Post-Sale Maintenance Fees   

What Will It Cost You?

The cost of on-going support is much higher for software-based products than for medical devices that are also software-based products. A typical medical device may have a maintenance cost for hardware and software of 8-12% per year. Yet a software only product (like an EHR) vendor may charge customers 16-20% per year for support that does not include hardware or hardware support. There is really no good reason for this other than the fees are paying for continued development of the product and are being pushed down to the EHR vendor's existing customer base. Large software vendors like Epic, McKesson, Siemens, Cerner and others have found that they "can" charge customers this amount and so they do charge customers this amount. As long as support/application maintenance fees continue to be paid, you can bet that EHR and CPM vendors will continue to charge (and collect) them. Perhaps as competition heats up and the number of deals increases, the fees will drop based on market pressure. Larger installed bases of customers will also help, as the development costs have no relationship to the number of clients who license the software. Therefore, the more clients there are paying for these relatively fixed development costs, the lower the fee-per-customer should be. Again, the larger established vendors are the offenders in this area. Very few vendors break out these costs or allow their clients the ability to opt in or out of specific support elements.  

Embedded, 3rd Party Middleware Products

Larger vendors will often point to the yearly fees they have to pay to their middleware vendors as the justification for the higher maintenance fees and to some degree this is true. Most vendors license their drug interactions database from a 3rd party, a vendor such as Cerner (Multum), Gold, First Databank or others. They have to pay a yearly license fee to these vendors, which are constantly sending them updates on the interactions, recalls, new drugs released, etc. This is also true for the structured-vocabulary, back end knowledgebases that are licensed - at least for some of them. Two such products are Snomed and Medcin. Snomed is owned by the College of Pathologists, which maintains it, but has been put into the public domain by the government. Medcin, on the other hand, remains a private company which provides much the same structure. It charges the 14 or so vendors which license it a substantial yearly royalty fee (we have heard figures like $70K per year) to license the product. The EHR vendor in turn, which embeds this product, must amortize that yearly fee across all of its installations and users. If the EHR vendor's installed base is small, the cost-per-physician group practice can be substantial. On the other hand, if the EHR vendor is very successful and has a large installed base, the amount amortized to each of the individual practices can be substantially reduced. Understanding how much your EHR vendor depends upon such embedded, 3rd party products is therefore an important factor.

Understand however, that the alternative for a vendor to using 3rd party drug interaction databases is for them to develop their own. In almost every case, doing so will be even more expensive than using a 3rd party module or will result in a substantially inferior implementation. Vendors simply can't devote the time to keeping such databases current that a 3rd party can; if they do, they will end up spending more per client than it costs them to license this information from the 3rd party. Therefore, don't look at selecting a vendor which does NOT use a 3rd party solution, rather lean towards one which does because you will end up with a better system and solution (in our opinion).

Contrast Between Snomed, Medcin and Proprietary or Freeform

A discussion of Snomed and Medcin (structured) backends, versus vendor-proprietary or unstructured backends is available for those who register on this site.