Three ongoing EHR costs you forgot to add to your budget

Best practices dictate that organizations budgeting for EHR costs should model long-term costs through the total cost of ownership (TCO).

For an EHR, TCO includes an accounting of short term and long term, and direct and indirect costs to arrive at a comprehensive “total cost of ownership.” As the EHR environment evolves it is important to approach the question of accounting for EHR with an eye toward modelling ongoing costs that may be overlooked or may not have been a relevant consideration in the past.

The need for a more nuanced and evolutionary approach to modelling EHR costs is illustrated in a survey of healthcare CFOs conducted by market research firm Peer60. The study used survey data to construct a standard and comprehensive TCO model based on the assumption that “CFOs are aware that the HIT market is changing, and that the basic assumptions they have used for decades to build accurate financial forecasts for their organizations must also change.” As such, an evolving EHR environment should consider the following three EHR costs to add to your software budget.

1. Onboarding and training

According to a survey of 10,250 healthcare facilities conducted by human resources consulting firm, CompData, the average total turnover rate reported for healthcare employers in 2015 was 19.2 percent. In raw numbers, an organization with 100 employees with a turnover rate of 19.2 percent can expect to turn over 19 employees a year. As such, each new employee will require training on their new employer’s EHR system. Onboarding new employees unfamiliar with an EHR system involves costs that are often lost in the training costs expended on existing employees.

2. Keeping security up-to-date

With the uptick in attacks on healthcare data systems, practices also experience an increased risk of financial penalties from regulators for healthcare data breaches and a loss of public confidence that can hurt revenue streams, so investment in data security is important.

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However, it is not an area that is viewed as an ongoing cost. Rather, data security measures are often viewed as a front-end investment that underestimates the need for data security to match hackers who increasingly employ more sophisticated measures to breach computer networks. As such, data security measures must be updated periodically along with conducting regular security audits to ensure data security is adequate.      

3. Updates

Updates to EHR software are important on several fronts. Firstly, updating improves a system’s functionality and, as mentioned previously, it also can be vital to system security. This was illustrated in the recent ransomware attacks that struck the National Health Service in England and Wales. In this case, malicious software involved in the attack exploited a vulnerability in the Windows Operating System which unfortunately had been previously addressed by a patch Microsoft released in March. However, the computers that had not installed the security update were vulnerable to a breach.  

Updates - particularly frequent updates - can present significant ongoing costs. These costs involve not only out of pocket expense for the software or hardware upgrades, but also labor costs needed to install and monitor updates.

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Jeff Green

About the author…

Jeff Green, MPH, JD works as a freelance writer and consultant in the Healthcare information Technology Space.

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Jeff Green

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