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Opinion: Epic costs likely in EMR flip from Cerner

25 November 2022
By Kate McDonald
Image: iStock

The cost of flipping NSW Health’s electronic medical record platform from Cerner to Epic could cost up to $1 billion over 10 years, industry experts project.

The massive program will represent the largest implementation of any EMR platform in the Southern Hemisphere and one of the largest Epic implementations in the world, covering 220 hospitals and eight million patients.

While Pulse+IT sources told us earlier this year that NSW Health was considering a single vendor approach, the initial tender for what it calls the Single Digital Patient Record (SDPR) envisioned a far more integrated system, floating the idea that a smart vendor could devise a single view accessing various clinical systems despite the source or the silo in one view of the patient.

There are a couple of international vendors who could probably achieve something approaching this using contemporary data exchange standards and integration engines, but for whatever reason, NSW Health has decided to start again, ripping out the Cerner-based platform it has invested hundreds of millions of dollars into with Epic, not just for its EMR but for pathology and patient administration too.

It is a bold strategy to say the least. Epic’s EMR was pioneered in Australia at Royal Children’s Hospital in Melbourne in 2016 in what has been a highly successful project. Epic is widely used in paediatric hospitals around the world so it was not surprising it was chosen, but so successful has the implementation been that it was subsequently adopted by the other three hospitals in what is now known as the Parkville precinct.

The model developed for Parkville was then expanded upon by ACT Health for its three hospitals, walk-in centres and community care centres. ACT Health also decided to implement Epic’s pathology system and its PAS to replace legacy systems, despite neither of these platforms having been tested in the Australian context before.

NSW Health’s announcement this week, however, represents magnitudes in scale. RCH had about 300 beds when it chose Epic, for a cost of $48 million in 2016. The three-site Parkville project had under 1000 beds at an overall cost of $124 million in 2019.

ACT Health’s project, which is on the same scale in terms of bed numbers but is bigger than Parkville as it includes pathology and PAS, came in at $151m over 10 years, of which Epic received $114m.

NSW Health, in contrast, has 220 hospitals supporting 9500 beds covering eight million patients, and it employs more than 120,000 people. It is a huge operation, stretching from enormous tertiary referral hospitals that are some of the largest in the country, several paediatric hospitals, and numerous metro and regional hospitals, both large and very small.

eHealth NSW told us yesterday that funding had been secured for the project but was not at liberty to tell us how much this would cost, as it was still in contract negotiations with Epic. It received $141 million in the 2021-22 state budget, and had already received an undisclosed amount to pay for the new pathology system in the 2020-21 budget.

Our experts tell us this is just a drop in the ocean when it comes to a statewide implementation, however. Figures they quoted ranged from half a million dollars to over a billion, considering the size of the project.

The most recent implementations of Epic in the US point to just how expensive it is likely to be. Mayo Clinic spent $US1.5b rolling it out to its 90 hospitals and clinics between 2017 and 2018. AdventHealth, with 50 hospitals and more than 8000 beds, spent $US650m flipping from Cerner to Epic in 2021. Both of those systems also include specialist and family physician practices, but they point to just how expensive the NSW plan might be.

And what of the money already spent on eHealth in NSW? Very early versions of Cerner began being implemented in the early 2000s, with FirstNet going live in a flawed implementation in 2009 and many of those costs are unquantifiable. However, since the Coalition was elected in 2011, it has invested over $1 billion in eHealth infrastructure.

This includes $170m allocated in 2011 for electronic medication management systems, the contract for which was awarded to Cerner and MedChart in 2015. The 2013 budget saw $400m allocated over four years for eHealth, the bulk going towards the early EMR rollout. A further $563m over eight years was secured in 2017, paying for a number of huge projects such as the HWAN roll-out, virtual care, the electronic record for intensive care (eRIC) and the state clinical information exchanges.

While much of this investment is separate to the SDPR project, it does raise the question of whether the vast amount of money, time and human resources that has been invested in the electronic medical records platform may have been better leveraged rather than abandoned.

3 comments on “Opinion: Epic costs likely in EMR flip from Cerner”

  1. “Figures they quoted ranged from half a million dollars to over a billion, considering the size of the project…”

    The first “million” should also be a “billion”, I’m guessing.

    • Name - M
  2. I wish ACT Health and NSW Health luck with their proposed EPIC Pathology implementations. There are only 3 Pathology Systems in Australia that support our complex Medicare coning rules for determining patient billing. Cerner has never attempted to emulate these rules such that a third-party billing system has to be “tacked on”. NSW Health would do well to look over the border to Queensland to see how NOT to implement a “foreign” Pathology System. I sense a large dose of hubris in NSW.

    • Name - Veronica

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