Understanding EHR Contracting & Pricing

Objectives:

  • Learn the most common EHR pricing structures
  • Learn about all the necessary components of researching an EHR
  • Learn about return on investment (ROI) calculations

Contracting and Pricing Considerations for Electronic Health Records

Pricing Structures

There are probably as many different ways of pricing EHR software as there are software companies courting your business. Some basic structures are fairly uniform across the board, but there are many variables to consider when trying to compare "apples to apples" as you wade through the selection process.

  1. Get detailed information about products and services included in the offer/contract. It may seem like splitting hairs, but it is useful to have outlined in writing every minor detail that is included in the vendor's contract. It is also important to ask the question "What is not included?" Some companies and vendors include a limited amount of training time with the offer, and charge more for later training. Some do not offer any training as part of the contract.
  2. Be clear about whether the contract is a lease or purchase. Lease usually implies an ongoing monthly expense for access to the software. Purchasing the software means purchasing a license to use the software. A purchase implies that, at some point, the full cost will be paid and only maintenance expense will be ongoing.
  3. Pay special attention to the licensing structure. Most companies will require that a practice purchase a certain amount of licenses based on physician users, staff users, and other factors. This licensing is very important and can be a big factor in hidden costs if you don't take the time to understand exactly what that structure is and what those licenses entitle you to do with the software.
  4. Be sure you fully understand the pricing structure. Most companies will quote a per physician/per month cost. As with purchasing a car or other major items, be sure to extend those costs out to get a final total. This is more applicable, of course, with a purchase than with a lease. Remember that this final total is almost always separate from the hardware costs discussed above. When you know what you are paying for the software, add the amount all the hardware will cost for a realistic total price of the EHR.
  5. Don't let the process intimidate you. All of these details can seem overwhelming and complicated but if you take the process one step at a time you will find that by the end you have learned a lot and will have already been brainstorming ways to become more efficient, provide better, more comprehensive care, and increase your bottom line.

Costs

Costs can be broken down into two categories: initial or implementation; and maintenance or recurring. These represent your up-front costs and your annual budgeting costs, respectively. Each category can be subdivided into software, hardware, and services.

Hardware will vary based on the EHR you choose. For example, application service provider (ASP) EHRs will typically have lower hardware requirements than a traditional client-server based EHR. This is because an ASP provider maintains the hardware at the vendor end. Client-server EHRs require designated file server computers, workstations, etc. Of course, the size of the practice affects the hardware requirements. Keep in mind that hardware costs include all of the following:

  • File servers
  • Workstations
  • Printers
  • Fax machines
  • Tablet/laptop PCs
  • Personal digital assistants (PDAs)
  • Hardware for networks including hubs, switches, routers, cabling, etc.

Software costs include the EHR itself but also contain add-on or support applications that are needed (such as interfaces to a practice management or lab system). Support applications may also include faxing, scanning, or word processing applications.

Service costs include support, training, and any consultants.