The following column is written by Patrick Doyle, vice president of sales for SourceMedical.
One of the many benefits associated with implementing an electronic medical record (EMR) system is the financial savings they afford ambulatory surgery centers. The most obvious savings comes from the elimination of paper-based systems.
Significant financial savings are also achieved through the ability to create more efficient processes. For example, EMR systems eliminate the need for your staff to spend hours preparing paper charts, including chart pack assembly, collating, document and chart retrieval and copying and faxing. Combined, these hard and soft costs can easily add up to more than $120,000 per year.
Despite the well documented benefits associated with going paperless, widespread adoption of EMR systems remains slow within the ASC industry. With many competing demands for scarce capital, the financial commitment necessary for implementation remains the key deterrent for moving forward. Key stakeholders at ASC facilities are hesitant to take financial risks associated with lengthy implementations.
To help alleviate some of these concerns, it is important to understand your deployment options and some of the generally associated costs.
Software acquisition: License model vs. service model
There are two basic options for software acquisition when deploying an EMR: a license model or a service model. With a license model, the ASC owns the software and pays a high upfront fee followed by annual support fees to keep the software updated. In contracts, utilizing a service model, the ASC rents or leases the software and pays a smaller upfront fee which is followed by a recurring monthly fee.
For example, a license model might require $75,000 for acquisition and a $15,000 annual fee, while a service model might require a $10,000 acquisition cost and then recurring monthly payments to make up the additional cost. ASCs with the option of using capital outlay during the implementation year are more likely to choose the license model. For cash-strapped ASCs, the ability to space payments out over time will be a much more appealing service model.
Acquisition costs
When pursuing a license model, in addition to the software license you will need to include software customization costs within your budget. Software customization should be approximately five percent of the total cost of the software. The software will also come with a recurring annual maintenance fee which you will need to factor into your budget.
Additional software-related costs which are often overlooked in favor of "hard costs" are "soft costs". Soft costs may include the cost of labor to implement the software, a process which can take approximately three months. You will also have to budget for short-term case volume disruption; plan for a 10 percent drop in cases for three months.
Hardware acquisition: Self-hosting vs. service model
Another consideration is whether to self-host EMR hardware or to rely on a service model. One option is to host the hardware yourself and purchase the server, workstations, tablets and scanners as well as set up a wireless network. Another option is to rely on a service model where the only thing needed is a broadband internet connection. The major benefit of a service model when considering hardware is your facility will not need to worry about routine server maintenance which is an added expense, typically in the form of additional personnel.
The choice to self-host or use a service model depends on the type of ASC. If your center is small, it might make more sense to use a service model as the monthly costs for hardware will be relatively low. However, for larger facilities where the hardware footprint is more complex and numerous connected devices are required, a service model could easily exceed the cost of your server and maintenance in comparison to what it would be if handled internally.
Acquisition costs
If your facility chooses to pursue a self-hosting model, remember to plan for the one-time cost of a server, workstations and tablets, scanners, printers and a wireless network. There will also be a recurring cost for the maintenance contract.
These costs can add up to over $40,000, with the biggest cost coming from workstations and tablets which will be distributed throughout your center.
Regardless of which deployment option you choose, carefully consider your current business needs as well as your long-term capital position and operational objectives. Additionally, consider your realistic growth projections and how your IT deployment model will look in one year and in five years.
Learn more about SourceMedical.
Read more from SourceMedical:
- 7 Things Surgery Center Administrators Need to Know About Information Technology
- 5 ASC IT Considerations for the Next Five Years
- SourceMedical Acquires Serbin Surgery Center Billing