Total Cost of Ownership (tco), Pages 56–57 Purpose

Total Cost of Ownership (TCO), Pages 56–57
Purpose: MGMA surveys have identified as much as 30 percent cost overruns in EHR projects. Often such unanticipated overages occur because a practice has not considered all costs associated with an EHR project. The money you pay an EHR vendor often is only a portion of the total cost. For example, you may need to buy some new furnishings for your exam rooms to accommodate a desktop computer or hire a contractor to install swing arms for monitors. You may find that enhancing your Website for more interaction with patients will greatly enhance your office’s productivity but require contracting with a Webmaster. The Total Cost of Ownership (TCO) tool provides a list of potentially every conceivable cost you might incur as you acquire an EHR, thus helping you avoid surprises.
Directions for Use: Use this tool to document initial estimates and then later to fine-tune your actual EHR budget. Initially, go through the list and estimate as many of the costs as you think will be incurred. Write down your assumptions so you remember how you derived the cost figure. Total your estimate to see if this figure was in the range that you were thinking. Consider how you will finance your EHR (refer to Chapter 6) and what impact that may have on your TCO. Use your TCO to evaluate vendor offerings. Once you have more specific information, adjust the figures. You may want to put this information on a spreadsheet to compare several vendors’ proposals. Once you decide on a product, use the spreadsheet as your budget.

Total Cost of Ownership (TCO)

Cost Elements	Assumptions	Initial Unit Cost	Qty	Total Initial Cost	Annual Cost Year 1	Annual Cost Year 2	Annual Cost Year 3
Hardware
Server(s)	List
Storage devices	List
Input devices	List
Peripherals	List
Output devices	List
Scanner(s)	List
Network and telecom devices	List
HVAC and power	List
Electrical devices	List
Back-up generator	List
Software
Operating system	Describe License
EHR software	Describe License
Upgrades (to existing software)	Identify
Interfaces	Describe
Other, new software	List
Support
Selection (e.g., consultant, attorney, site visits)	List
EHR education	List
Physician champion	Percentage
Implementation and Training
Vendor implementation	Fees
Training (Incl. travel)	Describe
Project manager	Percentage
MD loss of revenue	Amount
Overtime	Amount
Electrician	Fees
Contractor	Fees
Implementation consultant	Fees
Chart conversion	Expenses
Data conversion	Fees
Webmaster	Fees
Maintenance
Hardware	List and Describe
Software	List and Describe
Subscriptions	List
Telecom fees	Fees
IT operations/help desk	Salary & Benefits
Clinical data analysis	Salary & Benefits
Database administrator	Salary & Benefits
Applications specialist	Salary & Benefits
Webmaster	Fees
User group attendance	Expenses
Contingency	10% to 30%
Total Costs
Used with permission, © Margret\A Consulting, LLC