Wouldn’t it be great if you could shop for an electronic medical records (EMR) system simply by going to an office supply store, comparing the features of the models on the shelves and choosing the one that best fits your needs and price range? Unfortunately, nothing about EMRs is quite that straightforward, including the way they’re priced. EMR vendors don’t adhere to a uniform price structure, making it difficult to compare one vendor’s proposal with another. Some charge a low purchase price, but make up for it with higher support costs. And some potentially high costs (e.g., the ongoing costs of data entry) aren’t reflected in the purchase price or support costs at all. To help take some of the mystery out of vendor proposals, I’ve created a spreadsheet that you can use to calculate the initial purchase price and long-term costs of EMR systems so that you can more easily compare the systems you’re considering.

Do your homework

If you’re not sure what you’re looking for, you can waste a lot of time talking to vendors and test-driving products that don’t meet your needs. Before you begin to shop for an EMR system, you should familiarize yourself with the features available and try to determine what you want the EMR system to accomplish. FP Net, the AAFP’s online computer information source (www.aafp.org/fpnet), has a variety of resources to help family physicians evaluate products before they buy, including a list of criteria for a “family-physician friendly” EMR system (see also “Looking for a Good Electronic Medical Records System?” FPM, January 2002, p. 50).

Using the spreadsheet

The spreadsheet on the next page helps you calculate the initial purchase price of a complete EMR system as well as the annual and five-year operating costs of the system. A working copy of the spreadsheet is available for download. (

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To use the spreadsheet, simply enter a brief description of each component of the EMR, its unit cost and the quantity your practice will need. Different types of the same item (e.g., laptop/desktop computer or inkjet/laser printer) should be listed on separate rows. You’ll find most of the information you’ll need for the spreadsheet in the vendor’s proposal, but you may have to contact the vendor for additional information.

Perhaps the trickiest aspect of the spreadsheet is determining the first-year operating costs (“Annual cost: Year 1” on the spreadsheet). Typically, the first year starts when the system is installed. The annual cost is the sum of maintenance costs, licensing fees or other charges that will recur annually. The annual costs may be less during the first year than in subsequent years depending on the vendor warranty. For example, take a look at the “Servers” and “Data storage” rows in the sample spreadsheet. Because these items have 90-day warranties, the maintenance costs in the first year are 75 percent of what they will be in subsequent years.

The spreadsheet also estimates the net present value – the five-year cost in today’s dollars – of the EMR system. The default discount rate, or return on investment, is set at 8 percent in the sample spreadsheet; however, the online version will allow you to enter whatever discount rate you choose. To simplify calculations, I assumed that you would pay initial costs on the first day of the year, and annual costs midway through the year.

The spreadsheet does not address financing or leasing a system since these options involve working capital and tax implications unique to each practice. If you are interested in financing or leasing, I suggest consulting with a qualified accountant for advice on the option that would best suit your practice’s needs.

While this spreadsheet will help you calculate costs, it’s just one piece of information you should use to decide among EMR systems. Don’t make your decision based on up-front costs alone. Find out all you can about support costs (for questions to ask, see below). Consider features, functionality, ease of learning and ease of use to pick the system that meets your needs and your budget.