Healthcare News & Insights

EHR costs vary by location, study says

The cost of implementing an electronic health record (EHR) system can vary based on several factors, with many hidden costs adding to the total bill. Here’s one factor affecting EHR costs that many healthcare providers haven’t considered: 

The geographic location of the organization.

Specifically, hospitals in rural areas often end up spending more on EHR implementations compared to those near urban centers, according to a recent analysis of EHR costs conducted for the National Bureau of Economic Research. On average, urban hospitals studied began saving money three years after switching to EHRs, while costs were still higher for rural facilities even six years after adoption.

The main reason geographic location had such an impact: proximity to IT companies. Healthcare organizations saved more money when using EHRs when they had the right staff to help during and after the system’s installation.

It’s easier to find that help in urban areas close to many IT firms, because there are more IT pros looking for work, and because the hospital can more easily find an IT service provider to add support.

For the study, researchers looked at data about hospitals that had adopted EHRs from 1996 to 2009. The facilities were divided into categories based on proximity to IT companies. Those located in “IT-intensive markets” lowered costs by an average of 3.4% three years after installing a basic EHR system, while those in areas with the fewest IT firms still faced a 4% cost increase six years after switching to EHRs.

When healthcare providers implement EHR systems or undertake any other big IT project, it’s important to get an accurate picture of what the real costs will be. As this study shows, organizations should take their location into account when making those calculations.

Researchers also noted this may be a reason EHRs are being adopted unevenly, with large providers in cities using EHRs more often than smaller, rural hospitals.

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