Will Hospital EMR Prices Ever Fall?

In most industries, prices fall as supply rises. Basic economics, right? Well, if that’s true, will the price of EMRs fall as the industry matures?  A recent discussion on LinkedIn demonstrates – as you might expect – that there’s a lot of room for debate on the topic.

Davíð Þórisson, an emergency physician at Landspitali University Hospital in Iceland, kicked things off with this question:

Now that the major workflow has been designed in all major EHR systems available it would seem the biggest part of the hospital needs are addressed. Competition should increase as more vendors catch on… prices surely must go down from here?

Nelson Wong, a senior consultant with Fuji Xerox, responded that price increases are all but inevitable when EMR vendors compete with proprietary technology:

The only way out is a vendor neutral EHR providers to integrate all systems with international standard like HL7.

Zac Whitewood-Moores, a clinical data standards specialist who’s helping to implement SNOMED CT in systems across the NHS in England, noted that EMR vendors currently have little incentive to switch to a cheaper, less-customized EMR model:

Vendors appear reluctant to share work from previous deployments and part of this has to be that the commercial model is built on consultancy, not just licensing of the IT product itself.

But Whitewood-Moores also holds out hope that true data interoperability could do the trick:

When there is more use of SNOMED CT and common interoperability models forced by purchasing goverments/health providers…this may bring down costs if customers are not locked in by their data and the costs of migrating large amounts of it.

And Ryan Pena, social media manager at MentorMate and MobCon, argued that innovation might yet reduce health data management costs:

I think the key with EHRs is to ensure the industry continues to innovate on how information is captured. Perhaps secure automation will drive down this cost as we learn ways to transfer health data from medical grade wearables?

On the other hand, other people who commented felt that even some kind of open source reference EMR wouldn’t do the trick. John Shepard, president and co-founder of HIT software vendor Shepard Health, points out that there’s actually surprisingly little pressure on vendors to lower prices, in part because the market is still evolving:

The cost of EHRs has already gone down but also up. For example, you can buy an EHR out of the box at Costco or utilize one of the open source EHRs for free. However, to get a supported enterprise-level EHR (Epic, McKesson, etc.) then the price is very high and I don’t think it will come down anytime soon…[After all,] the cost of the EHR is not preventing sales because there is minimal change in demand based on increase in cost.

Meanwhile Pim Volkert, terminologies coordinator for Nicitz, the National IT Institute for Healthcare in the Netherlands, shared an interesting view of the future. He seems to suggest that paying more for EMRs may actually be justified as they grow more sophisticated:

EHRs will move more and more into the clinical domains. [They] will become a medical device just like an MRI or DaVinci robot. Development, testing of software and liability insurance fees will increase costs.

Obviously, there’s no way to predict exactly where EMR prices will go, but I’m more on the side of the posters suggesting that enterprise EMRs have nowhere to go but up. I hope I’m wrong!

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.

2 Comments

  • Buy an EHR at Costco? What’s that product number? 🙂

    All kidding aside, beyond the obvious that vendors don’t ever want you to be able to compare apples to oranges in terms of product detail, and don’t want their EHR to be readily replaced by another, there is also the constant pressure from ONC, etc. in terms of specific things, not always well specified, that regulators require the EHR’s to start doing, this keeping change as a constant, and keeping costs up. Most entities won’t go for open source because of the added responsibility of maintaining it, perhaps with little or no outside support, so there is a huge dependency on the big vendors, albeit one well cultivated.

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