If your practice is in the market for an Electronic Health Record (EHR), I’m sure system price and financing rank among your top concerns. There are two basic EHR models: on-premise, or client-server, and Software as a Service (SaaS), or web-based. Many practices love the SaaS or web-based software, because it works on a subscription model. Did you know there are many financing programs available that allow you to pay for your on-premise systems monthly, just like the SaaS model?
SaaS gained popularity because it works like any other monthly services, such as your internet, cable TV, or utilities. It does not require a purchase – no large amount of cash up front, so essentially it lowers the barriers of entry for practices who want to get started with EHR. The downfall of SaaS systems is that you never own the product. It is like renting an apartment compared to buying a house.
Buying a house, or an on-premise system, makes more economic sense in the long run. You pay off the system and the software is yours forever. Cash gets you the best deal. Just like buying a house, most practices will probably need financing. Financing is attractive, because it allows you to pay for a system monthly, like a SaaS model. This shifts the burden away from your capital budget, and moves it to your monthly operational budget.
Tax Code 179 offers a unique advantage over SaaS systems. The code allows you to deduct the full amount of capital purchases, up to $500,000, in one year. Assuming you purchase a system for $19,000 and your practice is in the 35% tax bracket, you will save approximately $6,600 in taxes, effectively decreasing the purchase price of your software to $12,000. This is not possible with SaaS, because you do not purchase the software.
GSG Capital, our preferred financing partner, offers many attractive plans. They provide deferred payment plans of three and six months. Deferred payments allow your practice to implement your EHR system and get your patient volumes back to normal before you begin paying for the system. GSG also boasts a “stimulus plan special” with nominal payments for the first year, followed by a 48-month term.
GSG also offers some of the most competitive rates. You have many options for financing, banks, credit unions, or other institutions. We have noticed over the years that GSG consistently offers the lowest interest rates, typically around six percent. Of course, rates are subject to change, and will vary based on your credit and purchase amount.
If you are interested in more information about purchasing EHR systems or financing, please contact us at info@xlemr.com. Feel free to contact Todd Greenberg at GSG capital directly via tgreenberg@gsgcapitalllc.com.
