July 20, 2016

10 Financial Questions to Ask Before an EHR Project

Travis Good, MD

Co-founder & Chief Technology Officer

Obviously, money is an important resource for EHR projects. No project results in success without the necessary financial resources. Despite all moderate estimates, conventional projections and supplemental buffers, most EHR projects are forecasted to go beyond scope. The most common causes for budget overruns usually go something like “I forgot to consider this,” “I did not expect it to be this high,” or “I wasn’t expecting it to take this long.” These oversights usually include:

  • Training: It’s very common to underestimate the number of people, length of time, and money it takes to train staff.
  • IT Infrastructure: EHR projects reveal constraints and limits of existing infrastructures, such as bandwidth requirements, dead spot access points, or new station cabling.
  • Hardware: Unforeseen impact of activities may require additional hardware, such as backup servers for redundancy, new area workstations, and computer carts.
  • Staff Requirements: Staff hiring may increase due to project loads and timelines, which may include desk and technical support staff, staff overtime for specific project dates and activities , and re-organizational changes within user groups.

Because going over budget on an EHR project is a real possibility, a strategic project leader needs to know the organization’s ability and willingness to pay for the prescribed budget and then go over budget. There is no question that the ability to pay the prescribed budget is a bare necessity. However, some commence a project without a realistic scope — “Start the project and we’ll find the money later.” This might cause delays, poor workmanship, or shelving of the project in the near future, but is not uncommon in healthcare. If an organization survives going over budget, the project itself lands on a solid foundation.

Believe it or not, an organization surviving going double or triple the prescribed budget is ideal for the project success. However, when an organization cannot handle going beyond scope, project importance should be assessed alongside leadership, as well as scope size and resource allotment. If an organization is financially capable to spend beyond what is initially approved but leadership is not united in support, problems should be anticipated later on. If there is unwillingness to go beyond budget, potential errors, failures, and delays will happen. The EHR project may just become a pawn in the organizational power struggles and politics.

In this scenario, it is best to remain neutral and divide the project into budgeted portions, then work towards incremental budget increases as soon as possible across segments. Asking for small amounts every month becomes much more digestible than asking for a mass amount upfront. Though before this scenario ever happens though, there are a few questions to answer that will better financially prepare you for an EHR project.

10 Financial Questions to Ask Before an EHR Project

  1. Can the organization pay for the prescribed budget?
  2. If the project goes beyond budget, can the organization afford it?
  3. If the project goes beyond budget, is the organization willing to fund it?
  4. What is the process of asking for more funding for the project?
  5. Who are the key decision-makers involved when asking for more funding?
  6. How did previous projects fare in asking for additional funding?
  7. From previous projects, what is the best way to ask for additional funding?
  8. What kind of data should be available for decision-makers to get additional funding?
  9. What kinds of delay and challenges should be expected when asking for additional funding?
  10. What is the impact to the project when additional funding is not available?

Based on experience, the true secret to EHR project success is understanding that the factors that make the project successful are not contributory but rather become requirements themselves. This is the perspective that differentiates the amateurs from the real HIT professionals.

Questions? Reach out to us directly, tweet us, or provide us your contact information. We’ll solve your problem so you can focus on your solution.

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