1.  A Cost-Benefit Analysis of Electronic Medical Records in Primary Care

Author(s): Wang SJ, Middleton B, Prosser LA, Bardon CG, Spurr CD, Carchidi PJ, Kittler AF, Goldszer RC, Fairchild DG, Sussman AJ, Kuperman GJ, Bates DW

Source: American Journal of Medicine 2003 (NULL);114(5):397-403.

Summary: 

The purpose of this study was to estimate the net financial benefit or cost of implementing electronic medical record systems in primary care. Much of the data and conclusions are based on expert opinion and assumptions, with a minority of data from actual studies.  We performed a cost-benefit study to analyze the financial effects of electronic medical record systems in ambulatory primary care settings from the perspective of the health care organization. The reference strategy for comparisons was the traditional paper-based medical record. The estimated net benefit from using an electronic medical record for a five-year period was $86,400 per provider. Benefits accrue primarily from savings in drug expenditures, improved utilization of radiology tests, better capture of charges, and decreased billing errors. Implementation of an electronic medical record system in primary care can result in a positive financial return on investment to the health care organization.

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2.  A Pilot Study to Document the Return on Investment for Implementing an Ambulatory Electronic Health Record at an Academic Medical Center

Author(s): Dara L Grieger, MD, Stephen H Cohen, MD, CPE, David A Krusch, MD, FACS

Source: Journal of American College of Surgeons 2007 (NULL);205(1):89-96.

Summary: 

Five ambulatory offices within the University of Rochester Medical Center participated in a pilot project using an electronic health record (EHR) to document the return on investment. A staged implementation of the Touchworks EHR (Allscripts) was undertaken from November 2003 to March 2004. Measurements of key financial indicators included chart pulls, new chart creation, filing time, support staff salary, and transcription costs. The savings realized were compared with the costs of the first 2 years of EHR use to determine return on investment. Total annual savings were $393,662 ($14,055 per provider). Total capital cost was $484,577. First-year operating expenses were $24,539, with ongoing annual cost for subsequent years is $114,016 ($4,072 per provider). So, initial costs were recaptured within 16 months, with ongoing annual savings of $9,983 per provider. An EHR can rapidly demonstrate a positive return on investment when implemented in ambulatory offices associated with a university medical center, with a neutral impact on efficiency and billing.

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3.  Computer Physician Order Entry: Benefits, Costs and Issues

Author(s): Gilad J. Kuperman and Richard F. Gibson

Source: Annals of Internal Medicine 2003 (NULL);139((NULL)):31-39.

Summary: 

Information technology has consistently been identified as an important component for quality improvement throughout the health care system. Computerized physician order entry (CPOE) is a promising technology that allows physicians to enter orders into a computer instead of handwriting them. Because CPOE fundamentally changes the ordering process, it can substantially decrease the overuse, underuse, and misuse of health care services. Studies have documented that CPOE can decrease costs, shorten length of stay, decrease medical errors, and improve compliance with several types of guidelines. The costs of CPOE are substantial both in terms of technology, system implementation, and user training and support. CPOE is a relatively new technology, and there is no consensus on the best approaches to many of the challenges it presents. This technology can yield many significant benefits and is an important platform for future changes to the health care system. Organizational leaders must advocate for CPOE as a critical tool in improving health care quality.

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4.  Is There a Business Case for Telehealth in Home Health Agencies?

Author(s): Jill Schumann Rumberger and Kathryn Dansky

Source: Telemedicine and e-Health 2006 (NULL);12(2):122-127.

Summary: 

Since most home health agencies (HHAs) in the United States rely on Medicare reimbursement as their primary revenue source, this paper addresses the basis for a financial business case for telehealth in (HHAs) to help manage costs.  In October 2000, HHAs went from a cost-based, fee-for-service payment to a per episode prospective payment reimbursement model. For HHAs, the revenue goal changed from maximizing the number of visits under fee-for-service to maximizing the number of patients and managing the episode within the prospective payment reimbursement formula. Utilizing a return on investment breakeven analysis model, we investigated the financial impact of telehealth, utilizing data from 32 HHAs in the Commonwealth of Pennsylvania. The breakeven analysis demonstrated that telehealth can have a positive impact on the HHA's financial position. Results indicate that HHAs should seriously consider the use of telehealth as part of their agency's care delivery model.

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5.  Quantifying Value for Physician Order-Entry Systems: A Balance of Cost and Quality

Author(s): Rick Taylor, FCA, MA; John Manzo, PharmD, FASHP, and Mark Sinnett, PharmD, FASHP

Source: Healthcare Financial Management 2002 (NULL);(NULL)((NULL)):44-48.

Summary: 

Healthcare CFOs commonly demand hard data to prove that an investment in computerized physician order entry (CPOE) will be worthwhile.  However, a balanced analysis of cost and quality of the CPOE system, also called the value on investment (VOI) has advantages over traditional return-on-investment appraisals.  Montefiore Medical Center (MMC), Bronx, New York, assessed the value of its CPOE system by quantifying cost and quality measures rather than relying solely on dollar returns. MMC collected process times for medication ordering before and after the CPOE system was introduced and demonstrated that the use of CPOE increased medication-ordering efficiency by 92 percent.  MMC calculated additional process times for ward clerks, nurses, and pharmacists before and after CPOE implementation and determined the time saved per employee.  From that number, the dollars potentially saved per employee and total potential dollar value of time savings per year were calculated.

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6.  Return on Investment for a Computerized Physician Order Entry System

Author(s): Rainu Kaushal, Ashish K. Jha, Calvin Franz, John Glaser, Kanaka D. Shetty, Tonushree Jaggi, Blackford Middleton, Gilad J. Kuperman, Ramin Khorasani, Milenko Anasijevic, David W. Bates, Brigham And Women’s Hospital Cpoe Working Group

Source: Journal of the American Medical Informatics Association 2006 May-Jun;13(3):261-266.

Summary: 

Although computerized physician order entry (CPOE) may decrease errors and improve quality, the high costs and limited data on financial benefits of CPOE systems are a major barrier to adoption. The authors assessed the costs and financial benefits of the CPOE system at Brigham and Women's Hospital (BWH) over ten years. Between 1993 and 2002, the BWH spent $11.8 million to develop, implement, and operate CPOE. Over ten years, the system saved BWH $28.5 million for cumulative net savings of $16.7 million and net operating budget savings of $9.5 million given the institutional 80% prospective reimbursement rate. The CPOE system elements that resulted in the greatest cumulative savings were renal dosing guidance, nursing time utilization, specific drug guidance, and adverse drug event prevention. The CPOE system at BWH has resulted in substantial savings, including operating budget savings, to the institution over ten years. Other hospitals may be able to save money and improve patient safety by investing in CPOE systems.

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7.  Reviewing the Benefits and Costs of Electronic Health Records and Associated Patient Safety Technologies

Author(s): Nir Menachemi, Robert G. Brooks

Source: Journal of Medical Systems 2006 (NULL);30((NULL)):159-168.

Summary: 

In the current paper, we describe the challenges in measuring return on investment (ROI) and review published ROI studies on health IT. In addition, given the absence of a robust ROI literature base, we review the general benefits and potential costs of various health IT applications including electronic health records (EHRs), computerized physicians order entry (CPOE) systems, and clinical decision support systems (CDSS). Articles, usually case studies, examining these benefits are much more common than studies examining ROI itself; these trends are indicative of the challenges in scientifically measuring many of the costs and benefits of health IT applications, and suggest the early stage of this knowledge base. Less-tangible benefits of IT applications, such as increased revenues and averted costs are described. Additional research utilizing broader perspectives and multidisciplinary techniques will be needed before a better understanding of ROI from health IT is achieved.