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The High Cost of an EHR Implementation

September 4, 2014
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Recently, my wife and I have gone down the path of house hunting. Or if I’m being honest, we’ve gone down the path of condo hunting.

Either way, we’re looking for a home to buy.

When you are looking at a potential home to buy, three things immediately spurt to mind: What kind of shape is it in, where is it located, and of course, what does it cost. Something might be cheaper, but it requires a lot more work. Skimping on the price of a down payment may cost you down the line. Or, you could find something that’s in good shape at a good price, but the neighborhood stinks and you have to deal with loud traffic. A bad neighborhood also may mean it would be harder to sell down the line.

Weighing this tangle of questions has become a tiring task. You don’t want to make a false move because it could end up costing you—in the wallet and in the metaphorical mind. Everything matters and you can’t assume anything.

This is why I have a new appreciation for CIOs and IT leaders in healthcare. My home purchase –as important as it is to me– really only affects two people. While I’m looking at flooring and walkability scores that satisfy my wife and myself, they’re looking at functionality that is supposed to appease a countless number of clinicians.

 When they decide which electronic health record (EHR) system to buy, it affects the entire organization and puts them under a microscope. With federal mandates surrounding health IT reaching a critical point, these decision makers have been thrust into a pivotal position in their organizations.

 And it’s not exactly a nickel and dime decision. A large South Carolina health system recently made the decision to purchase Epic to integrate its records. The cost? A cool $97 million. When that kind of dough is being spent, you’d better get it right. If you don’t, you are out of a job.

Another large health system, this one in Georgia, recently inked a reported 14-year, $400 million deal with Cerner to have the vendor take over all of the organization’s health IT services. This outsourcing deal is unique to healthcare IT investments, but the thought process behind it is the same. Health IT leaders are spending a lot of money to get it right.

 “As the state’s only public academic health center, we must contend with continued federal mandates to improve the quality of care while also lowering costs. These challenges have encouraged us to search for creative and innovative solutions that maximize efficiencies and control costs,” Ricardo Azziz, CEO of Georgia Regents Health System, said in a statement around the news.

He is basically saying it right there: We have to get this right, even if it means spending $400 million to do so.  

The sums of these investments are eye-catching but not entirely surprising. A recent study published in the Journal of the American Medical Informatics Association (JAMIA) showed that an EHR implementation can lead to increased revenues, better care, and a higher rate of ancillary office procedures, even when ambulatory practices are losing out of productivity (seeing fewer patients). The reason? The authors note that advanced EHR functionalities were telling them the right patients to see.

Advanced functionalities come at a price. Cheaper systems may not include them.  While that lower cost may be tempting  at the time of purchase, when you look at the return on investment (ROI) of any large purchase—be it an EHR system or a condo—you have to weigh the important questions.


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