Costs for a Physician Practice to Implement EHR

Most experts agree that greater use of information technology in outpatient health care settings has the potential to lower administrative costs and improve health care and health outcomes.  Primary barriers to wider adoption of these technologies include the cost and the hassle factor of implementing not just a new system, but often new processes for patient interactions.  To address the cost issue, one part of the stimulus bill provided significant incentives for “meaningful use” of electronic health records and ultimately penalties for their non-use.  A recent study in Health Affairs examines the real-life cost for adopting an EHR in a physician practice.  (Health Affairs Article)

The experience of 26 primary care practices in Texas was looked at, including the upfront acquisition costs for the software and any hardware, as well as ongoing maintenance and other hard costs.  The researchers also tracked how many hours were spend in implementation, including how much time the end-users–physicians and other clinical staff–needed to be fully prepared to actually use the system.  The EHR system to be adopted was GE’s Centricity, but it is likely the outcome would not have been greatly different with another system.

The initial implementation cost for an average five-physician practice was $162,000 or about $32,000 per doctor.  First year operating costs added another $85,500, bringing the total first-year cost per physician to $46,000.  The implementation took over 600 hours and each end-user needed 134 hours to be truly ready to use the system in clinical practice.  Given the potential incentives available, the practice might recoup a significant part of its costs over the next few years.  This study finds somewhat lower costs associated with EHR use than does other research, but the practices examined were part of a very large health system with extensive IT and process change management staff and resources.  The jury is still out on whether electronic medical records make financial sense and even more importantly, whether they really will contribute to an improvement in health outcomes.