EHR Costs & Pricing

A comprehensive guide to EHR pricing and how to compare costs between software vendors.

If you are considering adopting new software at your human services agency, you have probably noticed that there is a huge variation in pricing between the different EHRs and case management systems out there.

It is not always clear why there is so much variance between vendors, but, in general,  the functionality of the software and the level of support offered are the two biggest drivers of the pricing. There may also be some hidden costs that only become apparent after you have implemented a new system.

We want to demystify EHR pricing for agencies to help you understand what to expect when looking for new software. Along the way we will illustrate all of this by pulling back the curtain on how we think about pricing, and how that makes our software a great fit for some agencies – and not the right choice for others.

But with so many EHRs on the market, how do you choose the right one? This guide will position your organization to properly evaluate different EHRs and select the one that’s best for your agency.

Table of Contents

Types of Software

Let’s get started. There are three main categories of software: 

Off-the-Shelf Software (OTS)

This is software that comes ‘as is’, with little to no flexibility. Generally, there is not a lot of support or service included in the price of the software package. The main advantage to OTS software is that it is very economical. If the software functionality aligns well with your strategic goals then this may be the right choice for your organization. However, if your organization is growing or changing then OTS may be too constrictive. In addition, any services and support usually incur additional fees.  

Price Range: $0 – $10,000 Annually

Configurable-Off-the-Shelf Software (COTS) 

This software has a core system and requires formal implementation to get it integrated into your agency operations. The configurability of the system allows you to tailor the system to your strategic objectives. In addition, as your organization evolves and grows you can more easily adapt the software to those needs. There are typically some services included in the pricing. In general, the cost of these systems are higher than an OTS system. COTS systems typically require a System Administrator to keep them up and running. 

Price Range: $15,000 – $100,000 Annually

Customized Solution

A customized solution means starting from the ground up to build and maintain a bespoke system. The biggest advantage to a customized solution is that you can develop the system to fit your exact needs. If you have access to developers you can change the system when needed. 

The drawbacks are that there is generally a large up front cost and there can be a long timeframe to build the system. Even when the system is complete there will need to be ongoing maintenance to keep up with changing requirements and security protocols. Any support and services are managed internally and the System Administrator needs a high level of technical proficiency. 

Price Range: $100,000+ Annually

EHR Pricing

Pricing for EHRs can vary from a few hundred dollars per year all the way up to tens of thousands of dollars per month. There are four key factors that affect pricing; functionality offered, flexibility, level of use, and the level of support offered by the vendor.

Functionality

The number and quality of the features that an EHR offers ‘out-of-the-box’ will tell you a lot about the price. The more fully-featured and robust the software, the higher the price. It is important to consider whether those features will be important now or in the future. Also, it can be difficult to compare systems where required functionality is offered as a core feature, against others that only offer it as an add-on.

This is where knowing exactly what your organization’s needs are is extremely important. (We go into more detail on this in our guide on selecting an EHR.) When you have a well-researched list of ‘must-have’ functionality, versus ‘nice-to-have’ (and even a list for ‘not needed’) you will be in a much stronger position to compare apples to apples.

Flexibility & Configurability

In general, the more flexible the software the higher the cost. Understanding what is configurable in the system and what needs to be custom-developed is going to be important to what the overall cost of software will be. 

It is important to consider system configurability through a strategic lens. For some purposes you may not need a high degree of flexibility – and too many options may actually become a hindrance. In other cases you will need the flexibility to align the system with the current and future strategic goals of the organization. 

Most software companies are willing to customize their software for the right fee. This is very different from a system that offers integrated configurability as a feature. Configurability options allow the end users of the software to make their own adjustments without incurring any additional cost.

Usage

Usage can be measured in different ways by different software vendors. Some vendors will base usage on the number of staff at the agency, others on the number of clients in the system, and others still on the revenue of the organization. The usage is a primary indicator of price for software companies, because it can provide an indication of how much server space will be needed to support the system. 

Staff Size

This is the most common method of measuring usage of an EHR, and can be broken into two groups – named users and concurrent users. 

Named Users

This is the most common type of staff pricing. The pricing is simply based on the number of staff that will be using the system. The advantage to this model is that it is easy to see and price predictability. It can be challenging with lots of staff turnover and it can push the pricing up if there are lots of part-time staff.

Concurrent Users

The concurrent user model tracks the number of staff that are on the system at a given time. The advantage with this pricing is that it can provide some flexibility and price savings for larger staff sizes, staff with lots of turnover, and/or part-time staff. The challenge can be hard to manage who is on the system at the same time.  

Clients Served

Some vendors will base pricing on the number of clients that are in the system. This eliminates any staff size pricing concerns. Some challenges with this model is that it can end up costing you more if you grow. In addition, if the number of clients you serve changes from month-to-month it can make pricing hard to predict. 

Revenue Size

Some vendors will charge based on revenue size, or even asset size of the organization. This eliminates all of the staff or client usage challenges above – and should ensure some price predictability. However, charging a fee based on revenue size may not accurately reflect what revenue is correlated to program spending. 

‘Free’ Software

There are instances where software companies will charge nothing or very little to use their software. All software has a charge for usage in some form – even “free” software. Free software may serve the organizational needs and be the right choice. However, it is recommended that you understand the cost behind free software. Here are some examples of free software:

  • A state or collaborative system that provides free access to your organization. The entity funding the system is covering the cost so they own the data in the system.
  • A low-cost or free entry case management system. Companies like Salesforce and other platforms will provide human service organizations a free or low cost version of the system. However, you have to usually pay someone to customize the software for your organization.
  • A free or low cost EHR. They will allow access to the software on a very limited basis, with a goal to upsell in other areas (more modules, additional services, etc.) In which case it is similar to an OTS system.

Services & Support

All software requires some level of service or support for the system to work effectively. Software support can range from a “Help” button to full-blown customer support via phone, email, or even in-person. 

Understanding the level of services and support you require and what is offered by the vendor will have a huge impact on the price tag. Choosing the right level of support services is crucial to the successful adoption of a new EHR. When considering new software think about these roles:

2shutterstock_1477255091 [Converted]

Help Desk

Think about who will be managing your support tickets and whether there is a cost to this service. For example, here at Foothold we do not charge anything for Help Desk because we want to hear from our clients when there are issues. 

Professional Services 

These are people who will help implement or set up a new system. They may also jump in from time to time to assist with bigger projects or initiatives within the system. Note that professional services may be provided directly by your software vendor, or may require a 3rd party. 

Success Managers 

Success Managers are your go-to point of contact. They look at the overall strategic goals of your organization and how the software can help achieve those goals. This is sometimes combined into an Account Management role. 

Having different voices with equal influence is ideal for identifying a quality long-term solution. If one consideration dominates the selection process, you can end up with a system that doesn’t work for all parts of the organization. For example, if the billing team drives the decision-making, you could end up with a system that works well for billing but is lacking for other needs. It’s only a matter of time before that same organization sets out to select a new system because the clinical staff feels the software is a poor fit! Equitable representation from stakeholders across all departments encourages ‘buy-in’ and is key to selecting a system that will work well for the entire organization. 

"We made it a priority to communicate with staff how important it was to make this transition, focusing on the ways the new system would ease everyone’s day-to-day work and move the organization forward in the long term."
Jane Pirsig
Executive Director,
Aurora Family Service
Assedsd_1
2_19

Pricing Models

There are a few different pricing models that can affect how much you pay, and how often. There may be an initial one-off cost (e.g. Microsoft Excel), it may be an ongoing subscription model (i.e. Software as a Service / SaaS), or a mix of both (an up-front setup fee and ongoing maintenance). 

Flat Fee 

You pay an up-front fee and then you ‘own’ the software. This model is less and less common as technology is constantly evolving and software products require regular updates.

License Fee 

There is usually a sizable up-front cost and then an ongoing maintenance fee. The up-front fees go towards setting up the system and customizing it for your needs. The ongoing fees help to keep the system updated and provide for some level of services and support. 

Software as a Service (SaaS) 

The start-up cost is low or non-existent, but there is an ongoing monthly fee, similar to a subscription. This provides the software and service needed to run the system. The advantage to this model is that it allows for more predictable pricing.

Total Cost of Ownership (TCO)

When it comes to EHRs, there is a big difference between the price and the cost. We have talked about pricing so far, but that is only one part of the overall cost. A full understanding of cost, or Total Cost of Ownership (TCO), is crucial to running a Cost/Benefit Analysis when thinking about a major investment like a new EHR.

When evaluating the cost of software it can be hard to compare apples to apples, given all of the factors we have talked about already. One of the best ways to overcome this is to calculate the Total Cost of Ownership for a 3-5 year period for each system you are considering. From there it can be easier to make a comparison. If there is a vast difference in TCO between systems, double-check that you are comparing similar types of software – there may be hidden costs you are not aware of. 

Even if the price of software is free, there is always a cost. For the free apps that you get, generally the cost is your personal information. There is also the Salesforce model for small nonprofits – the software is free, but there is a cost to setting it up. 

Factors to Consider

  • Try to determine an ‘overall’ cost when evaluating systems. Don’t forget staff time, potential loss of revenue, onboarding time, etc.
  • Think about pricing over a 3 year period. Are there any costs to change the system during implementation, or hidden costs that pop up after a year or two? 
  • Is there a cost for support? If so, how much and is it hourly?
  • What about upgrades – will they cost extra? Is there a cost to access or download your data? Is there a cost to build, maintain, or change reports?

Comparing the Total Cost of all your options in the context of the desired benefits is the best way to make an informed buying decision.

If you are searching for new software, our team can provide guidance on pricing and choosing the right EHR for your agency and your programs.