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The true cost of switching EHRs

Medical Economics JournalJune 10, 2018 edition
Volume 96
Issue 10

The costs of moving from one EHR to another can be significant-and usually much higher than most practices anticipate.

Physicians have good reasons to change EHRs. They switch systems to one that better meets their needs or integrates more easily with other healthcare practices in their region and hospital system. Sometimes they’re making the move because they want a better user interface or more robust features.

In fact, 62 percent of respondents to the Medical Economics 2017 EHR Report had already switched systems at some point in their careers.
Experts say the payoffs for making the switch can be positive, with gains coming from increased efficiencies and productivity gains. But they also warn that the costs of moving from one EHR to another can be significant-and usually much higher than most practices anticipate. From costs for new software and hardware to per-record transfer fees, charges can quickly add up.

Indeed, experts say, the costs of switching EHRs start well before the system is even implemented.

Research and negotiation costs

Russell Libby, MD, president of Virginia Pediatric Group, saw the bills start as soon as he decided it was time to switch to a new EHR.
At first, the costs were just in his own time as he worked with the other physicians in the practice to get their support for moving forward and as he researched different EHRs to decide which one would work best for his practice.

Then, as the project progressed, Libby involved others from his staff, asking them to review and test EHRs that he identified as contenders. They had to commit more time to review contracts and plan for the switchover project once the EHR was selected, too.

“That time is inestimable,” says Libby, also co-founder of American Pediatric Consultants Inc. and a board member of the Physicians Foundation. “You shut down the practice for an afternoon to see how you operate, compare it to how the system operates, and you may do this for two or three or four EHRs. And you need your whole staff sitting in the room and working with a representative from the vendor.”

Some practices could incur even higher costs, experts say, as many also travel to other practices to see prospective EHRs in action, a move that’s recommended but can mean hours away from seeing patients plus travel expenses.

The EHR software contract

There are many fees to watch for in EHR contracts, experts say.

“There are maintenance fees, software subscription fees, support fees. And you might have other fees, like signing up for a database that’s required to run the system or a fee for a coding system,” says Lydon Neumann, vice president at Impact Advisors, a healthcare information technology consulting firm based in Naperville, Ill.

EHR contracts also specify whether and by how much those fees can increase each year, a point well worth watching because typical annual increases of 5 percent or so can add up quickly over the life of a contract, says Kathy Downing, director of practice excellence at the American Health Information Management Association in Chicago.

Moreover, EHRs now bundle functions that were previously in other software, meaning a practice could be paying for capabilities such as scheduling, billing or secure messaging in its new EHR even though the practice may already own those capabilities in other applications, Neumann says.

Although buying all the functions through a single EHR vendor helps ensure those functions work together, physicians should still examine and compare costs and certainly shouldn’t pay for the same functions twice. Experts recommend a cost analysis to know whether taking the bundled features with the new EHR is better than keeping the existing functions with other vendors.

Hardware and other technology costs

Software upgrades can require upgrades in hardware, too, Neumann says. Older printers, monitors, tablets and PCs might not work well with a new EHR, while older servers and networking equipment might not support the higher-intensity computing requirements of some modern applications.

Some practices that implement new EHRs, particularly if they’re moving from a system that ran on office-based servers to a cloud-based version, may also find that they don’t have the internet bandwidth to support the new software-thereby adding additional dollars to the total cost of implementation.

Vendors generally advise practices on hardware and networking requirements, and can sometimes even offer deals on those items, Downing says. “They’re not huge costs compared to other parts of the implementation, but it’s something to understand upfront,” she adds.

Practices also should anticipate the costs of integrating their new EHR with other systems, such as coding and insurance verification applications. These interface fees vary depending on what other systems need to interface with the new EHR and the complexity of the practice’s overall IT environment. For example, a typical office might face costs for integrating its new EHR with a secure messaging application (if not part of the new system) as well as potentially additional integration costs for tying the new EHR in with more specialized equipment, such as the software on an X-ray machine.

The cost and complexity of this work is often lower when the new EHR vendor has experience building interfaces to other applications from specific vendors, Neumann says. Given that, a practice might consider switching some of its other systems to products made by those vendors. That may be a smart move if the contracts for those other systems are nearing their end; however, it’s probably not cheaper or easier to do if that’s not the case or if the practice prefers its existing ancillary systems for any variety of possible reasons.

“A lot of times it takes some custom interfaces, and you might have to pay vendors on both sides [of the project] to make sure it works. And it’s worth having the conversation on whether it’s going to be an ongoing cost and what it’s going to cost to maintain them,” Downing explains.

Consultants and other outside expertise

Some practices hire consultants to help right from the start with the assessment of a new EHR. Libby says he did, noting that it cost him about $2,500 just for this early-stage advice.

For many practices, that’s just the start of the fees they’ll pay to the consultants they’ll hire to help with the EHR switch.
Of course, not all practices want or need multiple consultants, and they may actually find having too many involved can complicate the implementation, Downing says.

Libby, for instance, says he only used a consultant to help with the area where he felt he needed the most help: negotiating the contract. On the other hand, many physician practices, particularly larger ones with more complicated IT systems, use consultants throughout the entire process, from choosing the new EHR to getting the most benefits from it, experts say.

Downing says practices, particularly smaller ones without complicated IT needs, may find that the consulting services that usually come as part of the new EHR contract are adequate and more affordable.

Experts say physicians must decide whether they will need consultants to help them switch to a new EHR and, if so, what consulting services they will need and whether a single consultant or a single consulting firm can handle all of their needs which could range from customization and configuration requirements to staff training and software testing.

Some physician groups also hire project managers to help coordinate all the work, timeline, and personnel involved to ensure that deadlines are met and the implementation stays on track. “All that can get expensive very fast,” says Peter Winkelstein, MD, MS, MBA, executive director of the University at Buffalo Institute for Healthcare Informatics.

Practices frequently have consultants on site the day the new EHR goes live, and even during the first few weeks to get physicians and staff used to the new system and to help with any unexpected glitches.

“You need to provide that support at the point of go-live,” Stephanie Newkirchen, principal in life sciences and health care practice for Deloitte Consulting, says. While the cost can be unpredictable, because practices don’t always know how fast their physicians and staff will learn the new systems, she says practices commonly underfund this line item.

“The cost of that change management is always underestimated,” she warns.

Data transfer costs

Another frequently underestimated cost of switching EHRs is the price tag that comes with moving data out of the old application, experts say. Downing says she has seen costs run into the tens of thousands of dollars for physician groups.

This process may involve fees to both the previous EHR vendor as well as the new one. Costs vary depending on how contracts are structured. Experts say many existing EHR contracts between vendors and physicians don’t directly address how data will be transferred when the contract expires nor how much it will cost, leaving physicians to negotiate when they’re trying to switch. (That’s why experts advise physicians to address data-transfer fees when they’re negotiating initial contracts with vendors.)

There could also be fees for consultants or technical staff brought in to help with the data-transfer process. Then there are fees associated with archiving data that’s not transferred into the new EHR but still needs to be kept for regulatory or business requirements.

“You might have to pay for [your previous EHR] system to stay online just to meet your record retention requirements. That’s one bucket of cost that people just don’t think about and it can surprise them,” Downing says.

Transferring records from the previous EHR to paper files or discs is a cheaper option, Winkelstein says, but he notes that creating and storing those files to regulatory standards still have costs.

Lost productivity

Productivity will almost certainly suffer when switching EHRs, and experts say that the dip in productivity could last months.
“The costs there are really human [resources] costs,” Libby says. “The time and effort within a workplace to prepare and convert and then to work in a new routine with the EHR is never, never made up by future visits or payments.”

Neumann says he advises a 10 percent to 20 percent reduction in scheduled patient visits during at least the first few weeks following the switch to accommodate the demands of learning the new system, creating workflows within the system, and tweaking interfaces to personal and office needs, although some physicians and staff members will learn the new system faster than others and will be able to return to full schedules more quickly.

Other experts warn that it’s difficult for an office to accurately gauge exactly how long it could take the practice to be back to full capacity.
“It could take at least a month and up to six months before you’re up to full productivity,” Winkelstein, who is also chief medical informatics officer of UBMD Physicians’ Group and chief medical informatics officer of healthcare provider Kaleida Health, says. “We usually recommend cutting the patient load down by 50 percent in those first few weeks because there’s a real productivity hit there.”

Underestimated and unanticipated expenses

Like any project, switching EHRs can result in unanticipated costs no matter how well a practice thought through an implementation plan. Missed deadlines can increase consulting costs or result in longer downtimes. Integrating the new EHR with other systems could be more challenging than expected. Productivity could dip more or for longer than anticipated.

Despite all his research, Libby says he encountered some unexpected costs for messaging patients shortly after he implemented his new EHR. “I didn’t realize [in advance] there was going to be that cost per message. There might be costs not there in the beginning but they’re going to show up. That’s something you have to be aware of,” he says, noting that his experience underscores the need to thoroughly review an EHR’s features and how fees for those are structured.

Neumann advises setting aside an additional 20 percent of the total implementation budget for unanticipated expenses or underestimated costs. “And once you’re into the implementation, that 20 percent should not be erased,” he says. “Think of it as a checkbook that you can draw on as needed, and if it’s not needed, it’s a bonus.”

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