Electronic Health Records (EHRs) based on the Application Service Provider (ASP) or Software As A Service (SAAS) model are very popular, and with good reason. ASP systems offer many benefits to practices of all sizes. However, there are hidden costs and drawbacks with ASP systems that your vendor probably will not mention.
What are ASP systems are so popular? First, they require minimal hardware and infrastructure, because the EHR is web-based and runs from a web-server locked away in a remote data center. Practices using ASP EHRs typically do not have to invest tens-of-thousands into servers, backups, and other gear.
ASP EHR systems are attractive because of their pricing model. Many ASP systems retail for approximately $400 – $600 per provider per month. Rather than buying an EHR that requires cash up front or financing, ASP pricing structures are more like your cable or internet bill. You simply pay a monthly fee as long as you use the service.
What are the drawbacks to ASP systems? The first drawback is the pricing structure. While many practices prefer a fee-for-service to an outright purchase, they will lose money in the long run. A small practice with three providers would spend about $1200 – $1800 a month on their EMR, which comes out to $72,000 – $108,000 over five years. Compare this to purchasing a system outright for $25,000 to $60,000. If you buy a system, you may also be able to sell the licenses if you retire and sell your practice. This is the classic rent-vs.-buy debate; you should consider which will be best for your practice.
Remember, ASP systems run over the internet. Your practice will need a commercial-grade high speed internet connection. Many of these systems may require a T1 connection. A T1 connection offers 1.5 Megabits per second of dedicated bandwidth, and typically runs anywhere from $500 to $1000 per month. This adds up to anywhere from $30,000 to $60,000 over five years. If we add that to our EMR fees, you will spend around $102,000 to $168,000 over five years.
Performance is another thing to consider. T1 connections do offer dedicated bandwidth, unlike cable internet, but they can still slowdown or drop. Remember, an ASP EHR system runs over the web. If your connection slows down, your EHR slows down. Have you ever been frustrated waiting for a web page to load? Imagine if your practice and cash flows depended on that web page. What happens if your internet goes down? You will be unable to see patients, and you will either have to revert to paper-based charting, or you will have a waiting room full of angry patients. Just like your home internet, there is no way to tell if your service will be back on in a few minutes, a few hours, or a few days.
ASP EHRs could be a good choice for some practices, but you should carefully consider the benefits and drawbacks before signing on the dotted line.