Costs of EMR Certification for Meaningful Use And Impact on EMR Vendors

Long time readers will know that I’m not a fan of EMR certification. It seems quite pointless since it provides no assurance to the doctor of anything of value. EMR Certification doesn’t ensure a higher implementation success rate. EMR Certification doesn’t improve patient care. EMR Certification doesn’t improve doctor’s bottom line.

With that said, we’re still stuck with the term “certified EHR” in the HITECH Act EMR stimulus money legislation. So, EMR certification is going to be around for the foreseeable future.

CEO Mike from Medscribbler EMR posted an interesting look at the cost of CCHIT EMR Certification and the impact that it could have on EMR vendor selection and long term viability of EMR vendors. I’ve included his comments below:

Note: See my post about whether you have to use a CCHIT Certified EMR vendor before reading Mike’s comments.

Using the CMS’s own data and report a CCHIT EMR will spend between $125,000 to $350,000 in programming costs to be certified (add at least $20,000 for actual certification) An existing EMR not CCHIT certified they predict will spend $175,000 to $700,000 to meet the standards (plus the $20,000.)

Certification has to be done for each year, for three, so a 2011 certification does not guarantee MU certification for 2012.

Self certifying for Open Source are not exempt from requirements so it stands to reason they will have the same expense.

What does this mean:

1. Forget collecting MU with Open Source software.

2. If you are using no CCHIT software it is unlikely the software will be qualified by the vendor.

3. Even fewer EMR vendors will certify than those that did so for CCHIT.

4. Innovation is dead if MU certification becomes generally why an EMR is purchased as this will also set the preception of useability. Vendor design resourcess will go to MU not useability.

5. If MU EMRs fail to get widespread purchase, those EMRs who certify are dead (including some current larger market share ones, as they will undoubtably spend a ton on marketing to maintain their share.) The MU EMRs will also then presummably be left behind by the innovators for useability.

6. Certifying bodies, especially CCHIT may be in trouble because there will be fewer takers, or they will charge a lot more pushing EMR prices up.

7. Regardless everyone is going to pay a lot more for an EMR making the MU payment mote.

Medscribbler could be certified, we are still evaluating this, because there are a lot of CCHIT EMRs now dead in the water – certification is no guarantee of success – we believe useability is – and how do we balance useablity which will guarantee success with certification which may or may not?

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

17 Comments

  • John… Where are we on those 5 – 15 or so certifying entities getting their ONC approval?

    With cost projections for certification of every EHR/EMR annually that Mike supplied… I’m surprised the number of prospective certifiers hasn’t grown further.

    Who designed this crazy initiative?

  • Just so it’s clear, it’s $20-30k for certification. The rest is programming/planning etc costs. $20-30k times 300+ EMR vendors is the market size for these certifying entities. I think we’re still a month or two away. End of August at the earliest.

  • If the expense to the certifying entity is 85% of that $30k … that leaves all of $4500 per EHR certified as profit … which for 300 EHRs is $1.35mil as the market total … every year.

    If there are 15 entities trying to share the total market … that leaves $90k each total revenue annually.

    That is if all the entities generating those 300 EHRs are able to scrape together the capital for programming up front.

    John … you thought all 300 packages would be certified? If that’s the case … and nobody fails certification … then why bother? I guess that’s been your point all along.

  • I’m not sure the profit margin is that high. I’m also certain that EHR vendors won’t be paying that every year. Plus, there are probably only going to be 5 or so entities when it all pans out (my prediction).

    Of course I don’t think all 300 EHR vendors will go for it (although I think almost all of them will). However, I was measuring the market by total possible customers, not by how many of the possible actually will.

  • Okay… so using the lower certification cost of $20k x 300 packages = $6mil (2011 only) total market expense.

    According to Mike: “Certification has to be done for each year, for three, so a 2011 certification does not guarantee MU certification for 2012.”

    I don’t doubt that fewer than 300 will seek ONC ARRA certification either in lieu of or in addition to CCHIT certification but all that does is reduce the projected market revenue available.

    According to the recent post ONC had 30 packages out to prospective certifying entities. If we go with your prediction that only five will be certified or remain after the first round … this results in an annual revenue of only $1.2mil per entity.

    If you believe my 15% margin as too large… then at a 5% margin the average profit is only $60k per year per each of the five certifying entities.

    You said: “I don’t think all 300 EHR vendors will go for it (although I think almost all of them will). ” Mike said: “Even fewer EMR vendors will certify than those that did so for CCHIT.”

    So … the price of certification is going to eliminate some smaller perhaps more innovative EHR developers with little if any value to the end customer. If you aren’t certified… there is no way you stay in business… even if certification is totally meaningless to actual value and functionality.

    My suspicious brain tells me that major contributors to a political party convinced those who authored ARRA HEIT language to include the onerous certification as a way for them to protect their market share. ARRA proponents will point to the increased employment at certifying entities as a nice job growth story. Meanwhile how many non contributing small EHR developers go under.

  • Pardon my ignorance — I’ve undoubtedly missed a few of your “EMR and HIPAA’ issues. But why don’t the EMR vendors just ignore MU, CCHIT, and any other certification, as this is only for bureaucratic control, and obviously has nothing to do with advancing EMR — quite the opposite.

    What can “they” do other than to deny “Stimulus” funding?

  • Ok, I guess it’s true that they might have to certify again against the different meaningful use stage levels. However, I’ll be surprised if it’s $20-30k each year. Maybe just a couple thousand to prove the changes to the criteria.

    Mike and I disagree about number of EMR vendors that will be on board. I think more than those that have done CCHIT will be certified.

    I’m sure people who knew little to nothing about what certification really is put it into the legislation. On face it sounds good that you certify something, but once you dig in you find little value to it. Read this post where I asked Marc Probst who was on the EHR certification committee about the overlap between EHR Certification and Meaningful Use: https://www.healthcareittoday.com/2009/09/30/more-comments-from-marc-probsts-talk-on-emr/

  • David,
    You’re right that EMR vendors certainly gain ignore certification and meaningful use. In fact, the post by Mike above his basically an EMR vendor (Mike is CEO of an EMR company) evaluating the decision to ignore meaningful use.

    The other topic that Mike doesn’t cover in detail in his post is the impact on marketing that not being a certified EHR and not showing meaningful use will have. I think we can be quite sure that almost every RFP and evaluation process that will happen in the next 3 years is going to ask the question if you’re a certified EHR that can show meaningful use. Those EHR vendors that don’t have those 2 items will be facing a really tough uphill battle against a lot of misinformation.

  • Okay… I’ll not keep pinging you on semantics or your gut feel. I think your following statement is accurate:

    “I think more than those that have done CCHIT will be certified.”

    … but it ain’t going to be 300.

    You are right about RFPs asking the MU cert question. Willing to bet a large number of the innovative and fresh ideas will get flushed by that screen.

    Exactly what the big boys are counting on.

  • Hi

    Just a kindergarten question:

    What will be the cost if federal government designs a unique EHR system which hospitals, healthcare organisations, physicians across US can adopt to it for their clinical practice instead of dynamic number of IT companies developing their own design and cost attached it !! If so what will be hurdles for it.

    Cheers

  • Naga…

    You want an EHR that works and in this lifetime?

    The government has no ability to DO anything other than administer. The government does not actually do any work.

    If the FEDs attempted to take on the job of designing and programming a “unique” EHR for universal deployment it oversteps its authority over the private sector.

    The cost in time and money to develop a one size fits all EHR ignores the scores of variations of health care delivery … from ambulatory generalists to pharmacies to clinical specialists to labratories to general hospitals to specialty hospitals to out patient clinics. Legislating that take over would be at such a high risk politically that the politicians that supported it and their party would be decimated long before it was deployed.

    If the Feds developed a “unique” EHR and forced it on all hospitals, health care organizations, and physicians across the US … it would first not work and would cost zillions to implement. And for what?

    The biggest hurdle would be the American people would revolt over the Feds attempt to further subjugate it further than the health care insurance reform has already inflamed them.

  • Of course if you have a proprietary money making product, why would you support any FREE MU opensource application.

    Let us not forget that WorldVistA was certified until April 2010. The next up and coming is OpenEMR. They have a real agenda for MU and Certification and are near completion.

    As support grows so will the cash flow for certification. The bottom line is: An opensourse application can and will comply. If 50 providers, provide a tax deductible donation of one thousand dollars each, (as opposed to purchasing lets say, Medscribblers 9,950 dollar solution) they would save a sizable amount of money and be supporting a non-profit entity.

  • … or create an EMR that performs so well that the money saved is well beyond any MU cash or penalties. Let’s not forget what the words “meaningful use” actually mean. In my opinion, most of the stuff in the MU guidelines are no-brainers that should be in any EMR.

    It seems to me that most of these MU guidelines are there for government audit data points more than actually improving patient care.

  • Like Nick, I too found the guidelines and/or requirements for Meaningful Use easy to fill and as long as 1) roles were not defined for each of the requirements (i.e., physicians vs nurses vs unit clerks), and 2) a solid report writing facility (or team) tail-ended the EMR/EHR, most could be completed within the same week. Now that the final rule has been broadcasted, I find the requirements easier to fulfill – especially the clinical decision support rule (only one instead of five).
    What I find challenging though is – in the end, how does ARRA want the submission of completed requirements? via Snapshots? or reports? our word? I’ve not seen the ‘to do checklist’ for Meaningful Use and am unaware of how submittal will take place.
    If anyone knows – I would be grateful if they included me in on the answer.
    Thanks – have a great weekend!
    Marie

  • Marie,
    I have not seen that to do list or practical reporting details either. Once I do I’ll be sure to post them. I’m guessing November, but that’s just a complete guess.

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