Becker's Hospital Review

41 HEALTH IT EHR Implementation: Keeping Million-Dollar Projects From Bleeding Beyond the Budget By Carrie Pallardy L ove them or hate them, everyone can agree on one point: EHRs are expensive. Hospital and health system EHR implementations come with price tags ranging from the low millions to more than a billion dollars. ese projects span multiple locations and years, making dollar estimates a seemingly imperfect science. Stories of bloated budgets and costs spiraling out of control are hardly uncommon. Just this summer, four executives with New York City Health and Hospitals Corp. lost their jobs over an EHR implementation that blew past its budget point with no signs of slowing. Even across the pond, the CEO and CFO of Cambridge University Hospitals NHS Foundation Trust in the United Kingdom stepped down from their positions in light of the system's financial trouble, part of which may be linked to a $300 million EHR implementation. Given the scope and unpredictable nature of long-term proj- ects, can EHR implementations be pulled back from the brink of overspending or even stay on budget? Setting the budget No two hospitals or health systems are exactly alike, as no IT project budget will be the same. "All [hospitals and health systems] have different outcomes they are looking for, which inevitably drives change in what the EHR implementation will actually look like," says Mike Neal, se- nior vice president of consulting and application services with Cerner. "We develop a detailed list of scope of solutions and work process- es. Clients have predictability in what their out-of-pocket costs will be." Executives need to consider both one-time and recurring fees. One time fees oen include: • Soware license • Hardware • Training • Implementation fees • Consulting fees Recurring fees include: • Soware license upgrades and support fees • Hardware refreshes ough many EHR vendors with significant market share rely on a hardware model, some vendors focus on a different model. A number of cloud-based EHR vendors, such as eClinicalWorks, offer payment models based on monthly fees, rather than an upfront capital investment. eClinicalWorks is active in the physician and ambulatory spaces, with plans to expand into the inpatient market within the next year. "We have three different packages that focus on a per-user, per-month fee. ey range from $310 to $649 per-physician, per- month," says Girish Navani, CEO of eClinicalWorks. Cloud-based vendor athenahealth charges clients a percent- age of their collection. Under this scenario, vendor and client incentives are aligned, and athenahealth gets paid only if its cli- ent is achieving financial results. e cloud-based model is still emerging, particularly in the inpatient space, but it is becoming increasingly popular. "If companies are capable of delivering cloud-centric solu- tions for both inpatient and outpatient that can run on any plat- form and cost less to deploy, that value proposition will eventually win," says Mr. Navani. Taming the budgetary beast An IT project as large in scope as EHR implementation can quickly gobble up even the most carefully planned budgets, but it is possible to stay on target and achieve financial and performance goals. Beebe Healthcare, based in Lewes, Del., went live on the Cerner EHR in March 2014. e entire project was set on a $33 million budget. "Some vendors are intentionally opaque, but there are far more unintentional than intentional budget overruns." —Paul Merrild, Senior Vice President of Enterprise Solutions with athenahealth

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