

Granted, the training that solves the resistance problem can be tricky in itself. You have to either develop one course that fits all or split it into specialized training plans. This is the better approach as nurses and doctors of different specializations will have varied experiences with the system.

This ends our EHR implementation cost breakdown, but our ability to help doesn’t stop there. With over a decade of practical experience in creating custom software and adapting infrastructure to support optimization, JetBase is a leader in software development. We have experience in the medical field, creating sprawling SaaS solutions and flexible platforms.

Working with us means getting top-notch quality, professional communication, and the realization of your ideas. So if you need EHR, you need JetBase, and we’re just a message away.