From a technology standpoint, there are essentially four kinds of EHR and EMR models offered by vendors to the health care industry — and EHR and EMR software are just part of the equation.

1. Software

This is the "traditional" model of EMR software, where companies require a practice to physically install software onto a computer or server at the practice location. EMR software like this is usually associated with high up-front costs needed just to get the infrastructure up and running. When that infrastructure needs updating, all-new installations are required for upgrades or patches.

Most notable, EMR software can't offer its users or the vendor any shared insight into success or progress; a practice's accumulated data exists only within the silo that is the practice's particular office, and is visible only to them, if at all. In this case, the relationship between providers and EMR companies may very well end with the sale of the software.

2. Application Service Provider

With an ASP, the software lives on the vendor's system instead of the practice's own servers. This is an advance over conventional EHR software on the technology evolutionary scale, as it can reduce a practice's initial expenditures. On the flip side, however, operating costs can rise.

The need for ASPs arose as a response to small- or medium-sized businesses whose budgets couldn't afford expensive up-front costs for software. ASPs may deliver lower start-up costs for smaller medical practices, but they lack the value of a shared data network or any visibility into a practice's performance, pertinent benchmarks and growth opportunities. While many ASP vendors may talk about their services being "in the cloud," they're really referring to a type of "closed or private cloud," one that enables easy web-based access, but can't take advantage of an entire network's worth of knowledge and broader, open sharing.

3. Software as a Service (SaaS)

With the SaaS model, all clients access a single instance of the latest, most updated EMR software online. There's no need for practices to exert any technical effort or perform any maintenance — all work is done by the provider and stored in the cloud. Software can be updated once on a single network, available to all who access that network.

The SaaS model can easily support a nationwide provider database for health care needs such as orders, referrals, and globally deployed vocabularies and templates. It can also act as a single communications connection to payers, clearinghouses, hospitals and pharmacies. EMR companies that act as SaaS providers tend to charge a monthly fee rather than requiring a large up-front investment.

But for all the advantages of a SaaS solution, there's a glaring issue: The vendor has no particular investment in the practice's results. Beyond the management and maintenance of the software, no services are provided: There's no behind-the-scenes staff for clients, taking on their administrative work, monitoring regulatory change, or following up on payment claims.

4. Cloud-based Services

A cloud-based service takes the technological advantages of an SaaS and goes even further. EMR companies that offer cloud-based services extend and amplify SaaS benefits by injecting continually evolving knowledge and back-office services into a cloud network, driving improved results for everyone on that network. This three-pronged approach to health IT — network, knowledge and work — is a powerful combination of elements that defines the most sophisticated level of IT evolution in EHRs.