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Innovative Ways for Small Practices to Invest in Tech


Even with potential meaningful use incentives from the government, small practices have to get creative with tech investments.

At a time when American providers are offering some of the best care in the world, even the smallest medical practices cannot slip. They must offer top-tier services, while meeting and maintaining compliance with government regulations. This is no small order, and it's made increasingly difficult considering the price tag that comes with integrating cutting-edge technology - in particular, EHRs - into an office, especially for solo practitioners or practices with just a handful of doctors.

While the incentive to invest is greater than ever with the ongoing meaningful use program, the cost of implementation is still pricey. Physicians working in the smallest practices have to get creative when trimming technology expenses.


"Maintaining an electronic health record system is our largest expense," says pediatrician R. Frerichs of North Raleigh Pediatric Group. His practice isn't an isolated case. According to a survey in Medical Economics from February 2014, 45 percent of physicians spent more than $100,000 on EHR systems including service, hardware, software, training, and consulting. However, there are ways to shrink that number considerably.

It is easy to feel overwhelmed by options available in the marketplace. Practices on the hunt for tech investments must be mindful of what is specifically needed. "There is a want to measure everything without knowing why or what to do with the measurements," says Kyle Wailes, senior vice president of physician services at the Ft. Lauderdale, Fla.-based technology solutions provider, Intermedix. "A smart and focused practice can avoid much of this by determining must-haves ahead of time and knowing exactly what is needed when purchasing technology."

In addition to searching for the product that best matches a practice's needs and work flow, there is value in adopting open source products. Dozens of open source software programs have been developed for the medical industry with data security and usability at the forefront, says Greg Scott, owner and operator of Infrasupport Corporation, an IT consulting firm in Eagan, Minn. With open source software, physicians don't have to become IT experts, since someone else developed the software and the additional features. They do have to be willing to explore technology built using an open source model by accepting patches, new features, and other support built by an interested community. Any potential inconvenience is likely to be offset with the cost savings, which can be as much as 80 percent compared to proprietary competition, Scott says.

Similarly, practices should seek out "disruptive vendors" - those working on the innovative edge of mainstream technology - because they typically have lower gross margins, smaller target markets, and simpler products, experts say. Though the products and services may not appear as attractive as existing solutions when compared against traditional companies, the cost is often cheaper, says Austin Kirkland, principal and founder of healthcare management services consultancy Outperform, LLC, based in Falls Church, Va. "Many businesses have developed software tailored to suit specific specialties or to operate with less robust features, lower development costs, and reduced operating overhead," he says. "As a result, they are able to offer their products at a better price point to specific buyers than their larger competitors, so shopping for the right solution can save money."

Once practices have made the initial investment for EHR and practice management systems, there are ways to manage the ongoing costs associated with overseeing them. The unfortunate truth is that technology requires constant upgrading to remain efficient and compliant, which of course, comes at a cost. Instead of hosting technology infrastructure onsite at a practice, medical offices should consider migrating most (if not all) technology services to a cloud services provider or third-party data center. Doing so requires an initial upfront cost, but service fees are generally paid monthly at a predictable, scalable rate. Additionally, this frees medical practices from worrying about hardware failures or updating software because managing those responsibilities falls to a third-party vendor.


Despite doing due diligence to select the best and most cost-effective products and maintenance options for a small practice, the fact is that someone still has to pay the bill for technology.

One of the best things practices can do is find support within a larger group of physicians. Frerichs says his participation in a practice management group called Raleigh Durham Medical Group (RDMG) has been a critical factor in his ability to manage costs for his practice. "The power in numbers allows us to negotiate deals for pricing that I would not be able to attain alone," he says. For example, he adds, collaboration through RDMG allowed them to obtain optimal pricing for purchasing an EHR. Furthermore, when the need to replace or update equipment arises, the group provides flexible financing options.

Flexible financing also allows physicians to relieve some of the weight that comes with buying technology outright. For practices that don't have credit available to take term loans - or those that simply choose not to - leasing options are available. This ensures practices have cash on hand to pay for consumables, payroll, fees and taxes, and other necessities, says Jim Phelps, CEO of Beaverton, Ore.-based equipment financier, Capital Equipment Leasing, and it keeps a line of credit open for other needs. Leasing also removes the permanence that comes with an outright product purchase, allowing companies to upgrade or change technology with minimal cost. "Software and hardware can be leased on a turn-key basis, allowing the practice flexibility as needed to move at the end of a lease and to avoid upfront capital needs," Kirkland says.

Though hardware and software can be leased, other products can as well. Phelps' company has leased digital X-ray, sonogram, and MRI machines, and exam tables. "We can lease any equipment that is not 'body invasive,'" he says.

Investing in technology, whether hardware and software, diagnostic equipment, or other necessary products and services, is a given in the medical industry. Small practices must be innovative to keep on top of advances in the industry, because the ultimate bottom line is providing the very best care to each and every patient.

JoAnna Haugenis a Las Vegas-based freelance writer and editor with work published in dozens of print and online publications both in the U.S. and internationally. She can be contacted at

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