The biggest selling points of many Electronic Health Record (EHR) software vendors, are improved patient experiences, increase in revenues, efficient workflows and the like. But investing in an EHR software, even if it is not an expensive one, can sometimes be quite taxing on small and medium sized practices with a small number of providers. So what is the opportunity cost of a cheap EHR system? Practices need to do a detailed analysis of where they can invest if they don’t adopt an EHR system, and whether the benefits of an alternative investment outweigh those of an EHR system.

However, quantifying the exact variables involved in determining an opportunity cost in the medical world is difficult as there are many intangible services involved. Variables like patient satisfaction level, quality of services rendered, etc. cannot be quantified like some of the other services, which makes the medical industry a little difficult from a financial analysis point of view.

Since investing in an EHR requires a reasonable amount of money, even if it is not the most expensive, the practices need to analyze where else can they spend the money. Buying new equipment to upgrade medical facilities, expansion of services, or facility improvements are some of the alternative or ‘opportunity cost’ variables involved in making the decision.

In order to do a detailed analysis, practices need to put a dollar value on items that are intangible, such as improving patient care or quality of care. The other, tangible items can be taken for the dollar value which they possess. Some of them include reduction in redundant testing, reduction of cost in paper-based requests and reporting, reduction in time waiting for chart pulls, hourly savings in reduction of repetitive tasks, phone calls, coordination with labs and pharmacies, transcription savings and decreased administrative needs.

Once you have detailed dollar amounts of tangible and intangible variables, you can then do a detailed Return on Investment (ROI) and Return on Quality (ROQ) analysis in order to justify your decision of investing in Electronic Health Records (EHRs) or otherwise. The result can be interpreted in a simple way. If the benefits that you are going to derive by investing in items other than an EHR system do not outweigh the benefits that you might derive from an EHR, then you should go ahead and make the shift to Electronic Health Records software. But, in a scenario where investing in your facility or expanding your services has a better ROI than investing in an EHR, you should make the investment where it is going to yield you more return.

This was the financial side of making a decision to buy an EHR software or not. However, as the medical industry moves ahead into an era where delivery of quality patient care and seamless exchange of information between various stakeholders in the healthcare circle is of prime importance, using an Electronic Health Records software becomes imminent. There might be a feeling in the beginning that the investment in an EHR software is not giving the desired results, but over a long period of time, it will turn out to be the better option for practices and physicians.