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H H S Department of Health and Human Services
U.S. Department of Health and Human Services
Health Information Technology

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How do I assess the total costs for health IT and begin the budgeting process?

Determining the total cost of ownership (TCO) by calculating the initial purchase price and long-term costs of the EHR system can be an important factor to consider in choosing a system.  When implementing a health IT system, the total cost of ownership (TCO) should be an estimation of the "real" cost of ownership.  This includes direct costs, such as the purchase price, any additional software and hardware resources and setting up internet services.  The TCO should also address indirect costs in the acquisition phase (e.g., time spent selecting system), during the implementation (e.g., technical support charges and additional existing staff time necessary for tasks related to implementation) and after implementation (e.g.,. maintenance costs and ongoing training resources).  In making long-term forecasts, organizations should realize that estimates should account for reasonable increases in staffing-related expenses and costs to replace hardware based on the lifespan of the equipment. 

In addition to working to identify all the costs associated with implementing a system, an organization should critically review the potential benefits of implementing a particular solution. To increase transparency about usage, pricing and other EHR product information, the American Academy of Family Physicians Center for Health IT conducted a survey of the EHR vendors in the Partners for Patients Initiative for ambulatory providers. The report below summarizes findings from that survey.  The AAFP Center for Health IT has also created a number of online tutorials including videos, EHR courses, hardware tutorials, networking tutorials, implementation tutorials and patient-centered medical home educational materials.  Included in their EHR courses is a module for understanding EHR contracting and pricing. A link to this tutorial is below.

Additional Resources:

Developed by the Health Resources and Services Administration as a resource for health centers and other safety net and ambulatory care providers who are seeking to implement health IT.
Health Information Technology Toolboxes help health centers, safety net providers, and ambulatory care providers with electronic and online resources and technical assistance to improve patient care.  More>
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