Health IT Pulse

Mar 8 2011   2:56PM GMT

Calculating the cost of EHR for office-based physicians

Beastwood Profile: Beastwood

EHR implementation
meaningful use incentives

Two recent studies in the magazine Health Affairs shed some light on two critical aspects of meaningful use — the cost of an electronic health record (EHR) implementation for primary care physicians and the overall odds that PCPs and office-based specialists actually will be eligible for meaningful use incentives.

Based on a study of a network of 26 PCPs in north Texas, researchers concluded that a five-physician practice can expect the overall cost of EHR implementation to exceed $160,000. Maintenance in the first year of the deployment will eat up $85,000 — more than half of the total cost and nearly twice as much as an eligible provider can receive in meaningful use incentives.

This conclusion is consistent with the findings of a 2010 EHR software cost survey by IT supplier CDW LLC, which found that training, infrastructure and maintenance account for a far greater percentage of the cost of EHR than the software itself. CDW also suggested that physicians could expect a productivity gain of 15%, which would amount to $150,000 in additional revenue per physician per year. If realized, that money would certainly make the cost of EHR worth bearing.

With those benefits to be reaped, it begs the question of whether practices actually qualify for meaningful use incentives. An analysis of federal survey data suggests that roughly 80% of office-based physicians should qualify for meaningful use, based on the number of Medicare and Medicaid patients they see annually.

However, although more than 90% of PCPs and internists should meet the criteria, fewer than two-thirds of pediatricians, obstetrician-gynecologists and psychiatrists will qualify, the analysis found. Practice size also matters — not only are smaller practices less likely to use an EHR system, they also are less likely to see enough patients to qualify for federal incentives.

Unfortunately, there is no secret formula for calculating the cost of EHR at an individual practice, and determining the potential return on that investment. What physicians can do, however, is compare the meaningful use incentives and potential productivity gains to the amount that Medicare reimbursements will shrink after 2015. That reduction will start at 1% and increase each year that a practice cannot demonstrate meaningful use. This calculation will help put the true cost of EHR into perspective.

5  Comments on this Post

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  • Jenny Laurello
    Calculating the cost of #EHR for physician practices: 5 doc practice can expect the cost of #EHR to exceed... #HealthIT
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  • Alison Ward
    Worth the cost: #EHRs increase physician productivity by 15 percent, or $150,000 per physician per year, says #CDW:
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  • JenniferDennard
    I wonder how many physicians have looked into free EMRs from vendors like Practice Fusion and Mitochon Systems? If so, what were the pros and cons? In a recent article I wrote on the subject for Porter Research (, Dr. Lynn McCallum said it was the best solution for her small practice - it enabled her to get started on a path to comply with Meaningful Use, and didn't overextend her operating budget.
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  • Pray for Medicine
    Study of 26 PCPs in north Texas: the overall cost of #EHR implementation exceeds $160k; first year maintenance: $85k
    0 pointsBadges:
  • Cost of EHR implementation thinning ranks in private practice - Health IT Pulse
    [...] training, maintenance, and infrastructure have been documented as being far more costly than implementation in the overall EHR budget. A five-physician practice [...]
    0 pointsBadges:

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