7 ways to prevent overspending on EHRs
It's no secret that the broad adoption of electronic health record systems will bring about tremendous cost-savings once implemented. Repeat: once implemented. But before then? How does a healthcare organization avoid breaking the bank while trying to get to that lucrative promised land?
Healthcare Finance News recently spoke with Jeff Muscarella, executive vice president of the IT division at NPI. He helps healthcare providers manage their IT and telecom spending. Muscarella explains, "It's important to benchmark a vendor's EHR proposal to see if the terms and conditions are fair, if the pricing is good and if the healthcare company is getting reasonable discounts for the type and size of purchase they're making."
[Also: 5 things CFOs need to communicate to CIOs to prevent overspending]
Based on his experience, Muscarella outlines 7 ways healthcare companies can prevent overspending on their transition to EHRs.
1. Organizational readiness. It's important to bring together different parties to determine the needs of your company. Having a representative from IT, finance and even from the clinical side of things creates a cross-functional team that won't just examine one vendor solution from one perspective.
2. Develop a poker face. It may seem like common sense, but when there are deadlines to be met the worst thing you can communicate to a potential vendor is a sense of urgency. You may compromise any leverage you had regarding pricing and terms because a vendor can see you're in a rush.
[Also: EHRs: How do you choose?]
3. IT readiness. Is your current IT able to support any sort of new application? Is all the required networking in place? It's less of an issue these days, but if a hospital hasn't done much upgrading to their network, any new applications they purchase and install could actually place more of a burden on their infrastructure.
4. Data security. If you're having an external company host your data for you, you need to know, and be in control, of how and where they're storing your data - like patient records. Are they housed in one area or multiple? That particular information needs to be segregated, so one practice can't see or access another practice's data. In many cases, the technology vendors are using to roll out cloud-based EHRs aren't up to standards that would prevent this. And while those cloud-based solutions may initially seem cheap, know that in months and years to come those costs will probably rise: Once you're on the platform it's hard to move away from it. So, these vendors begin to add yearly price increases or ancillary charges, like if you want more bandwidth or if you want your information backed-up more frequently than what they offer.
5. Transition Assistance Clause, also known as the "Pre-Nup Approach." When you begin working with a new vendor, you need to establish an agreed upon amount of time they'll help you migrate your information from their system to a different system should you choose to make that change for whatever reason. This is not a standard part of agreements, so if you don't ask for it you could be stuck on the hook in the end where they make it very difficult for you.
6. Service Level Agreements. The moment you stop buying and operating hardware and software in your own data center and begin letting someone else do it, you need a defined agreement of what's expected from the company you're working with. For example, you need to know up-front exactly how long it will take them to respond to you if you need to make a change to your help desk, looping from screen to screen, etc. Set up monetary reimbursements for your company if they fail to meet those deadlines, such as: If they miss five major metrics, more than twice in one month, then they should decrease your next bill by 3 percent. And, if you end up having major problems frequently enough - if patient records are inaccessible, or the response time from screen to screen is slow enough to negatively impacting workflow - then you should have the ability to cancel your contract with them altogether.
7. Get Multiple Quotes. Finally, it's a really smart idea to bring in other providers so your incumbent vendor knows you're looking at all available options. Vendors who think they've already secured your business don't have your best interest in mind. They'll do whatever they have to do to reach their own quarterly numbers, potentially preventing you from getting the best price available.
