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"Finding the ROI in EMRs"

July 10, 2008
by vciotti
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To continue the theme of my last 2 posts, HFMA published a study this month noting 5 common pitfalls hospitals make when calculating potential ROI for EMRs:


1. Fixed costs are used for ROI, when most hospital costs are variable (e.g.: census fluctuations, FTE staffing levels, OP volumes, etc.).


2. Staff time savings are credited to EMRs when they might be due to other reasons, such as layoffs, hiring freezes, improved procedures, etc.


3. Savings for adverse effect are given, when in fact they are "incalculable" Â since they did not occur and create measurable costs.


4. Analyses often ignore revenue reductions from lower service utilization: e.g.: less duplicate tests, fewer admissions if MDs do not like the system, etc.Â


5. Hospital overall performance must be taken into account before and after implementation (e.g.: census increase/decrease, improved/decreased productivity, TQM/CQI programs, etc.).


I'd quibble with number 3 above, as I have seen one pretty good ROI study take the average cost of past malpractice suits (both at this facility and national studies) and use averages since medication errors are such an issue and malpractice suits are so large, but overall, it is nice to see a third time in a month that reality is setting in to balance the euphoria over EMRs. Granted, they do improve many things and are as inevitable as Gutenberg's printing press supplanting handwritten manuscripts from monks. However, to radically overestimate the benefits and ignore potential pitfalls can be as dangerous to a CIO's professional health as a medication error can be to one's personal health!

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Vince Ciotti's HIS Vendor blog covers the latest developments in the vendor scene such as:...