Cost Comparison of an On-Premise IT Solution with a Cloud-Based Solution for Electronic Health Records in a Dental School Clinic

Electronic health records (EHRs) are increasingly moving towards cloud-based web environments. While cloud-based EHRs claim substantial benefits at reduced cost, little cost-benefit research exists for dental schools. The aim of this study was to examine the cost-benefits of a cloud-based EHR compared to an on-premise client-server EHR in the University of Michigan School of Dentistry (U-M Dent). Data were collected in 2016 from the U-M Dent cost-benefit comparison of tangible and intangible factors associated with implementing a new EHR, using the Total Cost of Ownership (TCO) framework from EDUCAUSE. The TCO framework assessed three factors: foundational (overarching aspects: three items), qualitative (intangibles: 56 items), and quantitative (actual costs). Stakeholders performed factor grading, and relative assessment scores were derived for each item as well as the overall factor. The cloud-based EHR solution received higher foundational and qualitative factor summary scores. The overall cost of an on-premise solution over a two-year period was approximately $2,000,000 higher than a cloud-based solution. Cloud solutions did not carry any hidden costs, while such costs accounted for 8% (~$540,000) of the overall costs of the on-premise solution. Across the two-year period, both one-time and ongoing costs were higher for the on-premise solution than the cloud-based solution (by 40.5% and 20.5%, respectively). This study found that a cloud-based EHR system in the U-M Dent offered significant cost savings and unique benefits that were not available with the on-premise EHR solution. Based on cost, the U-M Dent has made a case for cloud-based EHR systems.