EHR Implementation Cost Breakdown: Critical Factors to Consider

The Electronic Health Record (EHR) is a key tool for healthcare businesses, so it's no surprise that many are considering integrating the system into their clinical workflow. One of the most important questions clinics ask when planning is: What is the estimated cost of implementing an EMR system?

The cost of EHR implementation depends on a large number of factors and includes various types of expenses. Understanding EHR costs details is critical for healthcare businesses planning to benefit from an EHR system and ensure a smooth EHR implementation, as careful budget planning is an important component of success.

Based on our 12+ years of experience in creating healthcare solutions, we at Cleveroad are ready to explain cost of implementing an EHR system and describe the categories and factors you should consider to plan your budget for EHR implementation effectively.

The EHR costs breakdown can be divided into four areas, each requiring separate consideration to develop a comprehensive EHR adoption budget strategy that accurately reflects the financial requirements of the integration process.

• Direct costs. Expenses directly associated with EHR implementation.
• Indirect costs. Additional expenses indirectly related to the implementation process.
• Staff-related costs. Expenditures related to training staff members.
• Unexpected costs. Unforeseen expenses that may arise during implementation.

Direct cost of EMR implementation refers to the expenses directly associated with acquiring, setting up, and integrating an EHR system into your clinic's software environment. These costs of hospital EHR implementation typically cover:

• Software licensing fees: Upfront costs of an EHR associated with purchasing the software license.
• Customization costs: Expenses for system’s customization to your workflow if you choose off-the-shelf software or overall EHR software development costs if you build it from scratch.
• Hardware expenses: Costs related to acquiring hardware infrastructure, such as servers, computers, and networking equipment.
• Implementation services: Fees for professional services provided by the EHR software vendor or third-party consultants to install and configure the system.

You also have to account for indirect EHR costs encompass expenses that are not included to the EHR adoption process but are still critical to consider. These may include:

• Downtime expenses: Expenditures due to the loss of productivity and revenue during the transition period, especially in the first days of EHR adoption, when staff members adapt to the new system.
• EHR maintenance costs: Ongoing costs for technical support, software updates, and maintenance services provided by the EHR vendor.

Staff-related cost of EHR implementation involve staff training and support throughout the EHR adoption process. Staff-related costs are influenced by the organization's size, the EHR system's complexity, and the training required for staff members to use the new system. They typically include:

• Labor expenses: Salaries and wages for internal staff involved in the EHR implementation process.
• EHR training expenses: Costs for training sessions, materials, and resources to educate staff on how to use the EHR effectively.
• Opportunity costs: Time spent by clinicians and administrative staff on EHR-related activities instead of focusing on patient care or core business operations.

Unexpected EHR implementation costs refer to unforeseen expenses that you may face during the integration process. These can include:

• Change management costs: Expenses associated with managing resistance to transitioning to an EHR, addressing workflow disruptions, and ensuring user adoption of the new system.
• Compliance costs: Additional expenditures for ensuring regulatory compliance, data security measures, and audit requirements.
• EHR integration expenses: EHR system cost for integration with existing healthcare systems, such as billing software or laboratory systems, to facilitate data exchange and interoperability.

Let's explore in detail key categories that affect the cost of implementing EHR and are necessarily considered by all software providers when making a cost estimates for hospital EHR implementation:

The cost of implementing EHR in hospital necessarily includes hardware and networking expenses, as these are the key cost categories for a properly functioning system. The necessary hardware infrastructure includes servers, workstations, networking equipment, and other devices needed to support the EHR system.

This part of EHR implementation costs varies greatly depending on the size of your clinic and the equipment you already have. When implementing an EHR, consult your software provider about what hardware you need. They can also give you valuable advice on how to reduce EHR equipment costs without sacrificing system performance.

The initial investment for hardware infrastructure typically ranges from $10,000 to $100,000+, depending on the scale and requirements of the implementation.

The cost of implementing the EHR system can vary significantly depending on the chosen deployment model: cloud vs on-premise.

• On-premise. This option allows you to host the EMR on your servers with a perpetual software license. While this option provides complete control, it entails a significant initial cost of implementing EMR - between $1,000 and $500,000. You'll also have to invest in hardware and ongoing support, resulting in a higher total cost of ownership.
• Cloud-based. By choosing cloud deployment, you can remotely store your data on the vendor's servers with flexible subscription plans. Depending on the vendor you select, the cost can vary from $200 to $35,000 per month.

EHR implementation cost basically includes the expenses on vendor’s assistance in its implementation. Off-the-shelf platforms require minimal implementation assistance and typically can be easily installed. However, many organizations prefer to apply for healthcare software development services to build custom EHR solutions because they fit their unique needs and processes better. In this case, cost of EMR implementation assistance is often included in the development price.

When introducing a new system or overhauling existing processes, it's crucial to ensure that staff members are adequately trained to adapt to the changes. The cost of training can fluctuate depending on various factors, including the complexity of the system being implemented, the size of the organization, and the extent of workflow modifications required. It's essential to allocate resources for comprehensive training programs to empower employees to effectively utilize the new system and maximize its benefits.

Training costs typically range from $2,000 to $20,000, depending on the duration and level of system's customization. The more features it has, the more time staff needs to learn how to use them.

Among the mandatory EHR implementation costs are support services. Maintenance can solve problems during system operation, monitor system performance, and provide cost-effective optimization strategies. The breakdown of maintenance costs also include implementing upgrades such as additional integrations and modules, increased memory capacity, and other enhancements to keep pace with organizational growth and technological advances. Investing in specialized support ensures that your EHR system runs smoothly, adapts to changing needs, and continues to deliver value.

First-year maintenance costs range from $10,000 to $50,000, depending on the level of service required and the complexity of the EHR system. Later, cost of an EHR system support typically decreases.

Now, let's analyze some hidden costs associated with EHR and EMR systems that you may encounter when calculating the cost of implementing electronic health records.

If you're considering implementing EHR, you may encounter hidden costs associated with healthcare data migration. This process involves transferring patient records and clinical data from existing systems to the new EHR platform. To ensure a smooth transition, you may need to invest in data migration tools and hire specialists. Fortunately, certified EHR developer who customize your solution can assist with this process, ensuring accuracy and integrity.

Cost of EHR system data migration can vary based on the volume and complexity of data, and the number of diverse formats, ranging from $5,000 to $150,000+.

Integrating your EHR system with existing healthcare software may also incur additional costs. These include expenses for customization, healthcare APIs integration, and testing to ensure seamless interoperability. EHR can be integrated with such systems:

• Remote patient monitoring software development
• Healthcare CRM implemetation
• Patient portal development
• Telemedicine software development
• E-prescription app development
• Laboratory information management systems
• Radiology information systems

Your EHR developers can provide support in building custom interfaces or connectors to facilitate data exchange between systems. Integration EHR software cost depend on the complexity of the requirements and range from $5,000 to $200,000+.

While initial software licensing fees may seem straightforward, hidden cost of implementing an EHR system can arise from add-on modules, user licenses, or ongoing subscription fees. You may also encounter expenses for license upgrades, maintenance contracts, and vendor lock-in fees for specialized functionalities. Your EHR developers can guide you through the licensing options and help optimize your software costs.

Total expenses for software licensing can range from $10,000 - $100,000+ over the system's lifetime.

Regulatory compliance encompasses adhering to various healthcare regulations, including HIPAA, GDPR, HITECH, FDA, PIPEDA, and other laws. These regulations govern data privacy, security, electronic health records usage, medical device approval, and more. Compliance may require conducting risk assessments, implementing encryption measures, providing staff training, and maintaining audit trails.

Compliance adjustments costs can vary significantly depending on the specific regulatory requirements applicable to your organization, starting by about $5,000.

Note: Explore how to build HIPAA compliant software to learn more about adherence to healthcare regulations on the example of this US law.

To give you a deeper understanding of the average cost of EHR implementation, we will provide the price comparison for some popular EHR/EMR solutions on the market:

Epic systems target larger healthcare organizations, such as hospitals and health systems. The cost of Epic EHR varies based on healthcare providers' specific needs. Their self-hosted solutions start at $1,200, while pricing for larger clinics and hospitals can begin at $500,000. Epic does not offer a free trial but provides a free demo through its sales representatives.

Cerner is a prominent EHR vendor catering to inpatient and ambulatory providers. They offer both cloud-based and on-premise deployment options, so many businesses are comparing Epic vs Cerner. Their cloud-based EMR implementation cost is approximately $25 per month, while on-premise deployment costs vary. Cerner offers specialized products but does not provide a free trial.

Allscripts targets medium to small practices and offers a range of solutions, including EHR, revenue cycle management, and population health tools. EHR implementation cost breakdown is not available online, and interested users have to contact the company for specific pricing information. Allscripts does not offer a free trial, and costs vary depending on the selected features and products.

eClinical provides EHR, practice management, patient engagement, and other solutions. Their EHR implementation cost starts from $449 per month, while the combined EHR and practice management solution costs $599 per month. Additionally, their revenue cycle management service costs 2.9% of collections. Pricing details are accessible on their website, and eClinical does not offer a free trial.

Some effective strategies can help you reduce and optimize the cost of implementing EMR. Let's review them so that you can successfully utilize them for your business:

Partnership with a reliable software vendor with expertise in healthcare who provides EHR/EMR software development services is crucial to successfully adopt an EHR system. Select an IT partner with a proven track record of delivering high-quality EHR solutions and a deep understanding of healthcare industry requirements. Collaborating with an experienced vendor ensures expert guidance throughout the adoption of electronic health records, from system customization to staff training and EHR maintenance. Their expertise in healthcare can help you navigate complex decisions, receive all the benefits of EHR, avoid common pitfalls, and optimize cost of implementing EMR.

Incorporating open-source libraries and frameworks into your EMR system can reduce development and implementation costs. Open-source EHR software offers pre-built components and functionalities that can be customized to fit your clinic's specific needs. By leveraging these existing resources, you can avoid a vast amount of work and focus your resources on integrating unique features tailored to your practice. An experienced healthcare software vendor can help identify and integrate the most suitable open-source solutions into your EMR system, ensuring EMR implementation cost effectiveness without compromising quality and performance.

When planning your EHR implementation costs, consider beginning with a Minimum Viable Product (MVP) to reduce expenses. An MVP for EHR implementation entails incorporating fundamental functionalities necessary for immediate usage, enabling a swift and cost-effective system launch. By prioritizing essential features and deferring non-critical components for subsequent iterations, healthcare providers can minimize initial expenses while garnering crucial user feedback.

Protecting patient data is paramount in healthcare, so security should be a top priority during EMR implementation. Invest in robust healthcare data security measures, including Role-Based Access (RBAC), data encryption, automatic logouts, and compliance with regulatory standards. Partnering with a vendor experienced in implementing secure healthcare solutions can help mitigate potential security risks and reduce cost of implementing electronic medical records. While security measures may entail additional upfront costs, they are essential for safeguarding sensitive patient information and avoiding costly data breaches or compliance violations in the long run.

At Cleveroad, we prioritize security, especially in the context of developing healthcare solutions. Our healthcare projects are designed to meet the most stringent safety and regulatory requirements.

The final cost of implementing EHR can range from $50,000 to $500,000+ depending on the solution’s characteristics, including its type, functionality, and your company’s unique needs. Understanding the final cost involves comprehensively evaluating various factors contributing to the EHR cost breakdown.

To summarize, EHR pricing require a thorough assessment of the following key factors:

The choice between a custom EHR/EMR or off-the-shelf solution significantly impacts the overall cost of implementing an EMR. Custom EHR solutions development costs are often higher, which can increase the project's final price. On the other hand, off-the-shelf EMR solutions may be more affordable in the initial phase. Still, their limited functionality may require additional fees for integration and customization to meet your clinic's specific needs.

The degree and variety of functionality directly impact the overall cost of implementation. A more comprehensive range of features and add-on modules can increase development, customization, and training costs. When evaluating functionality, consider the balance between required features and the availability of budget solutions.

The size of your clinic and its unique needs are key factors affecting the overall cost of EHR implementation. Larger clinics that serve many patients may require more powerful and advanced systems, which can increase hardware, licensing, and staff training costs. Considering your clinic's specific needs will help you optimize costs and select the most appropriate solution.

If you need a trusted healthcare IT partner to assist you in EHR implementation, Cleveroad is here to help. As a software provider with 12+ years of experience in the HealthTech, we have extensive expertise in developing and implementing diverse healthcare software, including EHR/EMR. We provide EHR/EMR software development services tailored to the clients’ needs, including the Discovery phase, UI/UX design, cloud development, legacy software modernization, etc.

Our experts have experience integrating EHR systems with diverse third-party services that improve software efficiency, including:

• Kareo
• Athenahealth
• Health Gorilla
• Memora Health
• ApiMedic
• HealthTap, etc.

Our team also has expertise building software solutions that are compliant with various healthcare regulations, such as HIPAA, PIPEDA, FDA, GDPR, FHIR, DICOM, CCDA, etc.

With our expertise in building complex healthcare and telemedicine software solutions, we guarantee the quality of EMR implementation services and extend system functionality within your budget. To assess our expertise, check our portfolio with the healthcare software we’ve delivered.