Health systems report financial strain from EHR rollouts

Hospitals and health systems are reporting financial losses tied to new EHR implementations.

New York City-based 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 Epic EHR rollout.

In an Aug. 15 news release, the cancer center reported an operating cash flow margin of 1.4%. Revenue rose 5.2% year over year, including a 3.9% increase in patient revenue, but expenses climbed 9.7%, driven by medical supplies, pharmaceuticals and Epic-related costs.

Patient activity declined in February and March after the Feb. 1 Epic go-live but rebounded in the second quarter, according to the release. Hospital leaders said Epic is a key part of the center’s digital modernization strategy, which is expected to improve patient satisfaction, efficiency and revenue cycle performance.

Smaller hospitals are also seeing losses. Waukon, Iowa-based Veterans Memorial Hospital reported a $430,135 loss in July following its Epic implementation. The 25-bed critical access hospital went live June 14 through University of Iowa Health Care’s Community Connect program at a cost of $3.88 million.

About $500,000 in Epic-related expenses contributed to the July loss, CEO Michael Coyle told trustees. Without those costs, the hospital would have posted a $70,000 positive bottom line, he said. Mr. Coyle added that operations remain on track and that Epic will be capitalized over seven years.

Industry analysts have noted similar trends. In 2023, Richard Park, director of the nonprofit healthcare department for Fitch, told the Star Herald that hospitals often see a temporary revenue dip following new EHR implementations.

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