Since the estimate for an average vendor to upgrade their product be certified so their customers can collect Medicare/Medicaid incentives is $2.4 Million, and that expense needs to be met over the next few years, the cost will likely be passed on to the customers in one way, shape or form. Today’s discussion centers on projecting fiscal impact on the provider.
It’s simple to compute what will likely be passed on to your agency in some way.
• How many customers does your vendor have who intend to seek the Medicare/Medicaid incentives?
• Tack on 30% or so (I’m guessing that’s what the market will bear) for profit
• If your vendor is tremendously flush on cash after these past two years of an interesting sales environment, they may amortize this over a few years to lower the up-front investment for you and your peers as well as create a new revenue stream
• EXAMPLE: If your vendor has 30 customers to pay for the average certification cost, somewhere, you will see at least $104,000, probably amortized over a few years if the vendor can afford to do that
• TIP: if you’re not involved with the user group for your software vendor and want to keep costs down while increasing software value, sign up for the next meeting, or facilitate one for your peers
Your best tact is to work closely with your vendor in this matter. If you haven’t upgraded to the latest version, which will probably be a requirement; and that may have a price tag that inflates to accommodate certification. If the vendor just won’t talk about it, arrange a serious C-Level conversation to discuss the likelihoods so you can budget. If you have solid business reasons to consider jumping ship and seeking a new EHR, do it now, one big change is easier on the users than two.
Some providers have invested a ton of money into home-grown systems, and are considering taking certification expense on themselves, rather than switch to a commercially manufactured system. Think about that: it’s an annual expense to get re-certified. Here comes IT budget inflation. The question most providers ask themselves is “is it worth the incentives to invest in certification?” It has to be done sometime, there’s a possible risk losing Medicare/Medicaid funding altogether in a few years. Home-grown systems have worked for many organizations, and will continue to be viable for a number of those folks.
I predict a few more home-grown systems on the market soon. This is not a new phenomenon, and if the agency has deep pockets, the resulting new software company may survive. This would be unlike Betty Ford Center’s SATIS system, which was sold off to a large software vendor at the demands of the board of directors due to lack of profit and an abundance of expense.
If your prescriber(s) spend 30% of their time working with Medicare / Medicaid patients, you probably qualify for the incentives for all your providers. Will the incentives make the upgrade and certification worth while?
Information Technology is an investment, not an expense…software tools are designed to increase efficiency, improve quality, and increase compliance to commandments from folks like JCAHO, CARF and OMIG. If that’s not happening at your agency, click on “About Terry McLeod” above and contact me, because together we can make your EHR pay off.
Leave a Reply