How to establish a budget for an EHR system (with free budget template)

What’s your bottleneck? When time is an independent healthcare provider’s most valuable resource, an electronic health record (EHR) system is critical to your business — streamlining administrative work, organizing patient records, and solving those bottlenecks that keep your practice from thriving.

But how much should you expect to pay for it? Budgeting for EHR costs is overwhelming at first glance, but we’ve created this guide to help you through the process.

Let’s dive into the costs of EHR software, including implementation, as well as recurring and hidden costs you should include in your budget.

As an independent healthcare provider, you likely face limited resources and tight budgets — all while facing the pressures of delivering top-tier patient care. Managing these hurdles with a subpar EHR — or worse, paper records — is a near-impossible challenge for any practice.

An EHR allows you to deliver a modern healthcare experience while enabling you to spend more time on patient care and less time on administrative tasks.

Here are some key benefits of implementing an EHR platform into your practice:

Recognizing these advantages is just the first step. Next, we'll dive into the financial considerations of implementing an EHR system.

Support your practice’s entire clinical workflow and control how you deliver care with Tebra’s cloud-based, ONC-certified EHR.

Okay, you’re sold on the idea, but just how much does an EHR cost to implement? Many independent practices face the daunting task of preparing an EHR budget. According to Tebra’s 2024 guide, Everything you need to know about selecting the best EHR for your practice, 39% of independent practices cite managing costs and financial concerns as the most significant EHR challenge.

There are a variety of factors to consider to prepare a software implementation budget, including:

According to Software Path’s 2022 EHR report, practices set an average budget for EHR software at $1,200 per year per user. Breaking that data down, a small medical practice with 3 users typically expects to pay $300 a month for an EHR system.

But remember — out-of-the-box software costs are only part of your budgeting equation. Your EHR budget should also include startup costs, equipment costs, and other indirect costs like internet connection upgrades, training, and more. In addition, providers may have to decrease their patient numbers initially as they adjust to the new system.

One big factor when considering your budget is the type of EHR system: on-premise, cloud-based, or hybrid. All have their pros and cons. On-premise typically costs more upfront, while cloud-based offers more flexibility for scale.

Both cloud-based and on-premise platforms come with an initial cost, with cloud-based often requiring a startup fee or upfront annual subscription and on-premise requiring software and hardware purchases.

Both models need modern hardware and infrastructure suitable for handling the EHR system. The specifics will differ depending on whether you go with on-premise or cloud-based and which vendor you work with. Ask your vendor partner for more specific details, and expect to make these purchases before you install the EHR.

On-premise EHRs typically involve more upfront work, including server installation and IT costs. With both options, you’ll want to customize the software to meet your needs with feature add-ons that make sense for your practice.

When planning your EHR budget, don’t forget to include the hidden implementation costs. Both cloud-based and on-premise models will have indirect fees, but they vary. 

Here are the costs they both incur:

Staff training 

According to Tebra’s 2024 EHR guide, training is one of the most significant challenges independent providers face when using their current EHR. Many EHRs offer video tutorials or include training as part of their package, but it may come at a fee. 

Workflow disruption

Plan for some temporary workflow disruptions and include them in your EHR budget. Besides training time, expect staff to work slower while they get used to the new system in the weeks leading up to and immediately after installation. This often means seeing fewer patients in the office initially.

For a cloud-based EHR solution, indirect costs include:

On-premise EHRs may include the following indirect costs:

Understanding these indirect setup costs will ensure a smoother transition and help maximize the benefits of your new EHR system. By budgeting for these expenses ahead of time, you’ll be ready to tackle them when they come up.

Be sure to plan for recurring costs for any EHR system. Besides monthly or annual subscription fees, cloud-based EHRs may require ongoing IT support for long-term troubleshooting. However, the costs of maintenance and updates are often included in the subscription fees.

Updating on-premise systems might require purchasing new software versions and manual installations by IT staff. Maintenance, including regular backups and security patches, is handled internally, which may add to your team’s workload. Plus, managing and maintaining local infrastructure often requires ongoing IT support.

Moving beyond your implementation costs, let’s look at the total cost of ownership of an EHR. 

By understanding the full scope of EHR implementation, you can plan better, avoid costly surprises, and set your practice up for success.

Costs are only part of the equation, and they’ll change based on the decisions you make early in the process. Will you go with a subscription model or on-premise? What features do you want to make the most out of your EHR system? 

The value your practice and your patients get from a well-run EHR system should also factor into your budget — it will absolutely impact your ROI.

Here’s how you can maximize your investment in an EHR system.

Find an EHR system that supports all of your practice’s activities. Look for features like a patient portal, intake, billing, and more. These tools can help streamline your practice and improve patient care.

But that’s not all. Your EHR system should align with your practice's unique needs. It must handle the specific workflows and requirements of your specialty. Make sure it’s flexible enough to adapt to your work style, ensuring a smoother, more efficient practice.

EHR systems are a game changer for independent practices with tight budgets. Why? One word: automation. Slow, mundane tasks like appointment scheduling, charting, and billing become streamlined and automated, giving your team more time with patients.

Additionally, EHR automation leads to decreased administrative costs. With less need for extra administrative staff, practices can refocus the budget on more resources for healthcare workers. EHRs can also improve insurance coding and billing, facilitating faster and more accurate claims processing and boosting cash flow.

Eligible independent providers can benefit from incentive payments through Medicare and Medicaid EHR incentive programs. These incentives offer financial relief, helping to offset some of the costs associated with implementation.

Using an EHR can also help you avoid penalties for non-compliance. Staying compliant with EHR requirements prevents fines, ultimately supporting your practice’s financial stability.

Planning your EHR implementation can be overwhelming — that’s why we created a budget planner, which allows you to easily navigate the total cost of ownership. From initial setup to recurring expenses, this planner covers all aspects to ensure you’re fully prepared. Don’t let unexpected costs catch you off guard — use this planner to budget confidently and set your practice up for long-term success.

Investing in an EHR enhances your practice’s efficiency, improving patient care and freeing up valuable time for your healthcare team. In addition, when you focus on maximizing your ROI, the right EHR can streamline your operations, reduce administrative burdens, and improve patient-staff communication. By planning and budgeting effectively, you set your practice up for long-term success and financial stability. 

For more detailed guidance, download our comprehensive EHR selection and implementation guide now and take the next step towards a more efficient and effective practice.