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How much does an e-prescribing system cost?

When considering whether to invest in an e-prescribing system it is important to be aware of what the upfront and ongoing costs are for these systems and what financing options are available. Later in this section we will discuss a number of Federal, State, and private sources of financial assistance for e-prescribing implementation.

The first step in the process of making the transition to e-prescribing is to decide on what type of system is needed, stand-alone or e-prescribing within an EMR. go to exit disclaimer Once the decision is made there are a number of other things that need to be considered as part of the cost, including:

  • Networking costs, such as Internet connectivity, wireless network, integrating the practice management system into the new system
  • Software licensing fee and future upgrades
  • Hardware, including desktops, laptops, servers, printers, etc.
  • Training and additional support
  • Annual costs, such as subscription or licensing fee
  • Transferring data from the current method to the new product
  • Establishing communication protocols between the practice management system with the e-prescribing system
  • Certification of transactions

Generally a stand-alone e-prescribing system program ranges from free go to exit disclaimer (offered by the National ePrescribing Patient Safety Initiative) to about $2,500 per physician annually, not including many of the factors listed above. A case report published in 2007 by the journal Psychiatric Services go to exit disclaimer, looked at the implementation of a computerized prescription system in a ten full-time equivalent (FTE) practice of psychiatrists working in a non-profit public mental health agency in 2004. Researchers looked at both direct and indirect costs in four major areas including pre-implementation or start-up activities ($3720); capital costs ($10,148); labor costs ($13,739); and ongoing user fees and technical support ($14,725). In this case, the agency already had the required wiring for Internet access so no additional costs were incurred. The total cost of implementing the e-prescribing system was $42,332, with annual costs after implementation of around $14,725 per year for ten FTE practice.

In a May 2008 report by the Congressional Budget Office (CBO) estimated that implementation of electronic health records (EHR) in physician offices cost between $25,000 and $45,000 per physician, with annual maintenance and subscription costs between $3,000 and $9,000. This varied greatly on the number of providers in the office and what types of health information technology (HIT) the office may already had in place.

A 2007 survey conducted by the Texas Medical Association for the median cost was approximately $25,000 per physician for EMR implementation. The following table shows typical total costs for lower cost, midrange, and higher cost EMRs for an average size physician practice in Texas, which is approximately a 3.5 FTE physician practice.

 

Sample Costs (based on an average, 3.5-physician practice)
ItemProduct AProduct BProduct C 
Software Licenses$ 31,980$ 61,020$ 71,000
Data Conversion$ 2,995$ 2,900$ 5,000
Other Licenses-$ 6,691 $ 8,000
Training$ 6,205$ 26,449$ 50,635
Installation$ 4,480$ 12,345$ 4,940
Discounts-($ 23,215)($ 19,402)
Annual Recurring Costs$ 12,871$ 26,834$ 21,537
Hardware/Network$ 30,000$ 30,000$ 30,000
Project Total$ 88,531$ 143,024$ 171,710


A factor that is not accounted for in these estimates is the change in work flow while the system is being implemented and the staffed is being trained. Initial implementation practices can significantly impact the number of patients that may be seen.

Currently, transaction fees for e-prescribing are paid by either the Pharmacy Benefit Manager (PBM) or the pharmacy. Some vendors may charge a transaction fee, but this is not considered standard practice.

The following resources provide additional information on the cost of e-prescribing:

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