How to set a budget for a small practice EHR

Ongoing financial and operational pressures mean many small practices have to consolidate, partner, or rethink how they invest in technology to remain viable.

Nearly nine in ten office-based physicians have adopted EHRs, yet meaningful use and full feature utilization remain uneven across smaller practices

Aligning an EHR budget with clinical and business priorities has become more critical than ever for practices that aim to manage revenue, control costs, and sustain care quality. 

Things to consider when making budget allocations

Below are updated considerations for small practices as they construct a budget for an EMR/EHR system.

Understanding total cost of ownership:

A common budgeting pitfall is focusing solely on software list prices. Costs extend beyond licensing or subscription fees and often include implementation, training, migration of legacy data, and ongoing maintenance.

Current benchmarks for small practice EHR costs:

• Cloud-based subscriptions commonly range from ~$100 to $700+ per provider per month.
• Initial implementation and training often range from $15,000 in the first year for practices with 2-5 providers, depending on complexity

Beware of hidden costs

These are expenses that may not appear in vendor quotes but materialize in practice operations, like efficiency losses during go-live or premium rates for support in small practices. 

Check out our comprehensive EHR budget and cost guide to create your EHR project budget

Costs to anticipate include:

• Staff training and productivity slowdowns during onboarding
• Costs to connect with external systems (labs, imaging, pharmacies)
• Security and compliance protocols, including annual risk assessments
• Data backup and disaster recovery processes

Research in recent years highlights that usability issues, poor design, and workflow misalignment can disrupt clinical efficiency and create additional workload, especially in small teams where support resources are limited.

System areas which could provide cost savings

Investing in a system with integrated revenue cycle management or third-party connectors can significantly improve billing accuracy and cash flow forecasting. Effective RCM tools reduce claim denials and speed reimbursement, which directly supports your budget projections.

Similarly, patient engagement tools such as secure portals, appointment reminders, and telehealth modules support continuity of care and can reduce no-shows and administrative burden. These tools often improve long-term patient experience.

Patient engagement and clinical value

Integrating the above tools into clinical workflows improves patient communication and care coordination, which can reduce redundant testing and follow-ups over time.

Patients who are more engaged in their care often demonstrate better adherence to treatment plans and lower rates of costly interventions.

Small practice outcomes and operational pressure

Evidence indicates that small, physician-led practices can deliver care at a lower average cost per patient with fewer preventable admissions when operations are stable.

Still, the pressures of competition and regulations aren't going away. Planning your EHR budget ahead of time helps you avoid surprise costs and makes it easier to keep up with changes in rules, system compatibility, and technology.

Further recommended reading:

• How much EHR costs and how to set your budget
• Popular EHR vendors for small practices to shortlist
• Considering a free EHR? Read this first.