Build Or Buy, EMRs Cost A Bundle

Ever wonder whether it would be smart to drop your vendors and grow your own EMR/HIT apps?  Here’s some food for thought.

Today, I ran across a very detailed analysis of the labor costs involved in developing EMR and HIT applications, straight from the blog of the always perceptive Shahid Shah.

Shah, a longtime health IT consultant and former CTO for two EMR companies, just posted a list of the various professionals you’ll need to develop such applications — and the high prices these professionals command:

  • Clinicians and healthcare professionals (HCP) like docs, nurses, etc. – perhaps as consultants
  • Senior project manager – about $150k per year
  • User interaction engineer (UX, usability) – about $120k per year
  • Web design engineers (UI, HTML, JavaScript) – about $60k to $100k per year
  • Web developers (UI, PHP, JavaScript, HTML) – about $80k to $120k per year
  • Mobile app developers (iOS, Android, etc.) — about $90k per year
  • Database modeler and information architect (SQL) — about $150k per year
  • Database administrator (SQL) –  about $120k per year
  • API engineer (REST / SOAP) – about $120k per year
  • Service code engineers (Java, Ruby, etc.) – about $150k per year
  • Security analyst and privacy engineer (HIPAA, HITECH, Sarbox, etc.) — perhaps as consultants, $175k per year
  • Cloud infrastructure admins (Amazon, Eucalyptus) – about $90k per year
  • Network infrastructure admin / engineer (TCP/IP, etc.) – about $120k per year
  • Data integration engineers (ESB / ETL / connectors) – about $90k per year
  • HL7 and healthcare data integration conformance engineers – about $90k per year
  • Technical documentation specialist – about $60k per year
  • Quality assurance directors (test strategy, test planning) — about $120k per year
  • Quality assurance engineers (test planning, manual execution) – about $80k per year
  • Quality assurance automation (automated execution) engineers – about $90k per year
  • Trainers (folks with healthcare office experience plus tech knowhow) — about $60k per year

As Shah notes, this is what U.S. specialists typically cost.  (Working with Indian developers can save you about 35 percent, he estimates.)  Still, either way we’re talking about a bundle on compensation alone.

Despite the expense, there are probably some large institutions which will choose to develop EMRs or related applications internally.

After all, if you have a deep enough IT bench, developing even high-end applications might be cheaper than paying for high-end packaged products.  And of course, there’s always something to be said for apps developed exactly to your own specs.

Ideally, your institution could build its own EMR/HIT apps, then license them to other institutions or co-develop them with partners who can sell them elsewhere. (For an example of how this might work, check out the $400 million partnership deal the University of Pittsburgh Medical Center did with IBM a few years ago.)

Still, Shah’s analysis is more than a little sobering, isn’t it?

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.


  • I am a 16-year IT professional and have been fortunate enough to acquire a strong skills on a wide swath of disparate technologies from server hardware to application development and everything around it. I’m changing careers and getting into practice management from scratch.

    Shah’s claims of these IT professional’s salaries, for American born and bread professionals, is by my estimation between 30 and 40 percent over-inflated. A few of them are over-inflated by as much as 50 or 60%. Some of this sentiment is borne out in Shah’s responses to comments as he suggests these are “blended” rates for professional consultants.

    But… if you are a physician interested in building your own EHR system, whether you hire FTEs or a consulting firm to do it, your investment is going to be substantial. Logic would then dictate that an investment of that magnitude warrants a look at all reasonable avenues to recoup part or all of that investment since the cost-benefit analysis of a completely customized system wouldn’t give you a fantastic ROI (assuming you are a control freak with a temper and MUST have it work the way you want it to). It’s only logical then that you’d license the system to other practices. And since you’re licensing it out, updates, bug fixes, additional features make IT Professionals as FTE’s for your homegrown EMR system a necessity.

    In other words, no marginally IT literate physician would build a system of this magnitude unless they intended to license it. And in doing that, you’d be a fool to not have a professional IT department with the staff mentioned above to reduce costs.

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