Evaluating Electronic Health Record Software Costs

There are many factors that go into the decision to implement an Electronic Health Record (EHR) system in the hospital environment and no single system will fit the needs of every hospital. Unfortunately, hospitals often make decisions without understanding the downstream costs that include training, maintenance, hardware and networking, and employee time.

Cost to Purchase  EHR software comes in 3 flavors of cost as follows:

Open Source  Open Source software like Open MRS is provided free of cost. Open Source software is often supported by companies and individuals who charge for implementation, modification, and ongoing technical assistance. While the hospital will not be paying for the software, the cost of these services can often exceed the cost of other options and be much less responsive and reliable.

Purchased License – Software that is sold with a user license is paid for at the time of purchase, at the time of implementation, or over a limited period of time. Normally, this is done with a non-transferable license, which means that the purchaser has the right to use the software themselves but cannot resell it if they are no longer using it. If the license is transferable on sale, the vendor will often have restrictions that might make it hard to resell. Another issue with purchased software is that the purchase price will normally not include free updates in the future. The cost of major updates can often add considerably to the hospital’s expenses.

Software as a Service (SAAS) – In this model, software is ‘rented’ instead of purchased and normally includes updates and technical services as part of a regular fee. With cloud-based systems, the cost of data hosting, backups and security is borne by the vendor, not the hospital. This can be based on use (number of users or transactions) or a time frame and be paid monthly, quarterly, or annually. Examples of this are Quickbooks Online and SalesForce.

Cost to Operate and Maintain  Hospitals often overlook the total cost of maintenance, upgrades, customization, and technical support services. These costs can include:

Internal IT staff requirements – Adopting systems that require a high degree of in-house technical support to maintain servers, databases, security, and other functions can add significantly to the cost of EHR implementation and maintenance. This will be driven by both the hardware required to operate the software and whether the user interface is intuitive enough to learn and maintain at minimal cost. In this regard, EHR software that works only on desktop systems instead of tablets can create not only high up front costs, but also high maintenance costs for IT staffing.

Cost of Hardware – EHR systems that run only on desktop computers (and not on mobile devices like cell phones and tablets) bring with them not only large out-front costs for computer workstations, scanners, and UPS power backups, but also high maintenance costs to sanitize and maintain these systems. Computers on Wheels (COWS) also take up a lot of floor space, which is often problematic in a crowded facility. In contrast, an EHR that runs on a $70 tablet and uses the camera to scan bar codes, and take photos, takes up no facility floor space and replaces expensive hardware with a device that fits in a nurse’s pocket.

Cost to Operate  Here is where most hospitals overlook one of the major expenses in implementing an EHR. A system that requires a nurse or physician to write things down and then enter it into a computer is creating double work as well as the possibility for errors. If nurses and physicians have to click through lots of screens to enter a medication order or lab test, this adds considerably to their workload.

Understanding the cost to operate is difficult out front, but a cumbersome system that is not adapted to the hospital’s workflow can add considerably to labor costs. A study of a small California Hospital showed that labor costs increased 15% when an EHR was adopted that required a lot of training, ran on COWS, and was cumbersome to use. This additional labor cost was one of the primary reasons the hospital failed 2 years later. Adopting an EHR should save money through added efficiency, not add to the hospital’s losses.

Cost to Maintain – Adopting an EHR system that does not have a maintenance contract with it would be a huge mistake. Companies have sprung up around open source software to provide these services, but often either the level of service is wanting or the cost makes Open Source a risky choice. Software that is purchased will normally have an annual service fee that will include at least some level of response to questions and problems. It is important to look carefully at the response times that can be anticipated in the case of systems going off line. One of the biggest reasons that Open Source has not been more widely adopted is that the service providers are usually divorced from the primary developers. This can lead to long delays to make modifications or get fixes done.

Additional Factors to Consider

Adaptability  Every hospital has its own workflow and requirements that will either be built into the EHR system or have to be adapted to the EHR. Even in the most flexible systems, both of these will have to take place. Some workflows in the hospital will have to change to meet the requirements of the EHR and the EHR should be able to adapt to hospital requirements.

This is especially true in the areas of exams, order sets, evaluations, and other clinical documents that would normally be done on paper but now need to be in electronic format. A system that supports building these and other forms into an electronic format can eliminate most, if not all paper forms and processing. If the system is not able to do this, it will leave a lot of clinical processes on paper and create double work for physicians and medical records.

Integration  Being able to integrate with Lab and Imaging systems is key to efficient hospital operations. The software vendor may charge a lot of money to do this or it might be part of base services. It is important to identify how integration will be done in the future if it is not anticipated in the early phases of implementation.

Implementation Costs – Implementation and training costs can be larger than the costs of the software, especially if a high level of technical expertise is required. A recent study of EHR implementations showed that the implementation and training costs often matched or exceeded the cost of the software. While some hospitals attempt to implement Open Source software with local help, this usually fails since an implementation takes in depth knowledge of the software and the hospital environment.

Training Costs – Complex or cumbersome EHR systems will require extensive training outside of the work environment. When new staff are hired, training will also have to be provided. EHR software is, by its nature, complex so the easiest to learn system will often be the least expensive to implement.


So far, we have talked only about costs. Now, lets examine opportunities for generating additional revenue and saving money. The implementation of any EHR system should improve the bottom line of the hospital, not detract from it, but this is often not the case. Realizing efficiencies can be difficult if the system is not intuitive and easy to use or requires extra steps in the clinical documentation process. Here are some of the areas where hospitals can improve bottom line results:

Attracting and Retaining Physicians – To accomplish this, physicians should be able to work from mobile devices like a cell phone and be able to see all of the information in the patient chart as well as be able to place orders for nursing services, medications, lab tests, procedures, imaging, and other services. Ideally, the system will function over the cell network so that physicians can work from their home, car or office without interruption.

The software should easily store photos as well as digital images to give physicians a visual view of patient conditions over a time frame. This is especially important for wound care, surgery and orthopedic conditions.

Having a system that allows physicians to work from any remote location and complete their work without having to be in the hospital environment can dramatically improve physician loyalty.

Attracting and Retaining Patients  A well-designed EHR will give patients the ability to access their health record on a smart phone. This will let them take their lab results to a local doctor, have their GP view their X-rays and medication history. A system that produces an affinity card that is used to give patients access to their medical information will help keep them as patients of that hospital and provide a secure method for access without having to provide a user name or password.

Attracting and Retaining Top Quality Staff  A system that is easy to use and works on mobile devices while still providing a high degree of clinical practice structure will be an attractor for hospital staff. A recent survey of nurses in the US indicated that 94% did not like the EHR they were working with and we know from experience that an overly complex or cumbersome system will drive away nurses and physicians alike.

Improved Charge Capture  Capturing charges for patient care can be greatly facilitated by an EHR system that includes the ability to read bar codes from patients, products, and medical devices. Charge capture for rooms, medications, procedures, imaging, lab tests and other clinical services can be greatly improved through automation using tablets to capture charges. The improvement in charge capture alone will often pay for the software (assuming that it is reasonably priced.) As a recent example of how a structured charging system can dramatically change collections, one hospital implemented having patients pay with a debit card instead of cash and saw a 30% increase in collections almost overnight. Using a structured charge capture system will accomplish a similar level of improvement.

Reducing Paperwork Expenses  The more that paper can be eliminated in the clinical environment, the more savings will accrue. Ideally, the EHR will be adaptable enough to eliminate almost all of the paperwork in the clinical environment. Having an Electronic Clinical Document (ECD) engine in the software that runs on mobile devices can, over time, achieve this goal. What is also critical to this process is that the ECD engine does not have problems with version control, meaning that the documents can easily be modified in the future as the hospital’s needs change.

It should be understood here that reducing paperwork is not just about the cost of the paper documentation process but eliminating the costs of moving, managing, and storing paperwork. An EHR that can offer this will significantly reduce hospital expenses.

Creating Accurate and Structured Data – The goal of every hospital is to have accurate and useful information that is easy to capture, completely and accurately. The use of physician order sets, evaluations, and structured nursing documentation that is easy to use and available in a nurse’s pocket will greatly improve not only the capture of clinical data, but also the quality of care.

Providing Reporting Appropriate to the Hospital’s Needs  Being able to develop reporting that is appropriate to the hospital’s needs is an important feature when evaluating any EHR system. It is not always practical to have these services in-house due to the complexity of EHR information so it is best to have the vendor provide reports at a reasonable price or as part of the service contract.


No one EHR will fit every hospital’s needs. What should be considered carefully in making an EHR decision is the true cost of ownership and service as well as the opportunities for enhanced revenue and cost savings. These may not be immediately apparent when evaluating any EHR platform and can often only be teased out in careful review of the product and services being offered. Discussion with the vendor will be a critical part of the decision.

While Open Source software might first appeal to any hospital administrator because there is no purchase price for the software, the features of more advanced software systems may more than make up for any additional costs they pose. As well, free software does not indicate the true cost of implementation, operation and maintenance. Otherwise, no one would be using Microsoft products today, we would all be running on Linux.

While purchasing software may appear to be the next best solution because it looks like you only pay once, it is important to realize that for software to be useful over time, it must be constantly maintained and updated to meet evolving customer needs. Software as a Service will normally build in future improvements and enhancements that you might otherwise have to pay a lot for.

eHealth Records International (EHRI) created HarmoniMD to provide the best return on investment by running on low-cost hardware over Wi-Fi and cell networks, providing an easy-to-learn user interface, and exploiting the latest in mobile and cloud-based technology. More importantly, HarmoniMD has developed the Electronic Clinical Document (ECD) system to adapt to the hospital’s workflow and provide a wide range of functionality both now and in the future. EHRI also bundles all of the services that a hospital might have to pay for into a simple quarterly or annual fee that will be less than the savings it produces.