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EHR Incentive Inflates EHR Pricing

Posted on July 25, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In a recent conversation I had, the question of EHR pricing came up. It was suggested in the conversation that EHR incentive money was inflating EHR pricing.

I wish that I had harder data on the price of EHR software. Unfortunately, there’s no really good source of EHR pricing across all the 600+ EHR comanies. At one point I considered the idea of creating such a resource, but the challenge of getting that type of information is ominous and might be impossible since many EHR vendors keep that information very close to the chest.

Since we don’t have the quantitative data that we’d love to have in this situation, instead let me offer some observational data on EMR pricing.

In my first couple years blogging about EMR software (I started EMR blogging 6+ years ago), I was able to witness a dramatic shift in the price of EHR software. The norm 6+ years ago was for an EMR for a small clinical practice to cost somewhere in the $30,000 range. For a larger group practice they were easily paying $100,000-200,000 for their EHR software. In almost every case this was a huge up front lump sum payment for the EHR software. Although, many of them conveniently offered financing for your purchase. These EHR were almost always an in house EMR software that needed a lot of up front costs for things like a server.

In those early years, we started to see a wave of mostly SaaS EHR software enter the market at a much lower price point. In most cases they were offering their EHR software for a small monthly fee (usually around $350-500/doctor). Of course at this same time a number of Free EHR software entered the market as well. Both of these entrances forced the price of EMR software to decrease dramatically. Sure, a few EMR software vendors pillaged a practice for an ourtrageous price, but for the most part the price of EMR software came down. Plus, the movement to the monthly charge pricing model for EMR software took hold. In most cases, EMR software vendors would offer a one time fee EMR pricing model along side a monthly per doctor EMR pricing model.

Over the past couple years I think we generally saw a leveling off of EMR pricing. However, I have seen one major thing happen with EMR pricing since the EHR stimulus money was introduced. The new bar for EMR pricing was set at $44k over 5 years. You can be certain that every EHR vendor has looked at their EHR pricing and compared it to the $44k over 5 years.

While I can’t say I’ve seen long time EHR vendors increase the price of their EHR to match the $44k of EHR incentive money, what I have seen is new EHR vendors pricing their EHR software accordingly. Instead of pricing their EHR according to market pricing, they’re generally inflating their EHR price to match the EHR incentive money. I believe this has driven the overall cost of EHR software up thanks to the EHR incentive money. Plus, it has held the EHR pricing of some EHR vendors higher than it would have been if the EHR incentive money weren’t there.

One other thing worth considering is the long term effect on EHR pricing because of the EHR incentive money. EHR incentive is creating an artificial pricing bubble, but eventually the incentive money will run out and I expect a number of EHR vendors to drop their price when that happens. However, what might have an even longer term impact on EHR pricing is the increased number of EHR vendors thanks to the EHR incentive money. Standard economics says more EHR competition leads to lower EHR prices.

What have you seen related to EMR pricing? I’d love to hear your thoughts and experience.

Pricing for iPhone EMR App

Posted on September 20, 2011 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The other day I was browsing the EMR Update forum (where I started my EMR education) and found this interesting comment about the e-MDs iphone app.

EMDs is charging $250 to “install” it even though the phone does the installation for you and then they are charging $35 a month per device for “support”. I guess they are trying to lose all of their long term customers to other EMRs that are free like Practice Fusion. I find these charges to be outrageous.

Note: I tried to verify this pricing on the e-MDs website, but it’s conveniently not listed on their mobile page. Although, they do have a “free trial.” Is that a $250 install to get the free trial? I also found their website tagline ironic: “Affordable EHR software”

I find this comment really interesting on a number of levels. First, it comes from someone who has indeed been a long time e-MDs user and long been a fan and vocal spokesperson for the e-MDs EHR software. The above seems like such a small amount of revenue to alienate your happy EHR users over.

Second, $250 to help the user install the EMR iPhone app? Really? That just feels wrong on every level.

Third, $35/month for support? Of course, this is on top of the doctors existing e-MDs support contract. Such a terrible plan by e-MDs. If they felt like they needed to get some money for the support that would be required for their iPhone EMR app, then they should have rolled it into the existing support contracts. Then, no one would complain. At least not as loudly.

Now I’m starting to wonder what other EHR vendors are charging for their apps. Let me know what you’ve been charged for your EHR app. A while back I posted about all the various EMR Android apps. All of them were free.

Free EHR Model Has Bent the EHR Cost Curve

Posted on September 7, 2011 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

One of the most fascinating people I met on my recent trip to San Francisco was a doctor named Aaron Blackledge from @CarePractice. We spent a great evening together talking EMR, healthcare and entrepreneurship in general. You may also remember me posting about Aaron drinking the CareCloud EHR kool-aid (See also an opposing view of CareCloud and my thoughts after seeing CareCloud), but I digress.

Dr. Blackledge has posted a thoughtful look at how the EHR cost curve has changed over the past few years. It’s an interesting read for those looking for an interesting take from a physician in Silicon Valley and his idea of the value of a widely adopted platform.

I love the idea of a healthcare/EMR platform. Would you rather be a $100 million EMR company or a billion dollar platform company? Think those numbers are exaggerations? That’s the question that SalesForce.com basically answered. They could have easily become a $100 million CRM company, but instead they’re now a multi billion dollar platform company. I won’t be surprised if we see the same happen for some company in healthcare.

Whether you agree or not on the value of a widely adopted platform, one thing is certain: The Free EHR Model (with Practice Fusion as the first to make the big “free EHR” splash) has absolutely brought the cost of EHR down. I’m sure there were some other forces at play too, but I believe the Free EHR model held everyone else accountable for their pricing.

As Dr. Blackledge says in his post, little by little EHR vendors couldn’t get away with charging $20,000 per user up front for an EHR. I started blogging about EMR when this was the norm. Most clinics would take out a hefty loan to buy their $100,000+ EMR software. It was a scary idea and certainly burnt a lot of physician bridges along the way.

Along came a new pricing model where a doctor could pay a small fee per month. Sure, if you evaluated that amount over 5 years it was still a fair amount of money, but no longer were doctors on the hook for the entire amount even if the EMR software failed to deliver on their promises. Plus, the EMR vendor couldn’t come back later and charge them even more money for future upgrades (that’s right…$20k up front and then amazing upgrade fees).

After that, the Free EHR model made a big splash. While certainly viewed with a fair amount of skepticism (myself included), many other industries are proving this model and doing quite well. We still have a ways to go to see which company is going to be able to execute the Free EHR model, but as I discussed in my recent Pharmacy Ads and Free EHR software post there are a lot of pharmaceutical marketing dollars on the table.

Reminds me of the favorite thing my Dell sales and marketing guy loved to say, “Whether you go with Dell or not, we’re keeping prices low so that everyone else has to offer you lower prices.” I believe Free EHR companies have had that same effect on the EHR industry.

CPA Comment on EMR Pricing

Posted on October 10, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In response to my previous post about possibly creating an EMR pricing comparison website, I got a really interesting set of comments from a CPA who’s been assisting their clients in their EMR selection process. You might laugh at the idea of a CPA participating in the EMR selection process. Interestingly, the CPA that I use has also been asked by their clients about the EMR stimulus money and so they were grateful they could ask me some questions.

This aside, I found this person’s comments interesting. I think they also illustrate some of the challenges in EMR pricing and some of the thirst for EMR pricing also. I removed some identifying information and some other comments about EMR and HIPAA. Otherwise, the comments are in tact.

I have been pondering trying to do some sort of price comparison myself, and you’re right, they all differ so it’s tough to just do one basic comparison chart. I’ve seen already how some have things all bundled (ie.Athena, and others do it in separate modules can add on – ie. Greenway)

I have featured remote demo’s for clients to listen/view through our firm so they can avoid the vendor pressure… I thought I would try to get info on others for comparison purposes, but in keeping with the theme… it is just not that easy.

There are a few challenging items for comparison purposes, one of them being support and related costs.
The support/training is many times where the wheels fall off the well-intentioned EMR wagons.
You just don’t seem to get an answer or know the true support/training costs until you have already tied the knot with your new EMR system. If you could get more comparative info on that aspect, that would be very helpful – or better yet, come up with an EMR Pre-Nup.

Another toughy is the interfacing costs
From what I hear a [EMR Vendor] system may charge $30k to interface with another EMR vendor.
The vendors call that “not playing nicely”.
So tack on another layer of subjective complexity to your pricing project.

And yet another cost factor I’ve noticed is what EMR system an affiliated hospital is getting preferred pricing on. There is a hospital by us in an arrangement with [EMR Vendor], and of course advising the outside practice physicians to use the same. I am not to thrilled with this idea, I think there are better products that are not spread so thin in so many markets.

I mention the patient portal separately below as some of my clients don’t seem quite ready for that yet.
They view it as another task and feel could attack it once get the EMR running smoothly.
I know they need it for MU [Stage 1 doesn’t require this, but future stages probably will], but they seem to want that a little later than sooner.

In any case, I think some possible approaches for a comparative pricing schematic would be to have different scenarios:
a) 1-5 Docs & Midlevel providers /Web Hosted/ EMR only/ PM Interface/ No Patient Portal
b) 1-5 Docs & Midlevel providers /Web Hosted/ EMR only/ PM Interface/ With Patient Portal
c) 1-5 Docs & Midlevel providers /Web Hosted/ EMR & PM Bundled/ No Patient Portal
d) 1-5 Docs & Midlevel providers /Web Hosted/ EMR & PM Bundled/ With Patient Portal
e) 1-5 Docs & Midlevel providers /Web Hosted/ EMR & PM Bundled/ With Revenue Cycle Mgt/ With Patient Portal

EMR Pricing Comparison Website

Posted on October 8, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In a number of my recent posts and conversations the idea that providers need a way to filter through the plethora of EHR vendors that exist out there (Between 300-600 EHR vendors) has become a really compelling theme.

I think some of the challenges with filtering EHR vendors include:

1. Getting truthful information about an EHR vendor. This is especially true when it comes to pricing. There’s just a lot of bad information out there. On top of that, there’s a lot of partial information that doesn’t tell the full story of how much an EHR costs.

2. Having a way to compare the pricing of various EHR vendors. Let’s be honest, price is ALWAYS a part of the EMR selection process. However, it’s definitely a challenge for providers to try and compare prices across EHR vendors. Comparing the cost of a SaaS EHR versus a Client Server EHR takes some analysis.

I’m considering the idea of creating a website or section of one of my existing websites that’s devoted to getting truthful and complete EHR pricing information. I’m not exactly sure the right approach to do this in a successful way that’s accurate and scalable.

One direction is to go to the EHR vendors themselves and get the pricing info. Over time I think that EHR vendors would start coming to me to be listed on the price list. The key would have to be asking the EHR vendors the right questions so that we got ALL the pricing information and not just part.

The other way is to talk to doctors who’ve recently implemented a specific EHR vendor and get the pricing details that they actually incurred implemented that EHR software. This would obviously be some very interesting data. The question here is whether doctors would be willing to collect and provide that data. Plus, would there be phony “doctors” deployed by the EHR vendors to skew things?

A few other challenges with this idea. The first challenge is that EHR vendors will often change prices. Keeping up with the EHR price changes would be a challenge. The second challenge is that many EHR vendors pricing is a negotiated price. Obviously, if I’m buying software for 100 doctor practice I have more leverage to negotiate price. Maybe the key for this second challenge is to just focus on the 1-5 doc practice EMR pricing. They have much less leverage in negotiating price anyway. Plus, wouldn’t it be interesting to see which EHR vendors have drastically different pricing?

What do you think of this idea? Does it have merit? What things would I have to do to ensure that the data was interesting and useful? Would having something related to EHR pricing be better than what we have now (very little)?

What data elements would be useful to have from an EHR vendor when you’re evaluating pricing? What’s on your list of pricing questions?

Would you as a doctor or EHR vendor be interested in sharing your pricing info?

If I decide to take this on, my goal would be to provide truthful information that was valuable to providers in their filtering of EHR vendors. To make it worth my time, I’d likely put ads on the site. In fact, both things are basically what I do here on EMR and HIPAA.