Tuesday, August 16, 2011

How Much Are The Typical IT Expenses In A Medical Office With EMR?

The introduction of EMR and Meaningful Use incentives has made it necessary for practitioners to undertake effective measures for successful EMR adoption and implementation. In order to maximize returns on EMR and resultant IT investments, physicians must perform a cost-benefit analysis and determine ways in which they can lower costs, save on expenses and utilize IT assets as efficiently as possible. This can be done by charting out a ground plan that underlines all projected expenses and revenue based on realistically researched data and information. 

Budgeting for EMR and IT Expenses
A primary requirement for accurate and realistic budgeting is identifying and understanding various elements that are involved in setting up your EMR and medical IT infrastructure. A good way to do so is by recognizing and incorporating factors that have contributed to successful EMR implementations at other physician practices. An effective EMR and medical IT budget will require you to look at a number of cost factors. Typically, these would include,
 - Hardware, software, networks, servers
 - Internet, wireless
 - Implementation, training
 - Maintenance, Upgrades, Updates, Technical Support
 - Anti-virus and other security systems
 - Emergency breakdowns and recovery
 - Data storage and backup systems
 - Digitization of existing paper files

You will also  need to account for year on year (or month on month) recurring costs and other hidden soft costs like time and money spent on staff training, revenue lost during the adoption process due to readjustment of workflow, resources utilized for internal IT management and so on. Many of these costs are not explicitly spelt out by vendors as they only surface after the installation has been completed. However, they markedly affect your overall profitability and must be carefully accounted and budgeted for.

EMR and Medical IT Infrastructure Costs

The costs of setting up the IT infrastructure for EMR implementations vary from practice to practice and installation to installation. However, to gain a rough idea or a general estimate about how much physicians can expect to spend on some primary variables involved in EMRs and medical IT set ups, we give you a few numbers (naturally, these will vary depending on market and situational factors).

EMR License – Between $1000 - $ 25,000 (depending on whether your system is an entry level EMR or a fully loaded one with advanced features and functionalities)

Hardware – Usually, Tablet PCs are recommended for primary providers and thin clients or workstations are suggested for assistant use. All these are centrally networked via a master server. Tablet PCs may be estimated at $2200, workstations at $1000 each and server at $5000-$10000.  

Implementation Costs – These are usually billed within the range of $90 - $150 per hour. Implementation includes setting up the network, customizing the software to the specifics of your practice as well as staff and employee training. 

In addition, you will need to incorporate projections for broadband connections and other soft costs that are specific to the nature and requirements of your practice.

It is also important to account for returns, benefits and added revenue that will accompany a fully implemented and adopted EMR system. Research by The American Journal of Medicine suggests that physicians can expect to save approximately $29,000 per year starting from their second year of EMR implementation, if the EMR system is used to its maximum potential. 
Another study reveals that EMRs worked to full capacity can increase the number of patients seen by as much as 15%, adding that much more to the physician’s annual revenue.

Optimizing Your Return on EMR Investment

Budgeting can help you draw out a roadmap to minimize unpredictable outflows of cash ensuring a secure financial environment for your practice to function. Even though your budget will focus on minimizing adoption costs and maximizing post-adoption value and returns, in the end, a budget is only as good as the efficiency and method with which it is followed. 

Here are certain guidelines that will help you extract maximum value from your EMR and IT investments.

 - Physicians must look at improving the speed at which the EMR systems are adopted and internalized in the daily workflow of the practice. This will save on a good chunk on staff training and downtime costs.
 - Look at upgrading your existing IT systems wherever possible, instead of replacing them altogether.
 - Try to have your EMR vendor include as much training time as possible, as part of the EMR package.
 - Ask vendors about the payment plans they offer (payment in parts or installments as opposed to complete down payments) and chart out an arrangement that best agrees with your financial interests.
 - Use antivirus software, firewalls and other security systems to prevent unprecedented system breakdowns and crashes.
 - Read all offer documents very carefully and get detailed information and clarifications on terms, products and services mentioned in the contract. Make sure that all verbal agreements are put in writing to avoid post-installation conflicts or confusion.

You can calculate your practice’s return on EMR investment using an ROI calculator similar to the one found at http://www.clinkareonline.com/clinkare-roi-calculator. This ROI calculator bases your return estimates on parameters like size of the medical office, number of providers, strength of staff, patient volumes, fees and so on.



Humaun Kabir said...

Thank you for your post. This is excellent information.
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