Health Information System Cost-Benefit Analysis
Health Information System Cost-Benefit Analysis
Complete a Vila Health interactive simulation in which you will practice analyzing the costs and the benefits associated with having the newly acquired rural hospitals switch to the same health information system currently used at the main hospital. Then, develop a cost-benefit spreadsheet and write a 2-3 page executive summary of your findings and recommendations.
The cost-benefit analysis at Vila health would be important in examining the value that new proposal of equipping the rural hospital with the HIM as the main hospital. The Vila Health leadership team required a cost-benefit analysis to weigh the benefits and drawbacks of adopting a health information system at the recently purchased rural hospital (Vila Health, n.d). For this project, a cost-benefit analysis table was prepared to represent Vila Health’s quantitative cost-benefit ratio. This project will design a cost-benefit analysis spreadsheet that would be developing a strong decision on the value of the current proposal of HIM at rural hospital of Vila health.
Health Information System Components
Vila Health sought to discover a solution to connect its hospital information systems to achieve internal interoperability. Vila Health will bear the costs of both hard and software for EHR implementation (Mishan & Quah, 2020). Implementation assistance, equipment, firmware, terms of installation, training, and ongoing network charges and maintenance are the primary components of system integration. The hardware components that would cost the project are database servers, Computers, phones, tablet devices, and printers (Mishan& Quah, 2020). EHR programs, interface components, and system upgrades are all included in software costs. In addition, before and during implementation, the top management should train doctors, nurses, and office employees.
The Gap between Current Health Information Technology and Future Needs
In the last five years, significant governmental and private expenditures have been made to improve the adoption of electronic health records in health facilities and doctor’s offices throughout the region. Vila Health’s data system is currently unconnected. This has the potential to stymie patient treatment and work procedures (Mishan & Quah, 2020). The main purpose of Vila Health is to modernize information systems to increase workflow and connection. Vila Health will increase communication and service quality by bringing all of its facilities into one information system.
Costs and Benefits of Implementing a Modern System
The cost is determined by the type of technology Vila Health wishes to employ. According to several studies, the cost of buying and operating an EHR system ranges from $15,000 to $70,000 per physician (HealthIT.gov, 2014). The overall cost of the project would come with corresponding benefits after years at the clinic. To use the new system at the rural center, Vila Health will also have to obtain a software license each year, which would cost $27,000 per year to use. Vila Health’s personnel had to be trained on the new system. The total cost of all staff training is $13,000, which includes all equipment needed for instructor training as well as pay (Moran et al., 2020). Employee training benefits not only the employees but also the patients and the company.
Vila Health will be able to promote a lot of costs and develop a more effective program with electronic patient information by modernizing the system. Increased usage of testing, fewer patient management employees, lower expenses for consumables used to keep paper records, lower transcription costs, and lower graphic download costs are just a few of the efficiencies. There is an extra cost of improving the infrastructure to produce a more efficient system. The cost of the hard and software used in the upgrade will cost $83,000 (Moran et al., 2020). Furthermore, the costs of maintaining the deployed system can be substantial (Moran et al., 2020). Changes to the hardware and software of a system are frequently required regularly. Another disadvantage of EHR is that it disrupts medical staff and supplier workflow, resulting in a temporary productivity loss.
Costs and Benefits of not Implementing an Updated System
Vila Health’s structure and healthcare procedures will be considerably improved as information systems are modernized. Some businesses may decide against implementing a new information management system. Vila Health will be forced to deal with obsolete technology if it does not modernize its information system (Moran et al., 2020). Furthermore, the Vila Health EHR he is presently using will expire, and maintaining a health record without the need for an ongoing EHR will be challenging for the business. Vila Health will need to pay staff to keep paper records and existing EHRs up to date until they are no longer functional. Furthermore, failing to adopt the new system will result in more work teams for employees and a reduction in productivity.
Impact of Evolving Business Trends on System Improvement Decisions
Health is always changing and evolving. It was difficult to conduct a study before the emergence of technology. The majority of the study is based on information gathered by states, states, and counties (Mishan & Quah, 2020). Electronically storing patient data boosts data availability, allowing for greater quantitative analysis to aid in the identification of evidence-based best practices.
Recommended Plan of Action
The health information system offers significant advantage to the healthcare delivery process despite the high initial implementation cost. According to Abbasi & Mirzaee (2020), lack of efficiencies in the data management causes errors and compromise the quality of care the patient receives. In another study, Laurenza et al. (2018) show that the adoption of information technology in the healthcare sector has improved the quality of care delivered to the patients. Similarly, many stakeholders including the clinicians, patients and national health systems have benefited from the improvement. As a result, Villa Health should install a new HIS based on the cost-benefit analysis to improve the operational efficiency and the quality of care given to the patients, A new HIS is expected to generate increasing benefits each year that would start from $72,000 with the initial cost of $61,290. The profit generated in the first year of operation will be $10,710 and this will increase subsequently. The total expenses for the five years will be $287,790 while the income to be generated will be $536,800 which is significantly profitable. This implies that the project would add value and revenue at the clinic. In addition to generating income, the HIS will enhance patient care by reducing overtime, reducing errors and readmission with access to applications that assist them in making critical health-care choices.
Conclusion
A cost-benefit analysis is an important part of the decision-making process in a health-care organization because it looks at the potential profits or losses that could arise from certain project decisions. The decision to adopt a new HIS at Vila Health is not an easy one, since there are numerous financial factors to consider. The associated cost-benefit analysis sheds light on the possible revenue gained as a result of this deployment. It is advised that Vila Health proceed through with a fresh HIS deployment at this time.
References
HealthIT.gov (2014). How much is this going to cost me? Retrieved from https://www.healthit.gov/faq/how-much-going-cost-me
Mishan, E. J., & Quah, E. (2020). Cost-benefit analysis.New York, NY: Routledge.
Moran, D., Wu, A. W., Connors, C., Chappidi, M. R., Sreedhara, S. K., Selter, J. H., &Padula, W. V. (2020). Cost-benefit analysis of a support program for nursing staff. Journal of Patient Safety, 16(4), e250-e254.
Vila Health (n.d.). HIM cost benefit analysis challenge. Retrieved from https://media.capella.edu/CourseMedia/VilaHealth/MHA5064/HIMSCostBenefitAnalysis /transcript.html
Abbasi, F., Khajouei, R., & Mirzaee, M. (2020). The efficiency and effectiveness of surgery information systems in Iran. BMC Medical Informatics and Decision Making, 20(1). https://doi.org/10.1186/s12911-020-01236-5
Laurenza, E., Quintano, M., Schiavone, F., & Vrontis, D. (2018). The effect of digital technologies adoption in healthcare industry: A case based analysis. Business Process Management Journal, 24(5), 1124-1144. https://doi.org/10.1108/bpmj-04-2017-0084
Introduction
Note: The assessments in this course build upon the work you have completed in the previous assessments. Therefore, complete the assessments in the order in which they are presented.
Meeting current and future needs means that health care managers must be able to analyze the costs and benefits of implementing new health information systems or taking on new health informatics projects. Cost-benefit analysis is a model that will help managers communicate and justify their projects. It is important for managers to translate the investment of health information technology into a benefit that the organization notices and feels.
This assessment provides an opportunity for you to complete a cost-benefit analysis of a health information system and justify your recommendations for implementation, based on best practices.
Overview and Preparation
Note: Complete the assessments in this course in the order in which they are presented.
The following resources are required to complete the assessment:
APA Style Paper Template [DOCX].
Use this template for your executive summary.
Cost-Benefit Analysis Spreadsheet [XLSX].
Use this spreadsheet for your analysis.
Vila Health: HIMS Cost Benefit Analysis.
This multimedia simulation will enable you to practice analyzing the short- and long-term costs and the benefits of implementing Vila Health’s existing health information system at one of the newly-acquired rural hospitals.
Leadership at Vila Health has asked for a cost-benefit analysis to address the pros and cons of having the newly acquired rural hospitals switch to the same health information system currently used by Vila Health.
Complete the Vila Health: HIMS Cost-Benefit Analysis interactive simulation. Gather information about the health information system being used by the main hospital. Speak with department heads to obtain their insights, and consider short- and long-term costs and benefits. You may also find it useful to review previous Vila Health simulations.
In addition, use the Capella University Library to explore topics relevant to currently available health information system technology and its costs and benefits.
Requirements
Conduct a cost-benefit analysis to determine the feasibility of the proposed system upgrade. Use the Cost-Benefit Analysis Spreadsheet for your analysis.
Write an executive summary of your findings, recommendations, and rationale for your recommendations.
Note: Remember that you can submit all—or a portion of—your draft executive summary to Smarthinking for feedback, before you submit the final version for this assessment. If you plan on using this free service, be mindful of the turnaround time of 24–48 hours for receiving feedback.
Document Format and Length
Format your executive summary using APA style.
Use the APA Style Paper Template [DOCX]. An APA Style Paper Tutorial [DOCX] is also provided to help you in writing and formatting your executive summary. Be sure to include:
A title page and references page. An abstract is not required.
Appropriate section headings.
Your executive summary should be 2–3 pages in length, not including the title page and references page.
Supporting Evidence
Cite at least two sources of credible scholarly or professional evidence to support your cost-benefit analysis.
Cost-Benefit Analysis
Note: The requirements outlined below correspond to the grading criteria in the scoring guide. Be sure that your cost-benefit analysis addresses each point, at a minimum. You may also want to read the HIS Cost-Benefit Analysis Scoring Guide to better understand how each criterion will be assessed.
Identify the components of the health information system.
Consider all system components that should be factored into a cost-benefit analysis.
Identify gaps between current health information technology and future needs.
What effect might forecasted future needs have on present system integration decisions?
Analyze the costs of implementing an upgraded system.
Identify all cost items that should be included in the analysis.
Consider short- and long-term costs.
Consider the relevant issues, objectives, and leadership decisions that should be factored into the analysis.
What additional information could improve the analysis?
Analyze the benefits of implementing an upgraded system.
Identify all cost items that should be included in the analysis.
Consider short- and long-term benefits, as well as the potential benefits to the organization, including patient care.
Consider the relevant issues, objectives, and leadership decisions that should be factored into the analysis.
What additional information could improve the analysis?
Analyze the costs and benefits of not implementing an upgraded system.
Consider the short- and long-term costs and potential benefits to the organization, including patient care.
Consider the relevant issues, objectives, and leadership decisions that should be factored into the analysis.
What additional information could improve the analysis?
Determine the impact of evolving business trends on system upgrade decisions.
What business trends have the potential to drive future health care informatics and IT needs?
How might these trends influence your cost-benefit analysis and project implementation recommendations?
What evidence do you have to support your assertions and conclusions?
Make implementation recommendations based on your cost-benefit analysis.
Justify your recommendations with well-reasoned rationale.
Write clearly and concisely, using correct grammar, mechanics, and APA formatting.
Express your main points and conclusions coherently.
Proofread your writing to minimize errors that could distract readers and make it more difficult for them to focus on the substance of your analysis.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 4: Forecast future organizational needs and/or applications of technology based on evolving business trends.
Identify gaps between current technology and future needs.
Determine the impact of evolving business trends on system upgrade decisions.
Competency 5: Analyze current and future system needs and cost-benefit factors to define requirements for system selection.
Identify the components of a health information system.
Analyze the costs of implementing an upgraded system.
Analyze the benefits of implementing an upgraded system.
Analyze the costs and benefits of not implementing an upgraded system.
Make implementation recommendations based on a cost-benefit analysis.
Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style, consistent with applicable organizational, professional, and scholarly standards.
Write clearly and concisely, using correct grammar, mechanics, and APA formatting.
The resources provided here are suggested and provide helpful information about topics relevant to the assessment. You may use other resources of your choice to prepare for this assessment; however, you will need to ensure that they are appropriate, credible, and valid. The MHA Program Library Guide can help direct your research.
The following articles examine issues surrounding the adoption of health information systems, which may be helpful when considering cost-benefit analyses:
Adler‐Milstein, J., Everson, J., & Lee, S. D. (2015). EHR adoption and hospital performance: Time‐related effects. Health Services Research, 50(6), 1751–1771.
This study looked for evidence of a relationship between the adoption of an EHR by hospital and hospital performance.
Ben-Assuli, O., Ziv, A., Sagi, D., Ironi, A., & Leshno, M. (2016). Cost-effectiveness evaluation of EHR: Simulation of an abdominal aortic aneurysm in the emergency department. Journal of Medical Systems, 40(6), 1–13.
This study examines whether health information technologies are cost-effective by current standards and whether they improve decision making and the quality of care.
Bergmo, T. S. (2015). How to measure costs and benefits of ehealth interventions: An overview of methods and frameworks. Journal of Medical Internet Research, 17(11), e254.
Examines how to best apply cost-benefit evaluation methods to health information technologies.
Price, M., & Lau, F. (2014). The clinical adoption meta-model: A temporal metamodel describing the clinical adoption of health information systems. BMC Medical Informatics & Decision Making, 14(1), 1–23.
Presents an accessible model to aid implementers, evaluators, and others in the planning and implementation of health information systems.
Health Information System Cost-Benefit Analysis Scoring Guide
CRITERIA NON-PERFORMANCE BASIC PROFICIENT DISTINGUISHED
Identify the components of a health information system. Does not identify the components of a health information system. Overlooks components of a health information system important to an accurate cost-benefit analysis. Identifies the components of a health information system. Identifies the components of a health information system. Provides a complete and accurate inventory of all key components.
Identify gaps between current health information technology and future needs. Does not identify gaps between current health information technology and future needs. Identifies gaps between current health information technology and future needs that are unclear or unlikely. Identifies gaps between current health information technology and future needs. Identifies gaps between current health information technology and future needs. Makes astute inferences from a rational assessment of future needs.
Analyze the costs of implementing an upgraded system. Does not analyze the costs of implementing an upgraded system. Provides an incomplete cost analysis that overlooks key considerations. Analyzes the costs of implementing an upgraded system. Analyzes the short- and long-term costs of implementing an upgraded system. Provides a detailed and insightful analysis, and articulates uncertainties or knowledge gaps that could affect investment decisions.
Analyze the benefits of implementing an upgraded system. Does not analyze the benefits of implementing an upgraded system. Provides an incomplete benefit analysis that overlooks key considerations. Analyzes the benefits of implementing an upgraded system. Analyzes the short- and long-term benefits of implementing an upgraded system. Provides a detailed and insightful analysis, and articulates uncertainties or knowledge gaps that could affect investment decisions.
Analyze the costs and benefits of not implementing an upgraded system. Does not analyze the costs and benefits of not implementing an upgraded system. Analyzes some of the costs and benefits of not implementing an upgraded system, but omits significant items that should have been understood through study activities. Analyzes the costs and benefits of not implementing an upgraded system. Analyzes the costs and benefits of not implementing an upgraded system. Also identifies knowledge gaps, unknowns, missing information, unanswered questions, or areas of uncertainty, where further information could improve the analysis.
Determine the impact of evolving business trends on system upgrade decisions. Does not describe evolving business trends. Describes evolving business trends. Determines the impact of evolving business trends on system upgrade decisions. Determines the impact of evolving business trends on system upgrade decisions. Explicitly identifies logical implications and consequence based on an insightful interpretation and synthesis of business trends; draws well-reasoned, logical conclusions supported by relevant and credible evidence.
Make implementation recommendations based on a cost-benefit analysis. Does not make implementation recommendations based on a cost-benefit analysis. Makes implementation recommendations, but the links to the cost-benefit analysis are unclear, questionable, or not well-documented. Makes implementation recommendations based on a cost-benefit analysis. Makes implementation recommendations based on a cost-benefit analysis. Draws rational, fully-justified conclusions from an insightful assessment of long-and short-term project costs, benefits, and risks.
Write clearly and concisely, using correct grammar, mechanics, and APA formatting. Does not write clearly and concisely, using correct grammar, mechanics, and APA formatting. Writing is unclear and disorganized, includes errors in grammar and mechanics that inhibit effective communication, or contains incorrect or improperly formatted source citations and references. Writes clearly and concisely, using correct grammar, mechanics, and APA formatting. Writes clearly and concisely. Grammar, mechanics, and APA formatting are error-free.