By Sandra Johnson, SVP of Client Services, CliniComp
LinkedIn: Sandra Johnson, CDH-E
LinkedIn: CliniComp
For a healthcare system, buying an EHR can be like purchasing an elephant: if you think the initial price is high, just wait until you see the upkeep costs. Depending on the size of the healthcare system, costs can range from tens of millions to billions of dollars with additional millions spent over the life of the EHR system for maintenance, support and updates.
The financial impact on hospitals can be devastating:
- Memorial Sloan Kettering Cancer Center posted a $113.2 million operating loss in the first half of 2025, citing higher expenses and one-time costs from its EHR rollout.
- Cleveland-based University Hospitals blamed operating losses in 2022 and 2023 on its purchase of a new EHR.
- And it’s not only large systems. Waukon, Iowa-based Veterans Memorial Hospital reported a $430,135 loss in 2025 following EHR implementation. The 25-bed critical access hospital went live at a cost of $3.88 million. About $500,000 in EHR-related expenses contributed to the loss, the CEO said.
- According to one consulting firm, organizations routinely underestimate ongoing operating costs for things like IT support, maintenance and upgrades, which can run in the millions.
Hospital systems can feel they have no choice but to write those enormous checks. The EHRs installed during the Meaningful Use period in the early 2010s are nearing obsolescence and are unable to meet the growing demands of digital medicine and AI. Hospitals are eager for the improvements that modern EHRs can bring, but the initial costs paired with the undisclosed ongoing maintenance, upgrade, and optimizations costs are daunting and it can take years to realize a financial return on the investment.
There is a better way, one that allows systems to obtain new EHRs with more transparent financial impact. The System as a Service (SYaaS) solution offers a more predictable and manageable approach that delivers all the benefits of a modern EHR but without the enormous upfront costs and additional expenses that can add millions to the investment.
How System as a Service works
The traditional model requires healthcare systems to buy the EHR and, in most cases, host the software on their servers. The EHR provider typically provides maintenance, updates, tech support and extra features for an additional cost. By contrast, the SYaaS model allows hospitals to lease the EHR, relieving them of the high initial purchase cost and ensuring the EHR company is responsible for hosting, maintenance, updates and tech support–all of which are included in the monthly subscription payments. The SYaaS model ensures a long-term operational strategy, one that gives hospital systems the predictability, flexibility and ongoing innovation necessary for financial and operational security.
Beyond the initial costs
Hospital systems often focus on the initial cost of an EHR purchase and with good reason: it can be enormous. But they shouldn’t overlook other unavoidable expenses of the traditional EHR model, such as licensing, implementation, training, and ongoing support, and the possibility of paying more for consultants and additional staff to make the transition smoother. And there are additional hidden costs, such as data migration, infrastructure upgrades, and potential lost revenue during implementation to take into consideration.
In contrast, with the SYaaS model the fear of high upfront costs and hidden fees is alleviated. The right SYaaS system will include the cost of migrating existing data as well as the professional and support services to implement, maintain, and optimize the system over time. This strategy takes the guesswork out of assessing the EHR impact on hospital budgets.
SYaaS solutions bundle all components of the EHR, including software (inpatient, ambulatory, ancillary, RCM), hardware and services as a complete offering for the life of the contract; meaning total cost of ownership is transparent and unchanging, thereby eliminating unexpected expenses. And hospital systems don’t have to worry about outgrowing their EHRs and being forced to upgrade at an additional cost. SYaaS systems are inherently scalable, so as the health system grows, so will the EHR.
AI readiness
The financial discussion is becoming even more important as healthcare organizations adopt AI. Many legacy EHR environments require separate investments for infrastructure modernization, interoperability initiatives, data normalization, and AI tooling before organizations can realize meaningful value. Health systems increasingly want a platform that delivers modernization, interoperability and AI readiness as part of a single operational strategy rather than a series of disconnected projects.
Saving on implementation
Implementing a new EHR can be costly for healthcare systems, staff, clinicians and patients. The inevitable confusion and downtime, as well as a learning curve, imposes a burden on already maxed-out systems. Experience has taught providers to be wary of adopting new EHRs; some resist the changes and drag their feet on adoption. However, SYaaS systems are designed to be up and running within months as opposed to a year or more with traditional EHRs. The interfaces are simple and intuitive, the learning curve is short, and the returns are immediate.
The cost of interruptions
Downtime is no longer simply an IT issue. It directly affects clinical operations, revenue cycle performance, patient access, and organizational reputation. As healthcare becomes increasingly digital, resiliency is becoming a board-level concern rather than a technical consideration.
When EHRs go down–either unexpectedly due to failure or cyberattacks or for scheduled upgrades and maintenance–the cost to hospitals is enormous. And that doesn’t include the potential harm to patients who might have their care postponed, be diverted to another hospital or be treated without clinician access to their full medical record. The SYaaS model is built on proven, highly secure core technology that provides continuous operation through maintenance, upgrades and even natural disasters. No scheduled downtime, ever.
Why SYaaS is the strategic choice
The healthcare industry is increasingly moving away from evaluating EHRs solely as technology purchases. Instead, executive teams are examining how these platforms affect long-term operating costs, organizational agility, scalability, and readiness for emerging technologies such as AI. The question facing healthcare leaders is no longer simply, “Which EHR should we buy?” but rather “What operating model best positions our organization for the next decade of healthcare transformation?” As financial pressures continue to intensify, that distinction may become one of the most important technology decisions health systems make.