As I travel the country speaking and consulting on electronic health record (EHR) best practices, I'm approached by conference attendees and clients who share their apprehensions and stories about obtaining the best price, fair terms and adequate support in their EHR contracts. So I was surprised when a vendor told me that many groups and practices don't negotiate as aggressively as they should. Having been in information technology management for more than 25 years, I've always felt that negotiating prices, contracts and support is key to success — and warrants fighting for your best interest instead of simply accepting an EHR deal.
Nobody wants to pay full price while someone else receives a discount. But caveat emptor is the message in this e-mail from a concerned physician: "I was told that an almost 60 percent discount was only available through Friday (this was on a Thursday afternoon) since a training session was beginning on Friday." Obviously, this kind of used-car scenario should raise a red flag.
The next physician encountered more of a win-win pricing negotiation: "When I was negotiating with [the vendor], they were very interested in breaking into the medium-size practice market, and it was end of fourth quarter. We were able to get substantial discounts."
Having been both a software purchaser and vendor, I can tell you that while you can try bullying the vendor into accepting your terms, you may be more successful with a partnership approach. Trying to understand your vendor's situation and needs may reward you with good pricing. In the second case above, the vendor, fairly new to the market, hoped to build a customer base and hit a sales quota. Maybe you're willing to provide feedback or be a referral site for the vendor's potential customers. Get to know your vendor and ask how you can help out. That type of relationship is worth something.
When I began looking at EHR contracts, I noticed that on face value they were fairly one-sided. This makes sense from the perspective of the vendor, who must guard its own interests and those of shareholders. Unfortunately, practices and groups usually don't intensely review and negotiate their EHR contracts to protect their own interests, even though they live with the results for years to come. Consider the following contract areas:
Licenses. For the most part, you'll encounter two types of EHR licenses — concurrent and provider (or "named user"). A concurrent license lets you use a specified number of workstations simultaneously. If you purchase five concurrent licenses and have 10 providers in your practice, any five can simultaneously access the system. With a provider license, you need to purchase licenses for all 10 providers. Examine your staffing situation to determine which model is best.
Also, license terms are important. A perpetual license enables you to use the software indefinitely with the purchase of yearly maintenance and support. A term license specifies expiration.
Third-party considerations. Software companies are infamous for finger-pointing when problems arise. In an EHR package, the sheer number of third-party interfaces to devices, labs and imaging — and to databases of formularies, drug interactions and patient education — can fuel the fire. The preference is that your vendor be, at the very least, the first point of contact for issues. Otherwise, you eventually could find yourself on the receiving end of the finger-pointing.
Escrow. Ever thought about what could happen if you purchase an EHR and your vendor goes out of business, changes direction or drops adequate support for your product? You have the right to request that your vendor put software and documentation in escrow for a rainy day should the vendor not be there one day.
Various "release events" must take place for you to access the vendor escrow documentation. They include:
- vendor becomes insolvent or bankrupt,
- vendor is liquidating its business, or
- vendor has discontinued support in accordance with obligations.
Database schema. When I'm involved with client contract negotiations, I always demand that they receive "database schema" (a term describing the road map of how your data looks inside the system), including all associated documentation. Technically, you own your clinical and billing data, but transferring it to another system can be very expensive without a road map.
Warranties. Many promises and assurances will be thrown your way during the sales process; make sure you're covered. Warranties hold the vendor accountable for what it has represented. You can associate penalties, and even termination, for failure to adhere to some warranties.
Payment terms. If you were a vendor, you'd want most of your money upfront — and typically this is what vendors ask for in an EHR contract. But where's the accountability in that? It's fair for you to request milestone-based payments.
Follow-up support. For some reason, Murphy's Law seems to be especially appropriate after a system is installed, the final payment is tendered and the practice is dependent on the technology. The service level agreement is the standard mechanism to document vendor service and support commitments. It shouldn't be taken lightly, since you pay 15 to 20 percent of your license fee every year for support. A few major focus areas:
- Do you just have e-mail and online chat during support hours, or is phone contact with a support analyst available?
- How do problems move up the chain of command and who's ultimately responsible?
- How long does the vendor have to address various problems and what are the financial penalties for failing to meet stated commitments?
To ensure EHR implementation success, consider these points for your contracts and agreements. At the end of the day, aggressive negotiations will guarantee you the best deal with maximum protection.
Mr. Uretz is executive director of The EHR Group in Issaquah, Wash., and author of the CD "How to Survive Your EHR Contract."
Source: Vol. 12 •Issue 1 • Page 63, Sealing the Deal, Planning an EHR adoption? You owe it to your facility to follow these tips for smoother contract negotiations.,