The impending double whammy after EHR implementations

Your hospital just went live on the best EHR in this universe after a multi year selection and implementation process that also saw hundreds of millions of dollars walk out of the door, without your CFO blinking an eyelid.

Now it must be the time to reap the rewards. Costs should go back down to where they were before implementation. You should now have the funds to invest in the rest of the organization, including people and facilities.

However, the reality is going to be very different from this. The shiny new EHR is like a shiny new car. It costs money to run, and the amount needed to run a car is more than the amount needed to run a bicycle. And the loan that financed it now needs to be paid back as well.

Increased EHR ongoing support costs, coupled with implementation capex amortization is going to put tremendous pressure on your hospital’s margins. This will come at a time when there are other cost squeezes of declining reimbursement, bundled payments, value based payments etc start to hit.

So, if you hear your CFO talking about margin deterioration and the need to cut staff and/ or services, it is quite likely that it is the double whammy of EHR costs that have contributed in good measure to the financial situation. And in the next round, the spotlight is going to be on the IT department itself.


About healthecosystem

A user, a patient, an advisor, a financier and a concerned participant in the Health Ecosystem
This entry was posted in Healthcare Finance, Information Technology, Uncategorized and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s