Why your practice needs to create an EHR ROI forecast

Implementing a new EHR comes with a hefty price tag, so it is important for a medical practice to create an ROI forecast to prepare for the transition.

This forecast helps estimate the potential return on investment before spending any money. The projection should include a comprehensive set of metrics that will affect the practice's revenue during implementation.

Here are four reasons why your practice needs to create an EHR ROI forecast:

Avoiding surprises

One of the worst kinds of surprises for a medical practice can be lost revenue and financial stress. Some costs can be easily calculated, such as those directly associated with the purchase and maintenance of the EHR system.

Others that need to be factored in are those that are less easily measured, such as lost productivity, slowed workflows, and training time. The practice must realize that it will have a loss of incoming revenue while increasing the financial output.

Recommended reading: get through your selection and planning phases with sanity intact using our EHR selection survival guide.

Financial planning

Your EHR ROI forecast will delineate the timeframe for changes to expected financial expenditures and revenue. The practice will be able to determine your total cost of ownership, approximately when it will break even, and thus establish what timeframe will be needed to begin making money again.

The practice needs to know when income will compensate for the cost of implementation. An ROI forecast for your EHR project will help determine when the practice may see an increase in revenue due to improved productivity.

Goal setting

By creating an EHR ROI forecast, the practice will be able to use the template for setting short and long term goals. Goals may be set for productivity, patient visits, and accounts receivable.

For example, the practice may plan that after one month, the practice will have returned to baseline productivity. After three months, the practice may expect an increase in patient visits by 10% and so forth. This will impact the financial forecast and can be the basis for quantifiable and achievable goals.

Realistic expectations

Achieving realistic expectations of the process and time until the practice reaches positive financial revenue will allow for improved communication with all board members and administration.

As such, the practice will be able to set realistic expectations for staffing needs, which will likely increase during implementation. The practice can also be realistic about when they should plan to see an increase in revenue and realize when to expect incentive payments, if applicable.

Additionally, it will allow the practice to realize that EHR implementation is a long-term project with long term impact on the practice.