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EHR Implementation Still Costs Too Much

Even with the federal government's EHR incentives, many hospitals continue to fret about costs, according to recent KPMG poll.

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Hospitals have always had problems securing the initial down payment for electronic health record (EHR) implementation; a recently released poll from KPMG suggests that financing such projects remains an ongoing concern that promises to last throughout the implementation phase and beyond.

The recently released results of a May poll that surveyed more than 220 hospital and health system administrators found that while 49% of respondents are more than halfway to completing full EHR implementation, 48% of those polled said they are only somewhat comfortable with the level of budgeting their organization planned for EHR deployment. Nine percent said they weren't comfortable at all with their budget plans, while 18% said they were unsure. On the positive side, 25% said they were very comfortable with the funding they had for their EHR implementation project.

With the majority of those polled expressing some level of discomfort about how they will pay for their project moving forward, Gary Anthony, principal with KPMG Healthcare, said the poll findings suggest that healthcare executives miscalculated the costs of their EHR projects.

"Organizations underestimated the impact and the effort required to fully implement an EHR. They also underestimated just how transformative this would be to their organization as a whole," Anthony said in an interview with InformationWeek Healthcare. "This is the largest, most significant investment that a health delivery organization will go through. EHRs touch and change everything within the organization, and so I think [there's been] a lack of experience and a lack of understanding about the magnitude of the effort."

[ Is it time to re-engineer your clinical decision support system? See 10 Innovative Clinical Decision Support Programs. ]

According to Anthony, recent reports that Duke University will spend $700 million to implement its EPIC EHR indicates the staggering costs of an EHR implementation project. He also said these projects are associated with maintaining and storing additional terabytes of data and providing security capabilities that adhere to Health Insurance Portability and Accountability Act (HIPAA) requirements. Additional costs come with maintaining a robust network that allows doctors and other clinicians to access the data remotely on their iPads or smartphones.

The demand for skilled health IT professionals also impacts the way health delivery organizations are developing a strategy for EHR deployment. The poll shows that 46% of hospital and health system leaders indicated that they are using a multiple-resource strategy--a mix of using existing staff, hiring additional staffers with new skills, or engaging consulting services. Sixteen percent of respondents said they were leveraging existing staff, while 13% said they will hire additional staff, and 10% said they will secure third-party assistance. Anthony said clinical informatics workers who know specific EHR systems from vendors like EPIC or Cerner, and who are also capable of implementing EHRs in areas such as emergency departments or operating rooms, are in short supply. Anthony estimates that salaries for employees with health IT skills have risen substantially during the last two years, which also drives up implementation cost.

"There is a lack of skills in most health organizations around high-level project management disciplines. It's difficult to find people who know how to manage these very large-scale projects across the organization and who will implement the project on time and on budget," Anthony said.

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Tim Pacileo
Tim Pacileo,
User Rank: Apprentice
7/18/2012 | 3:05:53 PM
re: EHR Implementation Still Costs Too Much
I agree that for the vast majority of hospital moving to the cloud for EHR would be their most cost effective approach, however there are some cultural issues that need to be changed in how hospitals approach, adopt and use technology for this to be a successful solution. Hospitals as a general rule focus on purchasing best of breed solutions first and worry about integration later. While they do try to have somewhat of an enterprise approach with their IT solutions for the most part they are very siloed. Hospitals need to move to an overarching enterprise architecture which will allow for both a better integrated and holistic approach to IT but also allow for the integration of cloud services.

The last report I read had indicated that only ~ 30% of US hospitals had a cloud policy in place or that 70% are not thinking about the cloud as an alternative. There are also other findings indicating that integrating Big Data with EHR will actually lower the costs of an EHR implementation by taking advantage of Big Data technology to mine all the patient information and capture it in a centralized solution. Without a holistic enterprise approach and the continued focus on one-off solutions and investments, unfortunately the opportunities for cost savings via better integration and consolidations are lost.
Jonathan Govette
Jonathan Govette,
User Rank: Apprentice
7/15/2012 | 8:11:28 AM
re: EHR Implementation Still Costs Too Much
Great points. Considering almost every hospital I have worked with hates their current EMR its rather sad on how much they cost.

I wanted to share with you and your readers about additional things that are wrong with healthcare Gă˘

11 Reasons Why Our Healthcare System is So $&@%#! Up
User Rank: Apprentice
7/12/2012 | 4:55:54 PM
re: EHR Implementation Still Costs Too Much
While we all recognize the complexity of EHR implementation projects, particularly in a large academic medical center like Duke, the existing culture that accepts multi-million dollar price tags for EHR software and support, server farms and commercial database licenses is archaic and must change if healthcare delivery organizations are to evolve to 21st century technologies and tools. Simply put, weGăÍve continued to accept proprietary software pricing models in an environment where cloud-based applications G㢠which virtually eliminate the need for large, specialized and expensive IT staffs -- are increasingly available.

Concerns about privacy and security are falling by the wayside as the industry gains more confidence in these new systems. Look at the headlines. Security breaches occur when laptops are stolen, not because of hackers breaking into web-based data stores. And the idea of paying 18-20% of software license fees for annual maintenance G㢠often locked into five or ten year commitments G㢠is based on an antiquated business model that no longer makes sense for anyone except software vendors. When software updates can be delivered transparently without disrupting operational systems, skilled resources can focus on workflow changes, necessary changes to interfaces, and end-user training G㢠not whether an upgrade will crash the data center.

And, while thereGăÍs still a role for consultants who specialize in workflow analysis and design, and for change management experts to help nurses and pharmacists design the right medication management process for an organization, meaningful use and the increasing adoption of standards (e.g., SNOMED and RxNORM) is leveling the playing field and minimizing the variations in functionality that have created long and lucrative careers for these folks. And we donGăÍt need programmers to install and configure EHRs any longer. The tools are readily available to allow systems to GăúrememberGăą a physicianGăÍs routine order and automatically build his or her order sets; and apply evidence-based rules. No, EHRs are not GoogleGă¬but neither are they rocket science.

There are a few companies emerging to shatter the old models. And a few hospitals and physiciansGăÍ practices are taking a different, dramatically less expensive and complex path to EHR adoption. LetGăÍs shine some light on these projects and change the health IT paradigm that weGăÍve accepted for the past 30 years.

Elizabeth (Liddy) West, CPHIMS
Representing Choice Hospital Systems (
User Rank: Apprentice
7/10/2012 | 2:57:53 PM
re: EHR Implementation Still Costs Too Much
Centers for Medicare and Medicaid Services (CMS) has provided $4.5 billion in electronic health record incentives. How might electronic health record (EHR) efforts progress from here? http://www.healthcaretownhall....
User Rank: Moderator
7/9/2012 | 10:46:08 PM
re: EHR Implementation Still Costs Too Much
If you want to read about a really bad implementation, check out this link about a system used in ER services at a hospital in Australia, unreal to where executives hacked the system to change items that would give them better public statistics...and lack of security on the system. I don't think I have ever read anything like this the hacking stood out like a sore thumb.
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