EHR Implementation Cost Breakdown: 2025 Guide [Hidden Costs Included]

Rapid advancements in the healthcare technology landscape have resulted in massive popularity of digital information storage methods among hospitals, medical practices and other healthcare facilities. 

Under the American recovery and reinvestment act (ARRA), all public and private healthcare providers and other eligible professionals were required to adopt and demonstrate meaningful use of electronic medical records. This mandate further spurred the adoption of EMR and EHR software. 

EHR/EMR software solutions make it easier for healthcare providers to manage patient’s medical records while automating clinical workflows. Electronic health records offer a wide range of benefits such as improved patient care, increased efficiency, and better data management. However, implementing an EHR system can be a significant investment for healthcare organizations, and it’s essential to understand the cost breakdown of this process.

As a leading healthcare software development company, Arkenea specializes in creating custom EHR solutions that can reduce your total implementation costs by 20-50% compared to traditional off the shelf systems. Our healthcare IT specialists guide you through every aspect of the EHR implementation process, from cost analysis to deployment. Contact Arkenea today for a free consultation and detailed cost breakdown for your specific requirements.

Cost Of EHR Implementation

There is a lot of hubris in the mind of healthcare practice owners when it comes to the cost of EHR implementation. There is also the question of whether it makes more sense to implement an off-the-shelf EHR software or get one custom built for your practice from a financial standpoint. 

The cost to implement an EHR system can vary depending on several factors such as the size of the healthcare organization, the complexity of the EHR system, the customization required, and the vendor chosen.

Before we dive deep into the EHR implementation cost breakdown and do a cost-benefit analysis of the same, let us first understand the difference between on-premise and cloud hosted EHR solutions since the EHR implementation cost varies for both of them. 

EHR Implementation Cost Breakdown

While the major component that needs to accounted for when setting up an EHR is the upfront cost but there are many other factors that need to be taken into consideration as well such as EHR maintenance cost, training costs, and other hidden costs. EHR costs can be broken down into the following three major components.

1. Direct EHR Implementation Costs

Depending upon whether you are choosing a cloud-based or on-premise EHR, the direct EHR implementation costs will greatly vary. The upfront costs also depend on whether you choose to custom develop the EHR software or choose an off-the-shelf EHR solution. 

The average multi-physician practice will spend about $162,000 to establish an EHR with $85,000 contributing to first-year maintenance expenditures, according to a Health Affairs research. Even though the estimate dates from the early days of EHR implementation, it still offers a framework and a general notion of how much you should budget.

For each full-time employee, practices that adopt an EHR system can anticipate receiving an average of around $23,000 in net benefits annually after paying off their EHRs initial investment in about two and a half years.

Keep in mind that not all EHR solutions will cost the same because of many variables that may influence your final bill. So, depending on whether you choose an on-premise or cloud EHR, custom develop or purchase an EHR, your costs will change. Regardless of the strategy you choose, you might need to make another big investment.

2. Indirect EHR Implementation Costs

Indirect EHR costs must be taken significantly into account in addition to initial and standard implementation costs. The overall cost of adoption, which includes these hidden EHR costs, is substantial.

For instance, you frequently need to allocate money in your implementation budget for EHR training. Although providing your doctors and workers with the right training may appear pricey, cutting corners could end up costing you more in the long run as they struggle to do their tasks. Don’t skimp on thorough training for individuals who require it because you’ll end up saving money.

Be aware that your doctors will be less productive than they were before for a short period of time after an EHR installation. Since you’ll want to acquaint your staff with the program rather than rushing it and running the risk of blunders, this is almost inescapable.

For up to six months after EHR deployment, it’s typical for doctors to see one fewer patient each day. After this adjustment period, productivity is anticipated to increase. Calculate the financial impact on practice productivity to be ready for both the best and worst case scenarios.

3. Staffing related Costs

The extent to which you’ll need to reorganize your IT workforce after the EHR software goes live is yet another factor to take into account. Even if your practice only has a few small IT requirements, think about whether you’ll need additional IT support during implementation.

Nearly every medical practice must maintain some IT resources (such practice management software or email servers) available 24/7, and maintaining these systems is labor-intensive. On premise systems normally need your own IT team, but the majority of cloud-based providers offer their own technical support.

EHR Implementation Cost Breakdown by Practice Size

Small Practice EHR Costs (1-3 Physicians)

Direct Costs:

• Software licensing: $15,000 – $45,000
• Hardware: $5,000 – $15,000
• Implementation: $3,000 – $8,000
• Total first year cost: $23,000 – $68,000

Ongoing Annual Costs:

• Maintenance and support: $3,000 – $7,000
• Training updates: $1,500 – $3,600
• Annual cost per physician: $1,500 – $3,533

Medium Practice EHR Costs (4-10 Physicians)

Direct Costs:

• Software licensing: $60,000 – $140,000
• Hardware: $15,000 – $25,000
• Implementation: $8,000 – $20,000
• Total first year cost: $83,000 – $185,000

Ongoing Annual Costs:

• Maintenance and support: $9,000 – $21,000
• Training updates: $4,800 – $12,000
• Annual cost per physician: $1,725 – $3,300

Large Practice EHR Costs (11+ Physicians)

Direct Costs:

• Software licensing: $165,000 – $385,000
• Hardware: $25,000 – $50,000
• Implementation: $20,000 – $50,000
• Total first year cost: $210,000 – $485,000

Ongoing Annual Costs:

• Maintenance and support: $25,000 – $58,000
• Training updates: $13,200 – $24,000
• Annual cost per physician: $2,018 – $3,455

Specific EHR Implementation Cost Ranges and Real World Examples

Understanding actual costs through real world examples helps healthcare practices make informed decisions. Here are detailed cost breakdowns based on specific scenarios and vendor pricing.

Popular EHR Vendors: Cost Comparison

Epic EHR

Small Practice (1-3 physicians):

• Not typically available for small practices
• Minimum: 10+ physicians required

Medium Practice (4-10 physicians):

• Implementation: $200,000 – $400,000
• Annual licensing: $80,000 – $150,000
• Training: $25,000 – $50,000
• Total first year: $305,000 – $600,000

Large Practice (25+ physicians):

• Implementation: $500,000 – $2,000,000
• Annual licensing: $200,000 – $500,000
• Training: $50,000 – $150,000
• Total first year: $750,000 – $2,650,000

Cerner (Oracle Health)

Small Practice (1-3 physicians):

• Implementation: $50,000 – $100,000
• Annual licensing: $25,000 – $45,000
• Training: $8,000 – $15,000
• Total first year: $83,000 – $160,000

Medium Practice (4-10 physicians):

• Implementation: $150,000 – $300,000
• Annual licensing: $75,000 – $125,000
• Training: $20,000 – $35,000
• Total first year: $245,000 – $460,000

Large Practice (25+ physicians):

• Implementation: $400,000 – $800,000
• Annual licensing: $150,000 – $300,000
• Training: $40,000 – $80,000
• Total first year: $590,000 – $1,180,000

AthenaHealth

Small Practice (1-3 physicians):

• Implementation: $15,000 – $30,000
• Monthly per provider: $1,200 – $1,800
• Annual cost: $58,200 – $94,800
• Training: $3,000 – $8,000
• Total first year: $76,200 – $132,800

Cost Examples by Specialty

Dermatology Practice (5 physicians)

Custom EHR Requirements:

• Specialty templates and forms: $15,000 – $25,000
• Image management integration: $10,000 – $20,000
• Dermoscopy device integration: $5,000 – $10,000
• Cosmetic procedure tracking: $8,000 – $15,000
• Total specialty customization: $38,000 – $70,000

Complete Implementation Cost:

• Base EHR system: $120,000
• Specialty customizations: $54,000
• Training and go-live: $18,000
• Total first-year: $192,000

Hidden Cost Examples by Category

Data Migration Costs

• Simple migration (basic patient demographics): $2,000 – $5,000
• Standard migration (full patient records): $8,000 – $15,000
• Complex migration (multiple systems, custom fields): $20,000 – $40,000
• Historical data cleanup: $5,000 – $12,000

Integration Costs

• Lab interface (Quest, LabCorp): $3,000 – $6,000 per interface
• Imaging integration (PACS): $15,000 – $30,000
• Pharmacy integration: $2,000 – $5,000
• Billing system integration: $8,000 – $15,000
• Patient portal integration: $5,000 – $10,000

Compliance and Security Costs

• HIPAA compliance audit: $8,000 – $15,000
• Penetration testing: $5,000 – $12,000
• Data encryption setup: $3,000 – $8,000
• Backup and disaster recovery: $10,000 – $25,000
• Annual security assessments: $3,000 – $8,000

EHR Implementation Comparison Tables

These comprehensive comparison tables help healthcare practices evaluate different EHR options based on their specific needs, budget, and organizational requirements.

Cloud vs On Premise EHR Comparison

EHR Vendor Comparison by Practice Size

Small Practice (1-3 Physicians)

Medium Practice (4-10 Physicians)

Hidden EHR Costs You Need to Know

Many healthcare practices underestimate the hidden costs associated with EHR implementation. Here are the most commonly overlooked expenses:

1. Productivity Loss During Transition

• Impact: 10-30% reduction in patient volume for 2-6 months
• Cost: $15,000 – $50,000 per physician in lost revenue

2. Additional IT Support

• Temporary IT staff: $3,000 – $8,000 per month during implementation
• Ongoing IT support: $2,000 – $5,000 monthly for on premise systems

3. Hardware Upgrades and Replacements

• Workstation upgrades: $1,500 – $3,000 per station
• Network infrastructure: $5,000 – $15,000
• Backup systems: $2,000 – $8,000

4. Interface and Integration Costs

• Lab interfaces: $2,000 – $5,000 per interface
• Imaging system integration: $5,000 – $15,000
• Billing system integration: $3,000 – $10,000

5. Compliance and Security Upgrades

• HIPAA compliance audits: $5,000 – $15,000
• Security assessments: $3,000 – $10,000
• Data encryption upgrades: $2,000 – $8,000

Regulatory Compliance Costs: Essential Requirements and Hidden Expenses

Healthcare practices must budget for various regulatory compliance requirements when implementing EHR systems. These costs are often underestimated but are critical for legal operation and avoiding penalties.

HIPAA Compliance Costs

Initial HIPAA Compliance Setup:

• Risk assessment and gap analysis: $5,000 – $15,000
• Policy and procedure development: $3,000 – $8,000
• Staff training and certification: $2,000 – $5,000
• Technical safeguards implementation: $8,000 – $20,000
• Business associate agreements: $1,000 – $3,000
• Total initial HIPAA compliance: $19,000 – $51,000

Ongoing HIPAA Compliance:

• Annual risk assessments: $3,000 – $8,000
• Staff training updates: $1,500 – $4,000
• Policy updates and maintenance: $1,000 – $3,000
• Compliance monitoring: $2,000 – $5,000
• Annual compliance costs: $7,500 – $20,000

HIPAA Violation Penalties:

• Tier 1 (unknowing violation): $137 – $68,928 per violation
• Tier 2 (reasonable cause): $1,379 – $68,928 per violation
• Tier 3 (willful neglect, corrected): $13,785 – $68,928 per violation
• Tier 4 (willful neglect, not corrected): $68,928 – $2,067,813 per violation

ONC Certification Requirements

Initial Certification Costs:

• ONC-ATCB certification application: $2,000 – $5,000
• Testing and validation: $8,000 – $15,000
• Documentation preparation: $3,000 – $7,000
• Certification maintenance: $1,500 – $3,000 annually
• Total certification costs: $14,500 – $30,000

Ongoing Certification Maintenance:

• Annual surveillance fees: $2,000 – $4,000
• Update testing for new standards: $5,000 – $12,000
• Recertification (every 3 years): $8,000 – $15,000
• Documentation updates: $1,000 – $3,000 annually

Meaningful Use and MIPS Compliance

Meaningful Use Program Costs:

• Initial attestation preparation: $5,000 – $12,000
• Clinical quality measure reporting: $3,000 – $8,000
• Audit preparation and response: $8,000 – $20,000
• Consultant fees for compliance: $10,000 – $25,000

MIPS (Merit based Incentive Payment System):

• Quality measure reporting setup: $5,000 – $15,000
• Improvement activities documentation: $3,000 – $8,000
• Advancing Care Information compliance: $8,000 – $18,000
• Cost category preparation: $2,000 – $5,000
• Annual MIPS compliance: $18,000 – $46,000

MIPS Penalties and Bonuses:

• Negative adjustment: Up to -9% of Medicare payments
• Positive adjustment: Up to +9% of Medicare payments
• Exceptional performance bonus: Additional +10% for top performers

State and Federal Reporting Requirements

Prescription Drug Monitoring Programs (PDMP):

• System integration: $3,000 – $8,000
• Ongoing compliance monitoring: $1,000 – $3,000 annually
• Staff training: $500 – $1,500

Immunization Information Systems (IIS):

• Interface development: $5,000 – $12,000
• Data mapping and testing: $2,000 – $5,000
• Ongoing maintenance: $1,500 – $3,500 annually

Public Health Reporting:

• Syndromic surveillance reporting: $3,000 – $7,000
• Cancer registry reporting: $2,000 – $5,000
• Birth defects reporting: $1,500 – $4,000
• Electronic case reporting: $4,000 – $10,000

Data Security and Privacy Compliance

Cybersecurity Requirements:

• Risk assessment and penetration testing: $8,000 – $20,000
• Security awareness training: $2,000 – $5,000
• Incident response planning: $5,000 – $12,000
• Encryption and access controls: $10,000 – $25,000
• Annual cybersecurity compliance: $25,000 – $62,000

Data Backup and Recovery:

• HIPAA-compliant backup solutions: $5,000 – $15,000 setup
• Disaster recovery planning: $8,000 – $18,000
• Recovery testing and validation: $3,000 – $8,000 annually
• Offsite storage compliance: $2,000 – $6,000 annually

Compliance Cost Summary by Practice Size

Small Practice (1-3 physicians):

• Initial compliance setup: $45,000 – $95,000
• Annual compliance costs: $25,000 – $55,000
• Risk of penalties: $50,000 – $200,000

Medium Practice (4-10 physicians):

• Initial compliance setup: $75,000 – $155,000
• Annual compliance costs: $45,000 – $95,000
• Risk of penalties: $150,000 – $500,000

Large Practice (11+ physicians):

• Initial compliance setup: $125,000 – $255,000
• Annual compliance costs: $85,000 – $175,000
• Risk of penalties: $300,000 – $1,000,000

Compliance Cost Reduction Strategies

Proactive Measures:

• Invest in comprehensive staff training: Reduces violation risk by 60-80%
• Implement automated compliance monitoring: Saves $10,000 – $25,000 annually
• Regular policy updates and reviews: Prevents 70-90% of common violations
• Vendor compliance support: Can reduce internal costs by 30-50%

Risk Mitigation:

• Cyber insurance for healthcare: $3,000 – $8,000 annually
• Legal counsel retainer: $5,000 – $15,000 annually
• Compliance consulting services: $10,000 – $30,000 annually
• Emergency response planning: Reduces breach costs by 40-60%

Future Compliance Considerations

Emerging Requirements:

• Information Blocking regulations: Estimated $5,000 – $15,000 compliance costs
• TEFCA (Trusted Exchange Framework): $10,000 – $25,000 implementation
• Updated cybersecurity frameworks: $15,000 – $35,000 annually
• AI and machine learning regulations: $8,000 – $20,000 compliance costs

Budget Planning Recommendations:

• Allocate 15-25% of EHR budget for compliance costs
• Plan for 10-15% annual increase in compliance requirements
• Maintain emergency fund of $50,000 – $200,000 for unexpected audits
• Consider compliance insurance to cap maximum exposure

Complete Total Cost of Ownership (TCO) Analysis

Understanding the total cost of ownership is crucial for making informed EHR investment decisions. This comprehensive analysis includes all direct, indirect, and hidden costs over a 5 year period.

TCO Calculation Methodology

Year 1: Implementation Costs

• Software licensing and setup
• Hardware and infrastructure
• Implementation services
• Training and go live support
• Data migration and integration
• Productivity loss during transition

Years 2-5: Ongoing Costs

• Annual maintenance and support
• Hardware refresh and upgrades
• Continued training and education
• Compliance and security updates
• System enhancements and customizations

Detailed 5 Year TCO Breakdown by Practice Size

Small Practice (1-3 Physicians) – Cloud based EHR

Small Practice (1-3 Physicians) – On premise EHR

TCO Comparison Summary

Cost Per Physician Per Year (5-Year Average)

• Small Practice Cloud: $12,200
• Small Practice On premise: $18,933
• Medium Practice Cloud: $14,200
• Medium Practice On premise: $20,143
• Large Practice Cloud: $17,427
• Large Practice On premise: $22,240

Key TCO Insights:

1. Cloud based solutions typically cost 20-35% less than on premise over 5 years
2. Medium practices achieve the best cost efficiency per physician
3. On premise systems have higher upfront costs but may offer better long-term control
4. Hidden costs represent 15-25% of total TCO across all scenarios

ROI Analysis and Payback Periods

Understanding the return on investment helps justify EHR implementation costs and demonstrates long term value to stakeholders. Here’s a comprehensive analysis of financial benefits and payback calculations.

Financial Benefits of EHR Implementation

Direct Revenue Increases:

• Improved billing accuracy: 2-5% revenue increase ($15,000 – $50,000 annually for medium practice)
• Faster claims processing: $5,000 – $15,000 annually
• Reduced denied claims: $3,000 – $10,000 annually
• Better coding compliance: $8,000 – $25,000 annually
• Meaningful Use incentives: $44,000 – $64,000 (first-time eligible professionals)

Cost Savings:

• Reduced paper and printing: $2,000 – $5,000 annually
• Decreased storage costs: $1,000 – $3,000 annually
• Lower transcription costs: $5,000 – $15,000 annually
• Reduced staff overtime: $8,000 – $20,000 annually
• Decreased medical record retrieval time: $3,000 – $8,000 annually

Productivity Gains:

• Faster documentation: 15-30% time savings (equivalent to $25,000 – $45,000 annually per physician)
• Improved patient throughput: 5-10% increase after adjustment period
• Reduced administrative overhead: $10,000 – $25,000 annually
• Automated appointment scheduling: $5,000 – $12,000 annually
• Electronic prescription benefits: $3,000 – $8,000 annually

ROI Calculation Examples by Practice Size

Small Practice (3 Physicians) ROI Analysis

Total 5 year investment (Cloud based): $183,000

Annual Benefits:

• Revenue increase (3% improvement): $27,000
• Cost savings: $12,000
• Productivity gains: $18,000
• Total annual benefits: $57,000

ROI Calculation:

• Payback period: 3.2 years
• 5 year net benefit: $102,000
• 5 year ROI: 56%
• Break even point: Month 38

Medium Practice (7 Physicians) ROI Analysis

Total 5 year investment (Cloud based): $497,000

Annual Benefits:

• Revenue increase (4% improvement): $84,000
• Cost savings: $28,000
• Productivity gains: $63,000
• Total annual benefits: $175,000

ROI Calculation:

• Payback period: 2.8 years
• 5 year net benefit: $378,000
• 5 year ROI: 76%
• Break even point: Month 34

Industry ROI Benchmarks

By Practice Size:

• Small practices (1-3 physicians): 2.5-4 year payback period
• Medium practices (4-10 physicians): 2-3 year payback period
• Large practices (11+ physicians): 1.5-2.5 year payback period

By Specialty:

• • Primary care: 2-3 year payback period
  • Cardiology: 1.5-2.5 year payback period
  • Dermatology: 2.5-3.5 year payback period
  • Orthopedics: 2-3 year payback period
  • Pediatrics: 3-4 year payback period

  Factors That Improve ROI

  High Impact Revenue Drivers:

  1. Improved coding accuracy: Can increase revenue by 3-7%
  2. Faster claims submission: Reduces payment delays by 15-30 days
  3. Better charge capture: Prevents 2-5% revenue leakage
  4. Quality reporting bonuses: $15,000 – $50,000 annually
  5. Value-based care contracts: 5-15% revenue premium

  Cost Reduction Opportunities:

  1. Staff efficiency gains: 20-40% reduction in administrative tasks
  2. Reduced medical errors: Saves $5,000 – $15,000 annually
  3. Automated workflows: 25-50% reduction in manual processes
  4. Better inventory management: $3,000 – $10,000 savings annually
  5. Reduced compliance costs: $2,000 – $8,000 annually

  ROI Maximization Strategies

  Pre Implementation Planning:

  • Conduct workflow analysis: Identifies 15-25% efficiency gains
  • Set clear performance metrics: Improves goal achievement by 40%
  • Plan staff training schedule: Reduces learning curve by 30%
  • Negotiate vendor contracts: Can save 10-20% on total costs

  Post Implementation Optimization:

  • Regular system audits: Identifies unused features worth $5,000 – $15,000
  • Continuous staff training: Maintains productivity gains
  • Monitor key performance indicators: Ensures ROI targets are met
  • Leverage advanced features: Can add 10-20% to annual benefits

  ROI Tracking and Measurement

  Key Performance Indicators:

  • Claims denial rate: Target reduction of 20-40%
  • Days in accounts receivable: Target reduction of 10-20%
  • Patient visit cycle time: Target reduction of 15-25%
  • Documentation time per patient: Target reduction of 20-30%
  • Staff overtime hours: Target reduction of 25-40%

  Monthly ROI Monitoring:

  • Revenue per patient visit
  • Collection rate percentage
  • Administrative cost per patient
  • Provider productivity metrics
  • Patient satisfaction scores

  Annual ROI Assessment:

  • Total cost of ownership review
  • Benefit realization analysis
  • Comparison to industry benchmarks
  • Adjustment of future projections
  • Strategic planning for system enhancements

Comprehensive EHR Maintenance Costs: What to Expect Year After Year

Understanding ongoing EHR maintenance costs is critical for long term budgeting success. Many healthcare practices underestimate these recurring expenses, leading to budget overruns and financial strain. Here’s a detailed breakdown of what to expect:

Annual Maintenance Cost Categories

Software Updates and Patches: $3,000 – $12,000 annually

• • • Regulatory updates (ICD-10, MACRA, MIPS compliance): $2,000 – $5,000
    • Security patches and bug fixes: $1,000 – $3,000
    • Feature enhancements and new modules: $1,500 – $4,000
    • Certification maintenance (ONC-ATCB): $500 – $1,500

Technical Support: $5,000 – $15,000 annually

• • • Help desk support (phone, email, chat): $2,000 – $6,000
    • System troubleshooting and diagnostics: $1,500 – $4,000
    • Emergency support services (24/7 availability): $1,000 – $3,000
    • Remote system monitoring: $500 – $2,000

Hardware and Infrastructure: $2,000 – $8,000 annually

• • • Server maintenance and monitoring: $1,000 – $3,000
    • Backup system management: $500 – $2,000
    • Network equipment updates: $500 – $1,500
    • Workstation maintenance: $300 – $1,000 per station

Training and Education: $1,500 – $5,000 annually

• • • New feature training sessions: $500 – $1,500
    • Staff turnover training: $800 – $2,500
    • Certification programs: $200 – $1,000

Data Management and Security: $2,000 – $6,000 annually

• • • Data backup and recovery services: $1,000 – $3,000
    • Security monitoring and assessments: $500 – $2,000
    • Compliance auditing: $500 – $1,000

Maintenance Cost by EHR Type and Practice Size

Cloud based EHR Maintenance:

Small Practice (1-3 physicians):

• • • Monthly subscription includes most maintenance
    • Additional costs: $2,000 – $4,000 annually for customizations
    • Training updates: $1,000 – $2,500 annually
    • Total annual maintenance: $3,000 – $6,500

Medium Practice (4-10 physicians):

• • • Monthly subscription includes most maintenance
    • Additional costs: $4,000 – $8,000 annually for customizations
    • Training updates: $2,500 – $5,000 annually
    • Total annual maintenance: $6,500 – $13,000

Large Practice (11+ physicians):

• • • Monthly subscription includes most maintenance
    • Additional costs: $8,000 – $15,000 annually for customizations
    • Training updates: $5,000 – $10,000 annually
    • Total annual maintenance: $13,000 – $25,000

On premise EHR Maintenance:

Small Practice (1-3 physicians):

• • • Annual maintenance fee: 15-20% of software cost ($3,000 – $9,000)
    • Hardware maintenance: $2,000 – $4,000 annually
    • IT support: $12,000 – $24,000 annually
    • Total annual maintenance: $17,000 – $37,000

Medium Practice (4-10 physicians):

• • • Annual maintenance fee: 15-20% of software cost ($9,000 – $28,000)
    • Hardware maintenance: $4,000 – $8,000 annually
    • IT support: $24,000 – $48,000 annually
    • Total annual maintenance: $37,000 – $84,000

Large Practice (11+ physicians):

• • • Annual maintenance fee: 15-20% of software cost ($25,000 – $77,000)
    • Hardware maintenance: $8,000 – $15,000 annually
    • IT support: $48,000 – $96,000 annually
    • Total annual maintenance: $81,000 – $188,000

Factors That Increase Maintenance Costs

High Impact Cost Drivers:

• • 1. System Complexity: More integrations = higher maintenance costs
    2. Customizations: Each custom feature adds 10-20% to maintenance costs
    3. User Volume: More users require more support and training
    4. Regulatory Changes: New compliance requirements can add $5,000-$15,000 annually
    5. Security Incidents: Breach response can cost $50,000-$200,000

Cost Optimization Strategies:

• • • Regular system audits to identify unused features
    • Standardized workflows to reduce customization needs
    • Proactive training programs to minimize support tickets
    • Vendor negotiation for multi-year maintenance contracts (5-15% savings)

ROI and Cost Benefit Analysis

Understanding the return on investment (ROI) helps justify EHR implementation costs. Here’s a comprehensive analysis:

Financial Benefits

Direct Revenue Increases:

• • • Improved billing accuracy: 2-5% revenue increase
    • Faster claims processing: $5,000 – $15,000 annually
    • Reduced denied claims: $3,000 – $10,000 annually

Cost Savings:

• • • Reduced paper and printing: $2,000 – $5,000 annually
    • Decreased storage costs: $1,000 – $3,000 annually
    • Lower transcription costs: $5,000 – $15,000 annually

Productivity Gains:

• • • Faster documentation: 15-30% time savings
    • Improved patient throughput: 5-10% increase after adjustment period
    • Reduced administrative overhead: $10,000 – $25,000 annually

ROI Calculation Example (Medium Practice)

• • • Total 5-year investment: $280,000
    • Annual benefits: $45,000
    • Payback period: 3.1 years
    • 5-year ROI: 80%

Industry ROI Benchmarks

• • • Small practices: 2.5-4 year payback period
    • Medium practices: 2-3 year payback period
    • Large practices: 1.5-2.5 year payback period

Budgeting for EHR Implementation

It can be challenging to obtain an exact estimate of the EHR implementation cost because it depends on the particular features and needs your practice requires. System types including web-based and on-site systems have different implementation costs. Additionally, whereas a cloud-based program requires a membership cost, an on-site system merely needs ongoing management and support.

When preparing for EHR adoption, you must budget for the following six essential elements:

1. Software licensing: One of the most significant costs associated with EHR implementation is the software licensing fees. Healthcare organizations need to purchase a license to use the EHR systems. The cost of the software license can vary depending on the number of users, the features required, and the vendor chosen.

2. Hardware and infrastructure: To support an EHR system, healthcare organizations must have the necessary hardware and infrastructure in place. This includes servers, workstations, and network equipment. Depending on the size of the healthcare organization, the cost of purchasing or upgrading the hardware required can be substantial.

3. Implementation services: For EHR adoption, healthcare organizations must work with the EHR vendor or a third-party consultant. The vendor or consultant will charge a fee for installing and configuring the EHR system. The cost of implementation services can vary depending on the complexity of the system, the customization required, and the EHR vendor chosen.

4. Training: Training is an essential aspect of EHR implementation. Healthcare staff requires comprehensive training on how to use the EHR system effectively. The cost of training can vary depending on the number of staff members who require training, the complexity of the EHR system, and the vendor chosen.

5. Data migration and integration: Healthcare organizations often have existing patient data that must be transferred to the new EHR system. The process of transferring data from existing systems into the new EHR system is called data migration. Additionally, healthcare organizations may need to integrate the EHR system with other healthcare IT systems. The cost of data migration and integration can vary depending on the complexity of the process and the vendor chosen.

6. Maintenance and support: After implementation, ongoing maintenance and support services are required to ensure that the EHR system runs smoothly and to address any issues that may arise. The maintenance costs and support services can vary depending on the vendor chosen and the level of support required.

It’s worth noting that there may be additional costs associated with EHR implementation, such as regulatory compliance and security requirements. For example, healthcare organizations may need to ensure that their electronic health records meets HIPAA (Health Insurance Portability and Accountability Act) compliance standards to protect patient privacy and confidentiality. 

However, when you partner with EHR software developers like Arkenea, that specialize in the healthcare sector, to get your custom EHR solution developed, the costs associated with ensuring regulatory compliance and the subsequent risks associated with noncompliance are drastically reduced. 

How Medical Practices Can Bring Down The Cost Of EHR Implementation?

Cloud based EHR systems are gaining popularity due to the convenience they offer. However, direct upfront costs of implementing a cloud-based EHR software goes upwards of $150k in software licensing costs that are charged on a monthly or annual basis. In fact, leading EHR software such as Epic EHR can cost up to $500k in annual subscription fees. Add the maintenance and indirect costs associated with it and the resulting figure becomes too high to be profitable in the near term. 

With the costs of EHR implementation being so high, it raises the question of whether custom development of bespoke EHR software is a better decision from the financial standpoint. A cost benefit analysis between the two goes in the favor of custom EHR development. 

Depending on factors such as the feature set, technology stack, size and experience of the development team, timeline of software development, the cost of developing custom EHR software begins from $100,00. While the upfront costs of software development may seem higher, the benefits clearly outweigh the cost and time invested in the same. 

To know exactly how much custom developing an EHR software from scratch would cost based on your exact requirements, get in touch with our team for a free consultation today. 

Benefits of Custom EHR Software Development

1. EHR software tailored to your unique needs

Unlike off-the-shelf EHR systems that may require you to change your existing workflows, custom software is developed as per your needs. This not only streamlines the software adoption, but also reduces the severity of the initial adjustment period in which you would likely see a loss in productivity as a result of implementing EHR systems.

Additionally, an EHR for a specialty practice such as dermatology, cardiology or dentistry would require different input fields and custom forms within the EHR. This can be easily achieved through a custom developed EHR software. However, in case of market-ready EHR systems, such customization options are either limited or come with a hefty additional cost.

2. Features that you need

The existing EHR software solutions readily available in the market are designed to cater to a wide range of audience as a result of which they are often bloated. Users are often riddled with features that are of no real consequence to them. Despite not needing those features, they end up paying the entire cost of bloated software.

The converse is true as well. Because of the generic nature of EHR software available, you might end up missing a set of features that you need in your practice. Custom development ensures that your software only has features that you need. Additionally, taking a MVP-first approach can result in a scalable EHR software that grows and adapts to your practice needs at a fraction of cost.

3. Improved adoption rates and interoperability

As opposed to market ready EHRs, custom software is generally better received by the internal staff since it is designed according to the existing processes and comes with a lower learning curve. The improved adoption rates and ease of use contribute in bringing down the indirect costs of EHR implementation. Additionally, custom developed EHR software is designed to be capable of integrating.

4. Lower cost of EHR adoption

While it may seem counterintuitive, implementing custom developed EHR software is a more cost effective alternative than adopting existing EHR software solutions. Both direct and indirect costs of EHR implementation are reduced. The monthly and annual subscription fees are replaced by one time development fees.

While the difference in direct costs are easy to compute, the indirect EHR implementation costs are also reduced, making it a better alternative over choosing existing EHR/EMR software. 

Arkenea is a 14+ years experienced EHR software development company – talk to us for a free consultation about your EHR implementation project.

Time Frame For EHR System’s Implementation

The time required to develop custom EHR software depends on the scope and complexity of the system being developed. The time for EHR system’s implementation will take anywhere from 60 to 120 days. 

The vendors need to make sure the jobs are finished on time and that all deadlines are reached in accordance with the implementation strategy. Every user utilizing the EHR system needs to be informed of any upgrades via the shared system. Additionally, go-live data for every step of the implementation process must be included in the EHR implementation plan.

Having a target is crucial since the data changes depending on how the system is configured and how the workflow is adjusted. The review, development, and planning for the launch of the EHR will take at least a year, according to studies in healthcare IT. Also bear in mind that it will take a few months to implement a cloud-based EHR system.

The workflow processes need to be modified and improved when the EHR system is introduced. To ensure HIPAA compliance for software development and other requirements, processes and policies must also be updated and modified. Overall, a successful EHR system adoption will increase income and automate a number of administrative, clinical, and financial instruments.

The key to a successful EHR adoption and implementation is user centric design, well planned software that runs in accordance to the organizational workflows and enables detailed functional documentation.

Conclusion

Implementing an EHR system can be a significant investment for healthcare organizations. Understanding the cost breakdown of this process is essential to plan and budget effectively. While the cost of developing and implementing an EHR system may seem high, the benefits that EHR systems offer, such as improved patient care and increased efficiency, can be well worth the investment.

Arkenea offers custom EHR/EMR software development services that focuses on security and interoperability for your healthcare enterprise. If you are looking for bespoke solutions that seamlessly integrate with the practice management tools that your facility uses, get in touch with our team to discuss your requirements further.