McKinsey estimates that MU incentives may pay for less than 20% of hospital EHR roll out costs

One of my favorite publications, McKinsey Quarterly, published an article this month entitled “Reforming hospitals with IT investment” which speaks in plain business language about the costs and benefits of hospitals rolling out EHRs. The article requires registration but is otherwise free and is worth reading. Here are some of the highlights for a 200 bed hospital:

  • They estimate the costs of EHRs to be around $80,000 to $100,000 per hospital bed
  • They estimate the government incentives will bring in about $17,500 per hospital bed
  • They say that if you use the high-end scenario of $100k per bed, the government incentives will amount to less than 20% of the cost
  • They note that these costs do not scale linearly for larger hospitals.

Here’s a graphic they have in their article that summarizes it well (click to see larger version):

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